Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 30, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | Teladoc Health, Inc. | |
Entity Central Index Key | 1,477,449 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Entity Common Stock, Shares Outstanding | 70,106,558 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 457,554 | $ 42,817 |
Short-term investments | 14,974 | 79,489 |
Accounts receivable, net of allowance of $3,103 and $2,422, respectively | 39,965 | 27,094 |
Prepaid expenses and other current assets | 10,760 | 6,839 |
Total current assets | 523,253 | 156,239 |
Property and equipment, net | 9,717 | 8,963 |
Goodwill | 744,062 | 498,520 |
Intangible assets, net | 256,834 | 159,811 |
Other assets | 1,316 | 858 |
Total assets | 1,535,182 | 824,391 |
Current liabilities: | ||
Accounts payable | 4,821 | 3,884 |
Accrued expenses and other current liabilities | 32,586 | 19,357 |
Accrued compensation | 20,786 | 17,089 |
Total current liabilities | 58,193 | 40,330 |
Other liabilities | 5,601 | 4,882 |
Deferred taxes | 34,964 | 12,906 |
Convertible senior notes, net | 408,653 | 207,370 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock, $0.001 par value; 150,000,000 and 100,000,000 shares authorized as of September 30, 2018 and December 31, 2017, respectively; 70,034,851 shares and 61,534,101 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively | 70 | 61 |
Additional paid-in capital | 1,415,840 | 866,330 |
Accumulated deficit | (383,782) | (311,577) |
Accumulated other comprehensive income (loss) | (4,357) | 4,089 |
Total stockholders' equity | 1,027,771 | 558,903 |
Total liabilities and stockholders' equity | $ 1,535,182 | $ 824,391 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Consolidated Balance Sheets | ||
Allowance of Accounts receivable | $ 3,103 | $ 2,422 |
Common stock par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 150,000,000 | 100,000,000 |
Common stock, shares issued | 70,034,851 | 61,534,101 |
Common stock, shares outstanding | 70,034,851 | 61,534,101 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Consolidated Statements of Operations | ||||
Revenue | $ 110,962 | $ 68,650 | $ 295,166 | $ 156,139 |
Cost of revenue | 34,167 | 16,742 | 88,707 | 38,907 |
Gross profit | 76,795 | 51,908 | 206,459 | 117,232 |
Operating expenses: | ||||
Advertising and marketing | 21,668 | 14,328 | 61,554 | 39,222 |
Sales | 16,303 | 11,393 | 44,645 | 26,705 |
Technology and development | 13,577 | 9,964 | 40,829 | 24,013 |
Legal | 254 | 105 | 843 | 725 |
Regulatory | 553 | 777 | 1,648 | 2,771 |
Acquisition and integration related costs | 1,588 | 8,526 | 8,957 | 10,639 |
Gain on sale | (1,430) | (5,500) | ||
General and administrative | 30,314 | 21,938 | 80,455 | 52,299 |
Depreciation and amortization | 9,746 | 6,418 | 26,045 | 11,693 |
Loss from operations | (15,778) | (21,541) | (53,017) | (50,835) |
Amortization of warrants and loss on extinguishment of debt | 1,457 | 1,457 | ||
Interest expense, net | 7,666 | 8,202 | 19,449 | 9,678 |
Net loss before taxes | (23,444) | (31,200) | (72,466) | (61,970) |
Income tax (benefit) provision | (180) | 130 | (261) | 429 |
Net loss | $ (23,264) | $ (31,330) | $ (72,205) | $ (62,399) |
Net loss per share, basic and diluted | $ (0.34) | $ (0.55) | $ (1.12) | $ (1.15) |
Weighted-average shares used to compute basic and diluted net loss per share | 68,247,655 | 56,493,054 | 64,363,943 | 54,435,343 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Consolidated Statements of Comprehensive Loss | ||||
Net loss | $ (23,264) | $ (31,330) | $ (72,205) | $ (62,399) |
Other comprehensive income (loss), net of tax | ||||
Net change in unrealized gains on available-for-sale securities | 11 | (6) | 52 | (6) |
Cumulative translation adjustment | (1,840) | 3,913 | (8,498) | 3,913 |
Other comprehensive income (loss), net of tax | (1,829) | 3,907 | (8,446) | 3,907 |
Comprehensive loss | $ (25,093) | $ (27,423) | $ (80,651) | $ (58,492) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows used in operating activities: | ||
Net loss | $ (72,205) | $ (62,399) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 26,045 | 11,693 |
Allowance for doubtful accounts | 1,535 | 1,343 |
Stock-based compensation | 31,086 | 13,628 |
Deferred income taxes | (1,907) | 225 |
Accretion of interest | 13,593 | 3,262 |
Amortization of warrants and loss on extinguishment of debt | 1,457 | |
Gain on sale | (5,500) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (7,535) | (3,186) |
Prepaid expenses and other current assets | (1,656) | (2,717) |
Other assets | (327) | (89) |
Accounts payable | (357) | (782) |
Accrued expenses and other current liabilities | 7,561 | 9,432 |
Accrued compensation | 1,991 | 967 |
Other liabilities | 340 | |
Net cash used in operating activities | (7,336) | (27,166) |
Cash flows used in investing activities: | ||
Purchase of property and equipment | (2,732) | (2,043) |
Purchase of internal-use software | (2,758) | (1,473) |
Purchase of marketable securities | (12,141) | (119,670) |
Proceeds from marketable securities | 79,470 | 45,820 |
Sale of assets | 5,500 | |
Acquisition of business, net of cash acquired | (282,487) | (379,355) |
Net cash used in investing activities | (215,148) | (456,721) |
Cash flows provided by financing activities: | ||
Net proceeds from the exercise of stock options | 26,198 | 6,996 |
Proceeds from issuance of convertible notes | 279,147 | 263,722 |
Proceeds from borrowing under bank and other debt | 166,679 | |
Repayment of debt | (46,191) | |
Proceeds from issuance of common stock | 330,856 | 123,928 |
Proceeds from employee stock purchase plan | 1,423 | 1,265 |
Proceeds from cash received for withholding taxes on stock-based compensation, net | 539 | 495 |
Net cash provided by financing activities | 638,163 | 516,894 |
Net increase in cash and cash equivalents | 415,679 | 33,007 |
Foreign exchange difference | (942) | 97 |
Cash and cash equivalents at beginning of the period | 42,817 | 50,015 |
Cash and cash equivalents at end of the period | 457,554 | 83,119 |
Income taxes paid | 238 | |
Interest paid | $ 4,125 | $ 4,727 |
Organization and Description of
Organization and Description of Business | 9 Months Ended |
Sep. 30, 2018 | |
Organization and Description of Business | |
Organization and Description of Business | Note 1. Organization and Description of Business Teladoc, Inc. was incorporated in the State of Texas in June 2002 and changed its state of incorporation to the State of Delaware in October 2008. Effective August 10, 2018, Teladoc, Inc. changed its corporate name to Teladoc Health, Inc. Unless the context otherwise requires, Teladoc Health, Inc., together with its subsidiaries, is referred to herein as “Teladoc” or the “Company”. The Company’s principal executive offices are located in Purchase, New York, Lewisville, Texas and Barcelona, Spain. Teladoc is the global leader in providing virtual healthcare services with a focus on high quality, lower costs, and improved outcomes around the world. On July 26, 2018, Teladoc completed a follow-on public offering (the “July Offering”) in which the Company issued and sold 5,000,000 shares of common stock, at an issuance price of $66.28 per share. The Company received net proceeds of $330.9 million after deducting offering expenses of $0.5 million. On May 31, 2018, the Company completed the acquisition of Advance Medical-Health Care Management Services, S.A. (“Advance Medical”), a leading global virtual healthcare provider. See Note 5 “Business Acquisition” for additional information. On May 8, 2018, the Company issued, at par value, $287.5 million aggregate principal amount of 1.375% convertible senior notes due 2025 (the “2025 Notes”). The 2025 Notes bear cash interest at a rate of 1.375% per year, payable semi-annually in arrears on May 15 and November 15 of each year. The 2025 Notes will mature on May 15, 2025. The net proceeds to the Company from the offering were $279.1 million after deducting offering costs of approximately $8.4 million. On December 4, 2017, Teladoc completed a follow on public offering (the “December Offering”) in which the Company issued and sold 4,096,600 shares of common stock, including the exercise of an underwriter option to purchase additional shares, at an issuance price of $35.00 per share. The Company received net proceeds of $134.7 million after deducting underwriting discounts and commissions of $8.2 million as well as other offering expenses of $0.5 million. On July 14, 2017, the Company completed the acquisition of Best Doctors Holdings, Inc. (“Best Doctors”), an expert medical consultation company focused on improving health outcomes for the most complex, critical and costly medical issues. See Note 5 “Business Acquisition” for additional information. On June 27, 2017, the Company issued, at par value, $275 million aggregate principal amount of 3% convertible senior notes due 2022 (the “2022 Notes”). The 2022 Notes bear cash interest at a rate of 3% per year, payable semi-annually in arrears on June 15 and December 15 of each year. The 2022 Notes will mature on December 15, 2022. The net proceeds to the Company from the offering were $263.7 million after deducting offering costs of approximately $11.3 million. On January 24, 2017, Teladoc completed a follow on public offering (the “Follow-On Offering”) in which the Company issued and sold 7,887,500 shares of common stock, including the exercise of an underwriter option to purchase additional shares, at an issuance price of $16.75 per share. The Company received net proceeds of $123.9 million after deducting underwriting discounts and commissions of $7.6 million as well as other offering expenses of $0.6 million. |
Basis of Presentation and Princ
Basis of Presentation and Principles of Consolidation | 9 Months Ended |
Sep. 30, 2018 | |
Basis Of Presentation And Principles Of Consolidation | |
Basis of Presentation and Principles of Consolidation | Note 2. Basis of Presentation and Principles of Consolidation Basis of Presentation and Principles of Consolidation The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. In the opinion of the Company’s management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal recurring accruals and adjustments) necessary to present fairly the financial position, results of operations and cash flows of the Company at the dates and for the periods indicated. The interim results for the quarter and nine months ended September 30, 2018 are not necessarily indicative of results for the full 2018 calendar year or any other future interim periods. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Form 10-K for the year ended December 31, 2017. The unaudited consolidated financial statements include the results of Teladoc, its wholly owned subsidiaries, two professional associations and twenty two professional corporations and a service corporation (collectively, the “Association”). Teladoc Physicians, P.A. is party to several services agreements by and among it and the professional corporations pursuant to which each professional corporation provides services to Teladoc Physicians, P.A. Each professional corporation is established pursuant to the requirements of its respective domestic jurisdiction governing the corporate practice of medicine. The Company holds a variable interest in the Association which contracts with physicians and other health professionals in order to provide services to Teladoc. The Association is considered a variable interest entity (“VIE”) since it does not have sufficient equity to finance its activities without additional subordinated financial support. An enterprise having a controlling financial interest in a VIE, must consolidate the VIE if it has both power and benefits—that is, it has (1) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance (power) and (2) the obligation to absorb losses of the VIE that potentially could be significant to the VIE or the right to receive benefits from the VIE that potentially could be significant to the VIE (benefits). The Company has the power and rights to control all activities of the Association and funds and absorbs all losses of the VIE. Total revenue and net loss for the VIE were $11.6 million and $(4.5) million, respectively, for the quarter ended September 30, 2018 and $6.9 million and $(1.3) million, respectively, for the quarter ended September 30, 2017. Total revenue and net loss for the VIE were $40.6 million and $(2.5) million, respectively, for the nine months ended September 30, 2018 and $22.6 million and $(5.7) million, respectively, for the nine months ended September 30, 2017. The VIE’s total assets were $7.2 million and $4.5 million at September 30, 2018 and December 31, 2017, respectively. Total liabilities for the VIE were $41.7 million and $36.5 million at September 30, 2018 and December 31, 2017, respectively. The VIE’s total stockholders’ deficit was $34.5 million and $32.0 million at September 30, 2018 and December 31, 2017, respectively. The functional currency for each of the Company’s foreign subsidiaries is the local currency. All assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the exchange rate on the balance sheet date. Revenues and expenses are translated at the weighted average exchange rate during the period. Cumulative translation gains or losses are included in stockholders’ equity as a component of accumulated other comprehensive income (loss). The Company operates in a single reportable segment – health services. Revenue earned by foreign operations outside of the United States were $24.5 million and $8.7 million for the quarter ended September 30, 2018 and 2017, respectively. Revenue earned by foreign operations outside of the United States were $50.4 million and $8.7 million for the nine months ended September 30, 2018 and 2017, respectively. Long-lived assets from foreign operations totaled $419.1 million as of September 30, 2018 and $163.3 million as of December 31, 2017. All intercompany transactions and balances have been eliminated. The Company adopted ASU 2014-09, Revenue from Contracts with Customers during the quarter ended March 31, 2018. See Note 3 “Revenue” for further information. Additionally, the Company has included “Gain on Sale” in the consolidated statement of operations which consists of the gain on sale of assets of certain client contracts. There have been no other changes to the significant accounting policies described in the 2017 Form 10-K that have had a material impact on the consolidated financial statements and related notes. Recently Issued Accounting Pronouncements In June 2018, the FASB issued ASU No. 2018-07, “Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting.” These amendments expand the scope of Topic 718, Compensation - Stock Compensation , which currently only includes share-based payments to employees , to include share-based payments issued to nonemployees for goods or services and the accounting is substantially aligned. The ASU supersedes Subtopic 505-50, Equity - Equity-Based Payments to Non-Employees. This standard is effective for public companies for annual periods beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted as long as ASU No. 2014-09 has been adopted by the Company. The Company has elected to early adopt this standard as of July 1, 2018 and t he adoption of ASU No. 2018-07 had no impact on the Company’s consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 outlines a comprehensive lease accounting model and supersedes the current lease guidance. The new guidance requires lessees to recognize lease liabilities and corresponding right-of-use assets for all leases with lease terms of greater than 12 months. It also changes the definition of a lease and expands the disclosure requirements of lease arrangements. The new guidance must be adopted using the modified retrospective approach and will be effective for the Company starting in the first quarter of fiscal 2019; early adoption is permitted. The Company is currently in the process of assessing the population for the new standard and evaluating the impact of the adoption of this standard on its consolidated financial statements. The Company anticipates the most significant impact will be from the recognition of right of use assets and lease liabilities for operating leases on the consolidated balance sheets and does not expect a material impact to the consolidated statements of operations . |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2018 | |
Revenue | |
Revenue | Note 3. Revenue The Company generates virtual healthcare service revenue from contracts with clients who purchase access to the Company’s professional provider network or medical experts for their employees, dependents and other beneficiaries. The Company’s client contracts include a per-member-per-month subscription access fee as well as certain contracts that generate additional revenue on a per-telehealth visit basis for general medical and other specialty visits and expert medical service on a per case basis. The Company also has certain contracts that generate revenue based solely on a per telehealth visit basis for general medical and other specialty visits. For the Company’s direct-to-consumer behavioral health product, members purchase access to the Company’s professional provider network for a subscription access fee. Accordingly, the Company generates subscription access revenue from subscription access fees and visit fee revenue for general medical, expert medical service and other specialty visit. The Company’s agreements generally have a term of one year. The majority of clients renew their contracts following their first year of services. Revenues are recognized when the Company satisfies its performance obligation to stand ready to provide telehealth services which occurs when the Company’s clients and members have access to and obtain control of the telehealth service. The Company generally bills for the telehealth services on a monthly basis with payment terms generally being 30 days. There are not significant differences between the timing of revenue recognition and billing. Consequently, the Company has determined that client contracts do not include a financing component. Revenue is recognized in an amount that reflects the consideration that is expected in exchange for the service and this may include a variable transaction price as the number of members may vary from the initial billing. Based on historical experience, the Company estimates this amount which is recorded as a component of revenue. Subscription access revenue accounted for approximately 87% and 88% of our total revenue for the quarters ended September 30, 2018 and 2017, respectively. Subscription access revenue accounted for approximately 84% and 85% of our total revenue for the nine months periods ended September 30, 2018 and 2017, respectively. The following table presents the Company’s revenues disaggregated by revenue source (in thousands): Quarters Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Subscription Access Fees: U.S. $ 72,521 $ 51,956 $ 198,607 $ 123,775 International 24,040 8,375 49,480 8,375 Visit Fee Revenue: U.S. 11,330 8,066 37,334 23,736 International 562 253 987 253 Visit Fee Only Revenue: U.S. 2,509 — 8,758 — Total Revenues $ 110,962 $ 68,650 $ 295,166 $ 156,139 As of September 30, 2018, accounts receivable, net of allowance for doubtful accounts, were $40.0 million. The allowance for doubtful accounts reflects our best estimate of probable losses inherent in the accounts receivable balance. The Company determines the allowance based on historical experience, specific account information and other currently available evidence. For certain services, payment is required for future months before the service is delivered to the Member. The Company records deferred revenue when cash payments are received in advance of the Company’s performance obligation to provide services. The net increase of $4.0 million in the deferred revenue balance for the nine months ended September 30, 2018 is primarily driven by the acquisition of Advance Medical and cash payments received or due in advance of satisfying the Company’s performance obligations, offset by revenue recognized that were included in the deferred revenue balance at the beginning of the period. The Company anticipates that it will satisfy most of its performance obligation associated with the deferred revenue within the prospective fiscal year. The Company’s contracts do not generally contain refund provisions for fees earned related to services performed. However, the Company’s direct-to-consumer behavioral health service provides for member refunds. Based on historical experience, the Company estimates the expected amount of refunds to be issued which are recorded as a reduction of revenue. The Company issued refunds of approximately $0.6 million and $2.2 million for the quarter and nine months ended September 30, 2018, respectively. Additionally, certain of the Company’s contracts include client performance guarantees that are based upon minimum Member utilization and guarantees by the Company for specific service level performance of the Company’s services. If client performance guarantees are not being realized, the Company records, as a reduction to revenue, an estimate of the amount that will be due at the end of the respective client’s contractual period. For the quarter and nine months ended September 30, 2018, revenue recognized from performance obligations related to prior periods for the aforementioned changes in transaction price or client performance guarantees, were not material. The Company has elected the optional exemption to not disclose the remaining performance obligations of its contracts since substantially all of its contracts have a duration of one year or less and the variable consideration expected to be received over the duration of the contract is allocated entirely to the wholly unsatisfied performance obligations. |
Lease Abandonment
Lease Abandonment | 9 Months Ended |
Sep. 30, 2018 | |
Lease Abandonment | |
Lease Abandonment | Note 4. Lease Abandonment In connection with the Company’s abandonment of a facility in Boston, Massachusetts, the Company incurred $1.5 million in lease abandonment charges during the quarter ended March 31, 2018, which is included within acquisition and integration related costs in the consolidated statement of operations. The following table details the associated liability. The current portion of the liability of $0.5 million was recorded in accrued expenses and other current liabilities and the non-current portion of the liability of $0.4 million was recorded in other liabilities in the consolidated balance sheet (in thousands): Balance January 1, 2018 $ — Charged to expense 1,479 Paid or settled (583) Balance September 30, 2018 $ 896 |
Business Acquisitions
Business Acquisitions | 9 Months Ended |
Sep. 30, 2018 | |
Business Acquisitions | |
Business Acquisitions | Note 5. Business Acquisitions On May 31, 2018, the Company completed the acquisition of Advance Medical through a merger in which Advance Medical became a wholly-owned subsidiary of the Company. The aggregate merger consideration paid was $351.7 million, net of cash acquired of $8.8 million, which was comprised of 1,344,387 shares of Teladoc’s common stock valued at $68.6 million on May 31, 2018, and $291.9 million of cash. Advance Medical is a leading global virtual healthcare provider offering a portfolio of virtual healthcare and expert medical service solutions. The acquisition was considered a stock acquisition for tax purposes and accordingly, the goodwill resulting from this acquisition is not tax deductible. The total acquisition related costs were $5.7 million and included transaction costs for investment bankers and other professional fees. On July 14, 2017, the Company completed the acquisition of Best Doctors through a merger in which Best Doctors became a wholly-owned subsidiary of the Company. The aggregate merger consideration paid was $445.5 million, net of cash acquired of $13.7 million, which was comprised of 1,855,078 shares of Teladoc’s common stock valued at $66.2 million on July 14, 2017, and $375.0 million of cash, subject to post-closing working capital adjustments in the amount of $4.3 million. Best Doctors provides technology innovations and services to help employers, health plans and provider organizations to ensure that their members combat medical uncertainty with access to the best medical minds. The acquisition was considered a stock acquisition for tax purposes and accordingly, the goodwill resulting from this acquisition is not tax deductible. The total acquisition related costs of the acquisition were $9.1 million and included transaction costs for investment bankers and other professional fees. The acquisitions described above were accounted for using the acquisition method of accounting, which requires, among other things, the assets acquired, and the liabilities assumed be recognized at their fair values as of the acquisition date. The results of the acquisitions were included within the consolidated financial statements commencing on the aforementioned acquisition dates. The following table summarizes the fair value estimates of the assets acquired and liabilities assumed at the respective acquisition dates. The Company, with the assistance of a third-party valuation expert, estimated the fair value of the acquired tangible and intangible assets. Identifiable assets acquired and liabilities assumed (in thousands): Advance Medical BestDoctors Purchase price, net of cash acquired $ 351,694 $ 445,535 Less: Accounts receivable 8,553 11,205 Property and equipment, net 1,326 2,650 Other assets 3,675 2,483 Client relationships 100,763 112,810 Non-compete agreements 1,540 — Internal-use software 617 8,480 Trademarks 16,190 24,920 Favorable leases 203 — Accounts payable (361) (393) Deferred taxes (23,489) (11,800) Other liabilities (8,499) (12,337) Goodwill $ 251,176 $ 307,517 The amount allocated to goodwill reflects the benefits Teladoc expects to realize from the growth of the respective acquisitions operations. The Company’s unaudited pro forma revenue and net loss for the quarters ended September 30, 2018 and 2017 and for the nine months ended September 30, 2018 and 2017 below have been prepared as if Advance Medical and Best Doctors had been purchased on January 1, 2017. Unaudited Pro Forma Unaudited Pro Forma Quarters Ended Nine Months Ended September 30, September 30, (in thousands) 2018 2017 2018 2017 Revenue $ 110,962 $ 88,338 $ 324,831 $ 254,075 Net loss $ (23,264) $ (32,209) $ (69,434) $ (69,433) The unaudited pro forma financial information above is not necessarily indicative of what the Company’s consolidated results actually would have been if the acquisitions had been completed at the beginning of the respective periods. In addition, the unaudited pro forma information above does not attempt to project the Company’s future results. The Company recorded $19.2 million of revenue and $(1.1 ) million of net loss from Advance Medical for the quarter ended September 30, 2018. The Company recorded $25.4 million of revenue and $(1.0) million of net loss from Advance Medical for the nine months ended September 30, 2018. |
Intangible Assets, Net
Intangible Assets, Net | 9 Months Ended |
Sep. 30, 2018 | |
Intangible Assets, Net | |
Intangible Assets, Net | Note 6. Intangible Assets, Net Intangible assets, net consist of the following (in thousands): Weighted Average Useful Accumulated Net Carrying Remaining Life Gross Value Amortization Value Useful Life September 30, 2018 Client relationships 2 to 20 years $ 235,134 $ (29,723) $ 205,411 13.8 Non-compete agreements 1.5 to 5 years 5,010 (3,590) 1,420 2.6 Trademarks 3 to 15 years 42,235 (3,389) 38,846 14.0 Patents 3 years 200 (122) 78 1.1 Internal-use software and others 1.8 to 5 years 24,024 (12,945) 11,079 1.7 Intangible assets, net $ 306,603 $ (49,769) $ 256,834 13.3 December 31, 2017 Client relationships 2 to 10 years $ 136,362 $ (14,711) $ 121,651 9.3 Non-compete agreements 1.5 to 5 years 3,480 (3,143) 337 0.8 Trademarks 3 to 15 years 26,454 (1,502) 24,952 14.2 Patents 3 years 200 (72) 128 1.9 Internal-use software 2 to 5 years 20,312 (7,569) 12,743 1.7 Intangible assets, net $ 186,808 $ (26,997) $ 159,811 9.4 Amortization expense for intangible assets was $8.9 million and $5.3 million for the quarters ended September 30, 2018 and 2017, respectively. Amortization expense for intangible assets was $22.9 million and $9.2 million for the nine months ended September 30, 2018 and 2017, respectively. |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill | |
Goodwill | Note 7. Goodwill Goodwill consists of the following (in thousands): As of September 30, As of December 31, 2018 2017 Beginning balance $ 498,520 $ 188,184 Additions associated with acquisitions 251,176 307,517 Cumulative translation adjustment (5,634) 2,819 Goodwill $ 744,062 $ 498,520 Goodwill is not amortized but is tested for impairment annually on October 1 or more frequently if events or changes in circumstances indicate that the asset may be impaired. The Company’s annual goodwill impairment test resulted in no impairment charges in any of the periods presented in the consolidated financial statements. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 9 Months Ended |
Sep. 30, 2018 | |
Accrued Expenses and Other Current Liabilities | |
Accrued Expenses and Other Current Liabilities | Note 8. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following (in thousands): As of September 30, As of December 31, 2018 2017 Professional fees $ 3,343 $ 1,325 Consulting fees/provider fees 4,205 4,028 Client performance guarantees 2,722 2,617 Legal fees 519 759 Interest payable 4,068 367 Income tax payable 3,136 — Lease abandonment obligation - current 482 — Marketing 2,458 524 Earnout and compensation — 722 Printing and postage — 302 Deferred revenue 8,062 4,111 Other 3,591 4,602 Total $ 32,586 $ 19,357 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Measurements | |
Fair Value Measurements | Note 9. Fair Value Measurements The Company measures its financial assets and liabilities at fair value at each reporting period using a fair value hierarchy that requires it to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value: Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2—Include other inputs that are directly or indirectly observable in the marketplace. Level 3—Unobservable inputs that are supported by little or no market activity. The Company measures its cash equivalents at fair value on a recurring basis. The Company classifies its cash equivalents within Level 1 because they are valued using observable inputs that reflect quoted prices for identical assets in active markets and quoted prices directly in active markets. The Company measures its short-term marketable securities at fair value on a recurring basis and classifies such as Level 2. They are valued using observable inputs that reflect quoted prices directly or indirectly in active markets. The short-term marketable securities amortized cost approximates fair value. The Company measured its contingent consideration at fair value on a recurring basis and classified such as Level 3. The Company estimates the fair value of contingent consideration as the present value of the expected contingent payments, determined using the weighted probability of the possible payments. The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis using the above input categories (in thousands): September 30, 2018 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 457,554 $ — $ — $ 457,554 Short-term investments $ — $ 14,974 $ — $ 14,974 December 31, 2017 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 39,051 $ 3,766 $ — $ 42,817 Short-term investments $ — $ 79,489 $ — $ 79,489 Contingent liability (included in accrued expenses and other current liabilities and other liabilities) $ — $ — $ 666 $ 666 There were no transfers between fair value measurement levels during the quarter and nine months ended September 30, 2018 and 2017. The change in fair value of the Company’s contingent liability is recorded in general and administrative expenses in the consolidated statements of operations. The following table reconciles the beginning and ending balance of the Company’s Level 3 contingent liability: Balance at December 31, 2017 $ 666 Payments (744) Change in fair value 78 Fair value at September 30, 2018 $ — |
Revolving Credit Facility
Revolving Credit Facility | 9 Months Ended |
Sep. 30, 2018 | |
Revolving Credit Facility | |
Revolving Credit Facility | Note 10. Revolving Credit Facility On July 14, 2017 and concurrent with the consummation of the Best Doctors acquisition, the Company entered into a $175.0 million Senior Secured Term Loan Facility (the “New Term Loan Facility”) and a $10.0 million Senior Secured Revolving Credit Facility (the “New Revolving Credit Facility”). The New Term Loan Facility was used to fund the purchase of Best Doctors and the New Revolving Credit Facility is available for working capital and other general corporate purposes. In December 2017, the Company used the proceeds from the December Offering and cash on hand and repaid all the outstanding amounts under the $175.0 million New Term Loan Facility. The Company has maintained the New Revolving Credit Facility and, as described above, there was no amount outstanding as of September 30, 2018 and December 31, 2017. The Company was in compliance with all debt covenants at September 30, 2018 and December 31, 2017. |
Convertible Senior Notes
Convertible Senior Notes | 9 Months Ended |
Sep. 30, 2018 | |
Convertible Senior Notes | |
Convertible Senior Notes | Note 11. Convertible Senior Notes Convertible Senior Notes Due 2025 On May 8, 2018, the Company issued, at par value, $287.5 million aggregate principal amount of 1.375% convertible senior notes due 2025. The 2025 Notes bear cash interest at a rate of 1.375% per year, payable semi-annually in arrears on May 15 and November 15 of each year. The 2025 Notes will mature on May 15, 2025. The net proceeds to the Company from the offering were $279.1 million after deducting offering costs of approximately $8.4 million. The 2025 Notes are senior unsecured obligations of the Company and rank senior in right of payment to the Company’s indebtedness that is expressly subordinated in right of payment to the 2025 Notes; equal in right of payment to the Company’s liabilities that is not so subordinated; effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities incurred by the Company’s subsidiaries. Holders may convert all or any portion of their 2025 Notes in integral multiples of $1,000 principal amount, at their option, at any time prior to the close of business on the business day immediately preceding November 15, 2024 only under the following circumstances: · during any calendar quarter commencing after the calendar quarter ending on September 30, 2018 (and only during such calendar quarter), if the last reported sale price of the shares of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; · during the five business day period after any ten consecutive trading day period (the ‘‘measurement period’’) in which the trading price (as defined in the indenture governing the 2025 Notes (the “2025 Notes Indenture”)) per $1,000 principal amount of 2025 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; · upon the occurrence of specified corporate events described under the 2025 Notes Indenture; or · if the Company calls the 2025 Notes for redemption, at any time until the close of business on the second business day immediately preceding the redemption date as described under the 2025 Notes Indenture. On or after November 15, 2024, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their 2025 Notes, regardless of the foregoing circumstances. The conversion rate for the 2025 Notes was initially, and remains, 18.6621 shares of the Company’s common stock per $1,000 principal amount of the 2025 Notes, which is equivalent to an initial conversion price of approximately $53.58 per share of the Company’s common stock. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination thereof, at the Company’s election. If the Company elects (or is deemed to have elected) to satisfy the conversion obligation solely in cash or through payment and delivery, as the case may be, of a combination of cash and shares of the Company’s common stock, the amount of cash and shares of the Company’s common stock, if any, due upon conversion will be based on a daily conversion value calculated on a proportionate basis for each trading day in a 25 trading day observation period (as defined in the 2025 Notes Indenture). The Company may redeem for cash all or any portion of the 2025 Notes, at its option, on or after May 22, 2022 if the last reported sale price of its common stock exceeds 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading days ending on, and including the trading day immediately preceding the date on which the Company provides notice of the redemption. The redemption price will be the principal amount of the 2025 Notes to be redeemed, plus accrued and unpaid interest, if any. In addition, calling any 2025 Note for redemption on or after May 22, 2022 will constitute a make-whole fundamental change (as defined in the 2025 Notes Indenture) with respect to that 2025 Note, in which case the conversion rate applicable to the conversion of that Note, if it is converted in connection with the redemption, will be increased in certain circumstances as described in the 2025 Notes Indenture. In accounting for the issuance of the 2025 Notes, the Company separated the 2025 Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the par value of the 2025 Notes as a whole. The excess of the principal amount of the liability component over its carrying amount, referred to as the debt discount, is amortized to interest expense from the issuance date to November 15, 2024 (the first date on which the Company may be required to repurchase the 2025 Notes at the option of the holder). The equity component is not re-measured as long as it continues to meet the conditions for equity classification. The equity component related to the 2025 Notes was $91.4 million, net of issuance costs which was recorded in additional paid-in capital on the accompanying consolidated balance sheet. In accounting for the transaction costs related to the issuance of the 2025 Notes, the Company allocated the total costs incurred to the liability and equity components of the 2025 Notes based on their relative values. Transaction costs attributable to the liability component are being amortized to interest expense over the seven-year term of the 2025 Notes, and transaction costs attributable to the equity component are netted with the equity component in stockholders’ equity. The 2025 Notes consist of the following (in thousands): As of September 30, Liability component 2018 Principal $ 287,500 Less: Debt discount, net (1) (95,659) Net carrying amount $ 191,841 (1) Included in the accompanying consolidated balance sheets within convertible senior notes and amortized to interest expense over the expected life of the 2025 Notes using the effective interest rate method. The fair value of the 2025 Notes was approximately $491.9 million as of September 30, 2018. The Company estimates the fair value of its 2025 Notes utilizing market quotations for debt that have quoted prices in active markets. Since the 2025 Notes do not trade on a daily basis in an active market, the fair value estimates are based on market observable inputs based on borrowing rates currently available for debt with similar terms and average maturities, which are classified as Level 2 measurements within the fair value hierarchy. See Note 9, “Fair Value Measurements,” for definitions of hierarchy levels. As of September 30, 2018, the remaining contractual life of the 2025 Notes is approximately 6.6 years. The following table sets forth total interest expense recognized related to the 2025 Notes (in thousands): Quarters Ended Nine Months Ended September 30, September 30, 2018 2018 Contractual interest expense $ 996 $ 1,581 Amortization of debt discount 2,593 4,086 Total $ 3,589 $ 5,667 Effective interest rate of the liability component 7.9 % 7.9 % Convertible Senior Notes Due 2022 On June 27, 2017, the Company issued, at par value, $275 million aggregate principal amount of 3% convertible senior notes due 2022. The 2022 Notes bear cash interest at a rate of 3% per year, payable semi-annually in arrears on June 15 and December 15 of each year. The 2022 Notes will mature on December 15, 2022. The net proceeds to the Company from the offering were $263.7 million after deducting offering costs of approximately $11.3 million. The 2022 Notes are senior unsecured obligations of the Company and rank senior in right of payment to the Company’s indebtedness that is expressly subordinated in right of payment to the 2022 Notes; equal in right of payment to the Company’s liabilities that is not so subordinated; effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities incurred by the Company’s subsidiaries. Holders may convert all or any portion of their 2022 Notes in integral multiples of $1,000 principal amount, at their option, at any time prior to the close of business on the business day immediately preceding June 15, 2022 only under the following circumstances: · during any calendar quarter commencing after the calendar quarter ending on September 30, 2017 (and only during such calendar quarter), if the last reported sale price of the shares of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; · during the five business day period after any ten consecutive trading day period (the ‘‘measurement period’’) in which the trading price (as defined in the indenture governing the 2022 Notes (the “2022 Notes Indenture”)) per $1,000 principal amount of 2022 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; · upon the occurrence of specified corporate events described under the 2022 Notes Indenture; or · if the Company calls the 2022 Notes for redemption, at any time until the close of business on the second business day immediately preceding the redemption date as described under the 2022 Notes Indenture. On or after June 15, 2022, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their 2022 Notes, regardless of the foregoing circumstances. The conversion rate for the 2022 Notes was initially, and remains, 22.7247 shares of the Company’s common stock per $1,000 principal amount of the 2022 Notes, which is equivalent to an initial conversion price of approximately $44.00 per share of the Company’s common stock. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination thereof, at the Company’s election. If the Company elects (or is deemed to have elected) to satisfy the conversion obligation solely in cash or through payment and delivery, as the case may be, of a combination of cash and shares of the Company’s common stock, the amount of cash and shares of the Company’s common stock, if any, due upon conversion will be based on a daily conversion value calculated on a proportionate basis for each trading day in a 25 trading day observation period (as defined in the 2022 Notes Indenture). The Company may redeem for cash all or any portion of the 2022 Notes, at its option, on or after December 22, 2020 if the last reported sale price of its common stock exceeds 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading days ending on, and including the trading day immediately preceding the date on which the Company provides notice of the redemption. The redemption price will be the principal amount of the 2022 Notes to be redeemed, plus accrued and unpaid interest, if any. In addition, calling any 2022 Note for redemption on or after December 22, 2020 will constitute a make-whole fundamental change (as defined in the 2022 Notes Indenture) with respect to that 2022 Note, in which case the conversion rate applicable to the conversion of that Note, if it is converted in connection with the redemption, will be increased in certain circumstances as described in the 2022 Notes Indenture. In accounting for the issuance of the 2022 Notes, the Company separated the 2022 Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the par value of the 2022 Notes as a whole. The excess of the principal amount of the liability component over its carrying amount, referred to as the debt discount, is amortized to interest expense from the issuance date to June 15, 2022 (the first date on which the Company may be required to repurchase the 2022 Notes at the option of the holder). The equity component is not re-measured as long as it continues to meet the conditions for equity classification. The equity component related to the 2022 Notes was $62.4 million, net of issuance costs which was recorded in additional paid-in capital on the accompanying condensed consolidated balance sheet. In accounting for the transaction costs related to the issuance of the 2022 Notes, the Company allocated the total costs incurred to the liability and equity components of the 2022 Notes based on their relative values. Transaction costs attributable to the liability component are being amortized to interest expense over the five and a half year term of the 2022 Notes, and transaction costs attributable to the equity component are netted with the equity components in stockholders’ equity. The 2022 Notes consist of the following (in thousands): As of September 30, As of December 31, Liability component 2018 2017 Principal $ 275,000 $ 275,000 Less: Debt discount, net (1) (58,188) (67,630) Net carrying amount $ 216,812 $ 207,370 (1) Included in the accompanying consolidated balance sheets within convertible senior notes and amortized to interest expense over the expected life of the 2022 Notes using the effective interest rate method. The fair value of the 2022 Notes was approximately $569.1 million as of September 30, 2018. The Company estimates the fair value of its 2022 Notes utilizing market quotations for debt that have quoted prices in active markets. Since the 2022 Notes do not trade on a daily basis in an active market, the fair value estimates are based on market observable inputs based on borrowing rates currently available for debt with similar terms and average maturities, which are classified as Level 2 measurements within the fair value hierarchy. See Note 9, “Fair Value Measurements,” for definitions of hierarchy levels. As of September 30, 2018, the remaining contractual life of the 2022 Notes is approximately 3.8 years. The following table sets forth total interest expense recognized related to the 2022 Notes (in thousands): Quarters Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Contractual interest expense $ 2,079 $ 68 $ 6,170 $ 68 Amortization of debt discount 3,285 77 9,442 77 Total $ 5,364 $ 145 $ 15,612 $ 145 Effective interest rate of the liability component 10.0 % 10.0 % 10.0 % 10.0 % |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 12. Commitments and Contingencies Legal Matters The Company may become subject to legal proceedings, claims and litigation arising in the ordinary course of its business. At September 30, 2018, the Company is not a party to any material legal proceeding, and it is not aware of any pending or threatened litigation that would have a material adverse effect on its business, results of operations, cash flows or financial condition should such litigation be resolved unfavorably. The Company routinely assesses all of its litigation and threatened ligation as to the probability of ultimately incurring a liability and records its best estimate of the ultimate loss in situations where it assesses the likelihood of loss as probable and estimable. In this regard, the Company establishes accruals for various lawsuits, claims, investigations and proceedings when it is probable that an asset has been impaired, or a liability incurred at the date of the financial statements and the loss can be reasonably estimated. At September 30, 2018, the Company has established accruals for certain of its lawsuits, claims, investigations and proceedings based upon estimates of the most likely outcome in a range of loss or the minimum amounts in a range of loss if no amount within a range is a more likely estimate. The Company does not believe that at September 30, 2018 any reasonably possible losses in excess of the amounts accrued would be material to the unaudited consolidated financial statements. |
Common Stock and Stockholders'
Common Stock and Stockholders' Equity | 9 Months Ended |
Sep. 30, 2018 | |
Common Stock and Stockholders'Equity | |
Common Stock and Stockholders' Equity | Note 13. Common Stock and Stockholders’ Equity Capitalization Effective May 31, 2018, the authorized number of shares of the Company’s common stock was increased from 100,000,000 to 150,000,000 shares. Stock Plan and Stock Options The Company’s 2015 Incentive Award Plan (the “Plan”) provides for the issuance of incentive and non-statutory options and other equity-based awards to its employees and non‑employees. Options issued under the Plan are exercisable for periods not to exceed ten years, and vest and contain such other terms and conditions as specified in the applicable award document. Options to buy common stock are issued under the Plan, with exercise prices equal to the closing price of shares of the Company’s common stock on the New York Stock Exchange on the trading day immediately preceding the date of award. The Company had 2,008,287 shares available for grant at September 30, 2018. Activity under stock options is as follows (in thousands, except share and per share amounts and years): Weighted- Weighted- Average Number of Average Remaining Aggregate Shares Exercise Contractual Intrinsic Outstanding Price Life in Years Value Balance at December 31, 2017 8,393,888 $ 17.56 8.36 $ 145,810 Stock option grants 1,259,679 $ 42.07 — $ — Stock options exercised (1,822,119) $ 14.38 — $ — Stock options forfeited (213,063) $ 24.32 — $ — Stock options expired (2,100) $ 0.80 — $ — Balance at September 30, 2018 7,616,285 $ 22.19 8.02 $ 488,639 Vested or expected to vest at September 30, 2018 7,616,285 $ 22.19 8.02 $ 488,639 Exercisable at September 30, 2018 2,591,344 $ 14.04 7.09 $ 187,372 The total grant‑date fair value of stock options granted during the quarter and nine months ended September 30, 2018 was $2.3 million and $24.6 million, respectively. The total grant‑date fair value of stock options granted during the quarter and nine months ended September 30, 2017 was $18.5 million and $54.8 million, respectively. Stock‑Based Compensation All stock‑based awards to employees are measured based on the grant‑date fair value of the awards and are generally recognized on a straight line basis in the Company’s consolidated statement of operations over the period during which the employee is required to perform services in exchange for the award (generally requiring a four‑year vesting period for each award). The Company estimates the fair value of stock options granted using the Black‑Scholes option‑pricing model. The assumptions used in the Black‑Scholes option‑pricing model are determined as follows: Volatility. Since the Company does not have a trading history prior to July 2015 for its common stock, the expected volatility was derived from the historical stock volatilities of several unrelated public companies within its industry that it considers to be comparable to its business combined with the Company’s stock volatility over a period equivalent to the expected term of the stock option grants. Risk‑Free Interest Rate. The risk‑free interest rate is based on U.S. Treasury zero‑coupon issues with terms similar to the expected term on the options. Expected Term. The expected term represents the period that the stock‑based awards are expected to be outstanding. When establishing the expected term assumption, the Company utilizes historical data. Dividend Yield. The Company has never declared or paid any cash dividends and does not plan to pay cash dividends in the foreseeable future, and therefore, it used an expected dividend yield of zero. Forfeiture rate. The Company recognizes forfeitures as they occur. The fair value of each option grant was estimated on the date of grant using the Black‑Scholes option‑pricing model with the following assumptions and fair value per share: Nine Months Ended September 30, 2018 2017 Volatility 43.5% – 46.1% 45.1% – 47.7% Expected life (in years) 6.0 6.1 Risk-free interest rate 2.45% - 2.88% 1.81% - 2.30% Dividend yield – – Weighted-average fair value of underlying stock options $ 19.54 $ 11.83 For the quarter ended September 30, 2018 and 2017, the Company recorded compensation expense related to stock options granted of $6.4 million and $5.0 million, respectively. For the nine months ended September 30, 2018 and 2017, the Company recorded compensation expense related to stock options granted of $17.7 million and $12.2 million, respectively. As of September 30, 2018, the Company had $55.9 million in unrecognized compensation cost related to non‑vested stock options, which is expected to be recognized over a weighted‑average period of approximately 2.6 years. Restricted Stock Units In May 2017, the Company commenced issuing Restricted Stock Units (“RSU’s”) to employees and Board members under the 2017 Employment Inducement Incentive Award Plan. The fair value of the RSU’s is determined on the date of grant. On a monthly basis, the Company will record compensation expense in the consolidated statement of operations on a straight-line basis over the vesting period. The vesting period for employees and members of the Board of Directors ranges from one to four years. Activity under the RSU’s is as follows (in thousands, except share and per share amounts and years): Weighted-Average Grant Date Shares Fair Value Per Share Balance at December 31, 2017 633,115 $ 33.84 Granted 1,246,126 $ 42.38 Vested and issued (277,791) $ 34.56 Forfeited (82,085) $ 41.31 Balance at September 30, 2018 1,519,365 $ 40.31 Vested and unissued at September 30, 2018 72,000 $ 35.43 Non-vested at September 30, 2018 1,447,365 $ 40.31 The total grant‑date fair value of RSU’s granted during the quarter and nine months ended September 30, 2018 were $2.7 million and $52.8 million, respectively. The total grant-date fair value of RSU’s granted during the quarter and nine months ended September 30, 2017 was $6.9 million and $11.3 million, respectively. For the quarter ended September 30, 2018 and 2017, the Company recorded stock based compensation expense related to the RSU’s of $5.6 million and $0.8 million, respectively. For the nine months ended September 30, 2018 and 2017, the Company recorded stock based compensation expense related to the RSU’s of $12.7 million and $0.9 million, respectively. As of September 30, 2018, the Company had $48.1 million in unrecognized compensation cost related to non‑vested RSU’s, which is expected to be recognized over a weighted‑average period of approximately 2.3 years. Employee Stock Purchase Plan In July 2015, the Company adopted the 2015 Employee Stock Purchase Plan, or ESPP. A total of 645,258 shares of common stock were reserved for issuance under this plan as of September 30, 2018. The Company’s ESPP permits eligible employees to purchase common stock at a discount through payroll deductions during defined offering periods. Under the ESPP, the Company may specify offerings with durations of not more than 27 months and may specify shorter purchase periods within each offering. Each offering will have one or more purchase dates on which shares of its common stock will be purchased for employees participating in the offering. An offering may be terminated under certain circumstances. The price at which the stock is purchased is equal to the lower of 85% of the fair market value of the common stock at the beginning of an offering period or on the date of purchase. On May 8, 2018, the Company issued 56,453 shares under the ESPP. During 2017, the Company issued 127,510 shares under the ESPP. As of September 30, 2018, 461,295 shares remained available for issuance. For the quarter ended September 30, 2018 and 2017, the Company recorded stock-based compensation expense related to the ESPP of $0.2 million and $0.2 million, respectively. For the nine months ended September 30, 2018 and 2017, the Company recorded stock-based compensation expense related to the ESPP of $0.7 million and $0.5 million, respectively. As of September 30, 2018, the Company had $0.1 million in unrecognized compensation cost related to the ESPP, which is expected to be recognized over a weighted‑average period of approximately 0.1 years. Total compensation costs charged as an expense for stock‑based awards, including stock options, RSU’s and ESPP, recognized in the components of operating expenses are as follows (in thousands): Quarters Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Administrative and marketing $ 579 $ 315 $ 1,551 $ 798 Sales 2,065 1,293 5,641 2,894 Technology and development 1,588 852 4,466 2,048 General and administrative 7,963 3,506 19,428 7,888 Total stock-based compensation expense $ 12,195 $ 5,966 $ 31,086 $ 13,628 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Taxes | |
Income Taxes | Note 14. Income Taxes As a result of the Company’s history of net operating losses, the Company has provided for a full valuation allowance against its deferred tax assets for assets that are not more-likely-than-not to be realized. For the quarter and nine months ended September 30, 2018, the Company recognized an income tax benefit, for the indefinite lived NOL in the United States that is forecasted for the 2018 calendar year which is partially offset by timing differences with respect to the treatment of the amortization of tax deductible goodwill, as well as foreign related income. Income tax provisions recognized for the quarter and nine months ended September 30, 2017, were primarily attributable to the timing differences with respect to the treatment of the amortization of tax deductible goodwill. A majority of the Company’s operations, and resulting deferred tax assets, were generated in the United States. H.R. 1, commonly referred to as the Tax Cuts and Jobs Act, was enacted on December 22, 2017. The Tax Act included significant changes to the Internal Revenue Code of 1986, as amended, including amendments which significantly change the taxation of business entities. ASC 740, Accounting for Income Taxes, requires companies to recognize the effect of tax law changes in the period of enactment. The Company recognized the impact of the reduction in the U.S. statutory rate from 35% to 21% at December 31, 2017 as well as the impact of the mandatory repatriation, which was fully offset with a change in valuation allowance. Given the significance of the legislation, the Securities and Exchange Commission staff issued Staff Accounting Bulletin No. 118 (SAB 118), which clarifies accounting for income taxes under ASC 740 if information is not yet available or complete and provided for up to a one-year period in which to complete the required analyses and accounting. The Company is continuing to evaluate the impacts of the Tax Cuts and Jobs Act in accordance with SAB 118. Beginning with the quarter ended March 31, 2018, the Company is calculating tax expense based on the newly enacted U.S. statutory rate of 21%. The Tax Act includes a Base Erosion Anti-Abuse Tax, commonly referred to as BEAT, which imposes a minimum tax on certain deductible payments or accruals made to foreign affiliates in tax years beginning after December 31, 2017. The Company has determined that it is currently not subject to BEAT. The Tax Act imposes a minimum tax on global intangible low-taxed income, commonly referred to as GILTI. The Company does not expect to recognize any tax expense related to GILTI as it has net operating losses available and a full valuation allowance. In addition, the Tax Act imposes an interest expense limitation which disallows a portion of the interest deduction based on EBTIDA. While the disallowed interest deduction is deferred, there is no impact to tax expense due to the current year taxable loss and related valuation allowance. |
Sale of Assets
Sale of Assets | 9 Months Ended |
Sep. 30, 2018 | |
Sale of Assets | |
Sale of Assets | Note 15. Sale of Assets On June 29, 2018, the Company completed the sale of certain assets, primarily client contracts for services provided in the workers compensation field for total consideration of $5.5 million. The Company recorded a gain on this sale of approximately $1.4 million and $5.5 million which is included in the consolidated statements of operations for the quarter ended and nine months ended September 30, 2018, respectively. The gain on sale of $1.4 million recorded during the quarter ended September 30, 2018 results from potential contingencies that were fully settled during the quarter. |
Basis of Presentation and Pri_2
Basis of Presentation and Principles of Consolidations (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Basis Of Presentation And Principles Of Consolidation | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. In the opinion of the Company’s management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal recurring accruals and adjustments) necessary to present fairly the financial position, results of operations and cash flows of the Company at the dates and for the periods indicated. The interim results for the quarter and nine months ended September 30, 2018 are not necessarily indicative of results for the full 2018 calendar year or any other future interim periods. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Form 10-K for the year ended December 31, 2017. The unaudited consolidated financial statements include the results of Teladoc, its wholly owned subsidiaries, two professional associations and twenty two professional corporations and a service corporation (collectively, the “Association”). Teladoc Physicians, P.A. is party to several services agreements by and among it and the professional corporations pursuant to which each professional corporation provides services to Teladoc Physicians, P.A. Each professional corporation is established pursuant to the requirements of its respective domestic jurisdiction governing the corporate practice of medicine. The Company holds a variable interest in the Association which contracts with physicians and other health professionals in order to provide services to Teladoc. The Association is considered a variable interest entity (“VIE”) since it does not have sufficient equity to finance its activities without additional subordinated financial support. An enterprise having a controlling financial interest in a VIE, must consolidate the VIE if it has both power and benefits—that is, it has (1) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance (power) and (2) the obligation to absorb losses of the VIE that potentially could be significant to the VIE or the right to receive benefits from the VIE that potentially could be significant to the VIE (benefits). The Company has the power and rights to control all activities of the Association and funds and absorbs all losses of the VIE. Total revenue and net loss for the VIE were $11.6 million and $(4.5) million, respectively, for the quarter ended September 30, 2018 and $6.9 million and $(1.3) million, respectively, for the quarter ended September 30, 2017. Total revenue and net loss for the VIE were $40.6 million and $(2.5) million, respectively, for the nine months ended September 30, 2018 and $22.6 million and $(5.7) million, respectively, for the nine months ended September 30, 2017. The VIE’s total assets were $7.2 million and $4.5 million at September 30, 2018 and December 31, 2017, respectively. Total liabilities for the VIE were $41.7 million and $36.5 million at September 30, 2018 and December 31, 2017, respectively. The VIE’s total stockholders’ deficit was $34.5 million and $32.0 million at September 30, 2018 and December 31, 2017, respectively. The functional currency for each of the Company’s foreign subsidiaries is the local currency. All assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the exchange rate on the balance sheet date. Revenues and expenses are translated at the weighted average exchange rate during the period. Cumulative translation gains or losses are included in stockholders’ equity as a component of accumulated other comprehensive income (loss). The Company operates in a single reportable segment – health services. Revenue earned by foreign operations outside of the United States were $24.5 million and $8.7 million for the quarter ended September 30, 2018 and 2017, respectively. Revenue earned by foreign operations outside of the United States were $50.4 million and $8.7 million for the nine months ended September 30, 2018 and 2017, respectively. Long-lived assets from foreign operations totaled $419.1 million as of September 30, 2018 and $163.3 million as of December 31, 2017. All intercompany transactions and balances have been eliminated. The Company adopted ASU 2014-09, Revenue from Contracts with Customers during the quarter ended March 31, 2018. See Note 3 “Revenue” for further information. Additionally, the Company has included “Gain on Sale” in the consolidated statement of operations which consists of the gain on sale of assets of certain client contracts. There have been no other changes to the significant accounting policies described in the 2017 Form 10-K that have had a material impact on the consolidated financial statements and related notes. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In June 2018, the FASB issued ASU No. 2018-07, “Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting.” These amendments expand the scope of Topic 718, Compensation - Stock Compensation , which currently only includes share-based payments to employees , to include share-based payments issued to nonemployees for goods or services and the accounting is substantially aligned. The ASU supersedes Subtopic 505-50, Equity - Equity-Based Payments to Non-Employees. This standard is effective for public companies for annual periods beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted as long as ASU No. 2014-09 has been adopted by the Company. The Company has elected to early adopt this standard as of July 1, 2018 and t he adoption of ASU No. 2018-07 had no impact on the Company’s consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 outlines a comprehensive lease accounting model and supersedes the current lease guidance. The new guidance requires lessees to recognize lease liabilities and corresponding right-of-use assets for all leases with lease terms of greater than 12 months. It also changes the definition of a lease and expands the disclosure requirements of lease arrangements. The new guidance must be adopted using the modified retrospective approach and will be effective for the Company starting in the first quarter of fiscal 2019; early adoption is permitted. The Company is currently in the process of assessing the population for the new standard and evaluating the impact of the adoption of this standard on its consolidated financial statements. The Company anticipates the most significant impact will be from the recognition of right of use assets and lease liabilities for operating leases on the consolidated balance sheets and does not expect a material impact to the consolidated statements of operations . |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue | |
Schedule of disaggregation of revenue | The following table presents the Company’s revenues disaggregated by revenue source (in thousands): Quarters Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Subscription Access Fees: U.S. $ 72,521 $ 51,956 $ 198,607 $ 123,775 International 24,040 8,375 49,480 8,375 Visit Fee Revenue: U.S. 11,330 8,066 37,334 23,736 International 562 253 987 253 Visit Fee Only Revenue: U.S. 2,509 — 8,758 — Total Revenues $ 110,962 $ 68,650 $ 295,166 $ 156,139 |
Lease Abandonment (Tables)
Lease Abandonment (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Lease Abandonment | |
Schedule of lease abandonment liability | The current portion of the liability of $0.5 million was recorded in accrued expenses and other current liabilities and the non-current portion of the liability of $0.4 million was recorded in other liabilities in the consolidated balance sheet (in thousands): Balance January 1, 2018 $ — Charged to expense 1,479 Paid or settled (583) Balance September 30, 2018 $ 896 |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Business Acquisitions | |
Summary of identifiable assets acquired and liabilities assumed | Identifiable assets acquired and liabilities assumed (in thousands): Advance Medical BestDoctors Purchase price, net of cash acquired $ 351,694 $ 445,535 Less: Accounts receivable 8,553 11,205 Property and equipment, net 1,326 2,650 Other assets 3,675 2,483 Client relationships 100,763 112,810 Non-compete agreements 1,540 — Internal-use software 617 8,480 Trademarks 16,190 24,920 Favorable leases 203 — Accounts payable (361) (393) Deferred taxes (23,489) (11,800) Other liabilities (8,499) (12,337) Goodwill $ 251,176 $ 307,517 |
Schedule of unaudited pro forma revenue and net loss | Unaudited Pro Forma Unaudited Pro Forma Quarters Ended Nine Months Ended September 30, September 30, (in thousands) 2018 2017 2018 2017 Revenue $ 110,962 $ 88,338 $ 324,831 $ 254,075 Net loss $ (23,264) $ (32,209) $ (69,434) $ (69,433) |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Intangible Assets, Net | |
Schedule of finite lived intangible assets | Intangible assets, net consist of the following (in thousands): Weighted Average Useful Accumulated Net Carrying Remaining Life Gross Value Amortization Value Useful Life September 30, 2018 Client relationships 2 to 20 years $ 235,134 $ (29,723) $ 205,411 13.8 Non-compete agreements 1.5 to 5 years 5,010 (3,590) 1,420 2.6 Trademarks 3 to 15 years 42,235 (3,389) 38,846 14.0 Patents 3 years 200 (122) 78 1.1 Internal-use software and others 1.8 to 5 years 24,024 (12,945) 11,079 1.7 Intangible assets, net $ 306,603 $ (49,769) $ 256,834 13.3 December 31, 2017 Client relationships 2 to 10 years $ 136,362 $ (14,711) $ 121,651 9.3 Non-compete agreements 1.5 to 5 years 3,480 (3,143) 337 0.8 Trademarks 3 to 15 years 26,454 (1,502) 24,952 14.2 Patents 3 years 200 (72) 128 1.9 Internal-use software 2 to 5 years 20,312 (7,569) 12,743 1.7 Intangible assets, net $ 186,808 $ (26,997) $ 159,811 9.4 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill | |
Summary of goodwill | Goodwill consists of the following (in thousands): As of September 30, As of December 31, 2018 2017 Beginning balance $ 498,520 $ 188,184 Additions associated with acquisitions 251,176 307,517 Cumulative translation adjustment (5,634) 2,819 Goodwill $ 744,062 $ 498,520 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accrued Expenses and Other Current Liabilities | |
Schedule of accrued expenses and other current liabilities | Accrued expenses and other current liabilities consist of the following (in thousands): As of September 30, As of December 31, 2018 2017 Professional fees $ 3,343 $ 1,325 Consulting fees/provider fees 4,205 4,028 Client performance guarantees 2,722 2,617 Legal fees 519 759 Interest payable 4,068 367 Income tax payable 3,136 — Lease abandonment obligation - current 482 — Marketing 2,458 524 Earnout and compensation — 722 Printing and postage — 302 Deferred revenue 8,062 4,111 Other 3,591 4,602 Total $ 32,586 $ 19,357 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Measurements | |
Schedule assets and liabilities measured at fair value on a recurring basis | The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis using the above input categories (in thousands): September 30, 2018 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 457,554 $ — $ — $ 457,554 Short-term investments $ — $ 14,974 $ — $ 14,974 December 31, 2017 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 39,051 $ 3,766 $ — $ 42,817 Short-term investments $ — $ 79,489 $ — $ 79,489 Contingent liability (included in accrued expenses and other current liabilities and other liabilities) $ — $ — $ 666 $ 666 |
Schedule of reconciliation of company's Level 3 liabilities | Balance at December 31, 2017 $ 666 Payments (744) Change in fair value 78 Fair value at September 30, 2018 $ — |
Convertible Senior Notes (Table
Convertible Senior Notes (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
2025 Notes | |
Convertible Senior Notes | |
Summary of the Notes | The 2025 Notes consist of the following (in thousands): As of September 30, Liability component 2018 Principal $ 287,500 Less: Debt discount, net (1) (95,659) Net carrying amount $ 191,841 (1) Included in the accompanying consolidated balance sheets within convertible senior notes and amortized to interest expense over the expected life of the 2025 Notes using the effective interest rate method. |
Schedule of total interest expense recognized related to the Notes | The following table sets forth total interest expense recognized related to the 2025 Notes (in thousands): Quarters Ended Nine Months Ended September 30, September 30, 2018 2018 Contractual interest expense $ 996 $ 1,581 Amortization of debt discount 2,593 4,086 Total $ 3,589 $ 5,667 Effective interest rate of the liability component 7.9 % 7.9 % |
2022 Notes | |
Convertible Senior Notes | |
Summary of the Notes | The 2022 Notes consist of the following (in thousands): As of September 30, As of December 31, Liability component 2018 2017 Principal $ 275,000 $ 275,000 Less: Debt discount, net (1) (58,188) (67,630) Net carrying amount $ 216,812 $ 207,370 (1) Included in the accompanying consolidated balance sheets within convertible senior notes and amortized to interest expense over the expected life of the 2022 Notes using the effective interest rate method. |
Schedule of total interest expense recognized related to the Notes | The following table sets forth total interest expense recognized related to the 2022 Notes (in thousands): Quarters Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Contractual interest expense $ 2,079 $ 68 $ 6,170 $ 68 Amortization of debt discount 3,285 77 9,442 77 Total $ 5,364 $ 145 $ 15,612 $ 145 Effective interest rate of the liability component 10.0 % 10.0 % 10.0 % 10.0 % |
Common Stock and Stockholders_2
Common Stock and Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Common Stock and Stockholders'Equity | |
Summary of activity under stock options | Activity under stock options is as follows (in thousands, except share and per share amounts and years): Weighted- Weighted- Average Number of Average Remaining Aggregate Shares Exercise Contractual Intrinsic Outstanding Price Life in Years Value Balance at December 31, 2017 8,393,888 $ 17.56 8.36 $ 145,810 Stock option grants 1,259,679 $ 42.07 — $ — Stock options exercised (1,822,119) $ 14.38 — $ — Stock options forfeited (213,063) $ 24.32 — $ — Stock options expired (2,100) $ 0.80 — $ — Balance at September 30, 2018 7,616,285 $ 22.19 8.02 $ 488,639 Vested or expected to vest at September 30, 2018 7,616,285 $ 22.19 8.02 $ 488,639 Exercisable at September 30, 2018 2,591,344 $ 14.04 7.09 $ 187,372 |
Assumptions used for estimate of fair value of options | Nine Months Ended September 30, 2018 2017 Volatility 43.5% – 46.1% 45.1% – 47.7% Expected life (in years) 6.0 6.1 Risk-free interest rate 2.45% - 2.88% 1.81% - 2.30% Dividend yield – – Weighted-average fair value of underlying stock options $ 19.54 $ 11.83 |
Schedule of activity under the RSU's | Activity under the RSU’s is as follows (in thousands, except share and per share amounts and years): Weighted-Average Grant Date Shares Fair Value Per Share Balance at December 31, 2017 633,115 $ 33.84 Granted 1,246,126 $ 42.38 Vested and issued (277,791) $ 34.56 Forfeited (82,085) $ 41.31 Balance at September 30, 2018 1,519,365 $ 40.31 Vested and unissued at September 30, 2018 72,000 $ 35.43 Non-vested at September 30, 2018 1,447,365 $ 40.31 |
Components of operating expense charged for compensation cost expense | Total compensation costs charged as an expense for stock‑based awards, including stock options, RSU’s and ESPP, recognized in the components of operating expenses are as follows (in thousands): Quarters Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Administrative and marketing $ 579 $ 315 $ 1,551 $ 798 Sales 2,065 1,293 5,641 2,894 Technology and development 1,588 852 4,466 2,048 General and administrative 7,963 3,506 19,428 7,888 Total stock-based compensation expense $ 12,195 $ 5,966 $ 31,086 $ 13,628 |
Organization and Description _2
Organization and Description of Business (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 26, 2018 | May 08, 2018 | Dec. 04, 2017 | Jun. 27, 2017 | Jan. 24, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 |
Convertible Senior Notes | ||||||||
Net proceeds from offering | $ 279,147 | $ 263,722 | ||||||
2025 Notes | ||||||||
Convertible Senior Notes | ||||||||
Face amount | $ 287,500 | 287,500 | ||||||
Interest rate (as a percent) | 1.375% | |||||||
Net proceeds from offering | $ 279,100 | |||||||
Offering costs | $ 8,400 | |||||||
2022 Notes | ||||||||
Convertible Senior Notes | ||||||||
Face amount | $ 275,000 | $ 275,000 | $ 275,000 | |||||
Interest rate (as a percent) | 3.00% | |||||||
Net proceeds from offering | $ 263,700 | |||||||
Offering costs | $ 11,300 | |||||||
Follow-On Offering | ||||||||
Follow-On Offering | ||||||||
Issuance of stock (in shares) | 5,000,000 | 4,096,600 | 7,887,500 | |||||
Price of stock issued (in dollars per share) | $ 66.28 | $ 35 | $ 16.75 | |||||
Proceeds received, net of issuance costs | $ 330,900 | $ 134,700 | $ 123,900 | |||||
Offering expenses | $ 500 | |||||||
Underwriting discounts and commissions | 8,200 | 7,600 | ||||||
Other offering expenses | $ 500 | $ 600 |
Basis of Presentation and Pri_3
Basis of Presentation and Principles of Consolidation - VIE (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)item | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Variable interest entity | |||||
Number of professional associations consolidated as VIEs | item | 2 | ||||
Number of professional corporations consolidated as VIEs | item | 22 | ||||
Number of service corporations consolidated as VIEs | item | 1 | ||||
Primary beneficiary | |||||
Variable interest entity | |||||
Total revenue of VIEs | $ 11.6 | $ 6.9 | $ 40.6 | $ 22.6 | |
Net loss of VIEs | (4.5) | $ (1.3) | (2.5) | $ (5.7) | |
Assets of VIEs | 7.2 | 7.2 | $ 4.5 | ||
Liabilities of VIEs | 41.7 | 41.7 | 36.5 | ||
Deficit of VIEs | $ 34.5 | $ 34.5 | $ 32 |
Basis of Presentation and Pri_4
Basis of Presentation and Principles of Consolidation - Segment and Foreign Operations (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)segment | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Segment Information | |||||
Number of reportable segments | segment | 1 | ||||
Revenues | $ 110,962 | $ 68,650 | $ 295,166 | $ 156,139 | |
Foreign | |||||
Segment Information | |||||
Revenues | 24,500 | $ 8,700 | 50,400 | $ 8,700 | |
Long-lived assets | $ 419,100 | $ 419,100 | $ 163,300 |
Revenue - Other Disclosures (De
Revenue - Other Disclosures (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue | ||||
Contract term | 1 year | |||
Payment terms | 30 days | |||
Product and Service Concentration Risk | Revenue from Contract with Customer | Subscription Access Fees | ||||
Revenue | ||||
Concentration risk (as a percent) | 87.00% | 88.00% | 84.00% | 85.00% |
Revenue - Disaggregation and Ot
Revenue - Disaggregation and Other (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Revenue | |||||
Total Revenues | $ 110,962 | $ 295,166 | |||
Accounts receivable, net of allowance for doubtful accounts | 39,965 | 39,965 | $ 27,094 | ||
Net increase in deferred revenue | 4,000 | ||||
Member refunds issued relating to Company's direct-to-consumer behavioral health products | 600 | 2,200 | |||
United States | Subscription Access Fees | |||||
Revenue | |||||
Total Revenues | 72,521 | 198,607 | |||
United States | Visit Fee Revenue | |||||
Revenue | |||||
Total Revenues | 11,330 | 37,334 | |||
United States | Visit Fee Only Revenue | |||||
Revenue | |||||
Total Revenues | 2,509 | 8,758 | |||
Foreign | Subscription Access Fees | |||||
Revenue | |||||
Total Revenues | 24,040 | 49,480 | |||
Foreign | Visit Fee Revenue | |||||
Revenue | |||||
Total Revenues | $ 562 | $ 987 | |||
Before Adoption of ASU 2014-09, Topic 606 | |||||
Revenue | |||||
Total Revenues | $ 68,650 | $ 156,139 | |||
Before Adoption of ASU 2014-09, Topic 606 | United States | Subscription Access Fees | |||||
Revenue | |||||
Total Revenues | 51,956 | 123,775 | |||
Before Adoption of ASU 2014-09, Topic 606 | United States | Visit Fee Revenue | |||||
Revenue | |||||
Total Revenues | 8,066 | 23,736 | |||
Before Adoption of ASU 2014-09, Topic 606 | Foreign | Subscription Access Fees | |||||
Revenue | |||||
Total Revenues | 8,375 | 8,375 | |||
Before Adoption of ASU 2014-09, Topic 606 | Foreign | Visit Fee Revenue | |||||
Revenue | |||||
Total Revenues | $ 253 | $ 253 |
Lease Abandonment (Details)
Lease Abandonment (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Lease Abandonment | |
Current portion of lease abandonment | $ 482 |
Charged to expense | 1,479 |
Paid or settled | (583) |
Balance at end of year | 896 |
Lease abandonment. | Accrued expenses and other current liabilities | |
Lease Abandonment | |
Current portion of lease abandonment | 500 |
Lease abandonment. | Other noncurrent liabilities | |
Lease Abandonment | |
Noncurrent restructuring charges | $ 400 |
Business Acquisitions (Details)
Business Acquisitions (Details) - USD ($) $ in Thousands | May 31, 2018 | Jul. 14, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Less: | ||||||||
Goodwill | $ 744,062 | $ 744,062 | $ 498,520 | $ 188,184 | ||||
Pro forma information | ||||||||
Revenue | 110,962 | $ 88,338 | 324,831 | $ 254,075 | ||||
Net loss | (23,264) | $ (32,209) | (69,434) | $ (69,433) | ||||
Advance Medical | ||||||||
Business acquisition | ||||||||
Purchase price | $ 351,700 | |||||||
Cash acquired | $ 8,800 | |||||||
Equity consideration (in shares) | 1,344,387 | |||||||
Equity consideration | $ 68,600 | |||||||
Cash paid for acquisition | 291,900 | |||||||
Transaction costs associated with acquisition | 5,700 | |||||||
Identifiable assets acquired and liabilities assumed: | ||||||||
Purchase price, net of cash acquired | 351,694 | |||||||
Less: | ||||||||
Accounts receivable | 8,553 | |||||||
Property and equipment, net | 1,326 | |||||||
Other assets | 3,675 | |||||||
Accounts payable | (361) | |||||||
Deferred taxes | (23,489) | |||||||
Other liabilities | (8,499) | |||||||
Goodwill | 251,176 | |||||||
Pro forma information | ||||||||
Revenue of acquiree | 19,200 | 25,400 | ||||||
Net loss of acquiree | $ (1,100) | $ (1,000) | ||||||
Advance Medical | Client relationships | ||||||||
Less: | ||||||||
Finite-lived intangibles | 100,763 | |||||||
Advance Medical | Non-compete agreements | ||||||||
Less: | ||||||||
Finite-lived intangibles | 1,540 | |||||||
Advance Medical | Internal-use software | ||||||||
Less: | ||||||||
Finite-lived intangibles | 617 | |||||||
Advance Medical | Trademarks | ||||||||
Less: | ||||||||
Finite-lived intangibles | 16,190 | |||||||
Advance Medical | Favorable leases | ||||||||
Less: | ||||||||
Finite-lived intangibles | $ 203 | |||||||
Best Doctors | ||||||||
Business acquisition | ||||||||
Purchase price | $ 445,500 | |||||||
Cash acquired | $ 13,700 | |||||||
Equity consideration (in shares) | 1,855,078 | |||||||
Equity consideration | $ 66,200 | |||||||
Cash paid for acquisition | 375,000 | |||||||
Adjustments for working capital | 4,300 | |||||||
Transaction costs associated with acquisition | 9,100 | |||||||
Identifiable assets acquired and liabilities assumed: | ||||||||
Purchase price, net of cash acquired | 445,535 | |||||||
Less: | ||||||||
Accounts receivable | 11,205 | |||||||
Property and equipment, net | 2,650 | |||||||
Other assets | 2,483 | |||||||
Accounts payable | (393) | |||||||
Deferred taxes | (11,800) | |||||||
Other liabilities | (12,337) | |||||||
Goodwill | 307,517 | |||||||
Best Doctors | Client relationships | ||||||||
Less: | ||||||||
Finite-lived intangibles | 112,810 | |||||||
Best Doctors | Internal-use software | ||||||||
Less: | ||||||||
Finite-lived intangibles | 8,480 | |||||||
Best Doctors | Trademarks | ||||||||
Less: | ||||||||
Finite-lived intangibles | $ 24,920 |
Intangible Assets, Net - Summar
Intangible Assets, Net - Summary (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Intangible assets | |||||
Gross Value | $ 306,603 | $ 306,603 | $ 186,808 | ||
Accumulated Amortization | (49,769) | (49,769) | (26,997) | ||
Net Carrying Value | 256,834 | 256,834 | $ 159,811 | ||
Amortization expense for intangible assets | 8,900 | $ 5,300 | $ 22,900 | $ 9,200 | |
Weighted Average | |||||
Intangible assets | |||||
Weighted Average Remaining Useful Life | 13 years 3 months 18 days | 9 years 4 months 24 days | |||
Client relationships | |||||
Intangible assets | |||||
Gross Value | 235,134 | $ 235,134 | $ 136,362 | ||
Accumulated Amortization | (29,723) | (29,723) | (14,711) | ||
Net Carrying Value | 205,411 | $ 205,411 | $ 121,651 | ||
Client relationships | Minimum | |||||
Intangible assets | |||||
Useful life | 2 years | 2 years | |||
Client relationships | Maximum | |||||
Intangible assets | |||||
Useful life | 20 years | 10 years | |||
Client relationships | Weighted Average | |||||
Intangible assets | |||||
Weighted Average Remaining Useful Life | 13 years 9 months 18 days | 9 years 3 months 18 days | |||
Non-compete agreements | |||||
Intangible assets | |||||
Gross Value | 5,010 | $ 5,010 | $ 3,480 | ||
Accumulated Amortization | (3,590) | (3,590) | (3,143) | ||
Net Carrying Value | 1,420 | $ 1,420 | $ 337 | ||
Non-compete agreements | Minimum | |||||
Intangible assets | |||||
Useful life | 1 year 6 months | 1 year 6 months | |||
Non-compete agreements | Maximum | |||||
Intangible assets | |||||
Useful life | 5 years | 5 years | |||
Non-compete agreements | Weighted Average | |||||
Intangible assets | |||||
Weighted Average Remaining Useful Life | 2 years 7 months 6 days | 9 months 18 days | |||
Trademarks | |||||
Intangible assets | |||||
Gross Value | 42,235 | $ 42,235 | $ 26,454 | ||
Accumulated Amortization | (3,389) | (3,389) | (1,502) | ||
Net Carrying Value | 38,846 | $ 38,846 | $ 24,952 | ||
Trademarks | Minimum | |||||
Intangible assets | |||||
Useful life | 3 years | 3 years | |||
Trademarks | Maximum | |||||
Intangible assets | |||||
Useful life | 15 years | 15 years | |||
Trademarks | Weighted Average | |||||
Intangible assets | |||||
Weighted Average Remaining Useful Life | 14 years | 14 years 2 months 12 days | |||
Patents | |||||
Intangible assets | |||||
Gross Value | 200 | $ 200 | $ 200 | ||
Accumulated Amortization | (122) | (122) | (72) | ||
Net Carrying Value | 78 | $ 78 | $ 128 | ||
Useful life | 3 years | 3 years | |||
Patents | Weighted Average | |||||
Intangible assets | |||||
Weighted Average Remaining Useful Life | 1 year 1 month 6 days | 1 year 10 months 24 days | |||
Internal-use software and others | |||||
Intangible assets | |||||
Gross Value | 24,024 | $ 24,024 | |||
Accumulated Amortization | (12,945) | (12,945) | |||
Net Carrying Value | $ 11,079 | $ 11,079 | |||
Internal-use software and others | Minimum | |||||
Intangible assets | |||||
Useful life | 1 year 9 months 18 days | ||||
Internal-use software and others | Maximum | |||||
Intangible assets | |||||
Useful life | 5 years | ||||
Internal-use software and others | Weighted Average | |||||
Intangible assets | |||||
Weighted Average Remaining Useful Life | 1 year 8 months 12 days | ||||
Internal-use software | |||||
Intangible assets | |||||
Gross Value | $ 20,312 | ||||
Accumulated Amortization | (7,569) | ||||
Net Carrying Value | $ 12,743 | ||||
Internal-use software | Minimum | |||||
Intangible assets | |||||
Useful life | 2 years | ||||
Internal-use software | Maximum | |||||
Intangible assets | |||||
Useful life | 5 years | ||||
Internal-use software | Weighted Average | |||||
Intangible assets | |||||
Weighted Average Remaining Useful Life | 1 year 8 months 12 days |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Goodwill | |||||
Beginning balance | $ 498,520 | $ 188,184 | $ 188,184 | ||
Additions associated with acquisitions | 251,176 | 307,517 | |||
Cumulative translation adjustment | (5,634) | 2,819 | |||
Goodwill | $ 744,062 | 744,062 | $ 498,520 | ||
Impairment charges | $ 0 | $ 0 | $ 0 | $ 0 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Accrued Expenses and Other Current Liabilities | ||
Professional fees | $ 3,343 | $ 1,325 |
Consulting fees/provider fees | 4,205 | 4,028 |
Client performance guarantees | 2,722 | 2,617 |
Legal fees | 519 | 759 |
Interest payable | 4,068 | 367 |
Income tax payable | 3,136 | |
Lease abandonment obligation - current | 482 | |
Marketing | 2,458 | 524 |
Earnout and compensation | 722 | |
Printing and postage | 302 | |
Deferred revenue | 8,062 | 4,111 |
Other | 3,591 | 4,602 |
Total | $ 32,586 | $ 19,357 |
Fair Value Measurements - Recur
Fair Value Measurements - Recurring (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Fair Value | |||||
Fair Value, Assets, Level 1 to Level 2 Transfers, Amount | $ 0 | $ 0 | $ 0 | $ 0 | |
Fair Value, Assets, Level 2 to Level 1 Transfers, Amount | 0 | 0 | 0 | 0 | |
Fair Value, Liabilities, Level 1 to Level 2 Transfers, Amount | 0 | 0 | 0 | 0 | |
Fair Value, Liabilities, Level 2 to Level 1 Transfers, Amount | 0 | 0 | 0 | 0 | |
Fair value assets level 3 net transfers | 0 | 0 | 0 | 0 | |
Fair value liabilities level 3 net transfers | 0 | $ 0 | 0 | $ 0 | |
Recurring | |||||
Fair Value | |||||
Cash and cash equivalents | 457,554 | 457,554 | $ 42,817 | ||
Short-term investments | 14,974 | 14,974 | 79,489 | ||
Contingent liability | 666 | ||||
Level 1 | Recurring | |||||
Fair Value | |||||
Cash and cash equivalents | 457,554 | 457,554 | 39,051 | ||
Level 2 | Recurring | |||||
Fair Value | |||||
Cash and cash equivalents | 3,766 | ||||
Short-term investments | $ 14,974 | $ 14,974 | 79,489 | ||
Level 3 | Recurring | |||||
Fair Value | |||||
Contingent liability | $ 666 |
Fair Value Measurements - Level
Fair Value Measurements - Level 3 (Details) - Contingent Liability $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Reconciliation of Level 3 liabilities | |
Fair value at beginning of period | $ 666 |
Payments | (744) |
Change in fair value | $ 78 |
Revolving Credit Facility (Deta
Revolving Credit Facility (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2018 | Jul. 14, 2017 | |
Revolving Credit Facility | ||||
Repayment of debt | $ 46,191 | |||
New Term Loan Facility | ||||
Revolving Credit Facility | ||||
Maximum borrowings | $ 175,000 | |||
Repayment of debt | $ 175,000 | |||
New Revolving Credit Facility | ||||
Revolving Credit Facility | ||||
Amount outstanding | $ 0 | $ 0 | ||
Maximum borrowings | $ 10,000 |
Convertible Senior Notes - Due
Convertible Senior Notes - Due 2025 - Terms (Details) | May 08, 2018USD ($)Ditem$ / shares | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) |
Convertible Senior Notes | |||
Net proceeds from offering | $ 279,147,000 | $ 263,722,000 | |
2025 Notes | |||
Convertible Senior Notes | |||
Face amount | $ 287,500,000 | $ 287,500,000 | |
Interest rate (as a percent) | 1.375% | ||
Net proceeds from offering | $ 279,100,000 | ||
Offering costs | 8,400,000 | ||
Principal multiple amount used in the conversion of the debt instrument | $ 1,000 | ||
Convertible debt, conversion rate | 18.6621 | ||
Convertible debt, conversion price (in dollars per share) | $ / shares | $ 53.58 | ||
Trading day observation period used to determine the amount of cash and shares, if any, that are due upon conversion | item | 25 | ||
Convertible debt, equity component | $ 91,400,000 | ||
2025 Notes | At any time prior to close of business on the business day immediately preceding November 15, 2024 | |||
Convertible Senior Notes | |||
Principal multiple amount used in the conversion of the debt instrument | $ 1,000 | ||
Convertible debt, threshold, trading days | D | 20 | ||
Convertible debt, threshold, consecutive trading days | D | 30 | ||
Minimum percentage of common stock price as a percentage of the conversion price | 130.00% | ||
Convertible debt, number of business days, measurement period | D | 5 | ||
Convertible debt, number of consecutive trading days, measurement period | D | 10 | ||
Trading price expressed as a percentage of the last reported sales price and conversion rate after the specified consecutive trading day period | 98.00% | ||
2025 Notes | On or after May 22, 2022 | |||
Convertible Senior Notes | |||
Convertible debt, threshold, trading days | D | 20 | ||
Convertible debt, threshold, consecutive trading days | D | 30 | ||
Minimum percentage of common stock price as a percentage of the conversion price | 130.00% |
Convertible Senior Notes - Du_2
Convertible Senior Notes - Due 2025 - Summary (Details) - 2025 Notes - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2018 | May 08, 2018 |
Convertible Senior Notes | ||||
Principal | $ 287,500 | $ 287,500 | $ 287,500 | $ 287,500 |
Less: Debt discount, net | (95,659) | (95,659) | (95,659) | |
Net carrying amount | $ 191,841 | 191,841 | 191,841 | |
Remaining contractual life | 6 years 7 months 6 days | |||
Interest Expense | ||||
Contractual interest expense | 996 | 1,581 | ||
Amortization of debt discount | 2,593 | 4,086 | ||
Total | $ 3,589 | $ 5,667 | ||
Effective interest rate of the liability component (as a percent) | 7.90% | 7.90% | 7.90% | |
Level 2 | ||||
Convertible Senior Notes | ||||
Fair value | $ 491,900 | $ 491,900 | $ 491,900 |
Convertible Senior Notes - Du_3
Convertible Senior Notes - Due 2022 - Terms (Details) | Jun. 27, 2017USD ($)Ditem$ / shares | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) |
Convertible Senior Notes | ||||
Net proceeds from offering | $ 279,147,000 | $ 263,722,000 | ||
2022 Notes | ||||
Convertible Senior Notes | ||||
Face amount | $ 275,000,000 | $ 275,000,000 | $ 275,000,000 | |
Interest rate (as a percent) | 3.00% | |||
Net proceeds from offering | $ 263,700,000 | |||
Offering costs | 11,300,000 | |||
Principal multiple amount used in the conversion of the debt instrument | $ 1,000 | |||
Convertible debt, conversion rate | 22.7247 | |||
Convertible debt, conversion price (in dollars per share) | $ / shares | $ 44 | |||
Trading day observation period used to determine the amount of cash and shares, if any, that are due upon conversion | item | 25 | |||
Debt term | 5 years 6 months | |||
Convertible debt, equity component | $ 62,400,000 | |||
At any time prior to close of business on the business day immediately preceding June 15, 2022 | 2022 Notes | ||||
Convertible Senior Notes | ||||
Principal multiple amount used in the conversion of the debt instrument | $ 1,000 | |||
Convertible debt, threshold, trading days | D | 20 | |||
Convertible debt, threshold, consecutive trading days | D | 30 | |||
Minimum percentage of common stock price as a percentage of the conversion price | 130.00% | |||
Convertible debt, number of business days, measurement period | D | 5 | |||
Convertible debt, number of consecutive trading days, measurement period | D | 10 | |||
Trading price expressed as a percentage of the last reported sales price and conversion rate after the specified consecutive trading day period | 98.00% | |||
On or after December 22, 2020 | 2022 Notes | ||||
Convertible Senior Notes | ||||
Convertible debt, threshold, trading days | D | 20 | |||
Convertible debt, threshold, consecutive trading days | D | 30 | |||
Minimum percentage of common stock price as a percentage of the conversion price | 130.00% |
Convertible Senior Notes - Du_4
Convertible Senior Notes - Due 2022 - Summary (Details) - 2022 Notes - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Jun. 27, 2017 |
Convertible Senior Notes | |||||||
Principal | $ 275,000 | $ 275,000 | $ 275,000 | $ 275,000 | $ 275,000 | ||
Less: Debt discount, net | (58,188) | (58,188) | (58,188) | (67,630) | |||
Net carrying amount | $ 216,812 | 216,812 | 216,812 | $ 207,370 | |||
Remaining contractual life | 3 years 9 months 18 days | ||||||
Interest Expense | |||||||
Contractual interest expense | 2,079 | $ 68 | 6,170 | $ 68 | |||
Amortization of debt discount | 3,285 | 77 | 9,442 | 77 | |||
Total | $ 5,364 | $ 145 | $ 15,612 | $ 145 | |||
Effective interest rate of the liability component (as a percent) | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | ||
Level 2 | |||||||
Convertible Senior Notes | |||||||
Fair value | $ 569,100 | $ 569,100 | $ 569,100 |
Common Stock and Stockholders_3
Common Stock and Stockholders' Equity - Capitalization (Details) - USD ($) $ / shares in Units, $ in Millions | Jul. 26, 2018 | Dec. 04, 2017 | Jan. 24, 2017 | Sep. 30, 2018 | May 31, 2018 | May 30, 2018 | Dec. 31, 2017 |
Capitalization | |||||||
Number of common stock shares authorized | 150,000,000 | 150,000,000 | 100,000,000 | 100,000,000 | |||
Follow-On Offering | |||||||
Capitalization | |||||||
Issuance of stock (in shares) | 5,000,000 | 4,096,600 | 7,887,500 | ||||
Price of stock issued (in dollars per share) | $ 66.28 | $ 35 | $ 16.75 | ||||
Proceeds received, net of issuance costs | $ 330.9 | $ 134.7 | $ 123.9 | ||||
Underwriting discounts and commissions | 8.2 | 7.6 | |||||
Other offering expenses | $ 0.5 | $ 0.6 |
Common Stock and Stockholders_4
Common Stock and Stockholders' Equity - Stock Plan and Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Stock-Based Compensation | |||||
Vesting period | 4 years | ||||
Other disclosures | |||||
Compensation expense | $ 12,195 | $ 5,966 | $ 31,086 | $ 13,628 | |
Stock options | |||||
Stock-Based Compensation | |||||
Shares available for grant | 2,008,287 | 2,008,287 | |||
Aggregate Intrinsic Value | |||||
Grant-date fair value of stock options granted during the period | $ 2,300 | 18,500 | $ 24,600 | $ 54,800 | |
Fair value assumptions | |||||
Volatility, minimum (as a percent) | 43.50% | 45.10% | |||
Volatility, maximum (as a percent) | 46.10% | 47.70% | |||
Expected life (in years) | 6 years | 6 years 1 month 6 days | |||
Risk-free interest rate, minimum | 2.45% | 1.81% | |||
Risk-free interest rate, maximum | 2.88% | 2.30% | |||
Dividend yield (as a percent) | 0.00% | 0.00% | |||
Weighted-average fair value of the underlying stock options | $ 19.54 | $ 11.83 | |||
Other disclosures | |||||
Compensation expense | 6,400 | $ 5,000 | $ 17,700 | $ 12,200 | |
Unrecognized compensation cost | $ 55,900 | $ 55,900 | |||
Period over which unrecognized compensation cost is expected to be recognized | 2 years 7 months 6 days | ||||
Stock options | Maximum | |||||
Stock-Based Compensation | |||||
Exercisable period (in years) | 10 years | ||||
2015 Incentive Award Plan | |||||
Number of Shares Outstanding | |||||
Balance, beginning of period (in shares) | 8,393,888 | ||||
Stock option grants (in shares) | 1,259,679 | ||||
Stock option exercised (in shares) | (1,822,119) | ||||
Stock options forfeited (in shares) | (213,063) | ||||
Stock options expired (in shares) | (2,100) | ||||
Balance, end of period (in shares) | 7,616,285 | 7,616,285 | 8,393,888 | ||
Vested or expected to vest at end of period (in shares) | 7,616,285 | 7,616,285 | |||
Exercisable as of end of period (in shares) | 2,591,344 | 2,591,344 | |||
Weighted-Average Exercise Price | |||||
Balance, beginning of period (in dollars per share) | $ 17.56 | ||||
Stock option grants (in dollars per share) | 42.07 | ||||
Stock option exercised (in dollars per share) | 14.38 | ||||
Stock options forfeited (in dollars per share) | 24.32 | ||||
Stock options expired (in dollars per share) | 0.80 | ||||
Balance, end of period (in dollars per share) | $ 22.19 | 22.19 | $ 17.56 | ||
Vested or expected to vest at end of period (in dollars per share) | 22.19 | 22.19 | |||
Exercisable as of end of period (in dollars per share) | $ 14.04 | $ 14.04 | |||
Weighted-average remaining contractual life in Years | |||||
Weighted-average remaining contractual life (in years) | 8 years 7 days | 8 years 4 months 10 days | |||
Vested or expected to vest at end of period (in years) | 8 years 7 days | ||||
Exercisable as of end of period (in years) | 7 years 1 month 2 days | ||||
Aggregate Intrinsic Value | |||||
Aggregate Intrinsic Value | $ 488,639 | $ 488,639 | $ 145,810 | ||
Vested or expected to vest at end of period | 488,639 | 488,639 | |||
Exercisable as of end of period | $ 187,372 | $ 187,372 |
Common Stock and Stockholders_5
Common Stock and Stockholders' Equity - Restricted Stock Units (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Stock-Based Compensation | ||||
Vesting period | 4 years | |||
Other disclosures | ||||
Stock-based compensation | $ 12,195 | $ 5,966 | $ 31,086 | $ 13,628 |
RSU's | ||||
Shares | ||||
Outstanding at beginning of period (in shares) | 633,115 | |||
Granted (in shares) | 1,246,126 | |||
Vested and issued (in shares) | (277,791) | |||
Forfeited (in shares) | (82,085) | |||
Outstanding at end of period (in shares) | 1,519,365 | 1,519,365 | ||
Vested and unissued (in shares) | 72,000 | 72,000 | ||
Nonvested (in shares) | 1,447,365 | 1,447,365 | ||
Weighted-Average Grant Date Fair Value Per Share | ||||
Outstanding at beginning of period (in dollars per share) | $ 33.84 | |||
Granted (in dollars per share) | 42.38 | |||
Vested and issued (in dollars per share) | 34.56 | |||
Forfeited (in dollars per share) | 41.31 | |||
Outstanding at end of period (in dollars per share) | $ 40.31 | 40.31 | ||
Vested and unissued (in dollars per share) | 35.43 | 35.43 | ||
Non-vested (in dollars per share) | $ 40.31 | $ 40.31 | ||
Other disclosures | ||||
Grant date fair value of RSU's granted | $ 2,700 | 6,900 | $ 52,800 | 11,300 |
Stock-based compensation | 5,600 | $ 800 | 12,700 | $ 900 |
Unrecognized compensation cost related to non vested | $ 48,100 | $ 48,100 | ||
Period over which unrecognized compensation cost is expected to be recognized | 2 years 3 months 18 days | |||
Minimum | RSU's | ||||
Stock-Based Compensation | ||||
Vesting period | 1 year | |||
Maximum | RSU's | ||||
Stock-Based Compensation | ||||
Vesting period | 4 years |
Common Stock and Stockholders_6
Common Stock and Stockholders' Equity - Employee Stock Purchase Plan (Details) - USD ($) $ in Thousands | May 08, 2018 | Jul. 31, 2015 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 |
Employee Stock Purchase Plan | |||||||
Stock-based compensation | $ 12,195 | $ 5,966 | $ 31,086 | $ 13,628 | |||
ESPP | |||||||
Employee Stock Purchase Plan | |||||||
Shares reserved for issuance under the plan (in shares) | 645,258 | 645,258 | |||||
Maximum offering period | 27 months | ||||||
Stock purchase price as a percentage of fair value (as a percent) | 85.00% | ||||||
Issuance of common stock under employee stock purchase plan (in shares) | 56,453 | 127,510 | |||||
Remaining shares available for issuance under the plan (in shares) | 461,295 | 461,295 | |||||
Stock-based compensation | $ 200 | $ 200 | $ 700 | $ 500 | |||
Unrecognized compensation cost | $ 100 | $ 100 | |||||
Period over which unrecognized compensation cost is expected to be recognized | 1 month 6 days |
Common Stock and Stockholders_7
Common Stock and Stockholders' Equity - Compensation Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Compensation costs charged as an expense | ||||
Stock-based compensation | $ 12,195 | $ 5,966 | $ 31,086 | $ 13,628 |
Administrative And Marketing | ||||
Compensation costs charged as an expense | ||||
Stock-based compensation | 579 | 315 | 1,551 | 798 |
Sales | ||||
Compensation costs charged as an expense | ||||
Stock-based compensation | 2,065 | 1,293 | 5,641 | 2,894 |
Technology And Development | ||||
Compensation costs charged as an expense | ||||
Stock-based compensation | 1,588 | 852 | 4,466 | 2,048 |
General and administrative expenses | ||||
Compensation costs charged as an expense | ||||
Stock-based compensation | $ 7,963 | $ 3,506 | $ 19,428 | $ 7,888 |
Income Taxes (Details)
Income Taxes (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Income Taxes | ||
Corporate tax rate (as a percent) | 21.00% | 35.00% |
Sale of Assets (Details)
Sale of Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018 | Sep. 30, 2018 | |
Sale of Assets | ||
Consideration from sale of assets | $ 5,500 | |
Gain on sale of assets | $ 1,430 | $ 5,500 |