Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Mar. 03, 2016 | Jun. 30, 2015 | |
Document and Entity Information | |||
Entity Registrant Name | 2U, Inc. | ||
Entity Central Index Key | 1,459,417 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 897,895,628 | ||
Entity Common Stock, Shares Outstanding | 45,962,954 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 183,729 | $ 86,929 |
Accounts receivable, net | 975 | 350 |
Advance to clients | 1,508 | |
Prepaid expenses and other assets | 6,695 | 2,709 |
Total current assets | 192,907 | 89,988 |
Property and equipment, net | 8,128 | 6,755 |
Capitalized content development costs, net | 18,121 | 13,155 |
Advance to clients, non-current | 1,042 | 1,675 |
Prepaid expenses, non-current | 7,099 | 643 |
Other non-current assets | 3,744 | 823 |
Total assets | 231,041 | 113,039 |
Current liabilities: | ||
Accounts payable | 4,544 | 2,293 |
Accrued compensation and related benefits | 13,405 | 9,088 |
Accrued expenses and other liabilities | 12,039 | 10,481 |
Deferred revenue | 2,609 | 1,906 |
Total current liabilities | 32,597 | 23,768 |
Non-current liabilities | 2,655 | 1,260 |
Total liabilities | $ 35,252 | $ 25,028 |
Commitments and contingencies (Note 6) | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value, 5,000,000 shares authorized, 0 shares issued and outstanding as of December 31, 2015 and 2014 | ||
Common stock, $0.001 par value, 200,000,000 shares authorized, 45,776,455 shares issued and outstanding as of December 31, 2015; 40,735,069 shares issued and outstanding as of December 31, 2014 | $ 46 | $ 41 |
Additional paid-in capital | 351,324 | 216,818 |
Accumulated deficit | (155,581) | (128,848) |
Total stockholders' equity | 195,789 | 88,011 |
Total liabilities, and stockholders' equity | $ 231,041 | $ 113,039 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
Consolidated Balance Sheets | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 45,776,455 | 40,735,069 |
Common stock, shares outstanding | 45,776,455 | 40,735,069 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Consolidated Statements of Operations | |||||||||||
Revenue | $ 43,252 | $ 37,092 | $ 35,238 | $ 34,612 | $ 30,756 | $ 28,407 | $ 24,744 | $ 26,332 | $ 150,194 | $ 110,239 | $ 83,127 |
Costs and expenses: | |||||||||||
Servicing and support | 8,749 | 7,845 | 7,903 | 7,550 | 7,012 | 6,598 | 7,000 | 6,248 | 32,047 | 26,858 | 22,718 |
Technology and content development | 7,529 | 7,082 | 6,466 | 6,134 | 5,403 | 5,726 | 5,818 | 5,674 | 27,211 | 22,621 | 19,472 |
Program marketing and sales | 20,231 | 21,567 | 21,526 | 19,587 | 16,296 | 16,971 | 16,710 | 15,241 | 82,911 | 65,218 | 54,103 |
General and administrative | 10,064 | 8,477 | 8,871 | 6,711 | 5,973 | 6,303 | 5,708 | 5,436 | 34,123 | 23,420 | 14,840 |
Total costs and expenses | 46,573 | 44,971 | 44,766 | 39,982 | 34,684 | 35,598 | 35,236 | 32,599 | 176,292 | 138,117 | 111,133 |
Loss from operations | (3,321) | (7,879) | (9,528) | (5,370) | (3,928) | (7,191) | (10,492) | (6,267) | (26,098) | (27,878) | (28,006) |
Other income (expense): | |||||||||||
Interest expense | (173) | (127) | (126) | (126) | (119) | (176) | (134) | (784) | (552) | (1,213) | 27 |
Interest income | 94 | 21 | 24 | 28 | 30 | 30 | 31 | 1 | 167 | 92 | 26 |
Other | (250) | (250) | |||||||||
Total other income (expense) | (79) | (356) | (102) | (98) | (89) | (146) | (103) | (783) | (635) | (1,121) | 53 |
Loss before income taxes | (26,733) | (28,999) | (27,953) | ||||||||
Net loss | $ (3,400) | $ (8,235) | $ (9,630) | $ (5,468) | $ (4,017) | $ (7,337) | $ (10,595) | $ (7,050) | (26,733) | (28,999) | (27,953) |
Preferred stock accretion | (89) | (347) | |||||||||
Net loss attributable to holders of common stock | $ (26,733) | $ (29,088) | $ (28,300) | ||||||||
Net loss per share attributable to holders of common stock, basic and diluted (in dollars per share) | $ (0.07) | $ (0.20) | $ (0.23) | $ (0.13) | $ (0.10) | $ (0.18) | $ (0.27) | $ (0.92) | $ (0.63) | $ (0.91) | $ (3.81) |
Weighted-average shares of common stock outstanding, basic and diluted (in shares) | 45,651,475 | 41,645,894 | 41,362,476 | 40,978,741 | 40,577,087 | 40,269,937 | 39,304,884 | 7,698,709 | 42,420,356 | 32,075,107 | 7,432,055 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Common Stock. | Additional Paid-In Capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2012 | $ 7 | $ 5,483 | $ (71,786) | $ (66,296) |
Balance (in shares) at Dec. 31, 2012 | 7,386,133 | |||
Increase (Decrease) in Stockholders' Equity | ||||
Exercise of stock options | $ 1 | 324 | 325 | |
Exercise of stock options (in shares) | 290,604 | |||
Accretion of issuance costs on redeemable convertible preferred stock | (347) | (347) | ||
Stock-based compensation expense | 2,426 | 2,426 | ||
Repurchase of common shares | (69) | (110) | (179) | |
Repurchase of common shares (in shares) | (47,604) | |||
Net loss | (27,953) | (27,953) | ||
Balance at Dec. 31, 2013 | $ 8 | 7,817 | (99,849) | (92,024) |
Balance (in shares) at Dec. 31, 2013 | 7,629,133 | |||
Increase (Decrease) in Stockholders' Equity | ||||
Exercise of stock options | $ 1 | 2,281 | 2,282 | |
Exercise of stock options (in shares) | 940,642 | |||
Grant of common stock | 55 | 55 | ||
Grant in common stock (in shares) | 5,000 | |||
Accretion of issuance costs on redeemable convertible preferred stock | (89) | (89) | ||
Stock-based compensation expense | 7,527 | 7,527 | ||
Conversion of redeemable convertible preferred stock to common stock | $ 23 | 98,113 | 98,136 | |
Conversion of redeemable convertible preferred stock to common stock (in shares) | 23,501,208 | |||
Conversion of Series D warrants to common stock warrants | 821 | 821 | ||
Issuance of common stock, net of issuance costs | $ 9 | 100,293 | 100,302 | |
Issuance of common stock, net of issuance costs ( in shares) | 8,626,377 | |||
Exercise of warrants to purchase common stock (in shares) | 32,709 | |||
Net loss | (28,999) | (28,999) | ||
Balance at Dec. 31, 2014 | $ 41 | 216,818 | (128,848) | $ 88,011 |
Balance (in shares) at Dec. 31, 2014 | 40,735,069 | 40,735,069 | ||
Increase (Decrease) in Stockholders' Equity | ||||
Exercise of stock options | $ 1 | 5,335 | $ 5,336 | |
Exercise of stock options (in shares) | 1,141,731 | |||
Stock-based compensation expense | 11,749 | 11,749 | ||
Issuance of common stock in connection with settlement of restricted stock units, net of withholdings | (436) | (436) | ||
Issuance of common stock in connection with settlement of restricted stock units, net of withholdings (in shares) | 248,088 | |||
Issuance of common stock, net of issuance costs | $ 4 | 117,108 | 117,112 | |
Issuance of common stock, net of issuance costs ( in shares) | 3,625,000 | |||
Issuance of common stock award | 750 | 750 | ||
Issuance of common stock award (in shares) | 26,567 | |||
Net loss | (26,733) | (26,733) | ||
Balance at Dec. 31, 2015 | $ 46 | $ 351,324 | $ (155,581) | $ 195,789 |
Balance (in shares) at Dec. 31, 2015 | 45,776,455 | 45,776,455 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities | |||
Net loss | $ (26,733) | $ (28,999) | $ (27,953) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation and amortization | 7,220 | 5,572 | 4,335 |
Stock-based compensation expense | 12,499 | 7,527 | 2,426 |
Charge related to execution of new lease agreement | 884 | ||
Loss on impairment and disposal of long-lived assets | 811 | ||
Changes in operating assets and liabilities: | |||
(Increase) decrease in accounts receivable, net | (625) | 1,485 | (1,587) |
(Increase) decrease in advance to clients | (875) | (1,094) | 415 |
(Increase) in prepaid expenses and other current assets | (4,001) | (374) | (939) |
Increase (decrease) in accounts payable | 2,251 | (2,565) | 1,894 |
Increase in accrued compensation and related benefits | 4,317 | 3,123 | 3,924 |
Increase in accrued expenses and other liabilities | 1,216 | 2,978 | 1,762 |
Increase in deferred revenue | 703 | 640 | 530 |
Increase in payments to clients | (3,664) | (826) | |
(Increase) decrease in other assets and other liabilities, net | (2,709) | 153 | (1,267) |
Other | 250 | 695 | (33) |
Net cash used in operating activities | (9,267) | (11,685) | (15,682) |
Cash flows from investing activities | |||
Purchases of property and equipment | (4,096) | (3,803) | (2,367) |
Capitalized content development cost expenditures | (9,518) | (7,150) | (5,213) |
Other | (2,331) | (29) | (56) |
Net cash used in investing activities | (15,945) | (10,982) | (7,636) |
Cash flows from financing activities | |||
Proceeds from issuance of common stock, net of offering costs | 117,112 | 100,302 | |
Proceeds from exercise of stock options | 5,336 | 2,282 | 325 |
Proceeds from revolving line of credit | 5,000 | ||
Payment on revolving line of credit | (5,000) | ||
Proceeds from issuance of Series D redeemable convertible preferred stock, net of issuance costs | 4,994 | ||
Other | (436) | (179) | |
Net cash provided by financing activities | 122,012 | 102,584 | 5,140 |
Net increase (decrease) in cash and cash equivalents | 96,800 | 79,917 | (18,178) |
Cash and cash equivalents, beginning of period | 86,929 | 7,012 | 25,190 |
Cash and cash equivalents, end of period | 183,729 | 86,929 | 7,012 |
Supplemental disclosure of non-cash investing and financing activities | |||
Accretion of issuance costs on redeemable convertible preferred stock | 89 | 347 | |
Accrued capital expenditures | $ 415 | 557 | 216 |
Deferred offering costs included in accounts payable and accrued expenses | (1,057) | ||
Issuance of Series D redeemable convertible preferred stock warrant in connection with revolving line of credit | $ 107 | ||
Common stock granted in exchange for consulting services received | $ 55 |
Description of the Business
Description of the Business | 12 Months Ended |
Dec. 31, 2015 | |
Description of the Business | |
Description of the Business | 1. Description of the Business 2U, Inc. (the "Company") was incorporated as 2Tor Inc. in the State of Delaware in April 2008 and changed its name to 2U, Inc. on October 11, 2012. Under long-term agreements, the Company provides an integrated solution comprised of cloud-based software-as-a-service ("SaaS"), fused with technology-enabled services (together, the "Platform"), that allows leading colleges and universities to deliver high quality online degree programs, extending the universities' reach and distinguishing their brands. The Company's SaaS technology consists of (i) a comprehensive learning environment ("Online Campus"), which acts as the hub for all student and faculty academic and social interaction, and (ii) operations applications, which provide the content management, admissions application processing, customer relationship management and other functionality necessary to effectively operate the Company's clients' programs. The Company also provides a suite of technology-enabled services that support the complete lifecycle of a higher education program, including attracting students, advising prospective students through the admissions application process, providing technical, success coaching and other support, facilitating accessibility to individuals with disabilities, and facilitating in-program field placements. On April 2, 2014, the Company closed the initial public offering of its common stock ("IPO") in which the Company issued and sold 8,626,377 shares of its common stock, including the partial exercise of the underwriters' over-allotment option, at an issuance price of $13.00 per share. The Company received net proceeds of $100.3 million after deducting underwriting discounts and commissions of $7.8 million and other offering expenses of approximately $4.0 million. Upon the closing of the IPO, all shares of the then-outstanding redeemable convertible preferred stock automatically converted into an aggregate of 23,501,208 shares of common stock, based on the shares of redeemable convertible preferred stock outstanding as of April 2, 2014. In addition, the outstanding Series D warrants automatically converted into warrants to purchase common stock, and the preferred stock warrant liability of $0.8 million as of April 2, 2014 was reclassified to additional paid-in capital. On September 30, 2015, the Company sold 3,625,000 shares of its common stock to the public, including 525,000 shares sold pursuant to the underwriters' over-allotment option, at an issuance price of $34.00 per share. The Company received net proceeds of $117.1 million after deducting underwriting discounts and commissions of $5.5 million and other offering expenses of approximately $0.6 million. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Significant Accounting Policies | |
Significant Accounting Policies | 2. Significant Accounting Policies Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries and have been prepared in accordance with United States generally accepted accounting principles ("U.S. GAAP") and include the assets, liabilities, results of operations and cash flows of the Company. All significant intercompany accounts and transactions have been eliminated in consolidation. Reclassifications Certain prior period amounts in the Consolidated Balance Sheets and Consolidated Statements of Cash Flows have been reclassified to conform to the current period's presentation. Use of Estimates The preparation of financial statements in accordance with U.S. GAAP requires management to make certain estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. On an ongoing basis, the Company evaluates its estimates, including those related to the useful lives of long-lived assets, fair value measurement and income taxes, among others. The Company bases its estimates and assumptions on historical experience and on various other factors that it believes to be reasonable under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in those estimates. The Company evaluates its estimates and assumptions on an ongoing basis. Cash and Cash Equivalents Cash and cash equivalents consist of bank checking accounts, money market accounts, investments in certificates of deposit that mature in less than three months and highly liquid marketable securities with maturities at the time of purchase of three months or less. Concentration of Credit Risk Financial instruments that subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. All of the Company's cash is held at financial institutions that management believes to be of high credit quality. The Company's bank accounts exceed federally insured limits at times. The Company has not experienced any losses on cash to date. To manage accounts receivable risk, the Company maintains an allowance for doubtful accounts, if needed. During each of the years ended December 31, 2015, 2014 and 2013, three clients accounted for more than 10% of the Company's revenue, as follows: • For the year ended December 31, 2015, the three largest clients accounted for $65.2 million, $23.8 million and $17.6 million of the Company's revenue, which equals 43%, 16% and 12% of total revenue. • For the year ended December 31, 2014, the three largest clients accounted for $61.1 million, $15.9 million and $14.6 million of the Company's revenue, which equals 55%, 14% and 13% of total revenue. • For the year ended December 31, 2013, the three largest clients accounted for $57.3 million, $13.5 million and $10.4 million of the Company's revenue, which equals 69%, 16% and 12% of total revenue. Additionally, the Company's largest client accounted for 7% and 35% of the Company's accounts receivable balance as of December 31, 2015 and 2014, respectively. Further, one additional client accounted for more than 10% of the Company's accounts receivable balance as of December 31, 2015, while two additional clients accounted for more than 10% of the Company's accounts receivable balance as of December 31, 2014. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are stated at realizable value. The Company extends a minimal amount of uncollateralized credit to its clients. The Company utilizes the allowance method to provide for doubtful accounts based on management's evaluation of the collectability of the amounts due. The Company's estimate is based on historical collection experience and a review of the current status of accounts receivable. Historically, actual write-offs for uncollectible accounts have not significantly differed from the Company's estimates. As of December 31, 2015 and 2014, the Company determined that no significant allowances for doubtful accounts were necessary. Fair Value Measurements The carrying amounts of certain assets and liabilities, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses and other current liabilities, approximate their respective fair values due to their short-term nature. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, based on the Company's principal or, in the absence of a principal, most advantageous, market for the specific asset or liability. U.S. GAAP provides for a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The fair value hierarchy requires the Company to use observable inputs when available, and to minimize the use of unobservable inputs when determining fair value. The three tiers are defined as follows: • Level 1 —Observable inputs that reflect quoted market prices (unadjusted) for identical assets or liabilities in active markets; • Level 2 —Observable inputs, other than quoted prices in active markets, that are observable either directly or indirectly in the marketplace for identical or similar assets and liabilities; and • Level 3 —Unobservable inputs that are supported by little or no market data, which require the Company to develop its own assumptions about the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances. Assets Measured at Fair Value on a Recurring Basis The Company evaluates its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level in which to classify them for each reporting period. This determination requires significant judgments to be made. The Company had Level 1 money market investments of $155.6 million and $82.9 million included in cash and cash equivalents as of December 31, 2015 and 2014, respectively. Advances to Clients The Company is contractually obligated to pay advances to certain of its clients in order to fund start-up expenses of the program on behalf of the client. Advances to clients are stated at realizable value. The advances are repaid to the Company on terms as required in the respective agreements. The Company recognizes imputed interest income on these advance payments when there is a significant amount of imputed interest. Long-Lived Assets Property and Equipment Property and equipment is stated at cost less accumulated depreciation and amortization. Computer software is included in property and equipment and consists of internally-developed software. Expenditures for major additions, construction and improvements are capitalized. Depreciation and amortization is expensed using the straight-line method over the estimated useful lives of the related assets, which range from three to five years for computer hardware and five to seven years for furniture and office equipment. Leasehold improvements are depreciated on a straight-line basis over the lesser of the remaining term of the leased facility or the estimated useful life of the improvement, which ranges from four to ten years. Useful lives of significant assets are periodically reviewed and adjusted prospectively to reflect the Company's current estimates of the respective assets' expected utility. Repair and maintenance costs are expensed as incurred. The Company capitalizes certain costs associated with internally-developed software, primarily consisting of direct labor associated with creating the software. Software development projects generally include three stages: the preliminary project stage (all costs are expensed as incurred), the application development stage (certain costs are capitalized and certain costs are expensed as incurred) and the post-implementation/operation stage (all costs are expensed as incurred). Costs capitalized in the application development stage include costs of designing the application, coding, integrating the Company's and the university's networks and systems, and the testing of the software. Capitalization of costs requires judgment in determining when a project has reached the application development stage and the period over which the Company expects to benefit from the use of that software. Once the software is placed in service, these costs are depreciated on the straight-line method over the estimated useful life of the software, which is generally three years. Capitalized Content Development Costs The Company works with each client's faculty members to develop and maintain educational content that is delivered to their students through Online Campus. The online content developed jointly by the Company and its clients consists of subjects chosen and taught by clients' faculty members and incorporates references and examples designed to remain relevant over extended periods of time. Online delivery of the content, combined with live, face-to-face instruction, provides the Company with rapid user feedback that it uses to make ongoing corrections, modifications and improvements to the course content. The Company's clients retain all intellectual property rights to the developed content, although the Company retains the rights to the content packaging and delivery mechanisms. Much of the Company's new content development uses proven delivery platforms and is therefore primarily subject-specific in nature. As a result, a significant portion of content development costs qualify for capitalization due to the focus of the Company's development efforts on the unique subject matter of the content. Similar to on-campus programs offered by the Company's clients, the online degree programs enabled by the Company offer numerous courses for each degree. The Company therefore capitalizes its development costs on a course-by-course basis. As students must matriculate into a client program in order to take a course, revenues and identifiable cash flows are also measured at the client program level. The Company develops content on a course-by-course basis in conjunction with the faculty for each client program. The clients and their faculty generally provide course outlines in the form of the curriculum, required textbooks, case studies and other reading materials, as well as presentations that are typically used in the on-campus setting. The Company is then responsible for, and incurs all of the expenses related to, the conversion of the materials provided by each client into a format suitable for delivery through Online Campus. The content development costs that qualify for capitalization are third-party direct costs, such as videography, editing and other services associated with creating digital content. Additionally, the Company capitalizes internal payroll and payroll-related costs incurred to create and produce videos and other digital content utilized in the clients' programs for delivery via Online Campus. Capitalization ends when content has been fully developed by both the Company and the client, at which time amortization of the capitalized content development costs begins. The capitalized costs are recorded on a course-by-course basis and included in capitalized content costs on the consolidated balance sheets. These costs are amortized using the straight-line method over the estimated useful life of the respective capitalized content program, which is generally five years. The estimated useful life corresponds with the Company's planned curriculum refresh rate. This refresh rate is consistent with expected curriculum refresh rates as cited by program faculty members for similar on-campus programs. It is reasonably possible that developed content could be refreshed before the estimated useful lives are complete or be expensed immediately in the event that the development of a course is discontinued prior to launch. Other Non-Current Assets The Company records amounts paid more than 12 months in advance of being incurred as prepaid expenses, non-current. In addition, the Company has certain other assets that are long-term in nature, which are classified as other non-current assets. These consist primarily of amortizable intangible assets associated with the Company's marketing websites and related domain names and security deposits on leased office facilities. Evaluation of Long-Lived Assets The Company reviews long-lived assets, which consist of property and equipment, capitalized content development costs and acquired finite-lived intangible assets, for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. Recoverability of a long-lived asset is measured by a comparison of the carrying value of an asset or asset group to the future undiscounted net cash flows expected to be generated by that asset or asset group. If such assets are not recoverable, the impairment to be recognized is measured by the amount by which the carrying value of an asset exceeds the estimated fair value (discounted cash flow) of the asset or asset group. In order to assess the recoverability of the capitalized content development costs, the costs are grouped by program, which is the lowest level of independent cash flows. The Company's impairment analysis is based upon forecasted financial and operational results. The actual results could vary from the Company's forecasts, especially in relation to recently launched programs. For the years ended December 31, 2015 and 2014, no impairment of long-lived assets was deemed to have occurred. In December 2013, the Company evaluated the recoverability of its capitalized assets and determined that the estimated carrying value of one asset group exceeded its net realizable value. Revenue Recognition and Deferred Revenue The Company recognizes revenue when all of the following conditions are met: (i) persuasive evidence of an arrangement exists, (ii) rendering of services is complete, (iii) fees are fixed or determinable and (iv) collection of fees is reasonably assured. The Company primarily derives its revenue from long-term contracts that typically range from 10 to 15 years in length. Under these contracts, the Company enables access to its Platform to its clients and their faculty and students. The Company is entitled to a contractually specified percentage of net program proceeds from its clients. These net program proceeds represent gross proceeds billed by clients to students, less credit card fees and other specified charges the Company has agreed to exclude in certain of its client contracts. The Company generates substantially all of its revenue from multiple-deliverable contractual arrangements with its clients. Under each of these arrangements, the Company provides (i) access to Online Campus, which serves as a learning platform for its client's faculty and students and which also enables a comprehensive range of other client functions, (ii) access to operations applications which provide the content management, admissions application processing, customer relationship management, and other functionality necessary to effectively operate the Company's clients' programs and (iii) technology-enabled services that support the complete lifecycle of a higher education program, including attracting students, advising prospective students through the admissions application process, providing technical, success coaching and other support, facilitating accessibility to individuals with disabilities, and facilitating in-program field placements. In order to treat deliverables in a multiple-deliverable contractual arrangement as separate units of accounting, deliverables must have standalone value upon delivery. The technology-enabled services within the Platform are provided primarily in support of programs delivered through Online Campus, and for students of the programs delivered through Online Campus. Accordingly, the Company has determined that no individual deliverable has standalone value upon delivery and, therefore, deliverables within the Company's multiple-deliverable arrangements do not qualify for treatment as separate units of accounting. Accordingly, the Company considers all deliverables to be a single unit of accounting and recognizes revenue from the entire arrangement over the term of the service period. Advance payments are recorded as deferred revenue until services are delivered or obligations are met, at which time revenue is recognized. Deferred revenue as of a particular balance sheet date represents the excess of amounts received as compared to amounts recognized in revenue in the consolidated statements of operations as of the end of the reporting period, and such amounts are reflected as a current liability on the Company's consolidated balance sheets. Program Marketing and Sales Expense The majority of the marketing and sales costs incurred by the Company are directly related to acquiring students for its clients' programs, with lesser amounts related to the Company's own marketing and advertising efforts. For the years ended December 31, 2015, 2014 and 2013, expenses related to the Company's own marketing and advertising efforts were not material. All such costs are expensed as incurred and reported in program marketing and sales expense in the Company's consolidated statements of operations. Leases The Company leases all of its office facilities and enters into various other lease agreements in conducting its business. At the inception of each lease, the Company evaluates the lease agreement to determine whether the lease is an operating or capital lease. Additionally, many of the Company's lease agreements contain renewal options, tenant improvement allowances, rent holiday and/or rent escalation clauses. When such items are included in a lease agreement, the Company records a deferred rent asset or liability in the Consolidated Financial Statements, and records these items in rent expense evenly over the term of the lease. The Company is also required to make additional payments under operating lease terms for taxes, insurance and other operating expenses incurred during the operating lease period; such items are expensed as incurred. Rental deposits are included as other assets in the Consolidated Financial Statements for lease agreements the require payments in advance or deposits held for security that are refundable, less any damages, at the end of the respective lease. Stock-Based Compensation The Company accounts for stock-based compensation awards based on the fair value of the award as of the grant date. For awards subject to service-based vesting conditions, the Company recognizes stock-based compensation expense on a straight-line basis over the awards' requisite service period, adjusted for estimated forfeitures. For awards subject to both performance and service-based vesting conditions, the Company recognizes stock-based compensation expense using an accelerated recognition method when it is probable that the performance condition will be achieved. Basic and Diluted Loss per Common Share The Company uses the two-class method to compute net loss per share of common stock because the Company has issued securities, other than common stock, that contractually entitle the holders to participate in dividends and earnings of the Company. The two-class method requires earnings for the period to be allocated between common stock and participating securities based upon their respective rights to receive distributed and undistributed earnings. Holders of each series of the Company's redeemable convertible preferred stock (prior to their conversion to common stock) were entitled to participate in distributions, when and if declared by the board of directors, that are made to holders of common stock, and as a result are considered participating securities. Under the two-class method, for periods with net income, basic net income per share of common stock is computed by dividing the net income attributable to holders of common stock by the weighted-average number of shares of common stock outstanding during the period. Net income attributable to holders of common stock is computed by subtracting from net income the portion of current year earnings that the participating securities would have been entitled to receive pursuant to their dividend rights had all of the year's earnings been distributed. No such adjustment to earnings is made during periods with a net loss, as the holders of the participating securities have no obligation to fund losses. Diluted net loss per share of common stock is computed under the two-class method by using the weighted-average number of shares of common stock outstanding, plus, for periods with net income attributable to holders of common stock, the potential dilutive effects of stock options and warrants. In addition, the Company analyzes the potential dilutive effect of the outstanding participating securities under the "if-converted" method when calculating diluted earnings per share, in which it is assumed that the outstanding participating securities convert into common stock at the beginning of the period. The Company reports the more dilutive of the approaches (two-class or "if-converted") as its diluted net income per share during the period. Due to net losses for the years ended December 31, 2015, 2014 and 2013, basic and diluted loss per share were the same, as the effect of potentially dilutive securities would have been anti-dilutive. Comprehensive Loss The Company's net loss equals comprehensive loss for all periods presented as the Company has no material components of other comprehensive income. Recent Accounting Pronouncements In November 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2015-17, Balance Sheet Classification of Deferred Taxes . The ASU eliminates the requirement to classify deferred tax assets and liabilities between current and noncurrent. The ASU requires classification of all deferred tax asset and liability balances as noncurrent. The amendments in this ASU are effective for fiscal years beginning after December 15, 2016, with early adoption permitted. Adoption of the ASU is either retrospective to each prior period presented, or prospective. As of December 31, 2015, the Company early adopted the ASU prospectively. Adoption of this standard did not have a material impact on the Company's consolidated financial position and related disclosures . In April 2015, the FASB issued ASU No. 2015-05, Intangibles—Goodwill and Other—Internal-Use Software . The ASU provides guidance to customers in a cloud computing arrangement to determine whether the arrangement includes a software license. When a cloud computing arrangement includes a software license, the customer is required to account for the license element of the arrangement consistent with the acquisition of other software licenses. The amendments in this ASU are effective for fiscal years beginning after December 15, 2015. The Company is currently evaluating the effect that the standard will have on its consolidated financial statements and related disclosures. In April 2015, the FASB issued ASU No. 2015-03, Interest—Imputation of Interest . The ASU simplifies the presentation of debt issuance costs by requiring that such costs be presented in the consolidated balance sheets as a direct deduction from the carrying value of the associated debt instrument, consistent with debt discounts. Subsequent to the issuance of this ASU, the SEC staff announced that the presentation of debt issuance costs associated with line-of-credit arrangements may be presented as an asset. This announcement was codified by the FASB in ASU 2015-15. The amendments in these ASUs are effective for fiscal years beginning after December 15, 2015. Adoption of this standard will not have a material impact on the Company's consolidated financial position. In January 2015, the FASB issued ASU No. 2015-01, Income Statement—Extraordinary and Unusual Items . The ASU simplifies income statement presentation by eliminating the concept of extraordinary items. The amendments in this ASU are effective for fiscal periods beginning after December 15, 2015. The Company does not expect the new standard to have a significant impact on its ongoing financial reporting. In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern . The ASU requires that an entity's management evaluate whether there are conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued. The amendments in this ASU are effective for annual reporting periods ending after December 15, 2016. The Company does not expect the new standard to have a significant impact on its reporting process. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers , which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. In July 2015, the FASB deferred by one year the mandatory effective date of this ASU from January 1, 2017 to January 1, 2018. Early application is permitted, but not prior to the original effective date of January 1, 2017. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is currently evaluating the effect that this standard will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. |
Accounts Receivable and Allowan
Accounts Receivable and Allowance for Doubtful Accounts | 12 Months Ended |
Dec. 31, 2015 | |
Accounts Receivable And Allowance for Doubtful Accounts | |
Accounts Receivable and Allowance for Doubtful Accounts | 3. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable, net consists of the following: December 31, 2015 2014 (in thousands) Accounts receivable $ $ Other receivables ​ ​ ​ ​ ​ ​ ​ ​ Accounts receivable, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The changes in allowance for doubtful accounts are as follows: Balance at Beginning of Period Additions Charged to Expense/Against Revenue Deductions Balance at End of Period (in thousands) Allowance for doubtful accounts: Year ended December 31, 2015 $ — $ — $ — $ — Year ended December 31, 2014 — ) — Year ended December 31, 2013 — — |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2015 | |
Property and Equipment | |
Property and Equipment | 4. Property and Equipment Property and equipment consisted of the following as of: December 31, 2015 2014 (in thousands) Internally-developed software $ $ Internally-developed software in process Computer hardware Furniture and office equipment Leasehold improvements ​ ​ ​ ​ ​ ​ ​ ​ Total Accumulated depreciation and amortization ) ) ​ ​ ​ ​ ​ ​ ​ ​ Property and equipment, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortization expense related to the capitalized internally-developed software was $1.6 million, $1.4 million and $1.5 million for the years ended December 31, 2015, 2014 and 2013, respectively, and is included in technology and content development costs in the accompanying consolidated statements of operations. The net book value of capitalized internally-developed software was $4.5 million and $3.3 million at December 31, 2015 and 2014, respectively. Depreciation and amortization expense of property and equipment (inclusive of amortization expense related to the capitalized internally-developed software) was $2.7 million, $2.4 million and $2.1 million for the years ended December 31, 2015, 2014 and 2013, respectively. As of December 31, 2015, the estimated future depreciation and amortization expense for property and equipment is as follows (in thousands): 2016 $ 2017 2018 2019 2020 Thereafter ​ ​ ​ ​ ​ Total $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Capitalized Content Development
Capitalized Content Development Costs | 12 Months Ended |
Dec. 31, 2015 | |
Capitalized Content Development Costs | |
Capitalized Content Development Costs | 5. Capitalized Content Development Costs Capitalized content development costs consisted of the following as of: December 31, 2015 December 31, 2014 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (in thousands) Capitalized content development costs $ $ ) $ $ $ ) $ Capitalized content development costs in process — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ) $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Company recorded amortization expense related to capitalized content development costs of $4.5 million, $3.2 million and $2.2 million for the years ended December 31, 2015, 2014 and 2013, respectively. The Company performed an impairment assessment in the fourth quarter of 2013 and determined that certain capitalized content development costs were not recoverable, and recorded an impairment charge of $0.8 million in that period. As of December 31, 2015, the estimated future amortization expense for capitalized content development costs is as follows (in thousands): 2016 $ 2017 2018 2019 2020 ​ ​ ​ ​ ​ Total $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies | |
Commitments and Contingencies | 6. Commitments and Contingencies Line of Credit On December 31, 2013, the Company entered into a credit agreement for a revolving line of credit with an aggregate commitment not to exceed $37.0 million. On January 21, 2014, the Company borrowed $5.0 million under this line of credit and repaid this borrowing in full on February 18, 2014. There have been no subsequent borrowings under this line of credit and therefore, no amounts were outstanding as of December 31, 2015 or December 31, 2014. On December 31, 2015, the Company amended this credit agreement to reduce the aggregate amount it may borrow to $25.0 million and extend the maturity date through April 29, 2016. Under this revolving line of credit, the Company has the option of borrowing funds subject to (i) a base rate, which is equal to 1.5% plus the greater of Comerica Bank's prime rate, the federal funds rate plus 1% or the 30 day LIBOR plus 1%, or (ii) LIBOR plus 2.5%. For amounts borrowed under the base rate, the Company may make interest-only payments quarterly, and may prepay such amounts with no penalty. For amounts borrowed under LIBOR, the Company makes interest-only payments in periods of one, two and three months and will be subject to a prepayment penalty if such borrowed amounts are repaid before the end of the interest period. Borrowings under the line of credit are collateralized by substantially all of the Company's assets. The availability of borrowings under this credit line is subject to compliance with reporting and financial covenants, including, among other things, that the Company achieves specified minimum three-month trailing revenue levels during the term of the agreement and specified minimum six-month trailing profitability levels for some client programs, measured quarterly. In addition, the Company is required to maintain a minimum adjusted quick ratio, which measures short-term liquidity, of at least 1.10 to 1.00. As of December 31, 2015 and 2014, the Company's adjusted quick ratios were 7.90 and 6.45, respectively. The covenants under the line of credit also place limitations on the Company's ability to incur additional indebtedness or to prepay permitted indebtedness, grant liens on or security interests in its assets, carry out mergers and acquisitions, dispose of assets, declare, make or pay dividends, make capital expenditures in excess of specified amounts, make investments, loans or advances, enter into transactions with affiliates, amend or modify the terms of material contracts, or change its fiscal year. If the Company is not in compliance with the covenants under the line of credit, after any opportunity to cure such non-compliance, or it otherwise experiences an event of default under the line of credit, the lenders may require repayment in full of all principal and interest outstanding. If the Company fails to repay such amounts, the lenders could foreclose on the assets pledged as collateral under the line of credit. The Company is currently in compliance with all such covenants. Legal Contingencies From time to time, the Company may become involved in legal proceedings or other contingencies in the ordinary course of its business. The Company is not presently involved in any legal proceeding or other contingency that, if determined adversely to it, would individually or in the aggregate have a material adverse effect on its business, operating results, financial condition or cash flows. Accordingly, the Company does not believe that there is a reasonable possibility that a material loss exceeding amounts already recognized may have been incurred as of the date of the balance sheets presented herein. Program Marketing and Sales Commitments Certain of the agreements entered into between the Company and its clients require the Company to commit to meet certain staffing and spending investment thresholds related to program marketing and sales activities. In addition, certain of the agreements require the Company to invest up to agreed upon levels in marketing the programs to achieve specified program performance. The Company believes it is currently in compliance with all such commitments. Operating Leases The Company leases office facilities under non-cancelable operating leases in Maryland, New York, California, Colorado, North Carolina, Virginia and Hong Kong. The Company also leases office equipment under non-cancelable leases. As of December 31, 2015, the future minimum lease payments (net of aggregate expected sublease payments of $0.3 million) were as follows (in thousands): 2016 $ 2017 2018 2019 2020 Thereafter ​ ​ ​ ​ ​ Total future minimum lease payments $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The future minimum lease payments due under non-cancelable operating lease arrangements contain fixed rent increases over the term of the lease. Rent expense on these operating leases is recognized over the term of the lease on a straight-line basis. The excess of rent expense over future minimum lease payments due has been reported in non-current liabilities in the accompanying consolidated balance sheets. The deferred rent liability related to these leases totaled $0.6 million and $0.5 million as of December 31, 2015 and 2014, respectively. Total rent expense from non-cancelable operating lease agreements (net of sublease income of $0.3 million, $0.3 million and $0.3 million) was $3.5 million, $2.6 million and $2.1 million for the years ended December 31, 2015, 2014 and 2013, respectively. Fixed Payments to Clients The Company is contractually obligated to make fixed payments to certain of its clients in exchange for contract extensions and various marketing and other rights. As of December 31, 2015, the future minimum fixed payments to the Company's clients in exchange for contract extensions and various marketing and other rights were as follows (in thousands): 2016 $ 2017 2018 2019 2020 Thereafter ​ ​ ​ ​ ​ Total future minimum program payments $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Contingent Payments to Clients The Company has entered into a specific program agreement under which it would be obligated to make future minimum program payments to a client in the event that certain program metrics, partially associated with a program not yet launched, are not achieved. Due to the dependency of this calculation on a future program launch, the amount of any associated contingent payments cannot be reasonably estimated at this time. As the Company cannot reasonably estimate the amount of the contingent payments, and because it believes any contingent payments under this agreement would likely be immaterial, the Company has excluded such payments from the table above. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes | |
Income Taxes | 7. Income Taxes The components of loss before income taxes for the years ended December 31 were as follows: 2015 2014 2013 (in thousands) Domestic $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total loss before income taxes $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ A reconciliation between the Company's statutory federal income tax rate and the effective tax rate for the years ended December 31, is as follows: 2015 2014 2013 U.S. statutory federal income tax rate % % % Increase (decrease) resulting from: U.S. state income taxes, net of federal benefits Non-deductible expenses ) ) ) Change in valuation allowance ) ) ) Other ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effective tax rate % % % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The significant components of the Company's deferred tax assets and liabilities as of December 31 are as follows: 2015 2014 (in thousands) Deferred tax assets: Accrued expenses and other $ $ Accrued compensation and related benefits Rebate reserve Deferred rent Stock-based compensation Net operating loss carryforwards Valuation allowance ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax assets $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred tax liabilities: Other expenses $ ) $ ) Capitalized content development costs ) ) Capitalized software development costs ) ) Property and equipment ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax liabilities $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ Net deferred tax assets/liabilities $ — $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred tax valuation allowances and changes in deferred tax valuation allowances are as follows: Balance at Beginning of Period Additions Charged to Expense/Against Revenue Deductions Balance at End of Period (in thousands) Income tax valuation allowance: Year ended December 31, 2015 $ $ $ — $ Year ended December 31, 2014 — Year ended December 31, 2013 — Income taxes are accounted for under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that are included in the financial statements. Deferred tax assets are subject to periodic recoverability assessments. Recognition of deferred tax assets is appropriate only if the likelihood of realization of such assets is more likely than not to occur. At December 31, 2015, the Company had a federal net operating loss ("NOL") carryforward of approximately $161.7 million, which expires between 2029 and 2035. The gross amount of the state NOL carryforwards is equal to or less than the federal NOL carryforwards and expires over various periods based on individual state tax laws. A full valuation allowance has been established to offset the net deferred tax assets. The total increase in the valuation allowance was $10.4 million for the year ended December 31, 2015, as the Company has not generated taxable income since inception and does not have sufficient deferred tax liabilities to recover the deferred tax assets. The utilization of the NOL carryforwards to reduce future income taxes will depend on the Company's ability to generate sufficient taxable income prior to the expiration of the NOL carryforwards. In addition, a certain portion of the above NOL carryforwards may be subject to Internal Revenue Code section 382 limitations, which may limit their future use. The Company completed an analysis of the stock ownership changes through September 30, 2015, and determined that there has not been an ownership change prior to that date. However, the Company has not completed an analysis to determine what, if any, impact any ownership change after September 30, 2015 has had on the ability to utilize NOL carryforwards. The Company has experienced a number of transactions subsequent to September 30, 2015, which could lead to a limitation of its NOL carryforwards under section 382 of the Internal Revenue Code. The Company intends to complete a study through December 31, 2015, regarding this limitation in the next twelve months. It is reasonably possible that the results of the study will reduce the reported NOL carryforwards and other deferred tax assets. The Company applies the provisions of ASC 740-10 to uncertain tax positions. ASC 740-10 clarifies accounting for income taxes by prescribing a minimum probability threshold that a tax position must meet before a financial statement benefit is recognized. If the probability for sustaining a tax position is greater than 50%, then the tax position is warranted and recognition should be at the highest amount which would be expected to be realized upon settlement. The Company did not identify any tax positions that would be required for inclusion in the financial statements. As of December 31, 2015, the Company had not made any changes to its tax positions since December 31, 2014. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2015 and 2014, the Company had no accrued interest or penalties related to uncertain tax positions. The Company has analyzed its filing positions in all significant federal, state and foreign jurisdictions where it is required to file income tax returns, as well as open tax years in these jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local tax examinations by tax authorities for the years prior to 2012, though the NOL carryforwards can be adjusted upon audit and could impact taxes owed in open tax years. No income tax returns are currently under examination by the taxing authorities. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2015 | |
Stockholders' Equity | |
Stockholders' Equity | 8. Stockholders' Equity Immediately upon the closing of the IPO on April 2, 2014, the Company's certificate of incorporation was amended and restated to, among other things, authorize 200,000,000 shares of common stock and 5,000,000 shares of preferred stock. On September 30, 2015, the Company sold 3,625,000 shares of its common stock to the public, including 525,000 shares sold pursuant to the underwriters' over-allotment option. The Company received net proceeds of $117.1 million, which the Company intends to use for general corporate purposes. As of December 31, 2015, the Company was authorized to issue 205,000,000 total shares of capital stock, consisting of 200,000,000 shares of common stock and 5,000,000 shares of preferred stock. At December 31, 2015, the Company had reserved a total of 8,423,261 of its authorized shares of common stock for future issuance as follows: Outstanding stock options Possible future issuance under 2014 Plan Outstanding restricted stock units ​ ​ ​ ​ ​ Total shares of common stock reserved for future issuance ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2015 | |
Stock-Based Compensation | |
Stock-Based Compensation | 9. Stock-Based Compensation The Company provides equity-based compensation awards to employees, independent contractors and directors as an effective means for attracting, retaining and motivating such individuals. The Company maintains two share-based compensation plans: the 2014 Equity Incentive Plan (the "2014 Plan") and the 2008 Stock Incentive Plan (the "2008 Plan"). Upon the effective date of the 2014 Plan in January 2014, the Company ceased using the 2008 Plan to grant new equity awards, and began using the 2014 Plan for grants of new equity awards. 2014 Plan In February 2014, the Company's stockholders approved the 2014 Plan. The 2014 Plan provides for the grant of incentive stock options to the Company's employees and its parent and subsidiary corporations' employees, and for the grant of nonstatutory stock options, restricted stock awards, restricted stock unit awards, stock appreciation rights, performance stock awards and other forms of stock compensation to the Company's employees, consultants and directors. The 2014 Plan also provides for the grant of performance-based cash awards to the Company's employees, consultants and directors. Authorized Shares. A total of 2,800,000 shares of the Company's common stock were initially reserved for issuance pursuant to the 2014 Plan. In addition, the shares reserved for issuance under the 2014 Plan include (a) those shares reserved but unissued under the 2008 Plan, and (b) shares returned to the 2008 Plan as the result of expiration or termination of awards (provided that the maximum number of shares that may be added to the 2014 Plan pursuant to (a) and (b) is 5,943,348 shares). The number of shares of the Company's common stock that may be issued under the 2014 Plan will automatically increase on January 1st of each year, for a period of ten years, from January 1, 2015 continuing through January 1, 2024, by 5% of the total number of shares of the Company's common stock outstanding on December 31st of the preceding calendar year, or a lesser number of shares as may be determined by the Company's board of directors. The shares available for issuance increased by 2,288,820 and 2,036,503 on January 1, 2016 and 2015, respectively, pursuant to the automatic share reserve increase provision under the 2014 Plan. In addition, shares subject to outstanding stock awards granted under the 2008 Plan and 2014 Plan that (i) expire or terminate for any reason prior to exercise or settlement; (ii) are forfeited because of the failure to meet a contingency or condition required to vest such shares or otherwise return to the Company; or (iii) are reacquired, withheld (or not issued) to satisfy a tax withholding obligation in connection with an award or to satisfy the purchase price or exercise price of a stock award, return to the 2014 Plan's share reserve and become available for future grant under the 2014 Plan, up to the maximum number of shares of 5,943,348. As of December 31, 2015, the Company had 1,904,743 shares reserved for issuance under the 2014 Plan. Further, as of December 31, 2015, under the 2014 Plan, options to purchase 1,698,475 shares of the Company's common stock were outstanding at a weighted-average exercise price of $17.03 per share and 1,220,008 restricted stock units were outstanding. The compensation committee of the Company's board of directors, acting under authority delegated from the board of directors, granted to employees in the first quarter of 2016, 12,708 shares of common stock, option awards to purchase an aggregate of 3,617 shares of common stock at an exercise price of $27.98 and restricted stock unit awards for an aggregate of 8,177 shares of common stock, in each case under the 2014 Equity Incentive Plan. 2008 Plan In October 2008, the Company's stockholders approved the Company's 2008 Plan. The 2008 Plan was most recently amended on May 8, 2013. The 2008 Plan provided for the grant of incentive stock options to the Company's employees and the employees of the Company's subsidiaries, and for the grant of nonstatutory stock options, restricted stock awards and deferred stock awards to the Company's employees, directors and consultants. Upon the effective date of the 2014 Plan, the Company ceased using the 2008 Plan to grant new equity awards, and began using the 2014 Plan for grants of new equity awards. Accordingly, as of January 30, 2014, no shares were available for future grant under the 2008 Plan. However, the 2008 Plan will continue to govern the terms and conditions of outstanding awards granted thereunder. As of December 31, 2015, options to purchase 3,600,035 shares of the Company's common stock were outstanding under the 2008 Plan at a weighted-average exercise price of $3.84 per share. Stock-Based Compensation Expense Stock-based compensation expense related to stock-based awards is included in the following line items in the accompanying consolidated statements of operations: Year Ended December 31, 2015 2014 2013 (in thousands) Servicing and support $ $ $ Technology and content development Program marketing and sales General and administrative ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total stock-based compensation expense $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock Options The terms of stock option grants, including the exercise price per share and vesting periods, are determined by the Company's board of directors or the compensation committee thereof. Stock options are granted at exercise prices of not less than the estimated fair market value of the Company's common stock at the date of grant. Stock options are generally subject to service-based vesting conditions and vest at various times from the date of the grant, with most options vesting in tranches, generally over a period of four years. Stock options granted under the 2014 Plan and the 2008 Plan are subject to service-based vesting conditions, and generally expire ten years from the grant date. The Company values stock options using the Black-Scholes-Merton option pricing model, which requires the input of subjective assumptions, including the risk-free interest rate, expected life of the option, expected stock price volatility and dividend yield. Additionally, the recognition of expense requires estimation of the number of options that will ultimately vest and those that will be forfeited. The Company estimates the expected forfeitures of share-based awards at the grant date and recognizes the compensation cost only for those awards expected to vest. The risk-free interest rate assumption is based upon observed interest rates for constant maturity U.S. Treasury securities consistent with the expected term of the Company's employee stock options. The expected life represents the period of time the stock options are expected to be outstanding and is based on the "simplified method." Under the "simplified method," the expected life of an option is presumed to be the mid-point between the vesting date and the end of the contractual term. The Company used the "simplified method" due to the lack of sufficient historical exercise data to provide a reasonable basis upon which to otherwise estimate the expected life of the stock options. Expected volatility is based on historical volatilities for publicly traded stock of comparable companies over the estimated expected life of the stock options. The Company assumed no dividend yield because dividends are not expected to be paid in the near future, which is consistent with the Company's history of not paying dividends. The following table summarizes the assumptions used for estimating the fair value of the stock options granted: Year Ended December 31, 2015 2014 2013 Risk-free interest rate 1.5% - 1.9% 1.7% - 2.1% 0.9% - 2.0% Expected term (years) 5.56 - 6.08 5.11 - 6.25 5.54 - 6.31 Expected volatility 50% 50% - 55% 55% - 58% Dividend yield 0% 0% 0% Weighted average grant date fair value $12.54 $5.71 $4.58 The following is a summary of the stock option activity for the year ended December 31, 2015: Number of Options Weighted-Average Exercise Price per Share Weighted-Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding balance at December 31, 2014 $ $ Granted Exercised ) Forfeited ) Expired ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding balance at December 31, 2015 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exercisable at December 31, 2015 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Vested and expected to vest at December 31, 2015 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The total compensation cost related to the nonvested options not yet recognized as of December 31, 2015 was $11.6 million and will be recognized over a weighted-average period of approximately 2.1 years. The aggregate intrinsic value of the options exercised during the years ended December 31, 2015, 2014 and 2013 was $25.8 million, $16.2 million and $1.8 million, respectively. The following table summarizes by grant date the number of shares of common stock subject to stock options granted from January 1, 2015 to December 31, 2015, as well as the associated exercise price per share and the estimated fair value per share of the Company's common stock on the grant date. Grant Date Number of Shares Underlying Options Granted Exercise Price per Share Estimated Grant Date Fair Value per Share January 1, 2015 $ $ January 2, 2015 April 1, 2015 June 1, 2015 June 3, 2015 July 1, 2015 October 1, 2015 Prior to the IPO, the Company determined for financial reporting purposes the estimated per share fair value of its common stock at various grant dates using contemporaneous valuations performed in accordance with the guidance outlined in the American Institute of Certified Public Accountants Practice Aid, "Valuation of Privately-Held Company Equity Securities Issued as Compensation," also known as the Practice Aid. In conducting the contemporaneous valuations, the Company used relevant information available and considered all objective and subjective factors that it believed to be relevant for each valuation conducted, including management's best estimate of the Company's business condition, prospects and operating performance at each valuation date. Restricted Stock Units Throughout 2015 and 2014, the Company granted restricted stock units under the 2014 Plan to the Company's directors and certain of the Company's employees. The terms of the restricted stock unit grants under the 2014 Plan, including the vesting periods, are determined by the Company's board of directors or the compensation committee thereof. Restricted stock units are generally subject to service-based vesting conditions and vest at various times from the date of the grant, with most restricted stock units vesting in equal annual tranches, generally over a period of four years. The following is a summary of restricted stock unit activity: Number of Restricted Stock Units Weighted-Average Grant Date Fair Value Outstanding balance at December 31, 2014 $ Granted Vested ) Forfeited ) ​ ​ ​ ​ ​ ​ ​ ​ Outstanding balance at December 31, 2015 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The total compensation cost related to the nonvested restricted stock units not yet recognized as of December 31, 2015 was $14.8 million and will be recognized over a weighted-average period of approximately 2.6 years. Other Stock Awards During 2015, the Company granted 26,567 shares of common stock to a new key employee, with a fair value of $0.8 million. |
Net Loss per Share
Net Loss per Share | 12 Months Ended |
Dec. 31, 2015 | |
Net Loss per Share | |
Net Loss per Share | 10. Net Loss per Share Diluted loss per share is the same as basic loss per share for all periods presented because the effects of potentially dilutive items were anti-dilutive, given the Company's net loss. The following securities have been excluded from the calculation of weighted-average shares of common stock outstanding because the effect is anti-dilutive for the years ended December 31, 2015, 2014 and 2013: Year Ended December 31, 2015 2014 2013 Redeemable convertible preferred stock: Series A — — Series B — — Series C — — Series D — — Warrants to purchase Series D redeemable convertible preferred stock — — Stock options Restricted stock units — Basic and diluted net loss per share attributable to holders of common stock is calculated as follows: Year Ended December 31, 2015 2014 2013 Numerator (in thousands): Net loss attributable to holders of common stock $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Denominator: Weighted-average shares of common stock outstanding, basic and diluted ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss per share attributable to holders of common stock, basic and diluted $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Segment and Geographic Informat
Segment and Geographic Information | 12 Months Ended |
Dec. 31, 2015 | |
Segment and Geographic Information | |
Segment and Geographic Information | 11. Segment and Geographic Information Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the chief operating decision maker ("CODM") for purposes of allocating resources and evaluating financial performance. The Company's CODM reviews the financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. As such, the Company's operations constitute a single operating segment and one reportable segment. The Company offers similar services to substantially all of its clients, which primarily represent well-recognized nonprofit colleges and universities in the United States. Substantially all assets were held and all revenue was generated in the United States during all periods presented. |
Retirement Plan
Retirement Plan | 12 Months Ended |
Dec. 31, 2015 | |
Retirement Plan | |
Retirement Plan | 12. Retirement Plan The Company has established a 401(k) plan for eligible employees to contribute up to 100% of their compensation, limited by the IRS-imposed maximum contribution amount. The Company matches 33% of each employee's contribution up to 6% of the employee's salary deferral. For the years ended December 31, 2015, 2014 and 2013, the Company made employer contributions of $0.8 million, $0.6 million and $0.4 million, respectively. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions | |
Related Party Transactions | 13. Related Party Transactions The Company subleases office space to an entity that was, upon execution of the sublease in 2011, a greater than 5% stockholder. The lease requires the subtenant to reimburse the Company for the allocated cost of the office space subleased. For the years ended December 31, 2015, 2014 and 2013, the Company recorded $0.3 million, $0.3 million and $0.2 million, respectively, as rental income from this related entity. The Company utilizes the marketing and event planning services of a company that is partially owned by one of the Company's executives. The Company recorded $1.7 million, $1.6 million and $0.8 million for the expenses incurred related to the services provided by this related party for the years ended December 31, 2015, 2014 and 2013, respectively. No material amounts were due to the related party or recorded in accounts payable on the consolidated balance sheets as of December 31, 2015 and 2014. |
Quarterly Financial Information
Quarterly Financial Information ( Unaudited ) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information ( Unaudited ) | |
Quarterly Financial Information ( Unaudited ) | 14. Quarterly Financial Information (Unaudited—see accompanying accountants' report) The following tables set forth certain unaudited quarterly financial data for 2015 and 2014. This unaudited information has been prepared on the same basis as the audited information included elsewhere in this Annual Report and includes all adjustments necessary to present fairly the information set forth therein. The operating results are not necessarily indicative of results for any future period. Three Months Ended March 31, 2015 June 30, 2015 September 30, 2015 December 31, 2015 (in thousands, except share and per share amounts) Revenue $ $ $ $ Costs and expenses: Servicing and support Technology and content development Program marketing and sales General and administrative ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total costs and expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss from operations ) ) ) ) Other income (expense): Interest expense ) ) ) ) Interest income Other — — ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total other income (expense) ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss $ ) $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss per share: Basic and diluted $ ) $ ) $ ) $ ) Weighted-average shares used in computing net loss per share: Basic and diluted Three Months Ended March 31, 2014 June 30, 2014 September 30, 2014 December 31, 2014 (in thousands, except share and per share amounts) Revenue $ $ $ $ Costs and expenses: Servicing and support Technology and content development Program marketing and sales General and administrative ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total costs and expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss from operations ) ) ) ) Other income (expense): Interest expense ) ) ) ) Interest income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total other income (expense) ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss $ ) $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss per share: Basic and diluted $ ) $ ) $ ) $ ) Weighted-average shares used in computing net loss per share: Basic and diluted |
Significant Accounting Polici21
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Significant Accounting Policies | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries and have been prepared in accordance with United States generally accepted accounting principles ("U.S. GAAP") and include the assets, liabilities, results of operations and cash flows of the Company. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Reclassifications | Reclassifications Certain prior period amounts in the Consolidated Balance Sheets and Consolidated Statements of Cash Flows have been reclassified to conform to the current period's presentation. |
Use of Estimates | Use of Estimates The preparation of financial statements in accordance with U.S. GAAP requires management to make certain estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. On an ongoing basis, the Company evaluates its estimates, including those related to the useful lives of long-lived assets, fair value measurement and income taxes, among others. The Company bases its estimates and assumptions on historical experience and on various other factors that it believes to be reasonable under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in those estimates. The Company evaluates its estimates and assumptions on an ongoing basis. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of bank checking accounts, money market accounts, investments in certificates of deposit that mature in less than three months and highly liquid marketable securities with maturities at the time of purchase of three months or less. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. All of the Company's cash is held at financial institutions that management believes to be of high credit quality. The Company's bank accounts exceed federally insured limits at times. The Company has not experienced any losses on cash to date. To manage accounts receivable risk, the Company maintains an allowance for doubtful accounts, if needed. During each of the years ended December 31, 2015, 2014 and 2013, three clients accounted for more than 10% of the Company's revenue, as follows: • For the year ended December 31, 2015, the three largest clients accounted for $65.2 million, $23.8 million and $17.6 million of the Company's revenue, which equals 43%, 16% and 12% of total revenue. • For the year ended December 31, 2014, the three largest clients accounted for $61.1 million, $15.9 million and $14.6 million of the Company's revenue, which equals 55%, 14% and 13% of total revenue. • For the year ended December 31, 2013, the three largest clients accounted for $57.3 million, $13.5 million and $10.4 million of the Company's revenue, which equals 69%, 16% and 12% of total revenue. Additionally, the Company's largest client accounted for 7% and 35% of the Company's accounts receivable balance as of December 31, 2015 and 2014, respectively. Further, one additional client accounted for more than 10% of the Company's accounts receivable balance as of December 31, 2015, while two additional clients accounted for more than 10% of the Company's accounts receivable balance as of December 31, 2014. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are stated at realizable value. The Company extends a minimal amount of uncollateralized credit to its clients. The Company utilizes the allowance method to provide for doubtful accounts based on management's evaluation of the collectability of the amounts due. The Company's estimate is based on historical collection experience and a review of the current status of accounts receivable. Historically, actual write-offs for uncollectible accounts have not significantly differed from the Company's estimates. As of December 31, 2015 and 2014, the Company determined that no significant allowances for doubtful accounts were necessary. |
Fair Value Measurements | Fair Value Measurements The carrying amounts of certain assets and liabilities, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses and other current liabilities, approximate their respective fair values due to their short-term nature. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, based on the Company's principal or, in the absence of a principal, most advantageous, market for the specific asset or liability. U.S. GAAP provides for a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The fair value hierarchy requires the Company to use observable inputs when available, and to minimize the use of unobservable inputs when determining fair value. The three tiers are defined as follows: • Level 1 —Observable inputs that reflect quoted market prices (unadjusted) for identical assets or liabilities in active markets; • Level 2 —Observable inputs, other than quoted prices in active markets, that are observable either directly or indirectly in the marketplace for identical or similar assets and liabilities; and • Level 3 —Unobservable inputs that are supported by little or no market data, which require the Company to develop its own assumptions about the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances. Assets Measured at Fair Value on a Recurring Basis The Company evaluates its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level in which to classify them for each reporting period. This determination requires significant judgments to be made. The Company had Level 1 money market investments of $155.6 million and $82.9 million included in cash and cash equivalents as of December 31, 2015 and 2014, respectively. |
Advances to Clients | Advances to Clients The Company is contractually obligated to pay advances to certain of its clients in order to fund start-up expenses of the program on behalf of the client. Advances to clients are stated at realizable value. The advances are repaid to the Company on terms as required in the respective agreements. The Company recognizes imputed interest income on these advance payments when there is a significant amount of imputed interest. |
Property and Equipment | Property and Equipment Property and equipment is stated at cost less accumulated depreciation and amortization. Computer software is included in property and equipment and consists of internally-developed software. Expenditures for major additions, construction and improvements are capitalized. Depreciation and amortization is expensed using the straight-line method over the estimated useful lives of the related assets, which range from three to five years for computer hardware and five to seven years for furniture and office equipment. Leasehold improvements are depreciated on a straight-line basis over the lesser of the remaining term of the leased facility or the estimated useful life of the improvement, which ranges from four to ten years. Useful lives of significant assets are periodically reviewed and adjusted prospectively to reflect the Company's current estimates of the respective assets' expected utility. Repair and maintenance costs are expensed as incurred. The Company capitalizes certain costs associated with internally-developed software, primarily consisting of direct labor associated with creating the software. Software development projects generally include three stages: the preliminary project stage (all costs are expensed as incurred), the application development stage (certain costs are capitalized and certain costs are expensed as incurred) and the post-implementation/operation stage (all costs are expensed as incurred). Costs capitalized in the application development stage include costs of designing the application, coding, integrating the Company's and the university's networks and systems, and the testing of the software. Capitalization of costs requires judgment in determining when a project has reached the application development stage and the period over which the Company expects to benefit from the use of that software. Once the software is placed in service, these costs are depreciated on the straight-line method over the estimated useful life of the software, which is generally three years. |
Capitalized Content Development Costs | Capitalized Content Development Costs The Company works with each client's faculty members to develop and maintain educational content that is delivered to their students through Online Campus. The online content developed jointly by the Company and its clients consists of subjects chosen and taught by clients' faculty members and incorporates references and examples designed to remain relevant over extended periods of time. Online delivery of the content, combined with live, face-to-face instruction, provides the Company with rapid user feedback that it uses to make ongoing corrections, modifications and improvements to the course content. The Company's clients retain all intellectual property rights to the developed content, although the Company retains the rights to the content packaging and delivery mechanisms. Much of the Company's new content development uses proven delivery platforms and is therefore primarily subject-specific in nature. As a result, a significant portion of content development costs qualify for capitalization due to the focus of the Company's development efforts on the unique subject matter of the content. Similar to on-campus programs offered by the Company's clients, the online degree programs enabled by the Company offer numerous courses for each degree. The Company therefore capitalizes its development costs on a course-by-course basis. As students must matriculate into a client program in order to take a course, revenues and identifiable cash flows are also measured at the client program level. The Company develops content on a course-by-course basis in conjunction with the faculty for each client program. The clients and their faculty generally provide course outlines in the form of the curriculum, required textbooks, case studies and other reading materials, as well as presentations that are typically used in the on-campus setting. The Company is then responsible for, and incurs all of the expenses related to, the conversion of the materials provided by each client into a format suitable for delivery through Online Campus. The content development costs that qualify for capitalization are third-party direct costs, such as videography, editing and other services associated with creating digital content. Additionally, the Company capitalizes internal payroll and payroll-related costs incurred to create and produce videos and other digital content utilized in the clients' programs for delivery via Online Campus. Capitalization ends when content has been fully developed by both the Company and the client, at which time amortization of the capitalized content development costs begins. The capitalized costs are recorded on a course-by-course basis and included in capitalized content costs on the consolidated balance sheets. These costs are amortized using the straight-line method over the estimated useful life of the respective capitalized content program, which is generally five years. The estimated useful life corresponds with the Company's planned curriculum refresh rate. This refresh rate is consistent with expected curriculum refresh rates as cited by program faculty members for similar on-campus programs. It is reasonably possible that developed content could be refreshed before the estimated useful lives are complete or be expensed immediately in the event that the development of a course is discontinued prior to launch. |
Other Non-Current Assets | Other Non-Current Assets The Company records amounts paid more than 12 months in advance of being incurred as prepaid expenses, non-current. In addition, the Company has certain other assets that are long-term in nature, which are classified as other non-current assets. These consist primarily of amortizable intangible assets associated with the Company's marketing websites and related domain names and security deposits on leased office facilities. |
Evaluation of Long-Lived Assets | Evaluation of Long-Lived Assets The Company reviews long-lived assets, which consist of property and equipment, capitalized content development costs and acquired finite-lived intangible assets, for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. Recoverability of a long-lived asset is measured by a comparison of the carrying value of an asset or asset group to the future undiscounted net cash flows expected to be generated by that asset or asset group. If such assets are not recoverable, the impairment to be recognized is measured by the amount by which the carrying value of an asset exceeds the estimated fair value (discounted cash flow) of the asset or asset group. In order to assess the recoverability of the capitalized content development costs, the costs are grouped by program, which is the lowest level of independent cash flows. The Company's impairment analysis is based upon forecasted financial and operational results. The actual results could vary from the Company's forecasts, especially in relation to recently launched programs. For the years ended December 31, 2015 and 2014, no impairment of long-lived assets was deemed to have occurred. In December 2013, the Company evaluated the recoverability of its capitalized assets and determined that the estimated carrying value of one asset group exceeded its net realizable value. |
Revenue Recognition and Deferred Revenue | Revenue Recognition and Deferred Revenue The Company recognizes revenue when all of the following conditions are met: (i) persuasive evidence of an arrangement exists, (ii) rendering of services is complete, (iii) fees are fixed or determinable and (iv) collection of fees is reasonably assured. The Company primarily derives its revenue from long-term contracts that typically range from 10 to 15 years in length. Under these contracts, the Company enables access to its Platform to its clients and their faculty and students. The Company is entitled to a contractually specified percentage of net program proceeds from its clients. These net program proceeds represent gross proceeds billed by clients to students, less credit card fees and other specified charges the Company has agreed to exclude in certain of its client contracts. The Company generates substantially all of its revenue from multiple-deliverable contractual arrangements with its clients. Under each of these arrangements, the Company provides (i) access to Online Campus, which serves as a learning platform for its client's faculty and students and which also enables a comprehensive range of other client functions, (ii) access to operations applications which provide the content management, admissions application processing, customer relationship management, and other functionality necessary to effectively operate the Company's clients' programs and (iii) technology-enabled services that support the complete lifecycle of a higher education program, including attracting students, advising prospective students through the admissions application process, providing technical, success coaching and other support, facilitating accessibility to individuals with disabilities, and facilitating in-program field placements. In order to treat deliverables in a multiple-deliverable contractual arrangement as separate units of accounting, deliverables must have standalone value upon delivery. The technology-enabled services within the Platform are provided primarily in support of programs delivered through Online Campus, and for students of the programs delivered through Online Campus. Accordingly, the Company has determined that no individual deliverable has standalone value upon delivery and, therefore, deliverables within the Company's multiple-deliverable arrangements do not qualify for treatment as separate units of accounting. Accordingly, the Company considers all deliverables to be a single unit of accounting and recognizes revenue from the entire arrangement over the term of the service period. Advance payments are recorded as deferred revenue until services are delivered or obligations are met, at which time revenue is recognized. Deferred revenue as of a particular balance sheet date represents the excess of amounts received as compared to amounts recognized in revenue in the consolidated statements of operations as of the end of the reporting period, and such amounts are reflected as a current liability on the Company's consolidated balance sheets. |
Program Marketing and Sales Expense | Program Marketing and Sales Expense The majority of the marketing and sales costs incurred by the Company are directly related to acquiring students for its clients' programs, with lesser amounts related to the Company's own marketing and advertising efforts. For the years ended December 31, 2015, 2014 and 2013, expenses related to the Company's own marketing and advertising efforts were not material. All such costs are expensed as incurred and reported in program marketing and sales expense in the Company's consolidated statements of operations. |
Leases | Leases The Company leases all of its office facilities and enters into various other lease agreements in conducting its business. At the inception of each lease, the Company evaluates the lease agreement to determine whether the lease is an operating or capital lease. Additionally, many of the Company's lease agreements contain renewal options, tenant improvement allowances, rent holiday and/or rent escalation clauses. When such items are included in a lease agreement, the Company records a deferred rent asset or liability in the Consolidated Financial Statements, and records these items in rent expense evenly over the term of the lease. The Company is also required to make additional payments under operating lease terms for taxes, insurance and other operating expenses incurred during the operating lease period; such items are expensed as incurred. Rental deposits are included as other assets in the Consolidated Financial Statements for lease agreements the require payments in advance or deposits held for security that are refundable, less any damages, at the end of the respective lease. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation awards based on the fair value of the award as of the grant date. For awards subject to service-based vesting conditions, the Company recognizes stock-based compensation expense on a straight-line basis over the awards' requisite service period, adjusted for estimated forfeitures. For awards subject to both performance and service-based vesting conditions, the Company recognizes stock-based compensation expense using an accelerated recognition method when it is probable that the performance condition will be achieved. |
Basic and Diluted Loss per Common Share | Basic and Diluted Loss per Common Share The Company uses the two-class method to compute net loss per share of common stock because the Company has issued securities, other than common stock, that contractually entitle the holders to participate in dividends and earnings of the Company. The two-class method requires earnings for the period to be allocated between common stock and participating securities based upon their respective rights to receive distributed and undistributed earnings. Holders of each series of the Company's redeemable convertible preferred stock (prior to their conversion to common stock) were entitled to participate in distributions, when and if declared by the board of directors, that are made to holders of common stock, and as a result are considered participating securities. Under the two-class method, for periods with net income, basic net income per share of common stock is computed by dividing the net income attributable to holders of common stock by the weighted-average number of shares of common stock outstanding during the period. Net income attributable to holders of common stock is computed by subtracting from net income the portion of current year earnings that the participating securities would have been entitled to receive pursuant to their dividend rights had all of the year's earnings been distributed. No such adjustment to earnings is made during periods with a net loss, as the holders of the participating securities have no obligation to fund losses. Diluted net loss per share of common stock is computed under the two-class method by using the weighted-average number of shares of common stock outstanding, plus, for periods with net income attributable to holders of common stock, the potential dilutive effects of stock options and warrants. In addition, the Company analyzes the potential dilutive effect of the outstanding participating securities under the "if-converted" method when calculating diluted earnings per share, in which it is assumed that the outstanding participating securities convert into common stock at the beginning of the period. The Company reports the more dilutive of the approaches (two-class or "if-converted") as its diluted net income per share during the period. Due to net losses for the years ended December 31, 2015, 2014 and 2013, basic and diluted loss per share were the same, as the effect of potentially dilutive securities would have been anti-dilutive. |
Comprehensive Loss | Comprehensive Loss The Company's net loss equals comprehensive loss for all periods presented as the Company has no material components of other comprehensive income. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In November 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2015-17, Balance Sheet Classification of Deferred Taxes . The ASU eliminates the requirement to classify deferred tax assets and liabilities between current and noncurrent. The ASU requires classification of all deferred tax asset and liability balances as noncurrent. The amendments in this ASU are effective for fiscal years beginning after December 15, 2016, with early adoption permitted. Adoption of the ASU is either retrospective to each prior period presented, or prospective. As of December 31, 2015, the Company early adopted the ASU prospectively. Adoption of this standard did not have a material impact on the Company's consolidated financial position and related disclosures . In April 2015, the FASB issued ASU No. 2015-05, Intangibles—Goodwill and Other—Internal-Use Software . The ASU provides guidance to customers in a cloud computing arrangement to determine whether the arrangement includes a software license. When a cloud computing arrangement includes a software license, the customer is required to account for the license element of the arrangement consistent with the acquisition of other software licenses. The amendments in this ASU are effective for fiscal years beginning after December 15, 2015. The Company is currently evaluating the effect that the standard will have on its consolidated financial statements and related disclosures. In April 2015, the FASB issued ASU No. 2015-03, Interest—Imputation of Interest . The ASU simplifies the presentation of debt issuance costs by requiring that such costs be presented in the consolidated balance sheets as a direct deduction from the carrying value of the associated debt instrument, consistent with debt discounts. Subsequent to the issuance of this ASU, the SEC staff announced that the presentation of debt issuance costs associated with line-of-credit arrangements may be presented as an asset. This announcement was codified by the FASB in ASU 2015-15. The amendments in these ASUs are effective for fiscal years beginning after December 15, 2015. Adoption of this standard will not have a material impact on the Company's consolidated financial position. In January 2015, the FASB issued ASU No. 2015-01, Income Statement—Extraordinary and Unusual Items . The ASU simplifies income statement presentation by eliminating the concept of extraordinary items. The amendments in this ASU are effective for fiscal periods beginning after December 15, 2015. The Company does not expect the new standard to have a significant impact on its ongoing financial reporting. In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern . The ASU requires that an entity's management evaluate whether there are conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued. The amendments in this ASU are effective for annual reporting periods ending after December 15, 2016. The Company does not expect the new standard to have a significant impact on its reporting process. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers , which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. In July 2015, the FASB deferred by one year the mandatory effective date of this ASU from January 1, 2017 to January 1, 2018. Early application is permitted, but not prior to the original effective date of January 1, 2017. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is currently evaluating the effect that this standard will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. |
Accounts Receivable and Allow22
Accounts Receivable and Allowance for Doubtful Accounts (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounts Receivable And Allowance for Doubtful Accounts | |
Schedule of accounts receivable, net | December 31, 2015 2014 (in thousands) Accounts receivable $ $ Other receivables ​ ​ ​ ​ ​ ​ ​ ​ Accounts receivable, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of changes in allowance for doubtful accounts | Balance at Beginning of Period Additions Charged to Expense/Against Revenue Deductions Balance at End of Period (in thousands) Allowance for doubtful accounts: Year ended December 31, 2015 $ — $ — $ — $ — Year ended December 31, 2014 — ) — Year ended December 31, 2013 — — |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property and Equipment | |
Schedule of Property and equipment | December 31, 2015 2014 (in thousands) Internally-developed software $ $ Internally-developed software in process Computer hardware Furniture and office equipment Leasehold improvements ​ ​ ​ ​ ​ ​ ​ ​ Total Accumulated depreciation and amortization ) ) ​ ​ ​ ​ ​ ​ ​ ​ Property and equipment, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of future depreciation and amortization expense for property and equipment | As of December 31, 2015, the estimated future depreciation and amortization expense for property and equipment is as follows (in thousands): 2016 $ 2017 2018 2019 2020 Thereafter ​ ​ ​ ​ ​ Total $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Capitalized Content Developme24
Capitalized Content Development Costs (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Capitalized Content Development Costs | |
Schedule of capitalized content development costs | December 31, 2015 December 31, 2014 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (in thousands) Capitalized content development costs $ $ ) $ $ $ ) $ Capitalized content development costs in process — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ) $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of estimated future amortization expense for the capitalized content development costs | As of December 31, 2015, the estimated future amortization expense for capitalized content development costs is as follows (in thousands): 2016 $ 2017 2018 2019 2020 ​ ​ ​ ​ ​ Total $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies | |
Schedule of future minimum lease payments, net of aggregate expected sublease payments | As of December 31, 2015, the future minimum lease payments (net of aggregate expected sublease payments of $0.3 million) were as follows (in thousands): 2016 $ 2017 2018 2019 2020 Thereafter ​ ​ ​ ​ ​ Total future minimum lease payments $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of future minimum program payments for intellectual property and other rights | As of December 31, 2015, the future minimum fixed payments to the Company's clients in exchange for contract extensions and various marketing and other rights were as follows (in thousands): 2016 $ 2017 2018 2019 2020 Thereafter ​ ​ ​ ​ ​ Total future minimum program payments $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes | |
Schedule components of loss before income taxes | 2015 2014 2013 (in thousands) Domestic $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total loss before income taxes $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Reconciliation of the statutory federal income tax rate to the actual effective income tax rate | 2015 2014 2013 U.S. statutory federal income tax rate % % % Increase (decrease) resulting from: U.S. state income taxes, net of federal benefits Non-deductible expenses ) ) ) Change in valuation allowance ) ) ) Other ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effective tax rate % % % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Components of the Company's deferred tax assets and liabilities | 2015 2014 (in thousands) Deferred tax assets: Accrued expenses and other $ $ Accrued compensation and related benefits Rebate reserve Deferred rent Stock-based compensation Net operating loss carryforwards Valuation allowance ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax assets $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred tax liabilities: Other expenses $ ) $ ) Capitalized content development costs ) ) Capitalized software development costs ) ) Property and equipment ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax liabilities $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ Net deferred tax assets/liabilities $ — $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of deferred tax valuation allowances | Balance at Beginning of Period Additions Charged to Expense/Against Revenue Deductions Balance at End of Period (in thousands) Income tax valuation allowance: Year ended December 31, 2015 $ $ $ — $ Year ended December 31, 2014 — Year ended December 31, 2013 — |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Stockholders' Equity | |
Schedule of shares of common stock reserved for future issuance | Outstanding stock options Possible future issuance under 2014 Plan Outstanding restricted stock units ​ ​ ​ ​ ​ Total shares of common stock reserved for future issuance ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Stock options | |
Schedule of stock-based compensation expense included in the consolidated statements of operations | Year Ended December 31, 2015 2014 2013 (in thousands) Servicing and support $ $ $ Technology and content development Program marketing and sales General and administrative ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total stock-based compensation expense $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary assumptions used for estimating the fair value of the stock options granted | Year Ended December 31, 2015 2014 2013 Risk-free interest rate 1.5% - 1.9% 1.7% - 2.1% 0.9% - 2.0% Expected term (years) 5.56 - 6.08 5.11 - 6.25 5.54 - 6.31 Expected volatility 50% 50% - 55% 55% - 58% Dividend yield 0% 0% 0% Weighted average grant date fair value $12.54 $5.71 $4.58 |
Summary of stock option activity | Number of Options Weighted-Average Exercise Price per Share Weighted-Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding balance at December 31, 2014 $ $ Granted Exercised ) Forfeited ) Expired ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding balance at December 31, 2015 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exercisable at December 31, 2015 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Vested and expected to vest at December 31, 2015 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of the number of shares of common stock subject to stock options granted during the period, as well as the associated exercise price per share and the estimated fair value per share of the Company's common stock on the grant date. | Grant Date Number of Shares Underlying Options Granted Exercise Price per Share Estimated Grant Date Fair Value per Share January 1, 2015 $ $ January 2, 2015 April 1, 2015 June 1, 2015 June 3, 2015 July 1, 2015 October 1, 2015 |
Restricted Stock Units | |
Summary of restricted stock unit activity | Number of Restricted Stock Units Weighted-Average Grant Date Fair Value Outstanding balance at December 31, 2014 $ Granted Vested ) Forfeited ) ​ ​ ​ ​ ​ ​ ​ ​ Outstanding balance at December 31, 2015 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Net Loss per Share | |
Schedule of potential dilutive securities that would have been anti-dilutive due to net loss | Year Ended December 31, 2015 2014 2013 Redeemable convertible preferred stock: Series A — — Series B — — Series C — — Series D — — Warrants to purchase Series D redeemable convertible preferred stock — — Stock options Restricted stock units — |
Schedule of calculation of basic and diluted net loss per share attributable to common stockholders | Year Ended December 31, 2015 2014 2013 Numerator (in thousands): Net loss attributable to holders of common stock $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Denominator: Weighted-average shares of common stock outstanding, basic and diluted ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss per share attributable to holders of common stock, basic and diluted $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Quarterly Financial Informati30
Quarterly Financial Information ( Unaudited ) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information ( Unaudited ) | |
Schedule of unaudited quarterly results | Three Months Ended March 31, 2015 June 30, 2015 September 30, 2015 December 31, 2015 (in thousands, except share and per share amounts) Revenue $ $ $ $ Costs and expenses: Servicing and support Technology and content development Program marketing and sales General and administrative ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total costs and expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss from operations ) ) ) ) Other income (expense): Interest expense ) ) ) ) Interest income Other — — ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total other income (expense) ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss $ ) $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss per share: Basic and diluted $ ) $ ) $ ) $ ) Weighted-average shares used in computing net loss per share: Basic and diluted Three Months Ended March 31, 2014 June 30, 2014 September 30, 2014 December 31, 2014 (in thousands, except share and per share amounts) Revenue $ $ $ $ Costs and expenses: Servicing and support Technology and content development Program marketing and sales General and administrative ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total costs and expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss from operations ) ) ) ) Other income (expense): Interest expense ) ) ) ) Interest income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total other income (expense) ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss $ ) $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss per share: Basic and diluted $ ) $ ) $ ) $ ) Weighted-average shares used in computing net loss per share: Basic and diluted |
Description of the Business (De
Description of the Business (Details) - USD ($) $ / shares in Units, $ in Millions | Sep. 30, 2015 | Apr. 02, 2014 |
Public Offering | ||
Common stock sold and issued (in shares) | 8,626,377 | |
Issuance price (in dollars per share) | $ 34 | $ 13 |
Net proceed from IPO. after deducting underwriting discounts and commissions and other offering expenses | $ 100.3 | |
Net proceeds from sale of common stock net accrued costs | $ 117.1 | |
Underwriting discounts and commissions | 5.5 | 7.8 |
Offering expenses | $ 0.6 | $ 4 |
Redeemable convertible preferred stock converted into shares of common stock | 23,501,208 | |
Preferred stock warrant liability | $ 0.8 | |
Public | ||
Public Offering | ||
Common stock sold and issued (in shares) | 3,625,000 | |
Underwriters' over-allotment option | ||
Public Offering | ||
Common stock sold and issued (in shares) | 525,000 |
Significant Accounting Polici32
Significant Accounting Policies (Details ) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($)item | Dec. 31, 2013USD ($) | |
Concentration of Credit Risk | |||||||||||
Revenue | $ 43,252 | $ 37,092 | $ 35,238 | $ 34,612 | $ 30,756 | $ 28,407 | $ 24,744 | $ 26,332 | $ 150,194 | $ 110,239 | $ 83,127 |
Client A | |||||||||||
Concentration of Credit Risk | |||||||||||
Revenue | 65,200 | 61,100 | 57,300 | ||||||||
Client B | |||||||||||
Concentration of Credit Risk | |||||||||||
Revenue | 23,800 | 15,900 | 13,500 | ||||||||
Client C | |||||||||||
Concentration of Credit Risk | |||||||||||
Revenue | $ 17,600 | $ 14,600 | $ 10,400 | ||||||||
Revenue | Customer concentration risk | Client A | |||||||||||
Concentration of Credit Risk | |||||||||||
Percentage of concentration of credit risk | 43.00% | 55.00% | 69.00% | ||||||||
Revenue | Customer concentration risk | Client B | |||||||||||
Concentration of Credit Risk | |||||||||||
Percentage of concentration of credit risk | 16.00% | 14.00% | 16.00% | ||||||||
Revenue | Customer concentration risk | Client C | |||||||||||
Concentration of Credit Risk | |||||||||||
Percentage of concentration of credit risk | 12.00% | 13.00% | 12.00% | ||||||||
Accounts receivable | Credit concentration risk | |||||||||||
Concentration of Credit Risk | |||||||||||
Percentage of concentration of credit risk | 7.00% | 35.00% | |||||||||
Number of additional clients who accounted for more than 10% | item | 1 | 2 |
Significant Accounting Polici33
Significant Accounting Policies (Details 2) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Recurring basis | Level 1 | ||
Assets: | ||
Cash equivalents | $ 155.6 | $ 82.9 |
Significant Accounting Polici34
Significant Accounting Policies (Details 3) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2015USD ($)segment | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Property and equipment | |||||||||||
Costs incurred during the period | $ 7,529 | $ 7,082 | $ 6,466 | $ 6,134 | $ 5,403 | $ 5,726 | $ 5,818 | $ 5,674 | $ 27,211 | $ 22,621 | $ 19,472 |
Capitalized Content Development Costs | |||||||||||
Useful life of capitalized content development costs | 5 years | ||||||||||
Impairment of Long-Lived Assets | |||||||||||
Impairments of long-lived assets | $ 0 | 0 | |||||||||
Segment and Geographic Information | |||||||||||
Number of Reportable Segments | segment | 1 | ||||||||||
Minimum | |||||||||||
Revenue Recognition and Deferred Revenue | |||||||||||
Term of revenue contracts | 10 years | ||||||||||
Maximum | |||||||||||
Revenue Recognition and Deferred Revenue | |||||||||||
Term of revenue contracts | 15 years | ||||||||||
Computer hardware | Minimum | |||||||||||
Property and equipment | |||||||||||
Useful life | 3 years | ||||||||||
Computer hardware | Maximum | |||||||||||
Property and equipment | |||||||||||
Useful life | 5 years | ||||||||||
Furniture and office equipment | Minimum | |||||||||||
Property and equipment | |||||||||||
Useful life | 5 years | ||||||||||
Furniture and office equipment | Maximum | |||||||||||
Property and equipment | |||||||||||
Useful life | 7 years | ||||||||||
Leasehold improvements | Minimum | |||||||||||
Property and equipment | |||||||||||
Useful life | 4 years | ||||||||||
Leasehold improvements | Maximum | |||||||||||
Property and equipment | |||||||||||
Useful life | 10 years | ||||||||||
Internally-developed software | |||||||||||
Property and equipment | |||||||||||
Useful life | 3 years | ||||||||||
Related amortization expense | $ 1,600 | 1,400 | $ 1,500 | ||||||||
Net book value | $ 4,500 | $ 3,300 | $ 4,500 | $ 3,300 |
Accounts Receivable and Allow35
Accounts Receivable and Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2015 | |
Accounts Receivable, Net [Abstract] | |||
Accounts receivable | $ 308 | $ 360 | |
Other receivables | 42 | 615 | |
Accounts receivable, net | 350 | $ 975 | |
Allowance for Doubtful Accounts | |||
Changes in allowance for doubtful accounts | |||
Balance at Beginning of Period | 12 | ||
Additions Charged to Expense/Against Revenue | $ 12 | ||
Deductions | $ (12) | ||
Balance at End of Period | $ 12 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property and equipment | |||
Property and equipment, gross | $ 16,618 | $ 13,741 | |
Accumulated depreciation and amortization | (8,490) | (6,986) | |
Property and equipment, net | 8,128 | 6,755 | |
Estimated Future Depreciation And Amortization Expense Abstract | |||
2,016 | 2,907 | ||
2,017 | 1,968 | ||
2,018 | 1,044 | ||
2,019 | 402 | ||
2,020 | 152 | ||
Thereafter | 15 | ||
Total | 6,488 | ||
Internally-developed software | |||
Property and equipment | |||
Property and equipment, gross | 8,564 | 6,069 | |
Depreciation expense | 2,700 | 2,400 | $ 2,100 |
Capitalized Computer Software, Net [Abstract] | |||
Amortization expense of capitalized internally developed software | 1,600 | 1,400 | $ 1,500 |
Net capitalized internally developed software | 4,500 | 3,300 | |
Internally-developed software in process | |||
Property and equipment | |||
Property and equipment, gross | 1,640 | 1,751 | |
Computer hardware | |||
Property and equipment | |||
Property and equipment, gross | 2,911 | 3,016 | |
Furniture and office equipment | |||
Property and equipment | |||
Property and equipment, gross | 1,666 | 1,104 | |
Leasehold improvements | |||
Property and equipment | |||
Property and equipment, gross | $ 1,837 | $ 1,801 |
Capitalized Content Developme37
Capitalized Content Development Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Gross Carrying Amount | $ 29,052 | $ 20,534 | ||
Accumulated Amortization | (10,931) | (7,379) | ||
Total | 18,121 | 13,155 | ||
Amortization expense related to capitalized content development costs | 4,500 | 3,200 | $ 2,200 | |
Impairment charge related to capitalized content development costs | $ 800 | |||
Estimated future amortization expense for the capitalized content development costs | ||||
2,016 | 4,245 | |||
2,017 | 3,650 | |||
2,018 | 3,136 | |||
2,019 | 2,166 | |||
2,020 | 668 | |||
Total | 13,865 | |||
Capitalized content development costs | ||||
Gross Carrying Amount | 24,796 | 16,835 | ||
Accumulated Amortization | (10,931) | (7,379) | ||
Total | 13,865 | 9,456 | ||
Capitalized content development costs in process | ||||
Gross Carrying Amount | 4,256 | 3,699 | ||
Total | $ 4,256 | $ 3,699 |
Commitments and Contingencies38
Commitments and Contingencies (Details) | Feb. 18, 2014USD ($) | Jan. 21, 2014USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) |
Line of Credit | |||||
Aggregate borrowing base | $ 25,000,000 | $ 37,000,000 | |||
Amount borrowed | $ 5,000,000 | $ 5,000,000 | |||
Borrowings repaid | $ 5,000,000 | 5,000,000 | |||
Amount outstanding | 0 | $ 0 | |||
Aggregate expected sublease payments | $ 300,000 | ||||
Adjusted quick ratio | 7.90 | 6.45 | |||
Future minimum lease payments, net of aggregate expected sublease payments | |||||
2,016 | $ 3,919,000 | ||||
2,017 | 5,420,000 | ||||
2,018 | 5,913,000 | ||||
2,019 | 5,679,000 | ||||
2,020 | 5,630,000 | ||||
Thereafter | 47,398,000 | ||||
Total future minimum lease payments | 73,959,000 | ||||
Deferred rent liability | 600,000 | $ 500,000 | |||
Rent expense net of sublease income | 3,500,000 | 2,600,000 | 2,100,000 | ||
Sublease income | 300,000 | $ 300,000 | $ 300,000 | ||
Future minimum program payments for intellectual property and other rights | |||||
2,016 | 1,550,000 | ||||
2,017 | 4,050,000 | ||||
2,018 | 3,550,000 | ||||
2,019 | 550,000 | ||||
2,020 | 300,000 | ||||
Thereafter | 2,400,000 | ||||
Total future minimum payments to clients | $ 12,400,000 | ||||
Base rate | |||||
Line of Credit | |||||
Variable interest rate basis | Base rate | ||||
Applicable margin (as a percent) | 1.50% | ||||
Federal fund rate | |||||
Line of Credit | |||||
Variable interest rate basis | Federal fund rate | ||||
Applicable margin (as a percent) | 1.00% | ||||
30 days LIBOR | |||||
Line of Credit | |||||
Variable interest rate basis | 30 day LIBOR | ||||
Applicable margin (as a percent) | 1.00% | ||||
LIBOR | |||||
Line of Credit | |||||
Variable interest rate basis | One, two and three months LIBOR | ||||
Applicable margin (as a percent) | 2.50% | ||||
Minimum | |||||
Line of Credit | |||||
Covenants ratio | 1.10 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Components of loss before income taxes | |||
Domestic | $ (26,733) | $ (28,999) | $ (27,953) |
Loss before income taxes | $ (26,733) | $ (28,999) | $ (27,953) |
Reconciliation between statutory federal income tax rate and the effective tax rate | |||
U.S. statutory federal income tax rate (as a percent) | 35.00% | 35.00% | 35.00% |
U.S. state income taxes, net of federal benefits (as a percent) | 7.70% | 5.80% | 7.30% |
Non-deductible expenses (as a percent) | (2.00%) | (2.80%) | (2.10%) |
Change in valuation allowance (as a percent) | (39.10%) | (32.40%) | (39.90%) |
Other (as a percent) | (1.60%) | (5.60%) | (0.30%) |
Effective tax rate (as a percent) | 0.00% | 0.00% | 0.00% |
Deferred tax assets: | |||
Accrued expenses and other | $ 1,899 | $ 1,054 | |
Accrued compensation and related benefits | 3,306 | 2,502 | |
Rebate reserve | 167 | 264 | |
Deferred rent | 282 | 212 | |
Stock-based compensation | 4,971 | 2,782 | |
Net operating loss carryforwards | 54,967 | 46,264 | |
Valuation allowance | (54,739) | (44,309) | |
Total deferred tax assets | 10,853 | 8,769 | |
Deferred tax liabilities: | |||
Other expenses | (875) | (1,344) | |
Capitalized content development costs | (7,583) | (5,439) | |
Capitalized software development costs | (1,886) | (1,346) | |
Property and equipment | (509) | (640) | |
Total deferred tax liabilities | $ (10,853) | $ (8,769) |
Income Taxes, Change in Deferre
Income Taxes, Change in Deferred Tax Valuation Allowance (Details 2) - Income tax valuation allowance - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Valuation allowance | |||
Balance at Beginning of Period | $ 44,309 | $ 34,921 | $ 23,864 |
Additions Charged to Expense/Against Revenue | 10,430 | 9,388 | 11,057 |
Balance at End of Period | $ 54,739 | $ 44,309 | $ 34,921 |
Income Taxes (Details 3)
Income Taxes (Details 3) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($) | Dec. 31, 2013 | |
Income Taxes | |||
Federal net operating loss carryforwards | $ 161.7 | ||
Increase in valuation allowance | $ 10.4 | ||
Effective tax rate (as a percent) | 0.00% | 0.00% | 0.00% |
Accrued interest or penalties related to uncertain tax positions | $ 0 | $ 0 | |
Income tax returns currently under examination | item | 0 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Apr. 02, 2014 | Dec. 31, 2015 | Dec. 31, 2014 |
Shares issued | 8,626,377 | |||
Net proceeds from sale of common stock net accrued costs | $ 117.1 | |||
Authorized shares of capital stock | 205,000,000 | |||
Authorized shares of common stock | 200,000,000 | 200,000,000 | 200,000,000 | |
Authorized shares of preferred stock | 5,000,000 | 5,000,000 | 5,000,000 | |
Shares of common stock reserved for future issuance | ||||
Outstanding stock options | 5,298,510 | |||
Possible future issuance under 2014 Plan | 1,904,743 | |||
Outstanding restricted stock units | 1,220,008 | |||
Total shares of common stock reserved for future issuance | 8,423,261 | |||
Public | ||||
Shares issued | 3,625,000 | |||
Underwriters' over-allotment option | ||||
Shares issued | 525,000 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) $ / shares in Units, $ in Thousands | Oct. 01, 2015shares | Jul. 01, 2015shares | Jun. 03, 2015shares | Jun. 01, 2015shares | Apr. 01, 2015shares | Jan. 02, 2015shares | Jan. 01, 2015shares | Mar. 31, 2016$ / sharesshares | Dec. 31, 2015USD ($)item$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares | Dec. 31, 2013USD ($) | Jan. 01, 2016shares | Jan. 30, 2014shares |
Stock-Based Compensation | |||||||||||||
Number of share-based employee compensation plans | item | 2 | ||||||||||||
Stock-based compensation expense included in the unaudited condensed consolidated statements of operations | |||||||||||||
Common stock reserved for issuance | 8,423,261 | ||||||||||||
Stock-based compensation expense | $ | $ 12,499 | $ 7,527 | $ 2,426 | ||||||||||
Servicing and support | |||||||||||||
Stock-based compensation expense included in the unaudited condensed consolidated statements of operations | |||||||||||||
Stock-based compensation expense | $ | 2,270 | 1,468 | 364 | ||||||||||
Technology and content development | |||||||||||||
Stock-based compensation expense included in the unaudited condensed consolidated statements of operations | |||||||||||||
Stock-based compensation expense | $ | 1,548 | 794 | 159 | ||||||||||
Program marketing and sales | |||||||||||||
Stock-based compensation expense included in the unaudited condensed consolidated statements of operations | |||||||||||||
Stock-based compensation expense | $ | 1,057 | 676 | 178 | ||||||||||
General and administrative | |||||||||||||
Stock-based compensation expense included in the unaudited condensed consolidated statements of operations | |||||||||||||
Stock-based compensation expense | $ | $ 7,624 | $ 4,589 | $ 1,725 | ||||||||||
Stock options | |||||||||||||
Stock-based compensation expense included in the unaudited condensed consolidated statements of operations | |||||||||||||
Option to purchase common stock, outstanding | 5,298,510 | 5,850,211 | |||||||||||
Weighted average exercise price | $ / shares | $ 8.07 | $ 5.39 | |||||||||||
Granted (in shares) | 6,520 | 19,743 | 10,629 | 28,770 | 608,746 | 14,888 | 3,518 | 692,814 | |||||
Restricted Stock Units | |||||||||||||
Stock-based compensation expense included in the unaudited condensed consolidated statements of operations | |||||||||||||
Number of restricted stock units granted (in shares) | 585,765 | ||||||||||||
2014 Equity Incentive Plan | |||||||||||||
Stock-based compensation expense included in the unaudited condensed consolidated statements of operations | |||||||||||||
Option to purchase common stock, outstanding | 1,698,475 | ||||||||||||
Weighted average exercise price | $ / shares | $ 17.03 | ||||||||||||
Shares authorized under the plan | 2,800,000 | ||||||||||||
Number of shares that may be added to the 2014 Plan | 5,943,348 | ||||||||||||
Period of annual automatic increase in the number of shares authorized | 10 years | ||||||||||||
Percentage applied on total number of shares of common stock outstanding on previous calendar year for automatic inclusion in the plan | 5.00% | ||||||||||||
Common stock reserved for issuance | 2,036,503 | 1,904,743 | 2,288,820 | ||||||||||
Common shares granted (in shares) | 12,708 | ||||||||||||
2014 Equity Incentive Plan | Maximum | |||||||||||||
Stock-based compensation expense included in the unaudited condensed consolidated statements of operations | |||||||||||||
Number of options or stock awards available for grant under the Plan | 5,943,348 | ||||||||||||
2014 Equity Incentive Plan | Stock options | |||||||||||||
Stock-based compensation expense included in the unaudited condensed consolidated statements of operations | |||||||||||||
Granted (in shares) | 3,617 | ||||||||||||
Exercise price (in dollars per share) | $ / shares | $ 27.98 | ||||||||||||
2014 Equity Incentive Plan | Restricted Stock Units | |||||||||||||
Stock-based compensation expense included in the unaudited condensed consolidated statements of operations | |||||||||||||
Number of restricted stock units granted (in shares) | 8,177 | ||||||||||||
2008 Equity Incentive Plan | |||||||||||||
Stock-based compensation expense included in the unaudited condensed consolidated statements of operations | |||||||||||||
Number of options or stock awards available for grant under the Plan | 0 | ||||||||||||
Option to purchase common stock, outstanding | 3,600,035 | ||||||||||||
Weighted average exercise price | $ / shares | $ 3.84 |
Stock-Based Compensation (Det44
Stock-Based Compensation (Details 2) - USD ($) $ / shares in Units, $ in Thousands | Oct. 01, 2015 | Jul. 01, 2015 | Jun. 03, 2015 | Jun. 01, 2015 | Apr. 01, 2015 | Jan. 02, 2015 | Jan. 01, 2015 | Mar. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Additional disclosures | |||||||||||
Compensation cost related to the nonvested awards not yet recognized | $ 11,600 | ||||||||||
Weighted average period for recognition of compensation cost | 2 years 1 month 6 days | ||||||||||
Summary of restricted stock unit activity | |||||||||||
Total unrecognized compensation cost related to unvested RSUs | $ 14,800 | ||||||||||
Unrecognized compensation cost period expected to be realized | 2 years 7 months 6 days | ||||||||||
Stock options | |||||||||||
Stock-Based Compensation | |||||||||||
Vesting period | 4 years | ||||||||||
Expiration period | 10 years | ||||||||||
Fair value assumptions and methodology | |||||||||||
Risk-free interest rate minimum (as a percent) | 1.50% | 1.70% | 0.90% | ||||||||
Risk-free interest rate maximum (as a percent) | 1.90% | 2.10% | 2.00% | ||||||||
Expected volatility minimum (as a percent) | 50.00% | 55.00% | |||||||||
Expected Volatility (as a percent) | 50.00% | ||||||||||
Expected volatility maximum (as a percent) | 55.00% | 58.00% | |||||||||
Dividend yield (as a percent) | 0.00% | 0.00% | 0.00% | ||||||||
Weighted average grant date fair value (in dollars per share) | $ 32.20 | $ 30.83 | $ 28.58 | $ 28.23 | $ 25.52 | $ 19.48 | $ 19.66 | $ 12.54 | $ 5.71 | $ 4.58 | |
Number of Options | |||||||||||
Outstanding balance at the beginning of the period (in shares) | 5,850,211 | 5,298,510 | 5,850,211 | ||||||||
Granted (in shares) | 6,520 | 19,743 | 10,629 | 28,770 | 608,746 | 14,888 | 3,518 | 692,814 | |||
Exercised (in shares) | (1,141,731) | ||||||||||
Forfeited (in shares) | (96,441) | ||||||||||
Expired (in shares) | (6,343) | ||||||||||
Outstanding balance at the end of the period (in shares) | 5,298,510 | 5,850,211 | |||||||||
Exercisable at the end of the period (in shares) | 3,426,496 | ||||||||||
Vested and expected to vest at the end of the period (in shares) | 5,161,978 | ||||||||||
Weighted Average Exercise Price per Share | |||||||||||
Outstanding balance at the beginning of the period (in dollars per share) | $ 5.39 | $ 8.07 | $ 5.39 | ||||||||
Granted (in dollars per share) | $ 32.20 | $ 30.83 | $ 28.58 | $ 28.23 | $ 25.52 | $ 19.48 | $ 19.66 | 25.73 | |||
Exercised (in dollars per share) | 4.67 | ||||||||||
Forfeited (in dollars per share) | 12.34 | ||||||||||
Expired (in dollars per share) | 12.13 | ||||||||||
Outstanding balance at the end of the period (in dollars per share) | 8.07 | $ 5.39 | |||||||||
Exercisable at the end of the period (in dollars per share) | 4.30 | ||||||||||
Vested and expected to vest at the end of the period (in dollars per share) | $ 7.82 | ||||||||||
Weighted Average Remaining Contractual Term | |||||||||||
Outstanding balance | 6 years 7 months 28 days | 7 years 3 months 29 days | |||||||||
Granted | 9 years 15 days | ||||||||||
Exercised | 5 years 9 months 4 days | ||||||||||
Exercisable at the end of the period | 5 years 9 months 7 days | ||||||||||
Vested and expected to vest at the end of the period | 6 years 7 months 10 days | ||||||||||
Aggregate Intrinsic Value | |||||||||||
Outstanding balance at the end of the period | $ 105,595 | $ 83,487 | |||||||||
Exercisable at the end of the period | 81,131 | ||||||||||
Vested and expected to vest at the end of the period | 104,132 | ||||||||||
Additional disclosures | |||||||||||
Aggregate intrinsic value of employee options exercised | $ 25,800 | $ 16,200 | $ 1,800 | ||||||||
Summary of shares of common stock granted during the period | |||||||||||
Number of Shares Underlying Options Granted | 6,520 | 19,743 | 10,629 | 28,770 | 608,746 | 14,888 | 3,518 | 692,814 | |||
Exercise Price per Share | $ 32.20 | $ 30.83 | $ 28.58 | $ 28.23 | $ 25.52 | $ 19.48 | $ 19.66 | $ 25.73 | |||
Estimated Grant Date Fair Value per Share | $ 32.20 | $ 30.83 | $ 28.58 | $ 28.23 | $ 25.52 | $ 19.48 | $ 19.66 | $ 12.54 | $ 5.71 | $ 4.58 | |
Stock options | Minimum | |||||||||||
Fair value assumptions and methodology | |||||||||||
Expected Term in (Years) | 5 years 6 months 22 days | 5 years 1 month 10 days | 5 years 6 months 15 days | ||||||||
Stock options | Maximum | |||||||||||
Fair value assumptions and methodology | |||||||||||
Expected Term in (Years) | 6 years 29 days | 6 years 3 months | 6 years 3 months 22 days | ||||||||
Restricted Stock Units | |||||||||||
Stock-Based Compensation | |||||||||||
Vesting period | 4 years | ||||||||||
Summary of restricted stock unit activity | |||||||||||
Outstanding balance at the beginning of the period (in shares) | 992,665 | 1,220,008 | 992,665 | ||||||||
Granted (in shares) | 585,765 | ||||||||||
Vested (in shares) | (272,128) | ||||||||||
Forfeited (in shares) | (86,294) | ||||||||||
Outstanding balance at the end of the period (in shares) | 1,220,008 | 992,665 | |||||||||
Weighted-Average Grant-Date Fair value | |||||||||||
Outstanding at the beginning of the period (in dollars per share) | $ 11.39 | $ 17.97 | $ 11.39 | ||||||||
Granted (in dollars per share) | 25.74 | ||||||||||
Vested (in dollars per share) | 11.54 | ||||||||||
Forfeited (in dollars per share) | 15.20 | ||||||||||
Outstanding at the end of the period (in dollars per share) | $ 17.97 | $ 11.39 | |||||||||
Other stock awards | |||||||||||
Summary of restricted stock unit activity | |||||||||||
Issuance of common stock award (in shares) | 26,567 | ||||||||||
Fair value of stocks granted | $ 800 | ||||||||||
2014 Equity Incentive Plan | |||||||||||
Number of Options | |||||||||||
Outstanding balance at the beginning of the period (in shares) | 1,698,475 | ||||||||||
Outstanding balance at the end of the period (in shares) | 1,698,475 | ||||||||||
Weighted Average Exercise Price per Share | |||||||||||
Outstanding balance at the beginning of the period (in dollars per share) | $ 17.03 | ||||||||||
Outstanding balance at the end of the period (in dollars per share) | $ 17.03 | ||||||||||
2014 Equity Incentive Plan | Stock options | |||||||||||
Number of Options | |||||||||||
Granted (in shares) | 3,617 | ||||||||||
Summary of shares of common stock granted during the period | |||||||||||
Number of Shares Underlying Options Granted | 3,617 | ||||||||||
2014 Equity Incentive Plan | Restricted Stock Units | |||||||||||
Summary of restricted stock unit activity | |||||||||||
Outstanding balance at the beginning of the period (in shares) | 1,220,008 | ||||||||||
Granted (in shares) | 8,177 | ||||||||||
Outstanding balance at the end of the period (in shares) | 1,220,008 |
Net Loss per Share (Details)
Net Loss per Share (Details) - shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Restricted Stock Units | |||
Potential dilutive securities that would have been anti-dilutive | |||
Potential dilutive securities that would have been anti-dilutive due to net loss (in shares) | 1,220,008 | 992,665 | |
Series A | |||
Potential dilutive securities that would have been anti-dilutive | |||
Potential dilutive securities that would have been anti-dilutive due to net loss (in shares) | 10,033,976 | ||
Series B | |||
Potential dilutive securities that would have been anti-dilutive | |||
Potential dilutive securities that would have been anti-dilutive due to net loss (in shares) | 5,057,901 | ||
Series C | |||
Potential dilutive securities that would have been anti-dilutive | |||
Potential dilutive securities that would have been anti-dilutive due to net loss (in shares) | 4,429,601 | ||
Series D | |||
Potential dilutive securities that would have been anti-dilutive | |||
Potential dilutive securities that would have been anti-dilutive due to net loss (in shares) | 3,979,730 | ||
Warrants to purchase Series D redeemable convertible preferred stock | |||
Potential dilutive securities that would have been anti-dilutive | |||
Potential dilutive securities that would have been anti-dilutive due to net loss (in shares) | 83,818 | ||
Stock options | |||
Potential dilutive securities that would have been anti-dilutive | |||
Potential dilutive securities that would have been anti-dilutive due to net loss (in shares) | 5,298,510 | 5,850,211 | 5,883,885 |
Net Loss per Share (Details 2)
Net Loss per Share (Details 2) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Numerator | |||||||||||
Net loss attributable to holders of common stock | $ (26,733) | $ (29,088) | $ (28,300) | ||||||||
Denominator: | |||||||||||
Weighted-average shares of common stock outstanding, basic and diluted | 45,651,475 | 41,645,894 | 41,362,476 | 40,978,741 | 40,577,087 | 40,269,937 | 39,304,884 | 7,698,709 | 42,420,356 | 32,075,107 | 7,432,055 |
Net loss per share attributable to holders of common stock, basic and diluted (in dollars per share) | $ (0.07) | $ (0.20) | $ (0.23) | $ (0.13) | $ (0.10) | $ (0.18) | $ (0.27) | $ (0.92) | $ (0.63) | $ (0.91) | $ (3.81) |
Segment and Geographic Inform47
Segment and Geographic Information (Details) | 12 Months Ended |
Dec. 31, 2015segment | |
Segment and Geographic Information | |
Number of reportable segments | 1 |
Retirement Plan (Details)
Retirement Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Retirement Plan | |||
Eligible Employees to contribute | 100.00% | ||
Employee contribution | 33.00% | ||
Maximum matching contributions as a percentage of eligible compensation | 6.00% | ||
Contributions made by Company | $ 0.8 | $ 0.6 | $ 0.4 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Related Party Transactions | |||
Rental income from related entity | $ 0.3 | $ 0.3 | $ 0.2 |
Executive Officer | |||
Related Party Transactions | |||
Expenses incurred related to the services received from related party | $ 1.7 | $ 1.6 | $ 0.8 |
Minimum | |||
Related Party Transactions | |||
Ownership interest (as percent) | 5.00% |
Quarterly Financial Informati50
Quarterly Financial Information ( Unaudited ) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenue | |||||||||||
Revenue | $ 43,252 | $ 37,092 | $ 35,238 | $ 34,612 | $ 30,756 | $ 28,407 | $ 24,744 | $ 26,332 | $ 150,194 | $ 110,239 | $ 83,127 |
Costs and expenses: | |||||||||||
Servicing and support | 8,749 | 7,845 | 7,903 | 7,550 | 7,012 | 6,598 | 7,000 | 6,248 | 32,047 | 26,858 | 22,718 |
Technology and content development | 7,529 | 7,082 | 6,466 | 6,134 | 5,403 | 5,726 | 5,818 | 5,674 | 27,211 | 22,621 | 19,472 |
Program marketing and sales | 20,231 | 21,567 | 21,526 | 19,587 | 16,296 | 16,971 | 16,710 | 15,241 | 82,911 | 65,218 | 54,103 |
General and administrative | 10,064 | 8,477 | 8,871 | 6,711 | 5,973 | 6,303 | 5,708 | 5,436 | 34,123 | 23,420 | 14,840 |
Total costs and expenses | 46,573 | 44,971 | 44,766 | 39,982 | 34,684 | 35,598 | 35,236 | 32,599 | 176,292 | 138,117 | 111,133 |
Loss from operations | (3,321) | (7,879) | (9,528) | (5,370) | (3,928) | (7,191) | (10,492) | (6,267) | (26,098) | (27,878) | (28,006) |
Other income (expense): | |||||||||||
Interest expense | (173) | (127) | (126) | (126) | (119) | (176) | (134) | (784) | (552) | (1,213) | 27 |
Interest income | 94 | 21 | 24 | 28 | 30 | 30 | 31 | 1 | 167 | 92 | 26 |
Other | (250) | (250) | |||||||||
Total other income (expense) | (79) | (356) | (102) | (98) | (89) | (146) | (103) | (783) | (635) | (1,121) | 53 |
Net loss | $ (3,400) | $ (8,235) | $ (9,630) | $ (5,468) | $ (4,017) | $ (7,337) | $ (10,595) | $ (7,050) | $ (26,733) | $ (28,999) | $ (27,953) |
Net Loss per Share | |||||||||||
Basic and diluted (in dollars per share) | $ (0.07) | $ (0.20) | $ (0.23) | $ (0.13) | $ (0.10) | $ (0.18) | $ (0.27) | $ (0.92) | $ (0.63) | $ (0.91) | $ (3.81) |
Weighted-average shares used in computing net loss per share: | |||||||||||
Basic and diluted (in shares) | 45,651,475 | 41,645,894 | 41,362,476 | 40,978,741 | 40,577,087 | 40,269,937 | 39,304,884 | 7,698,709 | 42,420,356 | 32,075,107 | 7,432,055 |