Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 22, 2018 | |
Document Information [Line Items] | ||
Entity Registrant Name | APPFOLIO INC | |
Entity Central Index Key | 1,433,195 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity emerging growth company | true | |
Entity small business | false | |
Entity emerging growth transition period | true | |
Class A common stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 16,110,969 | |
Class B common stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 18,139,559 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and cash equivalents | $ 13,745 | $ 16,109 |
Investment securities—current | 31,823 | 29,800 |
Accounts receivable, net | 5,489 | 3,387 |
Prepaid expenses and other current assets | 10,916 | 4,546 |
Total current assets | 61,973 | 53,842 |
Investment securities—noncurrent | 19,861 | 22,401 |
Property and equipment, net | 6,699 | 6,696 |
Capitalized software, net | 19,172 | 17,609 |
Goodwill | 15,548 | 6,737 |
Intangible assets, net | 6,179 | 1,725 |
Other assets | 6,757 | 1,238 |
Total assets | 136,189 | 110,248 |
Current liabilities | ||
Accounts payable | 1,108 | 610 |
Accrued employee expenses | 7,493 | 10,710 |
Accrued expenses | 7,715 | 4,289 |
Deferred revenue | 3,172 | 7,080 |
Other current liabilities | 1,296 | 1,223 |
Total current liabilities | 20,784 | 23,912 |
Other liabilities | 7,042 | 1,257 |
Total liabilities | 27,826 | 25,169 |
Commitments and contingencies (Note 7) | ||
Stockholders’ equity: | ||
Preferred stock, $0.0001 par value, 25,000 authorized and no shares issued and outstanding as of September 30, 2018 and December 31, 2017 | 0 | 0 |
Additional paid-in capital | 155,556 | 152,531 |
Accumulated other comprehensive loss | (232) | (209) |
Accumulated deficit | (46,965) | (67,247) |
Total stockholders’ equity | 108,363 | 85,079 |
Total liabilities and stockholders’ equity | 136,189 | 110,248 |
Class A common stock | ||
Stockholders’ equity: | ||
Common stock | 2 | 1 |
Class B common stock | ||
Stockholders’ equity: | ||
Common stock | $ 2 | $ 3 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
Preferred stock, par value (usd per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 25,000,000 | 25,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Class A common stock | ||
Common stock, par value (usd per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 15,984,000 | 14,879,000 |
Common stock, shares outstanding | 15,984,000 | 14,879,000 |
Class B common stock | ||
Common stock, par value (usd per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 18,250,000 | 19,102,000 |
Common stock, shares outstanding | 18,250,000 | 19,102,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
Revenue | $ 50,126 | $ 37,903 | $ 139,706 | $ 105,906 |
Costs and operating expenses: | ||||
Cost of revenue (exclusive of depreciation and amortization) | 19,282 | 14,053 | 53,624 | 40,747 |
Sales and marketing | 8,681 | 7,257 | 23,711 | 21,556 |
Research and product development | 6,440 | 4,367 | 17,523 | 11,998 |
General and administrative | 6,541 | 5,405 | 17,105 | 15,310 |
Depreciation and amortization | 3,705 | 3,237 | 10,784 | 9,347 |
Total costs and operating expenses | 44,649 | 34,319 | 122,747 | 98,958 |
Income from operations | 5,477 | 3,584 | 16,959 | 6,948 |
Other income (expense), net | 1 | (5) | (20) | (93) |
Interest income, net | 229 | 155 | 631 | 377 |
Income before provision for income taxes | 5,707 | 3,734 | 17,570 | 7,232 |
Provision for income taxes | 183 | 52 | 252 | 93 |
Net income | $ 5,524 | $ 3,682 | $ 17,318 | $ 7,139 |
Net income per common share: | ||||
Basic (usd per share) | $ 0.16 | $ 0.11 | $ 0.51 | $ 0.21 |
Diluted (usd per share) | $ 0.16 | $ 0.10 | $ 0.49 | $ 0.20 |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 34,219 | 33,905 | 34,154 | 33,817 |
Diluted (in shares) | 35,610 | 35,205 | 35,524 | 35,091 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 5,524 | $ 3,682 | $ 17,318 | $ 7,139 |
Other comprehensive income (loss): | ||||
Changes in unrealized gains (losses) on investment securities | 57 | 26 | (23) | 28 |
Comprehensive income | $ 5,581 | $ 3,708 | $ 17,295 | $ 7,167 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common StockClass A common stock | Common StockClass B common stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Cumulative-effect adjustment resulting from adoption of ASU 2014-09 (Note 2) | $ 2,964 | $ 2,964 | ||||
Beginning balance (in shares) at Dec. 31, 2017 | 14,879 | 19,102 | ||||
Beginning balance at Dec. 31, 2017 | $ 85,079 | $ 1 | $ 3 | $ 152,531 | $ (209) | (67,247) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Exercise of stock options (shares) | 143 | 143 | ||||
Exercise of stock options | $ 713 | 713 | ||||
Stock-based compensation | 4,992 | 4,992 | ||||
Vesting of restricted stock units, net of shares withheld for taxes (in shares) | 105 | |||||
Vesting of restricted stock units, net of shares withheld for taxes | (2,706) | (2,706) | ||||
Vesting of early exercised shares | 26 | 26 | ||||
Conversion of Class B stock to Class A stock (in shares) | 852 | (852) | ||||
Conversion of Class B stock to Class A stock | 0 | $ 1 | $ (1) | |||
Issuance of restricted stock awards (in shares) | 5 | |||||
Issuance of restricted stock awards | 0 | $ 0 | ||||
Other comprehensive loss | (23) | (23) | ||||
Net income | 17,318 | 17,318 | ||||
Ending balance (in shares) at Sep. 30, 2018 | 15,984 | 18,250 | ||||
Ending balance at Sep. 30, 2018 | $ 108,363 | $ 2 | $ 2 | $ 155,556 | $ (232) | $ (46,965) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash from operating activities | ||
Net income | $ 17,318 | $ 7,139 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 10,784 | 9,347 |
Purchased investment premium, net of amortization | 99 | (22) |
Amortization of deferred financing costs | 48 | 48 |
Amortization of Other Deferred Charges | 1,312 | 0 |
Loss on disposal of property and equipment | 18 | 94 |
Stock-based compensation | 4,419 | 4,304 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,465) | (908) |
Prepaid expenses and other current assets | (5,214) | (856) |
Other assets | (5,003) | (54) |
Accounts payable | 477 | 369 |
Accrued employee expenses | (3,225) | 846 |
Accrued expenses | 3,397 | 1,713 |
Deferred revenue | (4,247) | (130) |
Other liabilities | 5,883 | (334) |
Net cash provided by operating activities | 24,601 | 21,556 |
Cash from investing activities | ||
Purchases of property and equipment | (1,740) | (1,680) |
Additions to capitalized software | (8,997) | (8,085) |
Purchases of investment securities | (28,784) | (17,597) |
Sales of investment securities | 701 | 15 |
Maturities of investment securities | 28,477 | 10,974 |
Cash paid in business acquisition | (14,441) | 0 |
Purchases of intangible assets | 0 | (1) |
Net cash used in investing activities | (24,784) | (16,374) |
Cash from financing activities | ||
Proceeds from stock option exercises | 713 | 508 |
Tax withholding for net share settlement | (2,894) | (1,608) |
Proceeds from issuance of debt | 93 | 88 |
Principal payments on debt | (93) | (88) |
Net cash used in financing activities | (2,181) | (1,100) |
Net (decrease) increase in cash, cash equivalents and restricted cash | (2,364) | 4,082 |
Cash, cash equivalents and restricted cash | ||
Beginning of period | 16,537 | 11,126 |
End of period | 14,173 | 15,208 |
Noncash investing and financing activities | ||
Purchases of property and equipment included in accounts payable and accrued expenses | 55 | 271 |
Additions of capitalized software included in accrued employee expenses | 298 | 231 |
Stock-based compensation capitalized for software development | $ 751 | $ 548 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - Cash Reconciliation - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Statement of Cash Flows [Abstract] | ||
Cash and cash equivalents | $ 13,745 | $ 14,781 |
Restricted cash included in other assets | 428 | 427 |
Total cash, cash equivalents and restricted cash | $ 14,173 | $ 15,208 |
Nature of Business
Nature of Business | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business | Nature of Business AppFolio, Inc. (“we,” "us" or "our") provides industry-specific, cloud-based software solutions to the real estate market, which comprises a significant majority of our revenue, as well as to the legal market, and we intend to enter new vertical markets over time. Our mission is to revolutionize vertical industry businesses by providing great software and services. We believe we accomplish this mission by delivering software solutions and services that provide our customers with a system of record to automate essential business processes, a system of engagement to enhance business interactions between our customers and their clients and vendors, and, increasingly, a system of intelligence to anticipate, influence, and optimize customer experiences using data to take action in real time. Our property manager customers directly and indirectly account for more than 90% of our annual revenue and include third-party property managers and owner operators who manage single- and multi-family residences, commercial properties, community associations and student housing, as well as mixed real estate portfolios. Our legal customers are typically small law firms that directly and indirectly account for less than 10% of our annual revenue. Recent Developments Acquisition of WegoWise, Inc. On August 31, 2018, we completed the acquisition of substantially all of the assets of WegoWise, Inc. ("WegoWise"), a provider of cloud-based utility analytics software solutions serving the real estate market. The WegoWise platform empowers building owners and third-party property managers to better manage operating and capital expenditures relating to utilities, and we expect that the acquisition will provide enhanced functionality to our real estate customers over time. For additional information regarding this acquisition, refer to Note 3, Acquisition of WegoWise. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation and Significant Accounting Policies The accompanying unaudited Condensed Consolidated Financial Statements were prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. Accordingly, these Condensed Consolidated Financial Statements should be read in conjunction with our audited consolidated financial statements and the related notes included in our Annual Report filed with the Securities and Exchange Commission ("SEC") on February 26, 2018. The year-end condensed balance sheet was derived from our audited consolidated financial statements. Our unaudited interim Condensed Consolidated Financial Statements include, in the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair statement of the Condensed Consolidated Financial Statements. The operating results for the nine months ended September 30, 2018 are not necessarily indicative of the results expected for the full year ending December 31, 2018 . Changes in Accounting Policies On January 1, 2018, we adopted Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (as amended, "ASU 2014-09"), and have revised certain related accounting policies in connection with revenue recognition and deferred costs, as follows: Revenue Recognition We generate revenue from our customers primarily for subscriptions to access our core solutions and Value+ services for our cloud-based property management and legal software solutions. Revenue is recognized upon transfer of control of promised services in an amount that reflects the consideration we expect to receive in exchange for those services. We enter into contracts that can include various combinations of services, which are generally capable of being distinct, distinct within the context of the contract, and accounted for as separate performance obligations. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. We have applied the practical expedient to recognize revenue in proportion to the amount we have the right to invoice for certain core solutions and Value+ services revenue as that amount corresponds directly with our performance completed to date. Refer to Note 10, Revenue and Other Information for the disaggregated breakdown of revenues between core solutions, Value+ services and other revenues. Core Solutions We charge our customers on a subscription basis for our core solutions. Our subscription fees are designed to scale to the size of our customers' businesses. Subscription fees for our core solutions are charged on a per-unit per-month basis for our property management software solution and on a per-user per-month basis for our legal software solution. Our customers do not have rights to the underlying software code of our solutions, and, accordingly, we recognize subscription revenue over time on a straight-line basis over the contract term beginning on the date that our service is made available to the customer. The term of our core solutions subscription agreements generally ranges from one month to one year . We typically invoice our customers for subscription services in monthly or annual installments, in advance of the subscription period. Value+ Services We charge our customers for Value+ services based on subscriptions or usage-based fees. Subscription Value+ services include website hosting and contact center services. Usage-based Value+ services include fees for services such as electronic payment processing, applicant screening, legal liability to landlord insurance, renters insurance, collections, and online vacancy advertising services. Usage-based fees are charged on a flat fee per transaction basis with no minimum usage commitments. We recognize revenue for usage-based services in the period the service is rendered. We generally invoice our customers for usage-based services on a monthly basis for services rendered in the preceding month with the exception of fees for electronic payment processing, which are generally paid by the clients of our customers at the time the electronic payment is processed. We work with third party partners to provide certain of our Value+ services. For these Value+ services, we evaluate whether we are the principal, and report revenues on a gross basis, or the agent, and report revenues on a net basis. In this assessment we consider if we obtain control of the specified services before they are transferred to the customer, as well as other indicators such as whether we are the party primarily responsible for fulfillment, and whether we have discretion in establishing price. Other Revenues Other revenues include one-time services related to implementation and data migration of our core solutions, website design services, online vacancy advertising services offered to legacy RentLinx customers, and revenues from subscriptions to our utility tracking software and compliance reporting services, as well as one-time implementation fees for legacy WegoWise customers. The fees for implementation and data migration services are billed upon signing our core subscription contract and are not recognized until the core solution is accessible and fully functional for our customer's use. Our website design services are billed when the website design is completed and delivered to the customer. The online vacancy advertising services revenue includes a combination of monthly subscription revenue, which is billed in advance and deferred over the subscription period, and verified leads and clicks for online rental vacancies, which are billed when the services have been rendered and are recognized upon completion of the services. Revenue from subscriptions to our utility tracking software and compliance reporting services are billed in advance and deferred over the subscription period. Contracts with Multiple Performance Obligations Many of our contracts with customers contain multiple performance obligations. For these contracts, the performance obligations include access and use of our core solutions, implementation services, and customer support. We account for individual performance obligations separately if they are distinct. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. The transaction price is allocated to each performance obligation on a relative standalone selling price basis. Judgment is required to determine the standalone selling price for each distinct performance obligation. We typically have more than one standalone selling price for individual products and services due to the stratification of those products and services by customers and circumstances. In these instances, we determine the standalone selling price based on our overall pricing objectives, taking into consideration customer demographics and other factors. Fees are fixed based on rates specified in the subscription agreements, which do not provide for any refunds or adjustments. In determining the transaction price, we have applied the practical expedient which allows us not to adjust the consideration for the effects of the time value of money as the time between when we transfer the promised service to a customer and when a customer pays is one year or less. We do not disclose the value of unsatisfied performance obligations for contracts with an original expected term of one year or less. Deferred Revenues We record deferred revenues when cash payments are received in advance of our performance. During the nine months ended September 30, 2018 we recognized $6.7 million of revenues that were included in the deferred revenue balance at the beginning of the period. Deferred Costs Deferred costs, which primarily consist of sales commissions, are considered incremental and recoverable costs of obtaining a contract with a customer. These costs are deferred and then amortized on a straight-line basis over a period of benefit that we have determined to be three years . We typically do not pay commissions for contract renewals. We determined the period of benefit by taking into consideration our customer contract term, the useful life of our internal-use software, average customer life, and other factors. Amortization expense for the deferred costs is included within cost of revenue and sales and marketing expense in the accompanying Condensed Consolidated Statements of Operations. Deferred costs were $5.8 million as of September 30, 2018 , of which $2.5 million is included in prepaid expenses and other current assets and $3.3 million is included in other assets in the accompanying Condensed Consolidated Balance Sheets. Amortization expense for deferred costs was $0.5 million and $1.3 million for the three and nine months ended September 30, 2018 , respectively. For the nine months ended September 30, 2018 , no impairments were identified in relation to the costs capitalized for the period presented. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. On an ongoing basis, management evaluates its estimates based on historical data and experience, as well as various other factors that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Net Income per Common Share The net income per common share was the same for shares of our Class A and Class B common stock because they are entitled to the same liquidation and dividend rights and are therefore combined in the table below. The following table presents a reconciliation of our weighted average number of shares of our Class A and Class B common stock used to compute net income per common share (in thousands): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Weighted average common shares outstanding 34,227 33,923 34,166 33,848 Less: Weighted average unvested restricted shares subject to repurchase 8 18 12 31 Weighted average common shares outstanding; basic 34,219 33,905 34,154 33,817 Plus: Weighted average options, restricted stock units and restricted shares used to compute diluted net income per common share 1,391 1,300 1,370 1,274 Weighted average common shares outstanding; diluted 35,610 35,205 35,524 35,091 For the three and nine month periods ended September 30, 2018 and 2017 , an aggregate of approximately 503,000 and 571,000 shares, respectively, underlying performance based options ("PSOs") and performance based restricted stock units ("PSUs"), are not included in the computations of diluted and anti-dilutive shares as they are considered contingently issuable upon the satisfaction of pre-defined performance measures and their respective performance measures have not been met. The following table presents the number of anti-dilutive common shares excluded from the calculation of weighted average number of shares used to compute diluted net income per common share for the three and nine months ended September 30, 2018 and 2017 (in thousands): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Unvested restricted stock units 3 13 3 13 Contingent restricted stock units (1) 1 6 1 6 Total shares excluded from diluted net income per common share 4 19 4 19 (1) The reported shares are based on fixed price restricted stock unit (“RSU”) commitments for which the number of shares was not determined at the grant date. For the purposes of this table, the number of shares has been determined by dividing the fixed price commitment to issue shares in the future by the closing price of our common stock as of the applicable reporting period date. Recently Adopted Accounting Pronouncements We meet the definition of an emerging growth company under the Jumpstart our Business Startups Act (the “JOBS Act”). We have irrevocably elected to opt out of the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 107(b) of the JOBS Act. In May 2014, the FASB issued ASU 2014-09, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers (the “New Revenue Standard”). The New Revenue Standard also includes Subtopic 340-40, Other Assets and Deferred Costs - Contracts with Customers , which discusses the deferral of incremental costs of obtaining a contract with a customer. We adopted the New Revenue Standard as of January 1, 2018 using the modified retrospective transition method applied to those contracts which were not completed as of that date. We recognized the cumulative effect of initially applying the New Revenue Standard as an adjustment to the opening balance of retained earnings. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. We updated our accounting policies, processes, internal controls and information systems to conform to the New Revenue Standard's reporting and disclosure requirements. The adoption of the New Revenue Standard did not have an impact on our revenues. The most significant impact relates to the deferral of incremental costs of obtaining contracts. Prior to the adoption of the New Revenue Standard, our commissions were expensed as incurred. The cumulative effects of the changes made to our Condensed Consolidated Balance Sheet at January 1, 2018 for the adoption of the New Revenue Standard were as follows (in thousands): Balance at Adjustments Balance at Assets Prepaid expenses and other current assets $ 4,546 $ 1,148 $ 5,694 Other assets 1,238 1,816 3,054 Equity Accumulated deficit $ (67,247 ) $ 2,964 $ (64,283 ) The following tables summarize the current period impacts of adopting the New Revenue Standard on our Condensed Consolidated Financial Statements (in thousands): Condensed Consolidated Balance Sheet: September 30, 2018 As Reported Balances Without Adoption of ASU 2014-09 Effect of Adoption Assets Prepaid expenses and other current assets $ 10,916 $ 8,381 $ 2,535 Other assets 6,757 3,486 3,271 Equity Accumulated deficit $ (46,965 ) $ (52,772 ) $ 5,807 Condensed Consolidated Statements of Operations: Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 As Reported Balances Without Adoption of ASU 2014-09 Effect of Adoption As Reported Balances Without Adoption of ASU 2014-09 Effect of Adoption Costs and operating expenses: Cost of revenue (exclusive of depreciation and amortization) $ 19,282 $ 19,342 $ (60 ) $ 53,624 $ 53,806 $ (182 ) Sales and marketing 8,681 9,540 (859 ) 23,711 26,371 (2,660 ) Total costs and operating expenses 44,649 45,568 (919 ) 122,747 125,589 (2,842 ) Income from operations 5,477 4,558 919 16,959 14,117 2,842 Income before provision for income taxes 5,707 4,788 919 17,570 14,728 2,842 Net income $ 5,524 $ 4,605 $ 919 $ 17,318 $ 14,476 $ 2,842 Net income per common share: Basic $ 0.16 $ 0.13 $ 0.03 $ 0.51 $ 0.42 $ 0.09 Diluted $ 0.16 $ 0.13 $ 0.03 $ 0.49 $ 0.41 $ 0.08 In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments ("ASU 2016-15"), which provides cash flow statement classification guidance for debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; distributions received from equity method investees; beneficial interests in securitization transactions; and separately identifiable cash flows and application of the predominance principle. We adopted ASU 2016-15 effective January 1, 2018. The adoption of this guidance did not have a material impact on our statements of cash flows. In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory ("ASU 2016-16"), which changes the timing of when certain intercompany transactions are recognized within the provision for income taxes. We adopted ASU 2016-16 effective January 1, 2018. The adoption of this guidance did not have a material impact on our financial condition, results of operations, cash flows or disclosures. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash ("ASU 2016-18"), which provides amendments to current guidance to address the classification and presentation of changes in restricted cash in the statement of cash flows. We adopted ASU 2016-18 effective January 1, 2018. The adoption of this guidance changed the presentation of restricted cash on our statements of cash flows. In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ("ASU 2017-04"), which eliminates Step 2 from the goodwill impairment test. The annual, or interim goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable. ASU 2017-04 also eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. ASU 2017-04 is effective for public entities for fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on dates after January 1, 2017. We early adopted ASU 2017-04 effective January 1, 2018. The adoption of this guidance did not have a material impact on our financial condition, results of operations, cash flows or disclosures. In May 2017, the FASB issued ASU No. 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting ("ASU 2017-09") . ASU 2017-09 clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. The new guidance will reduce diversity in practice and result in fewer changes to the terms of an award being accounted for as modifications. Under ASU 2017-09, an entity will not apply modification accounting to a share-based payment award if the award’s fair value, vesting conditions and classification as an equity or liability instrument are the same immediately before and after the change. ASU 2017-09 will be applied prospectively to awards modified on or after the adoption date. We adopted ASU 2017-09 effective January 1, 2018. The adoption of this guidance did not have a material impact on our financial condition, results of operations, cash flows or disclosures. Recent Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) ("ASU 2016-02"). Under ASU 2016-02, an entity will be required to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. ASU 2016-02 offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. For public companies, ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvement s ("ASU 2018-11"). Among other things, ASU 2018-11 provides administrative relief by allowing entities to implement the lease standard on a modified retrospective basis, similar to the method that we used to adopt the new revenue standard. Effectively, the modified retrospective basis permits us to adopt the lease standard through a cumulative effect adjustment to our opening balance sheet for the first quarter of fiscal year 2019, with the cumulative effect accounted for as a component of retained earnings, and report under the new lease standard on a post adoption basis. We are currently evaluating the impact these standards will have on our results of operations and cash flows, and we anticipate a material increase in assets and liabilities due to the recording of the required right-of-use asset and corresponding liability for all lease obligations that are currently classified as operating leases. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"), which amends the current accounting guidance and requires the measurement of all expected losses based on historical experience, current conditions and reasonable and supportable forecasts. This guidance amends the accounting for credit losses for available-for-sale securities and purchased financial assets with credit deterioration. ASU 2016-13 is effective for annual periods beginning after December 15, 2019, and interim periods within those annual periods. Early adoption is permitted for any interim or annual period after December 15, 2018. We do not expect the adoption of this guidance to have a material impact on our financial condition, results of operations, cash flows or disclosures. In March 2017, the FASB issued ASU No. 2017-08, Receivables-Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities (“ASU 2017-08”) . ASU 2017-08 shortens the amortization period for certain callable debt securities held at a premium. Specifically, ASU 2017-08 requires the premium to be amortized to the earliest call date. ASU 2017-08 does not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. For public companies, ASU 2017-08 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018. Early adoption is permitted, including adoption in an interim period. The amendments should be applied on a modified retrospective basis, with a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. We do not expect the adoption of this guidance to have a material impact on our financial condition, results of operations, cash flows or disclosures since our current accounting policy is consistent with ASU 2017-08. In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting ("ASU 2018-07"). This amendment expands the scope of Topic 718, Compensation—Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. ASU 2018-07 supersedes Subtopic 505-50, Equity—Equity-Based Payments to Non-Employees and is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2018. We do not expect the adoption of this guidance to have a material impact on our financial condition, results of operations, cash flows or disclosures. In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract , a series of amendments which align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by these amendments. For public business entities, the amendments are effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2019. We do not expect the adoption of this guidance to have a material impact on our financial condition, results of operations, cash flows or disclosures. |
Acquisition of WegoWise
Acquisition of WegoWise | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Acquisition of WegoWise | Acquisition of WegoWise On August 31, 2018, we completed the acquisition of substantially all of the assets of WegoWise, a provider of cloud-based utility analytics software solutions serving the real estate market. The WegoWise platform empowers building owners and third-party property managers to better manage operating and capital expenditures relating to utilities, and we expect that the acquisition will provide enhanced functionality to our real estate customers over time. The consideration paid in cash for the assets was $14.4 million , of which $2.0 million will be held in escrow for twelve months to satisfy WegoWise’s indemnity obligations. In addition, if during the period beginning immediately after the closing of the transaction (the "Closing") and ending on the six month anniversary of the Closing, we enter into contracts with certain third parties (each, a "Milestone Contract"), we will be obligated to pay to WegoWise the aggregate amount of the recurring revenues billed and collected from the Milestone Contract that results in the highest amount of recurring revenues billed during the twelve month period ("Determination Period") following the date recurring revenue is first billed for such Milestone Contract, but in no event will the Determination Period extend beyond the date which is the 15th month anniversary of the execution of the Milestone Contract (and we will not be obligated to pay WegoWise for any recurring revenues resulting from any other Milestone Contracts). We have determined that the fair value of the contingent consideration is de minimis based on facts and circumstances that existed on the Closing. The significant inputs used in the fair value measurement of the contingent consideration were the probability of entering into the Milestone Contracts during the Determination Period and the potential payment amounts for each Milestone Contract. The fair value of the contingent consideration may change over time as we continue to evaluate the likelihood of payment. Changes in the fair value of the contingent consideration would be recognized as an expense within the Condensed Consolidated Statements of Operations. The transaction was accounted for using the acquisition method, and as a result, assets acquired and liabilities assumed were recorded at their estimated fair values as of the acquisition date. The preliminary fair values were based on management’s analysis as well as work performed by third‑party valuation specialists. We are in the process of finalizing the valuation of the assets. The following table summarizes the purchase price allocation (in thousands) as well as the estimated useful lives of the acquired intangible assets over which they are amortized on a straight-line basis, as this approximates the pattern in which economic benefits are consumed: Amount Estimated Useful Life (in years) Net assets $ 270 Identified intangible assets: Customer relationships 1,170 5.0 Technology and database 3,620 10.0 Trademark and trade name 370 10.0 Non-compete agreement 60 5.0 Backlog 140 1.0 Total intangible assets subject to amortization 5,360 8.6 Goodwill 8,811 Indefinite Purchase consideration, paid in cash $ 14,441 Goodwill is mainly attributable to synergies expected from the acquisition and assembled workforce and is deductible for U.S. federal income tax purposes. We incurred a total of $210,000 in transaction costs related to the acquisition and expensed all transaction costs incurred during the period in which such service was received. The results of operations of WegoWise since the acquisition are included in our Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2018 . Revenue and net income (loss) attributable to WegoWise, in the period from the acquisition date of August 31, 2018 through September 30, 2018 , were $79,000 and $(329,000) , respectively. The following unaudited pro forma information has been prepared for illustrative purposes only, and assumes that the acquisition occurred on January 1, 2017 and includes pro forma adjustments related to the amortization of acquired intangible assets, elimination of historical interest expense on WegoWise debt, which was paid off as part of the transaction, and the transaction costs incurred. The unaudited pro forma results have been prepared based on estimates and assumptions, which we believe are reasonable; however, they are not necessarily indicative of the consolidated results of operations had the acquisition occurred on January 1, 2017, or of future results of operations. The unaudited pro forma results are as follows (in thousands): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Revenue $ 50,850 $ 38,653 $ 142,158 $ 108,172 Net income $ 5,484 $ 2,423 $ 15,444 $ 3,493 Net income per common share: Basic $ 0.16 $ 0.07 $ 0.45 $ 0.10 Diluted $ 0.15 $ 0.07 $ 0.43 $ 0.10 |
Investment Securities and Fair
Investment Securities and Fair Value Measurements | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Investment Securities and Fair Value Measurements | Investment Securities and Fair Value Measurements Investment Securities Investment securities classified as available-for-sale consisted of the following at September 30, 2018 and December 31, 2017 (in thousands): September 30, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Corporate bonds $ 33,239 $ 1 $ (180 ) $ 33,060 Agency securities 10,283 — (45 ) 10,238 Certificates of deposit 492 — (1 ) 491 Treasury securities 7,902 — (7 ) 7,895 Total available-for-sale investment securities $ 51,916 $ 1 $ (233 ) $ 51,684 December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Corporate bonds $ 38,383 $ — $ (166 ) $ 38,217 Agency securities 11,045 — (42 ) 11,003 Certificates of deposit 2,982 1 (2 ) 2,981 Total available-for-sale investment securities $ 52,410 $ 1 $ (210 ) $ 52,201 As of September 30, 2018 , the unrealized losses on investment securities which have been in a net loss position for twelve months or greater were not material. These unrealized losses are considered temporary and there were no impairments considered to be "other-than-temporary" based on our evaluation of available evidence, which includes our intent to hold these investments to maturity or until a recovery of the cost basis. At September 30, 2018 and December 31, 2017 , the contractual maturities of our investments did not exceed 36 months . The fair values of available-for-sale investment securities, by remaining contractual maturity, are as follows (in thousands): September 30, 2018 December 31, 2017 Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value Due in one year or less $ 31,949 $ 31,823 $ 29,850 $ 29,800 Due after one year through three years 19,967 19,861 22,560 22,401 Total available-for-sale investment securities $ 51,916 $ 51,684 $ 52,410 $ 52,201 During the nine months ended September 30, 2018 and 2017 , we had sales and maturities (which includes calls) of investment securities, as follows (in thousands): Nine Months Ended September 30, 2018 Gross Realized Gains Gross Realized Losses Gross Proceeds from Sales Gross Proceeds from Maturities Corporate bonds $ — $ (1 ) $ — $ 16,457 Agency securities — — — 6,000 Certificates of deposit — — — 2,490 Treasury securities — — 701 3,530 Total sales and maturities (including calls) of investment securities $ — $ (1 ) $ 701 $ 28,477 Nine Months Ended September 30, 2017 Gross Realized Gains Gross Realized Losses Gross Proceeds from Sales Gross Proceeds from Maturities Corporate bonds $ — $ — $ — $ 7,440 Agency securities 1 — 15 1,044 Certificates of deposit — — — 2,490 Total sales and maturities (including calls) of investment securities $ 1 $ — $ 15 $ 10,974 Interest income, net of the amortization and accretion of the premium and discount, for the three months ended September 30, 2018 and 2017 , was $0.3 million and $0.2 million , respectively and $0.8 million and $0.5 million for the nine months ended September 30, 2018 and 2017 , respectively. Fair Value Measurements Recurring Fair Value Measurements Financial assets and financial liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following tables summarize our financial assets measured at fair value on a recurring basis as of September 30, 2018 and December 31, 2017 , by level within the fair value hierarchy (in thousands): September 30, 2018 Level 1 Level 2 Level 3 Total Fair Cash equivalents: Money market funds $ 865 $ — $ — $ 865 Available-for-sale investment securities: Corporate bonds — 33,060 — 33,060 Agency securities — 10,238 — 10,238 Certificates of deposit 491 — — 491 Treasury securities 7,895 — — 7,895 Total $ 9,251 $ 43,298 $ — $ 52,549 December 31, 2017 Level 1 Level 2 Level 3 Total Fair Cash equivalents: Money market funds $ 5,524 $ — $ — $ 5,524 Available-for-sale investment securities: Corporate bonds — 38,217 — 38,217 Agency securities — 11,003 — 11,003 Certificates of deposit 2,981 — — 2,981 Total $ 8,505 $ 49,220 $ — $ 57,725 The carrying amounts of cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities approximate fair value because of the short maturity of these items. There were no changes to our valuation techniques used to measure financial asset and financial liability fair values on a recurring basis during the nine months ended September 30, 2018 . The valuation techniques for the financial assets in the tables above are as follows: Cash Equivalents As of September 30, 2018 and December 31, 2017 , cash equivalents include cash invested in money market funds. Fair value is based on market prices for identical assets. Available-for-Sale Investment Securities The fair values of our corporate bonds and agency securities are based on pricing determined using inputs other than quoted prices that are observable either directly or indirectly, such as yield curve, volatility factors, credit spreads, default rates, loss severity, current market and contractual prices for the underlying instruments or debt, broker and dealer quotes, as well as other relevant economic measures. The fair values of our certificates of deposit and treasury securities are based on market prices for identical assets. Contingent Consideration Contingent consideration payable in connection with acquisitions is measured at fair value each period and is based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The valuation of contingent consideration uses assumptions we believe would be made by a market participant. We assess these estimates on an on-going basis as additional data impacting the assumptions become available. We determine the fair value of the contingent consideration using the probability weighted discounted cash flow method. Non-Recurring Fair Value Measurements Certain assets, including goodwill, intangible assets and our note receivable with SecureDocs, are also subject to measurement at fair value on a non-recurring basis using Level 3 measurement, but only when they are deemed to be impaired as a result of an impairment test. For the nine months ended September 30, 2018 and 2017 , no impairments were identified on those assets required to be measured at fair value on a non-recurring basis. |
Internal-Use Software Developme
Internal-Use Software Development Costs | 9 Months Ended |
Sep. 30, 2018 | |
Research and Development [Abstract] | |
Internal-Use Software Development Costs | Internal-Use Software Development Costs Internal-use software development costs as of September 30, 2018 and December 31, 2017 were as follows (in thousands): September 30, December 31, Internal use software development costs, gross $ 54,067 $ 44,626 Less: Accumulated amortization (34,895 ) (27,017 ) Internal use software development costs, net $ 19,172 $ 17,609 Capitalized software development costs for the three months ended September 30, 2018 and 2017 were $3.6 million and $2.9 million , respectively, and $9.7 million and $8.4 million for the nine months ended September 30, 2018 and 2017 , respectively. Amortization expense with respect to software development costs totaled $2.8 million and $2.3 million for the three months ended September 30, 2018 and 2017 , respectively, and $8.1 million and $6.6 million for the nine months ended September 30, 2018 and 2017 , respectively. Future amortization expense with respect to capitalized software development costs as of September 30, 2018 is estimated as follows (in thousands): Years Ending December 31, 2018 $ 2,784 2019 9,294 2020 5,453 2021 1,641 Total amortization expense $ 19,172 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | Intangible Assets and Goodwill Intangible assets consisted of the following as of September 30, 2018 and December 31, 2017 (in thousands): September 30, 2018 Gross Carrying Accumulated Net Carrying Weighted Customer relationships $ 1,960 $ (641 ) $ 1,319 5.0 Technology and database 8,431 (4,504 ) 3,927 8.0 Trademarks & trade names 1,300 (613 ) 687 9.0 Partner relationships 680 (680 ) — 3.0 Non-compete agreements 100 (41 ) 59 4.0 Domain names 273 (273 ) — 5.0 Patents 285 (226 ) 59 5.0 Backlog 140 (12 ) 128 1.0 $ 13,169 $ (6,990 ) $ 6,179 7.0 December 31, 2017 Gross Carrying Accumulated Net Carrying Weighted Average Useful Life in Years Customer relationships $ 790 $ (538 ) $ 252 5.0 Technology 4,811 (3,871 ) 940 6.0 Trademarks & trade names 930 (539 ) 391 9.0 Partner relationships 680 (623 ) 57 3.0 Non-compete agreements 40 (37 ) 3 3.0 Domain names 273 (273 ) — 5.0 Patents 285 (203 ) 82 5.0 $ 7,809 $ (6,084 ) $ 1,725 5.9 Amortization expense with respect to intangible assets for the three months ended September 30, 2018 and 2017 was $0.3 million and $0.4 million , respectively, and $0.9 million and $1.1 million for the nine months ended September 30, 2018 and 2017 , respectively. Future amortization expense with respect to intangible assets as of September 30, 2018 is estimated as follows (in thousands): Years Ending December 31, 2018 $ 285 2019 1,091 2020 904 2021 769 2022 706 Thereafter 2,424 Total amortization expense $ 6,179 Our goodwill balance is solely attributable to acquisitions. There have been no impairment charges recorded against goodwill. The change in the carrying amount of goodwill is as follows (in thousands) : Goodwill as of December 31, 2017 $ 6,737 Goodwill from acquisition of WegoWise 8,811 Goodwill as of September 30, 2018 $ 15,548 |
Commitment and Contingencies
Commitment and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Lease Obligations As of September 30, 2018 , we had operating lease obligations of approximately $27.8 million through 2028. We recorded rent expense of $0.6 million and $0.5 million for the three months ended September 30, 2018 and 2017 , respectively, and $1.7 million and $1.5 million for the nine months ended September 30, 2018 and 2017 , respectively. On July 27, 2018, we entered into a new lease agreement (the "Lease") with Nassau Land Company, L.P. (the "Landlord"), to lease approximately 86,000 square feet of office space located at 70 Castilian Drive in Santa Barbara, California (the "Premises"), which is directly adjacent to our corporate headquarters. The term of the Lease is 10 years, beginning on September 1, 2018 (the "Commencement Date"), and ending on the tenth anniversary of the Commencement Date. The term may be extended for two additional five year terms at our election. Beginning March 1, 2019, we will pay a base rent of approximately $80,000 per month for 60% of the Premises. Beginning March 1, 2020, we will pay a base rent of approximately $107,000 per month for 80% of the Premises. Beginning June 1, 2020, we will pay a base rent of approximately $134,000 per month for 100% of the Premises. The base rent will increase 3% annually, with the first such increase effective on March 1, 2020. On July 27, 2018, we also entered into a lease amendment for 90 Castilian Drive in Santa Barbara, California. This amendment extends the term of the lease from November 2020 to April 2023. The term may be extended for two additional three year terms at our election. The total commitment under this lease extension is $1.8 million . All other terms and conditions from the original lease and previous amendments remain the same. On September 30, 2018, we entered into a Membership Agreement (the “Membership Agreement”) with WeWork to lease office space located at 7300 Lone Star Drive in Plano, Texas. The term of the Membership Agreement commences on December 1, 2018 and is for a period of 24 months. We will pay a fee of $61,000 per month for the leased premises. Line of Credit We are party to a Credit Agreement with Wells Fargo, as administrative agent, and the lenders that are parties thereto (as amended, the “Credit Agreement”). Under the terms of the Credit Agreement, the lenders made available to us a $25.0 million revolving line of credit (the “Revolving Facility”). Borrowings under the Revolving Facility are subject to the satisfaction of customary conditions. The Revolving Facility matures on October 9, 2020; however, we can make payments on the Revolving Facility and cancel it in full at any time without premium or penalty. As of September 30, 2018 and December 31, 2017 , we had no outstanding balance and were in compliance with the financial covenants under the Revolving Facility. Legal Liability to Landlord Insurance We have a wholly owned subsidiary, Terra Mar Insurance Company, Inc., which was established to provide our customers with the option to purchase legal liability to landlord insurance. If our customers choose to use this insurance service, they are issued an insurance policy underwritten by our third-party service provider. The policy has a limit of $100,000 per incident for each insured residence. We have entered into a reinsurance agreement with our third-party service provider and, as a result, we assume a 100% quota share of the legal liability to landlord insurance provided to our customers through our third-party service provider. In cost of revenue, we accrue the expense for reported claims and an estimate of losses incurred but not reported by our property manager customers, as we bear the risk related to all such claims. Our liability for reported claims and incurred but not reported claims as of September 30, 2018 and December 31, 2017 was $0.7 million and $0.5 million , respectively, and is included in Other current liabilities on the Condensed Consolidated Balance Sheets. Included in Other current assets as of September 30, 2018 and December 31, 2017 , are $1.1 million and $1.8 million , respectively, of deposits held with a third party related to requirements to maintain collateral for this insurance service. Litigation On September 28, 2017, a putative federal class action styled Leo v. AppFolio, Inc. (Civ. No. 3:17-cv-05771; W.D. Wash.) was filed naming us as a defendant and alleging certain violations of the Fair Credit Reporting Act in connection with our tenant screening Value+ service (the "Leo Litigation"). The parties recently agreed to settle the Leo Litigation and filed a notice of settlement with the court. Key to the settlement is an agreement that we do not admit any liability whatsoever in connection with the claims and allegations in the Leo Litigation. The final settlement agreement will be subject to court approval. As a result of the foregoing developments, we have determined that a loss is probable and therefore recorded an expense, net of expected insurance proceeds, of $1.1 million during the nine months September 30, 2018, within cost of revenue. We expect that our insurer will pay its portion of the settlement proceeds directly to the settlement fund following final court approval. From time to time, we are involved in various other legal proceedings arising from or related to claims incident to the ordinary course of our business activities, including actions with respect to intellectual property, employment and contractual matters. Although the results of such legal proceedings and claims cannot be predicted with certainty, we believe that we are not currently a party to any legal proceeding(s) which, if determined adversely to us, would, individually or taken together, have a material adverse effect on our business, operating results, financial condition or cash flows. Indemnification In the ordinary course of business, we may provide indemnification of varying scope and terms to customers, investors, directors and officers with respect to certain matters, including, but not limited to, losses arising out of our breach of any applicable agreements, services to be provided by us, or intellectual property infringement claims made by third parties. These indemnification provisions may survive termination of the underlying agreement and the maximum potential amount of future payments we could be required to make under these indemnification provisions may not be subject to maximum loss clauses and is indeterminable. We have never paid a material claim, nor have any legal claims been brought against us in connection with these indemnification arrangements. As of September 30, 2018 and December 31, 2017 , we had not accrued a liability for these indemnification arrangements because we determined that the likelihood of incurring any payment obligation, in connection with these indemnification arrangements is not probable or reasonably possible and the amount or range of amounts of any such liability is not reasonably estimable. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Stock Options A summary of our stock option activity for the nine months ended September 30, 2018 , is as follows (number of shares in thousands): Number of Shares Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Life in Years Options outstanding as of December 31, 2017 1,692 $ 10.81 7.3 Options granted — — Options exercised (143 ) 5.00 Options cancelled/forfeited (9 ) 15.12 Options outstanding as of September 30, 2018 1,540 $ 11.33 6.6 Included in the options outstanding as of September 30, 2018 are 172,000 and 250,000 PSOs granted in 2017 and 2016, respectively. Vesting of these PSOs is based on the achievement of pre-established performance targets for each of the years ending December 31, 2018 and 2019, and continued employment throughout the performance period. Of the PSOs granted during 2017, 132,000 shares vest based on the achievement of a pre-established free cash flow performance target for the year ending December 31, 2019, assuming achievement of the performance metric at the maximum level, which is 150% of the performance target, resulting in a maximum payout of 100% of the initial target award. The remaining 40,000 PSOs granted during 2017 have a pre-established adjusted gross margin target for the year ending December 31, 2019. PSOs tied to the gross margin performance target have two levels of vesting, with 50% vesting based on the achievement of 110% of the targeted amount and the remaining 50% vesting based on the achievement of 115% of the targeted amount. The 250,000 PSOs granted in 2016 vest based on the achievement of a pre-established free cash flow performance target for the year ending December 31, 2018, assuming achievement of the performance metric at the maximum level, which is 150% of the performance target. During the nine months ended September 30, 2018 , 250,000 PSOs vested based on the achievement of 150% of the pre-established free cash flow performance target for the year ended December 31, 2017. No expense was recognized as a result of the vesting of PSOs that vested during the nine months ended September 30, 2018 , as all expense was recognized as of December 31, 2017. We recognize expense for the PSOs based on the grant date fair value of the PSOs that we determine are probable of vesting. Adjustments to compensation expense are made each period based on changes in our estimate of the number of PSOs that are probable of vesting. Our stock-based compensation expense for stock options, including the PSOs, for the three months ended September 30, 2018 and 2017 , was $0.6 million and $0.7 million , respectively, and $1.2 million and $2.0 million for the nine months ended September 30, 2018 and 2017 , respectively. The fair value of stock options is estimated on their date of grant using the Black-Scholes option-pricing model. No stock options were granted during the three months ended September 30, 2017 or the three or nine months ended September 30, 2018 . The following table summarizes information relating to our stock options granted during the nine months ended September 30, 2017 : Nine Months Ended September 30, 2017 Stock options granted (in thousands) 172 Weighted average exercise price per share $ 24.77 Weighted average grant-date fair value per share $ 9.58 Weighted average Black-Scholes model assumptions: Risk-free interest rate 2.02 % Expected term (in years) 6.4 Expected volatility 35 % Expected dividend yield — As of September 30, 2018 , the total estimated remaining stock-based compensation expense for unvested stock options, including the PSOs, was $1.0 million , which is expected to be recognized over a weighted average period of one year. Restricted Stock Units A summary of activity in connection with our RSUs for the nine months ended September 30, 2018 is as follows (number of shares in thousands): Number of Shares Weighted Average Grant Date Fair Value per Share Unvested as of December 31, 2017 598 $ 19.75 Granted 231 44.38 Vested (168 ) 17.34 Forfeited (45 ) 26.12 Unvested as of September 30, 2018 616 $ 29.18 During the nine months ended September 30, 2018 , we granted a total of 231,000 RSUs: 157,000 RSUs are subject to time-based vesting in equal annual installments over four years ; 59,000 PSUs vest based on the achievement of a pre-established consolidated net revenue growth target for each of the years ending December 31, 2018, 2019 and 2020; and 15,000 PSUs were granted and vested as a result of the achievement of a pre-established free cash flow performance target for the year ended December 31, 2017. The number of PSUs granted, as included in the above table, assumes achievement of the performance metric at 100% of the performance target. The actual number of shares to be issued at the end of the performance period will range from 0% to 100% of the initial target awards. Achievement of the performance target between 100% and 150% of the performance target will result in a performance based cash bonus payment between 100% and 165% of the initial target awards. During the nine months ended September 30, 2018 , 30,000 of the PSUs vested and an additional 15,000 PSUs were granted and vested based on the achievement of 150% of the pre-established free cash flow performance target for the year ended December 31, 2017. No expense was recognized related to the PSUs that vested during the nine months ended September 30, 2018 , as all expense was recognized as of December 31, 2017. Included in the unvested RSUs as of September 30, 2018 are 91,000 and 26,000 PSUs granted in 2017 and 2016, respectively. Vesting of these PSUs is based on the achievement of pre-established free cash flow performance targets for each of the years ending December 31, 2018 and 2019, and continued employment throughout the performance period. The number of PSUs granted assumes achievement of the performance metric at 100% of the performance target. For the PSUs granted in 2017, the actual number of shares to be issued at the end of the performance period will range from 0% to 165% of the initial target award. For the PSUs granted in 2016, the actual number of shares to be issued at the end of the performance period will range from 0% to 150% of the initial target award. We recognize expense for the PSUs based on the grant date fair value of the PSUs that we determine are probable of vesting. Adjustments to compensation expense are made each period based on changes in our estimate of the number of PSUs that are probable of vesting. Our stock-based compensation expense for the RSUs and PSUs for the three months ended September 30, 2018 and 2017 , was $1.3 million and $1.0 million , respectively, and $3.7 million and $2.6 million for the nine months ended September 30, 2018 and 2017 , respectively. As of September 30, 2018 , the total estimated remaining stock-based compensation expense for the RSUs and PSUs was $12.2 million , which is expected to be recognized over a weighted average period of 2.3 years. Restricted Stock Awards A summary of activity in connection with our restricted stock awards for the nine months ended September 30, 2018 , is as follows (number of shares in thousands): Number of Weighted Average Unvested as of December 31, 2017 16 $ 20.93 Granted 5 61.05 Vested (14 ) 23.83 Forfeited — — Unvested as of September 30, 2018 7 $ 41.86 We have the right to repurchase any unvested restricted stock awards subject to certain conditions. Restricted stock awards vest over a four -year period for employees and a one -year period for non-employee directors. We recognized stock-based compensation expense for restricted stock awards of $84,000 for each of the three months ended September 30, 2018 and 2017 , and $250,000 and $274,000 for the nine months ended September 30, 2018 and 2017 , respectively. As of September 30, 2018 , the total estimated remaining stock-based compensation expense for unvested restricted stock awards with a repurchasing right was $234,000 which is expected to be recognized over a weighted average period of 0.7 years . |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes On December 22, 2017, the United States government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the "Tax Act"). The Tax Act significantly revises the existing tax law by, among other things, lowering the United States corporate income tax rate from 35% to 21% beginning in 2018. Our effective tax rate differs from the United States federal statutory rate of 21% primarily because our previously reported losses have been offset by a valuation allowance due to uncertainty as to the realization of those losses. For the three and nine months ended September 30, 2018 , we recorded income tax expense of $183,000 and $252,000 , respectively, on pre-tax income of $5.7 million and $17.6 million , respectively, for an effective tax rate of 3.2% and 1.4% , respectively. The income tax expense is based on our payments of state minimum and franchise taxes, and the amortization of tax deductible goodwill that is not an available source of income to realize the deferred tax asset. For the three and nine months ended September 30, 2017 , we recorded income tax expense of $52,000 and $93,000 , respectively, on pre-tax income of $3.7 million and $7.2 million , respectively, for an effective tax rate of 1.4% and 1.3% , respectively. The income tax expense is based on our payments of state minimum taxes, alternative minimum tax ("AMT") (net of available AMT credit), and the amortization of tax deductible goodwill that is not an available source of income to realize the deferred tax asset. We have recorded a full valuation allowance related to our NOLs, credit carryforwards, and other net deferred tax assets due to the uncertainty of the ultimate realization of the future benefits of those assets. To the extent we determine that all, or a portion of, our valuation allowance is no longer necessary, we will reverse the valuation allowance and recognize an income tax benefit in the reported financial statement earnings in that period. Once the valuation allowance is eliminated or reduced, its reversal will no longer be available to offset our current financial statement tax provision in future periods. We believe that there is a possibility that, within the next twelve months, sufficient positive evidence may become available to allow us to reach a conclusion that some or all of the valuation allowance will no longer be needed. Release of the valuation allowance would result in the recognition of certain net deferred tax assets and a decrease to income tax expense for the period the release is recorded. However, the timing and amount of the valuation allowance release are subject to change on the basis of the level of company profitability and other factors. |
Revenue and Other Information
Revenue and Other Information | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Revenue and Other Information | Revenue and Other Information The following table presents our revenue categories for the three and nine months ended September 30, 2018 and 2017 (in thousands): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Core solutions $ 17,908 $ 14,670 $ 51,101 $ 41,682 Value+ services 30,797 21,752 84,189 60,053 Other 1,421 1,481 4,416 4,171 Total revenues $ 50,126 $ 37,903 $ 139,706 $ 105,906 Our revenue is generated primarily from customers in the United States. All of our property and equipment is located in the United States. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Significant Accounting Policies The accompanying unaudited Condensed Consolidated Financial Statements were prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. Accordingly, these Condensed Consolidated Financial Statements should be read in conjunction with our audited consolidated financial statements and the related notes included in our Annual Report filed with the Securities and Exchange Commission ("SEC") on February 26, 2018. The year-end condensed balance sheet was derived from our audited consolidated financial statements. Our unaudited interim Condensed Consolidated Financial Statements include, in the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair statement of the Condensed Consolidated Financial Statements. The operating results for the nine months ended September 30, 2018 are not necessarily indicative of the results expected for the full year ending December 31, 2018 . |
Revenue Recognition and Deferred Costs | Revenue Recognition We generate revenue from our customers primarily for subscriptions to access our core solutions and Value+ services for our cloud-based property management and legal software solutions. Revenue is recognized upon transfer of control of promised services in an amount that reflects the consideration we expect to receive in exchange for those services. We enter into contracts that can include various combinations of services, which are generally capable of being distinct, distinct within the context of the contract, and accounted for as separate performance obligations. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. We have applied the practical expedient to recognize revenue in proportion to the amount we have the right to invoice for certain core solutions and Value+ services revenue as that amount corresponds directly with our performance completed to date. Refer to Note 10, Revenue and Other Information for the disaggregated breakdown of revenues between core solutions, Value+ services and other revenues. Core Solutions We charge our customers on a subscription basis for our core solutions. Our subscription fees are designed to scale to the size of our customers' businesses. Subscription fees for our core solutions are charged on a per-unit per-month basis for our property management software solution and on a per-user per-month basis for our legal software solution. Our customers do not have rights to the underlying software code of our solutions, and, accordingly, we recognize subscription revenue over time on a straight-line basis over the contract term beginning on the date that our service is made available to the customer. The term of our core solutions subscription agreements generally ranges from one month to one year . We typically invoice our customers for subscription services in monthly or annual installments, in advance of the subscription period. Value+ Services We charge our customers for Value+ services based on subscriptions or usage-based fees. Subscription Value+ services include website hosting and contact center services. Usage-based Value+ services include fees for services such as electronic payment processing, applicant screening, legal liability to landlord insurance, renters insurance, collections, and online vacancy advertising services. Usage-based fees are charged on a flat fee per transaction basis with no minimum usage commitments. We recognize revenue for usage-based services in the period the service is rendered. We generally invoice our customers for usage-based services on a monthly basis for services rendered in the preceding month with the exception of fees for electronic payment processing, which are generally paid by the clients of our customers at the time the electronic payment is processed. We work with third party partners to provide certain of our Value+ services. For these Value+ services, we evaluate whether we are the principal, and report revenues on a gross basis, or the agent, and report revenues on a net basis. In this assessment we consider if we obtain control of the specified services before they are transferred to the customer, as well as other indicators such as whether we are the party primarily responsible for fulfillment, and whether we have discretion in establishing price. Other Revenues Other revenues include one-time services related to implementation and data migration of our core solutions, website design services, online vacancy advertising services offered to legacy RentLinx customers, and revenues from subscriptions to our utility tracking software and compliance reporting services, as well as one-time implementation fees for legacy WegoWise customers. The fees for implementation and data migration services are billed upon signing our core subscription contract and are not recognized until the core solution is accessible and fully functional for our customer's use. Our website design services are billed when the website design is completed and delivered to the customer. The online vacancy advertising services revenue includes a combination of monthly subscription revenue, which is billed in advance and deferred over the subscription period, and verified leads and clicks for online rental vacancies, which are billed when the services have been rendered and are recognized upon completion of the services. Revenue from subscriptions to our utility tracking software and compliance reporting services are billed in advance and deferred over the subscription period. Contracts with Multiple Performance Obligations Many of our contracts with customers contain multiple performance obligations. For these contracts, the performance obligations include access and use of our core solutions, implementation services, and customer support. We account for individual performance obligations separately if they are distinct. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. The transaction price is allocated to each performance obligation on a relative standalone selling price basis. Judgment is required to determine the standalone selling price for each distinct performance obligation. We typically have more than one standalone selling price for individual products and services due to the stratification of those products and services by customers and circumstances. In these instances, we determine the standalone selling price based on our overall pricing objectives, taking into consideration customer demographics and other factors. Fees are fixed based on rates specified in the subscription agreements, which do not provide for any refunds or adjustments. In determining the transaction price, we have applied the practical expedient which allows us not to adjust the consideration for the effects of the time value of money as the time between when we transfer the promised service to a customer and when a customer pays is one year or less. We do not disclose the value of unsatisfied performance obligations for contracts with an original expected term of one year or less. Deferred Revenues We record deferred revenues when cash payments are received in advance of our performance. During the nine months ended September 30, 2018 we recognized $6.7 million of revenues that were included in the deferred revenue balance at the beginning of the period. Deferred Costs Deferred costs, which primarily consist of sales commissions, are considered incremental and recoverable costs of obtaining a contract with a customer. These costs are deferred and then amortized on a straight-line basis over a period of benefit that we have determined to be three years . We typically do not pay commissions for contract renewals. We determined the period of benefit by taking into consideration our customer contract term, the useful life of our internal-use software, average customer life, and other factors. Amortization expense for the deferred costs is included within cost of revenue and sales and marketing expense in the accompanying Condensed Consolidated Statements of Operations. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. On an ongoing basis, management evaluates its estimates based on historical data and experience, as well as various other factors that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. |
Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncements We meet the definition of an emerging growth company under the Jumpstart our Business Startups Act (the “JOBS Act”). We have irrevocably elected to opt out of the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 107(b) of the JOBS Act. In May 2014, the FASB issued ASU 2014-09, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers (the “New Revenue Standard”). The New Revenue Standard also includes Subtopic 340-40, Other Assets and Deferred Costs - Contracts with Customers , which discusses the deferral of incremental costs of obtaining a contract with a customer. We adopted the New Revenue Standard as of January 1, 2018 using the modified retrospective transition method applied to those contracts which were not completed as of that date. We recognized the cumulative effect of initially applying the New Revenue Standard as an adjustment to the opening balance of retained earnings. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. We updated our accounting policies, processes, internal controls and information systems to conform to the New Revenue Standard's reporting and disclosure requirements. The adoption of the New Revenue Standard did not have an impact on our revenues. The most significant impact relates to the deferral of incremental costs of obtaining contracts. Prior to the adoption of the New Revenue Standard, our commissions were expensed as incurred. The cumulative effects of the changes made to our Condensed Consolidated Balance Sheet at January 1, 2018 for the adoption of the New Revenue Standard were as follows (in thousands): Balance at Adjustments Balance at Assets Prepaid expenses and other current assets $ 4,546 $ 1,148 $ 5,694 Other assets 1,238 1,816 3,054 Equity Accumulated deficit $ (67,247 ) $ 2,964 $ (64,283 ) The following tables summarize the current period impacts of adopting the New Revenue Standard on our Condensed Consolidated Financial Statements (in thousands): Condensed Consolidated Balance Sheet: September 30, 2018 As Reported Balances Without Adoption of ASU 2014-09 Effect of Adoption Assets Prepaid expenses and other current assets $ 10,916 $ 8,381 $ 2,535 Other assets 6,757 3,486 3,271 Equity Accumulated deficit $ (46,965 ) $ (52,772 ) $ 5,807 Condensed Consolidated Statements of Operations: Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 As Reported Balances Without Adoption of ASU 2014-09 Effect of Adoption As Reported Balances Without Adoption of ASU 2014-09 Effect of Adoption Costs and operating expenses: Cost of revenue (exclusive of depreciation and amortization) $ 19,282 $ 19,342 $ (60 ) $ 53,624 $ 53,806 $ (182 ) Sales and marketing 8,681 9,540 (859 ) 23,711 26,371 (2,660 ) Total costs and operating expenses 44,649 45,568 (919 ) 122,747 125,589 (2,842 ) Income from operations 5,477 4,558 919 16,959 14,117 2,842 Income before provision for income taxes 5,707 4,788 919 17,570 14,728 2,842 Net income $ 5,524 $ 4,605 $ 919 $ 17,318 $ 14,476 $ 2,842 Net income per common share: Basic $ 0.16 $ 0.13 $ 0.03 $ 0.51 $ 0.42 $ 0.09 Diluted $ 0.16 $ 0.13 $ 0.03 $ 0.49 $ 0.41 $ 0.08 In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments ("ASU 2016-15"), which provides cash flow statement classification guidance for debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; distributions received from equity method investees; beneficial interests in securitization transactions; and separately identifiable cash flows and application of the predominance principle. We adopted ASU 2016-15 effective January 1, 2018. The adoption of this guidance did not have a material impact on our statements of cash flows. In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory ("ASU 2016-16"), which changes the timing of when certain intercompany transactions are recognized within the provision for income taxes. We adopted ASU 2016-16 effective January 1, 2018. The adoption of this guidance did not have a material impact on our financial condition, results of operations, cash flows or disclosures. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash ("ASU 2016-18"), which provides amendments to current guidance to address the classification and presentation of changes in restricted cash in the statement of cash flows. We adopted ASU 2016-18 effective January 1, 2018. The adoption of this guidance changed the presentation of restricted cash on our statements of cash flows. In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ("ASU 2017-04"), which eliminates Step 2 from the goodwill impairment test. The annual, or interim goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable. ASU 2017-04 also eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. ASU 2017-04 is effective for public entities for fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on dates after January 1, 2017. We early adopted ASU 2017-04 effective January 1, 2018. The adoption of this guidance did not have a material impact on our financial condition, results of operations, cash flows or disclosures. In May 2017, the FASB issued ASU No. 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting ("ASU 2017-09") . ASU 2017-09 clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. The new guidance will reduce diversity in practice and result in fewer changes to the terms of an award being accounted for as modifications. Under ASU 2017-09, an entity will not apply modification accounting to a share-based payment award if the award’s fair value, vesting conditions and classification as an equity or liability instrument are the same immediately before and after the change. ASU 2017-09 will be applied prospectively to awards modified on or after the adoption date. We adopted ASU 2017-09 effective January 1, 2018. The adoption of this guidance did not have a material impact on our financial condition, results of operations, cash flows or disclosures. Recent Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) ("ASU 2016-02"). Under ASU 2016-02, an entity will be required to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. ASU 2016-02 offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. For public companies, ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvement s ("ASU 2018-11"). Among other things, ASU 2018-11 provides administrative relief by allowing entities to implement the lease standard on a modified retrospective basis, similar to the method that we used to adopt the new revenue standard. Effectively, the modified retrospective basis permits us to adopt the lease standard through a cumulative effect adjustment to our opening balance sheet for the first quarter of fiscal year 2019, with the cumulative effect accounted for as a component of retained earnings, and report under the new lease standard on a post adoption basis. We are currently evaluating the impact these standards will have on our results of operations and cash flows, and we anticipate a material increase in assets and liabilities due to the recording of the required right-of-use asset and corresponding liability for all lease obligations that are currently classified as operating leases. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"), which amends the current accounting guidance and requires the measurement of all expected losses based on historical experience, current conditions and reasonable and supportable forecasts. This guidance amends the accounting for credit losses for available-for-sale securities and purchased financial assets with credit deterioration. ASU 2016-13 is effective for annual periods beginning after December 15, 2019, and interim periods within those annual periods. Early adoption is permitted for any interim or annual period after December 15, 2018. We do not expect the adoption of this guidance to have a material impact on our financial condition, results of operations, cash flows or disclosures. In March 2017, the FASB issued ASU No. 2017-08, Receivables-Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities (“ASU 2017-08”) . ASU 2017-08 shortens the amortization period for certain callable debt securities held at a premium. Specifically, ASU 2017-08 requires the premium to be amortized to the earliest call date. ASU 2017-08 does not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. For public companies, ASU 2017-08 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018. Early adoption is permitted, including adoption in an interim period. The amendments should be applied on a modified retrospective basis, with a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. We do not expect the adoption of this guidance to have a material impact on our financial condition, results of operations, cash flows or disclosures since our current accounting policy is consistent with ASU 2017-08. In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting ("ASU 2018-07"). This amendment expands the scope of Topic 718, Compensation—Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. ASU 2018-07 supersedes Subtopic 505-50, Equity—Equity-Based Payments to Non-Employees and is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2018. We do not expect the adoption of this guidance to have a material impact on our financial condition, results of operations, cash flows or disclosures. In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract , a series of amendments which align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by these amendments. For public business entities, the amendments are effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2019. We do not expect the adoption of this guidance to have a material impact on our financial condition, results of operations, cash flows or disclosures. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Weighted Average Number of Shares | The following table presents a reconciliation of our weighted average number of shares of our Class A and Class B common stock used to compute net income per common share (in thousands): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Weighted average common shares outstanding 34,227 33,923 34,166 33,848 Less: Weighted average unvested restricted shares subject to repurchase 8 18 12 31 Weighted average common shares outstanding; basic 34,219 33,905 34,154 33,817 Plus: Weighted average options, restricted stock units and restricted shares used to compute diluted net income per common share 1,391 1,300 1,370 1,274 Weighted average common shares outstanding; diluted 35,610 35,205 35,524 35,091 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table presents the number of anti-dilutive common shares excluded from the calculation of weighted average number of shares used to compute diluted net income per common share for the three and nine months ended September 30, 2018 and 2017 (in thousands): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Unvested restricted stock units 3 13 3 13 Contingent restricted stock units (1) 1 6 1 6 Total shares excluded from diluted net income per common share 4 19 4 19 (1) The reported shares are based on fixed price restricted stock unit (“RSU”) commitments for which the number of shares was not determined at the grant date. For the purposes of this table, the number of shares has been determined by dividing the fixed price commitment to issue shares in the future by the closing price of our common stock as of the applicable reporting period date. |
Schedule of Impact of Adoption of New Revenue Standard Impact on Financial Statements | The cumulative effects of the changes made to our Condensed Consolidated Balance Sheet at January 1, 2018 for the adoption of the New Revenue Standard were as follows (in thousands): Balance at Adjustments Balance at Assets Prepaid expenses and other current assets $ 4,546 $ 1,148 $ 5,694 Other assets 1,238 1,816 3,054 Equity Accumulated deficit $ (67,247 ) $ 2,964 $ (64,283 ) The following tables summarize the current period impacts of adopting the New Revenue Standard on our Condensed Consolidated Financial Statements (in thousands): Condensed Consolidated Balance Sheet: September 30, 2018 As Reported Balances Without Adoption of ASU 2014-09 Effect of Adoption Assets Prepaid expenses and other current assets $ 10,916 $ 8,381 $ 2,535 Other assets 6,757 3,486 3,271 Equity Accumulated deficit $ (46,965 ) $ (52,772 ) $ 5,807 Condensed Consolidated Statements of Operations: Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 As Reported Balances Without Adoption of ASU 2014-09 Effect of Adoption As Reported Balances Without Adoption of ASU 2014-09 Effect of Adoption Costs and operating expenses: Cost of revenue (exclusive of depreciation and amortization) $ 19,282 $ 19,342 $ (60 ) $ 53,624 $ 53,806 $ (182 ) Sales and marketing 8,681 9,540 (859 ) 23,711 26,371 (2,660 ) Total costs and operating expenses 44,649 45,568 (919 ) 122,747 125,589 (2,842 ) Income from operations 5,477 4,558 919 16,959 14,117 2,842 Income before provision for income taxes 5,707 4,788 919 17,570 14,728 2,842 Net income $ 5,524 $ 4,605 $ 919 $ 17,318 $ 14,476 $ 2,842 Net income per common share: Basic $ 0.16 $ 0.13 $ 0.03 $ 0.51 $ 0.42 $ 0.09 Diluted $ 0.16 $ 0.13 $ 0.03 $ 0.49 $ 0.41 $ 0.08 |
Acquisition of WegoWise (Tables
Acquisition of WegoWise (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Schedule of Purchase Price Allocation | The following table summarizes the purchase price allocation (in thousands) as well as the estimated useful lives of the acquired intangible assets over which they are amortized on a straight-line basis, as this approximates the pattern in which economic benefits are consumed: Amount Estimated Useful Life (in years) Net assets $ 270 Identified intangible assets: Customer relationships 1,170 5.0 Technology and database 3,620 10.0 Trademark and trade name 370 10.0 Non-compete agreement 60 5.0 Backlog 140 1.0 Total intangible assets subject to amortization 5,360 8.6 Goodwill 8,811 Indefinite Purchase consideration, paid in cash $ 14,441 |
Schedule of Pro Forma Information | The unaudited pro forma results are as follows (in thousands): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Revenue $ 50,850 $ 38,653 $ 142,158 $ 108,172 Net income $ 5,484 $ 2,423 $ 15,444 $ 3,493 Net income per common share: Basic $ 0.16 $ 0.07 $ 0.45 $ 0.10 Diluted $ 0.15 $ 0.07 $ 0.43 $ 0.10 |
Investment Securities and Fai_2
Investment Securities and Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Available-for-sale Securities | Investment securities classified as available-for-sale consisted of the following at September 30, 2018 and December 31, 2017 (in thousands): September 30, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Corporate bonds $ 33,239 $ 1 $ (180 ) $ 33,060 Agency securities 10,283 — (45 ) 10,238 Certificates of deposit 492 — (1 ) 491 Treasury securities 7,902 — (7 ) 7,895 Total available-for-sale investment securities $ 51,916 $ 1 $ (233 ) $ 51,684 December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Corporate bonds $ 38,383 $ — $ (166 ) $ 38,217 Agency securities 11,045 — (42 ) 11,003 Certificates of deposit 2,982 1 (2 ) 2,981 Total available-for-sale investment securities $ 52,410 $ 1 $ (210 ) $ 52,201 |
Available-for-sale Investments, by Remaining Contract Maturity | The fair values of available-for-sale investment securities, by remaining contractual maturity, are as follows (in thousands): September 30, 2018 December 31, 2017 Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value Due in one year or less $ 31,949 $ 31,823 $ 29,850 $ 29,800 Due after one year through three years 19,967 19,861 22,560 22,401 Total available-for-sale investment securities $ 51,916 $ 51,684 $ 52,410 $ 52,201 |
Schedule of Sales, Calls, and Maturities | During the nine months ended September 30, 2018 and 2017 , we had sales and maturities (which includes calls) of investment securities, as follows (in thousands): Nine Months Ended September 30, 2018 Gross Realized Gains Gross Realized Losses Gross Proceeds from Sales Gross Proceeds from Maturities Corporate bonds $ — $ (1 ) $ — $ 16,457 Agency securities — — — 6,000 Certificates of deposit — — — 2,490 Treasury securities — — 701 3,530 Total sales and maturities (including calls) of investment securities $ — $ (1 ) $ 701 $ 28,477 Nine Months Ended September 30, 2017 Gross Realized Gains Gross Realized Losses Gross Proceeds from Sales Gross Proceeds from Maturities Corporate bonds $ — $ — $ — $ 7,440 Agency securities 1 — 15 1,044 Certificates of deposit — — — 2,490 Total sales and maturities (including calls) of investment securities $ 1 $ — $ 15 $ 10,974 |
Fair Value, Assets Measured on Recurring Basis | The following tables summarize our financial assets measured at fair value on a recurring basis as of September 30, 2018 and December 31, 2017 , by level within the fair value hierarchy (in thousands): September 30, 2018 Level 1 Level 2 Level 3 Total Fair Cash equivalents: Money market funds $ 865 $ — $ — $ 865 Available-for-sale investment securities: Corporate bonds — 33,060 — 33,060 Agency securities — 10,238 — 10,238 Certificates of deposit 491 — — 491 Treasury securities 7,895 — — 7,895 Total $ 9,251 $ 43,298 $ — $ 52,549 December 31, 2017 Level 1 Level 2 Level 3 Total Fair Cash equivalents: Money market funds $ 5,524 $ — $ — $ 5,524 Available-for-sale investment securities: Corporate bonds — 38,217 — 38,217 Agency securities — 11,003 — 11,003 Certificates of deposit 2,981 — — 2,981 Total $ 8,505 $ 49,220 $ — $ 57,725 |
Internal-Use Software Develop_2
Internal-Use Software Development Costs (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Research and Development [Abstract] | |
Schedule of Capitalized Computer Software | Internal-use software development costs as of September 30, 2018 and December 31, 2017 were as follows (in thousands): September 30, December 31, Internal use software development costs, gross $ 54,067 $ 44,626 Less: Accumulated amortization (34,895 ) (27,017 ) Internal use software development costs, net $ 19,172 $ 17,609 |
Schedule of Capitalized Computer Software Future Amortization Expense | Future amortization expense with respect to capitalized software development costs as of September 30, 2018 is estimated as follows (in thousands): Years Ending December 31, 2018 $ 2,784 2019 9,294 2020 5,453 2021 1,641 Total amortization expense $ 19,172 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Intangible assets consisted of the following as of September 30, 2018 and December 31, 2017 (in thousands): September 30, 2018 Gross Carrying Accumulated Net Carrying Weighted Customer relationships $ 1,960 $ (641 ) $ 1,319 5.0 Technology and database 8,431 (4,504 ) 3,927 8.0 Trademarks & trade names 1,300 (613 ) 687 9.0 Partner relationships 680 (680 ) — 3.0 Non-compete agreements 100 (41 ) 59 4.0 Domain names 273 (273 ) — 5.0 Patents 285 (226 ) 59 5.0 Backlog 140 (12 ) 128 1.0 $ 13,169 $ (6,990 ) $ 6,179 7.0 December 31, 2017 Gross Carrying Accumulated Net Carrying Weighted Average Useful Life in Years Customer relationships $ 790 $ (538 ) $ 252 5.0 Technology 4,811 (3,871 ) 940 6.0 Trademarks & trade names 930 (539 ) 391 9.0 Partner relationships 680 (623 ) 57 3.0 Non-compete agreements 40 (37 ) 3 3.0 Domain names 273 (273 ) — 5.0 Patents 285 (203 ) 82 5.0 $ 7,809 $ (6,084 ) $ 1,725 5.9 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Future amortization expense with respect to intangible assets as of September 30, 2018 is estimated as follows (in thousands): Years Ending December 31, 2018 $ 285 2019 1,091 2020 904 2021 769 2022 706 Thereafter 2,424 Total amortization expense $ 6,179 |
Schedule of Goodwill | The change in the carrying amount of goodwill is as follows (in thousands) : Goodwill as of December 31, 2017 $ 6,737 Goodwill from acquisition of WegoWise 8,811 Goodwill as of September 30, 2018 $ 15,548 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Stock Option Activity | A summary of our stock option activity for the nine months ended September 30, 2018 , is as follows (number of shares in thousands): Number of Shares Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Life in Years Options outstanding as of December 31, 2017 1,692 $ 10.81 7.3 Options granted — — Options exercised (143 ) 5.00 Options cancelled/forfeited (9 ) 15.12 Options outstanding as of September 30, 2018 1,540 $ 11.33 6.6 |
Schedule of Valuation Assumptions, Stock Options | The following table summarizes information relating to our stock options granted during the nine months ended September 30, 2017 : Nine Months Ended September 30, 2017 Stock options granted (in thousands) 172 Weighted average exercise price per share $ 24.77 Weighted average grant-date fair value per share $ 9.58 Weighted average Black-Scholes model assumptions: Risk-free interest rate 2.02 % Expected term (in years) 6.4 Expected volatility 35 % Expected dividend yield — |
Schedule of Restricted Stock Units Activity | A summary of activity in connection with our RSUs for the nine months ended September 30, 2018 is as follows (number of shares in thousands): Number of Shares Weighted Average Grant Date Fair Value per Share Unvested as of December 31, 2017 598 $ 19.75 Granted 231 44.38 Vested (168 ) 17.34 Forfeited (45 ) 26.12 Unvested as of September 30, 2018 616 $ 29.18 |
Schedule of Restricted Stock Awards Activity | A summary of activity in connection with our restricted stock awards for the nine months ended September 30, 2018 , is as follows (number of shares in thousands): Number of Weighted Average Unvested as of December 31, 2017 16 $ 20.93 Granted 5 61.05 Vested (14 ) 23.83 Forfeited — — Unvested as of September 30, 2018 7 $ 41.86 |
Revenue and Other Information (
Revenue and Other Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Product Information by Revenue Categories | The following table presents our revenue categories for the three and nine months ended September 30, 2018 and 2017 (in thousands): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Core solutions $ 17,908 $ 14,670 $ 51,101 $ 41,682 Value+ services 30,797 21,752 84,189 60,053 Other 1,421 1,481 4,416 4,171 Total revenues $ 50,126 $ 37,903 $ 139,706 $ 105,906 |
Nature of Business (Details)
Nature of Business (Details) | 9 Months Ended |
Sep. 30, 2018 | |
Property Management | |
Business Acquisition [Line Items] | |
Revenue percentage | 90.00% |
Legal Services | |
Business Acquisition [Line Items] | |
Revenue percentage | 10.00% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Revenue Recognition and Deferred Costs Narrative (Details) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018USD ($) | Sep. 30, 2018USD ($) | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Deferred revenue, revenue recognized | $ 6,700,000 | |
Deferred costs amortization term | 3 years | |
Deferred contract costs | $ 5,800,000 | $ 5,800,000 |
Deferred contract costs, current | 2,500,000 | 2,500,000 |
Deferred contract costs, noncurrent | 3,300,000 | 3,300,000 |
Amortization of contract costs | $ 500,000 | 1,300,000 |
Capitalized costs impairments | $ 0 | |
Core solutions | Minimum | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Subscription agreement term | one month | |
Core solutions | Maximum | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Subscription agreement term | one year |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Net Income per Share Schedule of Weighted Average Number of Shares (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Weighted average common shares outstanding (in shares) | 34,227 | 33,923 | 34,166 | 33,848 |
Less: Weighted average unvested restricted shares subject to repurchase (in shares) | 8 | 18 | 12 | 31 |
Weighted average common shares outstanding; basic (in shares) | 34,219 | 33,905 | 34,154 | 33,817 |
Plus: Weighted average options, restricted stock units and restricted shares used to compute diluted net income per common share (in shares) | 1,391 | 1,300 | 1,370 | 1,274 |
Weighted average common shares outstanding; diluted (in shares) | 35,610 | 35,205 | 35,524 | 35,091 |
Shares excluded from net loss per share attributable to common stockholders (in shares) | 4 | 19 | 4 | 19 |
PSUs and PSOs | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Shares excluded from net loss per share attributable to common stockholders (in shares) | 503 | 571 | 503 | 571 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Net (Income) Loss Schedule of Antidilutive Securities (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Shares excluded from net income (loss) per common share (in shares) | 4 | 19 | 4 | 19 |
Unvested restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Shares excluded from net income (loss) per common share (in shares) | 3 | 13 | 3 | 13 |
Contingent restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Shares excluded from net income (loss) per common share (in shares) | 1 | 6 | 1 | 6 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Impact of Adoption of New Revenue Standard on the Condensed Consolidated Balance Sheet and Statement of Operations (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | |
Assets | ||||||
Prepaid expenses and other current assets | $ 10,916 | $ 10,916 | $ 5,694 | $ 4,546 | ||
Other assets | 6,757 | 6,757 | 3,054 | 1,238 | ||
Equity | ||||||
Accumulated deficit | (46,965) | (46,965) | (64,283) | (67,247) | ||
Costs and operating expenses: | ||||||
Cost of revenue (exclusive of depreciation and amortization) | 19,282 | $ 14,053 | 53,624 | $ 40,747 | ||
Sales and marketing | 8,681 | 7,257 | 23,711 | 21,556 | ||
Total costs and operating expenses | 44,649 | 34,319 | 122,747 | 98,958 | ||
Income from operations | 5,477 | 3,584 | 16,959 | 6,948 | ||
Income before provision for income taxes | 5,707 | 3,734 | 17,570 | 7,232 | ||
Net income | $ 5,524 | $ 3,682 | $ 17,318 | $ 7,139 | ||
Net income per common share: | ||||||
Basic (usd per share) | $ 0.16 | $ 0.11 | $ 0.51 | $ 0.21 | ||
Diluted (usd per share) | $ 0.16 | $ 0.10 | $ 0.49 | $ 0.20 | ||
Calculated under Revenue Guidance in Effect before Topic 606 | ||||||
Assets | ||||||
Prepaid expenses and other current assets | $ 8,381 | $ 8,381 | 4,546 | |||
Other assets | 3,486 | 3,486 | 1,238 | |||
Equity | ||||||
Accumulated deficit | (52,772) | (52,772) | $ (67,247) | |||
Costs and operating expenses: | ||||||
Cost of revenue (exclusive of depreciation and amortization) | 19,342 | 53,806 | ||||
Sales and marketing | 9,540 | 26,371 | ||||
Total costs and operating expenses | 45,568 | 125,589 | ||||
Income from operations | 4,558 | 14,117 | ||||
Income before provision for income taxes | 4,788 | 14,728 | ||||
Net income | $ 4,605 | $ 14,476 | ||||
Net income per common share: | ||||||
Basic (usd per share) | $ 0.13 | $ 0.42 | ||||
Diluted (usd per share) | $ 0.13 | $ 0.41 | ||||
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | ||||||
Assets | ||||||
Prepaid expenses and other current assets | $ 2,535 | $ 2,535 | 1,148 | |||
Other assets | 3,271 | 3,271 | 1,816 | |||
Equity | ||||||
Accumulated deficit | 5,807 | 5,807 | $ 2,964 | |||
Costs and operating expenses: | ||||||
Cost of revenue (exclusive of depreciation and amortization) | (60) | (182) | ||||
Sales and marketing | (859) | (2,660) | ||||
Total costs and operating expenses | (919) | (2,842) | ||||
Income from operations | 919 | 2,842 | ||||
Income before provision for income taxes | 919 | 2,842 | ||||
Net income | $ 919 | $ 2,842 | ||||
Net income per common share: | ||||||
Basic (usd per share) | $ 0.03 | $ 0.09 | ||||
Diluted (usd per share) | $ 0.03 | $ 0.08 |
Acquisition of WegoWise (Detail
Acquisition of WegoWise (Details) - USD ($) $ in Thousands | Aug. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | |||
Goodwill | $ 15,548 | $ 6,737 | |
WegoWise, Inc. | |||
Business Acquisition [Line Items] | |||
Consideration total, gross | $ 14,400 | ||
Escrow consideration | 2,000 | ||
Net assets | 270 | ||
Identified intangible assets | 5,360 | ||
Goodwill | 8,811 | ||
Purchase consideration, paid in cash | $ 14,441 | ||
Estimated Useful Life (in years) | 8 years 7 months 10 days | ||
Acquisition related expenses | 210 | ||
Revenue from acquiree | 79 | ||
Net income (loss) from acquiree | $ (329) | ||
WegoWise, Inc. | Customer relationships | |||
Business Acquisition [Line Items] | |||
Identified intangible assets | $ 1,170 | ||
Estimated Useful Life (in years) | 5 years | ||
WegoWise, Inc. | Technology | |||
Business Acquisition [Line Items] | |||
Identified intangible assets | $ 3,620 | ||
Estimated Useful Life (in years) | 10 years | ||
WegoWise, Inc. | Trademark and trade name | |||
Business Acquisition [Line Items] | |||
Identified intangible assets | $ 370 | ||
Estimated Useful Life (in years) | 10 years | ||
WegoWise, Inc. | Non-compete agreements | |||
Business Acquisition [Line Items] | |||
Identified intangible assets | $ 60 | ||
Estimated Useful Life (in years) | 5 years | ||
WegoWise, Inc. | Backlog | |||
Business Acquisition [Line Items] | |||
Identified intangible assets | $ 140 | ||
Estimated Useful Life (in years) | 1 year |
Acquisition of WegoWise - Pro F
Acquisition of WegoWise - Pro Forma Information (Details) - WegoWise, Inc. - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Business Acquisition [Line Items] | ||||
Revenue | $ 50,850 | $ 38,653 | $ 142,158 | $ 108,172 |
Net income | $ 5,484 | $ 2,423 | $ 15,444 | $ 3,493 |
Net income per common share: | ||||
Basic (in dollars per share) | $ 0.16 | $ 0.07 | $ 0.45 | $ 0.10 |
Diluted (in dollars per share) | $ 0.15 | $ 0.07 | $ 0.43 | $ 0.10 |
Investment Securities and Fai_3
Investment Securities and Fair Value Measurements - Investment Securities (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Available-for-sale Securities, Amortized Cost Basis [Abstract] (Deprecated 2018-01-31) | ||
Total available-for-sale investment securities | $ 51,916 | $ 52,410 |
Gross Unrealized Gains | 1 | 1 |
Gross Unrealized Losses | (233) | (210) |
Estimated Fair Value | $ 51,684 | $ 52,201 |
Maximum contractual maturity period | 36 months | 36 months |
Amortized Cost | ||
Due in 1 year or less | $ 31,949 | $ 29,850 |
Due after 1 year through 3 years | 19,967 | 22,560 |
Total available-for-sale investment securities | 51,916 | 52,410 |
Estimated Fair Value | ||
Due in one year or less | 31,823 | 29,800 |
Due after one year through three years | 19,861 | 22,401 |
Total available-for-sale investment securities | 51,684 | 52,201 |
Corporate bonds | ||
Available-for-sale Securities, Amortized Cost Basis [Abstract] (Deprecated 2018-01-31) | ||
Total available-for-sale investment securities | 33,239 | 38,383 |
Gross Unrealized Gains | 1 | 0 |
Gross Unrealized Losses | (180) | (166) |
Estimated Fair Value | 33,060 | 38,217 |
Amortized Cost | ||
Total available-for-sale investment securities | 33,239 | 38,383 |
Estimated Fair Value | ||
Total available-for-sale investment securities | 33,060 | 38,217 |
Agency securities | ||
Available-for-sale Securities, Amortized Cost Basis [Abstract] (Deprecated 2018-01-31) | ||
Total available-for-sale investment securities | 10,283 | 11,045 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (45) | (42) |
Estimated Fair Value | 10,238 | 11,003 |
Amortized Cost | ||
Total available-for-sale investment securities | 10,283 | 11,045 |
Estimated Fair Value | ||
Total available-for-sale investment securities | 10,238 | 11,003 |
Certificates of deposit | ||
Available-for-sale Securities, Amortized Cost Basis [Abstract] (Deprecated 2018-01-31) | ||
Total available-for-sale investment securities | 492 | 2,982 |
Gross Unrealized Gains | 0 | 1 |
Gross Unrealized Losses | (1) | (2) |
Estimated Fair Value | 491 | 2,981 |
Amortized Cost | ||
Total available-for-sale investment securities | 492 | 2,982 |
Estimated Fair Value | ||
Total available-for-sale investment securities | 491 | $ 2,981 |
Treasury securities | ||
Available-for-sale Securities, Amortized Cost Basis [Abstract] (Deprecated 2018-01-31) | ||
Total available-for-sale investment securities | 7,902 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (7) | |
Estimated Fair Value | 7,895 | |
Amortized Cost | ||
Total available-for-sale investment securities | 7,902 | |
Estimated Fair Value | ||
Total available-for-sale investment securities | $ 7,895 |
Investment Securities and Fai_4
Investment Securities and Fair Value Measurements - Sales, Calls and Maturities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Debt Securities, Available-for-sale [Line Items] | ||||
Gross Realized Gains | $ 0 | $ 1 | ||
Gross Realized Losses | (1) | 0 | ||
Sales of investment securities | 701 | 15 | ||
Gross Proceeds from Maturities | 28,477 | 10,974 | ||
Accretion (amortization) of discounts and premiums | $ 300 | $ 200 | 800 | 500 |
Corporate bonds | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Gross Realized Gains | 0 | 0 | ||
Gross Realized Losses | (1) | 0 | ||
Sales of investment securities | 0 | 0 | ||
Gross Proceeds from Maturities | 16,457 | 7,440 | ||
Agency securities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Gross Realized Gains | 0 | 1 | ||
Gross Realized Losses | 0 | 0 | ||
Sales of investment securities | 0 | 15 | ||
Gross Proceeds from Maturities | 6,000 | 1,044 | ||
Certificates of deposit | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Gross Realized Gains | 0 | 0 | ||
Gross Realized Losses | 0 | 0 | ||
Sales of investment securities | 0 | 0 | ||
Gross Proceeds from Maturities | 2,490 | $ 2,490 | ||
Treasury securities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Gross Realized Gains | 0 | |||
Gross Realized Losses | 0 | |||
Sales of investment securities | 701 | |||
Gross Proceeds from Maturities | $ 3,530 |
Investment Securities and Fai_5
Investment Securities and Fair Value Measurements - Fair Value Measurements (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated Fair Value | $ 51,684 | $ 52,201 |
Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated Fair Value | 33,060 | 38,217 |
Agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated Fair Value | 10,238 | 11,003 |
Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated Fair Value | 491 | 2,981 |
Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated Fair Value | 7,895 | |
Fair value, recurring measurements | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 52,549 | 57,725 |
Fair value, recurring measurements | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated Fair Value | 33,060 | 38,217 |
Fair value, recurring measurements | Agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated Fair Value | 10,238 | 11,003 |
Fair value, recurring measurements | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated Fair Value | 491 | 2,981 |
Fair value, recurring measurements | Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated Fair Value | 7,895 | |
Fair value, recurring measurements | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 865 | 5,524 |
Fair value, recurring measurements | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 9,251 | 8,505 |
Fair value, recurring measurements | Level 1 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated Fair Value | 0 | 0 |
Fair value, recurring measurements | Level 1 | Agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated Fair Value | 0 | 0 |
Fair value, recurring measurements | Level 1 | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated Fair Value | 491 | 2,981 |
Fair value, recurring measurements | Level 1 | Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated Fair Value | 7,895 | |
Fair value, recurring measurements | Level 1 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 865 | 5,524 |
Fair value, recurring measurements | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 43,298 | 49,220 |
Fair value, recurring measurements | Level 2 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated Fair Value | 33,060 | 38,217 |
Fair value, recurring measurements | Level 2 | Agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated Fair Value | 10,238 | 11,003 |
Fair value, recurring measurements | Level 2 | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated Fair Value | 0 | 0 |
Fair value, recurring measurements | Level 2 | Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated Fair Value | 0 | |
Fair value, recurring measurements | Level 2 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Fair value, recurring measurements | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 0 | 0 |
Fair value, recurring measurements | Level 3 | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated Fair Value | 0 | 0 |
Fair value, recurring measurements | Level 3 | Agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated Fair Value | 0 | 0 |
Fair value, recurring measurements | Level 3 | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated Fair Value | 0 | 0 |
Fair value, recurring measurements | Level 3 | Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated Fair Value | 0 | |
Fair value, recurring measurements | Level 3 | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 0 | $ 0 |
Internal-Use Software Develop_3
Internal-Use Software Development Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Research and Development [Abstract] | |||||
Internal use software development costs, gross | $ 54,067 | $ 54,067 | $ 44,626 | ||
Less: Accumulated amortization | (34,895) | (34,895) | (27,017) | ||
Internal use software development costs, net | 19,172 | 19,172 | $ 17,609 | ||
Capitalized software development costs during the period | 3,600 | $ 2,900 | 9,700 | $ 8,400 | |
Amortization expense with respect to software development costs during the period | $ 2,800 | $ 2,300 | $ 8,100 | $ 6,600 |
Internal-Use Software Develop_4
Internal-Use Software Development Costs - Capitalized Computer Software Future Amortization Expense (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Research and Development [Abstract] | ||
2,018 | $ 2,784 | |
2,019 | 9,294 | |
2,020 | 5,453 | |
2,021 | 1,641 | |
Internal use software development costs, net | $ 19,172 | $ 17,609 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill - Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2015 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||||||
Gross Carrying Value | $ 13,169 | $ 13,169 | $ 7,809 | |||
Accumulated Amortization | (6,990) | (6,990) | (6,084) | |||
Net Carrying Value | 6,179 | 6,179 | 1,725 | |||
Amortization expense | 300 | $ 400 | $ 900 | $ 1,100 | ||
Weighted average | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Weighted Average Useful Life in Years | 7 years 4 days | 5 years 10 months 28 days | ||||
Customer relationships | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Gross Carrying Value | 1,960 | $ 1,960 | 790 | |||
Accumulated Amortization | (641) | (641) | (538) | |||
Net Carrying Value | 1,319 | $ 1,319 | 252 | |||
Customer relationships | Weighted average | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Weighted Average Useful Life in Years | 5 years | 5 years | ||||
Technology | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Gross Carrying Value | 8,431 | $ 8,431 | 4,811 | |||
Accumulated Amortization | (4,504) | (4,504) | (3,871) | |||
Net Carrying Value | 3,927 | $ 3,927 | 940 | |||
Technology | Weighted average | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Weighted Average Useful Life in Years | 8 years | 6 years | ||||
Trademark and trade name | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Gross Carrying Value | 1,300 | $ 1,300 | 930 | |||
Accumulated Amortization | (613) | (613) | (539) | |||
Net Carrying Value | 687 | $ 687 | 391 | |||
Trademark and trade name | Weighted average | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Weighted Average Useful Life in Years | 9 years | 9 years | ||||
Partner relationships | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Gross Carrying Value | 680 | $ 680 | 680 | |||
Accumulated Amortization | (680) | (680) | (623) | |||
Net Carrying Value | 0 | $ 0 | 57 | |||
Partner relationships | Weighted average | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Weighted Average Useful Life in Years | 3 years | 3 years | ||||
Non-compete agreements | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Gross Carrying Value | 100 | $ 100 | 40 | |||
Accumulated Amortization | (41) | (41) | (37) | |||
Net Carrying Value | 59 | $ 59 | 3 | |||
Non-compete agreements | Weighted average | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Weighted Average Useful Life in Years | 4 years | 3 years | ||||
Domain names | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Gross Carrying Value | 273 | $ 273 | 273 | |||
Accumulated Amortization | (273) | (273) | (273) | |||
Net Carrying Value | 0 | $ 0 | 0 | |||
Domain names | Weighted average | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Weighted Average Useful Life in Years | 5 years | 5 years | ||||
Patents | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Gross Carrying Value | 285 | $ 285 | 285 | |||
Accumulated Amortization | (226) | (226) | (203) | |||
Net Carrying Value | 59 | $ 59 | $ 82 | |||
Patents | Weighted average | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Weighted Average Useful Life in Years | 5 years | 5 years | ||||
Backlog | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Gross Carrying Value | 140 | $ 140 | ||||
Accumulated Amortization | (12) | (12) | ||||
Net Carrying Value | $ 128 | $ 128 | ||||
Backlog | Weighted average | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Weighted Average Useful Life in Years | 1 year |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill - Future Amortization (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2,018 | $ 285 | |
2,019 | 1,091 | |
2,020 | 904 | |
2,021 | 769 | |
2,022 | 706 | |
Thereafter | 2,424 | |
Net Carrying Value | $ 6,179 | $ 1,725 |
Intangible Assets and Goodwil_4
Intangible Assets and Goodwill - Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Goodwill [Roll Forward] | |
Goodwill as of December 31, 2017 | $ 6,737 |
Goodwill from acquisition of WegoWise | 8,811 |
Goodwill as of September 30, 2018 | $ 15,548 |
Commitment and Contingencies (D
Commitment and Contingencies (Details) ft² in Thousands | Sep. 30, 2018USD ($) | Jul. 27, 2018USD ($)ft²extension_term | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) |
Loss Contingencies [Line Items] | |||||||
Operating lease obligations | $ 27,800,000 | $ 27,800,000 | $ 27,800,000 | ||||
Rent expense | 600,000 | $ 500,000 | 1,700,000 | $ 1,500,000 | |||
Area of office space rented (in square feet) | ft² | 86 | ||||||
Lease term | 10 years | ||||||
Number of extension terms | extension_term | 2 | ||||||
Lease renewal term | 5 years | ||||||
Monthly rental expense for 60% of the Premises | $ 80,000 | ||||||
Monthly rental expense for 80% of the Premises | 107,000 | ||||||
Monthly rental expense for 100% of the Premises | $ 134,000 | ||||||
Annual base rate increase, percent | 3.00% | ||||||
Per incident policy limit | $ 100,000 | ||||||
Quota share of tenant liability insurance provided, percent | 100.00% | ||||||
Leo v. AppFolio, Inc. | |||||||
Loss Contingencies [Line Items] | |||||||
Expense, net of expected insurance proceeds | 1,100,000 | ||||||
Other current liabilities | |||||||
Loss Contingencies [Line Items] | |||||||
Liability for reported claims and claims incurred but not reported | 700,000 | 700,000 | $ 700,000 | $ 500,000 | |||
Other current assets | |||||||
Loss Contingencies [Line Items] | |||||||
Deposits held with a third party related to insurance services collateral | 1,100,000 | 1,100,000 | 1,100,000 | 1,800,000 | |||
Credit Facility | Revolving Facility | |||||||
Loss Contingencies [Line Items] | |||||||
Maximum borrowing capacity | 25,000,000 | 25,000,000 | 25,000,000 | ||||
Credit Facility | Term Loan | |||||||
Loss Contingencies [Line Items] | |||||||
Line of credit, amount outstanding | 0 | $ 0 | $ 0 | $ 0 | |||
Lease on 90 Castilian Drive, Santa Barbara, California | |||||||
Loss Contingencies [Line Items] | |||||||
Operating lease obligations | $ 1,800,000 | ||||||
Number of extension terms | extension_term | 2 | ||||||
Lease renewal term | 3 years | ||||||
Lease on 7300 Lone Star Drive in Plano, Texas | |||||||
Loss Contingencies [Line Items] | |||||||
Rent expense | $ 61,000 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||||
Options outstanding, beginning balance (shares) | 1,692,000 | ||||
Options granted (shares) | 0 | 0 | 0 | 172,000 | |
Options exercised (shares) | (143,000) | ||||
Options cancelled/forfeited (shares) | (9,000) | ||||
Options outstanding, ending balance (shares) | 1,540,000 | 1,540,000 | 1,692,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |||||
Options outstanding, weighted average exercise price, beginning balance (usd per share) | $ 10.81 | ||||
Options granted, weighted average exercise price (usd per share) | 0 | $ 24.77 | |||
Options exercised, weighted average exercise price (usd per share) | 5 | ||||
Options cancelled/forfeited, weighted average exercise price (usd per share) | 15.12 | ||||
Options outstanding, weighted average exercise price, ending balance (usd per share) | $ 11.33 | $ 11.33 | $ 10.81 | ||
Weighted average remaining contractual life, in years | 6 years 7 months 6 days | 7 years 3 months 18 days | |||
Stock Options and PSOs | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |||||
Stock-based compensation expense | $ 600,000 | $ 700,000 | $ 1,200,000 | $ 2,000,000 | |
PSOs | 2019 and 2018 Performance Metric Granted in 2017 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||||
Options outstanding, ending balance (shares) | 172,000 | 172,000 | |||
PSOs | 2018 Performance Metric Granted in 2016 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||||
Options granted (shares) | 250,000 | ||||
Options outstanding, ending balance (shares) | 250,000 | 250,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |||||
Percent of targeted performance metric | 150.00% | 150.00% | |||
PSOs | 2019 Performance Metric, Targeted Free Cash Flow Performance Metric | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||||
Options granted (shares) | 132,000 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |||||
Percent of targeted awards that will vest | 150.00% | 150.00% | |||
Percent of targeted performance metric | 100.00% | 100.00% | |||
PSOs | 2019 Performance Metric, Adjusted Gross Margin Target | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||||
Options granted (shares) | 40,000 | ||||
PSOs | 2019 Performance Metric, Adjusted Gross Margin Target | Vesting Tranche One | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |||||
Percent of targeted awards that will vest | 110.00% | 110.00% | |||
Percent of targeted performance metric | 50.00% | 50.00% | |||
PSOs | 2019 Performance Metric, Adjusted Gross Margin Target | Vesting Tranche Two | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |||||
Percent of targeted awards that will vest | 115.00% | 115.00% | |||
Percent of targeted performance metric | 50.00% | 50.00% | |||
PSOs | 2017 Performance Metric, Targeted Free Cash Flow Performance Metric | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |||||
Share-based compensation options vested (shares) | 250,000 | ||||
Percent of achievement of award target performance metric | 150.00% | 150.00% | |||
PSOs | 2017 Performance Metric | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |||||
Stock-based compensation expense | $ 0 |
Stock-Based Compensation - Valu
Stock-Based Compensation - Valuation Assumptions (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options granted (shares) | 0 | 0 | 0 | 172,000 |
Options granted, weighted average exercise price (usd per share) | $ 0 | $ 24.77 | ||
Weighted average grant-date fair value per share (usd per share) | $ 9.58 | |||
Stock Options and PSOs | ||||
Weighted average Black-Scholes model assumptions: | ||||
Risk-free interest rate | 2.02% | |||
Expected term (in years) | 6 years 4 months 24 days | |||
Expected volatility | 35.00% | |||
Expected dividend yield | 0.00% | |||
Remaining stock-based compensation expense for unvested options, not yet recognized | $ 1 | $ 1 | ||
Stock-based compensation expense, weighted average recognition period | 1 year |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Units Activity (Details) - RSUs and PSUs shares in Thousands | 9 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Number of Shares | |
Unvested, beginning balance (shares) | shares | 598 |
Granted (shares) | shares | 231 |
Vested (shares) | shares | (168) |
Forfeited (shares) | shares | (45) |
Unvested, ending balance (shares) | shares | 616 |
Weighted- Average Grant Date Fair Value per Share | |
Unvested, beginning balance (usd per share) | $ / shares | $ 19.75 |
Granted (usd per share) | $ / shares | 44.38 |
Vested (usd per share) | $ / shares | 17.34 |
Forfeited (usd per share) | $ / shares | 26.12 |
Unvested, ending balance (usd per share) | $ / shares | $ 29.18 |
Stock-Based Compensation - Re_2
Stock-Based Compensation - Restricted Stock Units (Details) - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
RSUs and PSUs | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares granted in period (shares) | 231 | ||||
Share-based compensation options vested in period (shares) | 168 | ||||
Stock-based compensation expense | $ 1.3 | $ 1 | $ 3.7 | $ 2.6 | |
Remaining stock-based compensation expense for unvested shares, not yet recognized | $ 12.2 | $ 12.2 | |||
Stock-based compensation expense, weighted average recognition period | 2 years 3 months 7 days | ||||
Restricted Stock Units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares granted in period (shares) | 157 | ||||
Vesting period | 4 years | ||||
PSUs | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares granted in period (shares) | 59 | ||||
Percent of targeted performance metric | 100.00% | 100.00% | |||
Share-based compensation options vested in period (shares) | 30 | ||||
Percent of achievement of award target performance metric | 150.00% | ||||
PSUs | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Percent of targeted performance metric | 0.00% | 0.00% | |||
PSUs | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Percent of targeted performance metric | 100.00% | 100.00% | |||
PSUs | Vesting Tranche One | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Percent of targeted performance metric | 100.00% | 100.00% | |||
Performance based cash bonus payment percent | 100.00% | ||||
PSUs | Vesting Tranche One | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Percent of targeted performance metric | 150.00% | 150.00% | |||
Performance based cash bonus payment percent | 165.00% | ||||
PSUs | 2017 Performance Metric | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares granted in period (shares) | 15 | ||||
PSUs | 2016 Performance Metric | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares granted in period (shares) | 15 | ||||
PSUs Granted in 2017 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares granted in period (shares) | 91 | ||||
PSUs Granted in 2017 | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Percent of targeted performance metric | 0.00% | 0.00% | |||
PSUs Granted in 2017 | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Percent of targeted performance metric | 165.00% | 165.00% | |||
PSUs Granted in 2016 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares granted in period (shares) | 26 | ||||
PSUs Granted in 2016 | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Percent of targeted performance metric | 0.00% | 0.00% | |||
PSUs Granted in 2016 | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Percent of targeted performance metric | 150.00% | 150.00% |
Stock-Based Compensation - Re_3
Stock-Based Compensation - Restricted Stock Awards (Details) - Restricted Stock Awards - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Number of Shares | ||||
Unvested, beginning balance (shares) | 16 | |||
Granted (shares) | 5 | |||
Vested (shares) | (14) | |||
Forfeited (shares) | 0 | |||
Unvested, ending balance (shares) | 7 | 7 | ||
Weighted Average Grant Date Fair Value per Share | ||||
Unvested, beginning balance (usd per share) | $ 20.93 | |||
Granted (usd per share) | 61.05 | |||
Vested (usd per share) | 23.83 | |||
Forfeited (usd per share) | 0 | |||
Unvested, ending balance (usd per share) | $ 41.86 | $ 41.86 | ||
Stock-based compensation expense | $ 84 | $ 84 | $ 250 | $ 274 |
Remaining stock-based compensation expense for unvested shares, not yet recognized | $ 234 | $ 234 | ||
Stock-based compensation expense, weighted average recognition period | 8 months 19 days | |||
Employee | ||||
Weighted Average Grant Date Fair Value per Share | ||||
Vesting period | 4 years | |||
Non-Employee Director | ||||
Weighted Average Grant Date Fair Value per Share | ||||
Vesting period | 1 year |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||||
U.S Federal statutory rate | 21.00% | 35.00% | |||
Income tax expense | $ 183 | $ 52 | $ 252 | $ 93 | |
Pre-tax income | $ 5,707 | $ 3,734 | $ 17,570 | $ 7,232 | |
Effective tax rate | 3.20% | 1.40% | 1.40% | 1.30% |
Revenue and Other Information_2
Revenue and Other Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 50,126 | $ 37,903 | $ 139,706 | $ 105,906 |
Core solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 17,908 | 14,670 | 51,101 | 41,682 |
Value plus services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 30,797 | 21,752 | 84,189 | 60,053 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 1,421 | $ 1,481 | $ 4,416 | $ 4,171 |