Diligent (DIL) 10-Q 9 Nov 15 2015 Q3 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 05, 2015
Document And Entity Information
Entity Registrant Name	Diligent Corp
Entity Central Index Key	1,433,269
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		87,211,106
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2015
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2,015
Entity Current Reporting Status	Yes

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 68,767	$ 70,809
Accounts receivable, net	8,335	1,754
Deferred commissions	1,578	1,353
Prepaid expenses and other current assets	4,113	3,233
Deferred tax assets	4,367	2,768
Total current assets	87,160	79,917
Property and equipment, net	12,434	12,203
Intangible assets, net	4,057	260
Deferred tax assets	7,473	6,804
Security deposits	817	801
Other non-current assets	333	436
Total assets	112,274	100,421
Current liabilities:
Accounts payable	3,570	2,197
Accrued expenses and other liabilities	11,846	11,468
Income taxes payable	1,187	1,552
Deferred revenue	32,687	32,238
Obligations under capital leases	170	623
Total current liabilities	49,460	48,078
Non-current liabilities:
Deferred revenue, less current portion	12,590	12,138
Obligations under capital leases		34
Other non-current liabilities	3,181	3,899
Total non-current liabilities	15,771	16,071
Total liabilities	$ 65,231	$ 64,149
Commitments and contingencies
Redeemable preferred stock:
Series A convertible redeemable preferred stock, $.001 par value, 50,000,000 shares authorized 30,000,000 shares issued and outstanding (liquidation value $4,748)	$ 3,000	$ 3,000
Stockholders' equity:
Common Stock, $.001 par value, 250,000,000 shares authorized, 87,105,699 and 86,895,778 shares issued and outstanding	87	87
Additional paid-in capital	37,670	32,631
Retained earnings	8,329	1,706
Accumulated other comprehensive loss	(2,043)	(1,152)
Total stockholders' equity	44,043	33,272
Total liabilities, redeemable preferred stock and stockholders' equity	$ 112,274	$ 100,421

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2015	Dec. 31, 2014
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	250,000,000	250,000,000
Common stock, shares issued	87,188,526	86,895,778
Common stock, shares outstanding	87,105,699	86,895,778
Series A convertible redeemable preferred stock
Series A convertible redeemable preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Series A convertible redeemable preferred stock, shares authorized	50,000,000	50,000,000
Series A convertible redeemable preferred stock, shares issued	30,000,000	30,000,000
Series A convertible redeemable preferred stock, shares outstanding	30,000,000	30,000,000

Condensed Consolidated Statemen

Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
CONSOLIDATED STATEMENTS OF OPERATIONS
Revenues	$ 24,920	$ 21,423	$ 71,850	$ 60,893
Cost of revenues (excluding depreciation and amortization)	5,101	4,668	14,433	12,847
Gross profit	19,819	16,755	57,417	48,046
Operating expenses:
Selling and marketing	6,222	3,286	15,505	9,542
General and administrative	7,347	4,867	19,328	17,575
Research and development	3,200	2,961	9,607	6,292
Depreciation and amortization	977	765	2,744	1,953
Investigation and Restatement				916
Total operating expenses	17,746	11,879	47,184	36,278
Operating income	2,073	4,876	10,233	11,768
Other income (expense), net:
Interest expense, net	1	59	(4)	30
Other income	(5)		71
Foreign exchange transaction loss	(138)	(126)	(330)	(25)
Total other (expense) income, net	(142)	(67)	(263)	5
Income before provision for income taxes	1,931	4,809	9,970	11,773
Income tax expense	235	2,107	3,347	4,622
Net income	1,696	2,702	6,623	7,151
Accrued preferred stock dividends	(83)	(83)	(248)	(253)
Net income attributable to common stockholders	$ 1,613	$ 2,619	$ 6,375	$ 6,898
Earnings per share:
Basic (in dollars per share)	$ 0.01	$ 0.02	$ 0.05	$ 0.06
Diluted (in dollars per share)	$ 0.01	$ 0.02	$ 0.05	$ 0.06
Weighted average shares outstanding:
Basic (in shares)	117,759	117,611	117,233	116,872
Diluted (in shares)	121,979	122,020	121,833	120,849

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Condensed Consolidated Statements of Comprehensive Income
Net income	$ 1,696	$ 2,702	$ 6,623	$ 7,151
Other comprehensive income (loss):
Foreign exchange translation adjustment	(538)	19	(891)	(9)
Comprehensive income	$ 1,158	$ 2,721	$ 5,732	$ 7,142

Condensed Consolidated Stateme6

Condensed Consolidated Statement of Changes in Stockholders' Equity - 9 months ended Sep. 30, 2015 - USD ($) shares in Thousands, $ in Thousands	Common Stock	Additional Paid-in-Capital	Accumulated Deficit	Accumulated Other Comprehensive Income (Loss)	Total
Balance at Dec. 31, 2014	$ 87	$ 32,631	$ 1,706	$ (1,152)	$ 33,272
Balance (in shares) at Dec. 31, 2014	86,896
Comprehensive income			6,623	(891)	5,732
Share-based compensation		5,263			5,263
Shares surrendered to fund withholding taxes	(50)
Settlement for equity based compensation		(186)			(186)
Tax deficiency realized from share-based compensation		(25)			(25)
Shares issued under employee stock purchase plan (in stock)		235			235
Shares issues to the Board of Directors (in shares)	58
Issuance of shares upon vesting of restricted stock units (in shares)	285
Preferred stock dividend ($0.0083 per share)		(248)			(248)
Balance at Sep. 30, 2015	$ 87	$ 37,670	$ 8,329	$ (2,043)	$ 44,043
Balance (in shares) at Sep. 30, 2015	87,189

Condensed Consolidated Stateme7

Condensed Consolidated Statement of Changes in Stockholders' Equity (Parenthetical)	9 Months Ended
	Sep. 30, 2015$ / shares
Consolidated Statement of Changes in Stockholders' Equity
Preferred stock dividend (in dollars per share)	$ 0.0083

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash flows from operating activities:
Net income	$ 6,623	$ 7,151
Adjustments to reconcile net income to net cash provided by operating activities
Deferred taxes	(2,629)	(1,411)
Depreciation and amortization	2,744	1,953
Share-based compensation	5,263	2,057
Changes in operating assets and liabilities:
Accounts receivable	(6,900)	65
Deferred commissions	(269)	189
Prepaid expenses and other current assets	(845)	(1,000)
Other non-current assets	103
Accounts payable and accrued expenses	2,827	(766)
Income taxes receivable/payable	(201)	1,780
Deferred revenue	1,845	5,335
Other non-current liabilities	(748)	748
Net cash provided by operating activities	7,813	16,101
Cash flows from investing activities:
Proceeds from maturity of short-term investments		12,497
Restricted cash - security deposit	11	(28)
Purchases of property and equipment	(3,540)	(4,160)
Purchases of intangible assets	(3,838)
Capitalized software development costs		(25)
Net cash (used in) provided by investing activities	(7,367)	8,284
Cash flows from financing activities:
Payment of preferred stock dividend	(335)	(359)
Proceeds from exercise of stock options and purchases of shares under stock purchasing plan		14
Payments of obligations under capital leases	(488)	(695)
Funding of withholding taxes for share-based compensation	(186)
Payments of obligations under software licensing agreements		(82)
Net cash used in financing activities	(1,009)	(1,122)
Effect of exchange rates on cash and cash equivalents	(1,479)	(9)
Net (decrease) increase in cash and cash equivalents	(2,042)	23,254
Cash and cash equivalents at beginning of period	70,809	43,583
Cash and cash equivalents at end of period	68,767	66,837
Supplemental disclosure of cash flow information:
Interest	18	41
Income taxes	5,669	3,862
Supplemental disclosure of noncash investing and financing activities:
Conversion of preferred stock to common stock		267
Accounts payable for property and equipment	$ 304	$ 489

Organization and nature of the

Organization and nature of the business	9 Months Ended
	Sep. 30, 2015
Organization and nature of the business
Organization and nature of the business	Note 1. Organization and nature of the business Diligent Corporation (“Diligent” or the “Company”) is a Delaware corporation established in 2007 and listed on the NZX Main Board, a regulated New Zealand equities market. In December 2007, the Company, then named Diligent Board Member Services, Inc., completed an offshore public offering in New Zealand in connection with its listing on the NZX Main Board. In June 2015, the Company changed its name to Diligent Corporation. Diligent’s corporate headquarters are located in New York, New York. Diligent provides one of the world’s most widely-used board portals (“Diligent Boards” or “Boards”). The Company develops and commercializes Diligent Boards, a secure software application available online, on iPad and Windows supported devices. The application allows board members, leadership teams and administrative staff to simplify how board materials are produced, delivered, reviewed and voted on. The Company provides clients with subscription-based access to its software along with associated services, including securely hosting the clients’ data, and customer service and support for the application. Diligent has a wholly-owned subsidiary located in New Zealand, Diligent Board Member Services NZ Limited (“DBMS NZ”), which provides customer support and research and development services for the Company. The Company has a wholly-owned subsidiary in the United Kingdom, Diligent Boardbooks Limited (“DBL”) and a wholly-owned subsidiary in Australia, Diligent Board Services Australia Pty Ltd. (“DBA”), which provide sales, marketing and customer success services in their respective regions. The Company’s Singapore subsidiary, Diligent APAC Board Services Pte. Ltd. (“APAC”) provides sales support in the Asia-Pacific region. The Company’s subsidiary in Hong Kong, Diligent APAC Limited (“APAC LTD”) was established in 2012 to support the Company’s Asia-Pacific sales and marketing operations. On February 4, 2014, the Company established a German subsidiary, Diligent Boardbooks GmbH (“DBG”), to offer dedicated, private data hosting solutions and data recovery support, primarily for European customers. Diligent’s unaudited condensed consolidated financial statements (“interim financial statements”) are presented in U.S. dollars, which is the Company’s functional and reporting currency.

Restatement

Restatement	9 Months Ended
	Sep. 30, 2015
Restatement
Restatement	Note 2. Restatement In August, 2013, the Company announced that its historical financial statements for the years ended December 31, 2012, 2011 and 2010 and the quarter ended March 31, 2013 would be restated due to revenue recognition errors. The Company completed the restatement process in April of 2014 and therefore did not incur any costs during 2015 relating to this matter. Costs for the restatement and re-audits incurred during the three and nine months ended September 30, 2014 were $0 and $0.9 million, respectively. These costs were comprised of professional fees incurred for accounting, auditing and consulting services.

Significant accounting policies

Significant accounting policies	9 Months Ended
	Sep. 30, 2015
Significant accounting policies
Significant accounting policies	Note 3. Significant accounting policies Basis of Presentation The Company’s interim financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. In the opinion of management, the accompanying interim financial statements contain all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the interim financial statements. The results of operations for the three and nine months ended September 30, 2015 are not necessarily indicative of the results to be expected for the full year. The preparation of interim financial statements in conformity with Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions made by management include the deferral and recognition of revenue, the fair value of share-based compensation, accounting for income and other taxes, including the realization of deferred tax assets and uncertain tax positions, and the useful lives of tangible and intangible assets. Actual results could differ from those estimates. Effective January 1, 2015, the Company began allocating facility and related costs and certain costs associated with its Enterprise Resource Planning system to Cost of revenues, Selling and marketing, General and administrative, and Research and development. Previously such costs had been presented within General and administrative expenses. Such costs are allocated based on a department’s proportionate share of total employee headcount. The Company also changed the presentation of sales-related incentive commissions paid to customer success personnel from Cost of revenues to Selling and marketing. The Company determined that these changes would better reflect industry practice and would provide more meaningful information as well as increased transparency of its operations. To conform the 2014 presentation to the current quarter’s presentation, $0.5 million was reclassified from General and administrative, of which less than $0.1 million was included in Costs of revenues, $0.3 million was included in Selling and marketing, and $0.2 million was included in Research and development for the three months ended September 30, 2014. For the nine months ended September 30, 2014, $1.6 million was reclassified from General and administrative, of which $0.1 million was included in Costs of revenues, $1.1 million was included in Selling and marketing, and $0.4 million was included in Research and development. Such reclassifications had no effect on previously reported operating income, net income or retained earnings. Principles of Consolidation The interim financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated. Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. The Company invests its excess cash primarily in bank and money market funds of major financial institutions. Accordingly, its cash equivalents are subject to minimal credit and market risk. Fair Value of Financial Instruments The fair value of the Company’s accounts receivable, accounts payable and accrued expenses and other liabilities approximates book value due to their short term settlements. Property and Equipment Property and equipment consists of computer and office equipment, leasehold improvements and purchased internal-use computer software. Property and equipment are carried at cost, less accumulated depreciation and amortization and any impairment losses. Depreciation and Amortization Depreciation on property and equipment is computed on a straight line basis at rates adequate to recover the cost of the assets over their estimated useful lives, which range from three to five years. Leasehold improvements are depreciated over their estimated useful lives of the assets or the term of the underlying lease, whichever is shorter. Amortization of acquired intangible assets and purchased internal-use computer software is computed on the straight-line method over their estimated useful lives, which range from three to five years. Expenditures for repair and maintenance costs are expensed as incurred. Impairment of Long-Lived Assets The Company periodically reviews the carrying amounts of its tangible and intangible assets to determine whether events or changes in circumstances indicate the carrying amount of an asset may not be fully recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Measurement of an impairment loss for long-lived assets and certain identifiable intangible assets that management expects to hold and use is based on the fair value of the asset. An impairment loss is measured as the amount by which the carrying amount of the long-lived asset exceeds its fair value. Revenue Recognition The Company derives its revenues primarily from subscription fees and installation fees, including training. The Company sells subscriptions to its cloud-based application that are generally one year in length. Its arrangements do not include a general right of return and generally automatically renew unless the Company is notified 30 days prior to the expiration of the initial term. The Company’s subscription agreements do not provide the customer the right to take possession of the software that supports the application. Installation fees consist of the configuration of the Company’s service and training of its customers. Revenue recognition commences when all of the following conditions are met:  There is persuasive evidence of the arrangement;  The service has been made available to the customer;  The fee is fixed or determinable; and  The collectability of the fees is reasonably assured. Pursuant to the authoritative accounting guidance regarding revenue recognition for arrangements with multiple deliverables, for a deliverable to qualify as a separate unit of accounting, the delivered item must have value to the customer on a standalone basis. The Company has determined that the installation fee does not have standalone value, so accordingly, it accounts for its arrangements as a single unit of accounting. Revenue from the Company’s subscription service is recognized on a daily basis over the subscription term as the services are delivered. The service is considered delivered, and hence revenue recognition commences, when the customer has access to Diligent Boards. Revenue is recorded ratably through the end of the contract period, which is generally twelve months from the contract date. Installation fees paid by customers in connection with the subscription service are deferred and are recognized ratably over the expected life of the customer relationships, generally nine years. In estimating the expected customer relationship period, the Company looked to guidance on the determination of the useful life of an intangible asset for the appropriate factors to be considered in estimating expected customer life and specifically focused on its customer renewal rate. Diligent’s customer contracts contain a standard “autorenew” feature which provides for one-year renewals unless either party provides written notice of termination. In addition, Diligent’s renewal history with its customers has been and remains at very high rates. As a result, the Company believes that its customers will renew numerous times during their tenure with Diligent. Consequently, Diligent has had a very low annual attrition rate which historically has been less than 5.0%. After considering these factors, the Company determined that a nine year estimated customer life was appropriate as of September 30, 2015. The Company evaluates its estimated customer life on an annual basis. Deferred Revenue Deferred revenue represents installation and subscription fees for which cash has been received, but for which the Company has not yet delivered its services or the criteria for the recognition of revenue have not yet been met. Deferred revenues presented in the condensed consolidated balance sheets do not include amounts receivable (both billed and unbilled) for executed subscription agreements for which the Company has not yet received payment. Accordingly, the deferred revenue balance does not represent the total contract value of annual subscription agreements. Long term deferred revenue consists of installation fees that will be recognized over the estimated life of the customer relationship, generally nine years. Installation fees expected to be recognized within the next 12 months of the balance sheet date are included in the current portion of deferred revenue. Accounts Receivable The Company generally invoices its customers on a quarterly or annual basis. Accounts receivable represents amounts due from Diligent’s customers for which revenue has been recognized. A provision for doubtful accounts is recorded based on management’s assessment of amounts considered uncollectable for specific customers based on the age of the receivable, history of payments and other relevant information. At each of September 30, 2015 and December 31, 2014, the Company has recorded a provision for doubtful accounts of $0.1 million. Research and Development Research and development expenses are incurred as the Company upgrades and maintains its software and evaluates and develops other potential applications. Such expenses include compensation and employee benefits of engineering and testing personnel, including share-based compensation, materials, travel and direct costs associated with the design and required testing of the product line. Research and development also includes allocated indirect costs such as facility and related costs that are clearly related to research and development activities. Internal-Use Software Development Costs The Company begins to capitalize costs incurred for computer software developed for internal use when the preliminary development efforts are successfully completed, management has authorized and committed to funding the project, and it is probable that the project will be completed and the software will be used as intended. Capitalization ceases when a computer software project is substantially complete and ready for its intended use. Costs incurred prior to meeting these criteria are expensed as incurred and recorded in research and development expense in the Company’s condensed consolidated statements of income. Enhancements that add functionality to previously released versions of Teams will be capitalized and maintenance and relatively minor enhancements will be expensed as incurred. The Company will begin to amortize the capitalized costs associated with the development of Teams during the fourth quarter of 2015 and is currently evaluating the estimated useful life of Teams. Operating Leases The Company records rental costs, including costs related to fixed rent escalation clauses and rent holidays, on a straight-line basis over the lease term. Income Taxes The Company files U.S. federal and state income tax returns. Foreign operations file income tax returns in their respective foreign jurisdictions. The Company accounts for deferred income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. A valuation allowance is recorded if it is considered more likely than not that some or all of a deferred tax asset may not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The tax effects of an uncertain tax position taken or expected be taken in income tax returns are recognized only if it is “more likely than not” to be sustained on examination by the taxing authorities, based on its technical merits as of the reporting date. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. The Company recognizes the benefit of an uncertain tax position in the period when it is effectively settled. Previously recognized tax positions are derecognized in the first period in which it is no longer more likely than not that the tax position would be sustained upon examination. The Company recognizes accrued interest and penalties related to uncertain tax positions in income tax expense. Foreign Exchange The Company’s wholly-owned foreign subsidiaries generally utilize their local currency as their functional currency. Assets and liabilities of these subsidiaries are translated to U.S. dollars at exchange rates in effect at the balance sheet date, with the resulting translation adjustments directly recorded to a separate component of accumulated other comprehensive income or loss. The functional currency of the Company’s Singapore subsidiary is the U.S. dollar. Transactions in foreign currencies are reported at the rates of exchange at the transaction date. Assets and liabilities are translated at the rates of exchange in effect at the balance sheet date. All differences are recorded in results of operations. Share-Based Compensation The Company measures the cost of employee services received in exchange for an equity-based award using the fair value of the award on the date of the grant, and recognizes the cost over the period that the award recipient is required to provide services to the Company in exchange for the award. The fair value of restricted stock units and performance stock units is determined using the market price of the Company’s common stock at the date of the grant and compensation expense is recognized for the portion of the award that is expected to vest. The Company measures compensation cost for awards granted to non-employees based on the fair value of the award at the measurement date, which is the date performance is satisfied or services are rendered by the non-employee. Segment Reporting Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated on a regular basis by the chief operating decision-maker (“CODM”), or decision making group, in deciding how to allocate resources to an individual segment and in assessing performance of the segment. In light of the Company’s current product offering and the fact that the Company’s CODM, which is the Company’s Chief Executive Officer, monitors and reviews financial information at a consolidated level for assessing operating results and allocation of resources, management has concluded that the Company has one reportable operating segment. Earnings Per Share Basic earnings per share is computed by dividing the net income attributable to common stockholders, after deducting accrued preferred stock dividends, by the weighted average number of common and preferred shares outstanding for the period. The preferred stockholders are entitled to participate on an “as converted basis” in any dividends paid on the Company’s common stock, and as such are considered participating securities to which earnings should be allocated using the two-class method. Diluted earnings per share reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised, settled or converted into common stock, unless the effect is anti-dilutive. Stock options and employee share awards are included as potential dilutive securities for the applicable periods, except that 1.8 and 1.6 million stock options have been excluded for the three and nine months ended September 30, 2015, respectively and 1.5 million stock options have been excluded for the three and nine months ended September 30, 2014, because their effect is antidilutive. For the three and nine months ended September 30, 2015 and 2014, 1.3 million and 0.3 million performance share units, respectively, were excluded as potential dilutive securities, as the performance criteria has not been met. The computation of shares used in calculating basic and diluted earnings per common share are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (in thousands) Basic weighted average common shares outstanding Basic weighted average preferred shares outstanding Basic weighted average shares outstanding Dilutive effect of stock options Dilutive effect of performance stock units Dilutive effect of restricted stock units Dilutive weighted average shares outstanding Recent Accounting Pronouncements In September 2015, the FASB issued ASU No. 2015-16, “Business Combinations (Topic 805) — Simplifying the Accounting for Measurement-Period Adjustments.” ASU No. 2015-16 eliminates the requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively. ASU No. 2015-16 is effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period. The Company is assessing the potential impact of the new standard on its consolidated financial statements. In May 2014, the FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers (Topic 606),” a new standard related to revenue recognition, 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 standard will replace most of the existing revenue recognition standards in U.S. GAAP when it becomes effective. In July 2015, the FASB decided to delay the effective date by one year to January 1, 2018. Early adoption is permitted no earlier than 2017. The new standard can be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of the change recognized at the date of the initial application in retained earnings. The Company is assessing the potential impact of the new standard on financial reporting and has not yet selected a transition method. In April 2015, the FASB issued ASU No. 2015-05, “Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement.” The amendments in this update provide guidance to customers about whether a cloud computing arrangement includes a software license. Under application of this guidance, if a cloud computing arrangement includes a software license, the update specifies that the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. A customer should account for a cloud computing arrangement as a service contract if the arrangement does not include a software license. ASU No. 2015-05 is effective for 2016 and early adoption is allowed. The Company is assessing the impact of this update and the timing of adoption.

Intangible Assets

Intangible Assets	9 Months Ended
	Sep. 30, 2015
Intangible Assets
Intangible Assets	Note 4. Intangible assets During 2014 the Company acquired certain intangible assets. The Company’s acquired intangible assets are comprised of the following: September 30, December 31, Weighted Average 2015 2014 Useful Life (in thousands) Domain names $ $ 5 years Less: accumulated amortization ) ) Domain names, net $ $ The related amortization expense of intangibles for the three and nine months ended September 30, 2015 and 2014 was less than $0.1 million. The Company’s estimate of future amortization expense for acquired intangible assets that exist at September 30, 2015 is as follows: (in thousands) October 1, 2015 to December 31, 2015 $ 2016 2017 2018 2019 Total $ During the first quarter of 2015, the Company began to capitalize costs related to the development of a new SaaS collaboration tool, (“Diligent Teams” or “Teams”). The initial version of Teams was ready for its intended use and was available for customer subscription as of September 30, 2015. The amount of capitalized costs during the three and nine months ended September 30, 2015 was $1.4 million and $3.8 million, respectively and no such costs were capitalized as of December 31, 2014. The Company will begin to amortize the capitalized costs associated with the development of Teams during the fourth quarter of 2015 and is currently evaluating the estimated useful life of Teams.

Fair Value of Financial Instrum

Fair Value of Financial Instruments	9 Months Ended
	Sep. 30, 2015
Fair Value of Financial Instruments
Fair Value of Financial Instruments	Note 5. Fair Value of Financial Instruments The fair value of a financial instrument is the amount at which the instrument could be exchanged in an orderly transaction between market participants. As of September 30, 2015 and December 31, 2014, the carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses and other liabilities approximated fair value due to the short-term nature of these instruments. ASC 820, Fair Value Measurements and Disclosures, establishes a fair value hierarchy for input into valuation techniques as follows: i. Level 1 input - unadjusted quoted prices in active markets for identical instrument; ii. Level 2 input - observable market data for the same or similar instrument but not Level 1, including quoted prices for identical or similar assets or liabilities in markets that are active or not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and iii. Level 3 input - unobservable inputs developed using management’s assumptions about the inputs used for pricing the asset or liability. Level 1 inputs were utilized to determine the fair value of the Company’s investments in U.S. treasury bills, U.S treasury money market funds, and term deposits. Due to the short-term nature of these investments, which mature between 90 days and 365 days, amortized cost is used to estimate the fair value. At September 30, 2015 and December 31, 2014, cash equivalents include investments in U.S. treasury money market funds and treasury bills totaling $0 and $32.5 million, respectively, which are carried at cost, which approximates fair value. The fair value of money market funds was determined by reference to quoted market prices. At September 30, 2015 and December 31, 2014, the Company did not have any short-term investments.

Redeemable Preferred Stock

Redeemable Preferred Stock	9 Months Ended
	Sep. 30, 2015
Redeemable Preferred Stock
Redeemable Preferred Stock	Note 6. Redeemable Preferred Stock In March 2009, the Company issued 30 million shares of Series A Preferred Stock for $0.10 per share in a private offering, providing aggregate gross proceeds of $3.0 million. The principal terms of the Preferred Shares are as follows: Dividend rights—The Preferred Shares carry a fixed, cumulative, dividend of 11% per annum (adjusted for stock splits, consolidation, and other factors). The dividend, which is due on the first business day of each calendar year for the prior year, may (at the Company’s option) be paid either in cash or in kind by the issuance of additional Preferred Shares (PIK Shares), to be issued at the same issue price as the Series A. Preferred Stock of $0.10 per share—The 11% annual dividend on the Preferred Shares will have preference over the declaration or payment of any dividends on the Company’s common stock. In addition to the 11% preferred dividend, the holders of the Preferred Shares are also entitled to participate pro rata in any dividend paid on the Company’s common stock. Conversion rights—The Preferred Shares are convertible at any time at the option of the holders into the Company’s common stock on a one-for-one basis. In addition, Preferred Shares will automatically be converted into common stock upon the closing of an underwritten share offering by the Company on a registered stock exchange which realizes at least $40 million of gross proceeds. Redemption rights—The holders of the Preferred Shares have the option to require the Preferred Shares (including any PIK shares) to be redeemed in cash, at $0.10 per share plus accrued and unpaid dividends, at any time after 60 months from the date of issue of the Preferred Shares. Any redeemed amounts will be paid in four equal quarterly installments commencing 60 days after the redemption request. Anti-Dilution Provision—In the event of a future offering of the Company’s stock at a price per common share which is less than the Preferred Share conversion rate immediately before such offering, the conversion price for the Preferred Shares is adjusted according to a weighted average formula. Liquidation preference—In the event of any voluntary or involuntary liquidation of the Company, the holders of Preferred Shares are entitled to an amount per Preferred Share equal to 1.5 times the original issue price of $0.10 plus any accrued but unpaid dividends. Voting rights—Preferred Shares have equal voting rights (one vote per share) to common stock, except that Preferred Shares do not vote in the general election of directors. Other provisions—For as long as not less than 15 million Preferred Shares are outstanding, the holders of the Preferred Shares have the right between them to appoint one director, and the Company may not take action relating to certain major transactions without obtaining the consent of not less than 60% of the Preferred Shares or without obtaining the approval of the director appointed by the holder of the Preferred Shares (for matters requiring Board of Directors approval). Accounting for Preferred Shares—If certain criteria are met, companies must bifurcate conversion options from their host instruments and account for them as free standing derivative instruments. The Company has evaluated the redemption, conversion and contingent conversion features of the Preferred Shares and determined that the embedded conversion option is not required to be bifurcated. Additionally, the Company analyzed the conversion feature and determined that the effective conversion price was higher than the market price at date of issuance; therefore no beneficial conversion feature was recorded. However, if the Company were to pay Preferred Stock dividends by issuing PIK shares, the issuance of such PIK shares would result in a beneficial conversion feature if the fair value of the Company’s common stock at the dividend declaration date exceeds the per share conversion price of the Preferred Shares. The Company has classified the Preferred Shares as temporary equity because they are redeemable upon the occurrence of an event that is not solely within the control of the issuer. As noted above, the holders of the Preferred Shares may demand redemption at any time after 60 months from the date of issue. The carrying value of the securities, which were initially recorded at their face value net of issuance costs, was increased to the redemption value over the period from the date of issuance to the earliest potential date of redemption. In 2015, the Company anticipates that accumulated unpaid dividends will be paid in cash on the Series A Preferred Stock. Accordingly, preferred stock dividends of $0.2 million for the nine months ended September 30, 2015 are included in accrued expenses and other liabilities.

Stock option and incentive plan

Stock option and incentive plan	9 Months Ended
	Sep. 30, 2015
Stock option and incentive plan
Stock option and incentive plan	Note 7. Stock option and incentive plan In May 2013, the Board adopted the Diligent Corporation 2013 Incentive Plan (the “Plan”), which was approved by the Company’s stockholders in June 2013. An aggregate of 15.5 million shares of the Company’s common stock may be issued pursuant to the Plan to employees, directors and consultants of the Company and its affiliates as of September 30, 2015. The Company has reserved 4.1 million shares for issuance in connection with the replacement incentive awards issued in accordance with the former CEO Substitute Remuneration Package as discussed below. In April 2015, the shareholders’ approved an increase in the shares reserved for issuance under the Plan of 7.0 million. As of September 30, 2015, 5.7 million shares were available for future issuances of awards under the Plan. Awards under the Plan may be made in the form of stock options (which may constitute incentive stock options or nonqualified stock options), share appreciation rights, restricted shares, restricted share units, performance awards, bonus shares and other awards. In addition, certain awards under the Plan may be denominated or settled in cash, including performance awards. The Company’s standard remuneration package for non-executive directors consists of both a cash component, designed to compensate members for their service on the Board and its Committees, and an equity component. The total value of the standard remuneration package is $0.1 million per annum, of which 38% is payable in cash and the remainder in common stock. In December 2012, the Company’s Board of Directors authorized a Special Committee of independent directors to conduct a review of the Company’s past stock issuances and stock option grants to determine whether they were in accordance with the relevant incentive plans. The Special Committee found that three option awards—one under the 2007 Stock Option and Incentive Plan (“2007 Plan”), and two under the 2010 Stock Option and Incentive Plan (“2010 Plan”)—exceeded the applicable plan caps on the number of shares covered by an award issued to a single recipient in a particular year. Specifically, a 2009 award to the former Chief Executive Officer (CEO) exceeded the cap in the 2007 Plan by 1.6 million shares, a 2011 award to the former CEO exceeded the cap in the 2010 Plan by 2.5 million shares, and a 2011 award to another officer exceeded the cap in the 2010 Plan by 250,000 shares. In May 2013, the Company and the Company’s former CEO entered into a Replacement Grant Agreement providing for the cancellation of the affected stock options and the issuance of a replacement award, which was to become effective upon the occurrence of certain future events. In June 2013, the Company entered into an agreement with respect to the options issued to the other officer in excess of the applicable plan cap, under which 250,000 options were cancelled, the vesting schedule for the remaining nonvested options were extended over a four and a half year period, and replaced with 150,000 restricted stock units, with graded vesting over four and a half years. The modification of this award resulted in less than $0.1 million of additional expense. In December 2013, the Company and the former CEO entered into an Amendment to Replacement Grant Agreement which finalized the terms of the incentive compensation package to be provided to the Company’s former CEO in substitution for certain awards that exceeded the applicable plan caps. Under the terms of the Amendment to Replacement Grant Agreement, on December 23, 2013 (the “Grant Date”), the former CEO’s fully vested option to purchase 2.4 million shares of the Company’s common stock for an exercise price of U.S. $0.14 per share was cancelled to the extent it was in excess of the applicable plan cap, consisting of 1.6 million of such shares. In exchange for the cancellation of the relevant portion of the award, the former CEO received: · An option to purchase 1.6 million shares of common stock having an exercise price of U.S. $2.79, which was the Company’s closing price per share expressed in U.S. dollars on the last trading day on the NZX Main Board immediately prior to the Grant Date (the “Exercise Price”) of December 23, 2013. The option vested on December 31, 2013, and has a term of ten years from the Grant Date. · A performance cash award of U.S. $4.2 million, determined based on 1.6 million multiplied by the excess of the Exercise Price of U.S. $2.79 over U.S. $0.14. The former CEO’s right to receive such cash award was contingent on the Company achieving revenue growth of at least 7% during the twelve month period ended June 30, 2014 and his continued employment through such date. This revenue target was achieved and the cash award was to be paid in three equal annual installments. The first installment in the amount of $1.4 million was paid in the third quarter of 2014, the second installment was paid in the first quarter of 2015 and the final installment will be paid in the first quarter of 2016, or, if earlier, upon a change in control of the Company or the former CEO’s separation from service. Effective March 31, 2015, the former CEO became the Company’s Chief Product Strategy Officer. Any payment due on any installment date will be proportionally reduced if the sum of the Company’s stock price plus dividends for a measurement period prior to each payment date falls below 75% of the Exercise Price. The liability for the performance cash award of $1.4 million is recorded in accrued expenses and other current liabilities on the condensed consolidated balance sheet as of September 30, 2015. In addition, the former CEO held an option to purchase 3.0 million shares of the Company’s common stock for an exercise price of U.S. $0.82 per share, which remained subject to vesting. Under the terms of the Amendment to Replacement Grant Agreement, the Company cancelled the portion of such option in excess of the applicable plan cap, consisting of 2.5 million of such shares. In exchange for the cancellation of the relevant portion of the award, the former CEO received: · Performance share units (“PSUs”) for 2.25 million shares of common stock issuable contingent on Diligent achieving revenue growth of at least 7% during the twelve month period ended September 30, 2014. Effective September 30, 2014, the Company’s revenues met the performance requirement of at least seven percent (7%) growth over the performance period as compared to the period from July 1, 2012 through September 30, 2013. The PSUs were determined to be earned and the award will vest in four equal installments based on continued employment, commencing September 30, 2015, with full vesting occurring on September 30, 2018. The delivery dates for the vested performance shares will be 50% in 2018 and 50% in 2019 or, if earlier, upon a change in control of the Company or the former CEO’s separation from service. · PSUs for up to 250,000 shares of common stock contingent on Diligent achieving either at least 15% fully diluted EPS growth (adjusted to exclude stock-based compensation expense and extraordinary items) or 15% total stockholder return (“TSR”) growth in four one-year measurement periods beginning April 1, 2013 (the “Level 2 PSU Agreement”). TSR growth is measured based on Diligent’s stock price performance during the 20 trading days prior to the relevant measurement date. The Level 2 PSU Agreement provides that 62,500 shares of common stock (the “Level 2 Performance Shares”) will be earned in each year for which the applicable target is met, with the additional opportunity to earn such shares at the end of the four year performance period if the cumulative fully diluted EPS growth or TSR growth meet the cumulative performance target. The delivery dates for the vested performance shares will be in 2018 or, if earlier, upon a change in control of the Company or the former CEO’s separation from service. The Company recorded compensation expense of $0.2 million in the third quarter and $0.9 million during the first nine months of 2015 and $0.2 million in the third quarter and $2.8 million during the first nine months of 2014 relating to the replacement award. On March 31, 2015, the Company and the former CEO entered into a Deferred Share Award Agreement (the “Deferred Share Award Agreement”) to give effect to the Company’s agreement that the former CEO would have been eligible to receive the first tranche of the Level 2 Performance Shares pursuant to the Level 2 PSU Agreement, after giving effect to the restatement of the Company’s financial statements. The Company calculated a new baseline EPS for the period beginning April 1, 2013 through March 31, 2014 using post-restatement amounts (the “New Baseline EPS”) and concluded that the former CEO earned the first tranche of 62,500 shares of common stock, based on the achievement of 15% growth of fully diluted EPS during the period from April 1, 2013 through March 31, 2014. The agreement to utilize the New Baseline EPS is considered an award modification and triggers a revaluation of the Level 2 Performance Shares on the modification date, which in this instance was March 31, 2015. Consequently, the Company revalued the Level 2 Performance Shares and is expensing the Level 2 Performance Shares based on the grant date fair value of the original award plus the incremental fair value of the modified award. The incremental expense associated with the revaluation of the Level 2 Performance Shares resulted in an additional expense of $0.3 million to be recognized over their original expected vesting dates. In connection with the entry into an employment agreement with the Company’s new CEO, and an amendment to the employment agreement of its former CEO, now its Founder and Chief Product Strategy Officer, on March 31, 2015, the Company granted PSUs providing for the issuance of up to an aggregate of 675,000 shares of common stock, with a grant date fair value of $2.7 million, to the new CEO and the Chief Product Strategy Officer. The shares of common stock underlying the PSUs are issuable contingent on the Company achieving revenue thresholds based on reported revenue over a trailing 12 month period measured at each quarter end date beginning on March 31, 2015 and ending on March 31, 2021. There are four performance thresholds and the performance share units will vest 25% upon the achievement of each performance threshold. The Company has determined that all four of the performance measures are probable to be met within the next four years and has begun recording compensation expense for each tranche on a graded basis from the grant date through the date each threshold is expected to be achieved. Vesting periods for the above mentioned PSUs range from one year to approximately four years. The expense associated with all PSUs are expected to result in compensation expense of $0.7 million for the remainder of 2015, $2.0 million in 2016, $1.0 million in 2017, $0.4 million in 2018 and less than $0.1 million in 2019. The vesting of the options, performance cash award and PSUs described above will be subject to certain acceleration provisions in the event of a change in control of the Company, upon death or disability or termination without cause or resignation for good reason. Stock Options A summary of stock option activity for the nine months ended September 30, 2015 is as follows: Weighted Average Weighted Average Remaining Options Exercise Price Contractual Term (in thousands) Outstanding at January 1, 2015 $ Granted $ Exercised — $ — Cancelled — $ — Forfeited ) $ Outstanding at September 30, 2015 $ 7.1 years Exercisable at September 30, 2015 $ 6.4 years Options vested and expected to vest Performance Stock Units A summary of PSU activity for the nine months ended September 30, 2015 is as follows: Weighted Average Performance Grant Date Fair Stock Units Value Per Share (in thousands) Nonvested at January 1, 2015 $ Granted $ Vested ) $ Forfeited — $ — Nonvested at September 30, 2015 $ The Company estimates the fair value of the PSU’s as of the grant date utilizing the closing price of its common stock on that date. Restricted Stock Units A summary of RSU activity for the nine months ended September 30, 2015 is as follows: Weighted Average Restricted Grant Date Fair Stock Units Value Per Share (in thousands) Nonvested at January 1, 2015 $ Granted $ Vested ) $ Forfeited ) $ Nonvested at September 30, 2015 $ The Company estimates the fair value of the RSUs as of the grant date utilizing the closing price of its common stock on that date. Share-Based Compensation A summary of share-based compensation for the three and nine months ended September 30, 2015 is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (in thousands) Stock options Performance stock units Restricted stock units Total At September 30, 2015, there was $10.9 million of unrecognized share-based compensation expense which includes $2.2 million for stock options, $4.0 million for PSUs and $4.7 million for RSUs. The weighted average period for this cost to be recognized is 1.19 years. Such amounts do not include any impact of the former CEO performance cash award.

Income taxes

Income taxes	9 Months Ended
	Sep. 30, 2015
Income taxes
Income taxes	Note 8. Income taxes Income tax expense is provided on an interim basis based upon management’s estimate of the annual effective tax rate. The income tax provision for the three and nine months ended September 30, 2015 provides income taxes at an effective rate of 12% and 34%, respectively. The Company recorded a net income tax provision for the three months and nine months ended September 30, 2014 based on an effective tax rate of 44% and 39%, respectively. The decrease in 2015 and difference from the federal statutory rate is due to discrete tax benefits associated with U.S. federal return to provision adjustments relating to share-based compensation and the domestic production activities deduction, based on the final amounts as reported in the Company’s U.S. federal tax return, which had a si gnificant effect on the effective tax rate for the third quarter of 2015. The Company’s effective tax rate for the three months ended September 30, 2014 was also impacted due to a change in methodology for determining the Company’s Research and Development credits for U.S. Federal Income Tax purposes which resulted in an unfavorable cumulative adjustment in the third quarter of 2014. Section 382 of the U.S. Internal Revenue Code generally imposes an annual limitation on the amount of net operating loss carryforwards that can be used to offset taxable income when a corporation has undergone significant changes in stock ownership. Beginning in 2013, the Company’s annual net operating loss carryforward is subject to a limitation of approximately $0.4 million to offset expected taxable income until expiration of the carryforwards. Based on this limitation, the Company expects that approximately $4.9 million of its total net operating loss carryforwards will expire unutilized in 2029. A full valuation allowance had previously been provided on the related deferred tax asset, and therefore the deferred tax asset and valuation allowance relating to the net operating loss carryforwards expected to expire unutilized were written off. Diligent and its subsidiaries are subject to regular audits by federal, state and foreign tax authorities. These audits may result in additional tax liabilities. The Company’s U.S. federal and state income tax returns for the tax years 2011 and forward are open for examination by the taxing jurisdictions. The Company’s foreign income tax returns are open for examination by the local taxing jurisdictions for the following years: New Zealand — 2009 and forward; U.K. — 2011 and forward; Australia — 2009 and forward.

Contingencies

Contingencies	9 Months Ended
	Sep. 30, 2015
Contingencies
Contingencies	Note 9. Contingencies Sales tax risk States and some local taxing jurisdictions have differing rules and regulations governing sales and use taxes, and these rules and regulations are subject to varying interpretations that may change over time. In particular, the applicability of sales taxes to our subscription services in various jurisdictions is unclear. The Company’s cumulative provisions as of September 30, 2015 and December 31, 2014 were $1.9 million and $2.1 million, respectively, with respect to sales and use tax liabilities in various states and local jurisdictions. It is possible that the Company could face sales tax audits and that its liability for these taxes could exceed our estimates as state tax authorities could assert that we are obligated to collect additional amounts as taxes from our customers and remit such taxes to those authorities. The Company could also be subject to audits with respect to states and international jurisdictions for which it has not accrued tax liabilities. A successful assertion that the Company should be collecting additional sales or other taxes on its services in jurisdictions where we have not historically done so and do not accrue for sales taxes could result in substantial tax liabilities for past sales, discourage customers from purchasing the Company’s application or otherwise harm our business and operating results. Litigation and claims In the ordinary course of business, Diligent is a party to pending legal proceedings and claims. Although the outcome of such items cannot be determined with certainty, management is of the opinion that the final outcome will not have a material effect on the Company’s financial position, results of operations or cash flows. NZX Main Board Listing Rules In June 2014, New Zealand time, the Company received notification from the NZX Limited (“NZX”) in respect to alleged breaches of the NZX Main Board Listing Rules for the delayed release of the 2013 annual report, the 2013 full year preliminary announcement and the 2013 interim report. The notification informed the Company that the NZX has determined to refer the Company’s alleged breaches to the NZ Markets Disciplinary Tribunal. Any actions by the NZX Limited, and any action taken by the NZ Markets Disciplinary Tribunal, does not foreclose the risk of litigation or other regulatory actions relating to the historical instances of non-compliance identified. Due to the instances of non-compliance, the Company may be subject to an increased risk of regulatory actions, claims or litigation, the defense of which would require the Company’s management to devote significant attention and to incur significant legal expense and which could require us to pay substantial judgments, settlements, fines or other penalties. In September 2014, the NZ Markets Disciplinary Tribunal approved a settlement reached by the Company and the NZX regarding the breaches of the NZX Main Board Listing Rules by the Company relating to the delayed reports described above. The settlement provided for the payment of fines and costs by the Company, consisting of less than $0.1 million as a penalty to the NZX Discipline Fund and less than $0.1 million towards the cost of NZXR. These amounts have been paid as of December 31, 2014. In June 2015, the NZ Markets Disciplinary Tribunal approved a settlement reached by the Company and the NZX regarding the breaches of the NZX Main Board Listing Rules by the Company, relating to the Company not having the required minimum of two New Zealand resident directors from the period of April 9, 2015 to April 29, 2015. The settlement provided for the payment of less than $0.1 million towards the cost of NZX and was paid as of September 30, 2015.

Subsequent events

Subsequent events	9 Months Ended
	Sep. 30, 2015
Subsequent events
Subsequent events	Note 10. Subsequent Events BoardLink Acquisition On October 19, 2015, the Company acquired all the assets of BoardLink, a SaaS provider of board and leadership team collaboration solutions, from Thomson Reuters. The acquisition of BoardLink strengthens Diligent’s position as one of the world’s leading providers of corporate governance and collaboration SaaS solutions for boards and senior executives. Under the terms of the agreement, Diligent paid $10.0 million in cash for the Thomson Reuters BoardLink business. The acquisition related costs for the three and nine months ended September 30, 2015 were $0.2 million and are included in General and administrative expenses in the condensed consolidated statements of income. As of the date of issuance of these interim financial statements, the preliminary purchase price allocation has not been completed as the Company is in the process of gathering the data required to perform the purchase price allocation. The Company is also currently evaluating the federal and state tax implications of the BoardLink acquisition.

Significant accounting polici19

Significant accounting policies (Policies)	9 Months Ended
	Sep. 30, 2015
Significant accounting policies
Basis of Presentation	Basis of Presentation The Company’s interim financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. In the opinion of management, the accompanying interim financial statements contain all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the interim financial statements. The results of operations for the three and nine months ended September 30, 2015 are not necessarily indicative of the results to be expected for the full year. The preparation of interim financial statements in conformity with Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions made by management include the deferral and recognition of revenue, the fair value of share-based compensation, accounting for income and other taxes, including the realization of deferred tax assets and uncertain tax positions, and the useful lives of tangible and intangible assets. Actual results could differ from those estimates. Effective January 1, 2015, the Company began allocating facility and related costs and certain costs associated with its Enterprise Resource Planning system to Cost of revenues, Selling and marketing, General and administrative, and Research and development. Previously such costs had been presented within General and administrative expenses. Such costs are allocated based on a department’s proportionate share of total employee headcount. The Company also changed the presentation of sales-related incentive commissions paid to customer success personnel from Cost of revenues to Selling and marketing. The Company determined that these changes would better reflect industry practice and would provide more meaningful information as well as increased transparency of its operations. To conform the 2014 presentation to the current quarter’s presentation, $0.5 million was reclassified from General and administrative, of which less than $0.1 million was included in Costs of revenues, $0.3 million was included in Selling and marketing, and $0.2 million was included in Research and development for the three months ended September 30, 2014. For the nine months ended September 30, 2014, $1.6 million was reclassified from General and administrative, of which $0.1 million was included in Costs of revenues, $1.1 million was included in Selling and marketing, and $0.4 million was included in Research and development. Such reclassifications had no effect on previously reported operating income, net income or retained earnings.
Principles of Consolidation	Principles of Consolidation The interim financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated.
Cash and Cash Equivalents	Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. The Company invests its excess cash primarily in bank and money market funds of major financial institutions. Accordingly, its cash equivalents are subject to minimal credit and market risk.
Fair Value of Financial Instruments	Fair Value of Financial Instruments The fair value of the Company’s accounts receivable, accounts payable and accrued expenses and other liabilities approximates book value due to their short term settlements.
Property and Equipment	Property and Equipment Property and equipment consists of computer and office equipment, leasehold improvements and purchased internal-use computer software. Property and equipment are carried at cost, less accumulated depreciation and amortization and any impairment losses.
Depreciation and Amortization	Depreciation and Amortization Depreciation on property and equipment is computed on a straight line basis at rates adequate to recover the cost of the assets over their estimated useful lives, which range from three to five years. Leasehold improvements are depreciated over their estimated useful lives of the assets or the term of the underlying lease, whichever is shorter. Amortization of acquired intangible assets and purchased internal-use computer software is computed on the straight-line method over their estimated useful lives, which range from three to five years. Expenditures for repair and maintenance costs are expensed as incurred.
Impairment of Long-Lived Assets	Impairment of Long-Lived Assets The Company periodically reviews the carrying amounts of its tangible and intangible assets to determine whether events or changes in circumstances indicate the carrying amount of an asset may not be fully recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Measurement of an impairment loss for long-lived assets and certain identifiable intangible assets that management expects to hold and use is based on the fair value of the asset. An impairment loss is measured as the amount by which the carrying amount of the long-lived asset exceeds its fair value.
Revenue Recognition	Revenue Recognition The Company derives its revenues primarily from subscription fees and installation fees, including training. The Company sells subscriptions to its cloud-based application that are generally one year in length. Its arrangements do not include a general right of return and generally automatically renew unless the Company is notified 30 days prior to the expiration of the initial term. The Company’s subscription agreements do not provide the customer the right to take possession of the software that supports the application. Installation fees consist of the configuration of the Company’s service and training of its customers. Revenue recognition commences when all of the following conditions are met:  There is persuasive evidence of the arrangement;  The service has been made available to the customer;  The fee is fixed or determinable; and  The collectability of the fees is reasonably assured. Pursuant to the authoritative accounting guidance regarding revenue recognition for arrangements with multiple deliverables, for a deliverable to qualify as a separate unit of accounting, the delivered item must have value to the customer on a standalone basis. The Company has determined that the installation fee does not have standalone value, so accordingly, it accounts for its arrangements as a single unit of accounting. Revenue from the Company’s subscription service is recognized on a daily basis over the subscription term as the services are delivered. The service is considered delivered, and hence revenue recognition commences, when the customer has access to Diligent Boards. Revenue is recorded ratably through the end of the contract period, which is generally twelve months from the contract date. Installation fees paid by customers in connection with the subscription service are deferred and are recognized ratably over the expected life of the customer relationships, generally nine years. In estimating the expected customer relationship period, the Company looked to guidance on the determination of the useful life of an intangible asset for the appropriate factors to be considered in estimating expected customer life and specifically focused on its customer renewal rate. Diligent’s customer contracts contain a standard “autorenew” feature which provides for one-year renewals unless either party provides written notice of termination. In addition, Diligent’s renewal history with its customers has been and remains at very high rates. As a result, the Company believes that its customers will renew numerous times during their tenure with Diligent. Consequently, Diligent has had a very low annual attrition rate which historically has been less than 5.0%. After considering these factors, the Company determined that a nine year estimated customer life was appropriate as of September 30, 2015. The Company evaluates its estimated customer life on an annual basis.
Deferred Revenue	Deferred Revenue Deferred revenue represents installation and subscription fees for which cash has been received, but for which the Company has not yet delivered its services or the criteria for the recognition of revenue have not yet been met. Deferred revenues presented in the condensed consolidated balance sheets do not include amounts receivable (both billed and unbilled) for executed subscription agreements for which the Company has not yet received payment. Accordingly, the deferred revenue balance does not represent the total contract value of annual subscription agreements. Long term deferred revenue consists of installation fees that will be recognized over the estimated life of the customer relationship, generally nine years. Installation fees expected to be recognized within the next 12 months of the balance sheet date are included in the current portion of deferred revenue.
Accounts Receivable	Accounts Receivable The Company generally invoices its customers on a quarterly or annual basis. Accounts receivable represents amounts due from Diligent’s customers for which revenue has been recognized. A provision for doubtful accounts is recorded based on management’s assessment of amounts considered uncollectable for specific customers based on the age of the receivable, history of payments and other relevant information. At each of September 30, 2015 and December 31, 2014, the Company has recorded a provision for doubtful accounts of $0.1 million.
Research and Development	Research and Development Research and development expenses are incurred as the Company upgrades and maintains its software and evaluates and develops other potential applications. Such expenses include compensation and employee benefits of engineering and testing personnel, including share-based compensation, materials, travel and direct costs associated with the design and required testing of the product line. Research and development also includes allocated indirect costs such as facility and related costs that are clearly related to research and development activities.
Internal-Use Software Development Costs	Internal-Use Software Development Costs The Company begins to capitalize costs incurred for computer software developed for internal use when the preliminary development efforts are successfully completed, management has authorized and committed to funding the project, and it is probable that the project will be completed and the software will be used as intended. Capitalization ceases when a computer software project is substantially complete and ready for its intended use. Costs incurred prior to meeting these criteria are expensed as incurred and recorded in research and development expense in the Company’s condensed consolidated statements of income. Enhancements that add functionality to previously released versions of Teams will be capitalized and maintenance and relatively minor enhancements will be expensed as incurred. The Company will begin to amortize the capitalized costs associated with the development of Teams during the fourth quarter of 2015 and is currently evaluating the estimated useful life of Teams.
Operating Leases	Operating Leases The Company records rental costs, including costs related to fixed rent escalation clauses and rent holidays, on a straight-line basis over the lease term.
Income Taxes	Income Taxes The Company files U.S. federal and state income tax returns. Foreign operations file income tax returns in their respective foreign jurisdictions. The Company accounts for deferred income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. A valuation allowance is recorded if it is considered more likely than not that some or all of a deferred tax asset may not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The tax effects of an uncertain tax position taken or expected be taken in income tax returns are recognized only if it is “more likely than not” to be sustained on examination by the taxing authorities, based on its technical merits as of the reporting date. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. The Company recognizes the benefit of an uncertain tax position in the period when it is effectively settled. Previously recognized tax positions are derecognized in the first period in which it is no longer more likely than not that the tax position would be sustained upon examination. The Company recognizes accrued interest and penalties related to uncertain tax positions in income tax expense.
Foreign Exchange	Foreign Exchange The Company’s wholly-owned foreign subsidiaries generally utilize their local currency as their functional currency. Assets and liabilities of these subsidiaries are translated to U.S. dollars at exchange rates in effect at the balance sheet date, with the resulting translation adjustments directly recorded to a separate component of accumulated other comprehensive income or loss. The functional currency of the Company’s Singapore subsidiary is the U.S. dollar. Transactions in foreign currencies are reported at the rates of exchange at the transaction date. Assets and liabilities are translated at the rates of exchange in effect at the balance sheet date. All differences are recorded in results of operations.
Share-Based Compensation	Share-Based Compensation The Company measures the cost of employee services received in exchange for an equity-based award using the fair value of the award on the date of the grant, and recognizes the cost over the period that the award recipient is required to provide services to the Company in exchange for the award. The fair value of restricted stock units and performance stock units is determined using the market price of the Company’s common stock at the date of the grant and compensation expense is recognized for the portion of the award that is expected to vest. The Company measures compensation cost for awards granted to non-employees based on the fair value of the award at the measurement date, which is the date performance is satisfied or services are rendered by the non-employee.
Segment Reporting	Segment Reporting Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated on a regular basis by the chief operating decision-maker (“CODM”), or decision making group, in deciding how to allocate resources to an individual segment and in assessing performance of the segment. In light of the Company’s current product offering and the fact that the Company’s CODM, which is the Company’s Chief Executive Officer, monitors and reviews financial information at a consolidated level for assessing operating results and allocation of resources, management has concluded that the Company has one reportable operating segment.
Earnings Per Share	Earnings Per Share Basic earnings per share is computed by dividing the net income attributable to common stockholders, after deducting accrued preferred stock dividends, by the weighted average number of common and preferred shares outstanding for the period. The preferred stockholders are entitled to participate on an “as converted basis” in any dividends paid on the Company’s common stock, and as such are considered participating securities to which earnings should be allocated using the two-class method. Diluted earnings per share reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised, settled or converted into common stock, unless the effect is anti-dilutive. Stock options and employee share awards are included as potential dilutive securities for the applicable periods, except that 1.8 and 1.6 million stock options have been excluded for the three and nine months ended September 30, 2015, respectively and 1.5 million stock options have been excluded for the three and nine months ended September 30, 2014, because their effect is antidilutive. For the three and nine months ended September 30, 2015 and 2014, 1.3 million and 0.3 million performance share units, respectively, were excluded as potential dilutive securities, as the performance criteria has not been met. The computation of shares used in calculating basic and diluted earnings per common share are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (in thousands) Basic weighted average common shares outstanding Basic weighted average preferred shares outstanding Basic weighted average shares outstanding Dilutive effect of stock options Dilutive effect of performance stock units Dilutive effect of restricted stock units Dilutive weighted average shares outstanding
Recent Accounting Pronouncements	Recent Accounting Pronouncements In September 2015, the FASB issued ASU No. 2015-16, “Business Combinations (Topic 805) — Simplifying the Accounting for Measurement-Period Adjustments.” ASU No. 2015-16 eliminates the requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively. ASU No. 2015-16 is effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period. The Company is assessing the potential impact of the new standard on its consolidated financial statements. In May 2014, the FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers (Topic 606),” a new standard related to revenue recognition, 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 standard will replace most of the existing revenue recognition standards in U.S. GAAP when it becomes effective. In July 2015, the FASB decided to delay the effective date by one year to January 1, 2018. Early adoption is permitted no earlier than 2017. The new standard can be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of the change recognized at the date of the initial application in retained earnings. The Company is assessing the potential impact of the new standard on financial reporting and has not yet selected a transition method. In April 2015, the FASB issued ASU No. 2015-05, “Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement.” The amendments in this update provide guidance to customers about whether a cloud computing arrangement includes a software license. Under application of this guidance, if a cloud computing arrangement includes a software license, the update specifies that the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. A customer should account for a cloud computing arrangement as a service contract if the arrangement does not include a software license. ASU No. 2015-05 is effective for 2016 and early adoption is allowed. The Company is assessing the impact of this update and the timing of adoption.

Significant Accounting Polici20

Significant Accounting Policies (Tables)	9 Months Ended
	Sep. 30, 2015
Significant accounting policies
Computation of shares used in calculating basic and diluted earnings per common share	Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (in thousands) Basic weighted average common shares outstanding Basic weighted average preferred shares outstanding Basic weighted average shares outstanding Dilutive effect of stock options Dilutive effect of performance stock units Dilutive effect of restricted stock units Dilutive weighted average shares outstanding

Intangible Assets (Tables)

Intangible Assets (Tables)	9 Months Ended
	Sep. 30, 2015
Finite-Lived Intangible Assets
Schedule of acquired finite-lived intangible assets	September 30, December 31, Weighted Average 2015 2014 Useful Life (in thousands) Domain names $ $ 5 years Less: accumulated amortization ) ) Domain names, net $ $
Schedule of estimate of future amortization expense for acquired intangible assets	(in thousands) October 1, 2015 to December 31, 2015 $ 2016 2017 2018 2019 Total $

Stock option and incentive pl22

Stock option and incentive plan (Tables)	9 Months Ended
	Sep. 30, 2015
Stock option and incentive plan
Summary of stock option activity	Weighted Average Weighted Average Remaining Options Exercise Price Contractual Term (in thousands) Outstanding at January 1, 2015 $ Granted $ Exercised — $ — Cancelled — $ — Forfeited ) $ Outstanding at September 30, 2015 $ 7.1 years Exercisable at September 30, 2015 $ 6.4 years Options vested and expected to vest
Summary of activity in PSUs	Weighted Average Performance Grant Date Fair Stock Units Value Per Share (in thousands) Nonvested at January 1, 2015 $ Granted $ Vested ) $ Forfeited — $ — Nonvested at September 30, 2015 $
Summary of RSU activity	Weighted Average Restricted Grant Date Fair Stock Units Value Per Share (in thousands) Nonvested at January 1, 2015 $ Granted $ Vested ) $ Forfeited ) $ Nonvested at September 30, 2015 $
Summary of share-based compensation	Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (in thousands) Stock options Performance stock units Restricted stock units Total

Restatement (Details)

Restatement (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Restatement
Cost for restatement and re-audits	$ 0	$ 0.9

Significant accounting polici24

Significant accounting policies (Details) $ in Thousands, shares in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015USD ($)shares	Sep. 30, 2014USD ($)shares	Sep. 30, 2015USD ($)segmentshares	Sep. 30, 2014USD ($)shares	Dec. 31, 2014USD ($)
Significant accounting policies
General and administrative expenses	$ 7,347	$ 4,867	$ 19,328	$ 17,575
Cost of revenues	5,101	4,668	14,433	12,847
Selling and marketing	6,222	3,286	15,505	9,542
Research and development	3,200	$ 2,961	$ 9,607	$ 6,292
Period in length of subscriptions to cloud-based application			1 year
Notice period for return and automatic renewal of subscription arrangements			30 days
Contract period of subscription services			12 months
Estimated customer attrition rate			5.00%
Provision for doubtful accounts	$ 100		$ 100		$ 100
Stock options excluded from computation of earnings per share (in shares) | shares				1.5
Number of operating segments | segment			1
Stock options
Significant accounting policies
Stock options excluded from computation of earnings per share (in shares) | shares	1.8	1.5	1.6	1.5
PSU
Significant accounting policies
Stock options excluded from computation of earnings per share (in shares) | shares			1.3	0.3
Minimum
Significant accounting policies
Short-term investment maturity period			90 days
Estimated useful lives			3 years
Maximum
Significant accounting policies
Short-term investment maturity period			365 days
Estimated useful lives			5 years
Customer relationships
Significant accounting policies
Estimated useful life			9 years
As Previously Reported
Significant accounting policies
General and administrative expenses		$ 500		$ 1,600
Restated
Significant accounting policies
Cost of revenues		100		100
Selling and marketing		300		1,100
Research and development		$ 200		$ 400

Significant accounting polici25

Significant accounting policies (Details 2) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Significant accounting policies
Basic weighted average common shares outstanding (in shares)	87,759	87,611	87,233	86,240
Basic weighted average preferred shares outstanding (in shares)	30,000	30,000	30,000	30,632
Basic weighted average shares outstanding (in shares)	117,759	117,611	117,233	116,872
Dilutive effect of stock options (in shares)	2,503	2,577	2,609	2,552
Dilutive effect of performance stock units (in shares)	1,266	1,171	1,541	1,105
Dilutive effect of restricted stock units (in shares)	451	661	450	320
Diluted weighted average shares outstanding (in shares)	121,979	122,020	121,833	120,849

Intangible Assets (Details)

Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Finite-Lived Intangible Assets
Domain names	$ 275	$ 275		$ 275		$ 275
Less: accumulated amortization	(56)	(56)		(56)		(15)
Domain names, net	$ 219	219		219		260
Weighted average useful life	5 years
Amortization expense		100	$ 100	100	$ 100
Finite-Lived Intangible Assets Future Amortization Expense
October 1, 2015 to December 31, 2015	$ 14	14		14
2,016	55	55		55
2,017	55	55		55
2,018	55	55		55
2,019	40	40		40
Total	$ 219
Capitalized costs of internally developed software		$ 1,400		$ 3,800		$ 0

Fair Value of Financial Instr27

Fair Value of Financial Instruments (Details) - USD ($)	9 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Minimum
Fair value of financial instruments
Short-term investment maturity period	90 days
Maximum
Fair value of financial instruments
Short-term investment maturity period	365 days
U.S. treasury money market funds
Fair value of financial instruments
Cash equivalents	$ 0
U.S. treasury bills
Fair value of financial instruments
Cash equivalents		$ 32,500,000

Redeemable Preferred Stock (Det

Redeemable Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions	1 Months Ended	9 Months Ended
	Mar. 31, 2009	Sep. 30, 2015
Redeemable preferred stock
Stock Issued During Period, Value, New Issues		$ 235
Preferred Stock, Redemption Terms		Redemption rights-The holders of the Preferred Shares have the option to require the Preferred Shares (including any PIK shares) to be redeemed in cash, at $0.10 per share plus accrued and unpaid dividends, at any time after 60 months from the date of issue of the Preferred Shares. Any redeemed amounts will be paid in four equal quarterly installments commencing 60 days after the redemption request.
Preferred Stock Terms Of Anti Dilution Provision		Anti-Dilution Provision-In the event of a future offering of the Company's stock at a price per common share which is less than the Preferred Share conversion rate immediately before such offering, the conversion price for the Preferred Shares is adjusted according to a weighted average formula.
Preferred Stock Liquidation Terms		Liquidation preference-In the event of any voluntary or involuntary liquidation of the Company, the holders of Preferred Shares are entitled to an amount per Preferred Share equal to 1.5 times the original issue price of $0.10 plus any accrued but unpaid dividends.
Preferred Stock, Voting Rights		Voting rights-Preferred Shares have equal voting rights (one vote per share) to common stock, except that Preferred Shares do not vote in the general election of directors.
Preferred Stock Other Provisions Terms		Other provisions-For as long as not less than 15 million Preferred Shares are outstanding, the holders of the Preferred Shares have the right between them to appoint one director, and the Company may not take action relating to certain major transactions without obtaining the consent of not less than 60% of the Preferred Shares or without obtaining the approval of the director appointed by the holder of the Preferred Shares (for matters requiring Board of Directors approval).
Series A Preferred Stock
Redeemable preferred stock
Shares issued under employee stock purchase plan (in shares)	30
Share price (in dollars per share)	$ 0.10
Stock Issued During Period, Value, New Issues	$ 3,000
Dividend (as a percent)		11.00%
Preferred stock dividend		$ 200
Convertible Preferred Stock Triggering Event Minimum Amount From Underwritten Share Offering		$ 40,000

Stock option and incentive pl29

Stock option and incentive plan (Details) $ / shares in Units, $ in Thousands	Sep. 30, 2015USD ($)shares	Dec. 23, 2013USD ($)item$ / sharesshares	Jun. 12, 2013shares	Apr. 30, 2015shares	Aug. 31, 2014USD ($)	Jun. 30, 2013USD ($)shares	Sep. 30, 2015USD ($)shares	Sep. 30, 2014USD ($)	Sep. 30, 2015USD ($)shares	Sep. 30, 2014USD ($)	May. 03, 2013shares	Dec. 31, 2012item
Stock option and incentive plans
Number of additional shares authorized for issuance under the plan | shares				7
Number of option awards exceeded the applicable plan cap | item												3
Number of shares issued in excess of cap | shares						250,000
Additional share-based expense recognized						$ 100	$ 1,765	$ 1,192	$ 5,263	$ 1,768
Unrecognized share-based compensation expense (in dollars)	$ 10,900						10,900		$ 10,900
Granted (in shares) | shares									720,000
Accrued expenses and other current liabilities
Stock option and incentive plans
Liability for the performance cash award	1,400						1,400		$ 1,400
2,015
Stock option and incentive plans
Unrecognized share-based compensation expense (in dollars)	700						700		700
2,016
Stock option and incentive plans
Unrecognized share-based compensation expense (in dollars)	2,000						2,000		2,000
2,017
Stock option and incentive plans
Unrecognized share-based compensation expense (in dollars)	1,000						1,000		1,000
2,018
Stock option and incentive plans
Unrecognized share-based compensation expense (in dollars)	400						400		400
2,019
Stock option and incentive plans
Unrecognized share-based compensation expense (in dollars)	$ 100						$ 100		$ 100
Replacement grant agreement
Stock option and incentive plans
Vesting period		10 years
Number of options vested subject to cancellation (in shares) | shares		2,400,000
Weighted average exercise price of options vested subject to cancellation (in dollars per share) | $ / shares		$ 0.14
Maximum number of vested shares applicable under the plan (in shares) | shares		1,600,000
Number of options to be granted in lieu of cancellation (in shares) | shares		1,600,000
Exercise price of options to be granted in lieu of cancellation (in dollars per share) | $ / shares		$ 2.79
Minimum revenue growth rate (as a percent)		7.00%
Number of equal annual installments payable on cash awards earned | item		3
Minimum percentage of exercise price used to determine measurement period prior to each payment due		75.00%
Number of options expected to vest subject to cancellation (in shares) | shares		3,000,000
Weighted average exercise price of options expected to vest subject to cancellation (in dollars per share) | $ / shares		$ 0.82
Maximum number of expected to vest shares applicable under the plan (in shares) | shares		2,500,000
Number of options to be granted in lieu of cancellation on achieving revenue growth (in shares) | shares		2,250,000
Number of equal annual installments based on continued employment | item		4
Percentage of delivery dates for vested performance shares in 2018		50.00%
Percentage of delivery dates for vested performance shares in 2019		50.00%
Number of options to be granted in lieu of cancellation on achieving EPS growth or stockholder return (in shares) | shares		250,000
Minimum percentage of fully diluted EPS growth		15.00%
Minimum percentage of total stockholder return growth		15.00%
Number of annual measurement period used to determine total stockholder return growth | item		4
Annual measurement period used to determine total stockholder return growth		1 year
Period of trailing days used to determine TSR growth which is measured based on the entity's stock price performance		20 days
Performance shares to be earned | shares		625,000
Performance revenue target cash award paid					$ 1,400
Replacement incentive awards
Stock option and incentive plans
Shares reserved for issuance | shares	4,100,000						4,100,000		4,100,000
Fair value of awards (in dollars)		$ 4,200
Unrecognized share-based compensation expense (in dollars)	$ 900						$ 900	2,800	$ 900	2,800
Replacement incentive awards | Remainder of 2014
Stock option and incentive plans
Unrecognized share-based compensation expense (in dollars)								200		200
Replacement incentive awards | 2015
Stock option and incentive plans
Unrecognized share-based compensation expense (in dollars)	200						200		200
New remuneration package
Stock option and incentive plans
Total value of compensation payable	$ 100						100		100
Percentage of compensation payable to officers in cash	38.00%
RSU
Stock option and incentive plans
Number of shares issued (in shares) | shares			150,000
Vesting period			4 years 6 months
Additional share-based expense recognized							813	459	2,262	419
Unrecognized share-based compensation expense (in dollars)	$ 4,700						4,700		4,700
Stock options
Stock option and incentive plans
Vesting period			4 years 6 months
Additional share-based expense recognized							354	495	1,366	578
PSU
Stock option and incentive plans
Additional share-based expense recognized							$ 598	$ 238	1,635	$ 771
Granted (in shares) | shares	675,000
Grant date fair value									$ 2,700
Maximum | PSU
Stock option and incentive plans
Vesting period	4 years
Minimum | PSU
Stock option and incentive plans
Vesting period	1 year
Vesting right percentage									25.00%
2007 Plan | Chief executive officer
Stock option and incentive plans
Number of option awards exceeded the applicable plan cap | item												1,600,000
2010 Plan | Employees
Stock option and incentive plans
Number of option awards exceeded the applicable plan cap | item												250,000
2010 Plan | Chief executive officer
Stock option and incentive plans
Number of option awards exceeded the applicable plan cap | item												2,500,000
2013 Plan
Stock option and incentive plans
Number of shares authorized for issuance under the plan | shares											15,500,000
Number of shares available for grant under the plan | shares	5,700,000						5,700,000		5,700,000

Stock option and incentive pl30

Stock option and incentive plan (Details 2) shares in Thousands	9 Months Ended
	Sep. 30, 2015$ / sharesshares	Sep. 30, 2014
Options
Option, Outstanding at Beginning	6,553
Granted (in shares)	720
Forfeited (in shares)	(100)
Option, Outstanding at Ending	7,173
Exercisable at the end of the period (in shares)	5,388
Options expected to vest at the end of the period (in shares)	7,084
Weighted average exercise price
Weighted average exercise price, Outstanding at January 1 | $ / shares	$ 2.31
Granted (in dollars per share) | $ / shares	3.42
Forfeited (in dollars per share) | $ / shares	3.85
Weighted average exercise price, Outstanding at September 30 | $ / shares	2.40
Exercisable at the end of the period (in dollars per share) | $ / shares	$ 1.96
Weighted average remaining contractual term
Weighted average remaining contractual term, Outstanding at September 30		7 years 1 month 6 days
Weighted average remaining contractual term, Exercisable at September 30		6 years 4 months 24 days

Stock option and incentive pl31

Stock option and incentive plan (Details 3) - USD ($) $ / shares in Units, $ in Thousands	Dec. 23, 2013	Jun. 12, 2013	Jun. 30, 2013	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Weighted Average Grant Date Fair Value Per Share
Options outstanding replaced by RSUs				7,173,000		7,173,000		6,553,000
Aggregate share-based compensation expense			$ 100	$ 1,765	$ 1,192	$ 5,263	$ 1,768
Unrecognized share-based compensation expense (in dollars)				$ 10,900		$ 10,900
Weighted average period over which unrecognized compensation is expected to be recognized						1 year 2 months 9 days
PSU
Performance Stock Units and Restricted Stock Units
Nonvested at the beginning of the period (in shares)						2,500,000
Granted (in shares)						1,065,000
Vested (in shares)						(625,000)
Nonvested at the end of the period (in shares)				2,940,000		2,940,000
Weighted Average Grant Date Fair Value Per Share
Nonvested at the beginning of the period (in dollars per share)						$ 2.79
Nonvested at the end of the period (in dollars per share)				$ 3.13		3.13
Granted (in dollars per share)						3.73
Vested (in dollars per share)						$ 2.79
Aggregate share-based compensation expense				$ 598	238	$ 1,635	771
Unrecognized share-based compensation expense related to PSUs and RSUs				$ 4,000		$ 4,000
RSU
Performance Stock Units and Restricted Stock Units
Nonvested at the beginning of the period (in shares)						1,055,000
Granted (in shares)						1,122,000
Vested (in shares)						(284,000)
Forfeited (in shares)						(58,000)
Nonvested at the end of the period (in shares)				1,835,000		1,835,000
Weighted Average Grant Date Fair Value Per Share
Nonvested at the beginning of the period (in dollars per share)						$ 4.17
Nonvested at the end of the period (in dollars per share)				$ 3.87		3.87
Granted (in dollars per share)						3.85
Vested (in dollars per share)						3.90
Forfeited (in dollars per share)						$ 3.85
Number of shares issued (in shares)		150,000
Vesting period		4 years 6 months
Aggregate share-based compensation expense				$ 813	459	$ 2,262	419
Unrecognized share-based compensation expense (in dollars)				4,700		4,700
Stock options
Weighted Average Grant Date Fair Value Per Share
Vesting period		4 years 6 months
Aggregate share-based compensation expense				354	$ 495	1,366	$ 578
Unrecognized share-based compensation expense related to stock options				$ 2,200		$ 2,200
Replacement grant agreement
Weighted Average Grant Date Fair Value Per Share
Vesting period	10 years

Income taxes (Details)

Income taxes (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Income taxes
Effective rate (as a percent)	12.00%	44.00%	34.00%	39.00%
Net operating loss carryforwards expected to expire unutilized in 2029	$ 4.9		$ 4.9
Operating loss carryforward utilized
Income taxes
Net operating loss carryforwards	$ 0.4		$ 0.4

Contingencies (Details)

Contingencies (Details) - USD ($) $ in Millions	Dec. 31, 2014	Sep. 30, 2015	Sep. 30, 2015
State and local taxes
Provision related to uncollected sales tax	$ 2.1		$ 1.9
NZX Member
Litigation Settlement [Abstract]
Settlement for payment of fines and costs	0.1	$ 0.1
NZXR Member
Litigation Settlement [Abstract]
Settlement for payment of fines and costs	$ 0.1

Subsequent events (Details)

Subsequent events (Details) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2015	Oct. 06, 2015
BoardLink Acquisition
Acquisition related costs	$ 200,000	$ 200,000
Subsequent Event
BoardLink Acquisition
Cash paid for Thomson Reuters Boardlink business			$ 10,000,000