Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Oct. 30, 2015 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | ALARM.COM HOLDINGS, INC. | |
Entity Central Index Key | 1,459,200 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 45,574,172 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Revenue: | |||||
SaaS and license revenue | $ 36,158 | $ 28,473 | $ 102,247 | $ 80,652 | |
Hardware and other revenue | 17,849 | 14,359 | 49,720 | 41,109 | |
Total revenue | 54,007 | 42,832 | 151,967 | 121,761 | |
Cost of revenue: | |||||
Cost of SaaS and license revenue | [1] | 6,764 | 6,002 | 19,094 | 16,679 |
Cost of hardware and other revenue | [1] | 13,205 | 11,546 | 38,171 | 32,893 |
Total cost of revenue | [1] | 19,969 | 17,548 | 57,265 | 49,572 |
Operating expenses: | |||||
Sales and marketing | 8,425 | 8,107 | 24,405 | 19,873 | |
General and administrative | 9,932 | 6,746 | 25,516 | 19,175 | |
Research and development | 9,836 | 6,094 | 26,667 | 16,468 | |
Amortization and depreciation | 1,504 | 1,058 | 4,370 | 2,714 | |
Total operating expenses | 29,697 | 22,005 | 80,958 | 58,230 | |
Operating income | 4,341 | 3,279 | 13,744 | 13,959 | |
Interest expense | (44) | (40) | (128) | (153) | |
Other (expense) / income, net | (7) | (80) | (62) | (70) | |
Income before income taxes | 4,290 | 3,159 | 13,554 | 13,736 | |
Provision for income taxes | 1,061 | 492 | 4,775 | 4,720 | |
Net income | 3,229 | 2,667 | 8,779 | 9,016 | |
Dividends paid to participating securities | 0 | 0 | (18,987) | 0 | |
Income allocated to participating securities | (50) | (2,549) | 0 | (8,651) | |
Net income / (loss) attributable to common stockholders | $ 3,179 | $ 118 | $ (10,208) | $ 365 | |
Net income / (loss) per share: | |||||
Net income / (loss) per share, basic (in dollars per share) | $ 0.07 | $ 0.05 | $ (0.60) | $ 0.17 | |
Net income / (loss) per share, diluted (in dollars per share) | $ 0.07 | $ 0.03 | $ (0.60) | $ 0.10 | |
Weighted average common shares outstanding: | |||||
Weighted average common shares outstanding, basic (in shares) | 44,922,410 | 2,429,445 | 16,910,090 | 2,211,263 | |
Weighted average common shares outstanding, diluted (in shares) | 46,832,014 | 4,345,685 | 16,910,090 | 3,792,228 | |
Cash dividends declared per share (in dollars per share) | $ 0 | $ 0 | $ 0.36 | $ 0 | |
[1] | Exclusive of amortization and depreciation shown below. |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Comprehensive Income (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 3,229 | $ 2,667 | $ 8,779 | $ 9,016 |
Other comprehensive income, net of tax: | ||||
Change in unrealized gains on marketable securities | 0 | 33 | 0 | 64 |
Comprehensive income | $ 3,229 | $ 2,700 | $ 8,779 | $ 9,080 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 126,601 | $ 42,572 |
Accounts receivable, net | 21,746 | 17,259 |
Inventory | 9,625 | 6,852 |
Deferred tax assets | 3,809 | 3,242 |
Other current assets | 4,535 | 1,919 |
Total current assets | 166,316 | 71,844 |
Property and equipment, net | 12,040 | 8,130 |
Intangible assets, net | 6,879 | 5,092 |
Goodwill | 24,723 | 21,374 |
Deferred tax assets | 6,715 | 5,121 |
Other assets | 6,452 | 9,371 |
Total Assets | 223,125 | 120,932 |
Current liabilities: | ||
Accounts payable, accrued expenses and other current liabilities | 24,226 | 15,233 |
Accrued compensation | 6,905 | 5,816 |
Deferred revenue | 2,372 | 1,699 |
Total current liabilities | 33,503 | 22,748 |
Deferred revenue | 9,631 | 9,202 |
Long-term debt | 6,700 | 6,700 |
Other liabilities | 7,487 | 1,670 |
Total Liabilities | $ 57,321 | $ 40,320 |
Commitments and contingencies (Note 11) | ||
Redeemable convertible preferred stock | ||
Redeemable convertible preferred stock | $ 0 | $ 202,456 |
Stockholders’ equity / (deficit) | ||
Preferred stock, $0.001 par value, 10,000,000 and 0 shares authorized; 0 shares issued and outstanding as of September 30, 2015 and December 31, 2014. | 0 | 0 |
Common stock, $0.01 par value, 300,000,000 and 100,000,000 shares authorized; 45,568,625 and 2,823,816 shares issued; and 45,443,547 and 2,614,444 shares outstanding as of September 30, 2015 and December 31, 2014. | 454 | 26 |
Additional paid-in capital | 296,444 | 7,168 |
Treasury stock (35,523 shares at cost of $1.20 per share) | (42) | (42) |
Accumulated other comprehensive income | 0 | 0 |
Accumulated deficit | (131,052) | (128,996) |
Total Stockholders’ Equity / (Deficit) | 165,804 | (121,844) |
Total Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Equity / (Deficit) | 223,125 | 120,932 |
Series B Redeemable Convertible Preferred Stock | ||
Redeemable convertible preferred stock | ||
Redeemable convertible preferred stock | 0 | 136,523 |
Series B-1 Redeemable Convertible Preferred Stock | ||
Redeemable convertible preferred stock | ||
Redeemable convertible preferred stock | 0 | 6,265 |
Series A Redeemable Convertible Preferred Stock | ||
Redeemable convertible preferred stock | ||
Redeemable convertible preferred stock | $ 0 | $ 59,668 |
Condensed Consolidated Balance5
Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 0 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 300,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 45,568,338 | 2,823,816 |
Common stock, shares outstanding (in shares) | 45,443,547 | 2,614,444 |
Treasury stock (in shares) | 35,523 | 35,523 |
Treasury stock, cost (in dollars per share) | $ 1.20 | $ 1.20 |
Series B Redeemable Convertible Preferred Stock | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 0 | 1,809,685 |
Preferred stock, shares issued (in shares) | 0 | 1,809,685 |
Preferred stock, shares outstanding (in shares) | 0 | 1,809,685 |
Preferred stock, liquidation preference | $ 0 | $ 191,132 |
Series B-1 Redeemable Convertible Preferred Stock | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 0 | 1,669,680 |
Preferred stock, shares issued (in shares) | 0 | 82,934 |
Preferred stock, shares outstanding (in shares) | 0 | 82,934 |
Preferred stock, liquidation preference | $ 0 | $ 8,759 |
Series A Redeemable Convertible Preferred Stock | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 0 | 3,511,725 |
Preferred stock, shares issued (in shares) | 0 | 1,998,257 |
Preferred stock, shares outstanding (in shares) | 0 | 1,998,257 |
Preferred stock, liquidation preference | $ 0 | $ 24,309 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities: | ||
Net income | $ 8,779 | $ 9,016 |
Adjustments to reconcile net income to net cash from operating activities: | ||
Provision for doubtful accounts | 420 | 909 |
Reserve for product returns | 1,148 | 1,453 |
Amortization on patents | 258 | 151 |
Amortization and depreciation | 4,370 | 2,714 |
Amortization of debt issuance costs | 81 | 43 |
Deferred income taxes | (2,160) | (1,055) |
Change in fair value of contingent liability | 180 | 0 |
Unrealized gain on derivative instrument | 0 | (155) |
Undistributed losses from equity investees | 285 | 450 |
Stock-based compensation | 2,198 | 2,365 |
Other, net | (49) | (196) |
Changes in operating assets and liabilities (net of business acquisition): | ||
Accounts receivable | (6,043) | (4,436) |
Inventory | (2,724) | (4,799) |
Other assets | (1,904) | (1,971) |
Accounts payable, accrued expenses and other current liabilities | 10,458 | 845 |
Deferred revenue | 1,095 | 894 |
Other liabilities | 4,784 | 260 |
Cash flows from operating activities | 21,176 | 6,488 |
Cash flows used in investing activities: | ||
Business acquisition, net of cash acquired | (5,849) | 0 |
Additions to property and equipment | (6,520) | (6,150) |
Investment in cost method investee | (54) | 0 |
Sale of cost method investee | 0 | 5 |
Issuances of notes receivable | (317) | (687) |
Purchases of licenses to patents | (1,000) | 0 |
Cash flows used in investing activities | (13,740) | (6,832) |
Cash flows from / (used in) financing activities | ||
Proceeds from issuance of common stock from initial public offering, net of underwriting discount and commission | 97,976 | 0 |
Proceeds from issuance of debt, net of debt issuance costs | 0 | 6,376 |
Repayments of term loan | 0 | (7,500) |
Dividends paid to common stockholders | (1,013) | 0 |
Dividends paid to employees for unvested shares | (57) | 0 |
Dividends paid to redeemable convertible preferred stockholders | (18,930) | 0 |
Payments of offering costs | (2,632) | (2,100) |
Repurchases of common stock | (1) | (3) |
Proceeds from early exercise of stock-based awards | 124 | 1,533 |
Issuances of common stock from equity based plans | 300 | 530 |
Tax windfall benefit from stock-based awards | 826 | 1,009 |
Cash flows from / (used in) financing activities | 76,593 | (155) |
Net increase / (decrease) in cash and cash equivalents | 84,029 | (499) |
Cash and cash equivalents at beginning of the period | 42,572 | 33,583 |
Cash and cash equivalents at end of the period | 126,601 | 33,084 |
Supplemental disclosure of noncash investing and financing activities: | ||
Conversion of redeemable convertible preferred stock to common stock | 202,456 | 0 |
Cash not yet paid for business acquisitions | 617 | 0 |
Contingent liability from business acquisition | 880 | 0 |
Cash not yet paid for capital expenditures | 232 | 0 |
Reclassification of deferred offering costs to additional paid-in-capital | 5,024 | 0 |
Deferred offering costs in accounts payable, accrued expenses and other current liabilities | $ 0 | $ 342 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Equity (unaudited) - 9 months ended Sep. 30, 2015 - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In- Capital | Treasury Stock | Accumulated Deficit | Accumulated Other Comprehensive Income |
Balance (in shares) at Dec. 31, 2014 | 2,614,444 | 2,614,000 | ||||
Balance at Dec. 31, 2014 | $ (121,844) | $ 26 | $ 7,168 | $ (42) | $ (128,996) | $ 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock from initial public offering, net of issuance costs (in shares) | 7,525,000 | |||||
Issuance of common stock from initial public offering, net of issuance costs | 92,953 | $ 75 | 92,878 | |||
Conversion of redeemable convertible preferred stock to common stock (in shares) | 35,018,000 | |||||
Conversion of redeemable convertible preferred stock to common stock | 202,456 | $ 350 | 202,106 | |||
Common stock issued in connection with equity based plans (in shares) | 265,000 | |||||
Common stock issued in connection with equity based plans | 300 | $ 3 | 297 | |||
Vesting of common stock subject to repurchase (in shares) | 97,000 | |||||
Vesting of common stock subject to repurchase | 343 | $ 1 | 342 | |||
Stock-based compensation expense | 2,198 | 2,198 | ||||
Tax benefit from stock-based awards, net | 665 | 665 | ||||
Modification of employee stock-based award and repurchase of common stock (in shares) | (75,000) | |||||
Modification of employee stock-based award and repurchase of common stock | (46) | $ (1) | (45) | |||
Dividends paid to common stockholders | (1,013) | (673) | (340) | |||
Dividends paid to employees with unvested common stock | (57) | (38) | (19) | |||
Dividends paid to redeemable convertible preferred stockholders | (18,930) | (8,454) | (10,476) | |||
Net income | $ 8,779 | 8,779 | ||||
Balance (in shares) at Sep. 30, 2015 | 45,443,547 | 45,444,000 | ||||
Balance at Sep. 30, 2015 | $ 165,804 | $ 454 | $ 296,444 | $ (42) | $ (131,052) | $ 0 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Alarm.com Holdings, Inc. (referred herein as “Alarm.com”, the “Company”, or “we”) is a cloud-based software platform solution for the connected home. Our multi-tenant software-as-a-service (“SaaS”) platform allows home and business owners to intelligently secure and manage their properties and remotely interact with a broad array of connected devices through a single, intuitive interface. Our solution is delivered through an established network of thousands of authorized and licensed service providers. Our four primary solutions are interactive security, intelligent automation, video monitoring and energy management, which can be used individually or integrated into a single user interface. We derive revenue from the sale of our software-as-a-service over our integrated platform, hardware, activation fees and other revenue. Our fiscal year ends on December 31st. Initial Public Offering Our registration statement on Form S-1 relating to our IPO was declared effective by the Securities and Exchange Commission (the "SEC") on June 25, 2015. On July 1, 2015, we closed our initial public offering ("IPO") of 7,000,000 shares of common stock at an offering price of $14.00 per share, resulting in gross proceeds of $98.0 million . In addition, on July 8, 2015, we closed the underwriters' exercise of their over-allotment option to purchase up to an additional 525,000 shares of our common stock from us and up to an additional 525,000 shares from the selling stockholders, we issued and sold an additional 525,000 additional shares of our common stock and certain selling stockholders affiliated with ABS Capital Partners sold 525,000 shares of our common stock, resulting in additional gross proceeds to us of $7.4 million . We did not receive any proceeds from the sale of shares by the selling stockholders. In total we issued 7,525,000 shares of common stock and raised $105.4 million in gross proceeds, or $93.0 million in net proceeds after deducting underwriting discounts and commissions of $7.4 million and offering costs of $5.0 million . Upon completion of the IPO, on July 1, 2015, all outstanding shares of convertible preferred stock converted into an aggregate of 35,017,884 shares of common stock. In addition, upon the closing of the IPO, our Certificate of Incorporation was amended and restated to authorize 10,000,000 shares of undesignated preferred stock and 300,000,000 shares of common stock. Dividend On June 12, 2015, our board of directors declared a cash dividend on our common and preferred stock in the amount of (1) $0.36368 per share of common stock and Series A preferred stock and (2) $0.72736 per share of Series B preferred stock and Series B-1 preferred stock or $20.0 million in the aggregate. We paid the dividends on June 26, 2015 to our stockholders of record as of June 12, 2015. |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts and our results of operations and our majority owned and controlled subsidiaries. All intercompany balances and transactions have been eliminated in the accompanying unaudited condensed consolidated financial statements. These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the applicable rules and regulations of the Securities and Exchange Commission ("SEC"). Accordingly, they do not include all the information and footnotes required by GAAP for annual financial statements. They should be read together with our audited consolidated financial statements and related notes for the year ended December 31, 2014 appearing in our final prospectus for our IPO dated June 25, 2015 and filed with the SEC, pursuant to Rule 424(b) under the Securities Act of 1933, as amended on June 26, 2015. The condensed balance sheet data as of December 31, 2014 was derived from our audited financial statements, but does not include all disclosures required by GAAP. In the opinion of management, these condensed consolidated financial statements include all normal recurring adjustments necessary for a fair presentation of the results of operations, financial position and cash flows. The results of operations for the three and nine months ended September 30, 2015 are not necessarily indicative of the results that can be expected for the entire fiscal year ending December 31, 2015 . Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Our estimates, judgments and assumptions are continually evaluated based on available information and experience. Because of the use of estimates inherent in the financial reporting process, actual results could differ from those estimates. Estimates are used when accounting for revenue recognition, allowances for doubtful accounts receivable, allowance for hardware returns, estimates of obsolete inventory, long-term incentive compensation, stock-based compensation, income taxes, legal reserves, contingent consideration and goodwill and intangible assets. Recent Accounting Pronouncements Adopted On April 10, 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-08, “ Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity,” which amends the definition of a discontinued operation in ASC 205-20 and requires entities to provide additional disclosures about discontinued operations as well as disposal transactions that do not meet the discontinued operations criteria. The guidance narrowed the definition of discontinued operations for disposal of a component or group of components that represents a strategic shift that has or will have a major impact on an entity’s operations or financial results. The guidance also expands the scope to include equity method investments and businesses that, upon initial acquisition, qualify as held for sale. The expanded disclosure requirements include statement of financial position and statement of cash flows disclosures for all comparative periods. The ASU 2014-08 is effective prospectively for all disposals (or classifications as held for sale) in periods beginning on or after December 15, 2014 with early adoption permitted. We adopted this pronouncement in the first quarter of 2015, and it did not have a material impact on our financial statements. On August 18, 2015, the FASB issued ASU 2015-15, “Interest- Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements - Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015, EITF Meeting,” which clarifies the application of ASU 2015-03 related to presentation and subsequent measurement of debt issuance costs related to line-of-credit arrangements to allow for an entity to defer and present debt issuance costs as an asset and subsequently amortize the deferred debt issuance costs ratably over the line-of-credit arrangement, regardless of whether there are any outstanding borrowings. ASU 2015-03, “ Simplifying the Presentation of Debt Issuance Costs,” otherwise requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. We adopted these pronouncements in the third quarter of 2015. The adoption did not have an impact on our financial statements. We continue to present the debt issuance costs associated with our revolving credit facility as an asset that is amortized ratably over the term of the agreement. Not yet adopted On September 25, 2015, the FASB issued ASU 2015-16, “Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments,” which requires entities to apply the guidance prospectively to adjustments to provisional amounts that occur after the effective date. Under current guidance, the acquirer retrospectively adjusts provisional amounts recognized as of the acquisition date with a corresponding adjustment to goodwill. Adjustments are required when new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts initially recognized or would have resulted in the recognition of additional assets or liabilities. The amendments in ASU 2015-16 eliminate the requirement to retrospectively account for those adjustments. The amendment is effective for annual periods, including periods within those annual periods beginning after December 15, 2015 with early adoption permitted. We are required to adopt this pronouncement prospectively in the first quarter of 2016, and we do not anticipate that adoption of the pronouncement will have a material impact on our financial statements. On August 12, 2015, the FASB issued ASU 2015-14, "Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date," which defers the effective date for all entities for one year of ASU 2014-09, “ Revenue from Contracts with Customers (Topic 606),” issued on May 28, 2014. ASU 2014-09 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. The guidance supersedes the revenue recognition guidance in Topic 605, “Revenue Recognition,” and most industry-specific guidance throughout the Industry Topics of the FASB Accounting Standards Codification. The guidance also supersedes some cost guidance included in Subtopic 605-35, “ Revenue Recognition - Contract-Type and Production-Type Contracts." ASU 2014-9, as amended, is effective for annual periods, and interim periods within those years, beginning after December 31, 2017. An entity is required to apply the amendments using one of the following two methods: (1) retrospectively to each prior period presented with three possible expedients: (a) for completed contracts that begin and end in the same reporting period no restatement is required; (b) for completed contract with variable consideration an entity may use the transaction price at completion rather than restating estimated variable consideration amounts in comparable reporting periods; and (c) for comparable reporting periods before date of initial application reduced disclosure requirements related to transaction price; (2) retrospectively with the cumulative effect of initially applying the amendment recognized at the date of initial application with additional disclosures for the differences of the prior guidance to the reporting periods compared to the new guidance and an explanation of the reasons for significant changes. We are required to adopt ASU 2014-09 in the first quarter of 2018, and we are currently assessing the impact of this pronouncement on our financial statements. On July 22, 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory,” which requires entities to measure most inventory "at the lower of cost and net realizable value," thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market (market in this context is defined as one of three different measures). The guidance does not apply to inventories that are measured by using either the last-in, first-out method or the retail inventory method. Under current guidance, an entity subsequently measures inventory at the lower of cost or market, with market defined as replacement cost provided that it is not above the ceiling (net realizable value) or below the floor (net realizable value less an approximately normal profit margin) which is unnecessarily complex. The amendment does not change other guidance on measuring inventory. The amendment is effective for annual periods, including periods within those annual periods beginning after December 15, 2016 with early adoption permitted. We are required to adopt this pronouncement prospectively in the first quarter of 2017, and we are currently assessing the impact of this pronouncement on our financial statements. On April 15, 2015, the FASB issued ASU 2015-05, “ Intangibles - Goodwill and Other - Internal- Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement,” which clarifies the accounting for fees paid by a customer in a cloud computing arrangement by providing guidance as to whether an arrangement includes the sale or license of software. The amendment requires a customer to determine whether a cloud computing arrangement contains a software license. If the arrangement contains a software license, the customer would account for the fees related to the software license element in a manner consistent with how the acquisition of other software licenses is accounted for under ASC 350-40; if the arrangement does not contain a software license, the customer would account for the arrangement as a service contract. The guidance will not change GAAP for a customer’s accounting for service contracts. The amendment is effective for annual periods, including periods within those annual periods beginning after December 31, 2015 with early adoption permitted. We can elect to adopt the amendments either prospectively to all arrangements entered into or materially modified after the effective date or retrospectively. We are required to adopt this pronouncement in the first quarter of 2016, and we are currently assessing the impact of this pronouncement on our financial statements. On February 18, 2015, the FASB issued ASU 2015-02, “ Consolidation (Topic 810): Amendments to the Consolidation Analysis,” which requires an entity to evaluate whether it should consolidate certain legal entities. All legal entities are subject to reevaluation under the revised consolidation model. The amendment modifies the evaluation of whether limited partnerships and similar legal entities are variable interest entities ("VIEs"). The amendment eliminates the presumption that a general partner should consolidate a limited partnership. The amendment affects the consolidation analysis of reporting entities that are involved with VIEs particularly those that have fee arrangements and related party relationships. The amendment also provides a scope exception from consolidation guidance for reporting entities that comply with the requirements for registered money market funds. We are required to adopt ASU 2015-02 in the first quarter of 2016, and we do not anticipate that adoption of the pronouncement will have a material effect on our financial statements. On August 27, 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements — Going Concern (Subtopic 205-4 0),” which requires management to perform interim and annual assessments regarding conditions or events that raise substantial doubt about a company’s ability to continue as a going concern and to provide related disclosures, if applicable. We are required to adopt ASU 2014-15 in the first quarter of 2017, with early adoption permitted. We do not anticipate that the adoption of this standard will have a material effect on our financial statements. On June 19, 2014, the FASB issued ASU 2014-12, “ Compensation - Stock Compensation (Topic 718),” which affects any entity that grants its employees share-based payments in which the terms of the award stipulate that a performance target that affects vesting could be achieved after the requisite service period. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. We are required to adopt ASU 2014-12 in the first quarter of 2016 and the adoption of this standard is not expected to have a material effect on our financial statements. |
Accounts Receivable, Net
Accounts Receivable, Net | 9 Months Ended |
Sep. 30, 2015 | |
Receivables [Abstract] | |
Accounts Receivable, Net | Accounts Receivable, Net The components of accounts receivable are as follows (in thousands): September 30, 2015 December 31, 2014 Accounts receivable $ 25,473 $ 20,494 Allowance for doubtful accounts (1,783 ) (1,397 ) Allowance for product returns (1,944 ) (1,838 ) Accounts receivable, net $ 21,746 $ 17,259 For the three and nine months ended September 30, 2015 , we recorded a $ 0.3 million and a $ 1.1 million reserve for product returns in our hardware and other revenue. For the three and nine months ended September 30, 2014 , we recorded a $0.5 million and a $ 1.5 million reserve for product returns in our hardware and other revenue. For the three and nine months ended September 30, 2015 , we recorded a $ 0.0 million and a $ 0.4 million provision for doubtful accounts receivable. For the three and nine months ended September 30, 2014 , we recorded a $ 0.4 million and a $ 0.9 million provision for doubtful accounts receivable. Historically, we have not experienced write-offs for uncollectible accounts or sales returns that have differed significantly from our estimates. |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory The components of inventory are as follows (in thousands): September 30, December 31, Raw materials $ 6,633 $ 3,371 Finished goods 2,992 3,481 Total inventory $ 9,625 $ 6,852 |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions SecurityTrax Acquisition On March 13, 2015, in accordance with an asset purchase agreement, we completed our purchase of certain assets of HiValley Technology, Inc., (“SecurityTrax”) that constituted a business. SecurityTrax is a provider of SaaS-based, customer relationship management software tailored for security system dealers. The consideration included $ 5.6 million cash paid at closing and $ 0.4 million of cash not yet paid and established a contingent liability of $ 0.7 million for earn-out considerations to be paid to the former owners. The agreement also contains $ 2.0 million in potential payments associated with the continued employment of key employees through March 31, 2018 that will be accounted for as compensation expense over the period. We included the results of SecurityTrax’s operations since its acquisition date in the Alarm.com segment (see Note 18). The table below sets forth the consideration paid to SecurityTrax’s sellers and the estimated fair value of the tangible and intangible net assets acquired (in thousands): 2015 Calculation of Consideration: Cash paid, net of working capital adjustment $ 5,612 Cash not yet paid 400 Contingent consideration liability 700 Total consideration $ 6,712 Estimated Tangible and Intangible Net Assets: Current assets $ 14 Customer relationships 1,699 Developed technology 1,407 Trade name 271 Current liabilities (7 ) Goodwill 3,328 Total estimated tangible and intangible net assets $ 6,712 Goodwill of $ 3.3 million reflects the value of acquired workforce and expected synergies from pairing SecurityTrax's solutions to security service providers with our offerings. The goodwill will be deductible for tax purposes. We developed our estimate of the fair value of intangible net assets using a multi-period excess earnings method for customer relationships, the relief from royalty method for the developed technology, replacement cost method for the developed technology home page and the relief from royalty method for the trade name. The purchase price allocation presented above is preliminary as we are currently in the process of completing fair value estimates for the intangible assets. Fair Value of Net Assets Acquired and Intangibles In accordance with ASC 805, the assets and liabilities of SecurityTrax we acquired were recorded at their respective fair values as of March 13, 2015, the date of the acquisition. Customer Relationships We recorded the customer relationships intangible separately from goodwill based on determination of the length, strength and contractual nature of the relationship that SecurityTrax shared with its customers. We valued two groups of customer relationships using the multi-period excess earnings method, an income approach. We used several assumptions in the income approach, including revenue growth, operating expenses, charge for contributory assets, and a 22.5% discount rate used to calculate the present value of the cash flows. For the second group of customer relationships, we used the same assumptions in addition to a customer retention rate of 90% . We are amortizing the customer relationships, valued at $ 1.7 million , on a straight-line basis over a weighted-average estimated useful life of 7 years. Developed Technology Developed technology recorded separately from goodwill consists of intellectual property such as proprietary software used internally for revenue producing activities. SecurityTrax’s proprietary software is offered for sale on a SaaS hosted basis to customers. We valued the developed technology by applying the relief from royalty method, an income approach. We used several assumptions in the relief from royalty method, which included revenue growth, a market royalty rate of 25% and a 22.5% discount rate used to the calculate the present value of the cash flows. An additional component of the developed technology which we refer to as the "home page" organized customer data and functioned as the billing and administration tool. We valued the home page component by applying the replacement cost model, a cost approach. We used several assumptions in the replacement cost approach, which included analyzing costs that a company would expect to incur to recreate an asset of equivalent utility. In addition, we made an adjustment for developer’s profit of 30.4% which brought the asset to fair value on an exit-price basis. We are amortizing the developed technology, valued at $ 1.4 million , on a straight-line basis over a weighted-average estimated useful life of 8 years. Contingent Consideration Liability The amount of contingent consideration liability to be paid, up to a maximum of $ 2.0 million , to the former owners will be determined based on revenue and EBITDA of the acquired business for the year ended December 31, 2017. We estimated the fair value of the contingent consideration liability by using a Monte Carlo simulation model for determining projected revenue by using an expected distribution of potential outcomes. The fair value of contingent consideration liability is calculated with thousands of projected revenue outcomes, the results of which are averaged and then discounted to estimate the present value. We used several assumptions including an 8.45% discount rate and a 7.5% revenue risk adjustment. We recorded the contingent consideration, valued at $ 0.7 million , as a contingent consideration liability in other liabilities in our consolidated balance sheet. At each reporting date we will remeasure the liability and record any changes in general and administrative expense, until we pay the contingent consideration, if any, in the first quarter of 2018. As of September 30, 2015 , we adjusted the fair value of the contingent consideration liability to $0.9 million using the same method with a 10.75% discount rate and a 6.7% revenue risk adjustment, which resulted in $0.2 million of expense. Secure-i Acquisition On December 8, 2014, in accordance with an asset purchase agreement, we completed our purchase of certain assets of Secure-i, Inc. (“Secure-i”) that constituted a business. Secure-i is a provider of internet based remote video hosting services including off-site storage, viewing and management from web-based browsers and mobile applications. Total consideration included $ 2.6 million in cash and $ 0.3 million in cash not yet paid. We recorded $0.7 million of intangibles and $2.2 million of goodwill in connection with the acquisition. During the second quarter of 2015, we finalized the working capital adjustment and recorded an additional $20 thousand of goodwill. We included the results of Secure-i’s operations since its acquisition date in the Alarm.com segment. Horizon Analog Acquisition On December 10, 2014, in accordance with an asset purchase agreement, we completed our purchase of certain assets of Horizon Analog, Inc. (“Horizon Analog”) that constituted a business. Horizon Analog is a producer of research that focuses on cost-effective collection and analysis of data relating to energy usage and consumer behavior and energy disaggregation. Total consideration included $ 0.6 million in cash and $ 0.1 million in cash not yet paid. We recorded less than $ 0.1 million of property and equipment and $ 0.7 million of goodwill in connection with the acquisition, which reflects the acquired workforce and synergies expected from combining our operations with those of Horizon Analog. The goodwill is deductible for tax purposes. We included the results of Horizon Analog’s operations since its acquisition date in the Alarm.com segment. Unaudited Pro Forma Information The following pro forma data is presented as if Secure-i, Horizon Analog and SecurityTrax were included in our historical consolidated statements of operations beginning January 1, 2014. These pro forma results do not necessarily represent what would have occurred if all the business combinations had taken place on January 1, 2014, nor do they represent the results that may occur in the future. This pro forma financial information includes our historical financial statements and those of our business combinations with the following adjustments: (1) we adjusted for amortization expense assuming the fair value adjustments to intangible assets had been applied beginning January 1, 2014; (2) we adjusted for $ 0.1 million of transaction costs incurred in 2015 and reclassified them to 2014 and (3) we included adjustments for income taxes associated with these pro forma adjustments. The pro forma adjustments were based on available information and upon assumptions that we believe are reasonable to reflect the impact of these acquisitions on our historical financial information on a supplemental pro forma basis, as follows (in thousands): Pro forma 2015 2014 Revenue $ 152,189 $ 122,994 Net income 8,735 8,274 |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net The changes in goodwill by operating segment are outlined below for the nine months ended September 30, 2015 (in thousands): Alarm.com Other Total Balance as of December 31, 2014 $ 21,374 $ — $ 21,374 Goodwill acquired 3,349 — 3,349 Balance as of September 30, 2015 $ 24,723 $ — $ 24,723 The $ 3.3 million of acquired goodwill in the Alarm.com segment was related to the acquisition of SecurityTrax in March 2015. See Note 5 for additional information regarding this acquisition. There were no impairments of goodwill recorded during the three and nine months ended September 30, 2015 or 2014 . The following table reflects changes in the net carrying amount of the components of intangible assets for the nine months ended September 30, 2015 (in thousands): Customer Relationships Developed Technology Trade Name Other Total Balance as of December 31, 2014 $ 3,853 $ 918 $ 94 $ 227 $ 5,092 Intangible assets acquired 1,699 1,407 271 — 3,377 Amortization (828 ) (613 ) (61 ) (88 ) (1,590 ) Balance as of September 30, 2015 $ 4,724 $ 1,712 $ 304 $ 139 $ 6,879 For the three and nine months ended September 30, 2015 , we recorded $ 0.6 million and $ 1.6 million of amortization related to our intangible assets. For the three and nine months ended September 30, 2014 , we recorded $ 0.4 million and $ 1.2 million of amortization related to our intangible assets. The following tables reflect the weighted average remaining life and carrying value of finite-lived intangible assets as of September 30, 2015 and December 31, 2014 (in thousands): September 30, 2015 Gross Carrying Amount Accumulated Amortization Net Carrying Value Weighted- average Remaining Life Customer relationships $ 10,666 $ (5,942 ) $ 4,724 4.6 Developed technology 5,390 (3,678 ) 1,712 5.1 Trade name 914 (610 ) 304 5.2 Other 234 (95 ) 139 1.2 Total intangible assets $ 17,204 $ (10,325 ) $ 6,879 December 31, 2014 Gross Carrying Amount Accumulated Amortization Net Carrying Value Weighted- average Remaining Life Customer relationships $ 8,967 $ (5,114 ) $ 3,853 4.4 Developed technology 3,983 (3,065 ) 918 1.6 Trade name 643 (549 ) 94 1.8 Other 234 (7 ) 227 1.9 Total intangible assets $ 13,827 $ (8,735 ) $ 5,092 The following table reflects the future estimated amortization expense for intangible assets (in thousands): Year ending December 31, Amortization 2015 $ 538 2016 1,726 2017 1,400 2018 1,329 2019 and thereafter 1,886 |
Investments in Other Entities
Investments in Other Entities | 9 Months Ended |
Sep. 30, 2015 | |
Investments [Abstract] | |
Investments in Other Entities | Investments in Other Entities Cost Method Investment in Connected Home Service Provider On September 4, 2012, we purchased 20,000 Series A Convertible Preferred Membership Units of a Brazilian connected home solutions provider for $ 15.00 per unit, or $ 0.3 million , for a 12.2% interest on a fully diluted basis in this entity. On June 26, 2013, we entered into an agreement with the same company to purchase 2,667 Series B Convertible Preferred Membership Units at $ 26.22 per unit, or $ 0.1 million , which brought our aggregate interest to 12.4% on a fully diluted basis. On April 15, 2015, we entered into an additional agreement with the same company to purchase 2,333 Series B-1 Convertible Preferred Membership Units at $23.31 per unit or $0.1 million , which brought our aggregate equity interest to 12.6% on a fully diluted basis. The entity resells our products and services to residential and commercial customers in Brazil. Based upon the level of equity investment at risk, the connected home service provider is a VIE. We do not control the marketing, sales, installation, or customer maintenance functions of the entity and therefore do not direct the activities of the entity that most significantly impact its economic performance. We have determined that we are not the primary beneficiary of the entity and do not consolidate its financial results into ours. We account for this investment using the cost method. As of September 30, 2015 and December 31, 2014 , the fair value of this cost method investment was not estimated as there were no events or changes in circumstances that may have had a significant adverse effect on the fair value of the investment. The $ 0.4 million investment balance is included in other assets in our consolidated balance sheets as of September 30, 2015 and December 31, 2014 . Investments in and Loans to an Installation Partner On November 20, 2013, we paid $ 1.0 million to purchase 48,190 common units of an installation partner for a 48.2% interest on a fully diluted basis in this entity. The entity performs installation services for security dealers. Based upon the level of equity investment at risk, we determined that the installation partner is not a VIE. We account for this investment under the equity method because we have the ability to exercise significant influence over the operating and financial policies of the entity. Under the equity method, we recognize our share of the earnings or losses of the installation partner in other (expense) / income, net in our consolidated statements of operations in the periods they are reported by the installation partner. The loss in other (expense) / income, net was $ 0.1 million and $ 0.3 million for the three and nine months ended September 30, 2015 . The loss in other (expense) / income, net was $ 0.3 million and $ 0.5 million for the three and nine months ended September 30, 2014 . Our $ 1.0 million investment, net of equity losses, is included in other assets in our consolidated balance sheets and was $ 0.1 million and $ 0.4 million as of September 30, 2015 and December 31, 2014 . In September 2014, we loaned $ 315,000 to our installation partner under a secured promissory note that accrues interest at 8.0% . The note receivable is included in other assets in our consolidated balance sheets. Interest is payable monthly with the entire principal balance plus accrued but unpaid interest due at maturity in September 2016. This event did not cause us to reconsider our conclusion that the installation partner has sufficient equity investment at risk and therefore is not a VIE. We continue to account for the investment under the equity method. During the third quarter of 2015, there were indications of loan impairment and we evaluated the installation partner's ability to repay the note. The installation partner is current on the loan interest payments. Through examination of the installation partner's financial statements and forecast, management determined that it was not probable that our installation partner would default on the secured promissory note and therefore was not impaired. Management will continue to monitor indicators of impairment. Investments in and Loans to a Platform Partner A platform partner produces connected devices that are integrated into our connected home platform, and we invested in the platform partner to provide it with the capital required to bring its devices to market and integrate them onto our connected home platform. In the first quarter of 2013, we paid $ 3.5 million in cash to purchase 3,548,820 shares of our platform partner’s Series A convertible preferred shares, or an 18.7% interest on as-converted and fully diluted basis. In the fourth quarter of 2014, we entered into a Series 1 Preferred Stock purchase agreement with the platform partner and another investor. The other investor invested cash to purchase shares of the platform partner’s Series 1 Preferred Stock. As a result of the purchase, our 3,548,820 shares of Series A convertible preferred shares converted into 3,548,820 shares of common stock, and we hold an 8.6% interest in the platform partner on an as converted and fully diluted basis. In conjunction with the transaction, we received a $ 2.5 million dividend that we recorded as a return of investment as it was in excess of the accumulated earnings and profits of the investee since the date of the investment. Based upon the level of equity investment at risk, the platform partner is a VIE. We have concluded that we are not the primary beneficiary of the platform partner VIE. We do not control the product design, software development, manufacturing, marketing, or sales functions of the platform partner and, therefore, we do not direct the activities of the platform partner that most significantly impact its economic performance. We continue to conclude that we are not the primary beneficiary of our platform partner and, therefore, we do not consolidate it. We account for this investment under the cost method. As of September 30, 2015 , the fair value of this cost method investment was not estimated as there were no events or changes in circumstances that may have had a significant adverse effect on the fair value of the investment. As of September 30, 2015 and December 31, 2014 , our $ 1.0 million cost method investment in a platform partner was recorded in other assets in our consolidated balance sheets. |
Other Assets
Other Assets | 9 Months Ended |
Sep. 30, 2015 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | Other Assets Patent Licenses From time to time, we enter into agreements to license patents. We have $ 3.3 million in patent licenses related to two such agreements. We are amortizing the patent licenses over the estimated useful lives of the patents, which range from three to eleven years. The net balance as of September 30, 2015 and December 31, 2014 was $2.4 million and $ 1.5 million . For the three and nine months ended September 30, 2015 , amortization expense on patent licenses was $0.2 million and $0.3 million . For the three and nine months ended September 30, 2014 , amortization expense on patent licenses was $0.1 million and $0.2 million . Loan to a Distribution Partner On July 25, 2013, we entered into a revolving loan agreement with a distribution partner. The distribution partner is also a service provider with whom we have a standard agreement to resell our connected home service and hardware. We evaluate the credit quality of our distribution partner for purposes of the revolving loan agreement using the same methods that we employ to evaluate its creditworthiness as a service provider, including a credit review at the inception of the arrangement and if risk indicators arise. At the inception of the loan agreement, we determined the credit quality of our distribution partner to be good. No risk indicators have arisen to cause us to change that assessment. Under the terms of the revolving loan agreement, we agreed to loan our distribution partner up to $ 2.8 million , with the proceeds of the loan used to finance the creation of new customer accounts that use our products and services. The amount that our distribution partner may draw down on the loan is based on the number of its qualifying new customer accounts created each month. The loan bears interest at a rate of 8.0% per annum, and requires monthly interest payments, with the entire principal balance due on the loan maturity date, July 24, 2018. The balance outstanding under the loan is collateralized by the customer accounts owned by our distribution partner, as well as all of the physical assets and accounts receivable associated with those customer accounts. As of September 30, 2015 and December 31, 2014 , our distribution partner has borrowed $2.3 million and $ 2.0 million under this loan agreement, respectively, and this note receivable is included in other assets on our consolidated balance sheets. |
Liabilities
Liabilities | 9 Months Ended |
Sep. 30, 2015 | |
Payables and Accruals [Abstract] | |
Liabilities | Liabilities The components of accounts payable, accrued expenses and other current liabilities are as follows (in thousands): September 30, December 31, Accounts payable $ 17,902 $ 11,179 Accrued expenses 2,498 1,911 Other current liabilities 3,826 2,143 Accounts payable, accrued expenses and other current liabilities $ 24,226 $ 15,233 The components of other liabilities (in thousands): September 30, December 31, Deferred rent $ 5,485 $ 1,013 Other liabilities 2,002 657 Other liabilities $ 7,487 $ 1,670 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The following presents our assets and liabilities measured at fair value on a recurring basis as of September 30, 2015 and December 31, 2014 (in thousands): Fair Value Measurements on a Recurring Basis as of Level 1 Level 2 Level 3 Total Assets: Money market account $ 120,179 $ — $ — $ 120,179 Liabilities: Subsidiary unit awards — — (194 ) (194 ) Contingent consideration liability from acquisition — — (880 ) (880 ) $ 120,179 $ — $ (1,074 ) $ 119,105 Fair Value Measurements on a Recurring Basis as of Level 1 Level 2 Level 3 Total Assets: Money market account $ 38,578 $ — $ — $ 38,578 $ 38,578 $ — $ — $ 38,578 The following table summarizes the change in fair value of the Level 3 liability for the three months ended September 30, 2015 (in thousands): Fair Value Beginning balance - June 30, 2015 $ 782 Obligations assumed — Transfers — Payments — Realized (gain) / loss — Unrealized (gain) / loss 292 Ending Balance - September 30, 2015 $ 1,074 The following table summarizes the change in fair value of the Level 3 liability for the nine months ended September 30, 2015 (in thousands): Fair Value Measurements using significant unobservable inputs (Level 3) Beginning balance - December 31, 2014 $ — Obligations assumed 700 Transfers 152 Payments — Realized (gain) / loss — Unrealized (gain) / loss 222 Ending Balance - September 30, 2015 $ 1,074 The money market account is included in our cash and cash equivalents in our consolidated balance sheets. The liability for the subsidiary unit awards relates to agreements established with the presidents of two of our subsidiaries, who are also our employees, for cash awards contingent upon the subsidiary companies meeting certain financial milestones. Before our IPO, we used the intrinsic method available to non-public companies under ASC 718, "Compensation - Stock Compensation" to account for our liability for our subsidiary units. After our IPO, we have accounted for these subsidiary awards using fair value. The effect of this change had an immaterial impact to our consolidated financial statements. We established liabilities for the future payment for the repurchase of subsidiary units under the terms of the agreements based on estimating revenue, working capital, EBITDA and EBITDA margin of the subsidiary units for the periods of the two awards. We estimated the fair value of each liability by using a Monte Carlo simulation model for determining each of the projected measures by using an expected distribution of potential outcomes. The fair value of each liability is calculated with thousands of projected outcomes, the results of which are averaged and then discounted to estimate the present value. At each reporting date until the respective payment dates, we will remeasure these liabilities, using the same valuation approach based on the applicable subsidiary's revenue, and we will record any changes in general and administrative expense. The liability balances are included in our other liabilities in our consolidated balance sheets. The amount of contingent consideration liability to be paid, up to a maximum of $ 2.0 million , from our acquisition of SecurityTrax in the first quarter of 2015, will be determined based on revenue and adjusted EBITDA for the year ended December 31, 2017. We estimated the fair value of the contingent consideration liability by using a Monte Carlo simulation model for determining projected revenue by using an expected distribution of potential outcomes. The fair value of contingent consideration liability is calculated with thousands of projected revenue outcomes, the results of which are averaged and then discounted to estimate the present value. At each reporting date until payment in first quarter of 2018, we will remeasure the contingent consideration liability, using the same valuation approach based on our subsidiary’s revenue, an unobservable input, and we will record any changes in general and administrative expense. The contingent consideration liability balance is included in our other liabilities in our consolidated balance sheets. We monitor the availability of observable market data to assess the appropriate classification of financial instruments within the fair value hierarchy. Changes in economic conditions or model-based valuation techniques may require the transfer of financial instruments from one fair value level to another. In such instances, the transfer is reported at the beginning of the reporting period. There were no transfers between Levels 1, 2 or 3 during the three and nine months ended September 30, 2015 and 2014 . We also monitor the value of the investments for other-than-temporary impairment on a quarterly basis. No other-than-temporary impairments occurred during the three and nine months ended September 30, 2015 and 2014 . |
Debt, Commitments and Contingen
Debt, Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Debt, Commitments and Contingencies Disclosure [Abstract] | |
Debt, Commitments and Contingencies | Debt, Commitments and Contingencies The debt, commitments and contingencies described below are currently in effect and would require us, or our subsidiaries, to make payments to third parties under certain circumstances. Debt On May 8, 2014, we repaid all of the outstanding principal and interest under our previous term loan, which was accounted for as an extinguishment of debt, and replaced it with a $ 50.0 million revolving credit facility (the “2014 Facility”) with Silicon Valley Bank, as administrative agent, and a syndicate of lenders. We utilized $ 6.7 million under this facility to repay in full our indebtedness under our previous term loan. The 2014 Facility includes an option to increase the borrowing capacity available under the 2014 Facility to $ 75.0 million with the consent of the lenders. The 2014 Facility is available to us to finance working capital and certain permitted acquisitions and investments, and is secured by substantially all of our assets, including our intellectual property. The principal outstanding under the 2014 Facility is due upon maturity in May 2017. The outstanding principal balance on the 2014 Facility accrues interest at a rate equal to either (1) the Eurodollar Base Rate, or LIBOR, plus an applicable margin based on our consolidated leverage ratio, or (2) the higher of (a) the Wall Street Journal prime rate and (b) the Federal Funds rate plus 0.50% plus an applicable margin based on our consolidated leverage ratio, or ABR, at our option. Borrowings under LIBOR rates accrue interest at LIBOR plus 2.25% , LIBOR plus 2.5% , and LIBOR plus 2.75% when our consolidated leverage ratio is less than or equal to 1.00 :1.00, greater than or equal to 1.00 :1.00 but less than 2.00 :1.00, and greater than 2.00 :1.00, respectively. Borrowings under ABR rates accrue interest at ABR plus 1.25% , ABR plus 1.5% , and ABR plus 1.75% when our consolidated leverage ratio is less than or equal to 1.00 :1.00, greater than or equal to 1.00 :1.00 but less than 2.00 :1.00, and greater than 2.00 :1.00, respectively. The 2014 Facility also carries an unused line commitment fee of 0.20% to 0.25% depending on our consolidated leverage ratio. For the nine months ended September 30, 2015 , the effective interest rate on the 2014 Facility was 2.54% . The carrying value of 2014 Facility was $ 6.7 million as of September 30, 2015 and December 31, 2014. The 2014 Facility includes a variable interest rate that approximates market and, as such, we determined that the carrying amount of the 2014 Facility approximates its fair value. The 2014 facility contains various financial and other covenants that require us to maintain a maximum consolidated leverage ratio not to exceed 2.50 :1.00 and a consolidated fixed charge coverage ratio of at least 1.25 :1.00. During the nine months ended September 30, 2015 , we were in compliance with all financial and non-financial covenants and there were no events of default. Commitments and Contingencies Repurchase of Subsidiary Units In September 2012, we formed a subsidiary to develop and market home and commercial energy management devices and services. We granted an award of subsidiary stock to the founder and president. The terms of the award for the founder, who is also our employee, require a payment in cash on either the third or the fourth anniversary from the date the subsidiary first makes its products and services commercially available, which was determined to be April 1, 2014. The vesting of the award is based on the subsidiary meeting certain minimum financial targets. We recorded a liability of $0.0 million related to this commitment in other liabilities in our consolidated balance sheets as of September 30, 2015 and December 31, 2014 . In February 2011, we formed a subsidiary that offers to professional residential property management and vacation rental management companies technology solutions for remote monitoring and control of properties, including access control and energy management. We granted an award of subsidiary stock awards to the founder and president. The terms of the award for the founder, who is our employee, require a payment in cash on between the fourth and sixth anniversary of the date that the subsidiary’s products and services first become commercially available, which was determined to be June 1, 2013. The vesting of the award is based on the subsidiary meeting certain minimum financial targets. We have recorded a liability of $ 0.2 million related to the commitment in other liabilities in our consolidated balance sheets as of September 30, 2015 and December 31, 2014 . At each reporting date until the respective payment dates, we will remeasure these liabilities, and we will record any changes in fair value in general and administrative expense. The liability balances are included in our other liabilities in our consolidated balance sheets. Leases We lease office space and office equipment under non-cancelable operating leases with various expiration dates through 2026. Per the terms of our lease, the landlord provided us a $8.0 million tenant improvement allowance. As of September 30, 2015, we have utilized $3.2 million of this allowance. Rent expense was $ 1.2 million and $ 3.6 million for the three and nine months ended September 30, 2015 and $ 0.8 million and $ 1.6 million for the three and nine months ended September 30, 2014 . Indemnification Agreements We have various agreements that may obligate us to indemnify the other party to the agreement with respect to certain matters. Generally, these indemnification provisions are included in contracts arising in the normal course of business. Although we cannot predict the maximum potential amount of future payments that may become due under these indemnification agreements, we do not believe any potential liability that might arise from such indemnity provisions is probable or material. Legal Proceedings On June 2, 2015, Vivint, Inc. filed a lawsuit against us in U.S. District Court, District of Utah, alleging that our technology directly and indirectly infringes six patents that Vivint purchased. Vivint is seeking preliminary and permanent injunctions, enhanced damages and attorney’s fees. We answered the complaint on July 23, 2015. Among other things, we asserted defenses based on non-infringement and invalidity of the patents in question. Should Vivint prevail on its claims that one or more elements of our solution infringe one or more of its patents, we could be required to pay damages of Vivint’s lost profits and/or a reasonable royalty for sales of our solution, enjoined from making, using and selling our solution if a license or other right to continue selling such elements is not made available to us or we are unable to design around such patents, and required to pay ongoing royalties and comply with unfavorable terms if such a license is made available to us. The outcome of the legal claim and proceeding against us cannot be predicted with certainty. We believe we have valid defenses to Vivint’s claims. Based on currently available information, we determined a loss is not probable or reasonably estimable at this time. In addition, from time to time, we are a party to litigation and subject to claims incident to the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, we currently believe that the final outcome of these ordinary course matters will not have a material adverse effect on our business. Other than the preceding matter, we are not a party to any lawsuit or proceeding that, in the opinion of management, is reasonably possible or probable of having a material adverse effect on our financial position, results of operations or cash flows. We reserve for contingent liabilities based on ASC 450, “ Contingencies ,” when it is determined that a liability, inclusive of defense costs, is probable and reasonably estimable. Litigation is subject to many factors that are difficult to predict, so there can be no assurance that, in the event of a material unfavorable result in one or more claims, we will not incur material costs. |
Employee Benefit Plans
Employee Benefit Plans | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans Employee Stock Purchase Plan We adopted our Employee Stock Purchase Plan (the "2015 ESPP") in June 2015. Under the 2015 ESPP, 1,200,000 shares have been initially reserved for future grant with provisions established to increase the number of shares available on January 1 of each subsequent year for nine years. The annual automatic increase in the number of shares available for issuance under the 2015 ESPP is the lesser of 1% of each class of common stock outstanding as of December 31 of the preceding fiscal year, 1,500,000 shares of common stock or such lesser number as determined by the board of directors. The ESPP will allow eligible employees to purchase shares of our common stock through payroll deductions at a discount not to exceed 10% of the market value on the date of each purchase period. The maximum number of shares of our common stock that a participant may purchase during any calendar year for the 2015 ESPP shall not exceed such number of shares having a fair market value equal to the lesser of $15,000 or 10% of the participant's base compensation for that year. The ESPP is considered compensatory for purposes of share-based compensation expense. For the nine months ended September 30, 2015 , no shares were purchased by employees and we did not recognize any compensation expense. As of September 30, 2015 , 1,200,000 shares remain available for future issuance. Stock-Based Compensation Stock Options In June 2015, our board of directors adopted, our stockholders approved, and we registered the shares for our 2015 Equity Incentive Plan (the "2015 Plan"), pursuant to which we initially reserved and registered 4,700,000 shares of common stock for issuance to our employees, directors and non-employee directors and consultants including 141,222 shares of our common stock previously reserved for issuance under our Amended and Restated 2009 Stock Incentive Plan (the "2009 Plan") that were added to the shares reserved under the 2015 Plan upon its effectiveness. The 2015 Plan provides for the grant of incentive stock options to employees and for the grant of nonqualified stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance-based stock awards, and other forms of equity compensations to employees, directors and non-employee directors and consultants. The number of shares of common stock reserved for issuance under the 2015 Plan will automatically increase on January 1 each year, for a period of not more than ten years, commencing on January 1, 2015 through January 1, 2024, by 5% of the total number of shares of common stock outstanding on December 31st of the preceding calendar year, or a lesser number of shares as may be determined by the board of directors. As a result of the adoption of the 2015 Plan, no further grants may be made under the 2009 Plan described below. As of September 30, 2015 we made one grant under the 2015 Plan and 4,674,312 shares remained available for future grant. The 2009 Plan provided for the grant of incentive stock options to employees and for the grant of nonqualified stock options and restricted stock to our employees, directors and non-employee directors and consultants. Stock options have been granted at exercise prices as determined by the board of directors to our officers and employees. These stock options generally vest over a five year period and each option, if not exercised or terminated, expires on the ten th anniversary of the grant date. The 2009 Plan allows for the granting of options that may be exercised before the options have vested. Unvested shares issued as a result of early exercise are subject to repurchase by us upon termination of employment or services at the original exercise price. The proceeds from the early exercise of stock options are initially recorded as a current liability and are reclassified to common stock and additional paid-in capital as the awards vest and our repurchase right lapses. As of September 30, 2015 , there were 124,791 unvested shares of common stock outstanding subject to our right of repurchase. As of December 31, 2014 , there were 209,372 unvested shares of common stock outstanding subject to our right of repurchase. During the nine months ended September 30, 2015 , we repurchased 287 unvested shares of common stock related to early exercised stock options in connection with employee terminations. As of September 30, 2015 and December 31, 2014 , we recorded $ 0.5 million and $ 0.7 million in accounts payable, accrued expenses and other current liabilities on the consolidated balance sheets for the proceeds from the early exercise of the unvested stock options. Included in the stock-based compensation expense for the nine months ended September 30, 2015 was $0.8 million related to the cash settlement of recently exercised stock options of a terminated employee, at the company's election. We accounted for this cash settlement as a liability modification of the stock option awards. We account for stock-based compensation awards based on the fair value of the award as of the grant date. We recognize stock-based compensation expense using the accelerated attribution method, net of estimated forfeitures, in which compensation cost for each vesting tranche in an award is recognized ratably from the service inception date to the vesting date for that tranche. The following table summarizes the components of stock-based compensation expense for the three and nine months ended September 30, 2015 and 2014 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Stock options $ 809 $ 724 $ 2,005 $ 2,300 Compensation related to the sale of common stock — 22 193 65 Compensation related to the repurchase of stock options — — 777 — Total equity based compensation expense $ 809 $ 746 $ 2,975 $ 2,365 Tax benefit / (expense) from stock-based awards $ 424 $ (73 ) $ 665 $ 675 Stock-based compensation expense is included in the following line items in the accompanying consolidated statements of operations for the three and nine months ended September 30, 2015 and 2014 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Sales and marketing $ 114 $ 80 $ 260 $ 235 General and administrative 305 434 1,825 1,396 Research and development 390 232 890 734 Total stock-based compensation expense $ 809 $ 746 $ 2,975 $ 2,365 There were 514,276 stock options granted during the nine months ended September 30, 2015 . The dividends declared and paid in June 2015 were in anticipation of our IPO, which we closed on July 1, 2015. After the IPO, we do not expect to declare or pay dividends on a recurring basis. As such, we assume that the dividend rate is zero . The following table summarizes the assumptions used for estimating the fair value of stock options granted during the three and nine months ended September 30, 2015 and 2014 : Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Volatility 51.0 % 47.2 % 48.5 - 51.8% 47.2 - 49.6% Expected term 6.3 years 5.6 years 4.5 - 6.3 years 4.0 - 5.7 years Risk-free interest rate 1.8% 1.8 % 1.3 - 1.8% 1.4 - 1.9% Dividend rate — % — % — % — % The following table summarizes the stock option activity for the nine months ended September 30, 2015 : Number of Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2014 3,345,993 $ 2.68 7.0 $ 27,725 Granted 514,276 11.90 Exercised (276,925 ) 1.53 3,119 Forfeited (28,544 ) 4.69 Cancelled (4,476 ) 1.54 Outstanding at September 30, 2015 3,550,324 $ 4.09 6.8 $ 27,038 Vested and expected to vest at September 30, 2015 3,506,414 $ 4.05 6.8 $ 26,681 Exercisable at September 30, 2015 1,844,358 $ 1.78 5.4 $ 18,221 The weighted average grant date fair value for our stock options granted during the nine months ended September 30, 2015 was $ 11.90 . There were 514,276 stock options granted during the nine months ended September 30, 2015 . The total fair value of stock options vested during the nine months ended September 30, 2015 and 2014 was $ 1.2 million and $ 0.4 million . The aggregate intrinsic value of stock options exercised during the nine months ended September 30, 2015 and 2014 was $ 3.1 million and $ 7.1 million . As of September 30, 2015 , the total compensation cost related to nonvested awards not yet recognized was $ 4.0 million , which will be recognized over a weighted average period of 2.2 years. Warrants In 2010, we issued a performance-based warrant to an executive officer that gives this individual the right to purchase up to 91,881 shares of our common stock in the aggregate if certain performance targets and market conditions are achieved. In 2012, we issued an additional performance-based warrant to an executive officer that gives that executive officer the right to purchase up to 27,000 shares of our common stock if certain performance targets and market conditions are achieved. On March 30, 2015, we issued performance-based warrants to two employees. These warrants give these individuals the right to purchase up to 54,694 shares of our common stock in the aggregate if certain performance targets are achieved. The first performance-based warrant for 91,881 shares of our common stock has an exercise price of $ 0.41 per share and becomes exercisable if we have a change in control or if we complete an initial public offering. This warrant for 91,881 shares of our common stock expired in May 2015 upon the cessation of the holder of the warrant's employment with us. The second performance-based warrant for 27,000 shares of our common stock has an exercise price of $ 3.89 per share and becomes exercisable if we have a change in control or if we complete an initial public offering. This warrant expired in July 2015 because the minimum annual revenue and EBITDA targets of the subsidiary unit required under the warrant were not met during the exercise period. The exercise period began upon the occurrence of a triggering event, which occurred on June 25, 2015, upon the effectiveness of the registration statement for our IPO, and closed 30 days after the effectiveness of our registration statement. The third and fourth performance-based warrants, each for 27,347 shares of our common stock, have an exercise price of $ 10.97 per share and we may elect to terminate the warrants in exchange for a one-time cash settlement in the event of a change in control. If the warrants become exercisable, the number of shares that become exercisable which cannot exceed 27,347 shares for each warrant, is based upon the achievement of certain minimum annual revenue targets. These warrants will expire upon the earlier of March 2025 and the date upon which the holder of the warrant is no longer our employee or an employee of an affiliate of ours. We believe that the achievement of the minimum annual revenue targets is probable, and we began recognizing expense related to these performance-based warrants on April 1, 2015. As of September 30, 2015 and December 31, 2014 , none of the warrants that remained outstanding were exercisable because the performance requirements had not been met. We recorded $0.0 million of expense associated with the performance-based warrants during the three months ended September 30, 2015 and 2014 and $0.0 million of expense associated with the performance-based warrants during the nine months ended September 30, 2015 and 2014 . |
Redeemable Convertible Preferre
Redeemable Convertible Preferred Stock | 9 Months Ended |
Sep. 30, 2015 | |
Temporary Equity Disclosure [Abstract] | |
Redeemable Convertible Preferred Stock | Redeemable Convertible Preferred Stock Summary of Activity Upon completion of the IPO on July 1, 2015, all outstanding shares of convertible preferred stock converted into an aggregate of 35,017,884 shares of common stock. The following table presents a summary of activity for our redeemable convertible preferred stock issued and outstanding for the nine months ended September 30, 2015 (in thousands): SERIES B Redeemable Convertible Preferred Stock SERIES B-1 Redeemable Convertible Preferred Stock NEW SERIES A Redeemable Convertible Preferred Stock Total Amount Shares Amount Shares Amount Shares Amount Balance, December 31, 2014 1,810 $136,523 83 $6,265 1,998 $59,668 $202,456 Conversion of Preferred Stock into Common Stock (1,810) $(136,523) (83) $(6,265) (1,998) $(59,668) $(202,456) Balance, September 30, 2015 — $— — $— — $— $— |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Employee Benefit Plans Employee Stock Purchase Plan We adopted our Employee Stock Purchase Plan (the "2015 ESPP") in June 2015. Under the 2015 ESPP, 1,200,000 shares have been initially reserved for future grant with provisions established to increase the number of shares available on January 1 of each subsequent year for nine years. The annual automatic increase in the number of shares available for issuance under the 2015 ESPP is the lesser of 1% of each class of common stock outstanding as of December 31 of the preceding fiscal year, 1,500,000 shares of common stock or such lesser number as determined by the board of directors. The ESPP will allow eligible employees to purchase shares of our common stock through payroll deductions at a discount not to exceed 10% of the market value on the date of each purchase period. The maximum number of shares of our common stock that a participant may purchase during any calendar year for the 2015 ESPP shall not exceed such number of shares having a fair market value equal to the lesser of $15,000 or 10% of the participant's base compensation for that year. The ESPP is considered compensatory for purposes of share-based compensation expense. For the nine months ended September 30, 2015 , no shares were purchased by employees and we did not recognize any compensation expense. As of September 30, 2015 , 1,200,000 shares remain available for future issuance. Stock-Based Compensation Stock Options In June 2015, our board of directors adopted, our stockholders approved, and we registered the shares for our 2015 Equity Incentive Plan (the "2015 Plan"), pursuant to which we initially reserved and registered 4,700,000 shares of common stock for issuance to our employees, directors and non-employee directors and consultants including 141,222 shares of our common stock previously reserved for issuance under our Amended and Restated 2009 Stock Incentive Plan (the "2009 Plan") that were added to the shares reserved under the 2015 Plan upon its effectiveness. The 2015 Plan provides for the grant of incentive stock options to employees and for the grant of nonqualified stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance-based stock awards, and other forms of equity compensations to employees, directors and non-employee directors and consultants. The number of shares of common stock reserved for issuance under the 2015 Plan will automatically increase on January 1 each year, for a period of not more than ten years, commencing on January 1, 2015 through January 1, 2024, by 5% of the total number of shares of common stock outstanding on December 31st of the preceding calendar year, or a lesser number of shares as may be determined by the board of directors. As a result of the adoption of the 2015 Plan, no further grants may be made under the 2009 Plan described below. As of September 30, 2015 we made one grant under the 2015 Plan and 4,674,312 shares remained available for future grant. The 2009 Plan provided for the grant of incentive stock options to employees and for the grant of nonqualified stock options and restricted stock to our employees, directors and non-employee directors and consultants. Stock options have been granted at exercise prices as determined by the board of directors to our officers and employees. These stock options generally vest over a five year period and each option, if not exercised or terminated, expires on the ten th anniversary of the grant date. The 2009 Plan allows for the granting of options that may be exercised before the options have vested. Unvested shares issued as a result of early exercise are subject to repurchase by us upon termination of employment or services at the original exercise price. The proceeds from the early exercise of stock options are initially recorded as a current liability and are reclassified to common stock and additional paid-in capital as the awards vest and our repurchase right lapses. As of September 30, 2015 , there were 124,791 unvested shares of common stock outstanding subject to our right of repurchase. As of December 31, 2014 , there were 209,372 unvested shares of common stock outstanding subject to our right of repurchase. During the nine months ended September 30, 2015 , we repurchased 287 unvested shares of common stock related to early exercised stock options in connection with employee terminations. As of September 30, 2015 and December 31, 2014 , we recorded $ 0.5 million and $ 0.7 million in accounts payable, accrued expenses and other current liabilities on the consolidated balance sheets for the proceeds from the early exercise of the unvested stock options. Included in the stock-based compensation expense for the nine months ended September 30, 2015 was $0.8 million related to the cash settlement of recently exercised stock options of a terminated employee, at the company's election. We accounted for this cash settlement as a liability modification of the stock option awards. We account for stock-based compensation awards based on the fair value of the award as of the grant date. We recognize stock-based compensation expense using the accelerated attribution method, net of estimated forfeitures, in which compensation cost for each vesting tranche in an award is recognized ratably from the service inception date to the vesting date for that tranche. The following table summarizes the components of stock-based compensation expense for the three and nine months ended September 30, 2015 and 2014 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Stock options $ 809 $ 724 $ 2,005 $ 2,300 Compensation related to the sale of common stock — 22 193 65 Compensation related to the repurchase of stock options — — 777 — Total equity based compensation expense $ 809 $ 746 $ 2,975 $ 2,365 Tax benefit / (expense) from stock-based awards $ 424 $ (73 ) $ 665 $ 675 Stock-based compensation expense is included in the following line items in the accompanying consolidated statements of operations for the three and nine months ended September 30, 2015 and 2014 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Sales and marketing $ 114 $ 80 $ 260 $ 235 General and administrative 305 434 1,825 1,396 Research and development 390 232 890 734 Total stock-based compensation expense $ 809 $ 746 $ 2,975 $ 2,365 There were 514,276 stock options granted during the nine months ended September 30, 2015 . The dividends declared and paid in June 2015 were in anticipation of our IPO, which we closed on July 1, 2015. After the IPO, we do not expect to declare or pay dividends on a recurring basis. As such, we assume that the dividend rate is zero . The following table summarizes the assumptions used for estimating the fair value of stock options granted during the three and nine months ended September 30, 2015 and 2014 : Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Volatility 51.0 % 47.2 % 48.5 - 51.8% 47.2 - 49.6% Expected term 6.3 years 5.6 years 4.5 - 6.3 years 4.0 - 5.7 years Risk-free interest rate 1.8% 1.8 % 1.3 - 1.8% 1.4 - 1.9% Dividend rate — % — % — % — % The following table summarizes the stock option activity for the nine months ended September 30, 2015 : Number of Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2014 3,345,993 $ 2.68 7.0 $ 27,725 Granted 514,276 11.90 Exercised (276,925 ) 1.53 3,119 Forfeited (28,544 ) 4.69 Cancelled (4,476 ) 1.54 Outstanding at September 30, 2015 3,550,324 $ 4.09 6.8 $ 27,038 Vested and expected to vest at September 30, 2015 3,506,414 $ 4.05 6.8 $ 26,681 Exercisable at September 30, 2015 1,844,358 $ 1.78 5.4 $ 18,221 The weighted average grant date fair value for our stock options granted during the nine months ended September 30, 2015 was $ 11.90 . There were 514,276 stock options granted during the nine months ended September 30, 2015 . The total fair value of stock options vested during the nine months ended September 30, 2015 and 2014 was $ 1.2 million and $ 0.4 million . The aggregate intrinsic value of stock options exercised during the nine months ended September 30, 2015 and 2014 was $ 3.1 million and $ 7.1 million . As of September 30, 2015 , the total compensation cost related to nonvested awards not yet recognized was $ 4.0 million , which will be recognized over a weighted average period of 2.2 years. Warrants In 2010, we issued a performance-based warrant to an executive officer that gives this individual the right to purchase up to 91,881 shares of our common stock in the aggregate if certain performance targets and market conditions are achieved. In 2012, we issued an additional performance-based warrant to an executive officer that gives that executive officer the right to purchase up to 27,000 shares of our common stock if certain performance targets and market conditions are achieved. On March 30, 2015, we issued performance-based warrants to two employees. These warrants give these individuals the right to purchase up to 54,694 shares of our common stock in the aggregate if certain performance targets are achieved. The first performance-based warrant for 91,881 shares of our common stock has an exercise price of $ 0.41 per share and becomes exercisable if we have a change in control or if we complete an initial public offering. This warrant for 91,881 shares of our common stock expired in May 2015 upon the cessation of the holder of the warrant's employment with us. The second performance-based warrant for 27,000 shares of our common stock has an exercise price of $ 3.89 per share and becomes exercisable if we have a change in control or if we complete an initial public offering. This warrant expired in July 2015 because the minimum annual revenue and EBITDA targets of the subsidiary unit required under the warrant were not met during the exercise period. The exercise period began upon the occurrence of a triggering event, which occurred on June 25, 2015, upon the effectiveness of the registration statement for our IPO, and closed 30 days after the effectiveness of our registration statement. The third and fourth performance-based warrants, each for 27,347 shares of our common stock, have an exercise price of $ 10.97 per share and we may elect to terminate the warrants in exchange for a one-time cash settlement in the event of a change in control. If the warrants become exercisable, the number of shares that become exercisable which cannot exceed 27,347 shares for each warrant, is based upon the achievement of certain minimum annual revenue targets. These warrants will expire upon the earlier of March 2025 and the date upon which the holder of the warrant is no longer our employee or an employee of an affiliate of ours. We believe that the achievement of the minimum annual revenue targets is probable, and we began recognizing expense related to these performance-based warrants on April 1, 2015. As of September 30, 2015 and December 31, 2014 , none of the warrants that remained outstanding were exercisable because the performance requirements had not been met. We recorded $0.0 million of expense associated with the performance-based warrants during the three months ended September 30, 2015 and 2014 and $0.0 million of expense associated with the performance-based warrants during the nine months ended September 30, 2015 and 2014 . |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic and Diluted Earnings Per Share The components of basic and diluted EPS are as follows (in thousands, except share and per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Net income $ 3,229 $ 2,667 $ 8,779 $ 9,016 Less: dividends paid to participating securities — — (18,987 ) — Less: income allocated to participating securities (50 ) (2,549 ) — (8,651 ) Net income available for common stockholders (A) $ 3,179 $ 118 $ (10,208 ) $ 365 Weighted average common shares outstanding — basic (B) 44,922,410 2,429,445 16,910,090 2,211,263 Dilutive effect of stock options 1,909,604 1,916,240 — 1,580,965 Weighted average common shares outstanding — diluted (C) 46,832,014 4,345,685 16,910,090 3,792,228 Earnings per share: Basic (A/B) $ 0.07 $ 0.05 $ (0.60 ) $ 0.17 Diluted (A/C) $ 0.07 $ 0.03 $ (0.60 ) $ 0.10 The following securities have been excluded from the calculation of diluted weighted average common shares outstanding because the effect is anti-dilutive for the three and nine months ended September 30, 2015 and 2014 : Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Redeemable convertible preferred stock: Series A — 1,998,257 — 1,998,257 Series B — 1,809,685 — 1,809,685 Series B-1 — 82,934 — 82,934 Stock options 32,000 185,150 537,525 185,150 Common stock subject to repurchase 124,791 357,392 124,791 357,392 |
Significant Service Providers
Significant Service Providers | 9 Months Ended |
Sep. 30, 2015 | |
Risks and Uncertainties [Abstract] | |
Significant Service Providers | Significant Service Providers During the three months ended September 30, 2015 and 2014 , our 10 largest revenue service providers accounted for 63.7% and 61.5% of our revenue. One of our service providers individually represented greater than 15% but not more than 20% of our revenue for the three months ended September 30, 2015 . One of our service providers individually represented greater than 10% but not more than 15% of our revenue for the three months ended September 30, 2014 . One of our service providers individually represented greater than 15% but not more than 20% of our revenue for the three months ended September 30, 2014 . During the nine months ended September 30, 2015 and 2014 , our 10 largest revenue service providers accounted for 63.7% and 65.9% of our revenue. One of our service providers individually represented greater than 15% but not more than 20% of our revenue for the nine months ended September 30, 2015 . Two of our service providers individually represented greater than 10% but not more than 15% of our revenue for the nine months ended September 30, 2014 . One of our service providers individually represented greater than 15% but not more than 20% of our revenue for the nine months ended September 30, 2014 . Trade accounts receivable from two service providers totaled $3.0 million and $2.9 million as of September 30, 2015 . No other individual service provider represented more than 10% of accounts receivable as of September 30, 2015 . Trade accounts receivable from three service providers totaled $ 3.1 million , $ 2.7 million and $ 1.1 million , as of December 31, 2014 . No other individual service provider represented more than 10% of accounts receivable as of December 31, 2014 . |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For purposes of interim reporting, our annual effective income tax rate is estimated in accordance with ASC 740-270, " Interim Reporting ." This rate is applied to the pre-tax book income of the entities expected to be benefited during the year. Discrete items that impact the tax provision were recorded in the period incurred. Our effective income tax rates were 24.7% and 15.6% for the three months ended September 30, 2015 and 2014 and 35.2% and 34.4% for the nine months ended September 30, 2015 and 2014 . For the nine months ended September 30, 2015 , our effective tax rate was approximately the same as the statutory rate primarily due to the discrete benefit of $0.7 million for research and development tax credits claimed for prior years, offset by the impact of state taxes and non-deductible meal and entertainment expenses. For the nine months ended September 30, 2014 , our effective tax rate was below the statutory rate primarily due to the discrete benefit of $0.8 million for research and development tax credits claimed for prior years, partially offset by the impact of state taxes and non-deductible meal and entertainment expenses. For the three months ended September 30, 2015, our effective tax rate was below the statutory rate primarily due to the discreet benefit for research and development tax credits claimed for prior years recorded during the quarter. For the three months ended September 30, 2014, our effective tax rate was below the statutory rate primarily due to the discrete benefit for research and development tax credits claimed for prior years recorded during the quarter. We recognize a valuation allowance if, based on the weight of available evidence, both positive and negative, it is more likely than not that some portion, or all, of net deferred tax assets will not be realized. Based on our historical and expected future taxable earnings, we believe it is more likely than not that we will realize all of the benefit of the existing deferred tax assets at September 30, 2015 and December 31, 2014 . Accordingly, we have not recorded a valuation allowance as of September 30, 2015 and December 31, 2014 . We apply guidance for uncertainty in income taxes that requires the application of a more likely than not threshold to the recognition and de-recognition of uncertain tax positions. If the recognition threshold is met, this guidance permits us to recognize a tax benefit measured at the largest amount of the tax benefit that, in our judgment, is more likely than not to be realized upon settlement. We recorded an unrecognized tax benefit of $0.2 million for research and development tax credits for the 2011 and 2014 tax years during the three and nine months ended September 30, 2015 . We established a $0.1 million liability for uncertain tax positions related to research and development tax credits for the 2012 and 2013 tax years during the three and nine months ended September 30, 2014 . During 2014, we recorded an unrecognized tax benefit of $ 0.2 million for research and development tax credits for the 2012 , 2013 and 2014 tax years. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information We have two reportable segments: • Alarm.com segment • Other segment Our chief operating decision maker is the chief executive officer. Management determined that the operational data used by the chief operating decision maker is that of the two reportable segments. Management bases strategic goals and decisions on these segments and the data presented below is used to measure financial results. Our Alarm.com segment represents our cloud-based platform for the connected home and related solutions. Our Alarm.com segment also includes the results of Horizon Analog, a research company that focuses on cost-effective collection and analysis of data relating energy usage and consumer behavior and energy disaggregation, Secure-i, a commercial video as a service provider, and SecurityTrax, a provider of SaaS-based, customer relationship management software tailored for security system dealers. This segment contributed over 97% of our revenue for the three and nine months ended September 30, 2015 and 2014 . Our Other segment is focused on researching and developing home and commercial automation, and energy management products and services in adjacent markets. Management evaluates the performance of its segments and allocates resources to them based on operating income on a pre-tax basis. The reportable segment operational data is presented in the table below as of September 30, 2015 and December 31, 2014 and for the three and nine months ended September 30, 2015 and 2014 (in thousands): Three Months Ended September 30, Segment Information 2015 2014 Alarm.com Other Intersegment Intersegment Total Alarm.com Other Intersegment Intersegment Total Revenue $ 52,684 $ 2,073 $ (50 ) (700 ) $ 54,007 $ 42,274 $ 638 $ (80 ) $ — $ 42,832 Operating income / (loss) 8,865 (4,561 ) 4 33 4,341 6,810 (3,658 ) (8 ) 135 3,279 Nine Months Ended September 30, Segment Information 2015 2014 Alarm.com Other Intersegment Alarm.com Intersegment Other Total Alarm.com Other Intersegment Alarm.com Intersegment Other Total Revenue $ 148,302 $ 5,714 $ (570 ) (1,479 ) $ 151,967 $ 120,948 $ 1,225 $ (412 ) $ — $ 121,761 Operating income / (loss) 27,195 (13,467 ) (167 ) 183 13,744 23,900 (9,937 ) (88 ) 84 13,959 As of September 30, 2015 As of December 31, 2014 Alarm.com Other Total Alarm.com Other Total Total Assets $ 209,194 $ 13,931 $ 223,125 $ 108,935 $ 11,997 $ 120,932 We derived substantially all revenue from the United States for the three and nine months ended September 30, 2015 and 2014 . Substantially all our long lived assets were in the United States as of September 30, 2015 and December 31, 2014 . |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Our installation partner in which we have a 48.2% ownership interest performs installation services for security dealers and also provides installation services for us and certain of our subsidiaries. We account for this investment using the equity method (see Note 7). During the nine months ended September 30, 2015 and 2014 , we recorded $0.5 million and $0.2 million of cost of hardware and other revenue in connection with this installation partner and, as of September 30, 2015 and December 31, 2014 the accounts payable balance was $0.0 million and $0.1 million . In September 2014, we loaned $315,000 to our installation partner under a secured promissory note that accrues interest at 8.0% . Interest is payable monthly with the entire principal balance plus accrued but unpaid interest due at maturity in September 2016. For the three and nine months ended September 30, 2015 , we recorded $6,000 and $19,000 of interest income related to this note receivable. In June 2015, two of our significant stockholders, entities affiliated with Technology Crossover Ventures ("TCV"), and entities affiliated with ABS Capital Partners ("ABS"), entered into a Securities Purchase Agreement (the "Secondary Sale Agreement"). Pursuant to the terms of the Secondary Sale Agreement, ABS agreed to sell to TCV, and TCV agreed to buy from ABS, 888,988 shares of our common stock at a purchase price of $13.02 per share. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts and our results of operations and our majority owned and controlled subsidiaries. All intercompany balances and transactions have been eliminated in the accompanying unaudited condensed consolidated financial statements. These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the applicable rules and regulations of the Securities and Exchange Commission ("SEC"). Accordingly, they do not include all the information and footnotes required by GAAP for annual financial statements. They should be read together with our audited consolidated financial statements and related notes for the year ended December 31, 2014 appearing in our final prospectus for our IPO dated June 25, 2015 and filed with the SEC, pursuant to Rule 424(b) under the Securities Act of 1933, as amended on June 26, 2015. The condensed balance sheet data as of December 31, 2014 was derived from our audited financial statements, but does not include all disclosures required by GAAP. In the opinion of management, these condensed consolidated financial statements include all normal recurring adjustments necessary for a fair presentation of the results of operations, financial position and cash flows. The results of operations for the three and nine months ended September 30, 2015 are not necessarily indicative of the results that can be expected for the entire fiscal year ending December 31, 2015 . |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Our estimates, judgments and assumptions are continually evaluated based on available information and experience. Because of the use of estimates inherent in the financial reporting process, actual results could differ from those estimates. Estimates are used when accounting for revenue recognition, allowances for doubtful accounts receivable, allowance for hardware returns, estimates of obsolete inventory, long-term incentive compensation, stock-based compensation, income taxes, legal reserves, contingent consideration and goodwill and intangible assets. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Adopted On April 10, 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-08, “ Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity,” which amends the definition of a discontinued operation in ASC 205-20 and requires entities to provide additional disclosures about discontinued operations as well as disposal transactions that do not meet the discontinued operations criteria. The guidance narrowed the definition of discontinued operations for disposal of a component or group of components that represents a strategic shift that has or will have a major impact on an entity’s operations or financial results. The guidance also expands the scope to include equity method investments and businesses that, upon initial acquisition, qualify as held for sale. The expanded disclosure requirements include statement of financial position and statement of cash flows disclosures for all comparative periods. The ASU 2014-08 is effective prospectively for all disposals (or classifications as held for sale) in periods beginning on or after December 15, 2014 with early adoption permitted. We adopted this pronouncement in the first quarter of 2015, and it did not have a material impact on our financial statements. On August 18, 2015, the FASB issued ASU 2015-15, “Interest- Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements - Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015, EITF Meeting,” which clarifies the application of ASU 2015-03 related to presentation and subsequent measurement of debt issuance costs related to line-of-credit arrangements to allow for an entity to defer and present debt issuance costs as an asset and subsequently amortize the deferred debt issuance costs ratably over the line-of-credit arrangement, regardless of whether there are any outstanding borrowings. ASU 2015-03, “ Simplifying the Presentation of Debt Issuance Costs,” otherwise requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. We adopted these pronouncements in the third quarter of 2015. The adoption did not have an impact on our financial statements. We continue to present the debt issuance costs associated with our revolving credit facility as an asset that is amortized ratably over the term of the agreement. Not yet adopted On September 25, 2015, the FASB issued ASU 2015-16, “Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments,” which requires entities to apply the guidance prospectively to adjustments to provisional amounts that occur after the effective date. Under current guidance, the acquirer retrospectively adjusts provisional amounts recognized as of the acquisition date with a corresponding adjustment to goodwill. Adjustments are required when new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts initially recognized or would have resulted in the recognition of additional assets or liabilities. The amendments in ASU 2015-16 eliminate the requirement to retrospectively account for those adjustments. The amendment is effective for annual periods, including periods within those annual periods beginning after December 15, 2015 with early adoption permitted. We are required to adopt this pronouncement prospectively in the first quarter of 2016, and we do not anticipate that adoption of the pronouncement will have a material impact on our financial statements. On August 12, 2015, the FASB issued ASU 2015-14, "Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date," which defers the effective date for all entities for one year of ASU 2014-09, “ Revenue from Contracts with Customers (Topic 606),” issued on May 28, 2014. ASU 2014-09 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. The guidance supersedes the revenue recognition guidance in Topic 605, “Revenue Recognition,” and most industry-specific guidance throughout the Industry Topics of the FASB Accounting Standards Codification. The guidance also supersedes some cost guidance included in Subtopic 605-35, “ Revenue Recognition - Contract-Type and Production-Type Contracts." ASU 2014-9, as amended, is effective for annual periods, and interim periods within those years, beginning after December 31, 2017. An entity is required to apply the amendments using one of the following two methods: (1) retrospectively to each prior period presented with three possible expedients: (a) for completed contracts that begin and end in the same reporting period no restatement is required; (b) for completed contract with variable consideration an entity may use the transaction price at completion rather than restating estimated variable consideration amounts in comparable reporting periods; and (c) for comparable reporting periods before date of initial application reduced disclosure requirements related to transaction price; (2) retrospectively with the cumulative effect of initially applying the amendment recognized at the date of initial application with additional disclosures for the differences of the prior guidance to the reporting periods compared to the new guidance and an explanation of the reasons for significant changes. We are required to adopt ASU 2014-09 in the first quarter of 2018, and we are currently assessing the impact of this pronouncement on our financial statements. On July 22, 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory,” which requires entities to measure most inventory "at the lower of cost and net realizable value," thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market (market in this context is defined as one of three different measures). The guidance does not apply to inventories that are measured by using either the last-in, first-out method or the retail inventory method. Under current guidance, an entity subsequently measures inventory at the lower of cost or market, with market defined as replacement cost provided that it is not above the ceiling (net realizable value) or below the floor (net realizable value less an approximately normal profit margin) which is unnecessarily complex. The amendment does not change other guidance on measuring inventory. The amendment is effective for annual periods, including periods within those annual periods beginning after December 15, 2016 with early adoption permitted. We are required to adopt this pronouncement prospectively in the first quarter of 2017, and we are currently assessing the impact of this pronouncement on our financial statements. On April 15, 2015, the FASB issued ASU 2015-05, “ Intangibles - Goodwill and Other - Internal- Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement,” which clarifies the accounting for fees paid by a customer in a cloud computing arrangement by providing guidance as to whether an arrangement includes the sale or license of software. The amendment requires a customer to determine whether a cloud computing arrangement contains a software license. If the arrangement contains a software license, the customer would account for the fees related to the software license element in a manner consistent with how the acquisition of other software licenses is accounted for under ASC 350-40; if the arrangement does not contain a software license, the customer would account for the arrangement as a service contract. The guidance will not change GAAP for a customer’s accounting for service contracts. The amendment is effective for annual periods, including periods within those annual periods beginning after December 31, 2015 with early adoption permitted. We can elect to adopt the amendments either prospectively to all arrangements entered into or materially modified after the effective date or retrospectively. We are required to adopt this pronouncement in the first quarter of 2016, and we are currently assessing the impact of this pronouncement on our financial statements. On February 18, 2015, the FASB issued ASU 2015-02, “ Consolidation (Topic 810): Amendments to the Consolidation Analysis,” which requires an entity to evaluate whether it should consolidate certain legal entities. All legal entities are subject to reevaluation under the revised consolidation model. The amendment modifies the evaluation of whether limited partnerships and similar legal entities are variable interest entities ("VIEs"). The amendment eliminates the presumption that a general partner should consolidate a limited partnership. The amendment affects the consolidation analysis of reporting entities that are involved with VIEs particularly those that have fee arrangements and related party relationships. The amendment also provides a scope exception from consolidation guidance for reporting entities that comply with the requirements for registered money market funds. We are required to adopt ASU 2015-02 in the first quarter of 2016, and we do not anticipate that adoption of the pronouncement will have a material effect on our financial statements. On August 27, 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements — Going Concern (Subtopic 205-4 0),” which requires management to perform interim and annual assessments regarding conditions or events that raise substantial doubt about a company’s ability to continue as a going concern and to provide related disclosures, if applicable. We are required to adopt ASU 2014-15 in the first quarter of 2017, with early adoption permitted. We do not anticipate that the adoption of this standard will have a material effect on our financial statements. On June 19, 2014, the FASB issued ASU 2014-12, “ Compensation - Stock Compensation (Topic 718),” which affects any entity that grants its employees share-based payments in which the terms of the award stipulate that a performance target that affects vesting could be achieved after the requisite service period. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. We are required to adopt ASU 2014-12 in the first quarter of 2016 and the adoption of this standard is not expected to have a material effect on our financial statements. |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Receivables [Abstract] | |
Schedule of Components of Accounts Receivable | The components of accounts receivable are as follows (in thousands): September 30, 2015 December 31, 2014 Accounts receivable $ 25,473 $ 20,494 Allowance for doubtful accounts (1,783 ) (1,397 ) Allowance for product returns (1,944 ) (1,838 ) Accounts receivable, net $ 21,746 $ 17,259 |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Schedule of Components of Inventory | The components of inventory are as follows (in thousands): September 30, December 31, Raw materials $ 6,633 $ 3,371 Finished goods 2,992 3,481 Total inventory $ 9,625 $ 6,852 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Schedule of Consideration Paid to SecurityTrax and Estimated Fair Value of Tangible and Intangible Net Assets Acquired | The table below sets forth the consideration paid to SecurityTrax’s sellers and the estimated fair value of the tangible and intangible net assets acquired (in thousands): 2015 Calculation of Consideration: Cash paid, net of working capital adjustment $ 5,612 Cash not yet paid 400 Contingent consideration liability 700 Total consideration $ 6,712 Estimated Tangible and Intangible Net Assets: Current assets $ 14 Customer relationships 1,699 Developed technology 1,407 Trade name 271 Current liabilities (7 ) Goodwill 3,328 Total estimated tangible and intangible net assets $ 6,712 |
Unaudited Pro Forma Financial Information | The pro forma adjustments were based on available information and upon assumptions that we believe are reasonable to reflect the impact of these acquisitions on our historical financial information on a supplemental pro forma basis, as follows (in thousands): Pro forma 2015 2014 Revenue $ 152,189 $ 122,994 Net income 8,735 8,274 |
Goodwill and Intangible Asset31
Goodwill and Intangible Assets, Net (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The changes in goodwill by operating segment are outlined below for the nine months ended September 30, 2015 (in thousands): Alarm.com Other Total Balance as of December 31, 2014 $ 21,374 $ — $ 21,374 Goodwill acquired 3,349 — 3,349 Balance as of September 30, 2015 $ 24,723 $ — $ 24,723 |
Schedule of Intangible Assets | The following table reflects changes in the net carrying amount of the components of intangible assets for the nine months ended September 30, 2015 (in thousands): Customer Relationships Developed Technology Trade Name Other Total Balance as of December 31, 2014 $ 3,853 $ 918 $ 94 $ 227 $ 5,092 Intangible assets acquired 1,699 1,407 271 — 3,377 Amortization (828 ) (613 ) (61 ) (88 ) (1,590 ) Balance as of September 30, 2015 $ 4,724 $ 1,712 $ 304 $ 139 $ 6,879 The following tables reflect the weighted average remaining life and carrying value of finite-lived intangible assets as of September 30, 2015 and December 31, 2014 (in thousands): September 30, 2015 Gross Carrying Amount Accumulated Amortization Net Carrying Value Weighted- average Remaining Life Customer relationships $ 10,666 $ (5,942 ) $ 4,724 4.6 Developed technology 5,390 (3,678 ) 1,712 5.1 Trade name 914 (610 ) 304 5.2 Other 234 (95 ) 139 1.2 Total intangible assets $ 17,204 $ (10,325 ) $ 6,879 December 31, 2014 Gross Carrying Amount Accumulated Amortization Net Carrying Value Weighted- average Remaining Life Customer relationships $ 8,967 $ (5,114 ) $ 3,853 4.4 Developed technology 3,983 (3,065 ) 918 1.6 Trade name 643 (549 ) 94 1.8 Other 234 (7 ) 227 1.9 Total intangible assets $ 13,827 $ (8,735 ) $ 5,092 |
Schedule of Future Estimated Amortization Expense | The following table reflects the future estimated amortization expense for intangible assets (in thousands): Year ending December 31, Amortization 2015 $ 538 2016 1,726 2017 1,400 2018 1,329 2019 and thereafter 1,886 |
Liabilities (Tables)
Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable. Accrued Expenses and Other Current Liabilities | The components of accounts payable, accrued expenses and other current liabilities are as follows (in thousands): September 30, December 31, Accounts payable $ 17,902 $ 11,179 Accrued expenses 2,498 1,911 Other current liabilities 3,826 2,143 Accounts payable, accrued expenses and other current liabilities $ 24,226 $ 15,233 The components of other liabilities (in thousands): September 30, December 31, Deferred rent $ 5,485 $ 1,013 Other liabilities 2,002 657 Other liabilities $ 7,487 $ 1,670 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis | The following presents our assets and liabilities measured at fair value on a recurring basis as of September 30, 2015 and December 31, 2014 (in thousands): Fair Value Measurements on a Recurring Basis as of Level 1 Level 2 Level 3 Total Assets: Money market account $ 120,179 $ — $ — $ 120,179 Liabilities: Subsidiary unit awards — — (194 ) (194 ) Contingent consideration liability from acquisition — — (880 ) (880 ) $ 120,179 $ — $ (1,074 ) $ 119,105 Fair Value Measurements on a Recurring Basis as of Level 1 Level 2 Level 3 Total Assets: Money market account $ 38,578 $ — $ — $ 38,578 $ 38,578 $ — $ — $ 38,578 |
Summary of Fair Value of Level 3 Liability | The following table summarizes the change in fair value of the Level 3 liability for the three months ended September 30, 2015 (in thousands): Fair Value Beginning balance - June 30, 2015 $ 782 Obligations assumed — Transfers — Payments — Realized (gain) / loss — Unrealized (gain) / loss 292 Ending Balance - September 30, 2015 $ 1,074 The following table summarizes the change in fair value of the Level 3 liability for the nine months ended September 30, 2015 (in thousands): Fair Value Measurements using significant unobservable inputs (Level 3) Beginning balance - December 31, 2014 $ — Obligations assumed 700 Transfers 152 Payments — Realized (gain) / loss — Unrealized (gain) / loss 222 Ending Balance - September 30, 2015 $ 1,074 |
Redeemable Convertible Prefer34
Redeemable Convertible Preferred Stock (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Temporary Equity Disclosure [Abstract] | |
Summary of Activity for Redeemable Convertible Preferred Stock | The following table presents a summary of activity for our redeemable convertible preferred stock issued and outstanding for the nine months ended September 30, 2015 (in thousands): SERIES B Redeemable Convertible Preferred Stock SERIES B-1 Redeemable Convertible Preferred Stock NEW SERIES A Redeemable Convertible Preferred Stock Total Amount Shares Amount Shares Amount Shares Amount Balance, December 31, 2014 1,810 $136,523 83 $6,265 1,998 $59,668 $202,456 Conversion of Preferred Stock into Common Stock (1,810) $(136,523) (83) $(6,265) (1,998) $(59,668) $(202,456) Balance, September 30, 2015 — $— — $— — $— $— |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock-Based Compensation Expense | The following table summarizes the components of stock-based compensation expense for the three and nine months ended September 30, 2015 and 2014 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Stock options $ 809 $ 724 $ 2,005 $ 2,300 Compensation related to the sale of common stock — 22 193 65 Compensation related to the repurchase of stock options — — 777 — Total equity based compensation expense $ 809 $ 746 $ 2,975 $ 2,365 Tax benefit / (expense) from stock-based awards $ 424 $ (73 ) $ 665 $ 675 Stock-based compensation expense is included in the following line items in the accompanying consolidated statements of operations for the three and nine months ended September 30, 2015 and 2014 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Sales and marketing $ 114 $ 80 $ 260 $ 235 General and administrative 305 434 1,825 1,396 Research and development 390 232 890 734 Total stock-based compensation expense $ 809 $ 746 $ 2,975 $ 2,365 |
Summary of Assumptions Used for Estimating Fair Value of Stock Options Granted | The following table summarizes the assumptions used for estimating the fair value of stock options granted during the three and nine months ended September 30, 2015 and 2014 : Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Volatility 51.0 % 47.2 % 48.5 - 51.8% 47.2 - 49.6% Expected term 6.3 years 5.6 years 4.5 - 6.3 years 4.0 - 5.7 years Risk-free interest rate 1.8% 1.8 % 1.3 - 1.8% 1.4 - 1.9% Dividend rate — % — % — % — % |
Summary of Stock Option Activity | The following table summarizes the stock option activity for the nine months ended September 30, 2015 : Number of Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2014 3,345,993 $ 2.68 7.0 $ 27,725 Granted 514,276 11.90 Exercised (276,925 ) 1.53 3,119 Forfeited (28,544 ) 4.69 Cancelled (4,476 ) 1.54 Outstanding at September 30, 2015 3,550,324 $ 4.09 6.8 $ 27,038 Vested and expected to vest at September 30, 2015 3,506,414 $ 4.05 6.8 $ 26,681 Exercisable at September 30, 2015 1,844,358 $ 1.78 5.4 $ 18,221 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Components of Basic and Diluted EPS | The components of basic and diluted EPS are as follows (in thousands, except share and per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Net income $ 3,229 $ 2,667 $ 8,779 $ 9,016 Less: dividends paid to participating securities — — (18,987 ) — Less: income allocated to participating securities (50 ) (2,549 ) — (8,651 ) Net income available for common stockholders (A) $ 3,179 $ 118 $ (10,208 ) $ 365 Weighted average common shares outstanding — basic (B) 44,922,410 2,429,445 16,910,090 2,211,263 Dilutive effect of stock options 1,909,604 1,916,240 — 1,580,965 Weighted average common shares outstanding — diluted (C) 46,832,014 4,345,685 16,910,090 3,792,228 Earnings per share: Basic (A/B) $ 0.07 $ 0.05 $ (0.60 ) $ 0.17 Diluted (A/C) $ 0.07 $ 0.03 $ (0.60 ) $ 0.10 |
Schedule of Securities Excluded from Calculation of Diluted Weighted Average Common Shares Outstanding Due to Anti-dilutive Effect | The following securities have been excluded from the calculation of diluted weighted average common shares outstanding because the effect is anti-dilutive for the three and nine months ended September 30, 2015 and 2014 : Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Redeemable convertible preferred stock: Series A — 1,998,257 — 1,998,257 Series B — 1,809,685 — 1,809,685 Series B-1 — 82,934 — 82,934 Stock options 32,000 185,150 537,525 185,150 Common stock subject to repurchase 124,791 357,392 124,791 357,392 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Schedule of Reportable Segment Operational Data | The reportable segment operational data is presented in the table below as of September 30, 2015 and December 31, 2014 and for the three and nine months ended September 30, 2015 and 2014 (in thousands): Three Months Ended September 30, Segment Information 2015 2014 Alarm.com Other Intersegment Intersegment Total Alarm.com Other Intersegment Intersegment Total Revenue $ 52,684 $ 2,073 $ (50 ) (700 ) $ 54,007 $ 42,274 $ 638 $ (80 ) $ — $ 42,832 Operating income / (loss) 8,865 (4,561 ) 4 33 4,341 6,810 (3,658 ) (8 ) 135 3,279 Nine Months Ended September 30, Segment Information 2015 2014 Alarm.com Other Intersegment Alarm.com Intersegment Other Total Alarm.com Other Intersegment Alarm.com Intersegment Other Total Revenue $ 148,302 $ 5,714 $ (570 ) (1,479 ) $ 151,967 $ 120,948 $ 1,225 $ (412 ) $ — $ 121,761 Operating income / (loss) 27,195 (13,467 ) (167 ) 183 13,744 23,900 (9,937 ) (88 ) 84 13,959 As of September 30, 2015 As of December 31, 2014 Alarm.com Other Total Alarm.com Other Total Total Assets $ 209,194 $ 13,931 $ 223,125 $ 108,935 $ 11,997 $ 120,932 |
Organization (Details)
Organization (Details) $ / shares in Units, $ in Thousands | Jul. 08, 2015USD ($)shares | Jul. 08, 2015USD ($)shares | Jul. 01, 2015USD ($)$ / sharesshares | Jun. 26, 2015USD ($) | Jun. 12, 2015$ / shares | Sep. 30, 2015$ / sharesshares | Sep. 30, 2014$ / shares | Sep. 30, 2015USD ($)solution$ / sharesshares | Sep. 30, 2014USD ($)$ / shares | Dec. 31, 2014shares |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||
Number of primary solutions | solution | 4 | |||||||||
Class of Stock [Line Items] | ||||||||||
Proceeds from issuance of common stock from initial public offering, net of underwriting discount and commission | $ 97,976 | $ 0 | ||||||||
Issuance of common stock from initial public offering, net of issuance costs | $ 92,953 | |||||||||
Preferred stock, shares authorized (in shares) | shares | 10,000,000 | 10,000,000 | 0 | |||||||
Common stock, shares authorized (in shares) | shares | 300,000,000 | 300,000,000 | 100,000,000 | |||||||
Dividends declared, common stock (in dollars per share) | $ / shares | $ 0.36368 | $ 0 | $ 0 | $ 0.36 | $ 0 | |||||
Dividends declared and paid | $ 20,000 | |||||||||
Series A Redeemable Convertible Preferred Stock | ||||||||||
Class of Stock [Line Items] | ||||||||||
Dividends declared, preferred stock (in dollars per share) | $ / shares | 0.36368 | |||||||||
Series B Redeemable Convertible Preferred Stock | ||||||||||
Class of Stock [Line Items] | ||||||||||
Dividends declared, preferred stock (in dollars per share) | $ / shares | 0.72736 | |||||||||
Series B-1 Redeemable Convertible Preferred Stock | ||||||||||
Class of Stock [Line Items] | ||||||||||
Dividends declared, preferred stock (in dollars per share) | $ / shares | $ 0.72736 | |||||||||
Common Stock | ||||||||||
Class of Stock [Line Items] | ||||||||||
Shares issued | shares | 7,525,000 | |||||||||
Issuance of common stock from initial public offering, net of issuance costs | $ 75 | |||||||||
IPO | ||||||||||
Class of Stock [Line Items] | ||||||||||
Shares issued | shares | 7,525,000 | |||||||||
Proceeds from issuance of common stock from initial public offering, net of underwriting discount and commission | $ 105,400 | |||||||||
Underwriting discount and commission | 7,400 | |||||||||
Offering costs | 5,000 | |||||||||
Issuance of common stock from initial public offering, net of issuance costs | $ 93,000 | |||||||||
IPO | Common Stock | ||||||||||
Class of Stock [Line Items] | ||||||||||
Shares issued | shares | 525,000 | 7,000,000 | ||||||||
Issuance price per share (in dollars per share) | $ / shares | $ 14 | |||||||||
Proceeds from issuance of common stock from initial public offering, net of underwriting discount and commission | $ 98,000 | |||||||||
Issuance of common stock from initial public offering, net of issuance costs | $ 7,400 | |||||||||
Shares issued upon conversion of redeemable convertible preferred stock | shares | 35,017,884 | 35,017,884 | 35,017,884 |
Accounts Receivable, Net - Sche
Accounts Receivable, Net - Schedule of Components of Accounts Receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Receivables [Abstract] | ||
Accounts receivable | $ 25,473 | $ 20,494 |
Allowance for doubtful accounts | (1,783) | (1,397) |
Allowance for product returns | (1,944) | (1,838) |
Accounts receivable, net | $ 21,746 | $ 17,259 |
Accounts Receivable, Net - Narr
Accounts Receivable, Net - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Reserve for product returns | $ 1,148 | $ 1,453 | ||
Provision for doubtful accounts | $ 0 | $ 400 | 420 | 909 |
Hardware and Other Revenue | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Reserve for product returns | $ 300 | $ 500 | $ 1,100 | $ 1,500 |
Inventory - Schedule of Compone
Inventory - Schedule of Components of Inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 6,633 | $ 3,371 |
Finished goods | 2,992 | 3,481 |
Total inventory | $ 9,625 | $ 6,852 |
Acquisitions - SecurityTrax Acq
Acquisitions - SecurityTrax Acquisition (Details) | Mar. 13, 2015USD ($)group | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Business Acquisition [Line Items] | |||||
Cash not yet paid for business acquisitions | $ 617,000 | $ 0 | |||
Goodwill | 24,723,000 | $ 21,374,000 | |||
Gain in change in fair value of contingent liability | $ (180,000) | $ 0 | |||
SecurityTrax | |||||
Business Acquisition [Line Items] | |||||
Cash paid to acquire business | $ 5,612,000 | ||||
Cash not yet paid for business acquisitions | 400,000 | ||||
Goodwill | 3,328,000 | ||||
SecurityTrax | Customer Relationships | |||||
Business Acquisition [Line Items] | |||||
Intangible assets acquired | $ 1,699,000 | ||||
Weighted-average estimated useful life of intangible assets acquired | 7 years | ||||
SecurityTrax | Customer Relationships | Income Approach Valuation Technique | |||||
Business Acquisition [Line Items] | |||||
Number of groups measured under valuation technique | group | 2 | ||||
Discount rate | 22.50% | ||||
Customer retention rate | 90.00% | ||||
SecurityTrax | Developed Technology | |||||
Business Acquisition [Line Items] | |||||
Intangible assets acquired | $ 1,407,000 | ||||
Weighted-average estimated useful life of intangible assets acquired | 8 years | ||||
SecurityTrax | Developed Technology | Income Approach Valuation Technique | |||||
Business Acquisition [Line Items] | |||||
Discount rate | 22.50% | ||||
Market royalty rate | 25.00% | ||||
SecurityTrax | Developed Technology | Cost Approach Valuation Technique | |||||
Business Acquisition [Line Items] | |||||
Adjustment for developer's profit rate | 30.40% | ||||
SecurityTrax | Contingent Consideration, Earn Out Program | |||||
Business Acquisition [Line Items] | |||||
Contingent consideration liability | $ 700,000 | ||||
Maximum amount of contingent consideration liability to be paid | $ 2,000,000 | $ 2,000,000 | |||
SecurityTrax | Contingent Consideration, Earn Out Program | Income Approach Valuation Technique | |||||
Business Acquisition [Line Items] | |||||
Discount rate | 8.45% | 10.75% | |||
Revenue risk adjustment rate | 7.50% | 6.70% | |||
Other Liabilities | SecurityTrax | Contingent Consideration, Earn Out Program | |||||
Business Acquisition [Line Items] | |||||
Contingent consideration liability | $ 700,000 | $ 900,000 | |||
Gain in change in fair value of contingent liability | $ 200,000 |
Acquisitions - Schedule of Cons
Acquisitions - Schedule of Consideration Paid to SecurityTrax and Estimated Fair Value of Tangible and Intangible Net Assets Acquired (Details) - USD ($) $ in Thousands | Mar. 13, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 |
Calculation of Consideration: | ||||
Cash not yet paid | $ 617 | $ 0 | ||
Estimated Tangible and Intangible Net Assets: | ||||
Goodwill | $ 24,723 | $ 21,374 | ||
SecurityTrax | ||||
Calculation of Consideration: | ||||
Cash paid, net of working capital adjustment | $ 5,612 | |||
Cash not yet paid | 400 | |||
Total consideration | 6,712 | |||
Estimated Tangible and Intangible Net Assets: | ||||
Current assets | 14 | |||
Current liabilities | (7) | |||
Goodwill | 3,328 | |||
Total estimated tangible and intangible net assets | 6,712 | |||
SecurityTrax | Customer Relationships | ||||
Estimated Tangible and Intangible Net Assets: | ||||
Intangible assets | 1,699 | |||
SecurityTrax | Developed Technology | ||||
Estimated Tangible and Intangible Net Assets: | ||||
Intangible assets | 1,407 | |||
SecurityTrax | Trade Name | ||||
Estimated Tangible and Intangible Net Assets: | ||||
Intangible assets | 271 | |||
SecurityTrax | Contingent Consideration, Earn Out Program | ||||
Calculation of Consideration: | ||||
Contingent consideration liability | $ 700 |
Acquisitions - Secure-i Acquisi
Acquisitions - Secure-i Acquisition (Details) - USD ($) $ in Thousands | Dec. 08, 2014 | Jun. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 |
Business Acquisition [Line Items] | |||||
Cash not yet paid for business acquisitions | $ 617 | $ 0 | |||
Goodwill | $ 24,723 | $ 21,374 | |||
Secure-i | |||||
Business Acquisition [Line Items] | |||||
Cash paid to acquire business | $ 2,600 | ||||
Cash not yet paid for business acquisitions | 300 | ||||
Intangible assets acquired | 700 | ||||
Goodwill | $ 2,200 | ||||
Increase in goodwill due to working capital adjustment | $ 20 |
Acquisitions - Horizon Analog A
Acquisitions - Horizon Analog Acquisition (Details) - USD ($) $ in Thousands | Dec. 10, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 |
Business Acquisition [Line Items] | ||||
Cash not yet paid for business acquisitions | $ 617 | $ 0 | ||
Goodwill | $ 24,723 | $ 21,374 | ||
Horizon Analog | ||||
Business Acquisition [Line Items] | ||||
Cash paid to acquire business | $ 600 | |||
Cash not yet paid for business acquisitions | 100 | |||
Property and equipment recorded in connection with acquisition (less than) | 100 | |||
Goodwill | $ 700 |
Acquisitions - Unaudited Pro Fo
Acquisitions - Unaudited Pro Forma Financial Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net income adjusted for transaction costs | $ 3,229 | $ 2,667 | $ 8,779 | $ 9,016 |
Revenue | 152,189 | 122,994 | ||
Net income | 8,735 | $ 8,274 | ||
Transaction Costs | ||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net income adjusted for transaction costs | $ 100 |
Goodwill and Intangible Asset47
Goodwill and Intangible Assets, Net - Schedule of Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 21,374 |
Goodwill acquired | 3,349 |
Ending balance | 24,723 |
Alarm.com | |
Goodwill [Roll Forward] | |
Beginning balance | 21,374 |
Goodwill acquired | 3,349 |
Ending balance | 24,723 |
Other | |
Goodwill [Roll Forward] | |
Beginning balance | 0 |
Goodwill acquired | 0 |
Ending balance | $ 0 |
Goodwill and Intangible Asset48
Goodwill and Intangible Assets, Net - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Goodwill [Line Items] | ||||
Goodwill acquired | $ 3,349,000 | |||
Goodwill impairment | $ 0 | $ 0 | 0 | $ 0 |
Amortization | $ 600,000 | $ 400,000 | 1,590,000 | $ 1,200,000 |
SecurityTrax | ||||
Goodwill [Line Items] | ||||
Goodwill acquired | $ 3,300,000 |
Goodwill and Intangible Asset49
Goodwill and Intangible Assets, Net - Schedule of Net Carrying Amount of Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Finite-lived Intangible Assets [Roll Forward] | ||||
Beginning balance | $ 5,092 | |||
Intangible assets acquired | 3,377 | |||
Amortization | $ (600) | $ (400) | (1,590) | $ (1,200) |
Ending balance | 6,879 | 6,879 | ||
Customer Relationships | ||||
Finite-lived Intangible Assets [Roll Forward] | ||||
Beginning balance | 3,853 | |||
Intangible assets acquired | 1,699 | |||
Amortization | (828) | |||
Ending balance | 4,724 | 4,724 | ||
Developed Technology | ||||
Finite-lived Intangible Assets [Roll Forward] | ||||
Beginning balance | 918 | |||
Intangible assets acquired | 1,407 | |||
Amortization | (613) | |||
Ending balance | 1,712 | 1,712 | ||
Trade Name | ||||
Finite-lived Intangible Assets [Roll Forward] | ||||
Beginning balance | 94 | |||
Intangible assets acquired | 271 | |||
Amortization | (61) | |||
Ending balance | 304 | 304 | ||
Other | ||||
Finite-lived Intangible Assets [Roll Forward] | ||||
Beginning balance | 227 | |||
Intangible assets acquired | 0 | |||
Amortization | (88) | |||
Ending balance | $ 139 | $ 139 |
Goodwill and Intangible Asset50
Goodwill and Intangible Assets, Net - Schedule of Weighted Average Remaining Life and Carrying Value of Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 17,204 | $ 13,827 |
Accumulated Amortization | (10,325) | (8,735) |
Net Carrying Value | 6,879 | 5,092 |
Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 10,666 | 8,967 |
Accumulated Amortization | (5,942) | (5,114) |
Net Carrying Value | $ 4,724 | $ 3,853 |
Customer Relationships | Weighted Average | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted- average Remaining Life (in years) | 4 years 7 months 6 days | 4 years 4 months 24 days |
Developed Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 5,390 | $ 3,983 |
Accumulated Amortization | (3,678) | (3,065) |
Net Carrying Value | $ 1,712 | $ 918 |
Developed Technology | Weighted Average | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted- average Remaining Life (in years) | 5 years 1 month 5 days | 1 year 7 months 6 days |
Trade Name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 914 | $ 643 |
Accumulated Amortization | (610) | (549) |
Net Carrying Value | $ 304 | $ 94 |
Trade Name | Weighted Average | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted- average Remaining Life (in years) | 5 years 2 months 12 days | 1 year 9 months 18 days |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 234 | $ 234 |
Accumulated Amortization | (95) | (7) |
Net Carrying Value | $ 139 | $ 227 |
Other | Weighted Average | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted- average Remaining Life (in years) | 1 year 2 months 12 days | 1 year 10 months 24 days |
Goodwill and Intangible Asset51
Goodwill and Intangible Assets, Net - Schedule of Future Estimated Amortization Expense (Details) $ in Thousands | Sep. 30, 2015USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2,015 | $ 538 |
2,016 | 1,726 |
2,017 | 1,400 |
2,018 | 1,329 |
2019 and thereafter | $ 1,886 |
Investments in Other Entities -
Investments in Other Entities - Home Service Provider (Details) - Connected Home Service Provider - USD ($) $ / shares in Units, $ in Millions | Apr. 15, 2015 | Jun. 26, 2013 | Sep. 04, 2012 | Sep. 30, 2015 | Dec. 31, 2014 |
Other Assets | |||||
Schedule of Cost-method Investments [Line Items] | |||||
Cost method investment | $ 0.4 | $ 0.4 | |||
Variable Interest Entity, Not Primary Beneficiary | |||||
Schedule of Cost-method Investments [Line Items] | |||||
Ownership interest in cost method investment | 12.60% | 12.40% | 12.20% | ||
Variable Interest Entity, Not Primary Beneficiary | Series A Convertible Preferred Membership Units | |||||
Schedule of Cost-method Investments [Line Items] | |||||
Cost method investment, shares | 20,000 | ||||
Cost method investment, share price | $ 15 | ||||
Cost method investment, original cost | $ 0.3 | ||||
Variable Interest Entity, Not Primary Beneficiary | Series B Convertible Preferred Membership Units | |||||
Schedule of Cost-method Investments [Line Items] | |||||
Cost method investment, shares | 2,667,000 | ||||
Cost method investment, share price | $ 26.22 | ||||
Cost method investment, original cost | $ 0.1 | ||||
Variable Interest Entity, Not Primary Beneficiary | Series B-1 Convertible Preferred Membership Units | |||||
Schedule of Cost-method Investments [Line Items] | |||||
Cost method investment, shares | 2,333 | ||||
Cost method investment, share price | $ 23.31 | ||||
Cost method investment, original cost | $ 0.1 |
Investments in Other Entities53
Investments in Other Entities - Installation Partner (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | Nov. 20, 2013 | |
Schedule of Equity Method Investments [Line Items] | ||||||
Loss from equity method investment | $ 285,000 | $ 450,000 | ||||
Installation Partner | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Equity method investment, cost | $ 1,000,000 | |||||
Equity method investment, shares | 48,190 | |||||
Ownership percentage in equity method investment | 48.20% | 48.20% | 48.20% | |||
Other Assets | Installation Partner | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Equity method investment | $ 100,000 | $ 100,000 | $ 400,000 | |||
Other (expense) / income, net | Installation Partner | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Loss from equity method investment | $ 100,000 | $ 300,000 | $ 300,000 | 500,000 | ||
Secured Promissory Note | Equity Method Investee | Installation Partner | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Related party notes receivable, face amount | $ 315,000 | $ 315,000 | ||||
Notes receivable, Interest rate | 8.00% | 8.00% | ||||
Secured Promissory Note | Equity Method Investee | Other Assets | Installation Partner | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Related party notes receivable, face amount | $ 315,000 | $ 315,000 |
Investments in Other Entities54
Investments in Other Entities - Platform Partner (Details) - Platform Partner - USD ($) $ in Millions | 3 Months Ended | ||
Dec. 31, 2014 | Mar. 31, 2013 | Sep. 30, 2015 | |
Variable Interest Entity, Not Primary Beneficiary | |||
Schedule of Cost-method Investments [Line Items] | |||
Return on investment | $ 2.5 | ||
Variable Interest Entity, Not Primary Beneficiary | Series A Convertible Preferred Shares | |||
Schedule of Cost-method Investments [Line Items] | |||
Cost method investment, original cost | $ 3.5 | ||
Cost method investment, shares | 3,548,820 | ||
Ownership interest in cost method investment | 18.70% | ||
Variable Interest Entity, Not Primary Beneficiary | Common Stock | |||
Schedule of Cost-method Investments [Line Items] | |||
Ownership interest in cost method investment | 8.60% | ||
Shares converted | 3,548,820 | ||
Other Assets | |||
Schedule of Cost-method Investments [Line Items] | |||
Cost method investment | $ 1 | $ 1 |
Other Assets - Patent Licenses
Other Assets - Patent Licenses (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)patent_license_agreement | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |||||
Finite-lived intangible assets, gross | $ 17,204 | $ 17,204 | $ 13,827 | ||
Number of patent license agreements | patent_license_agreement | 2 | ||||
Finite-lived, intangible assets, net | 6,879 | $ 6,879 | 5,092 | ||
Amortization on patents | 258 | $ 151 | |||
Cost of SaaS and License Revenue | Patent Licenses | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization on patents | 200 | $ 100 | 300 | $ 200 | |
Other Assets | Patent Licenses | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Finite-lived intangible assets, gross | 3,300 | 3,300 | |||
Finite-lived, intangible assets, net | $ 2,400 | $ 2,400 | $ 1,500 | ||
Minimum | Patent Licenses | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Finite-lived intangible asset, useful life (in years) | 3 years | ||||
Maximum | Patent Licenses | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Finite-lived intangible asset, useful life (in years) | 11 years |
Other Assets - Loans to Distrib
Other Assets - Loans to Distribution Partner and Deferred Offering Costs (Details) - Other Assets - Distribution Partner - Notes Receivable - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 | Jul. 25, 2013 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Notes receivable, maximum available | $ 2,800,000 | ||
Notes receivable, Interest rate | 8.00% | ||
Note receivable | $ 2,300,000 | $ 2,000,000 |
Liabilities (Details)
Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 17,902 | $ 11,179 |
Accrued expenses | 2,498 | 1,911 |
Other current liabilities | 3,826 | 2,143 |
Accounts payable, accrued expenses and other current liabilities | $ 24,226 | $ 15,233 |
Liabilities (Other LIabilities)
Liabilities (Other LIabilities) (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Payables and Accruals [Abstract] | ||
Deferred rent | $ 5,485 | $ 1,013 |
Other liabilities | 2,002 | 657 |
Other liabilities | $ 7,487 | $ 1,670 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Subsidiary unit awards | $ (194) | |
Contingent consideration liability from acquisition | (880) | |
Fair value, net asset (liability) | 119,105 | $ 38,578 |
Money market account | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market account | 120,179 | 38,578 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Subsidiary unit awards | 0 | |
Contingent consideration liability from acquisition | 0 | |
Fair value, net asset (liability) | 120,179 | 38,578 |
Level 1 | Money market account | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market account | 120,179 | 38,578 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Subsidiary unit awards | 0 | |
Contingent consideration liability from acquisition | 0 | |
Fair value, net asset (liability) | 0 | 0 |
Level 2 | Money market account | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market account | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Subsidiary unit awards | (194) | |
Contingent consideration liability from acquisition | (880) | |
Fair value, net asset (liability) | (1,074) | 0 |
Level 3 | Money market account | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market account | $ 0 | $ 0 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Fair Value of Level 3 Liability (Details) - Level 3 - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2015 | Sep. 30, 2015 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 782 | $ 0 |
Obligations assumed | 0 | 700 |
Transfers | 0 | 152 |
Payments | 0 | 0 |
Realized (gain) / loss | 0 | 0 |
Unrealized (gain) / loss | 292 | 222 |
Ending balance | $ 1,074 | $ 1,074 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)subsidiaryaward | Sep. 30, 2014USD ($) | Mar. 31, 2015USD ($) | Mar. 13, 2015USD ($) | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Other-than-temporary impairments | $ 0 | $ 0 | $ 0 | $ 0 | ||
Contingent Consideration, Earn Out Program | SecurityTrax | ||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Maximum amount of contingent consideration liability to be paid | $ 2,000,000 | $ 2,000,000 | ||||
Founder and President | Repurchase of Subsidiary Units, February 2011 | ||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Number of subsidiaries involved in subsidiary unit agreement | subsidiary | 2 | |||||
Number of awards in subsidiary unit agreement | award | 2 |
Debt, Commitments and Conting62
Debt, Commitments and Contingencies - Debt (Details) | May. 08, 2014USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2014USD ($) |
Term Loan | Prior Facility | |||
Debt Instrument [Line Items] | |||
Proceeds from line of credit used to repay prior facility | $ 6,700,000 | ||
Line of Credit | Revolving Credit Facility | 2014 Facility | |||
Debt Instrument [Line Items] | |||
Current borrowing capacity | 50,000,000 | ||
Maximum borrowing capacity | $ 75,000,000 | ||
Effective interest rate (percent) | 2.54% | ||
Long-term debt | $ 6,700,000 | $ 6,700,000 | |
Consolidated leverage ratio covenant (not to exceed) | 2.50 | ||
Consolidated fixed charge coverage ratio covenant (at least) | 1.25 | ||
Line of Credit | Revolving Credit Facility | 2014 Facility | Minimum | |||
Debt Instrument [Line Items] | |||
Unused line commitment fee (percentage) | 0.20% | ||
Line of Credit | Revolving Credit Facility | 2014 Facility | Maximum | |||
Debt Instrument [Line Items] | |||
Unused line commitment fee (percentage) | 0.25% | ||
Line of Credit | Revolving Credit Facility | 2014 Facility | Federal Funds Rate | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate (percent) | 0.50% | ||
Line of Credit | Revolving Credit Facility | 2014 Facility | London Interbank Offered Rate (LIBOR) | Leverage Ratio (less than or equal to) | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate (percent) | 2.25% | ||
Consolidated leverage ratio | 1 | ||
Line of Credit | Revolving Credit Facility | 2014 Facility | London Interbank Offered Rate (LIBOR) | Leverage Ratio (greater than or equal to, but less than) | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate (percent) | 2.50% | ||
Line of Credit | Revolving Credit Facility | 2014 Facility | London Interbank Offered Rate (LIBOR) | Leverage Ratio (greater than or equal to, but less than) | Minimum | |||
Debt Instrument [Line Items] | |||
Consolidated leverage ratio | 1 | ||
Line of Credit | Revolving Credit Facility | 2014 Facility | London Interbank Offered Rate (LIBOR) | Leverage Ratio (greater than or equal to, but less than) | Maximum | |||
Debt Instrument [Line Items] | |||
Consolidated leverage ratio | 2 | ||
Line of Credit | Revolving Credit Facility | 2014 Facility | London Interbank Offered Rate (LIBOR) | Leverage Ratio (less than) | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate (percent) | 2.75% | ||
Consolidated leverage ratio | 2 | ||
Line of Credit | Revolving Credit Facility | 2014 Facility | Alternate Base Rate (ABR) | Leverage Ratio (less than or equal to) | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate (percent) | 1.25% | ||
Consolidated leverage ratio | 1 | ||
Line of Credit | Revolving Credit Facility | 2014 Facility | Alternate Base Rate (ABR) | Leverage Ratio (greater than or equal to, but less than) | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate (percent) | 1.50% | ||
Line of Credit | Revolving Credit Facility | 2014 Facility | Alternate Base Rate (ABR) | Leverage Ratio (greater than or equal to, but less than) | Minimum | |||
Debt Instrument [Line Items] | |||
Consolidated leverage ratio | 1 | ||
Line of Credit | Revolving Credit Facility | 2014 Facility | Alternate Base Rate (ABR) | Leverage Ratio (greater than or equal to, but less than) | Maximum | |||
Debt Instrument [Line Items] | |||
Consolidated leverage ratio | 2 | ||
Line of Credit | Revolving Credit Facility | 2014 Facility | Alternate Base Rate (ABR) | Leverage Ratio (less than) | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate (percent) | 1.75% | ||
Consolidated leverage ratio | 2 |
Debt, Commitments and Conting63
Debt, Commitments and Contingencies - Commitments and Contingencies (Details) | Jun. 02, 2015patentelement | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($) |
Related Party Transaction [Line Items] | ||||||
Available leasehold improvement allowance | $ 8,000,000 | $ 8,000,000 | ||||
Available leasehold improvement allowance utilized | 3,200,000 | |||||
Rent expense | 1,200,000 | $ 800,000 | 3,600,000 | $ 1,600,000 | ||
Repurchase of Subsidiary Units, February 2011 | Founder and President | ||||||
Related Party Transaction [Line Items] | ||||||
Due to related parties | 200,000 | 200,000 | $ 200,000 | |||
Other Liabilities | Repurchase of Subsidiary Units, September 2012 | Founder and President | ||||||
Related Party Transaction [Line Items] | ||||||
Due to related parties | $ 0 | $ 0 | $ 0 | |||
Pending Litigation | Vivint, Inc. vs. Alarm.com Holdings, Inc | ||||||
Related Party Transaction [Line Items] | ||||||
Number of patents allegedly infringed | patent | 6 | |||||
Number of elements of a solution in a patent, potentially infringed (or more) | element | 1 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - 2015 ESPP - Employee Stock | 9 Months Ended |
Sep. 30, 2015USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares reserved for future grant | 1,200,000 |
Shares reserved for grant, annual increase period (in years) | 9 years |
Annual automatic increase in shares available, percentage of each class of common stock outstanding | 1.00% |
Annual automatic increase in shares available, shares | 1,500,000 |
Maximum number of shares participant may purchase, fair market value (not to exceed) | $ | $ 15,000 |
Maximum number of shares participant may purchase as a percentage of base compensation (not to exceed) | 10.00% |
Shares purchased by employees | 0 |
Shares available to be issued | 1,200,000 |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Discount of the market value on the date of purchase (not to exceed) (percentage) | 10.00% |
Redeemable Convertible Prefer65
Redeemable Convertible Preferred Stock (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2015 | Jul. 08, 2015 | Jul. 01, 2015 | |
Increase (Decrease) in Temporary Equity [Roll Forward] | |||
Beginning balance, Redeemable convertible preferred stock, Beginning balance | $ 202,456 | ||
Conversion of Preferred Stock into Common Stock | (202,456) | ||
Ending balance, Redeemable convertible preferred stock | $ 0 | ||
SERIES B Redeemable Convertible Preferred Stock | |||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||
Beginning balance, Preferred stock, shares issued (in shares) | 1,809,685 | ||
Beginning balance, Redeemable convertible preferred stock, Beginning balance | $ 136,523 | ||
Conversion of Preferred Stock into Common Stock (in shares) | (1,810,000) | ||
Conversion of Preferred Stock into Common Stock | $ (136,523) | ||
Ending balance, Redeemable convertible preferred stock | $ 0 | ||
Ending balance, Preferred stock, shares issued (in shares) | 0 | ||
SERIES B-1 Redeemable Convertible Preferred Stock | |||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||
Beginning balance, Preferred stock, shares issued (in shares) | 82,934 | ||
Beginning balance, Redeemable convertible preferred stock, Beginning balance | $ 6,265 | ||
Conversion of Preferred Stock into Common Stock (in shares) | (83,000) | ||
Conversion of Preferred Stock into Common Stock | $ (6,265) | ||
Ending balance, Redeemable convertible preferred stock | $ 0 | ||
Ending balance, Preferred stock, shares issued (in shares) | 0 | ||
NEW SERIES A Redeemable Convertible Preferred Stock | |||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||
Beginning balance, Preferred stock, shares issued (in shares) | 1,998,257 | ||
Beginning balance, Redeemable convertible preferred stock, Beginning balance | $ 59,668 | ||
Conversion of Preferred Stock into Common Stock (in shares) | (1,998,000) | ||
Conversion of Preferred Stock into Common Stock | $ (59,668) | ||
Ending balance, Redeemable convertible preferred stock | $ 0 | ||
Ending balance, Preferred stock, shares issued (in shares) | 0 | ||
Common Stock | |||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||
Conversion of Preferred Stock into Common Stock (in shares) | (35,018,000) | ||
Conversion of Preferred Stock into Common Stock | $ (350) | ||
Common Stock | IPO | |||
Temporary Equity [Line Items] | |||
Shares issued upon conversion of redeemable convertible preferred stock | 35,017,884 | 35,017,884 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted (in shares) | 514,276 | |||
Weighted average grant date fair value for stock options (in dollars per share) | $ 11.90 | |||
Fair value of stock options vested during period | $ 1,200 | $ 400 | ||
Aggregate intrinsic value of stock options exercised during period | 3,119 | $ 7,100 | ||
Compensation cost not yet recognized on nonvested awards | $ 4,000 | 4,000 | ||
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Cash settlement of exercised stock options included in stock-based compensation | 800 | $ 800 | ||
Compensation cost not yet recognized, period for recognition | 2 years 2 months 12 days | |||
2009 and 2015 Plan | Accounts Payable, Accrued Expenses and Other Current Liabilities | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Liability from proceeds of early exercise of stock options | $ 500 | $ 500 | $ 700 | |
2015 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common shares reserved for issuance | 4,700,000 | 4,700,000 | ||
Common shares reserved for issuance, annual increase period (not more than) (in years) | 10 years | |||
Common shares reserved for issuance, percentage of annual increase | 5.00% | |||
Shares available to be issued | 4,674,312 | 4,674,312 | ||
Granted (in shares) | 1 | |||
2009 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common shares reserved for issuance | 141,222 | 141,222 | ||
Shares available to be issued | 0 | 0 | ||
Unvested shares of common stock outstanding | 124,791 | 124,791 | 209,372 | |
2009 Plan | Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Award vesting period (in years) | 5 years | |||
Award expiration period (in years) | 10 years | |||
2009 Plan | Common Stock | Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Repurchase of unvested shares | 287 |
Stock-Based Compensation - St67
Stock-Based Compensation - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | $ 809 | $ 746 | $ 2,975 | $ 2,365 |
Tax benefit / (expense) from stock-based awards | 424 | (73) | 665 | 675 |
Sales and marketing | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | 114 | 80 | 260 | 235 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | 305 | 434 | 1,825 | 1,396 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | 390 | 232 | 890 | 734 |
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | 809 | 724 | 2,005 | 2,300 |
Compensation related to the sale of common stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | 0 | 22 | 193 | 65 |
Compensation related to the repurchase of stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | $ 0 | $ 0 | $ 777 | $ 0 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Assumptions Used for Estimating Fair Value of Stock Options Granted (Details) - Stock options | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Volatility (percent) | 51.00% | 47.20% | ||
Volatility, minimum (percent) | 48.50% | 47.20% | ||
Volatility, maximum (percent) | 51.80% | 49.60% | ||
Expected term (in years) | 6 years 3 months 18 days | 5 years 7 months 6 days | ||
Risk-free interest rate (percent) | 1.80% | 1.80% | ||
Risk-free interest rate, minimum (percent) | 1.30% | 1.40% | ||
Risk-free interest rate, maximum (percent) | 1.80% | 1.90% | ||
Dividend rate (percent) | 0.00% | 0.00% | 0.00% | 0.00% |
Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected term (in years) | 4 years 6 months | 4 years | ||
Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected term (in years) | 6 years 3 months 18 days | 5 years 8 months 12 days |
Stock-Based Compensation - Su69
Stock-Based Compensation - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Outstanding, beginning balance (in shares) | 3,345,993 | ||
Granted (in shares) | 514,276 | ||
Exercised (in shares) | (276,925) | ||
Forfeited (in shares) | (28,544) | ||
Cancelled (in shares) | (4,476) | ||
Outstanding, ending balance (in shares) | 3,550,324 | 3,345,993 | |
Vested and expected to vest (in shares) | 3,506,414 | ||
Exercisable (in shares) | 1,844,358 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |||
Outstanding, beginning balance, weighted average exercise price per share (in dollars per share) | $ 2.68 | ||
Granted, weighted average exercise price per share (in dollars per share) | 11.90 | ||
Exercised, weighted average exercise price per share (in dollars per share) | 1.53 | ||
Forfeited, weighted average exercise price per share (in dollars per share) | 4.69 | ||
Cancelled, weighted average exercise price per share (in dollars per share) | 1.54 | ||
Outstanding, ending balance, weighted average exercise price per share (in dollars per share) | 4.09 | $ 2.68 | |
Vested and expected to vest, weighted average exercise price per share (in dollars per share) | 4.05 | ||
Exercisable, weighted average exercise price per share (in dollars per share) | $ 1.78 | ||
Balance. weighted average remaining contractual life (in years) | 6 years 9 months 18 days | 7 years | |
Exercisable. weighted average remaining contractual life (in years) | 6 years 9 months 18 days | ||
Vested and expected to vest. weighted average remaining contractual life (in years) | 5 years 4 months 24 days | ||
Outstanding, beginning balance, aggregate intrinsic value | $ 27,725 | ||
Exercised, aggregate intrinsic value | 3,119 | $ 7,100 | |
Outstanding, ending balance, aggregate intrinsic value | 27,038 | $ 27,725 | |
Vested and expected to vest, aggregate intrinsic value | 26,681 | ||
Exercisable, aggregate intrinsic value | $ 18,221 |
Stock-Based Compensation - Warr
Stock-Based Compensation - Warrants (Details) $ / shares in Units, $ in Thousands | Mar. 30, 2015employeeshares | Sep. 30, 2015USD ($)$ / sharesshares | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)$ / sharesshares | Sep. 30, 2014USD ($) | May. 31, 2015shares | Dec. 31, 2014shares | Dec. 31, 2012$ / sharesshares | Dec. 31, 2010$ / sharesshares |
Performance Based Warrants | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Number of exercisable warrants | 0 | 0 | 0 | ||||||
Expense associated with warrants | $ | $ 0 | $ 0 | $ 0 | $ 0 | |||||
Common Stock | 2015 Performance Based Warrant | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Number of employees who were issued warrants | employee | 2 | ||||||||
Executive Officer | Common Stock | 2010 Performance-Based Warrant | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Number of shares exercisable when warrants exercise (up to / not to exceed) | 91,881 | 91,881 | |||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 0.41 | ||||||||
Executive Officer | Common Stock | 2012 Performance Based Warrant | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Number of shares exercisable when warrants exercise (up to / not to exceed) | 27,000 | ||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 3.89 | ||||||||
Employee | Common Stock | 2015 Performance Based Warrant | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Number of shares exercisable when warrants exercise (up to / not to exceed) | 54,694 | ||||||||
Employee | Common Stock | 2015 Performance Based Warrant, One | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Number of shares exercisable when warrants exercise (up to / not to exceed) | 27,347 | 27,347 | |||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 10.97 | $ 10.97 | |||||||
Employee | Common Stock | 2015 Performance Based Warrant, Two | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Number of shares exercisable when warrants exercise (up to / not to exceed) | 27,347 | 27,347 | |||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 10.97 | $ 10.97 |
Earnings Per Share - Components
Earnings Per Share - Components of Basic and Diluted EPS (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Earnings Per Share [Abstract] | ||||
Net income | $ 3,229 | $ 2,667 | $ 8,779 | $ 9,016 |
Less: dividends paid to participating securities | 0 | 0 | (18,987) | 0 |
Less: income allocated to participating securities | (50) | (2,549) | 0 | (8,651) |
Net income / (loss) attributable to common stockholders | $ 3,179 | $ 118 | $ (10,208) | $ 365 |
Weighted average common shares outstanding — basic (in shares) | 44,922,410 | 2,429,445 | 16,910,090 | 2,211,263 |
Dilutive effect of stock options (in shares) | 1,909,604 | 1,916,240 | 0 | 1,580,965 |
Weighted average common shares outstanding — diluted (in shares) | 46,832,014 | 4,345,685 | 16,910,090 | 3,792,228 |
Earnings per share: | ||||
Earnings per share, basic (in dollars per shares) | $ 0.07 | $ 0.05 | $ (0.60) | $ 0.17 |
Earnings per share, diluted (in dollars per shares) | $ 0.07 | $ 0.03 | $ (0.60) | $ 0.10 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Securities Excluded from Calculation of Diluted Weighted Average Common Shares Outstanding Due to Anti-dilutive Effect (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Series A Redeemable Convertible Preferred Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from the calculation of diluted weighted average common shares outstanding | 0 | 1,998,257 | 0 | 1,998,257 |
Series B Redeemable Convertible Preferred Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from the calculation of diluted weighted average common shares outstanding | 0 | 1,809,685 | 0 | 1,809,685 |
Series B-1 Redeemable Convertible Preferred Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from the calculation of diluted weighted average common shares outstanding | 0 | 82,934 | 0 | 82,934 |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from the calculation of diluted weighted average common shares outstanding | 32,000 | 185,150 | 537,525 | 185,150 |
Common stock subject to repurchase | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from the calculation of diluted weighted average common shares outstanding | 124,791 | 357,392 | 124,791 | 357,392 |
Significant Service Providers (
Significant Service Providers (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Concentration Risk [Line Items] | |||||
Trade accounts receivable | $ 21,746 | $ 21,746 | $ 17,259 | ||
Revenue | 10 Largest Service Providers | Service Provider Concentration Risk | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 63.70% | 61.50% | 63.70% | 65.90% | |
Revenue | Minimum | Service Provider A | Service Provider Concentration Risk | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 15.00% | 10.00% | 15.00% | 10.00% | |
Revenue | Minimum | Service Provider B | Service Provider Concentration Risk | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 15.00% | 10.00% | |||
Revenue | Minimum | Service Provider C | Service Provider Concentration Risk | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 15.00% | ||||
Revenue | Maximum | Service Provider A | Service Provider Concentration Risk | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 20.00% | 15.00% | 20.00% | 15.00% | |
Revenue | Maximum | Service Provider B | Service Provider Concentration Risk | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 20.00% | 15.00% | |||
Revenue | Maximum | Service Provider C | Service Provider Concentration Risk | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 20.00% | ||||
Trade Accounts Receivable | Service Provider One | Service Provider Concentration Risk | |||||
Concentration Risk [Line Items] | |||||
Trade accounts receivable | $ 3,000 | $ 3,000 | 3,100 | ||
Trade Accounts Receivable | Service Provider Two | Service Provider Concentration Risk | |||||
Concentration Risk [Line Items] | |||||
Trade accounts receivable | $ 2,900 | $ 2,900 | 2,700 | ||
Trade Accounts Receivable | Service Provider Three | Service Provider Concentration Risk | |||||
Concentration Risk [Line Items] | |||||
Trade accounts receivable | $ 1,100 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||||
Effective income tax rate (percent) | 24.70% | 15.60% | 35.20% | 34.40% | |
Discrete benefit due to research and development tax credits | $ 0.7 | $ 0.8 | |||
Unrecognized tax benefits recorded for research and development tax credits from prior years | $ 0.2 | $ 0.2 | $ 0.2 | ||
Liability for uncertain tax position established | $ 0.1 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)segment | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($) | |
Segment Reporting [Abstract] | |||||
Number of reportable segments | segment | 2 | ||||
Segment Reporting Information [Line Items] | |||||
Revenue | $ 54,007 | $ 42,832 | $ 151,967 | $ 121,761 | |
Operating income / (loss) | 4,341 | 3,279 | 13,744 | 13,959 | |
Total Assets | 223,125 | 223,125 | $ 120,932 | ||
Operating Segments | Alarm.com | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 52,684 | 42,274 | 148,302 | 120,948 | |
Operating income / (loss) | 8,865 | 6,810 | 27,195 | 23,900 | |
Total Assets | 209,194 | 209,194 | 108,935 | ||
Operating Segments | Other | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 2,073 | 638 | 5,714 | 1,225 | |
Operating income / (loss) | (4,561) | (3,658) | (13,467) | (9,937) | |
Total Assets | 13,931 | 13,931 | $ 11,997 | ||
Intersegment Eliminations | Alarm.com | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | (50) | (80) | (570) | (412) | |
Operating income / (loss) | 4 | (8) | (167) | (88) | |
Intersegment Eliminations | Other | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | (700) | 0 | (1,479) | 0 | |
Operating income / (loss) | $ 33 | $ 135 | $ 183 | $ 84 | |
Segment Concentration Risk | Revenue | Alarm.com | |||||
Segment Reporting Information [Line Items] | |||||
Concentration risk percentage (more than) | 97.00% | 97.00% | 97.00% | 97.00% |
Related Party Transactions (Det
Related Party Transactions (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2015shareholder$ / sharesshares | Sep. 30, 2015USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($) | Nov. 20, 2013 | |
Significant Stockholders | Secondary Sale Agreement | ||||||
Related Party Transaction [Line Items] | ||||||
Number of shareholders involved in transaction | shareholder | 2 | |||||
Number of shares agreed to be bought in transaction | shares | 888,988 | |||||
Share price (in dollars per share) | $ / shares | $ 13.02 | |||||
Installation Partner | ||||||
Related Party Transaction [Line Items] | ||||||
Ownership percentage in equity method investment | 48.20% | 48.20% | 48.20% | |||
Installation Partner | Equity Method Investee | ||||||
Related Party Transaction [Line Items] | ||||||
Accounts payable to related party | $ 0 | $ 0 | $ 100,000 | |||
Interest income from related party | $ 6,000 | 19,000 | ||||
Installation Partner | Equity Method Investee | Secured Promissory Note | ||||||
Related Party Transaction [Line Items] | ||||||
Related party notes receivable, face amount | $ 315,000 | |||||
Notes receivable, Interest rate | 8.00% | |||||
Cost of Hardware and Other Revenue | Installation Partner | Equity Method Investee | ||||||
Related Party Transaction [Line Items] | ||||||
Expenses incurred from related party | $ 500,000 | $ 200,000 |