Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 01, 2019 | Jun. 29, 2018 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Upland Software, Inc. | ||
Entity Central Index Key | 0001505155 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding (in shares) | 21,494,738 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Small Business | false | ||
Entity Emerging Growth | true | ||
Entity Ex Period | true | ||
Entity Shell Company | false | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float (in dollars) | $ 568 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 16,738 | $ 22,326 |
Accounts receivable (net of allowance of $1,405 and $1,069 at December 31, 2018 and December 31, 2017, respectively) | 40,841 | 26,504 |
Deferred commissions, current | 2,633 | 0 |
Unbilled receivables | 3,694 | 891 |
Prepaid and other | 3,382 | 1,965 |
Total current assets | 67,288 | 51,686 |
Canadian tax credits receivable | 1,573 | 1,196 |
Property and equipment, net | 2,827 | 2,927 |
Intangible assets, net | 179,572 | 70,043 |
Goodwill | 225,322 | 154,607 |
Deferred commissions, noncurrent | 6,292 | 0 |
Other assets | 324 | 800 |
Total assets | 483,198 | 281,259 |
Current liabilities: | ||
Accounts payable | 3,494 | 3,887 |
Accrued compensation | 6,581 | 5,157 |
Accrued expenses and other current liabilities | 16,666 | 12,148 |
Deferred revenue | 57,626 | 43,807 |
Due to sellers | 17,267 | 7,839 |
Current maturities of notes payable (includes unamortized discount of $1,109 and $699 at December 31, 2018 and December 31, 2017, respectively) | 6,015 | 2,301 |
Total current liabilities | 107,649 | 75,139 |
Notes payable, less current maturities (includes unamortized discount of $2,381 and $1,969 at December 31, 2018 and December 31, 2017, respectively) | 273,713 | 108,843 |
Deferred revenue, noncurrent | 578 | 1,570 |
Noncurrent deferred tax liability, net | 13,311 | 3,262 |
Other long-term liabilities | 640 | 1,030 |
Total liabilities | 395,891 | 189,844 |
Stockholders’ equity: | ||
Preferred stock, $0.0001 par value; 5,000,000 shares authorized; no shares issued and outstanding as of December 31, 2018; no shares issued and outstanding as of December 31, 2017, respectively | 0 | 0 |
Common stock, $0.0001 par value; 50,000,000 shares authorized: 21,489,112 and 20,768,401 shares issued and outstanding as of December 31, 2018 and December 31, 2017, respectively) | 2 | 2 |
Additional paid-in capital | 180,481 | 174,944 |
Accumulated other comprehensive loss | (7,501) | (2,403) |
Accumulated deficit | (85,675) | (81,128) |
Total stockholders’ equity | 87,307 | 91,415 |
Total liabilities and stockholders’ equity | $ 483,198 | $ 281,259 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 1,405 | $ 1,069 |
Unamortized discount, current maturities | 1,109 | 699 |
Unamortized discount, noncurrent maturities | $ 2,381 | $ 1,969 |
Preferred Stock | ||
Preferred stock par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Preferred stock shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock shares issued (in shares) | 0 | 0 |
Preferred stock shares outstanding (in shares) | 0 | 0 |
Common Stock | ||
Par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Shares authorized (in shares) | 50,000,000 | 50,000,000 |
Shares issued (in shares) | 21,489,112 | 20,768,401 |
Shares outstanding (in shares) | 21,489,112 | 20,768,401 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue | $ 45,180 | $ 37,144 | $ 35,946 | $ 31,615 | $ 27,847 | $ 26,072 | $ 23,281 | $ 20,752 | $ 149,885 | $ 97,952 | $ 74,767 |
Cost of revenue | 15,012 | 12,083 | 10,849 | 10,645 | 9,503 | 9,113 | 8,003 | 7,028 | 48,589 | 33,647 | 27,565 |
Gross profit | 30,168 | 25,061 | 25,097 | 20,970 | 18,344 | 16,959 | 15,278 | 13,724 | 101,296 | 64,305 | 47,202 |
Operating expenses: | |||||||||||
Sales and marketing | 5,980 | 5,299 | 5,248 | 4,408 | 3,791 | 4,258 | 4,037 | 3,221 | 20,935 | 15,307 | 12,160 |
Research and development | 5,743 | 5,400 | 5,286 | 4,891 | 4,223 | 4,092 | 4,003 | 3,477 | 21,320 | 15,795 | 14,919 |
Refundable Canadian tax credits | (2) | (99) | (203) | (102) | 118 | (195) | (112) | (117) | (406) | (542) | (513) |
General and administrative | 8,566 | 8,011 | 8,464 | 7,000 | 5,727 | 5,084 | 6,576 | 5,904 | 32,041 | 23,291 | 18,286 |
Depreciation and amortization | 4,683 | 3,606 | 3,853 | 2,130 | 2,387 | 1,648 | 1,299 | 1,164 | 14,272 | 6,498 | 5,291 |
Acquisition-related expenses | 9,989 | 2,497 | 3,140 | 3,102 | 4,724 | 4,399 | 2,278 | 3,691 | 18,728 | 15,092 | 5,583 |
Total operating expenses | 34,959 | 24,714 | 25,788 | 21,429 | 20,734 | 19,286 | 18,081 | 17,340 | 106,890 | 75,441 | 55,726 |
Loss from operations | (4,791) | 347 | (691) | (459) | (2,390) | (2,327) | (2,803) | (3,616) | (5,594) | (11,136) | (8,524) |
Other expense: | |||||||||||
Interest expense, net | (4,518) | (3,118) | (3,143) | (2,494) | (2,210) | (2,277) | (1,160) | (935) | (13,273) | (6,582) | (2,781) |
Other income (expense), net | (816) | (744) | (524) | 303 | 549 | (130) | (18) | (112) | (1,781) | 289 | (678) |
Total other expense | (5,334) | (3,862) | (3,667) | (2,191) | (1,661) | (773) | (2,812) | (1,047) | (15,054) | (6,293) | (3,459) |
Loss before provision for income taxes | (10,125) | (3,515) | (4,358) | (2,650) | (4,051) | (3,100) | (5,615) | (4,663) | (20,648) | (17,429) | (11,983) |
Benefit from (provision for) income taxes | 11,927 | (735) | (872) | (511) | (257) | (406) | (196) | (951) | 9,809 | (1,296) | (1,530) |
Net income (loss) | 1,802 | (4,250) | (5,230) | (3,161) | (3,794) | (3,506) | (5,811) | (5,614) | $ (10,839) | $ (18,725) | $ (13,513) |
Net loss per common share: | |||||||||||
Net loss per common share, basic and diluted (in USD per share) | $ (0.54) | $ (1.02) | $ (0.82) | ||||||||
Weighted-average common shares outstanding, basic and diluted (in shares) | 19,985,528 | 18,411,247 | 16,472,799 | ||||||||
Subscription and support | |||||||||||
Revenue | 41,776 | 33,919 | 33,154 | 27,729 | 24,756 | 23,169 | 19,407 | 18,135 | $ 136,578 | $ 85,467 | $ 65,552 |
Cost of revenue | 13,486 | 10,566 | 9,580 | 9,249 | 8,148 | 7,737 | 6,676 | 5,893 | 42,881 | 28,454 | 22,734 |
Perpetual license | |||||||||||
Revenue | 678 | 915 | 683 | 1,626 | 1,050 | 856 | 1,746 | 694 | 3,902 | 4,346 | 1,650 |
Cost of revenue | 5,708 | 5,193 | 4,831 | ||||||||
Total product revenue | |||||||||||
Revenue | 42,454 | 34,834 | 33,837 | 29,355 | 25,806 | 24,025 | 21,153 | 18,829 | 140,480 | 89,813 | 67,202 |
Professional services | |||||||||||
Revenue | 2,726 | 2,310 | 2,109 | 2,260 | 2,041 | 2,047 | 2,128 | 1,923 | $ 9,405 | $ 8,139 | $ 7,565 |
Cost of revenue | $ 1,526 | $ 1,517 | $ 1,269 | $ 1,396 | $ 1,355 | $ 1,376 | $ 1,327 | $ 1,135 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (10,839) | $ (18,725) | $ (13,513) |
Foreign currency translation adjustment | (5,098) | 749 | 137 |
Comprehensive loss | $ (15,937) | $ (17,976) | $ (13,376) |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2015 | 15,746,288 | ||||
Beginning balance at Dec. 31, 2015 | $ 60,270 | $ 2 | $ 112,447 | $ (3,289) | $ (48,890) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock in business combination (in shares) | 1,344,463 | ||||
Issuance of common stock in business combination | 8,300 | 8,300 | |||
Issuance of stock under Company plans, net of shares withheld for tax (in shares) | 694,537 | ||||
Issuance of stock under Company plans, net of shares withheld for tax | (514) | (514) | |||
Stock-based compensation | 4,333 | 4,333 | |||
Other comprehensive loss | 137 | 137 | |||
Net loss | (13,513) | (13,513) | |||
Ending balance (in shares) at Dec. 31, 2016 | 17,785,288 | ||||
Ending balance at Dec. 31, 2016 | 59,013 | $ 2 | 124,566 | (3,152) | (62,403) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of stock under Company plans, net of shares withheld for tax (in shares) | 843,579 | ||||
Issuance of stock under Company plans, net of shares withheld for tax | (2,163) | (2,163) | |||
Issuance of stock, net of issuance costs (in shares) | 2,139,534 | ||||
Issuance of stock, net of issuance costs | 42,564 | 42,564 | |||
Stock-based compensation | 9,977 | 9,977 | |||
Other comprehensive loss | 749 | 749 | |||
Net loss | $ (18,725) | (18,725) | |||
Ending balance (in shares) at Dec. 31, 2017 | 20,768,401 | 20,768,401 | |||
Ending balance at Dec. 31, 2017 | $ 91,415 | $ 2 | 174,944 | (2,403) | (81,128) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock in business combination (in shares) | 911 | ||||
Issuance of common stock in business combination | (61) | (61) | |||
Issuance of stock under Company plans, net of shares withheld for tax (in shares) | 719,800 | ||||
Issuance of stock under Company plans, net of shares withheld for tax | (8,511) | (8,511) | |||
Issuance of stock, net of issuance costs | (21) | (21) | |||
Stock-based compensation | 14,130 | 14,130 | |||
Other comprehensive loss | (5,098) | (5,098) | |||
Net loss | $ (10,839) | (10,839) | |||
Ending balance (in shares) at Dec. 31, 2018 | 21,489,112 | 21,489,112 | |||
Ending balance at Dec. 31, 2018 | $ 87,307 | $ 2 | $ 180,481 | $ (7,501) | $ (85,675) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating activities | |||
Net loss | $ (10,839) | $ (18,725) | $ (13,513) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Depreciation and amortization | 21,347 | 11,914 | 9,794 |
Deferred income taxes | 268 | (262) | 529 |
Amortization of deferred commissions | 2,367 | 0 | 0 |
Foreign currency re-measurement (gain) loss | 305 | (382) | (64) |
Non-cash interest and other expense | 874 | 592 | 327 |
Non-cash stock compensation expense | 14,130 | 9,977 | 4,333 |
Loss on disposal of business | 0 | 0 | 746 |
Non-cash loss on retirement of fixed assets | 0 | (19) | 276 |
Changes in operating assets and liabilities, net of purchase business combinations: | |||
Accounts receivable | (5,212) | (4,710) | (361) |
Prepaids and other | (2,798) | 1,555 | 648 |
Accounts payable | (3,399) | 1,254 | (1,453) |
Accrued expenses and other liabilities | (17,615) | 3,715 | 413 |
Deferred revenue | 7,919 | 2,807 | 2,200 |
Net cash provided by operating activities | 7,347 | 7,716 | 3,875 |
Investing activities | |||
Purchase of property and equipment | (935) | (396) | (670) |
Purchase of customer relationships | 0 | (55) | (408) |
Purchase business combinations, net of cash acquired | (160,751) | (110,324) | (12,151) |
Net cash used in investing activities | (161,686) | (110,775) | (13,229) |
Financing activities | |||
Payments on capital leases | (1,136) | (1,497) | (1,683) |
Proceeds from notes payable, net of issuance costs | 172,397 | 74,538 | 30,992 |
Payments on notes payable | (4,689) | (11,912) | (7,190) |
Taxes paid related to net share settlement of equity awards | (9,400) | (3,387) | 0 |
Issuance of common stock, net of issuance costs | 807 | 43,797 | (515) |
Additional consideration paid to sellers of businesses | (8,056) | (5,361) | (2,079) |
Net cash provided by financing activities | 149,923 | 96,178 | 19,525 |
Effect of exchange rate fluctuations on cash | (1,172) | 449 | 114 |
Change in cash and cash equivalents | (5,588) | (6,432) | 10,285 |
Cash and cash equivalents, beginning of period | 22,326 | 28,758 | 18,473 |
Cash and cash equivalents, end of period | 16,738 | 22,326 | 28,758 |
Supplemental disclosures of cash flow information: | |||
Cash paid for interest | 12,429 | 6,012 | 2,455 |
Cash paid for taxes | 3,348 | 1,782 | 488 |
Noncash investing and financing activities: | |||
Business combination consideration including holdbacks and earnouts | 17,713 | 9,132 | 5,100 |
Equipment acquired pursuant to capital lease obligations | 0 | 50 | 1,293 |
Issuance of common stock in business combination | $ 0 | $ 0 | $ 8,300 |
Organization and Nature of Oper
Organization and Nature of Operations | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Operations | 1. Organization and Nature of Operations Upland Software, Inc. (“Upland” or the “Company”) is a provider of cloud-based enterprise work management software. Upland’s software applications help organizations better optimize the allocation and utilization of their people, time, and money. Upland provides a family of cloud-based enterprise work management software applications for the information technology, process excellence, finance, professional services, and marketing functions within organizations. Upland’s software applications address a broad range of enterprise work management needs, from strategic planning to task execution. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of P resentation These consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States, or GAAP. The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Certain prior period amounts have been reclassified to conform to the current period presentation. Use of Estimates The preparation of the accompanying consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses. Significant items subject to such estimates include those related to revenue recognition, deferred commissions, allowance for doubtful accounts, stock-based compensation, acquired intangible assets, the useful lives of intangible assets and property and equipment, and income taxes. In accordance with GAAP, management bases its estimates on historical experience and on various other assumptions that management believes are reasonable under the circumstances. Management regularly evaluates its estimates and assumptions using historical experience and other factors; however, actual results could differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents consist of cash deposits and liquid investments with original maturities of three months or less when purchased. Cash equivalents are stated at cost, which approximates market value, because of the short maturity of these instruments. Accounts Receivable and Allowance for Doubtful Accounts The Company extends credit to the majority of its customers. Issuance of credit is based on ongoing credit evaluations by the Company of customers’ financial condition and generally requires no collateral. Trade accounts receivable are recorded at the invoiced amount and do not bear interest. Invoices generally require payment within 30 days from the invoice date. The Company generally does not charge interest on past due payments, although the Company's contracts with its customers usually allow it to do so. The Company maintains an allowance for doubtful accounts to reserve for potential uncollectible receivables. The allowance is based upon the creditworthiness of the Company’s customers, the customers’ historical payment experience, the age of the receivables and current market conditions. Provisions for potentially uncollectible accounts are recorded in sales and marketing expenses. The Company writes off accounts receivable balances to the allowance for doubtful accounts when it becomes likely that they will not be collected. The following table presents the changes in the allowance for doubtful accounts (in thousands): Year Ended December 31, 2018 2017 2016 Balance at beginning of year $ 1,069 $ 658 $ 581 Provision 875 1,069 863 Divestitures — — (230 ) Writeoffs, net of recoveries (539 ) (658 ) (556 ) Balance at end of year $ 1,405 $ 1,069 $ 658 Concentrations of Credit Risk and Significant Customers Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents and accounts receivable. The Company’s cash and cash equivalents are placed with high-quality financial institutions, which, at times, may exceed federally insured limits. The Company has not experienced any losses in these accounts, and the Company does not believe it is exposed to any significant credit risk related to cash and cash equivalents. The Company provides credit, in the normal course of business, to a number of its customers. The Company performs periodic credit evaluations of its customers and generally does not require collateral. No individual customer represented more than 10% of total revenues nor more than 10% of accounts receivable in the years ended December 31, 2018 , 2017 , or 2016 . Property and Equipment Property and equipment are carried at cost, less accumulated depreciation and amortization. Depreciation of property and equipment is computed using the straight-line method over each asset’s useful life. Leasehold improvements are amortized over the shorter of the lease term or of the estimated useful lives of the related assets. Upon retirement or disposal, the cost of each asset and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is credited or charged to income. Repairs, maintenance, and minor replacements are expensed as incurred. The estimated useful lives of property and equipment are as follows: Computer hardware and equipment 3 - 5 years Purchased software and licenses 3 - 5 years Furniture and fixtures 7 years Leasehold improvements Lesser of estimated useful life or lease term Business Combinations We apply the provisions of ASC 805, Business Combinations, in accounting for our acquisitions which requires the acquisition purchase price to be allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition dates. The excess of the purchase price over these estimated fair values is recorded to goodwill. Significant estimates and assumptions, including fair value estimates, are used to determine the fair value of assets acquired, liabilities assumed and contingent consideration transfered as well as the useful lives of long-lived assets acquired. During the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill based on changes to our intial estimates and assumptions. Upon conclusion of the measurement period or final determination of the values of assets acquired and liabilities assumed, whichever comes first, any subsequent adjustments are recorded to acquisition related expenses in our consolidated statement of operations. Tangible assets are valued at their respective carrying amounts, which approximates their estimated fair value. The valuation of identifiable intangible assets reflects management’s estimates based on, among other factors, use of established valuation methods. Customer relationships are valued using an income approach, which estimates fair value based on the earnings and cash flow capacity of the subject asset. The value of the marketing-related intangibles is determined using a relief-from-royalty method, which estimates fair value based on the value the owner of the asset receives from not having to pay a royalty to use the asset. Developed technology is valued using a cost-to-recreate approach. The purchase price transfered in our acquisitions often contain holdback and contingent consideration provisions. Holdbacks are subject to reduction for indemnification claims and are typically payable within 12 to 18 months of the acquisition date. Contingent consideration typically includes earnout payments payable within 12 to 18 months of the date of acquisition based on attainment of certain performance goals. C ontingent consideration liabilities are recorded at fair value on the acquisition date and are remeasured periodically based on the then assessed fair value and adjusted if necessary. Holdback and contingent consideration liabilities are recorded in due to sellers in our consolidated balance sheet. Any changes in fair value of the contingent consideration subsequent to the measurement period are recorded to operating income (expense) in our statement of operations. Goodwill and Other Intangibles Goodwill is evaluated for impairment annually in October or more frequently when an event occurs or circumstances change that indicate the carrying value may not be recoverable. The events and circumstances considered by the Company include the business climate, legal factors, operating performance indicators and competition.The company adopted ASU 2017-04, Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment during the first quarter of 2018 which eliminated step 2 from the goodwill impairment test. As we operate as one reporting unit, the impairment test is performed at the consolidated entity level by comparing the estimated fair value of the Company to the its carrying value. We have elected to first assess qualitative factors to determine whether it is more likely than not that the fair value of our single reporting unit is less than its carrying value. Based on the qualitative assessment, if it is determined that it is more likely than not that the Company's fair value is less than its carrying value we would compare the carrying value of the Company's single reporting unit to its fair value and recognize any excess carrying value as an impairment loss. Determining the fair value of goodwill is subjective in nature and often involves the use of estimates and assumptions including, without limitation, use of estimates of future prices and volumes for our products, capital needs, economic trends and other factors which are inherently difficult to forecast. If actual results, or the plans and estimates used in future impairment analyses are lower than the original estimates used to assess the recoverability of these assets, we could incur impairment charges in a future period. The annual impairment test was performed as of October 31, 2018 . No impairment of goodwill was identified during the years ended December 31, 2018 , 2017 , or 2016 . Identifiable intangible assets consist of customer relationships, marketing-related intangible assets and developed technology. Intangible assets with definite lives are amortized over their estimated useful lives on a straight-line basis. The straight-line method of amortization represents the Company’s best estimate of the distribution of the economic value of the identifiable intangible assets. Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of intangible assets may not be recoverable. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used or any other significant adverse change that would indicate that the carrying amount of an asset or group of assets may not be recoverable. The Company evaluates the recoverability of intangible assets by comparing their carrying amounts to the future net undiscounted cash flows expected to be generated by the intangible assets. If such intangible assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the intangible assets exceeds the fair value of the assets. There were no impairments of our intangible assets during the years ended December 31, 2018 , 2017 or 2016 . Long-Lived Assets Long-lived assets are reviewed for impairment whenever events or circumstances indicate their carrying value may not be recoverable. When such events or circumstances arise, an estimate of future undiscounted cash flows produced by the asset, or the appropriate grouping of assets, is compared to the asset's carrying value to determine whether impairment exists. If the asset is determined to be impaired, the impairment loss is measured based on the excess of its carrying value over its fair value. Assets to be disposed of are reported at the lower of the carrying value or net realizable value. No indicators of impairment were identified during the years ended December 31, 2018 , 2017 , or 2016 . Software Development Costs Software development costs are expensed as incurred until the point the Company establishes technological feasibility. Technological feasibility is established upon the completion of a working model. Costs incurred by the Company between establishment of technological feasibility and the point at which the product is ready for general release are capitalized, subject to their recoverability, and amortized over the economic life of the related products. Because the Company believes its current process for developing its software products essentially results in the completion of a working product concurrent with the establishment of technological feasibility, no software development costs have been capitalized to date. There were no software development costs required to be capitalized under ASC 985-20, Costs of Software to be Sold, Leased or Marketed, and under ASC 350-40, Internal-Use Software. Canadian Tax Credits Canadian tax credits related to current expenses are accounted for as a reduction of the research and development costs. Such credits relate to the Company's operations in Canada and are not dependent upon taxable income. Credits are accrued in the year in which the research and development costs or the capital expenditures are incurred, provided the Company is reasonably certain that the credits will be received. The government credit must be examined and approved by the tax authorities, and it is possible that the amounts granted will differ from the amounts recorded. Debt Issuance Costs The Company capitalizes underwriting, legal, and other direct costs incurred related to the issuance of debt, which are recorded as a direct deduction from the carrying amount of the related debt liability and amortized to interest expense over the term of the related debt using the effective interest rate method. Upon the extinguishment of the related debt, any unamortized capitalized deferred financing costs are recorded to interest expense. In 2018 and 2017, the Company had no write offs of deferred financing costs and in 2016 the Company wrote off approximately $0.1 million of deferred financing costs associated with the expansion of its Wells Fargo facility. Fair Value of Financial Instruments The Company accounts for financial instruments in accordance with the authoritative guidance on fair value measurements and disclosures for financial assets and liabilities. This guidance defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and expands disclosures about fair value measurements. The guidance also establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include Level 1, defined as observable inputs, such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore, requiring an entity to develop its own assumptions. The Company’s financial instruments consist principally of cash and cash equivalents, accounts receivable, and accounts payable, long–term debt and warrant liabilities. The carrying value of cash and cash equivalents, accounts receivable, and accounts payable approximate fair value, primarily due to short maturities. The carrying values of the Company’s debt instruments approximated their fair value based on rates currently available to the Company. The carrying values of warrant liabilities are marked to the market at each reporting period. Revenue Recognition On January 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers . Refer to Note 12 Revenue Recognition for a detailed discussion of accounting policies related to revenue recognition, including deferred revenue and deferred commissions. Cost of Revenue Cost of revenue primarily consists of salaries and related expenses (e.g. bonuses, employee benefits, and payroll taxes) for personnel directly involved in the delivery of services and products directly to customers. Cost of revenue also includes the amortization of acquired technology. Customer Contract Acquisition Costs Costs associated with the acquisition or origination of customer contracts are expensed as incurred. Customer Relationship Acquisition Costs Costs associated with the acquisition or origination of customer relationships are capitalized as customer relationship assets as incurred and amortized over the estimated life of the customer relationship. Advertising Costs Advertising costs are expensed in the period incurred. Advertising expenses were $79,000 , $33,000 and $59,000 for the years ended December 31, 2018 , 2017 , or 2016 , respectively. Advertising costs are recorded in sales and marketing expenses in the accompanying consolidated statement of operations. Income Taxes The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities will be recognized in the period that includes the enactment date. A valuation allowance is established against the deferred tax assets to reduce their carrying value to an amount that is more likely than not to be realized. The Company has adopted a permanent reinvestment position whereby foreign earnings for foreign subsidiaries are expected to be reinvested and future earnings are not expected to be repatriated. As a result of this policy, no tax liability has been accrued in anticipation of future dividends from foreign subsidiaries. The Company accounts for uncertainty of income taxes based on a “more likely than not” threshold for the recognition and derecognition of tax positions, which includes the accounting for interest and penalties. Stock-Based Compensation We measure all share-based payments, including grants of options to purchase common stock and the issuance of restricted stock or restricted stock units to employees, service providers and board members, using a fair-value based method. We record forfeitures as they occur. The cost of services received from employees and non-employees in exchange for awards of equity instruments is recognized in the consolidated statement of operations based on the estimated fair value of those awards on the grant date and amortized on a straight-line basis over the requisite service period. We use the Black-Scholes option-pricing model to determine the fair values of stock option awards. For restricted stock and restricted stock units, fair value is based on the closing price of our common stock on the grant date. The Black-Scholes option pricing model used to compute share-based compensation expense requires extensive use of accounting judgment and financial estimates. Items requiring estimation include the expected term option holders will retain their vested stock options before exercising them, the estimated volatility of the Company’s common stock price over the expected term of each stock option, and the number of stock options that will be forfeited prior to the completion of their vesting requirements. Application of alternative assumptions could result in significantly different share-based compensation amounts being recorded in the financial statements. The following table summarizes the weighted-average grant-date fair value of options granted in 2018 , 2017 , and 2016 and the assumptions used to develop their fair values. As there was no public market for its common stock prior to November 2014, the Company estimates the volatility of its common stock based on the volatility of publicly traded shares of comparable companies' common stock. The Company's decision to use the volatility of comparable stock was based upon the Company's assessment that this information is more representative of future stock price trends than the Company's historical volatility. The Company estimates the expected term using the simplified method, which calculates the expected term as the midpoint between the vesting date and the contractual termination date of each award. The dividend yield assumption is based on historical and expected future dividend payouts. The risk-free interest rate is based on observed market interest rates appropriate for the term of each options. Year Ended December 31, 2018 2017 2016 Weighted average grant-date fair value of options $11.42 $7.47 $3.23 Expected volatility 33.4% 35.0% 42.5% Risk-free interest rate 2.8% 1.1% - 2.0% 1.2% Expected life in years 5.00 5.00 5.93 Dividend yield — — — Comprehensive Loss The Company utilizes the guidance in Accounting Standards Codification (ASC) Topic 220, Comprehensive Income, for the reporting and display of comprehensive loss and its components in the consolidated financial statements. Comprehensive loss comprises net loss and cumulative foreign currency translation adjustments. The accumulated comprehensive loss as of December 31, 2018 , 2017 , and 2016 was due to foreign currency translation adjustments. Foreign Currency Transactions The functional currency of our foreign subsidiaries are the local currencies. Results of operations for foreign subsidiaries are translated in United State dollars using the average exchange rates on a monthly basis during the year. The assets and liabilities of those subsidiaries are translated into United States dollars using the exchange rates in effect at the balance sheet date. The related translation adjustments are recorded in a separate component of stockholders' equity in accumulated other comprehensive loss. Foreign currency transaction gains and losses are included in other income (expense) in our statements of operations. For the year ended December 31, 2018 foreign currency transaction gains were $293,000 . For the years ended December 31, 2017 and 2016 foreign currency transaction losses were $178,000 , and $271,000 , respectively. We have a foreign currency denominated intercompany loan that was used to fund the acquisition of a foreign subsidiary during the year ended December 31, 2018. Due to the long-term nature of the loan, the foreign currency gains (losses) resulting from remeasurement are recognized as a component of accumulated other comprehensive income (loss). During the year ended December 31, 2018, a foreign currency translation adjustment of $1.4 million was recognized as a component of accumulated other comprehensive income (loss) related to this long-term intercompany loan. Recent Accounting Pronouncements Recently issued accounting pronouncements not yet adopted In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement, to eliminate, add and modify certain disclosure requirements for fair value measurements. Entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but public companies will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The guidance is effective for annual and interim periods beginning after December 15, 2019, but entities are permitted to early adopt either the entire standard or only the provisions that eliminate or modify the requirements. The Company is currently evaluating how to apply the new guidance. In January 2018, the FASB issued ASU 2018-02 Income Statement - Reporting Comprehensive Income (ASC 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (AOCI) , which gives entities the option to reclassify to retained earnings the tax effects resulting from the Tax Act related to items in Additional Other Comprehensive Income (AOCI) that the FASB refers to as having been “stranded” in AOCI. The guidance is effective for annual and interim periods beginning after December 15, 2018, and is applicable to the Company in 2019; however, early adoption is permitted. The Company is currently evaluating the effect that the adoption of ASU 2018-02 will have on its financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . The new standard supersedes the present U.S. GAAP standard on leases and requires substantially all leases to be reported on the balance sheet as right-of-use assets and lease obligations. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018, and interim reporting periods within those annual reporting periods. Early adoption is permitted and in the original guidance the modified retrospective application was required, however, in July 2018 the FASB issued ASU 2018-11 which permits entities with another transition method in which the effective date would be the date of initial application of transition. Under this optional transition method, we would recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. We expect to elect the optional transition method. We plan to adopt the new standard on its effective date of January 1, 2019. We anticipate adoption of the standard will not significantly impact results. We are evaluating the election of the practical expedients upon transition that would retain the lease classification and initial direct costs for any leases that exist prior to adoption of the standard. We are in the process of cataloging our existing lease contracts and implementing changes to our systems. We currently estimate $4.7 million to $6.2 million of right-of-use assets and lease liabilities will be recognized on our balances sheet as of January 1, 2019 primarily related to our office facilities. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments , which changes the impairment model for most financial assets. The new model uses a forward-looking expected loss method, which will generally result in earlier recognition of allowances for losses. ASU 2016-13 is effective for annual and interim periods beginning after December 15, 2019 and early adoption is permitted for annual and interim periods beginning after December 15, 2018. The Company is currently evaluating the effect that the adoption of ASU 2016-13 will have on its financial statements. Recently adopted accounting pronouncements In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (ASC 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement (“CCA“) That Is a Service Contract , which requires hosting arrangements that are service contracts to follow the guidance for internal-use software to determine which implementation costs can be capitalized. ASU 2018-15 is effective either prospectively or retrospectively for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. We early adopted ASU 2018-15 on a prospective basis during the fourth quarter of 2018. As a result of the adoption of ASU 2018-15 certain implementation costs related to CCAs that are service contracts will now be capitalized as “other assets” in the Company's consolidated balance sheet in accordance with ASC 350-40. All implementation costs related to these arrangements were previously expensed as incurred prior to adoption of ASU 2018-15. Capitalized implementation costs will be amortized to operating expense over the non-cancelbale term of the underlying agreement plus any reasonably certain renewal periods. There was no material impact to our financial statements upon adoption of ASU 2018-15. In June 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2018-07 Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting which simplifies the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees, with certain exceptions. For public business entities, the guidance is effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods, however, early adoption is permitted. Although nonemployee directors do not satisfy the definition of employee, under FASB guidance, the Company's nonemployee directors acting in their role as members of a board of directors are treated as employees as those directors were elected by the Company's shareholders. Therefore, awards granted to these nonemployee directors for their services as directors already were accounted for as employee awards. We adopted ASU 2018-07 during the second quarter of 2018 with no material impact on our financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , to replace existing revenue recognition rules with a single comprehensive model to use in accounting for revenue arising from contracts with customers. Under this ASU and the associated subsequent amendments (collectively, “ASC 606”), revenue is recognized when a customer obtains control of promised goods or services for an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. In addition, ASC 606 requires expanded disclosure of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted ASC 606 on January 1, 2018 for all contracts using the modified retrospective method. We recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of accumulated deficit. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. We expect the impact of the adoption of the new revenue standard to be immaterial to our net income on an ongoing basis. A majority of our sales revenue continues to be recognized ratably over the applicable term of the respective subscription or maintenance contracts. For most sales commissions formerly expensed as incurred, other than for perpetual license commissions which will continue to be expensed as incurred, we are now amortizing these costs to the consolidated statements of income over the shorter of 1) the expected life of our customer relationships, which we have determined to be approximately 6 years, or 2) the life of the related technology. For further discussion about the financial statement impact and changes to Significant Accounting Policies impacted by the adoption of 2014-09 (Topic 606) see Note 12 Revenue Recognition. In January 2017, the FASB issued ASU 2017-01, Clarifying the Definition of a Business , which revises the definition of a business and assists in the evaluation of when a set of transferred assets and activities is a business. ASU 2017-01 is effective for interim and annual reporting periods beginning after December 15, 2017, and should be applied prospectively. Early adoption is permitted under certain circumstances. The Company adopted ASU 2017-01 during the first quarter of 2018. No impact on the financial statements was recorded as a result of the adoption of ASU 2017-01. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment . ASU 2017-04 eliminates step two of the goodwill impairment test and specifies that goodwill impairment should be measured by comparing the fair value of a reporting unit with its carrying amount. Additionally, the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets should be disclosed. ASU 2017-04 is effective for annual or interim goodwill impairment tests performed in fiscal years beginning after December 15, 2019; early adoption is permitted. The Company adopted ASU 2017-04 during the first quarter of 2018. No impact on the financial statements was recorded as a result of the adoption of ASU 2017-04. In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments . ASU 2016-15 is intended to add or clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows and to eliminate the diversity in practice related to such cl |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | 3. Acquisitions We perform quantitative and qualitative analyses to determine the significance of each acquisition, to our consolidated financial statements. Based on these analyses the below acquisitions were deemed to be insignificant on an individual and cumulative basis, with the exception of Qvidian Corporation, a Delaware corporation (“Qvidian”) and Rapide Communication LTD, a private company limited by shares organized and existing under the laws of England and Wales doing business as Rant & Rave (“Rant & Rave”) . Refer to the pro formas disclosed below. 2018 Acquisitions On March 21, 2018, the Company’s wholly owned subsidiary, PowerSteering Software Limited, a limited liability company organized and existing under the laws of England and Wales (“PowerSteering UK”), completed its purchase of the shares comprising the entire issued share capital of Interfax Communications Limited (“Interfax”), an Irish-based software company providing secured cloud-based messaging solutions, including enterprise cloud fax and secure document distribution. In connection with this acquisition, the Company also acquired certain assets related to Interfax’s business from a United States based reseller of Interfax’s products. The purchase price consideration paid for Interfax was $33.6 million in cash at closing, net of cash acquired of $1.4 million , and a $5.0 million cash holdback payable over 18 months (subject to reduction for indemnification claims). Revenues recorded since the acquisition date through December 31, 2018 were approximately $12.1 million . In addition, in connection with the acquisition of Interfax, we acquired certain assets and customer relationships of their U.S. reseller (“Marketech”) for $2.0 million , excluding potential future earn-out payments of $1.0 million valued at $0.3 million as of the acquisition dated based on the probability of attainment of future performance-based goals. On June 27, 2018, the Company completed its purchase of RO Innovation, Inc. (“RO Innovation”), a cloud-based customer reference solution for creating, deploying, managing, and measuring customer reference and sales enablement content. The purchase price consideration paid was approximately $12.3 million in cash payable at closing, net of cash acquired of $0.2 million and a $1.8 million cash holdback payable in 12 months (subject to reduction for indemnification claims) and potential future earn-out payments for up to $7.5 million valued at $0.0 million as of the acquisition date based on the probability of attainment of future performance-based goals. Revenues recorded since the acquisition date through December 31, 2018 were approximately $3.0 million . On October 3, 2018, the Company’s wholly owned subsidiary, PowerSteering UK, completed its purchase of the shares comprising the entire issued voting share capital of Rant & Rave, a leading provider of cloud-based customer engagement solutions. The purchase price paid for Rant & Rave was $58.5 million in cash at closing, net of cash acquired, and a $6.5 million cash holdback payable in 12 months (subject to indemnification claims). Revenues recorded since the acquisition date through December 31, 2018 were approximately $5.4 million . The pro forma statements of operations data for years ended December 31, 2018 and December 31, 2017, shown in table below, give effect to the Rant & Rave acquisition, described above, as if it had occurred at January 1, 2017. These amounts have been calculated after applying our accounting policies and adjusting the results of Rant & Rave to reflect: the reversal and deferral of commissions expense, the costs of debt financing incurred to acquire Rant & Rave, the additional intangible amortization and the adjustments to acquired deferred revenue that would have been recognized assuming the fair value adjustments had been applied and incurred since January 1, 2017. This pro forma data is presented for informational purposes only and does not purport to be indicative of our future results of operations. The table below shows the Pro forma statements of operations data for the respective years ending December 31 (in thousands): 2018 2017 Revenue $ 167,450 $ 118,696 Net loss (1) $ (14,086 ) $ (24,867 ) (1) While some recurring adjustments impact the pro forma figures presented, the decrease in pro forma net loss compared to our net loss presented on the consolidated statements of operations for the year ended December 31, 2018 includes nonrecurring adjustment removing acquisition costs from 2018 and reflects these costs in the year ended 2017, the year the acquisition was assumed to be completed for pro forma purposes. On December 12, 2018, the Company completed its purchase of Adestra Ltd. (“Adestra”), a leading provider of enterprise-grade email marketing, transaction and automation software. The purchase price paid was $56.0 million in cash paid at closing, net of cash acquired, and a $4.2 million cash holdback payable in 12 months (subject to indemnification claims). Revenues recorded since the acquisition date through December 31, 2018 were approximately $0.6 million . 2017 Acquisitions On January 10, 2017, Upland completed its acquisition of Omtool, Ltd., an enterprise document capture, fax, and workflow solution company. The purchase price paid for Omtool was $19.3 million (net of cash acquired). On April 21, 2017, the Company acquired RightAnswers, Inc. (“RightAnswers”), a cloud-based knowledge management system. The purchase price was $17.4 million , in cash at closing (net of $0.1 million cash acquired) and a $2.5 million cash holdback payable in one year (subject to indemnification claims) and excludes potential future earn-out payments valued at $4.0 million at the date of acquisition tied to additional performance-based goals, towards which $1.0 million was paid in September 2017 and an additional final payment of $2.0 million was paid during the year ended December 31, 2018 . On July 12, 2017, the Company acquired Waterfall International Inc. (“Waterfall”), a cloud-based mobile messaging platform. The purchase price consideration paid was approximately $24.4 million in cash at closing (net of $0.4 million of cash acquired) and a $1.5 million cash holdback payable in 18 months (subject to reduction for indemnification claims). The foregoing excludes potential future earn-out payments valued at $3.0 million at the date of acquisition tied to performance-based conditions, towards which $2.2 million was paid during the year ended December 31, 2018 based on the final earn-out calculation. On November 16, 2017, Upland Software, Inc., a Delaware corporation (the “Company” or “Upland”) completed its acquisition of the entire issued voting share capital of Qvidian Corporation, a Delaware corporation (“Qvidian”), a Massachusetts-based provider of cloud-based RFP and sales-proposal automation software. The purchase price consideration paid by the Company was $50 million in cash. The pro forma statements of operations data for years ended December 31, 2017 and December 31, 2016, shown in table below, give effect to the Qvidian acquisition, described above, as if it had occurred at January 1, 2016. These amounts have been calculated after applying our accounting policies and adjusting the results of Qvidian to reflect: the costs of debt financing incurred to acquire Qvidian, the additional intangible amortization and the adjustments to acquired deferred revenue that would have been occurred assuming the fair value adjustments had been applied and incurred since January 1, 2016. This pro forma data is presented for informational purposes only and does not purport to be indicative of our future results of operations. The table below shows the Pro forma statements of operations data for the respective years ending December 31 (in thousands): 2017 2016 Revenue $ 115,707 $ 89,906 Net loss (1) $ (13,679 ) $ (14,370 ) (1) While some recurring adjustments impact the pro forma figures presented, the decrease in pro forma net loss compared to our net loss on the consolidated statements of operations for the year ended December 31, 2017 includes nonrecurring adjustment removing acquisition costs from 2017 and reflects these costs in the year ended 2016, the year the acquisition was assumed to be completed for pro forma purposes. 2016 Acquisitions On January 7, 2016, Upland completed its purchase of substantially all of the assets of LeadLander, Inc. (LeadLander), a website analytics provider. The purchase price consideration paid was approximately $8.0 million in cash payable at closing (net of approximately $0.4 million of cash acquired) and a $1.2 million cash holdback payable in 12 months (subject to indemnification claims), which was fully paid after December 31, 2016. In addition to the cash consideration described above, the Asset Purchase Agreement included a contingent share consideration component pursuant to which Upland issued an aggregate of $2.4 million in common stock on July 25, 2016. The Company also paid additional consideration of $2.4 million in March 2017 in cash to the selling shareholders of LeadLander based on the achievement of certain revenue targets during 2016 and 2017 and no further payments are expected to be made as of December 31, 2018. On March 14, 2016, Upland completed its purchase of substantially all of the assets of HipCricket, Inc., a cloud-based mobile messaging software provider. The consideration paid to the seller consisted of our issuance of one million shares of our common stock and the transfer of our EPM Live product business. The value of the shares on the closing date of the transaction was approximately $5.7 million and the fair value of our EPM Live product business was approximately $5.9 million . The Company recognized a loss on the transfer in conjunction with the EPM Live net asset value of approximately $0.7 million in Other expense, net. Prior to the transaction, HipCricket was owned by an affiliate of ESW Capital, LLC, which is a shareholder of Upland. Raymond James & Co. provided a fairness opinion to Upland in connection with the transaction. On April 27, 2016, Upland acquired Advanced Processing & Imaging, Inc., a content management platform driving workflow in governments and schools. The purchase price consideration consisted of $4.1 million in cash payable at closing (net of $0.1 million of cash acquired), and a $0.8 million cash holdback payable in 12 months (subject to indemnification claims). The Company recorded the purchase of the acquisitions described above using the acquisition method of accounting and, accordingly, recognized the assets acquired and liabilities assumed at their fair values as of the date of the acquisition. The purchase price allocations for the 2016 acquisitions of LeadLander, HipCricket, and API, the 2017 acquisitions of Omtool, RightAnswers, Waterfall and Qvidian and the 2018 acquisition of RO Innovation are final, and the 2018 acquisitions of Interfax, Rant & Rave and Adestra are preliminary as the Company has not obtained and evaluated all of the detailed information, including the valuation of assets acquired and liabilities assumed, necessary to finalize the opening balance sheet amounts in all respects. Management has recorded the preliminary purchase price allocations based upon acquired company information that is currently available. Management expects to finalize its purchase price allocations in the first half of 2019 for Interfax, Rant & Rave and Adestra. The following condensed table presents the preliminary and final acquisition-date fair value of the assets acquired and liabilities assumed for the acquisitions, as well as assets and liabilities (in thousands): Preliminary Finalized Adestra Rant & Rave Interfax RO Innovation Qvidian Waterfall Right Answers Omtool Year Acquired 2018 2018 2018 2018 2017 2017 2017 2017 Cash $ 145 $ 696 $ 1,396 $ 197 $ 468 $ 100 $ 139 $ 2,957 Accounts receivable 2,925 3,482 1,587 1,563 1,907 1,477 2,164 784 Other current assets 1,395 3,836 1,341 1,299 335 608 246 464 Property and equipment 796 131 286 15 108 23 408 58 Customer relationships 29,823 29,981 22,577 6,688 30,160 6,400 10,500 4,400 Trade name 992 1,099 649 111 227 110 180 170 Technology 6,696 6,565 5,236 1,670 5,739 2,800 2,300 3,180 Noncompetes — — 1,148 — — — — Goodwill 26,363 32,575 13,832 7,568 29,199 18,575 15,680 14,081 Other assets — — 14 — 8 — — 33 Total assets acquired 69,135 78,365 46,918 20,259 68,151 30,093 31,617 26,127 Accounts payable (543 ) (1,577 ) (737 ) (229 ) (388 ) (605 ) (139 ) (219 ) Accrued expense and other (1,916 ) (6,114 ) (2,817 ) (1,921 ) (403 ) (1,136 ) (2,108 ) (915 ) Deferred tax liabilities (5,680 ) (3,896 ) (3,364 ) (2,129 ) (7,971 ) — — — Deferred revenue (1,322 ) (2,019 ) — (1,817 ) (9,389 ) (1,220 ) (5,479 ) (2,779 ) Total liabilities assumed (9,461 ) (13,606 ) (6,918 ) (6,096 ) (18,151 ) (2,961 ) (7,726 ) (3,913 ) Total consideration $ 59,674 $ 64,759 $ 40,000 $ 14,163 $ 50,000 $ 27,132 $ 23,891 $ 22,214 During the measurement period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill based on changes to our estimates and assumptions. The significant measurement period adjustments booked during the twelve month period ended December 31, 2018 include the following. The change in the preliminary acquisition-date fair value of assets and liabilities for Qvidian was was primarily related to a $15.7 million increase in the estimated fair value of customer relationships due to a change in estimates upon completion of our final valuation. This change was partially offset by an $8.0 million increase to deferred tax liabilities attributable to completion of the analysis of the deferred tax assets and liabilities at the time of acquisition following finalization of the of the valuation. The change in the preliminary acquisition-date fair value of assets and liabilities for Interfax during the year ended December 31, 2018 was primarily related to a decrease of $5.7 million in the estimated fair value of customer relationships due to changes in estimates upon completion of our final valuation. The goodwill of $157.9 million for the above acquisitions is primarily attributable to the synergies expected to arise after the acquisition. Goodwill deductible for tax purposes is $11.3 million for our LeadLander acquisition, $8.0 million for HipCricket, $3.7 million for Waterfall, $2.4 million (at the time of the acquisition) for Interfax, and $2.5 million for RO Innovation. There was no Goodwill deductible for tax purposes for our API, Omtool, RightAnswers, Qvidian Rant & Rave and Adestra acquisitions. Total one-time transaction costs incurred with respect to acquisition activity in the years ended December 31, 2018, 2017, and 2016 were $7.5 million , $6.1 million , and $3.6 million , respectively. These costs are included in 'Acquisitions and related costs' in our consolidated statement of operations. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 4. Fair Value Measurements Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. GAAP sets forth a three–tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The three tiers are Level 1, defined as observable inputs, such as quoted market prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, which therefore requires an entity to develop its own assumptions. As of December 31, 2018 and 2017 the Company has contingent accrued earnout business acquisition consideration liabilities for which fair values are measured as Level 3 instruments. These contingent consideration liabilities were recorded at fair value on the acquisition date and are remeasured periodically based on the then assessed fair value and adjusted if necessary. The increases or decreases in the fair value of contingent consideration payable can result from changes in anticipated revenue levels or changes in assumed discount periods and rates. As the fair value measure is based on significant inputs that are not observable in the market, they are categorized as Level 3. Changes to the fair value of earnout liabilities are recorded to other expense, net. Liabilities measured at fair value on a recurring basis are summarized below (in thousands): Fair Value Measurements at December 31, 2018 Level 1 Level 2 Level 3 Total Liabilities: Earnout consideration liability $ — $ — $ 1,396 $ 1,396 Fair Value Measurements at December 31, 2017 Level 1 Level 2 Level 3 Total Liabilities: Earnout consideration liability $ — $ — $ 3,576 $ 3,576 As of December 31, 2018 the Level 3 earnout consideration liability consists of amounts associated with the acquisition Marketech in March 2018 and RO Innovations in June 2018 . Settlements of Level 3 earnout consideration for the year ended December 31, 2018 included a $2.0 million earnout paid in February 2018 for RightAnswers, all of which was accrued as of December 31, 2017 , and a $2.2 million earnout paid in November 2018 for Waterfall, which included $1.6 million that was accrued as of December 31, 2017 . The following table presents additional information about liabilities measured at fair value on a recurring basis and for which we have utilized significant unobservable (Level 3) inputs to determine fair value: December 31, 2018 2017 Beginning balance $ 3,576 $ 2,500 Remeasurement adjustments: (Gains) or losses included in earnings (1) 1,627 (617 ) Acquisitions and settlements: Acquisitions 321 5,226 Settlements (4,128 ) (3,533 ) Ending balance $ 1,396 $ 3,576 (1) Recorded as a component of other operating income (expense) in the Company's statement of operations. Quantitative Information about Level 3 Fair Value Measurements The significant unobservable inputs used in the fair value measurement of the Company's contingent consideration liabilities designated as Level 3 are as follows: Fair Value at December 31, 2018 Valuation Technique Significant Unobservable Inputs Contingent acquisition consideration: (Marketech and RO Innovation) $ 1,396 Binary option model Expected future annual revenue streams and probability of achievement Fair Value at December 31, 2017 Valuation Technique Significant Unobservable Inputs Contingent acquisition consideration: (RightAnswers and Waterfall) $ 3,576 Binary option model Expected future annual revenue streams and probability of achievement Sensitivity to Changes in Significant Unobservable Inputs As presented in the table above, the significant unobservable inputs used in the fair value measurement of contingent consideration related to business acquisitions are forecasts of expected future annual revenues as developed by the Company's management and the probability of achievement of those revenue forecast. Significant increases (decreases) in these unobservable inputs in isolation would likely result in a significantly (lower) higher fair value measurement. Debt The Company believes the carrying value of its long-term debt at December 31, 2018 approximates its fair value based on the variable interest rate feature or based upon interest rates currently available to the Company. The carrying value and estimated fair value of our debt at December 31, 2018 and December 31, 2017 is $283.2 million and $113.8 million , respectively, based on valuation methodologies using interest rates currently available to the Company which are Level 2 inputs. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | 5. Goodwill and Other Intangible Assets Changes in the Company’s goodwill balance for each of the two years in the period ended December 31, 2018 are summarized in the table below (in thousands): Balance at December 31, 2016 $ 69,097 Acquired in business combinations 88,819 Adjustment related to prior year business combinations 17 Adjustment related to finalization of business combinations (4,232 ) Foreign currency translation adjustment 906 Balance at December 31, 2017 $ 154,607 Acquired in business combinations 70,139 Adjustment related to prior year business combinations (7,051 ) Adjustment related to finalization of current year business combinations 8,685 Foreign currency translation adjustment (1,058 ) Balance at December 31, 2018 $ 225,322 Intangible assets, net, include the estimated acquisition-date fair values of customer relationships, marketing-related assets, and developed technology that the Company recorded as part of its business acquisitions purchases and from acquisitions of customer relationships. The following is a summary of the Company’s intangible assets, net (in thousands): Estimated Useful Gross Accumulated Net Carrying December 31, 2018 Customer relationships 1-10 $ 173,592 $ 30,650 $ 142,942 Trade name 1.5-10 6,113 3,334 2,779 Developed technology 4-7 48,943 16,049 32,894 Non-Compete Agreements 3 $ 1,148 $ 191 $ 957 Total intangible assets $ 229,796 $ 50,224 $ 179,572 Estimated Useful Life (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount December 31, 2017 Customer relationships 5-10 $ 69,061 $ 18,040 $ 51,021 Trade name 1.5 3,431 2,900 531 Developed technology 4-7 29,308 10,817 18,491 Total intangible assets $ 101,800 $ 31,757 $ 70,043 The following table summarizes the Company’s weighted-average amortization period, in total and by major finite-lived intangible asset class, for intangibles acquired during the year ended December 31 (in years): 2018 2017 2016 Customer relationships 9.8 9.0 9.3 Trade name 8.7 1.5 2.8 Developed technology 6.0 6.4 6.3 Non-Compete Agreements 3.0 0.0 0.0 Total weighted-average amortization period 9.0 8.2 8.0 The Company periodically reviews the estimated useful lives of its identifiable intangible assets, taking into consideration any events or circumstances that might result in either a diminished fair value or revised useful life. Management has determined there have been no other indicators of impairment or change in the useful life during the years ended December 31, 2018 , 2017 , and 2016 . Total amortization expense was $19.0 million and $9.6 million , and $7.2 million during the years ended December 31, 2018 , 2017 , and 2016 , respectively. Estim ated annual amortization expense for the next five years and thereafter is as follows (in thousands): Amortization Expense Year ending December 31: 2019 27,011 2020 24,912 2021 23,992 2022 21,691 2023 and thereafter 81,966 Total $ 179,572 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 6. Income Taxes The Tax Act was enacted in December 2017. The Tax Act significantly changes U.S. tax law by, among other things, lowering U.S. corporate income tax rates, implementing a territorial tax system and imposing a one-time transition tax on deemed repatriated earnings of foreign subsidiaries. The Tax Act reduced the U.S. corporate income tax rate from 35% to 21%, effective January 1, 2018. While the Tax Act provides for a modified territorial tax system, beginning in 2018, global intangible low-taxed income (“GILTI”) provisions will be applied providing an incremental tax on low taxed foreign income. The GILTI provisions require us to include in our U.S. income tax return foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary’s tangible assets. Under U.S. GAAP, the Company is allowed to make an accounting policy choice of either (1) treating taxes due on future U.S. inclusions in taxable income related to GILTI as a current-period expense when incurred (the “period cost method”) or (2) factoring such amounts into the Company’s measurement of its deferred taxes (the “deferred method”). The Company has selected the "period cost method" as its accounting policy with respect to the new GILTI tax rules. The Company's loss from continuing operations before income taxes for the years ended December 31, was as follows (in thousands): 2018 2017 2016 Loss before provision for income taxes: United States $ (23,350 ) $ (22,748 ) $ (14,242 ) Foreign 2,702 5,319 2,259 $ (20,648 ) $ (17,429 ) $ (11,983 ) The components of the provision (benefit) for income taxes attributable to continuing operations are as follows (in thousands): 2018 2017 2016 Current Federal $ 177 $ — $ — State 253 177 37 Foreign 2,328 1,381 964 Total Current $ 2,758 $ 1,558 $ 1,001 Deferred Federal $ (9,866 ) $ (168 ) $ 727 State (1,584 ) 128 131 Foreign (1,117 ) (222 ) (329 ) Total Deferred (12,567 ) (262 ) 529 (Benefit from) provision for income taxes $ (9,809 ) $ 1,296 $ 1,530 As of December 31, 2018 , the Company had U.S. federal net operating loss carryforwards of approximately $204.8 million and research and development credit carryforwards of approximately $3.5 million . The net operating loss and credit carryforwards will expire beginning in 2019, if not utilized. Utilization of the net operating losses and tax credits may be subject to substantial annual limitation due to the “change of ownership” provisions of the Internal Revenue Code of 1986. The annual limitation will result in the expiration of approximately $82.6 million of net operating losses and $3.5 million of credit carryforwards before utilization. As of December 31, 2018 we also had foreign net operating loss carryforwards of approximately $24.8 million , which carry forward indefinitely. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred taxes as of December 31 are as follows (in thousands): 2018 2017 2016 Deferred tax assets: Accrued expenses and allowances $ 1,871 $ 1,715 $ 993 Deferred revenue 4 — 573 Stock compensation 743 901 1,054 Net operating loss and tax credit carryforwards 33,579 26,810 24,895 Disallowed interest expense carryforwards 2,888 — — Capital expenses 205 294 307 Other 723 129 176 Valuation allowance for noncurrent deferred tax assets (15,507 ) (15,730 ) (24,588 ) Net deferred tax assets $ 24,506 $ 14,119 $ 3,410 Deferred tax liabilities: Deferred revenue — (401 ) — Prepaid expenses (61 ) (58 ) (31 ) Intangible assets (33,518 ) (15,298 ) (5,716 ) Goodwill (2,012 ) (1,214 ) (1,029 ) Tax credit carryforwards (302 ) (410 ) (38 ) Deferred commissions (1,924 ) — — Net deferred tax liabilities $ (37,817 ) $ (17,381 ) $ (6,814 ) Net deferred taxes $ (13,311 ) $ (3,262 ) $ (3,404 ) Due to the uncertainty surrounding the timing of realizing the benefits of its domestic favorable tax attributes in future tax returns, the Company has placed a valuation allowance against its domestic net deferred tax asset, exclusive of goodwill. During the year ended December 31, 2018 and 2017 , the valuation allowance decreased by approximately $0.2 million and $8.8 million, respectively, due primarily to operations, acquisitions, and the impact of changes in tax law. The valuation allowance change included a reduction of $10.1 million due to acquired net deferred tax liabilities as a result of domestic business combinations, which was recorded as an income tax benefit in the year ended December 31, 2018. At December 31, 2018 , we did not provide deferred income taxes on temporary differences resulting from earnings of certain foreign subsidiaries which are indefinitely reinvested. The reversal of these temporary differences could result in additional tax; however, it is not practicable to estimate the amount of any unrecognized deferred income tax liabilities at this time. Deferred income taxes are provided as necessary with respect to earnings that are not indefinitely reinvested. The Company’s provision for income taxes differs from the expected tax expense (benefit) amount computed by applying the statutory federal income tax rate to income before taxes due to the following: 2018 2017 2016 Federal statutory rate 21.0 % 34.0 % 34.0 % State taxes, net of federal benefit 4.6 % 4.7 % 1.2 % Tax credits 0.4 % 1.0 % (0.1 )% Effect of foreign operations (2.1 )% 2.1 % 1.1 % Stock compensation 12.3 % 7.9 % (1.7 )% Permanent items and other (6.6 )% (0.5 )% (1.6 )% Effect of Tax Act — % (43.7 )% — % Tax carryforwards not benefited 17.9 % (12.9 )% (45.7 )% 47.5 % (7.4 )% (12.8 )% Under ASC 740-10, Income Taxes - Overall, the Company periodically reviews the uncertainties and judgments related to the application of complex income tax regulations to determine income tax liabilities in several jurisdictions. The Company uses a “more likely than not” criterion for recognizing an asset for unrecognized income tax benefits or a liability for uncertain tax positions. The Company has determined it has the following unrecognized assets or liabilities related to uncertain tax positions as of December 31, 2018 . The Company does not anticipate any significant changes in such uncertainties and judgments during the next 12 months. To the extent the Company is required to recognize interest and penalties related to unrecognized tax liabilities, this amount will be recorded as an accrued liability, (in thousands). Balance at December 31, 2016 $ 705 Additional based on tax positions related to the current year — Additions for tax positions of prior years — Reductions for tax positions of prior years (225 ) Settlements — Balance at December 31, 2017 $ 480 Additional based on tax positions related to the current year — Additions for tax positions of prior years 1,526 Reductions for tax positions of prior years — Settlements — Balance at December 31, 2018 $ 2,006 Due to the existence of the valuation allowance, future changes in our unrecognized tax benefits will not materially impact the Company’s effective tax rate. If the Company were to recognize unrecognized tax benefits as of December 31, 2018 , $0.6 million would impact the effective tax rate. The Company’s assessment of its unrecognized tax benefits is subject to change as a function of the Company’s financial statement audit. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2018 , the Company had $0.2 million accrued interest or penalties related to uncertain tax positions. The Company and its subsidiaries file tax returns in the U.S. federal jurisdiction and in several state and foreign jurisdictions. The Company is no longer subject to U.S. federal income tax examinations for years ending before December 31, 2015 and is no longer subject to state and local or foreign income tax examinations by tax authorities for years ending before December 31, 2014. The Company is not currently under audit for federal, state or any foreign jurisdictions. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt | 7. Debt Long-term debt consisted of the following at December 31, 2018 and December 31, 2017 (in thousands): December 31, 2018 2017 Senior secured loans (includes unamortized discount of $3,490 and $2,668 at December 31, 2018 and December 31, 2017, respectively, based on an imputed interest rate of 6.8%) $ 279,728 $ 111,144 Less current maturities (6,015 ) (2,301 ) Total long-term debt $ 273,713 $ 108,843 Loan and Security Agreements Credit Facility On May 14, 2015, we entered into a credit agreement (the “Credit Facility”) between the Company, certain of its subsidiaries, and each of the lenders named in the Credit Facility. From time to time we enter into amendments to the Credit Facility typically to expand the available borrowing limit in order to fund the Company's acquisitions. During the year ended December 31, 2018 we entered into amendments six through nine (the “Amendments”) in connection with our 2018 acquisitions. The main provision of The Amendments provide for, among other things: • Expansion of the Credit Facility from $200 million as of December 31, 2017 to $400.0 million as of December 31, 2018 ; • A favorable adjustment to decrease the overall applicable interest rate for accounts outstanding under the Credit Facility; • A favorable adjustment to the leverage ratio to increase the amount of funded indebtedness to EBITDA (as defined in the Credit Facility); • A favorable increase to the recurring revenue ratio future draw condition to the delayed draw term loan facility; • A waiver of the requirement that Interfax Communications Limited, Data Guard Limited and Return Fax 2000 Limited become Canadian Guarantors and join the Canadian Guarantee and Security Agreement as Grantors; • Clarification of certain definitions within the Credit Facility; and • An increase in the fixed charge coverage ratio (as defined in the Credit Facility). Loans The Credit Facility, as amended, provides for a $400.0 million credit facility, including (i) a fully drawn $285.0 million term loan, (ii) a fully available $30.0 million delayed draw term loan commitment (the “DDTL”) , (iii) a fully available $30.0 million revolving loan commitment, and (iv) a $55.0 million uncommitted accordion. Specifically, the Credit Facility provides for $285.0 million of term debt comprised of (i) a fully drawn U.S. term loan facility in an aggregate principal amount of $279.8 million (the “U.S. Term Loan”), and (ii) a fully drawn Canadian term loan facility in an aggregate principal amount of $5.2 million (the “Canadian Term Loan”) (the Canadian Term Loan and the U.S. Term Loan together are referred to as the “Term Loans”). In addition, the Credit Facility also provides for revolvers of $30.0 million , comprised of (i) a U.S. revolving credit facility in an aggregate principal amount of up to $29.0 million (the “U.S. Revolver”), and (ii) a Canadian revolving credit facility in an aggregate principal amount of up to $1.0 million (the “Canadian Revolver”) (the Canadian Revolver and the U.S. Revolver are referred to as the “Revolver”). As of December 31, 2018 , there were no amounts drawn on its U.S. Revolver or Canadian Revolver loans outstanding under the Credit Facility, and there was $283.2 million outstanding on the Term Loans comprised of (i) $278.0 million in the U.S. Term Loan outstanding under the Credit Facility, and (ii) $5.2 million in the Canadian Term Loan outstanding under the Credit Facility. Terms of Term Loans Under the terms of the Credit Facility, as amended, the Term Loans are repayable, on a quarterly basis by an amount equal to 2.5% per annum on or before September 30, 2020, after which the remaining balance is payable on a straight-line basis by an amount equal to 5.0% per annum thereafter until the facility’s maturity date of August 2, 2022. The Amendments also, among other things, provides for updates to the following (i) a favorable adjustment to decrease the overall applicable interest rate for accounts outstanding under the Credit Facility by 50 to 150 basis points resulting in an effective interest rate as of December 31, 2018 6.40% down from the previous effective interest rate as of December 31, 2017 of approximately 7.0% ; (ii) a favorable adjustment to the leverage ratio to increase the amount of funded indebtedness to EBITDA (as defined in the Credit Facility) to 4.75 to 1.00 during 2018, along with additional leverage ratio improvements throughout the remainder of the loan term; (iii) a favorable increase to the recurring revenue ratio future draw condition to the delayed draw term loan facility from 1.25 :1.0 to 1.50 :1.0; and (iv) an increase in the fixed charge coverage ratio (as defined in the Credit Facility) from 1.10 to 1.25 . Also, the maximum amount of purchase consideration payable in respect of an individual permitted acquisition is $40.0 million and in respect of all permitted acquisitions is $175.0 million . In addition, the amount of permitted indebtedness to sellers of businesses is $20.0 million . Terms of Delay Draw Term Loan Pursuant to the terms of the Credit Facility, the $30.0 million DDTL is to be used to finance acquisitions. The DDTL, if all or a portion is drawn, is repayable, on a quarterly basis, by an amount equal to 2.5% per annum on or before September 30, 2020, after which the existing 5.0% per annum is due thereafter until the facility’s maturity date of August 2, 2022. Terms of Revolver Loans under the Revolver are available up to the lesser of (i) $30.0 million (the “Maximum Revolver Amount”) or (ii) the maximum facility amount of $345.0 million , less the sum of any amount of Revolver usage plus the outstanding balance of the Term Loans and other uses of the capacity made under the Credit Facility (such amount, the “Credit Amount”). The Revolver provides a subfacility whereby the Company may request letters of credit (the “Letters of Credit”) in an aggregate amount not to exceed, at any one time outstanding, $0.5 million and $0.25 million , from the U.S and Canadian facilities, respectively. The aggregate amount of outstanding Letters of Credit is reserved against the credit availability under the Maximum Revolver Amount and the Credit Amount. Loan s under the Revolver may be borrowed, repaid and reborrowed until August 2, 2022 (the “Maturity Date”), at which time all amounts borrowed under the Credit Facility must be repaid. Other Terms of Credit Facility At the option of the Company, U.S. loans accrue interest at a per annum rate based on (i) the U.S. base rate plus a margin ranging from 2.75% to 3.00% depending on the leverage ratio or (ii) the U.S. LIBOR rate determined in accordance with the Credit Facility (based on 1, 2, 3 or 6-month interest periods) plus a margin ranging from 3.75% to 4.00% depending on the leverage ratio. The U.S. base rate is a rate equal to the highest of (i) the federal funds rate plus a margin equal to 0.5% , the U.S. LIBOR rate for a 1-month interest period plus 1.0% , and (ii) Wells Fargo Capital Finance’s prime rate. At the option of the Company, the Canadian loans accrue interest at a per annum rate based on (i) the Canadian prime rate or the U.S. base rate plus a margin ranging from 2.75% to 3.00% depending on the leverage ratio or (ii) the U.S. LIBOR rate determined in accordance with the Credit Facility (based on 1, 2, 3 or 6-month interest periods) (or the Canadian Bankers' Acceptance (“Canadian BA”) rate determined in accordance with the Credit Facility for obligations in Canadian dollars) plus a margin ranging from 3.75% to 4.00% depending on the leverage ratio. Accrued interest on the loans will be paid monthly, or, with respect to loans that are accruing interest based on the U.S. LIBOR rate or Canadian BA rate, at the end of the applicable U.S. LIBOR or Canadian BA interest rate period. Lenders are entitled to a premium (the “Prepayment Premium”) in the event of certain prepayments as follows: (i) from August 2, 2017 to August 1, 2018, 2.0% times the sum of (a) the Maximum Revolver Amount plus (b) the outstanding principal amount of the Term Loans and DDTL on the date immediately prior to the date of the prepayment (such sum, the “Prepayment Amount”) and (ii) from August 2, 2018 to August 1, 2019, 1.0% times the Prepayment Amount and (iii) from August 2, 2019 to the Maturity Date, 0.0% times the Prepayment Amount. The Company may also be subject to prepayment fees in the case of commitment reductions of the Revolver and also may be obligated to prepay loans upon the occurrence of certain events. The Company is also obligated to pay other customary servicing fees, letter of credit fees and unused credit facility fees. The Credit Facility contains customary affirmative and negative covenants. The negative covenants limit the ability of the Company and its subsidiaries to, among other things (in each case subject to customary exceptions for a credit facility of this size and type): • Incur additional indebtedness or guarantee indebtedness of others; • Create liens on their assets; • Make investments, including certain acquisitions; • Enter into mergers or consolidations; • Dispose of assets; • Pay dividends and make other distributions on the Company’s capital stock, and redeem and repurchase the Company’s capital stock; • Enter into transactions with affiliates; and • Prepay indebtedness or make changes to certain agreements. There are certain financial covenants that became more restrictive starting June 30, 2019. If an event of default occurs, at the election of the Lenders, a default interest rate shall apply on all obligations during an event of default, at a rate per annum equal to 2.00% above the applicable interest rate. The Credit Facility permits the Company's to buyback up to $10.0 million of its capital stock, subject to restrictions includin g a minimum liquidity requirement of $25.0 million before and after any such buyback. Any borrowings and letters of credit pursuant to our Credit Facility are secured by substantially all of our assets, including our intellectual property. Interest Rate and Debt Discount Cash interest costs averaged 6.6% under the Credit Facility for the year ended December 31, 2018 . In addition, the Company incurred $1.7 million of financing costs associated with the Credit Facility in the year ended December 31, 2018 . These financing costs will be amortized to non-cash interest expense over the term of the Credit Facility. Seller Notes In May 2013, the Company issued seller notes payable in connection with the acquisition of FileBound. The notes had an aggregate principal amount of $3.5 million with 5% stated interest. $3.0 million of the notes were paid in May 2015, and $500,000 of the notes were paid in May 2016. Debt Maturities Under the terms of the Credit Facility, f uture debt maturities of long-term debt excluding debt discounts at December 31, 2018 are as follows, (in thousands): Year ending December 31: 2019 $ 7,125 2020 8,906 2021 14,250 2022 252,938 2023 — Thereafter — $ 283,219 |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | 8. Net Loss Per Share The following table sets for the computations of loss per share (in thousands, except share and per share amounts): December 31, 2018 2017 2016 Numerators: Net loss $ (10,839 ) $ (18,725 ) $ (13,513 ) Denominator: Weighted–average common shares outstanding, basic and diluted 19,985,528 18,411,247 16,472,799 Net loss per common share, basic and diluted $ (0.54 ) $ (1.02 ) $ (0.82 ) Due to the net losses incurred for the years ended December 31, 2018, 2017, and 2016 , basic and diluted loss per share were the same, as the effect of all potentially dilutive securities would have been anti-dilutive. The following table sets forth the anti-dilutive common share equivalents excluded from the weighted-average shares used to calculate diluted net loss per common share: December 31, 2018 2017 2016 Stock options 408,899 549,907 759,719 Restricted stock 997,014 1,047,480 839,477 Total anti–dilutive common share equivalents 1,405,913 1,597,387 1,599,196 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 9. Commitments and Contingencies Future minimum payments for operating and capital lease obligations and purchase commitments are as follows (in thousands): Capital Operating Purchase Commitments 2019 $ 605 $ 2,719 $ 6,273 2020 8 1,269 1,350 2021 — 720 675 2022 — 584 — 2023 — 489 — Thereafter — 702 — Total minimum lease payments 613 $ 6,483 $ 8,298 Less amount representing interest (81 ) Present value of capital lease obligations 532 Less current portion of capital lease obligations (544 ) Long-term capital lease obligations $ (12 ) Operating Leases The Company leases office space under operating leases that expire between 2019 and 2025. The terms of the Company's non-cancelable operating lease arrangements typically contain fixed rent increases over the term of the lease, rent holidays and provide for additional renewal periods. Rent expense on these operating leases is recognized over the term of the lease on a straight-line basis. The excess of rent expense over future minimum lease payments due has been reported in 'Accrued expenses and other current liabilities' and 'Other long-term liabilities' in the accompanying consolidated balance sheets. Total office rent expense for the years ended December 31, 2018, 2017, and 2016 were approximately $1.9 million , $3.8 million , and $2.1 million , respectively. The $3.8 million office r ent expense in 2017 includes approximately $2.3 million of transformation charges in conjunction with the closures of the Omtool & RightAnswers offices, the remainder represents $1.5 million in operating rent expense. The Company has entered into sublease agreements related to excess office space as a result of the Company's transformation activities connected to the Omtool and Right Answers acquisitions. Both sublease agreements end in 2020. For the years ended December 31, 2018, 2017, and 2016 the Company recognized rental income related to theses leases, as offsets to rental expense, of $0.3 million , $0.3 million and $0.0 million , respectively. Operating lease obligations in the future minimum payments table above do not include the impact of future rental income of $0.4 million related to these subleases as of December 31, 2018 . Capital Leases The current and long-term portion of capital lease obligations are recorded in other current liabilities and other long-term liabilities line items on the balance sheet, respectively. The Company's capital lease agreements are generally for four years and contain a bargain purchase option at the end of the lease term. Purchase Commitments The Company has an outstanding purchase commitment with Amazon Web Services (“AWS”) to support its cloud infrastructure in conjunction with the consolidation and elimination of a substantial portion of its physical cloud infrastructure formerly maintained around the United States, Canada and the UK. Total expense with AWS for the years ended December 31, 2018, 2017, and 2016 were approximately $3.9 million , $1.5 million , and $0.4 million , respectively. The Company has an outstanding purchase commitment in 2019 for software development services from DevFactory FZ-LLC (“DevFactory”) pursuant to a technology services agreement in the amount of $4.9 million . On March 28, 2017, the Company and DevFactory executed an amendment to extend the initial term of the agreement to December 31, 2021. Additionally, the Company amended the option for either party to renew annually for one additional year. The effective date of the amendment was January 1, 2017. For years after 2019 , the purchase commitment amount for software development services will be equal to the prior year purchase commitment increased (decreased) by the percentage change in total revenue for the prior year as compared to the preceding year. For example, if 2019 total revenues increase by 10% as compared to 2018 total revenues, then the 2020 purchase commitment will increase by approximately $0.5 million from the 2019 purchase commitment amount to approximately $5.4 million . Litigation In the normal course of business, the Company may become involved in various lawsuits and legal proceedings. While the ultimate results of these matters cannot be predicted with certainty, management does not expect them to have a material adverse effect on the consolidated financial position or results of operations of the Company. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | 10. Property and Equipment, Net Property and equipment consisted of the following (in thousands) at: December 31, 2018 2017 Equipment (including equipment under capital lease of $5,773 and $6,234 at December 31, 2018 and 2017, respectively) $ 10,703 $ 9,861 Furniture and fixtures 434 263 Leasehold improvements 1,012 769 Accumulated depreciation (including for equipment under capital lease of $4,962 and $4,329 at December 31, 2018 and 2017, respectively) (9,322 ) (7,966 ) Property and equipment, net $ 2,827 $ 2,927 Amortization of assets recorded under capital leases is included with depreciation expense. Depreciation and amortization expense on property and equipment was $2.3 million , $2.6 million and $2.7 million for the years ended December 31, 2018, 2017, and 2016 , respectively. The Company recorded no impairment of property and equipment and recorded losses on the disposal of property and equipment of $0.0 million , $0.0 million , and $0.2 million during the years ended December 31, 2018, 2017, and 2016 . |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | 11. Stockholders' Equity Common and Preferred Stock Our certificate of incorporation authorizes shares of stock as follows: 50,000,000 shares of common stock and 5,000,000 shares of preferred stock. The common and preferred stock have a par value of $0.0001 per share. No shares of preferred stock are issued or outstanding. Each share of common stock is entitled to one vote at all meetings of stockholders. The number of authorized shares of common stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of shares of capital stock of the Company representing a majority of the votes represented by all outstanding shares of capital stock of the Company entitled to vote. The holders of common stock are also entitled to receive dividends, when, if and as declared by our board of directors, whenever funds are legally available therefore, subject to the priority rights of any outstanding preferred stock. • In March 2016, the Company issued 1,000,000 shares of common stock valued at approximately $5,700,000 in connection with the acquisition of HipCricket, Inc. • In July, 2016, the Company issued 318,302 shares of common stock valued at approximately $2,400,000 in connection with the acquisition of LeadLander, Inc. • In November, 2016, the Company issued 24,587 shares of common stock valued at approximately $200,000 in connection with the acquisition of Ultriva, Inc. • On May 12, 2017, the Company filed a registration statement on Form S-3 (File No. 333-217977) (the “S-3”), to register Upland securities in an aggregate amount of up to $75.0 million for offerings from time to time. The S-3 was amended on May 22, 2017 and declared effective on May 26, 2017. On June 6, 2017, the Company completed a registered underwritten public offering pursuant to the S-3. The net proceeds of the offering were approximately $42.7 million , net of issuance costs, in exchange for 2,139,534 shares of common stock. • On December 12, 2018, the Company filed a registration statement on Form S-3 (File No. 333-228767) (the “Form S-3”), to register Upland securities in an aggregate amount of up to $250.0 million for offerings from time to time. In connection with the filing of the Form S-3 the Company withdrew its previous registration statement filed on May 12, 2017. Stock Compensation Plans The Company maintains two stock-based compensation plans, the 2010 Stock Option Plan (the “2010 Plan”) and the 2014 Stock Option Plan (the “2014 Plan”), which are described below. 2010 Plan At December 31, 2018 , there were 113,536 options outstanding under the 2010 Plan. Following the effectiveness of the Company’s 2014 Plan in November 2014, no further awards have been made under the 2010 Plan, although each option previously granted under the 2010 Plan will remain outstanding subject to its terms. Any such shares of common stock that are subject to awards under the 2010 Plan which are forfeited or lapse unexercised and would otherwise have been returned to the share reserve under the 2010 Plan instead will be available for issuance under the 2014 Plan. 2014 Plan In November 2014, the Company adopted the 2014 Plan, providing for the granting of incentive stock options, as defined by the Internal Revenue Code, to employees and for the grant of non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units, performance units and performance shares to employees, directors and consultants. The 2014 Plan also provides for the automatic grant of option awards to our non-employee directors. As of December 31, 2018 , there were 295,363 options outstanding under the 2014 Plan, and shares of common stock reserved for issuance under the 2014 Plan consist of 623,000 shares. In addition, the number of shares available for issuance under the 2014 Plan will be increased annually in an amount equal to the least of (i) 4% of the outstanding Shares on the last day of the immediately preceding Fiscal Year or (ii) such number of Shares determined by the Board. At December 31, 2018 , there were 997,014 restricted stock shares outstanding under the 2014 Plan. Under both the 2010 Plan and 2014 Plan options granted to date generally vest over a four or three year period, with a maximum term of ten years. The Company also grants restricted stock awards (“RSAs”) which generally vest annually over a three or four year period. Shares issued upon any stock option exercise and restricted under the 2010 Plan or 2014 Plan will be issued from the Company's authorized but unissued shares. Stock Option Activity A summary of the Company’s stock option activity under all Plans is as follows: Number of Weighted– Weighted– Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2017 549,907 $ 7.36 Options granted 4,378 33.39 Options exercised (145,313 ) 6.12 Options forfeited — — Options expired (73 ) 1.79 Outstanding at December 31, 2018 408,899 $ 8.09 6.53 $ 7,835 Options vested and expected to vest at December 31, 2018 408,616 $ 8.08 6.53 $ 7,831 Options vested and exercisable at December 31, 2018 401,149 $ 7.95 6.50 $ 7,727 The aggregate intrinsic value of options exercised at December 31, 2018, 2017, and 2016 , was approximately $3.7 million , $3.5 million and $0.1 million , respectively. The total fair value of options vested during the years ended December 31, 2018, 2017, and 2016 was approximately $0.4 million , $1.0 million and $1.0 million , respectively. As of December 31, 2018 , $41,000 unrecognized compensation cost related to stock options is expected to be recognized over a weighted-average period of 0.40 years. The Company received approximately $0.9 million in cash from option exercises under the respective Plans in 2018 . The Company issued shares from amounts reserved under the respective Plans upon the exercise of these stock options. The Company does not currently expect to repurchase shares from any source to satisfy such obligation under any of the Company’s stock option Plans. The exercise of stock options during the year ended December 31, 2018 resulted in an excess tax deduction of approximately $1.8 million . The expected tax benefit of approximately $0.5 million is included as part of the deferred tax asset associated with net operating loss carryforwards, currently fully offset by a valuation allowance. Restricted Stock Awards A summary of the Company’s restricted stock activity under the 2010 and 2014 Plan is as follows: Number of Weighted-Average Grant Date Fair Value Unvested balances at December 31, 2017 1,047,480 $13.35 Awards granted 840,241 $29.00 Awards vested (873,706) $16.18 Awards forfeited (17,001) $21.04 Unvested balances at December 31, 2018 997,014 $23.93 During 2018 , 873,706 restricted stock awards vested with a weighted average grant date fair value of $16.18 per share. For restricted stock awards, grant date fair value is equal to the closing stock price on the day of the event. As of December 31, 2018 , $22.0 million of unrecognized compensation cost related to unvested restricted stock awards is expected to be recognized over a weighted-average period of 1.8 years. The vesting of restricted stock during the year ended December 31, 2018 resulted in an excess tax deduction of approximately $10.3 million . The expected tax benefit of approximately $2.7 million is included as part of the deferred tax asset associated with net operating loss carryforwards, currently fully offset by a valuation allowance. Share-based Compensation The Company recognized share-based compensation expense from all awards in the following expense categories (in thousands): Year Ended December 31, 2018 2017 2016 Cost of revenue $ 654 $ 436 $ 44 Research and development 1,250 796 204 Sales and marketing 533 232 105 General and administrative 11,693 8,513 3,980 Total $ 14,130 $ 9,977 $ 4,333 |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | 12. Revenue Recognition Revenue Recognition Policy Revenues are recognized when control of the promised goods or services is transferred to the Company's customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services over the term of the agreement, generally when made available to the customers. We enter into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. Revenues are recognized net of sales credits and allowances. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. Revenue is recognized based on the following five step model in accordance with ASC 606, Revenue from Contracts with Customers : • Identification of the contract with a customer • Identification of the performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, the Company satisfies a performance obligation Performance obligations under our contracts consist of subscription and support, perpetual licenses, and professional services revenues within a single operating segment. Subscription and Support Revenues The Company's software solutions are available for use as hosted application arrangements under subscription fee agreements without licensing perpetual rights to the software. Subscription fees from these applications are recognized over time on a ratable basis over the customer agreement term beginning on the date the Company's solution is made available to the customer. As our customers have access to use our solutions over the term of the contract agreement we believe this method of revenue recognition provides a faithful depiction of the transfer of services provided. Our subscription contracts are generally 1 to 3 years in length. Amounts that have been invoiced are recorded in accounts receivable and deferred revenues or revenues, depending on whether the revenue recognition criteria have been met. Additional fees for monthly usage above the levels included in the standard subscription fee are recognized as revenue at the end of each month and is invoiced concurrently. Perpetual License Revenues The Company also records revenue from the sales of proprietary software products under perpetual licenses. Revenue from distinct on-premises licenses is recognized upfront at the point in time when the software is made available to the customer. The Company’s products do not require significant customization. Professional Services Revenue Professional services provided with subscription and support licenses and perpetual licenses consist of implementation fees, data extraction, configuration, and training. The Company’s implementation and configuration services do not involve significant customization of the software and are not considered essential to the functionality. Revenues from professional services are recognized over time as such services are performed. Revenues for fixed price services are generally recognized over time applying input methods to estimate progress to completion. Revenues for consumption-based services are generally recognized as the services are performed. Messaging-related Revenue The Company recognizes subscription revenue for its digital engagement application which provides short code connectivity for its two-way SMS programs and campaigns. The Company evaluates whether it is appropriate to recognize revenue based on the gross amount billed to its customers for these services. Since the Company is primarily obligated in these transactions, has latitude in establishing prices associated with its messaging program management services, is responsible for fulfillment of the transaction, and has credit risk, revenue is recorded on a gross basis. While none of the factors individually are considered presumptive or determinative, in reaching conclusions on gross versus net revenue recognition, the Company places the most weight on the analysis of whether or not it is the primary obligor in the arrangement. Significant Judgments Performance Obligations and Standalone Selling Price A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of accounting. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. The Company has contracts with customers that often include multiple performance obligations, usually including professional services sold with either individual or multiple subscriptions or perpetual licenses. For these contracts, the Company accounts for individual performance obligations separately if they are distinct by allocating the contract's total transaction price to each performance obligation in an amount based on the relative standalone selling price, or SSP, of each distinct good or service in the contract. Judgment is required to determine the SSP for each distinct performance obligation. A residual approach is only applied in limited circumstances when a particular performance obligation has highly variable and uncertain SSP and is bundled with other performance obligations that have observable SSP. A contract's transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. We determine the SSP based on our overall pricing objectives, taking into consideration market conditions and other factors, including the value of our contracts, historical standalone sales, customer demographics, geographic locations, and the number and types of users within our contracts. Other Considerations The Company evaluates whether it is the principal (i.e., report revenues on a gross basis) or agent (i.e., report revenues on a net basis) for vendor reseller agreements. Generally, the Company reports revenues from these types of contracts on a gross basis, meaning the amounts billed to customers are recorded as revenues, and expenses incurred are recorded as cost of revenues. Where the Company is the principal, it first obtains control of the inputs to the specific good or service and directs their use to create the combined output. The Company's control is evidenced by its involvement in the integration of the good or service on its platform before it is transferred to its customers, and is further supported by the Company being primarily responsible to its customers and having a level of discretion in establishing pricing. Revenues provided from agreements in which the Company is an agent are immaterial. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 60 days and include no general rights of return. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined our contracts generally do not include a significant financing component. The primary purpose of our invoicing terms is to provide customers with simplified and predictable ways of purchasing our products and services, not to receive financing from our customers or to provide customers with financing. Example includes invoicing at the beginning of a subscription term with revenue recognized ratably over the contract period. Contract Balances The timing of revenue recognition, billings and cash collections can result in billed accounts receivable, unbilled receivables (contract assets), and deferred revenues (contract liabilities). Billings scheduled to occur after the performance obligation has been satisfied and revenue recognition has occurred result in contract assets. Contract assets are expected to be billed during the succeeding twelve-month period and are recorded in 'Unbilled receivables' in our consolidated statement of operations. A contract liability results when we receive prepayments or deposits from customers in advance for implementation, maintenance and other services, as well as initial subscription fees. Customer prepayments are generally applied against invoices issued to customers when services are performed and billed. We recognize contract liabilities as revenues upon satisfaction of the underlying performance obligations. Contract liabilities that are expected to be recognized as revenues during the succeeding twelve-month period are recorded in 'Deferred revenue' and the remaining portion is recorded in 'Deferred revenue noncurrent' on the accompanying consolidated balance sheets at the end of each reporting period. Unbilled Receivables Unbilled receivables represent amounts for which the Company has recognized revenue, pursuant to its revenue recognition policy, for software licenses already delivered and professional services already performed, but billed in arrears and for which the Company believes it has an unconditional right to payment. As of December 31, 2018 and 2017 unbilled receivables were $3.7 million and $0.9 million , respectively. Deferred Commissions Sales commissions earned by our sales force are considered incremental and recoverable costs of obtaining a contract with a customer. Deferred commissions and other costs for a particular customer agreement for initial contracts are amortized over the expected life of the customer relationships, which has been determined to be approximately 6 years based on historical data and managements judgment, once revenue recognition criteria are met. We utilized the 'portfolio approach' practical expedient permitted under ASC 606-10-10-4, which allows entities to apply the guidance to a portfolio of contracts with similar characteristics as the effects on the financial statements of this approach would not differ materially from applying the guidance to individual contracts. The portion of capitalized costs expected to be amortized during the succeeding twelve-month period is recorded in current assets as deferred commissions, current, and the remainder is recorded in long-term assets as deferred commissions, net of current portion. Amortization expense is included in sales and marketing expenses in the accompanying condensed consolidated statements of operations. Deferred commissions are reviewed for impairment whenever events or circumstances indicate their carrying value may not be recoverable consistent with the Company's long-lived assets policy as described in Note 2. No indicators of impairment were identified during the year ended December 31, 2018 . The following table presents the activity impacting deferred commissions for the year ended December 31, 2018 (in thousands): December 31, 2018 Deferred commissions beginning balance $ — Adoption of ASC 606 6,517 Capitalized deferred commissions 4,775 Amortization of deferred commissions (2,367 ) Deferred commissions ending balance $ 8,925 Deferred Revenue Deferred revenue represents either customer advance payments or billings for which the aforementioned revenue recognition criteria have not yet been met. Deferred revenue is mainly unearned revenue related to subscription and support services. During the twelve months ended December 31, 2018 , we recognized $40.5 million of subscription services revenue that was included in the deferred revenue balances at the beginning of the period, which excludes the $5.2 million in deferred revenue we recorded related to our 2018 acquisitions as discussed in Note 3. Acquisitions. Professional services revenue recognized in the same period from deferred revenue balances at the beginning of the period was $2.8 million . Remaining Performance Obligations As of December 31, 2018 , approximately $114.8 million of revenue is expected to be recognized from remaining performance obligations for subscription contracts. We expect to recognize revenue on approximately 72% of these remaining performance obligations over the next 12 months, with the balance recognized thereafter. Revenue from remaining performance obligations for professional services contracts as of December 31, 2018 was no t material. Disaggregated Revenue The Company disaggregates revenue from contracts with customers by geography and revenue generating activity, as it believes it best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors Revenue by geography is based on the ship-to address of the customer, which is intended to approximate where the customers' users are located. The ship-to country is generally the same as the billing country. The Company has operations primarily in the U.S., United Kingdom and Canada. Information about these operations is presented below (in thousands): December 31, 2018 2017 2016 Revenues: Subscription and support: United States $ 106,628 $ 72,355 $ 55,846 United Kingdom 11,189 3,127 4,674 Canada 5,395 3,838 3,522 Other International 13,366 6,147 1,510 Total subscription and support revenue 136,578 85,467 65,552 Perpetual license: United States 2,378 2,099 1,300 United Kingdom 94 218 150 Canada 303 70 66 Other International 1,127 1,959 134 Total perpetual license revenue 3,902 4,346 1,650 Professional services: United States 7,321 5,388 5,388 United Kingdom 487 494 1,556 Canada 591 471 502 Other International 1,006 1,786 119 Total perpetual license revenue 9,405 8,139 7,565 Total revenue $ 149,885 $ 97,952 $ 74,767 Financial Statement Impact of Adoption of ASC 606 The cumulative effect of the changes made to our consolidated January 1, 2018 balance sheet for the adoption of ASC 606 were as follows (in thousands): Balance Sheet Balance at December 31, 2017 Adjustments Due to ASC 606 Balance at January 1, 2018 Assets Deferred commissions, current $ — $ 2,070 $ 2,070 Deferred commissions, noncurrent — 4,447 4,447 Liabilities Deferred revenue (current) 43,807 225 44,032 Equity Accumulated deficit $ (81,128 ) $ 6,292 $ (74,836 ) In accordance with the new revenue standard requirements, the disclosure of the impact of adoption on our consolidated balance sheet, statement of operations and statement of cash flows for the periods ended December 31, 2018 was as follows (in thousands): As of December 31, 2018 Balance Sheet As Reported Balances Without Adoption of ASC 606 Effect of Change Assets Deferred commissions, current $ 2,633 $ — $ 2,633 Deferred commissions, noncurrent 6,292 — 6,292 Liabilities Deferred revenue (current) 57,626 57,777 (151 ) Equity Accumulated earnings (deficit) $ (85,675 ) $ (89,464 ) $ 3,789 Twelve Months Ended December 31, 2018 Statement of Operations As Reported Balances Without Adoption of ASC 606 Effect of Change Revenues Perpetual license 3,902 3,751 151 Operating expenses Sales & marketing 20,935 23,287 (2,352 ) During the twelve months ended December 31, 2018 , the effect on earnings per share of the adoption of ASC 606 was an increase in earnings per share of $0.13 . |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | 13. Employee Benefit Plans The Company has established two voluntary defined contribution retirement plans qualifying under Section 401(k) of the Internal Revenue Code. The Company made no contributions to the 401(k) plans for the years ended December 31, 2018, 2017, and 2016 . |
Segment and Geographic Informat
Segment and Geographic Information | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | 14. Segment and Geographic Information ASC 280, Segment Reporting, establishes standards for reporting information about operating segments. It defines operating segments as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-maker (“CODM”) in deciding how to allocate resources and in assessing performance. Our Chief Executive Officer is considered to be our CODM. Our CODM manages the business as a multi-product business that utilizes its model to deliver software products to customers regardless of their geography or IT environment. Operating results are reviewed by the CODM primarily at the consolidated entity level, with the exception of recurring product level revenue, for purposes of making resource allocation decisions and for evaluating financial performance. Accordingly, we considered ourselves to be in a single operating and reporting segment structure. Revenue See Note 12 Revenue Recognition for a detail of revenue by geography. Identifiable Long-Lived Assets December 31, 2018 2017 2016 Identifiable long-lived assets: United States $ 1,648 $ 2,768 $ 4,054 United Kingdom 756 14 18 Canada 77 145 284 Other International 346 — — Total identifiable long-lived assets $ 2,827 $ 2,927 $ 4,356 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 15. Related Party Transactions We are a party to three agreements with companies controlled by a non-management investor in the Company: • On March 28, 2017, the Company and DevFactory executed an amendment to the agreement to extend the initial term to December 31, 2021. Additionally, the Company amended the option for either party to renew annually for one additional year. The effective date of the amendment was January 1, 2017. DevFactory is an affiliate of ESW Capital LLC, which holds more than 5% of the Company's capital stock. The Company has an outstanding purchase commitment in 2019 for software development services pursuant to a technology services agreement in the amount of $4.9 million . For years after 2019 , the purchase commitment amount for software development services will be equal to the prior year purchase commitment increased (decreased) by the percentage change in total revenue for the prior year as compared to the preceding year. For example, if 2019 total revenues increase by 10% as compared to 2018 total revenues, then the 2020 purchase commitment will increase by approximately $0.5 million from the 2019 purchase commitment amount to approximately $5.4 million . During the years ended December 31, 2018, 2017, and 2016 , the Company purchased software development services pursuant to a technology services agreement with DevFactory FZ-LLC (“DevFactory”), in the amount of $3.2 million , $2.4 million , and $2.3 million , respectively. At December 31, 2018 and December 31, 2017 , amounts included in accounts payable owed to this company totaled none and $0.6 million , respectively. Invoicing is based on hourly contractor rates that management believes is in line with industry pricing. • The Company purchased services from Crossover, Inc. (“Crossover”), a company controlled by ESW Capital, LLC (a non-management investor) of approximately $3.2 million , $3.0 million , and $1.8 million during the years ended December 31, 2018, 2017, and 2016 , respectively. Crossover provides a proprietary technology system to help the Company identify, screen, select, assign, and connect with necessary resources from time to time to perform technology software development and other services throughout the Company, and track productivity of such resources. While there are no purchase commitments with Crossover, the Company will continue to use their services in 2019 . Invoicing is based on hourly contractor rates that management believes is in line with industry pricing. • On March 14, 2016, Upland completed its purchase of substantially all of the assets of HipCricket, Inc., a cloud-based mobile messaging software provider, and completed the transfer of its EPM Live product business. Prior to the transaction, HipCricket was owned by an affiliate of ESW Capital, LLC, which is a shareholder of Upland. Raymond James & Co. provided a fairness opinion to Upland in connection with the transaction. Refer to Note 3 - Acquisitions for a description of the transaction. Relating to this transaction, the Company provided certain transition services to and received certain transition services from the affiliate. The cost offsets earned by the Company for these services during the year ended December 31, 2016 totaled $0.7 million and the fees owed to the affiliate by the Company for these services during the year ended December 31, 2016 totaled $0.1 million . The Company has had no transactions with the affiliate subsequent to the year ended December 31, 2016. The Company has an arrangement with a former subsidiary, Visionael Corporation (“Visionael”), to provide management, human resource/payroll, and administrative services. John T. McDonald, the Company's Chief Executive Officer and Chairman of the Board, beneficially holds an approximate 26.18% interest in Visionael. The Company received fees from this arrangement during the years ended December 31, 2018, 2017, and 2016 totaled $60,000 , $285,000 , and $360,000 , respectively, and are expected to be approximately $60,000 in 2019 . |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 16. Subsequent Events In accordance with ASC Topic 855, “ Subsequent Events ”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events and transactions that occurred after December 31, 2018 through the date the consolidated financial statements were available for issuance. During this period the Company did not have any material reportable subsequent events. |
Quarterly Results (Unaudited)
Quarterly Results (Unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Results (Unaudited) | 17. Quarterly Results (Unaudited) The following table sets forth our unaudited quarterly condensed consolidated statements of operations data for each of the last eight quarters through December 31, 2018 . The data has been prepared on the same basis as the audited consolidated financial statements and related notes included elsewhere in this Annual Report, and you should read the following tables together with such financial statements. The quarterly results of operations include all normal recurring adjustments necessary for a fair presentation of this data. Results of interim periods are not necessarily indicative of results for the entire year and are not necessarily indicative of future results. 2018 Quarters 2017 Quarters First Second Third Fourth First Second Third Fourth (dollars in thousands, except per share data) Consolidated Statements of Operations Data: Revenue: Subscription and support $ 27,729 $ 33,154 $ 33,919 $ 41,776 $ 18,135 $ 19,407 $ 23,169 $ 24,756 Perpetual license 1,626 683 915 678 694 1,746 856 1,050 Total product revenue 29,355 33,837 34,834 42,454 18,829 21,153 24,025 25,806 Professional services 2,260 2,109 2,310 2,726 1,923 2,128 2,047 2,041 Total revenue 31,615 35,946 37,144 45,180 20,752 23,281 26,072 27,847 Cost of revenue: Subscription and support (1)(2) 9,249 9,580 10,566 13,486 5,893 6,676 7,737 8,148 Professional services (1) 1,396 1,269 1,517 1,526 1,135 1,327 1,376 1,355 Total cost of revenue 10,645 10,849 12,083 15,012 7,028 8,003 9,113 9,503 Gross profit 20,970 25,097 25,061 30,168 13,724 15,278 16,959 18,344 Operating expenses: Sales and marketing (1) 4,408 5,248 5,299 5,980 3,221 4,037 4,258 3,791 Research and development (1) 4,891 5,286 5,400 5,743 3,477 4,003 4,092 4,223 Refundable Canadian tax credits (102 ) (203 ) (99 ) (2 ) (117 ) (112 ) (195 ) (118 ) General and administrative (1) 7,000 8,464 8,011 8,566 5,904 6,576 5,084 5,727 Depreciation and amortization 2,130 3,853 3,606 4,683 1,164 1,299 1,648 2,387 Acquisition-related expenses 3,102 3,140 2,497 9,989 3,691 2,278 4,399 4,724 Total operating expenses 21,429 25,788 24,714 34,959 17,340 18,081 19,286 20,734 Loss from operations (459 ) (691 ) 347 (4,791 ) (3,616 ) (2,803 ) (2,327 ) (2,390 ) Other expense: Interest expense, net (2,494 ) (3,143 ) (3,118 ) (4,518 ) (935 ) (1,160 ) (2,277 ) (2,210 ) Loss on debt extinguishment — — — — — (1,634 ) 1,634 — Other expense, net 303 (524 ) (744 ) (816 ) (112 ) (18 ) (130 ) 549 Total other expense (2,191 ) (3,667 ) (3,862 ) (5,334 ) (1,047 ) (2,812 ) (773 ) (1,661 ) Loss before provision for income taxes (2,650 ) (4,358 ) (3,515 ) (10,125 ) (4,663 ) (5,615 ) (3,100 ) (4,051 ) Provision for income taxes (511 ) (872 ) (735 ) 11,927 (951 ) (196 ) (406 ) 257 Net income (loss) $ (3,161 ) $ (5,230 ) $ (4,250 ) $ 1,802 $ (5,614 ) $ (5,811 ) $ (3,506 ) $ (3,794 ) Net income (loss) per common share: Basic $ (0.16 ) $ (0.26 ) $ (0.21 ) $ 0.09 $ (0.33 ) $ (0.33 ) $ (0.18 ) $ (0.19 ) Diluted (2) $ (0.16 ) $ (0.26 ) $ (0.21 ) $ 0.09 $ (0.33 ) $ (0.33 ) $ (0.18 ) $ (0.19 ) (1) During the fourth quarter of 2018 we recorded income tax benefits primarily related to our acquisition of companies with deferred tax liabilities that we recorded at the time of acquisition. These deferred tax liabilities enabled us to recognize $10.1 million of our historic deferred tax assets that had previously been offset by our valuation allowance. This reduction in our valuation allowance was recorded as a tax benefit on our consolidated statement of operations. (2) For all quarters, with the exception of the quarter ended December 31, 2018, basic and diluted net loss per share and weighted average common shares outstanding were the same as any additional common stock equivalents would have been anti-dilutive due to the net losses incurred during these periods. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of P resentation These consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States, or GAAP. The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Certain prior period amounts have been reclassified to conform to the current period presentation. |
Use of Estimates | Use of Estimates The preparation of the accompanying consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses. Significant items subject to such estimates include those related to revenue recognition, deferred commissions, allowance for doubtful accounts, stock-based compensation, acquired intangible assets, the useful lives of intangible assets and property and equipment, and income taxes. In accordance with GAAP, management bases its estimates on historical experience and on various other assumptions that management believes are reasonable under the circumstances. Management regularly evaluates its estimates and assumptions using historical experience and other factors; however, actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash deposits and liquid investments with original maturities of three months or less when purchased. Cash equivalents are stated at cost, which approximates market value, because of the short maturity of these instruments. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts The Company extends credit to the majority of its customers. Issuance of credit is based on ongoing credit evaluations by the Company of customers’ financial condition and generally requires no collateral. Trade accounts receivable are recorded at the invoiced amount and do not bear interest. Invoices generally require payment within 30 days from the invoice date. The Company generally does not charge interest on past due payments, although the Company's contracts with its customers usually allow it to do so. The Company maintains an allowance for doubtful accounts to reserve for potential uncollectible receivables. The allowance is based upon the creditworthiness of the Company’s customers, the customers’ historical payment experience, the age of the receivables and current market conditions. Provisions for potentially uncollectible accounts are recorded in sales and marketing expenses. The Company writes off accounts receivable balances to the allowance for doubtful accounts when it becomes likely that they will not be collected. |
Concentrations of Credit Risk and Significant Customers | Concentrations of Credit Risk and Significant Customers Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents and accounts receivable. The Company’s cash and cash equivalents are placed with high-quality financial institutions, which, at times, may exceed federally insured limits. The Company has not experienced any losses in these accounts, and the Company does not believe it is exposed to any significant credit risk related to cash and cash equivalents. The Company provides credit, in the normal course of business, to a number of its customers. The Company performs periodic credit evaluations of its customers and generally does not require collateral. |
Property and Equipment | Property and Equipment Property and equipment are carried at cost, less accumulated depreciation and amortization. Depreciation of property and equipment is computed using the straight-line method over each asset’s useful life. Leasehold improvements are amortized over the shorter of the lease term or of the estimated useful lives of the related assets. Upon retirement or disposal, the cost of each asset and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is credited or charged to income. Repairs, maintenance, and minor replacements are expensed as incurred. The estimated useful lives of property and equipment are as follows: Computer hardware and equipment 3 - 5 years Purchased software and licenses 3 - 5 years Furniture and fixtures 7 years Leasehold improvements Lesser of estimated useful life or lease term |
Business Combinations | Business Combinations We apply the provisions of ASC 805, Business Combinations, in accounting for our acquisitions which requires the acquisition purchase price to be allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition dates. The excess of the purchase price over these estimated fair values is recorded to goodwill. Significant estimates and assumptions, including fair value estimates, are used to determine the fair value of assets acquired, liabilities assumed and contingent consideration transfered as well as the useful lives of long-lived assets acquired. During the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill based on changes to our intial estimates and assumptions. Upon conclusion of the measurement period or final determination of the values of assets acquired and liabilities assumed, whichever comes first, any subsequent adjustments are recorded to acquisition related expenses in our consolidated statement of operations. Tangible assets are valued at their respective carrying amounts, which approximates their estimated fair value. The valuation of identifiable intangible assets reflects management’s estimates based on, among other factors, use of established valuation methods. Customer relationships are valued using an income approach, which estimates fair value based on the earnings and cash flow capacity of the subject asset. The value of the marketing-related intangibles is determined using a relief-from-royalty method, which estimates fair value based on the value the owner of the asset receives from not having to pay a royalty to use the asset. Developed technology is valued using a cost-to-recreate approach. The purchase price transfered in our acquisitions often contain holdback and contingent consideration provisions. Holdbacks are subject to reduction for indemnification claims and are typically payable within 12 to 18 months of the acquisition date. Contingent consideration typically includes earnout payments payable within 12 to 18 months of the date of acquisition based on attainment of certain performance goals. C ontingent consideration liabilities are recorded at fair value on the acquisition date and are remeasured periodically based on the then assessed fair value and adjusted if necessary. Holdback and contingent consideration liabilities are recorded in due to sellers in our consolidated balance sheet. Any changes in fair value of the contingent consideration subsequent to the measurement period are recorded to operating income (expense) in our statement of operations. |
Goodwill and Other Intangibles | Goodwill and Other Intangibles Goodwill is evaluated for impairment annually in October or more frequently when an event occurs or circumstances change that indicate the carrying value may not be recoverable. The events and circumstances considered by the Company include the business climate, legal factors, operating performance indicators and competition.The company adopted ASU 2017-04, Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment during the first quarter of 2018 which eliminated step 2 from the goodwill impairment test. As we operate as one reporting unit, the impairment test is performed at the consolidated entity level by comparing the estimated fair value of the Company to the its carrying value. We have elected to first assess qualitative factors to determine whether it is more likely than not that the fair value of our single reporting unit is less than its carrying value. Based on the qualitative assessment, if it is determined that it is more likely than not that the Company's fair value is less than its carrying value we would compare the carrying value of the Company's single reporting unit to its fair value and recognize any excess carrying value as an impairment loss. Determining the fair value of goodwill is subjective in nature and often involves the use of estimates and assumptions including, without limitation, use of estimates of future prices and volumes for our products, capital needs, economic trends and other factors which are inherently difficult to forecast. If actual results, or the plans and estimates used in future impairment analyses are lower than the original estimates used to assess the recoverability of these assets, we could incur impairment charges in a future period. The annual impairment test was performed as of October 31, 2018 . No impairment of goodwill was identified during the years ended December 31, 2018 , 2017 , or 2016 . Identifiable intangible assets consist of customer relationships, marketing-related intangible assets and developed technology. Intangible assets with definite lives are amortized over their estimated useful lives on a straight-line basis. The straight-line method of amortization represents the Company’s best estimate of the distribution of the economic value of the identifiable intangible assets. Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of intangible assets may not be recoverable. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used or any other significant adverse change that would indicate that the carrying amount of an asset or group of assets may not be recoverable. The Company evaluates the recoverability of intangible assets by comparing their carrying amounts to the future net undiscounted cash flows expected to be generated by the intangible assets. If such intangible assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the intangible assets exceeds the fair value of the assets. |
Long-Lived Assets | Long-Lived Assets Long-lived assets are reviewed for impairment whenever events or circumstances indicate their carrying value may not be recoverable. When such events or circumstances arise, an estimate of future undiscounted cash flows produced by the asset, or the appropriate grouping of assets, is compared to the asset's carrying value to determine whether impairment exists. If the asset is determined to be impaired, the impairment loss is measured based on the excess of its carrying value over its fair value. Assets to be disposed of are reported at the lower of the carrying value or net realizable value. |
Software Development Costs | Software Development Costs Software development costs are expensed as incurred until the point the Company establishes technological feasibility. Technological feasibility is established upon the completion of a working model. Costs incurred by the Company between establishment of technological feasibility and the point at which the product is ready for general release are capitalized, subject to their recoverability, and amortized over the economic life of the related products. Because the Company believes its current process for developing its software products essentially results in the completion of a working product concurrent with the establishment of technological feasibility, no software development costs have been capitalized to date. There were no software development costs required to be capitalized under ASC 985-20, Costs of Software to be Sold, Leased or Marketed, and under ASC 350-40, Internal-Use Software. |
Canadian Tax Credits/Income Taxes | Canadian Tax Credits Canadian tax credits related to current expenses are accounted for as a reduction of the research and development costs. Such credits relate to the Company's operations in Canada and are not dependent upon taxable income. Credits are accrued in the year in which the research and development costs or the capital expenditures are incurred, provided the Company is reasonably certain that the credits will be received. The government credit must be examined and approved by the tax authorities, and it is possible that the amounts granted will differ from the amounts recorded. Income Taxes The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities will be recognized in the period that includes the enactment date. A valuation allowance is established against the deferred tax assets to reduce their carrying value to an amount that is more likely than not to be realized. The Company has adopted a permanent reinvestment position whereby foreign earnings for foreign subsidiaries are expected to be reinvested and future earnings are not expected to be repatriated. As a result of this policy, no tax liability has been accrued in anticipation of future dividends from foreign subsidiaries. The Company accounts for uncertainty of income taxes based on a “more likely than not” threshold for the recognition and derecognition of tax positions, which includes the accounting for interest and penalties. |
Deferred Financing Costs | Debt Issuance Costs The Company capitalizes underwriting, legal, and other direct costs incurred related to the issuance of debt, which are recorded as a direct deduction from the carrying amount of the related debt liability and amortized to interest expense over the term of the related debt using the effective interest rate method. Upon the extinguishment of the related debt, any unamortized capitalized deferred financing costs are recorded to interest expense. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company accounts for financial instruments in accordance with the authoritative guidance on fair value measurements and disclosures for financial assets and liabilities. This guidance defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and expands disclosures about fair value measurements. The guidance also establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include Level 1, defined as observable inputs, such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore, requiring an entity to develop its own assumptions. The Company’s financial instruments consist principally of cash and cash equivalents, accounts receivable, and accounts payable, long–term debt and warrant liabilities. The carrying value of cash and cash equivalents, accounts receivable, and accounts payable approximate fair value, primarily due to short maturities. The carrying values of the Company’s debt instruments approximated their fair value based on rates currently available to the Company. The carrying values of warrant liabilities are marked to the market at each reporting period. |
Revenue, Cost of Revenue, Customer Acquisition Costs | Revenue Recognition On January 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers . Refer to Note 12 Revenue Recognition for a detailed discussion of accounting policies related to revenue recognition, including deferred revenue and deferred commissions. Cost of Revenue Cost of revenue primarily consists of salaries and related expenses (e.g. bonuses, employee benefits, and payroll taxes) for personnel directly involved in the delivery of services and products directly to customers. Cost of revenue also includes the amortization of acquired technology. Customer Contract Acquisition Costs Costs associated with the acquisition or origination of customer contracts are expensed as incurred. Customer Relationship Acquisition Costs Costs associated with the acquisition or origination of customer relationships are capitalized as customer relationship assets as incurred and amortized over the estimated life of the customer relationship. |
Advertising Costs | Advertising Costs Advertising costs are expensed in the period incurred. |
Share-Based Compensation | Stock-Based Compensation We measure all share-based payments, including grants of options to purchase common stock and the issuance of restricted stock or restricted stock units to employees, service providers and board members, using a fair-value based method. We record forfeitures as they occur. The cost of services received from employees and non-employees in exchange for awards of equity instruments is recognized in the consolidated statement of operations based on the estimated fair value of those awards on the grant date and amortized on a straight-line basis over the requisite service period. We use the Black-Scholes option-pricing model to determine the fair values of stock option awards. For restricted stock and restricted stock units, fair value is based on the closing price of our common stock on the grant date. The Black-Scholes option pricing model used to compute share-based compensation expense requires extensive use of accounting judgment and financial estimates. Items requiring estimation include the expected term option holders will retain their vested stock options before exercising them, the estimated volatility of the Company’s common stock price over the expected term of each stock option, and the number of stock options that will be forfeited prior to the completion of their vesting requirements. Application of alternative assumptions could result in significantly different share-based compensation amounts being recorded in the financial statements. |
Comprehensive Loss | Comprehensive Loss The Company utilizes the guidance in Accounting Standards Codification (ASC) Topic 220, Comprehensive Income, for the reporting and display of comprehensive loss and its components in the consolidated financial statements. Comprehensive loss comprises net loss and cumulative foreign currency translation adjustments. |
Foreign Currency Transactions | Foreign Currency Transactions The functional currency of our foreign subsidiaries are the local currencies. Results of operations for foreign subsidiaries are translated in United State dollars using the average exchange rates on a monthly basis during the year. The assets and liabilities of those subsidiaries are translated into United States dollars using the exchange rates in effect at the balance sheet date. The related translation adjustments are recorded in a separate component of stockholders' equity in accumulated other comprehensive loss. Foreign currency transaction gains and losses are included in other income (expense) in our statements of operations. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently issued accounting pronouncements not yet adopted In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement, to eliminate, add and modify certain disclosure requirements for fair value measurements. Entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but public companies will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The guidance is effective for annual and interim periods beginning after December 15, 2019, but entities are permitted to early adopt either the entire standard or only the provisions that eliminate or modify the requirements. The Company is currently evaluating how to apply the new guidance. In January 2018, the FASB issued ASU 2018-02 Income Statement - Reporting Comprehensive Income (ASC 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (AOCI) , which gives entities the option to reclassify to retained earnings the tax effects resulting from the Tax Act related to items in Additional Other Comprehensive Income (AOCI) that the FASB refers to as having been “stranded” in AOCI. The guidance is effective for annual and interim periods beginning after December 15, 2018, and is applicable to the Company in 2019; however, early adoption is permitted. The Company is currently evaluating the effect that the adoption of ASU 2018-02 will have on its financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . The new standard supersedes the present U.S. GAAP standard on leases and requires substantially all leases to be reported on the balance sheet as right-of-use assets and lease obligations. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018, and interim reporting periods within those annual reporting periods. Early adoption is permitted and in the original guidance the modified retrospective application was required, however, in July 2018 the FASB issued ASU 2018-11 which permits entities with another transition method in which the effective date would be the date of initial application of transition. Under this optional transition method, we would recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. We expect to elect the optional transition method. We plan to adopt the new standard on its effective date of January 1, 2019. We anticipate adoption of the standard will not significantly impact results. We are evaluating the election of the practical expedients upon transition that would retain the lease classification and initial direct costs for any leases that exist prior to adoption of the standard. We are in the process of cataloging our existing lease contracts and implementing changes to our systems. We currently estimate $4.7 million to $6.2 million of right-of-use assets and lease liabilities will be recognized on our balances sheet as of January 1, 2019 primarily related to our office facilities. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments , which changes the impairment model for most financial assets. The new model uses a forward-looking expected loss method, which will generally result in earlier recognition of allowances for losses. ASU 2016-13 is effective for annual and interim periods beginning after December 15, 2019 and early adoption is permitted for annual and interim periods beginning after December 15, 2018. The Company is currently evaluating the effect that the adoption of ASU 2016-13 will have on its financial statements. Recently adopted accounting pronouncements In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (ASC 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement (“CCA“) That Is a Service Contract , which requires hosting arrangements that are service contracts to follow the guidance for internal-use software to determine which implementation costs can be capitalized. ASU 2018-15 is effective either prospectively or retrospectively for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. We early adopted ASU 2018-15 on a prospective basis during the fourth quarter of 2018. As a result of the adoption of ASU 2018-15 certain implementation costs related to CCAs that are service contracts will now be capitalized as “other assets” in the Company's consolidated balance sheet in accordance with ASC 350-40. All implementation costs related to these arrangements were previously expensed as incurred prior to adoption of ASU 2018-15. Capitalized implementation costs will be amortized to operating expense over the non-cancelbale term of the underlying agreement plus any reasonably certain renewal periods. There was no material impact to our financial statements upon adoption of ASU 2018-15. In June 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2018-07 Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting which simplifies the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees, with certain exceptions. For public business entities, the guidance is effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods, however, early adoption is permitted. Although nonemployee directors do not satisfy the definition of employee, under FASB guidance, the Company's nonemployee directors acting in their role as members of a board of directors are treated as employees as those directors were elected by the Company's shareholders. Therefore, awards granted to these nonemployee directors for their services as directors already were accounted for as employee awards. We adopted ASU 2018-07 during the second quarter of 2018 with no material impact on our financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , to replace existing revenue recognition rules with a single comprehensive model to use in accounting for revenue arising from contracts with customers. Under this ASU and the associated subsequent amendments (collectively, “ASC 606”), revenue is recognized when a customer obtains control of promised goods or services for an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. In addition, ASC 606 requires expanded disclosure of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted ASC 606 on January 1, 2018 for all contracts using the modified retrospective method. We recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of accumulated deficit. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. We expect the impact of the adoption of the new revenue standard to be immaterial to our net income on an ongoing basis. A majority of our sales revenue continues to be recognized ratably over the applicable term of the respective subscription or maintenance contracts. For most sales commissions formerly expensed as incurred, other than for perpetual license commissions which will continue to be expensed as incurred, we are now amortizing these costs to the consolidated statements of income over the shorter of 1) the expected life of our customer relationships, which we have determined to be approximately 6 years, or 2) the life of the related technology. For further discussion about the financial statement impact and changes to Significant Accounting Policies impacted by the adoption of 2014-09 (Topic 606) see Note 12 Revenue Recognition. In January 2017, the FASB issued ASU 2017-01, Clarifying the Definition of a Business , which revises the definition of a business and assists in the evaluation of when a set of transferred assets and activities is a business. ASU 2017-01 is effective for interim and annual reporting periods beginning after December 15, 2017, and should be applied prospectively. Early adoption is permitted under certain circumstances. The Company adopted ASU 2017-01 during the first quarter of 2018. No impact on the financial statements was recorded as a result of the adoption of ASU 2017-01. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment . ASU 2017-04 eliminates step two of the goodwill impairment test and specifies that goodwill impairment should be measured by comparing the fair value of a reporting unit with its carrying amount. Additionally, the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets should be disclosed. ASU 2017-04 is effective for annual or interim goodwill impairment tests performed in fiscal years beginning after December 15, 2019; early adoption is permitted. The Company adopted ASU 2017-04 during the first quarter of 2018. No impact on the financial statements was recorded as a result of the adoption of ASU 2017-04. In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments . ASU 2016-15 is intended to add or clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows and to eliminate the diversity in practice related to such classifications. The guidance in ASU 2016-15 is required for annual reporting periods beginning after December 15, 2017, with early adoption permitted. The Company adopted ASU 2016-15 during the first quarter of 2017. No additional disclosure was deemed necessary upon the adoption of ASU 2016-15. No impact on the financial statements was recorded as a result of the adoption of ASU 2016-15. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedules of changes in the allowance for doubtful accounts | The following table presents the changes in the allowance for doubtful accounts (in thousands): Year Ended December 31, 2018 2017 2016 Balance at beginning of year $ 1,069 $ 658 $ 581 Provision 875 1,069 863 Divestitures — — (230 ) Writeoffs, net of recoveries (539 ) (658 ) (556 ) Balance at end of year $ 1,405 $ 1,069 $ 658 |
Schedule of estimated useful lives of property and equipment | The estimated useful lives of property and equipment are as follows: Computer hardware and equipment 3 - 5 years Purchased software and licenses 3 - 5 years Furniture and fixtures 7 years Leasehold improvements Lesser of estimated useful life or lease term Property and equipment consisted of the following (in thousands) at: December 31, 2018 2017 Equipment (including equipment under capital lease of $5,773 and $6,234 at December 31, 2018 and 2017, respectively) $ 10,703 $ 9,861 Furniture and fixtures 434 263 Leasehold improvements 1,012 769 Accumulated depreciation (including for equipment under capital lease of $4,962 and $4,329 at December 31, 2018 and 2017, respectively) (9,322 ) (7,966 ) Property and equipment, net $ 2,827 $ 2,927 |
Schedule of weighted-average grant-date fair value assumptions | The following table summarizes the weighted-average grant-date fair value of options granted in 2018 , 2017 , and 2016 and the assumptions used to develop their fair values. As there was no public market for its common stock prior to November 2014, the Company estimates the volatility of its common stock based on the volatility of publicly traded shares of comparable companies' common stock. The Company's decision to use the volatility of comparable stock was based upon the Company's assessment that this information is more representative of future stock price trends than the Company's historical volatility. The Company estimates the expected term using the simplified method, which calculates the expected term as the midpoint between the vesting date and the contractual termination date of each award. The dividend yield assumption is based on historical and expected future dividend payouts. The risk-free interest rate is based on observed market interest rates appropriate for the term of each options. Year Ended December 31, 2018 2017 2016 Weighted average grant-date fair value of options $11.42 $7.47 $3.23 Expected volatility 33.4% 35.0% 42.5% Risk-free interest rate 2.8% 1.1% - 2.0% 1.2% Expected life in years 5.00 5.00 5.93 Dividend yield — — — |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Pro Forma Statements | The table below shows the Pro forma statements of operations data for the respective years ending December 31 (in thousands): 2018 2017 Revenue $ 167,450 $ 118,696 Net loss (1) $ (14,086 ) $ (24,867 ) (1) While some recurring adjustments impact the pro forma figures presented, the decrease in pro forma net loss compared to our net loss presented on the consolidated statements of operations for the year ended December 31, 2018 includes nonrecurring adjustment removing acquisition costs from 2018 and reflects these costs in the year ended 2017, the year the acquisition was assumed to be completed for pro forma purposes. The table below shows the Pro forma statements of operations data for the respective years ending December 31 (in thousands): 2017 2016 Revenue $ 115,707 $ 89,906 Net loss (1) $ (13,679 ) $ (14,370 ) (1) While some recurring adjustments impact the pro forma figures presented, the decrease in pro forma net loss compared to our net loss on the consolidated statements of operations for the year ended December 31, 2017 includes nonrecurring adjustment removing acquisition costs from 2017 and reflects these costs in the year ended 2016, the year the acquisition was assumed to be completed for pro forma purposes. |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following condensed table presents the preliminary and final acquisition-date fair value of the assets acquired and liabilities assumed for the acquisitions, as well as assets and liabilities (in thousands): Preliminary Finalized Adestra Rant & Rave Interfax RO Innovation Qvidian Waterfall Right Answers Omtool Year Acquired 2018 2018 2018 2018 2017 2017 2017 2017 Cash $ 145 $ 696 $ 1,396 $ 197 $ 468 $ 100 $ 139 $ 2,957 Accounts receivable 2,925 3,482 1,587 1,563 1,907 1,477 2,164 784 Other current assets 1,395 3,836 1,341 1,299 335 608 246 464 Property and equipment 796 131 286 15 108 23 408 58 Customer relationships 29,823 29,981 22,577 6,688 30,160 6,400 10,500 4,400 Trade name 992 1,099 649 111 227 110 180 170 Technology 6,696 6,565 5,236 1,670 5,739 2,800 2,300 3,180 Noncompetes — — 1,148 — — — — Goodwill 26,363 32,575 13,832 7,568 29,199 18,575 15,680 14,081 Other assets — — 14 — 8 — — 33 Total assets acquired 69,135 78,365 46,918 20,259 68,151 30,093 31,617 26,127 Accounts payable (543 ) (1,577 ) (737 ) (229 ) (388 ) (605 ) (139 ) (219 ) Accrued expense and other (1,916 ) (6,114 ) (2,817 ) (1,921 ) (403 ) (1,136 ) (2,108 ) (915 ) Deferred tax liabilities (5,680 ) (3,896 ) (3,364 ) (2,129 ) (7,971 ) — — — Deferred revenue (1,322 ) (2,019 ) — (1,817 ) (9,389 ) (1,220 ) (5,479 ) (2,779 ) Total liabilities assumed (9,461 ) (13,606 ) (6,918 ) (6,096 ) (18,151 ) (2,961 ) (7,726 ) (3,913 ) Total consideration $ 59,674 $ 64,759 $ 40,000 $ 14,163 $ 50,000 $ 27,132 $ 23,891 $ 22,214 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | Liabilities measured at fair value on a recurring basis are summarized below (in thousands): Fair Value Measurements at December 31, 2018 Level 1 Level 2 Level 3 Total Liabilities: Earnout consideration liability $ — $ — $ 1,396 $ 1,396 Fair Value Measurements at December 31, 2017 Level 1 Level 2 Level 3 Total Liabilities: Earnout consideration liability $ — $ — $ 3,576 $ 3,576 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The following table presents additional information about liabilities measured at fair value on a recurring basis and for which we have utilized significant unobservable (Level 3) inputs to determine fair value: December 31, 2018 2017 Beginning balance $ 3,576 $ 2,500 Remeasurement adjustments: (Gains) or losses included in earnings (1) 1,627 (617 ) Acquisitions and settlements: Acquisitions 321 5,226 Settlements (4,128 ) (3,533 ) Ending balance $ 1,396 $ 3,576 (1) Recorded as a component of other operating income (expense) in the Company's statement of operations. |
Fair Value Measurement Inputs and Valuation Techniques | The significant unobservable inputs used in the fair value measurement of the Company's contingent consideration liabilities designated as Level 3 are as follows: Fair Value at December 31, 2018 Valuation Technique Significant Unobservable Inputs Contingent acquisition consideration: (Marketech and RO Innovation) $ 1,396 Binary option model Expected future annual revenue streams and probability of achievement Fair Value at December 31, 2017 Valuation Technique Significant Unobservable Inputs Contingent acquisition consideration: (RightAnswers and Waterfall) $ 3,576 Binary option model Expected future annual revenue streams and probability of achievement |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Changes in the Company’s goodwill balance for each of the two years in the period ended December 31, 2018 are summarized in the table below (in thousands): Balance at December 31, 2016 $ 69,097 Acquired in business combinations 88,819 Adjustment related to prior year business combinations 17 Adjustment related to finalization of business combinations (4,232 ) Foreign currency translation adjustment 906 Balance at December 31, 2017 $ 154,607 Acquired in business combinations 70,139 Adjustment related to prior year business combinations (7,051 ) Adjustment related to finalization of current year business combinations 8,685 Foreign currency translation adjustment (1,058 ) Balance at December 31, 2018 $ 225,322 |
Schedule of Finite-Lived Intangible Assets | The following is a summary of the Company’s intangible assets, net (in thousands): Estimated Useful Gross Accumulated Net Carrying December 31, 2018 Customer relationships 1-10 $ 173,592 $ 30,650 $ 142,942 Trade name 1.5-10 6,113 3,334 2,779 Developed technology 4-7 48,943 16,049 32,894 Non-Compete Agreements 3 $ 1,148 $ 191 $ 957 Total intangible assets $ 229,796 $ 50,224 $ 179,572 Estimated Useful Life (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount December 31, 2017 Customer relationships 5-10 $ 69,061 $ 18,040 $ 51,021 Trade name 1.5 3,431 2,900 531 Developed technology 4-7 29,308 10,817 18,491 Total intangible assets $ 101,800 $ 31,757 $ 70,043 |
Schedule of Weighted-Average Amortization Period | The following table summarizes the Company’s weighted-average amortization period, in total and by major finite-lived intangible asset class, for intangibles acquired during the year ended December 31 (in years): 2018 2017 2016 Customer relationships 9.8 9.0 9.3 Trade name 8.7 1.5 2.8 Developed technology 6.0 6.4 6.3 Non-Compete Agreements 3.0 0.0 0.0 Total weighted-average amortization period 9.0 8.2 8.0 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Estim ated annual amortization expense for the next five years and thereafter is as follows (in thousands): Amortization Expense Year ending December 31: 2019 27,011 2020 24,912 2021 23,992 2022 21,691 2023 and thereafter 81,966 Total $ 179,572 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of continuing operations before income taxes | The Company's loss from continuing operations before income taxes for the years ended December 31, was as follows (in thousands): 2018 2017 2016 Loss before provision for income taxes: United States $ (23,350 ) $ (22,748 ) $ (14,242 ) Foreign 2,702 5,319 2,259 $ (20,648 ) $ (17,429 ) $ (11,983 ) |
Schedule of components of income tax (benefit) | The components of the provision (benefit) for income taxes attributable to continuing operations are as follows (in thousands): 2018 2017 2016 Current Federal $ 177 $ — $ — State 253 177 37 Foreign 2,328 1,381 964 Total Current $ 2,758 $ 1,558 $ 1,001 Deferred Federal $ (9,866 ) $ (168 ) $ 727 State (1,584 ) 128 131 Foreign (1,117 ) (222 ) (329 ) Total Deferred (12,567 ) (262 ) 529 (Benefit from) provision for income taxes $ (9,809 ) $ 1,296 $ 1,530 |
Schedule of deferred tax components | Significant components of the Company’s deferred taxes as of December 31 are as follows (in thousands): 2018 2017 2016 Deferred tax assets: Accrued expenses and allowances $ 1,871 $ 1,715 $ 993 Deferred revenue 4 — 573 Stock compensation 743 901 1,054 Net operating loss and tax credit carryforwards 33,579 26,810 24,895 Disallowed interest expense carryforwards 2,888 — — Capital expenses 205 294 307 Other 723 129 176 Valuation allowance for noncurrent deferred tax assets (15,507 ) (15,730 ) (24,588 ) Net deferred tax assets $ 24,506 $ 14,119 $ 3,410 Deferred tax liabilities: Deferred revenue — (401 ) — Prepaid expenses (61 ) (58 ) (31 ) Intangible assets (33,518 ) (15,298 ) (5,716 ) Goodwill (2,012 ) (1,214 ) (1,029 ) Tax credit carryforwards (302 ) (410 ) (38 ) Deferred commissions (1,924 ) — — Net deferred tax liabilities $ (37,817 ) $ (17,381 ) $ (6,814 ) Net deferred taxes $ (13,311 ) $ (3,262 ) $ (3,404 ) |
Schedule of effective income tax rate reconciliation | The Company’s provision for income taxes differs from the expected tax expense (benefit) amount computed by applying the statutory federal income tax rate to income before taxes due to the following: 2018 2017 2016 Federal statutory rate 21.0 % 34.0 % 34.0 % State taxes, net of federal benefit 4.6 % 4.7 % 1.2 % Tax credits 0.4 % 1.0 % (0.1 )% Effect of foreign operations (2.1 )% 2.1 % 1.1 % Stock compensation 12.3 % 7.9 % (1.7 )% Permanent items and other (6.6 )% (0.5 )% (1.6 )% Effect of Tax Act — % (43.7 )% — % Tax carryforwards not benefited 17.9 % (12.9 )% (45.7 )% 47.5 % (7.4 )% (12.8 )% |
Schedule of unrecognized tax benefits | To the extent the Company is required to recognize interest and penalties related to unrecognized tax liabilities, this amount will be recorded as an accrued liability, (in thousands). Balance at December 31, 2016 $ 705 Additional based on tax positions related to the current year — Additions for tax positions of prior years — Reductions for tax positions of prior years (225 ) Settlements — Balance at December 31, 2017 $ 480 Additional based on tax positions related to the current year — Additions for tax positions of prior years 1,526 Reductions for tax positions of prior years — Settlements — Balance at December 31, 2018 $ 2,006 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Long-term debt consisted of the following at December 31, 2018 and December 31, 2017 (in thousands): December 31, 2018 2017 Senior secured loans (includes unamortized discount of $3,490 and $2,668 at December 31, 2018 and December 31, 2017, respectively, based on an imputed interest rate of 6.8%) $ 279,728 $ 111,144 Less current maturities (6,015 ) (2,301 ) Total long-term debt $ 273,713 $ 108,843 |
Schedule of Maturities of Long-term Debt | Under the terms of the Credit Facility, f uture debt maturities of long-term debt excluding debt discounts at December 31, 2018 are as follows, (in thousands): Year ending December 31: 2019 $ 7,125 2020 8,906 2021 14,250 2022 252,938 2023 — Thereafter — $ 283,219 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets for the computations of loss per share (in thousands, except share and per share amounts): December 31, 2018 2017 2016 Numerators: Net loss $ (10,839 ) $ (18,725 ) $ (13,513 ) Denominator: Weighted–average common shares outstanding, basic and diluted 19,985,528 18,411,247 16,472,799 Net loss per common share, basic and diluted $ (0.54 ) $ (1.02 ) $ (0.82 ) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table sets forth the anti-dilutive common share equivalents excluded from the weighted-average shares used to calculate diluted net loss per common share: December 31, 2018 2017 2016 Stock options 408,899 549,907 759,719 Restricted stock 997,014 1,047,480 839,477 Total anti–dilutive common share equivalents 1,405,913 1,597,387 1,599,196 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum lease payments under operating and capital lease obligations | Future minimum payments for operating and capital lease obligations and purchase commitments are as follows (in thousands): Capital Operating Purchase Commitments 2019 $ 605 $ 2,719 $ 6,273 2020 8 1,269 1,350 2021 — 720 675 2022 — 584 — 2023 — 489 — Thereafter — 702 — Total minimum lease payments 613 $ 6,483 $ 8,298 Less amount representing interest (81 ) Present value of capital lease obligations 532 Less current portion of capital lease obligations (544 ) Long-term capital lease obligations $ (12 ) |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | The estimated useful lives of property and equipment are as follows: Computer hardware and equipment 3 - 5 years Purchased software and licenses 3 - 5 years Furniture and fixtures 7 years Leasehold improvements Lesser of estimated useful life or lease term Property and equipment consisted of the following (in thousands) at: December 31, 2018 2017 Equipment (including equipment under capital lease of $5,773 and $6,234 at December 31, 2018 and 2017, respectively) $ 10,703 $ 9,861 Furniture and fixtures 434 263 Leasehold improvements 1,012 769 Accumulated depreciation (including for equipment under capital lease of $4,962 and $4,329 at December 31, 2018 and 2017, respectively) (9,322 ) (7,966 ) Property and equipment, net $ 2,827 $ 2,927 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Schedule of stock option activity | A summary of the Company’s stock option activity under all Plans is as follows: Number of Weighted– Weighted– Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2017 549,907 $ 7.36 Options granted 4,378 33.39 Options exercised (145,313 ) 6.12 Options forfeited — — Options expired (73 ) 1.79 Outstanding at December 31, 2018 408,899 $ 8.09 6.53 $ 7,835 Options vested and expected to vest at December 31, 2018 408,616 $ 8.08 6.53 $ 7,831 Options vested and exercisable at December 31, 2018 401,149 $ 7.95 6.50 $ 7,727 |
Schedule of restricted stock activity | A summary of the Company’s restricted stock activity under the 2010 and 2014 Plan is as follows: Number of Weighted-Average Grant Date Fair Value Unvested balances at December 31, 2017 1,047,480 $13.35 Awards granted 840,241 $29.00 Awards vested (873,706) $16.18 Awards forfeited (17,001) $21.04 Unvested balances at December 31, 2018 997,014 $23.93 |
Schedule of allocated share-based compensation expense | The Company recognized share-based compensation expense from all awards in the following expense categories (in thousands): Year Ended December 31, 2018 2017 2016 Cost of revenue $ 654 $ 436 $ 44 Research and development 1,250 796 204 Sales and marketing 533 232 105 General and administrative 11,693 8,513 3,980 Total $ 14,130 $ 9,977 $ 4,333 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Activity Impacting Deferred Commissions | The following table presents the activity impacting deferred commissions for the year ended December 31, 2018 (in thousands): December 31, 2018 Deferred commissions beginning balance $ — Adoption of ASC 606 6,517 Capitalized deferred commissions 4,775 Amortization of deferred commissions (2,367 ) Deferred commissions ending balance $ 8,925 |
Disaggregation of Revenue | The Company has operations primarily in the U.S., United Kingdom and Canada. Information about these operations is presented below (in thousands): December 31, 2018 2017 2016 Revenues: Subscription and support: United States $ 106,628 $ 72,355 $ 55,846 United Kingdom 11,189 3,127 4,674 Canada 5,395 3,838 3,522 Other International 13,366 6,147 1,510 Total subscription and support revenue 136,578 85,467 65,552 Perpetual license: United States 2,378 2,099 1,300 United Kingdom 94 218 150 Canada 303 70 66 Other International 1,127 1,959 134 Total perpetual license revenue 3,902 4,346 1,650 Professional services: United States 7,321 5,388 5,388 United Kingdom 487 494 1,556 Canada 591 471 502 Other International 1,006 1,786 119 Total perpetual license revenue 9,405 8,139 7,565 Total revenue $ 149,885 $ 97,952 $ 74,767 |
Adjustments for Adoption of 606 | The cumulative effect of the changes made to our consolidated January 1, 2018 balance sheet for the adoption of ASC 606 were as follows (in thousands): Balance Sheet Balance at December 31, 2017 Adjustments Due to ASC 606 Balance at January 1, 2018 Assets Deferred commissions, current $ — $ 2,070 $ 2,070 Deferred commissions, noncurrent — 4,447 4,447 Liabilities Deferred revenue (current) 43,807 225 44,032 Equity Accumulated deficit $ (81,128 ) $ 6,292 $ (74,836 ) In accordance with the new revenue standard requirements, the disclosure of the impact of adoption on our consolidated balance sheet, statement of operations and statement of cash flows for the periods ended December 31, 2018 was as follows (in thousands): As of December 31, 2018 Balance Sheet As Reported Balances Without Adoption of ASC 606 Effect of Change Assets Deferred commissions, current $ 2,633 $ — $ 2,633 Deferred commissions, noncurrent 6,292 — 6,292 Liabilities Deferred revenue (current) 57,626 57,777 (151 ) Equity Accumulated earnings (deficit) $ (85,675 ) $ (89,464 ) $ 3,789 Twelve Months Ended December 31, 2018 Statement of Operations As Reported Balances Without Adoption of ASC 606 Effect of Change Revenues Perpetual license 3,902 3,751 151 Operating expenses Sales & marketing 20,935 23,287 (2,352 ) |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of revenues and long lived assets by geographical area | December 31, 2018 2017 2016 Identifiable long-lived assets: United States $ 1,648 $ 2,768 $ 4,054 United Kingdom 756 14 18 Canada 77 145 284 Other International 346 — — Total identifiable long-lived assets $ 2,827 $ 2,927 $ 4,356 |
Quarterly Results (Unaudited) (
Quarterly Results (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Results | The following table sets forth our unaudited quarterly condensed consolidated statements of operations data for each of the last eight quarters through December 31, 2018 . The data has been prepared on the same basis as the audited consolidated financial statements and related notes included elsewhere in this Annual Report, and you should read the following tables together with such financial statements. The quarterly results of operations include all normal recurring adjustments necessary for a fair presentation of this data. Results of interim periods are not necessarily indicative of results for the entire year and are not necessarily indicative of future results. 2018 Quarters 2017 Quarters First Second Third Fourth First Second Third Fourth (dollars in thousands, except per share data) Consolidated Statements of Operations Data: Revenue: Subscription and support $ 27,729 $ 33,154 $ 33,919 $ 41,776 $ 18,135 $ 19,407 $ 23,169 $ 24,756 Perpetual license 1,626 683 915 678 694 1,746 856 1,050 Total product revenue 29,355 33,837 34,834 42,454 18,829 21,153 24,025 25,806 Professional services 2,260 2,109 2,310 2,726 1,923 2,128 2,047 2,041 Total revenue 31,615 35,946 37,144 45,180 20,752 23,281 26,072 27,847 Cost of revenue: Subscription and support (1)(2) 9,249 9,580 10,566 13,486 5,893 6,676 7,737 8,148 Professional services (1) 1,396 1,269 1,517 1,526 1,135 1,327 1,376 1,355 Total cost of revenue 10,645 10,849 12,083 15,012 7,028 8,003 9,113 9,503 Gross profit 20,970 25,097 25,061 30,168 13,724 15,278 16,959 18,344 Operating expenses: Sales and marketing (1) 4,408 5,248 5,299 5,980 3,221 4,037 4,258 3,791 Research and development (1) 4,891 5,286 5,400 5,743 3,477 4,003 4,092 4,223 Refundable Canadian tax credits (102 ) (203 ) (99 ) (2 ) (117 ) (112 ) (195 ) (118 ) General and administrative (1) 7,000 8,464 8,011 8,566 5,904 6,576 5,084 5,727 Depreciation and amortization 2,130 3,853 3,606 4,683 1,164 1,299 1,648 2,387 Acquisition-related expenses 3,102 3,140 2,497 9,989 3,691 2,278 4,399 4,724 Total operating expenses 21,429 25,788 24,714 34,959 17,340 18,081 19,286 20,734 Loss from operations (459 ) (691 ) 347 (4,791 ) (3,616 ) (2,803 ) (2,327 ) (2,390 ) Other expense: Interest expense, net (2,494 ) (3,143 ) (3,118 ) (4,518 ) (935 ) (1,160 ) (2,277 ) (2,210 ) Loss on debt extinguishment — — — — — (1,634 ) 1,634 — Other expense, net 303 (524 ) (744 ) (816 ) (112 ) (18 ) (130 ) 549 Total other expense (2,191 ) (3,667 ) (3,862 ) (5,334 ) (1,047 ) (2,812 ) (773 ) (1,661 ) Loss before provision for income taxes (2,650 ) (4,358 ) (3,515 ) (10,125 ) (4,663 ) (5,615 ) (3,100 ) (4,051 ) Provision for income taxes (511 ) (872 ) (735 ) 11,927 (951 ) (196 ) (406 ) 257 Net income (loss) $ (3,161 ) $ (5,230 ) $ (4,250 ) $ 1,802 $ (5,614 ) $ (5,811 ) $ (3,506 ) $ (3,794 ) Net income (loss) per common share: Basic $ (0.16 ) $ (0.26 ) $ (0.21 ) $ 0.09 $ (0.33 ) $ (0.33 ) $ (0.18 ) $ (0.19 ) Diluted (2) $ (0.16 ) $ (0.26 ) $ (0.21 ) $ 0.09 $ (0.33 ) $ (0.33 ) $ (0.18 ) $ (0.19 ) (1) During the fourth quarter of 2018 we recorded income tax benefits primarily related to our acquisition of companies with deferred tax liabilities that we recorded at the time of acquisition. These deferred tax liabilities enabled us to recognize $10.1 million of our historic deferred tax assets that had previously been offset by our valuation allowance. This reduction in our valuation allowance was recorded as a tax benefit on our consolidated statement of operations. (2) For all quarters, with the exception of the quarter ended December 31, 2018, basic and diluted net loss per share and weighted average common shares outstanding were the same as any additional common stock equivalents would have been anti-dilutive due to the net losses incurred during these periods. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Allowance for Doubtful Accounts) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Balance at beginning of year | $ 1,069 | $ 658 | $ 581 |
Provision | 875 | 1,069 | 863 |
Divestitures | 0 | 0 | (230) |
Writeoffs, net of recoveries | (539) | (658) | (556) |
Balance at end of year | $ 1,405 | $ 1,069 | $ 658 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details) | 12 Months Ended | |||
Dec. 31, 2018USD ($)reporting_unit | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Jan. 01, 2019USD ($) | |
Property, Plant and Equipment [Abstract] | ||||
Number of reportable units | reporting_unit | 1 | |||
Impairment of goodwill | $ 0 | $ 0 | $ 0 | |
Impairment of long-lived assets | 0 | 0 | 0 | |
Write off of deferred financing costs | 0 | 0 | 100,000 | |
Advertising expenses | 79,000 | 33,000 | 59,000 | |
Tax liability accrued in anticipation of future dividends from foreign subsidiaries | 0 | |||
Foreign currency transaction gains | $ 293,000 | |||
Foreign currency transaction losses | 178,000 | 271,000 | ||
Minimum | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Cash holdback, payment period (in months) | 12 months | |||
Earnout payment, payment period (in months) | 12 months | |||
Maximum | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Cash holdback, payment period (in months) | 18 months | |||
Earnout payment, payment period (in months) | 18 months | |||
Trade name | ||||
Property, Plant and Equipment [Abstract] | ||||
Impairment of intangible asset | $ 0 | $ 0 | $ 0 | |
Computer Equipment | Minimum | ||||
Property, Plant and Equipment [Abstract] | ||||
Estimated useful life (in years) | 3 years | |||
Computer Equipment | Maximum | ||||
Property, Plant and Equipment [Abstract] | ||||
Estimated useful life (in years) | 5 years | |||
Purchased Software and Licenses | Minimum | ||||
Property, Plant and Equipment [Abstract] | ||||
Estimated useful life (in years) | 3 years | |||
Purchased Software and Licenses | Maximum | ||||
Property, Plant and Equipment [Abstract] | ||||
Estimated useful life (in years) | 5 years | |||
Furniture and Fixtures | ||||
Property, Plant and Equipment [Abstract] | ||||
Estimated useful life (in years) | 7 years | |||
Subsequent Event | Forecast | Accounting Standards Update 2016-02 | Minimum | ||||
Property, Plant and Equipment [Abstract] | ||||
Right-of-use asset | $ 4,700,000 | |||
Operating lease liability | 4,700,000 | |||
Subsequent Event | Forecast | Accounting Standards Update 2016-02 | Maximum | ||||
Property, Plant and Equipment [Abstract] | ||||
Right-of-use asset | 6,200,000 | |||
Operating lease liability | $ 6,200,000 | |||
Accumulated Other Comprehensive Loss | ||||
Property, Plant and Equipment [Abstract] | ||||
Foreign currency translation adjustment | $ 1,400,000 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Fair Value Assumptions) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Weighted average grant-date fair value of options (in dollars per share) | $ 11.42 | $ 7.47 | $ 3.23 |
Expected volatility (percent) | 33.40% | 35.00% | 42.50% |
Risk-free interest rate (percent) | 2.80% | 1.20% | |
Expected life in years (in years) | 5 years | 5 years | 5 years 11 months 5 days |
Dividend yield (percent) | $ 0 | $ 0 | $ 0 |
Minimum | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Risk-free interest rate (percent) | 1.10% | ||
Maximum | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Risk-free interest rate (percent) | 2.00% |
Acquisitions - 2018 Acquisition
Acquisitions - 2018 Acquisitions (Details) - USD ($) $ in Thousands | Dec. 12, 2018 | Oct. 03, 2018 | Jun. 27, 2018 | Mar. 21, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | |||||||
Purchase price paid | $ 160,751 | $ 110,324 | $ 12,151 | ||||
Interfax Communications Limited | |||||||
Business Acquisition [Line Items] | |||||||
Business combination consideration including holdbacks and earnouts | $ 33,600 | ||||||
Cash acquired | 1,400 | ||||||
Holdback | $ 5,000 | ||||||
Cash holdback, payment period (in months) | 18 months | ||||||
Earnout consideration liability | $ 300 | ||||||
Revenue since date of acquisition | 12,100 | ||||||
RO Innovation, Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Cash acquired | $ 200 | ||||||
Cash holdback, payment period (in months) | 12 months | ||||||
Earnout consideration liability | $ 0 | ||||||
Revenue since date of acquisition | 3,000 | ||||||
Purchase price paid | 12,300 | ||||||
Business combination, contingent consideration liability | 1,800 | ||||||
Business combination, maximum earnout payments | $ 7,500 | ||||||
Rant & Rave | |||||||
Business Acquisition [Line Items] | |||||||
Cash holdback, payment period (in months) | 12 months | ||||||
Revenue since date of acquisition | $ 5,400 | ||||||
Purchase price paid | 58,500 | ||||||
Business combination, contingent consideration liability | $ 6,500 | ||||||
Adestra Ltd. | |||||||
Business Acquisition [Line Items] | |||||||
Cash holdback, payment period (in months) | 12 months | ||||||
Revenue since date of acquisition | $ 600 | ||||||
Purchase price paid | 56,000 | ||||||
Business combination, contingent consideration liability | $ 4,200 | ||||||
Marketech | Interfax Communications Limited | |||||||
Business Acquisition [Line Items] | |||||||
Payments to acquire certain assets and intangible assets | 2,000 | ||||||
Business combination, maximum earnout payments | $ 1,000 |
Acquisitions - Rant & Rave Pro
Acquisitions - Rant & Rave Pro Forma (Details) - Rant & Rave - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Business Acquisition [Line Items] | ||
Revenue | $ 167,450 | $ 118,696 |
Net loss | $ (14,086) | $ (24,867) |
Acquisitions - 2017 Acquisition
Acquisitions - 2017 Acquisitions (Details) - USD ($) $ in Thousands | Nov. 16, 2017 | Jul. 12, 2017 | Apr. 21, 2017 | Jan. 10, 2017 | Sep. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | ||||||||
Purchase price paid | $ 160,751 | $ 110,324 | $ 12,151 | |||||
Omtool, Ltd | ||||||||
Business Acquisition [Line Items] | ||||||||
Purchase price paid | $ 19,300 | |||||||
RightAnswers | ||||||||
Business Acquisition [Line Items] | ||||||||
Purchase price paid | $ 17,400 | |||||||
Cash holdback, payment period (in months) | 1 year | |||||||
Cash acquired | $ 100 | |||||||
Cash holdback payable | 2,500 | |||||||
Earnout consideration liability | $ 4,000 | |||||||
Earnout payment | $ 1,000 | |||||||
Holdback | $ 2,000 | |||||||
Waterfall | ||||||||
Business Acquisition [Line Items] | ||||||||
Purchase price paid | $ 24,400 | |||||||
Cash holdback, payment period (in months) | 18 months | |||||||
Cash acquired | $ 400 | |||||||
Cash holdback payable | 1,500 | |||||||
Earnout consideration liability | 3,000 | |||||||
Earnout payment | $ 2,200 | |||||||
Qvidian | ||||||||
Business Acquisition [Line Items] | ||||||||
Purchase price paid | $ 50,000 |
Acquisitions - Qvidian Pro Form
Acquisitions - Qvidian Pro Forma (Details) - Qvidian - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Business Acquisition [Line Items] | ||
Revenue | $ 115,707 | $ 89,906 |
Net loss | $ (13,679) | $ (14,370) |
Acquisitions - 2016 Acquisition
Acquisitions - 2016 Acquisitions (Details) - USD ($) $ in Thousands | Apr. 27, 2016 | Mar. 14, 2016 | Jan. 07, 2016 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jul. 25, 2016 |
Business Acquisition [Line Items] | ||||||||
Purchase price paid | $ 160,751 | $ 110,324 | $ 12,151 | |||||
Loss on disposal of business | $ 0 | $ 0 | $ 746 | |||||
LeadLander | ||||||||
Business Acquisition [Line Items] | ||||||||
Purchase price paid | $ 8,000 | |||||||
Cash acquired | 400 | |||||||
Cash holdback | $ 1,200 | |||||||
Cash holdback, payment period (in months) | 12 months | |||||||
California-based Website Analytic Provider | ||||||||
Business Acquisition [Line Items] | ||||||||
Value of shares issued in acquisition | $ 2,400 | |||||||
Earnout payment | $ 2,400 | |||||||
Hipcricket, Inc. | ||||||||
Business Acquisition [Line Items] | ||||||||
Numbers of share issued in acquisition (in shares) | 1,000,000 | |||||||
Value of shares issued | $ 5,700 | |||||||
API | ||||||||
Business Acquisition [Line Items] | ||||||||
Purchase price paid | $ 4,100 | |||||||
Cash acquired | 100 | |||||||
Cash holdback | $ 800 | |||||||
Cash holdback, payment period (in months) | 12 months | |||||||
EPM Live Product Business | Discontinued Operations, Disposed of by Means Other than Sale, Exchange | Hipcricket, Inc. | ||||||||
Business Acquisition [Line Items] | ||||||||
Fair value of business transferred | 5,900 | |||||||
Loss on disposal of business | $ 700 |
Acquisitions (Assets Acquired a
Acquisitions (Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 13, 2018 | Oct. 03, 2018 | Jun. 28, 2018 | Mar. 21, 2018 | Dec. 31, 2017 | Nov. 16, 2017 | Jul. 12, 2017 | Apr. 21, 2017 | Jan. 10, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | |||||||||||
Goodwill | $ 225,322 | $ 154,607 | $ 69,097 | ||||||||
Adestra Ltd. | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Cash | $ 145 | ||||||||||
Accounts receivable | 2,925 | ||||||||||
Other current assets | 1,395 | ||||||||||
Property and equipment | 796 | ||||||||||
Goodwill | 26,363 | ||||||||||
Other assets | 0 | ||||||||||
Total assets acquired | 69,135 | ||||||||||
Accounts payable | (543) | ||||||||||
Accrued expense and other | (1,916) | ||||||||||
Deferred tax liabilities | (5,680) | ||||||||||
Deferred revenue | (1,322) | ||||||||||
Total liabilities assumed | (9,461) | ||||||||||
Total consideration | 59,674 | ||||||||||
Adestra Ltd. | Customer relationships | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 29,823 | ||||||||||
Adestra Ltd. | Trade name | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 992 | ||||||||||
Adestra Ltd. | Technology | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 6,696 | ||||||||||
Adestra Ltd. | Noncompetes | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | $ 0 | ||||||||||
Rant & Rave | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Cash | $ 696 | ||||||||||
Accounts receivable | 3,482 | ||||||||||
Other current assets | 3,836 | ||||||||||
Property and equipment | 131 | ||||||||||
Goodwill | 32,575 | ||||||||||
Other assets | 0 | ||||||||||
Total assets acquired | 78,365 | ||||||||||
Accounts payable | (1,577) | ||||||||||
Accrued expense and other | (6,114) | ||||||||||
Deferred tax liabilities | (3,896) | ||||||||||
Deferred revenue | (2,019) | ||||||||||
Total liabilities assumed | (13,606) | ||||||||||
Total consideration | 64,759 | ||||||||||
Rant & Rave | Customer relationships | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 29,981 | ||||||||||
Rant & Rave | Trade name | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 1,099 | ||||||||||
Rant & Rave | Technology | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 6,565 | ||||||||||
Rant & Rave | Noncompetes | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | |||||||||||
Interfax Communications Limited | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Cash | $ 1,396 | ||||||||||
Accounts receivable | 1,587 | ||||||||||
Other current assets | 1,341 | ||||||||||
Property and equipment | 286 | ||||||||||
Goodwill | 13,832 | ||||||||||
Other assets | 14 | ||||||||||
Total assets acquired | 46,918 | ||||||||||
Accounts payable | (737) | ||||||||||
Accrued expense and other | (2,817) | ||||||||||
Deferred tax liabilities | (3,364) | ||||||||||
Deferred revenue | 0 | ||||||||||
Total liabilities assumed | (6,918) | ||||||||||
Total consideration | 40,000 | ||||||||||
Interfax Communications Limited | Customer relationships | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 22,577 | ||||||||||
Interfax Communications Limited | Trade name | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 649 | ||||||||||
Interfax Communications Limited | Technology | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 5,236 | ||||||||||
Interfax Communications Limited | Noncompetes | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | $ 0 | ||||||||||
RO Innovation, Inc. | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Cash | $ 197 | ||||||||||
Accounts receivable | 1,563 | ||||||||||
Other current assets | 1,299 | ||||||||||
Property and equipment | 15 | ||||||||||
Goodwill | 7,568 | ||||||||||
Other assets | 0 | ||||||||||
Total assets acquired | 20,259 | ||||||||||
Accounts payable | (229) | ||||||||||
Accrued expense and other | (1,921) | ||||||||||
Deferred tax liabilities | (2,129) | ||||||||||
Deferred revenue | (1,817) | ||||||||||
Total liabilities assumed | (6,096) | ||||||||||
Total consideration | 14,163 | ||||||||||
RO Innovation, Inc. | Customer relationships | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 6,688 | ||||||||||
RO Innovation, Inc. | Trade name | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 111 | ||||||||||
RO Innovation, Inc. | Technology | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 1,670 | ||||||||||
RO Innovation, Inc. | Noncompetes | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | $ 1,148 | ||||||||||
Qvidian | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Cash | $ 468 | ||||||||||
Accounts receivable | 1,907 | ||||||||||
Other current assets | 335 | ||||||||||
Property and equipment | 108 | ||||||||||
Goodwill | 29,199 | ||||||||||
Other assets | 8 | ||||||||||
Total assets acquired | 68,151 | ||||||||||
Accounts payable | (388) | ||||||||||
Accrued expense and other | (403) | ||||||||||
Deferred tax liabilities | (7,971) | ||||||||||
Deferred revenue | (9,389) | ||||||||||
Total liabilities assumed | (18,151) | ||||||||||
Total consideration | 50,000 | ||||||||||
Qvidian | Customer relationships | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 30,160 | ||||||||||
Qvidian | Trade name | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 227 | ||||||||||
Qvidian | Technology | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 5,739 | ||||||||||
Qvidian | Noncompetes | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | $ 0 | ||||||||||
Waterfall | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Cash | $ 100 | ||||||||||
Accounts receivable | 1,477 | ||||||||||
Other current assets | 608 | ||||||||||
Property and equipment | 23 | ||||||||||
Goodwill | 18,575 | ||||||||||
Other assets | 0 | ||||||||||
Total assets acquired | 30,093 | ||||||||||
Accounts payable | (605) | ||||||||||
Accrued expense and other | (1,136) | ||||||||||
Deferred tax liabilities | 0 | ||||||||||
Deferred revenue | (1,220) | ||||||||||
Total liabilities assumed | (2,961) | ||||||||||
Total consideration | 27,132 | ||||||||||
Waterfall | Customer relationships | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 6,400 | ||||||||||
Waterfall | Trade name | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 110 | ||||||||||
Waterfall | Technology | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 2,800 | ||||||||||
Waterfall | Noncompetes | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | $ 0 | ||||||||||
RightAnswers | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Cash | $ 139 | ||||||||||
Accounts receivable | 2,164 | ||||||||||
Other current assets | 246 | ||||||||||
Property and equipment | 408 | ||||||||||
Goodwill | 15,680 | ||||||||||
Other assets | 0 | ||||||||||
Total assets acquired | 31,617 | ||||||||||
Accounts payable | (139) | ||||||||||
Accrued expense and other | (2,108) | ||||||||||
Deferred tax liabilities | 0 | ||||||||||
Deferred revenue | (5,479) | ||||||||||
Total liabilities assumed | (7,726) | ||||||||||
Total consideration | 23,891 | ||||||||||
RightAnswers | Customer relationships | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 10,500 | ||||||||||
RightAnswers | Trade name | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 180 | ||||||||||
RightAnswers | Technology | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 2,300 | ||||||||||
RightAnswers | Noncompetes | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | $ 0 | ||||||||||
Omtool, Ltd | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Cash | $ 2,957 | ||||||||||
Accounts receivable | 784 | ||||||||||
Other current assets | 464 | ||||||||||
Property and equipment | 58 | ||||||||||
Goodwill | 14,081 | ||||||||||
Other assets | 33 | ||||||||||
Total assets acquired | 26,127 | ||||||||||
Accounts payable | (219) | ||||||||||
Accrued expense and other | (915) | ||||||||||
Deferred tax liabilities | 0 | ||||||||||
Deferred revenue | (2,779) | ||||||||||
Total liabilities assumed | (3,913) | ||||||||||
Total consideration | 22,214 | ||||||||||
Omtool, Ltd | Customer relationships | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 4,400 | ||||||||||
Omtool, Ltd | Trade name | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 170 | ||||||||||
Omtool, Ltd | Technology | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 3,180 | ||||||||||
Omtool, Ltd | Noncompetes | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | $ 0 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) | 12 Months Ended | ||||||||
Dec. 31, 2018 | Dec. 13, 2018 | Oct. 03, 2018 | Jun. 28, 2018 | Mar. 21, 2018 | Dec. 31, 2017 | Nov. 16, 2017 | Jul. 12, 2017 | Dec. 31, 2016 | |
Business Acquisition [Line Items] | |||||||||
Goodwill | $ 225,322,000 | $ 154,607,000 | $ 69,097,000 | ||||||
Business acquisition, transaction costs | 7,500,000 | $ 6,100,000 | $ 3,600,000 | ||||||
Qvidian | |||||||||
Business Acquisition [Line Items] | |||||||||
Business combination adjustment, intangibles | 15,700,000 | ||||||||
Business combination adjustment, deferred tax liabilities | 8,000,000 | ||||||||
Goodwill | $ 29,199,000 | ||||||||
Interfax Communications Limited | |||||||||
Business Acquisition [Line Items] | |||||||||
Business combination adjustment, intangibles | (5,700,000) | ||||||||
Goodwill | $ 13,832,000 | ||||||||
Expected tax deductible amount of goodwill | 2,400,000 | ||||||||
RO Innovation, Inc. | |||||||||
Business Acquisition [Line Items] | |||||||||
Goodwill | $ 7,568,000 | ||||||||
Expected tax deductible amount of goodwill | 2,500,000 | ||||||||
LeadLander, HipCricket, Waterfall, Interfax, RO Innovation, Rant & Rave, Adestra, API, Omtool, RightAnswers, and Qvidian | |||||||||
Business Acquisition [Line Items] | |||||||||
Goodwill | 157,900,000 | ||||||||
LeadLander | |||||||||
Business Acquisition [Line Items] | |||||||||
Expected tax deductible amount of goodwill | 11,300,000 | ||||||||
Hipcricket, Inc. | |||||||||
Business Acquisition [Line Items] | |||||||||
Expected tax deductible amount of goodwill | 8,000,000 | ||||||||
Waterfall | |||||||||
Business Acquisition [Line Items] | |||||||||
Goodwill | $ 18,575,000 | ||||||||
Expected tax deductible amount of goodwill | 3,700,000 | ||||||||
Rant & Rave | |||||||||
Business Acquisition [Line Items] | |||||||||
Goodwill | $ 32,575,000 | ||||||||
Adestra Ltd. | |||||||||
Business Acquisition [Line Items] | |||||||||
Goodwill | $ 26,363,000 | ||||||||
API, Omtool, RightAnswers, and Qvidian | |||||||||
Business Acquisition [Line Items] | |||||||||
Expected tax deductible amount of goodwill | $ 0 |
Fair Value Measurements (Assets
Fair Value Measurements (Assets and Liabilities at Fair Value, Recurring Basis) (Details) - Recurring Measurement - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Liabilities: | ||
Earnout consideration liability | $ 1,396 | $ 3,576 |
Level 1 | ||
Liabilities: | ||
Earnout consideration liability | 0 | 0 |
Level 2 | ||
Liabilities: | ||
Earnout consideration liability | 0 | 0 |
Level 3 | ||
Liabilities: | ||
Earnout consideration liability | $ 1,396 | $ 3,576 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) $ in Thousands | 1 Months Ended | |||
Nov. 30, 2018 | Feb. 28, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Holdback | $ 1,396 | $ 3,576 | ||
RightAnswers | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Holdback | $ 2,000 | |||
RightAnswers | Recurring Measurement | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Settlements | $ 2,000 | |||
Waterfall | Recurring Measurement | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Settlements | $ 2,200 | |||
Holdback | $ 1,600 |
Fair Value Measurements (Fixed
Fair Value Measurements (Fixed Maturity Securities) (Details) - Level 3 - Earnout Consideration - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 3,576 | |
Ending balance | 1,396 | $ 3,576 |
Recurring Measurement | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 3,576 | 2,500 |
(Gains) or losses included in earnings | 1,627 | (617) |
Acquisitions | 321 | 5,226 |
Settlements | $ (4,128) | (3,533) |
Ending balance | $ 3,576 |
Fair Value Measurements (Quanti
Fair Value Measurements (Quantitative Information) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Level 3 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Contingent consideration | $ 1,396 | $ 3,576 |
Fair Value Measurements (Debt)
Fair Value Measurements (Debt) (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of debt | $ 283.2 | $ 113.8 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets (Schedule of Goodwill) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill [Roll Forward] | ||
Beginning balance, goodwill | $ 154,607 | $ 69,097 |
Acquired in business combinations | 70,139 | 88,819 |
Adjustment related to prior year business combinations | (7,051) | 17 |
Adjustment due to current year business combinations | 8,685 | (4,232) |
Foreign currency translation adjustment | (1,058) | 906 |
Ending balance, goodwill | $ 225,322 | $ 154,607 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets (Intangible Assets, Net) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 229,796 | $ 101,800 |
Accumulated Amortization | 50,224 | 31,757 |
Net Carrying Amount | 179,572 | 70,043 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 173,592 | 69,061 |
Accumulated Amortization | 30,650 | 18,040 |
Net Carrying Amount | $ 142,942 | $ 51,021 |
Customer relationships | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life (in years) | 1 year | 5 years |
Customer relationships | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life (in years) | 10 years | 10 years |
Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life (in years) | 1 year 6 months | |
Gross Carrying Amount | $ 6,113 | $ 3,431 |
Accumulated Amortization | 3,334 | 2,900 |
Net Carrying Amount | $ 2,779 | 531 |
Trade name | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life (in years) | 1 year 6 months | |
Trade name | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life (in years) | 10 years | |
Developed Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 48,943 | 29,308 |
Accumulated Amortization | 16,049 | 10,817 |
Net Carrying Amount | $ 32,894 | $ 18,491 |
Developed Technology | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life (in years) | 4 years | 4 years |
Developed Technology | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life (in years) | 7 years | 7 years |
Noncompetes | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life (in years) | 3 years | |
Gross Carrying Amount | $ 1,148 | |
Accumulated Amortization | 191 | |
Net Carrying Amount | $ 957 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets (Weighted-Average Amortization Period) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Weighted-average amortization period (in years) | 9 years | 8 years 2 months | 8 years |
Amortization expense | $ 19 | $ 9.6 | $ 7.2 |
Customer relationships | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Weighted-average amortization period (in years) | 9 years 9 months | 9 years | 9 years 4 months |
Trade name | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Weighted-average amortization period (in years) | 8 years 8 months | 1 year 6 months | 2 years 9 months 18 days |
Developed Technology | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Weighted-average amortization period (in years) | 6 years | 6 years 5 months | 6 years 3 months 18 days |
Noncompetes | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Weighted-average amortization period (in years) | 3 years | 0 years | 0 years |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets (Estimated Annual Amortization Expense) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2019 | $ 27,011 | |
2020 | 24,912 | |
2021 | 23,992 | |
2022 | 21,691 | |
2023 and thereafter | 81,966 | |
Net Carrying Amount | $ 179,572 | $ 70,043 |
Income Taxes (Loss from Continu
Income Taxes (Loss from Continuing Operations, Domestic and Foreign) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
United States | $ (23,350) | $ (22,748) | $ (14,242) |
Foreign | 2,702 | 5,319 | 2,259 |
Income (loss) before provision for income taxes | $ (20,648) | $ (17,429) | $ (11,983) |
Income Taxes (Components of the
Income Taxes (Components of the Provision(Benefit) for Income Taxes) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current | |||||||||||
Federal | $ 177 | $ 0 | $ 0 | ||||||||
State | 253 | 177 | 37 | ||||||||
Foreign | 2,328 | 1,381 | 964 | ||||||||
Total Current | 2,758 | 1,558 | 1,001 | ||||||||
Deferred | |||||||||||
Federal | (9,866) | (168) | 727 | ||||||||
State | (1,584) | 128 | 131 | ||||||||
Foreign | (1,117) | (222) | (329) | ||||||||
Total Deferred | (12,567) | (262) | 529 | ||||||||
Provision (benefit) for income taxes | $ (11,927) | $ 735 | $ 872 | $ 511 | $ 257 | $ 406 | $ 196 | $ 951 | $ (9,809) | $ 1,296 | $ 1,530 |
Income Taxes (Deferred Tax Asse
Income Taxes (Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | |||
Accrued expenses and allowances | $ 1,871 | $ 1,715 | $ 993 |
Deferred revenue | 4 | 0 | 573 |
Stock compensation | 743 | 901 | 1,054 |
Net operating loss and tax credit carryforwards | 33,579 | 26,810 | 24,895 |
Disallowed interest expense carryforwards | 2,888 | 0 | 0 |
Capital expenses | 205 | 294 | 307 |
Other | 723 | 129 | 176 |
Valuation allowance for noncurrent deferred tax assets | (15,507) | (15,730) | (24,588) |
Net deferred tax assets | 24,506 | 14,119 | 3,410 |
Deferred tax liabilities: | |||
Deferred revenue | 0 | (401) | 0 |
Prepaid expenses | (61) | (58) | (31) |
Intangible assets | (33,518) | (15,298) | (5,716) |
Goodwill | (2,012) | (1,214) | (1,029) |
Tax credit carryforwards | (302) | (410) | (38) |
Deferred commissions | (1,924) | 0 | 0 |
Net deferred tax liabilities | (37,817) | (17,381) | (6,814) |
Net deferred taxes | $ (13,311) | $ (3,262) | $ (3,404) |
Income Taxes (Reconciliation of
Income Taxes (Reconciliation of Income Tax Rate) (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory rate (percent) | 21.00% | 34.00% | 34.00% |
State taxes, net of federal benefit (percent) | 4.60% | 4.70% | 1.20% |
Tax credits (percent) | 0.40% | 1.00% | (0.10%) |
Effect of foreign operations (percent) | (2.10%) | 2.10% | 1.10% |
Stock compensation (percent) | 12.30% | 7.90% | (1.70%) |
Permanent items and other (percent) | (6.60%) | (0.50%) | (1.60%) |
Effect of Tax Act (percent) | 0.00% | (43.70%) | 0.00% |
Tax carryforwards not benefited (percent) | 17.90% | (12.90%) | (45.70%) |
Effective tax rate (percent) | 47.50% | (7.40%) | (12.80%) |
Income Taxes (Unrecognized Tax
Income Taxes (Unrecognized Tax Benefits Roll Forward) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Beginning balance | $ 480 | $ 705 |
Additional based on tax positions related to the current year | 0 | 0 |
Additions for tax positions of prior years | 1,526 | 0 |
Reductions for tax positions of prior years | 0 | (225) |
Settlements | 0 | 0 |
Ending balance | $ 2,006 | $ 480 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Operating Loss Carryforwards [Line Items] | ||
Unrecognized tax benefits that would impact effective tax rate | $ 0.6 | |
Accrued interest or penalties related to uncertain tax positions | 0.2 | |
Operations and Acquisitions | ||
Operating Loss Carryforwards [Line Items] | ||
Valuation allowance, deferred tax asset increase (decrease) | (0.2) | $ (8.8) |
Domestic Business Combinations | ||
Operating Loss Carryforwards [Line Items] | ||
Valuation allowance, deferred tax asset increase (decrease) | (10.1) | |
Domestic Tax Authority | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | 204.8 | |
Operating loss carryforwards, expiration amount | 82.6 | |
Credit carryforwards, expiration before utilization | 3.5 | |
Domestic Tax Authority | Research Tax Credit Carryforward | ||
Operating Loss Carryforwards [Line Items] | ||
Research & development credit carryforwards | 3.5 | |
Foreign Tax Authority | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards, carry forward indefinitely | $ 24.8 |
Debt (Long-term Debt) (Details)
Debt (Long-term Debt) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | ||
Less current maturities | $ (6,015) | $ (2,301) |
Total long-term debt | 273,713 | 108,843 |
Senior secured loans | ||
Debt Instrument [Line Items] | ||
Long-term debt | 279,728 | 111,144 |
Note discount | $ 3,490 | $ 2,668 |
Imputed interest rate (as a percent) | 6.80% | 6.80% |
Debt (Loan and Security Agreeme
Debt (Loan and Security Agreements) (Details) | Dec. 12, 2018USD ($) | May 14, 2015 | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Debt Instrument [Line Items] | ||||
Capital stock buyback maximum | $ 10,000,000 | |||
Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 345,000,000 | |||
Domestic Line of Credit | Line of Credit | Base Rate | Minimum | ||||
Debt Instrument [Line Items] | ||||
Basis spread | 2.75% | |||
Domestic Line of Credit | Line of Credit | Base Rate | Maximum | ||||
Debt Instrument [Line Items] | ||||
Basis spread | 3.00% | |||
Domestic Line of Credit | Line of Credit | London Interbank Offered Rate (LIBOR) | Minimum | ||||
Debt Instrument [Line Items] | ||||
Basis spread | 3.75% | |||
Domestic Line of Credit | Line of Credit | London Interbank Offered Rate (LIBOR) | Maximum | ||||
Debt Instrument [Line Items] | ||||
Basis spread | 4.00% | |||
Domestic Line of Credit | Line of Credit | Federal Funds Effective Swap Rate | ||||
Debt Instrument [Line Items] | ||||
Margin (as percent) | 0.50% | |||
Domestic Line of Credit | Line of Credit | Prime Rate | ||||
Debt Instrument [Line Items] | ||||
Margin (as percent) | 1.00% | |||
Domestic Line of Credit | Term Loan | ||||
Debt Instrument [Line Items] | ||||
Long-term line of credit | $ 278,000,000 | |||
Foreign Line of Credit | Line of Credit | London Interbank Offered Rate (LIBOR) | Minimum | ||||
Debt Instrument [Line Items] | ||||
Basis spread | 3.75% | |||
Foreign Line of Credit | Line of Credit | London Interbank Offered Rate (LIBOR) | Maximum | ||||
Debt Instrument [Line Items] | ||||
Basis spread | 4.00% | |||
Credit Facility | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 400,000,000 | $ 200,000,000 | ||
Stated interest rate (as percent) | 2.50% | |||
Maximum allowed leverage ratio | 4.75 | |||
Maximum allowed revenue ratio | 1.25 | 1.50 | ||
Debt Instrument, Covenant, Fixed Charge Coverage Ratio | 1.10 | 1.25 | ||
Maximum amount of purchase consideration payable, per transaction | $ 40,000,000 | |||
Maximum amount of purchase consideration payable, combined | 175,000,000 | |||
Maximum permitted indebtedness to sellers of businesses | $ 20,000,000 | |||
Credit Facility | Line of Credit | Minimum | ||||
Debt Instrument [Line Items] | ||||
Decrease in basis spread on variable rate (as a percent) | 0.50% | |||
Credit Facility | Line of Credit | Maximum | ||||
Debt Instrument [Line Items] | ||||
Decrease in basis spread on variable rate (as a percent) | 1.50% | |||
Credit Facility | Medium-term Notes | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 285,000,000 | |||
Long-term line of credit | $ 283,200,000 | |||
Debt instrument effective interest rate (as a percent) | 6.40% | 7.00% | ||
Credit Facility | Delayed Draw Term Loan | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 30,000,000 | |||
Stated interest rate (as percent) | 2.50% | |||
Credit Facility | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 30,000,000 | |||
Credit Facility | Uncommitted Accordion Debt | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | 55,000,000 | |||
Credit Facility | Domestic Line of Credit | Medium-term Notes | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | 279,768,750 | |||
Credit Facility | Domestic Line of Credit | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | 29,000,000 | |||
Credit Facility | Domestic Line of Credit | Letter of Credit | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | 500,000 | |||
Credit Facility | Foreign Line of Credit | Medium-term Notes | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | 5,231,250 | |||
Long-term line of credit | 5,200,000 | |||
Credit Facility | Foreign Line of Credit | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | 1,000,000 | |||
Credit Facility | Foreign Line of Credit | Letter of Credit | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 250,000 | |||
Loan Facility | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Increase in interest rate upon default (as a percent) | 2.00% | |||
Stock repurchases minimum liquidity requirement | $ 25,000,000 | |||
Loan Facility | August 2,2017 to August 1,2018 | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Prepayment premium, percent | 2.00% | |||
Loan Facility | August 2, 2018 to August 1,2019 | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Prepayment premium, percent | 1.00% | |||
Loan Facility | August 2,2019 to Maturity Date | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Prepayment premium, percent | 0.00% | |||
Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Interest charges (as a percent) | 6.60% | |||
Financing costs | $ 1,700,000 | |||
Term One | Credit Facility | Delayed Draw Term Loan | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate (as percent) | 5.00% |
Debt (Seller Notes) (Details)
Debt (Seller Notes) (Details) - Seller Notes Payable - FileBound - USD ($) | May 31, 2016 | May 31, 2015 | May 31, 2013 |
Business Acquisition [Line Items] | |||
Note face amount | $ 3,500,000 | ||
Stated interest rate (as percent) | 5.00% | ||
Notes paid | $ 500,000 | $ 3,000,000 |
Debt (Future Debt Maturities of
Debt (Future Debt Maturities of Long-term Debt) (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Long-term Debt, Fiscal Year Maturity [Abstract] | |
2019 | $ 7,125 |
2020 | 8,906 |
2021 | 14,250 |
2022 | 252,938 |
2023 | 0 |
Thereafter | 0 |
Long-term debt | $ 283,219 |
Net Loss Per Share (Computation
Net Loss Per Share (Computation of Loss Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Numerators: | |||||||||||
Net loss | $ 1,802 | $ (4,250) | $ (5,230) | $ (3,161) | $ (3,794) | $ (3,506) | $ (5,811) | $ (5,614) | $ (10,839) | $ (18,725) | $ (13,513) |
Denominator: | |||||||||||
Weighted-average common shares outstanding, basic and diluted (in shares) | 19,985,528 | 18,411,247 | 16,472,799 | ||||||||
Net loss per common share, basic and diluted (in USD per share) | $ (0.54) | $ (1.02) | $ (0.82) |
Net Loss Per Share (Anti-Diluti
Net Loss Per Share (Anti-Dilutive Common Share Equivalents) (Details) - shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti–dilutive common share equivalents (in shares) | 1,405,913 | 1,597,387 | 1,599,196 |
Stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti–dilutive common share equivalents (in shares) | 408,899 | 549,907 | 759,719 |
Restricted stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti–dilutive common share equivalents (in shares) | 997,014 | 1,047,480 | 839,477 |
Commitments and Contingencies_2
Commitments and Contingencies (Future Minimum Payments, Operating and Capital Leases) (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Capital Leases | |
2019 | $ 605 |
2020 | 8 |
2021 | 0 |
2022 | 0 |
2023 | 0 |
Thereafter | 0 |
Total minimum lease payments | 613 |
Less amount representing interest | (81) |
Present value of capital lease obligations | 532 |
Less current portion of capital lease obligations | (544) |
Long-term capital lease obligations | (12) |
Operating Leases | |
2019 | 2,719 |
2020 | 1,269 |
2021 | 720 |
2022 | 584 |
2023 | 489 |
Thereafter | 702 |
Total minimum lease payments | 6,483 |
Purchase Commitments | |
2019 | 6,273 |
2020 | 1,350 |
2021 | 675 |
2022 | 0 |
2023 | 0 |
Thereafter | 0 |
Total minimum lease payments | $ 8,298 |
Commitments and Contingencies_3
Commitments and Contingencies (Additional Information) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Line of Credit Facility [Line Items] | |||
Rent expense | $ 1,900 | $ 3,800 | $ 2,100 |
Operating rent expense, net of restructuring charges | 1,500 | ||
Sublease rental income | 300 | 300 | 0 |
Future sublease income | $ 400 | ||
Capital leases, term of contract (in years) | 4 years | ||
Professional fees | $ 3,900 | 1,500 | $ 400 |
Purchase obligation | 8,298 | ||
Increase in obligation of third year if a 10% increase in revenue | 500 | ||
Omtool, Ltd and Rightanswers, Inc. | Facility Closing | |||
Line of Credit Facility [Line Items] | |||
Restructuring charges | $ 2,300 | ||
Software Development Services | Investor | |||
Line of Credit Facility [Line Items] | |||
Purchase obligation | $ 4,900 | ||
Renewal term | 1 year | ||
Pro Forma | |||
Line of Credit Facility [Line Items] | |||
Purchase commitment | $ 5,400 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment, Net [Abstract] | |||
Accumulated depreciation (including for equipment under capital lease of $4,962 and $4,329 at December 31, 2018 and 2017, respectively) | $ (9,322,000) | $ (7,966,000) | |
Property and equipment, net | 2,827,000 | 2,927,000 | |
Accumulated depreciation on capitalized leased assets | 4,962,000 | 4,329,000 | |
Depreciation and amortization expense | 2,300,000 | 2,600,000 | $ 2,700,000 |
Impairment of long-lived assets | 0 | 0 | 0 |
Losses on disposal of property and equipment | 0 | 0 | $ 200,000 |
Equipment | |||
Property, Plant and Equipment, Net [Abstract] | |||
Property and Equipment | 10,703,000 | 9,861,000 | |
Capital leases | 5,773,000 | 6,234,000 | |
Furniture and Fixtures | |||
Property, Plant and Equipment, Net [Abstract] | |||
Property and Equipment | 434,000 | 263,000 | |
Leasehold improvements | |||
Property, Plant and Equipment, Net [Abstract] | |||
Property and Equipment | $ 1,012,000 | $ 769,000 |
Stockholders' Equity (Common St
Stockholders' Equity (Common Stock) (Details) - USD ($) | Jun. 06, 2017 | Mar. 14, 2016 | Nov. 30, 2016 | Jul. 31, 2016 | Mar. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 12, 2018 | May 12, 2017 |
Class of Stock [Line Items] | ||||||||||
Shares authorized, common stock (in shares) | 50,000,000 | 50,000,000 | ||||||||
Shares authorized, preferred stock (in shares) | 5,000,000 | 5,000,000 | ||||||||
Par value, common stock (in dollars per share) | $ 0.0001 | $ 0.0001 | ||||||||
Net proceeds from issuance of common stock, net of issuance costs | $ 807,000 | $ 43,797,000 | $ (515,000) | |||||||
Hipcricket, Inc. | ||||||||||
Class of Stock [Line Items] | ||||||||||
Numbers of share issued in acquisition (in shares) | 1,000,000 | |||||||||
Public Offering | ||||||||||
Class of Stock [Line Items] | ||||||||||
Securities authorized, value | $ 250,000,000 | $ 75,000,000 | ||||||||
Net proceeds from issuance of common stock, net of issuance costs | $ 42,700,000 | |||||||||
Issuance of common stock in initial public offering (in shares) | 2,139,534 | |||||||||
Common Stock | Hipcricket, Inc. | ||||||||||
Class of Stock [Line Items] | ||||||||||
Numbers of share issued in acquisition (in shares) | 1,000,000 | |||||||||
Value of shares issued in acquisition | $ 5,700,000 | |||||||||
Common Stock | LeadLander | ||||||||||
Class of Stock [Line Items] | ||||||||||
Numbers of share issued in acquisition (in shares) | 318,302 | |||||||||
Value of shares issued in acquisition | $ 2,400,000 | |||||||||
Common Stock | Ultriva, Inc. | ||||||||||
Class of Stock [Line Items] | ||||||||||
Numbers of share issued in acquisition (in shares) | 24,587 | |||||||||
Value of shares issued in acquisition | $ 200,000 |
Stockholders' Equity (Stock Com
Stockholders' Equity (Stock Compensation Plans) (Details) | 12 Months Ended | |
Dec. 31, 2018stock_based_compensation_plansshares | Dec. 31, 2017shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of stock-based compensation plans | stock_based_compensation_plans | 2 | |
Number of shares available for grant, annual increase (as a percent) | 4.00% | |
Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options outstanding (in shares) | 408,899 | 549,907 |
Restricted stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Anti–dilutive common share equivalents (in shares) | 997,014 | 1,047,480 |
2010 Stock Plan | Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options outstanding (in shares) | 113,536 | |
2014 Stock Plan | Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options outstanding (in shares) | 295,363 | |
Common stock shares reserved for issuance under the plan (in shares) | 623,000 | |
2010 Plan And 2014 Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Maximum vesting period | 10 years | |
Maximum | 2010 Plan And 2014 Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 4 years | |
Minimum | 2010 Plan And 2014 Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years |
Stockholders' Equity (Stock Opt
Stockholders' Equity (Stock Option Activity) (Details) - Stock Options - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Number of Options Outstanding | |||
Options outstanding at beginning of period (in shares) | 549,907 | ||
Options granted (in shares) | 4,378 | ||
Options exercised (in shares) | (145,313) | ||
Options forfeited (in shares) | 0 | ||
Options expired (in shares) | (73) | ||
Options outstanding at end of period (in shares) | 408,899 | 549,907 | |
Options vested and expected to vest (in shares) | 408,616 | ||
Options vested and exercisable (in shares) | 401,149 | ||
Weighted-Average Exercise Price | |||
Weighted-average exercise price, beginning of period (in dollars per share) | $ 7.36 | ||
Weighted-average exercise price, options granted (in dollars per share) | 33.39 | ||
Weighted-average exercise price, options exercised (in dollars per share) | 6.12 | ||
Weighted-average exercise price, options forfeited (in dollars per share) | 0 | ||
Weighted-average exercise price, options expired (in dollars per share) | 1.79 | ||
Weighted-average exercise price, end of period (in dollars per share) | 8.09 | $ 7.36 | |
Weighted-average exercise price, options vested and expected to vest (in dollars per share) | 8.08 | ||
Weighted-average exercise price, options vested and exercisable (in dollars per share) | $ 7.95 | ||
Weighted-average remaining contractual life (in years) | 6 years 6 months 10 days | ||
Weighted-average remaining contractual life, options vested and expected to vest (in years) | 6 years 6 months 10 days | ||
Weighted-average remaining contractual life, options vested and exercisable (in years) | 6 years 6 months | ||
Aggregate intrinsic value of options outstanding | $ 7,835 | ||
Aggregate intrinsic value of option vested and expected to vest | 7,831 | ||
Aggregate intrinsic value of options vested and exercisable | 7,727 | ||
Aggregate intrinsic value of options | 3,700 | $ 3,500 | $ 100 |
Total fair value of employee options vested during the period | 400 | $ 1,000 | $ 1,000 |
Unrecognized compensation costs | $ 41 | ||
Unrecognized compensation costs, period of recognition (in years) | 4 months 24 days | ||
Cash from option exercises | $ 900 | ||
Excess tax benefit recognized | 1,800 | ||
Tax benefit to be recognized | $ 500 |
Stockholders' Equity (Restricte
Stockholders' Equity (Restricted Stock Awards) (Details) - Restricted stock $ / shares in Units, $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($)$ / sharesshares | |
Number of Restricted Shares Outstanding | |
Unvested balances, beginning (shares) | shares | 1,047,480 |
Awards granted (in shares) | shares | 840,241 |
Awards vested (shares) | shares | (873,706) |
Awards forfeited (shares) | shares | (17,001) |
Unvested balances, ending (shares) | shares | 997,014 |
Weighted-Average Grant Date Fair Value | |
Weighted average grant date fair value, beginning (in dollars per share) | $ / shares | $ 13.35 |
Weighted average grant date fair value, awards granted (in dollars per share) | $ / shares | 29 |
Weighted average grant date fair value, awards vested (in dollars per share) | $ / shares | 16.18 |
Weighted average grant date fair value, awards forfeited (in dollars per share) | $ / shares | 21.04 |
Weighted average grant date fair value, ending (in dollars per share) | $ / shares | $ 23.93 |
Awards vested (shares) | shares | 873,706 |
Weighted average grant date fair value, awards vested (in dollars per share) | $ / shares | $ 16.18 |
Unrecognized compensation costs | $ | $ 22 |
Unrecognized compensation costs, period of recognition (in years) | 1 year 10 months 6 days |
Excess tax deduction | $ | $ 10.3 |
Expected income tax benefit included as part of deferred tax asset | $ | $ 2.7 |
Stockholders' Equity (Shared Ba
Stockholders' Equity (Shared Based Compensation) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | $ 14,130 | $ 9,977 | $ 4,333 |
Cost of revenue | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | 654 | 436 | 44 |
Research and development | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | 1,250 | 796 | 204 |
Sales and marketing | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | 533 | 232 | 105 |
General and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | $ 11,693 | $ 8,513 | $ 3,980 |
Revenue Recognition (Narrative)
Revenue Recognition (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue from Contract with Customer [Abstract] | |||
Performance obligation, description of timing | 1 to 3 years | ||
Unbilled receivables | $ 3,694,000 | $ 891,000 | |
Deferred commissions, amortization period | 6 years | ||
Impairment of long-lived assets | $ 0 | $ 0 | $ 0 |
Revenue Recognition (Change in
Revenue Recognition (Change in Deferred Commissions) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Capitalized Contract Costs [Roll Forward] | |||
Deferred commissions beginning balance | $ 0 | ||
Adoption of ASC 606 | 6,517 | ||
Capitalized deferred commissions | 4,775 | ||
Amortization of deferred commissions | (2,367) | $ 0 | $ 0 |
Deferred commissions ending balance | $ 8,925 | $ 0 |
Revenue Recognition (Deferred R
Revenue Recognition (Deferred Revenue) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Revenue from External Customer [Line Items] | |
Additions related to business combinations | $ 5,158 |
Subscription and support | |
Revenue from External Customer [Line Items] | |
Deferred revenue recognized | 40,500 |
Professional services | |
Revenue from External Customer [Line Items] | |
Deferred revenue recognized | $ 2,800 |
Revenue Recognition (Performanc
Revenue Recognition (Performance Obligation) (Details) $ in Millions | Dec. 31, 2018USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, percent | 72.00% |
Remaining performance obligation, timing | 12 months |
Subscription Contracts | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil) | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 114.8 |
Revenue Recognition (Disaggrega
Revenue Recognition (Disaggregation of Revenue) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | $ 45,180 | $ 37,144 | $ 35,946 | $ 31,615 | $ 27,847 | $ 26,072 | $ 23,281 | $ 20,752 | $ 149,885 | $ 97,952 | $ 74,767 |
Subscription and support | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 41,776 | 33,919 | 33,154 | 27,729 | 24,756 | 23,169 | 19,407 | 18,135 | 136,578 | 85,467 | 65,552 |
Subscription and support | United States | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 106,628 | 72,355 | 55,846 | ||||||||
Subscription and support | United Kingdom | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 11,189 | 3,127 | 4,674 | ||||||||
Subscription and support | Canada | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 5,395 | 3,838 | 3,522 | ||||||||
Subscription and support | Other International | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 13,366 | 6,147 | 1,510 | ||||||||
Perpetual license | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 678 | 915 | 683 | 1,626 | 1,050 | 856 | 1,746 | 694 | 3,902 | 4,346 | 1,650 |
Perpetual license | United States | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 2,378 | 2,099 | 1,300 | ||||||||
Perpetual license | United Kingdom | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 94 | 218 | 150 | ||||||||
Perpetual license | Canada | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 303 | 70 | 66 | ||||||||
Perpetual license | Other International | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 1,127 | 1,959 | 134 | ||||||||
Professional services | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | $ 2,726 | $ 2,310 | $ 2,109 | $ 2,260 | $ 2,041 | $ 2,047 | $ 2,128 | $ 1,923 | 9,405 | 8,139 | 7,565 |
Professional services | United States | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 7,321 | 5,388 | 5,388 | ||||||||
Professional services | United Kingdom | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 487 | 494 | 1,556 | ||||||||
Professional services | Canada | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 591 | 471 | 502 | ||||||||
Professional services | Other International | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | $ 1,006 | $ 1,786 | $ 119 |
Revenue Recognition (Impact of
Revenue Recognition (Impact of Adoption of ASC 606) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Deferred commissions, current | $ 2,633 | $ 0 | $ 2,633 | $ 0 | $ 2,070 | |||||||
Deferred commissions, noncurrent | 6,292 | 0 | 6,292 | 0 | 4,447 | |||||||
Deferred revenue | 57,626 | 43,807 | 57,626 | 43,807 | 44,032 | |||||||
Accumulated earnings (deficit) | (85,675) | (81,128) | (85,675) | (81,128) | $ (74,836) | |||||||
Revenue | 45,180 | $ 37,144 | $ 35,946 | $ 31,615 | 27,847 | $ 26,072 | $ 23,281 | $ 20,752 | 149,885 | 97,952 | $ 74,767 | |
Sales and marketing | 5,980 | 5,299 | 5,248 | 4,408 | 3,791 | 4,258 | 4,037 | 3,221 | $ 20,935 | $ 15,307 | $ 12,160 | |
Earnings per share (in USD per share) | $ (0.54) | $ (1.02) | $ (0.82) | |||||||||
Calculated under Revenue Guidance in Effect before Topic 606 | ||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Deferred commissions, current | 0 | 0 | $ 0 | $ 0 | ||||||||
Deferred commissions, noncurrent | 0 | 0 | 0 | 0 | ||||||||
Deferred revenue | 57,777 | 43,807 | 57,777 | 43,807 | ||||||||
Accumulated earnings (deficit) | (89,464) | (81,128) | (89,464) | (81,128) | ||||||||
Sales and marketing | 23,287 | |||||||||||
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | ||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Deferred commissions, current | 2,633 | 2,070 | 2,633 | 2,070 | ||||||||
Deferred commissions, noncurrent | 6,292 | 4,447 | 6,292 | 4,447 | ||||||||
Deferred revenue | (151) | 225 | (151) | 225 | ||||||||
Accumulated earnings (deficit) | 3,789 | 6,292 | 3,789 | 6,292 | ||||||||
Sales and marketing | $ (2,352) | |||||||||||
Earnings per share (in USD per share) | $ 0.13 | |||||||||||
Perpetual license | ||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Revenue | $ 678 | $ 915 | $ 683 | $ 1,626 | $ 1,050 | $ 856 | $ 1,746 | $ 694 | $ 3,902 | $ 4,346 | $ 1,650 | |
Perpetual license | Calculated under Revenue Guidance in Effect before Topic 606 | ||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Revenue | 3,751 | |||||||||||
Perpetual license | Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | ||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Revenue | $ 151 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) | 12 Months Ended | ||
Dec. 31, 2018USD ($)plan | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Retirement Benefits [Abstract] | |||
Number of voluntary defined contribution plans | plan | 2 | ||
Contributions to the 401(k) plans | $ | $ 0 | $ 0 | $ 0 |
Segment and Geographic Inform_3
Segment and Geographic Information (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Long-lived assets | $ 2,827 | $ 2,927 | $ 4,356 |
United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Long-lived assets | 1,648 | 2,768 | 4,054 |
United Kingdom | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Long-lived assets | 756 | 14 | 18 |
Canada | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Long-lived assets | 77 | 145 | 284 |
Other International | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Long-lived assets | $ 346 | $ 0 | $ 0 |
Related Party Transactions (Det
Related Party Transactions (Details) | Mar. 28, 2017 | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($)agreement | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Related Party Transaction [Line Items] | |||||
Number of agreements | agreement | 3 | ||||
Purchase obligation | $ 8,298,000 | ||||
Increase in obligation of third year if a 10% increase in revenue | $ 500,000 | ||||
Investor | |||||
Related Party Transaction [Line Items] | |||||
Ownership percentage minimum | 5.00% | ||||
Amount of related party transaction | $ 3,200,000 | $ 2,400,000 | $ 2,300,000 | ||
Accounts payable | 0 | 600,000 | |||
Software Development Services | Investor | |||||
Related Party Transaction [Line Items] | |||||
Renewal period term | 1 year | ||||
Purchase obligation | 4,900,000 | ||||
Services | Investor | |||||
Related Party Transaction [Line Items] | |||||
Purchase obligation | 0 | ||||
Amount of related party transaction | 3,200,000 | 3,000,000 | 1,800,000 | ||
Transition Services | Affiliate of ESW Capital, LLC | |||||
Related Party Transaction [Line Items] | |||||
Revenue | 700,000 | ||||
Fees owed to affiliate of ESW Capital, LLC | 100,000 | ||||
Management, HR/Payroll and Administrative Services | Former Subsidiary | |||||
Related Party Transaction [Line Items] | |||||
Revenue | 60,000 | $ 285,000 | $ 360,000 | ||
Pro Forma | |||||
Related Party Transaction [Line Items] | |||||
Purchase obligation in third year if revenue increases 10% | $ 5,400,000 | ||||
Forecast | Management, HR/Payroll and Administrative Services | Former Subsidiary | |||||
Related Party Transaction [Line Items] | |||||
Revenue | $ 60,000 | ||||
Chief Executive Officer And Board Of Directors Chairman | Visionael Corporation | |||||
Related Party Transaction [Line Items] | |||||
Percentage of ownership | 26.18% |
Quarterly Results (Unaudited)_2
Quarterly Results (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Condensed Income Statements, Captions [Line Items] | |||||||||||
Revenue | $ 45,180 | $ 37,144 | $ 35,946 | $ 31,615 | $ 27,847 | $ 26,072 | $ 23,281 | $ 20,752 | $ 149,885 | $ 97,952 | $ 74,767 |
Cost of revenue | 15,012 | 12,083 | 10,849 | 10,645 | 9,503 | 9,113 | 8,003 | 7,028 | 48,589 | 33,647 | 27,565 |
Gross profit | 30,168 | 25,061 | 25,097 | 20,970 | 18,344 | 16,959 | 15,278 | 13,724 | 101,296 | 64,305 | 47,202 |
Operating expenses: | |||||||||||
Sales and marketing | 5,980 | 5,299 | 5,248 | 4,408 | 3,791 | 4,258 | 4,037 | 3,221 | 20,935 | 15,307 | 12,160 |
Research and development | 5,743 | 5,400 | 5,286 | 4,891 | 4,223 | 4,092 | 4,003 | 3,477 | 21,320 | 15,795 | 14,919 |
Refundable Canadian tax credits | (2) | (99) | (203) | (102) | 118 | (195) | (112) | (117) | (406) | (542) | (513) |
General and administrative | 8,566 | 8,011 | 8,464 | 7,000 | 5,727 | 5,084 | 6,576 | 5,904 | 32,041 | 23,291 | 18,286 |
Depreciation and amortization | 4,683 | 3,606 | 3,853 | 2,130 | 2,387 | 1,648 | 1,299 | 1,164 | 14,272 | 6,498 | 5,291 |
Acquisition-related expenses | 9,989 | 2,497 | 3,140 | 3,102 | 4,724 | 4,399 | 2,278 | 3,691 | 18,728 | 15,092 | 5,583 |
Total operating expenses | 34,959 | 24,714 | 25,788 | 21,429 | 20,734 | 19,286 | 18,081 | 17,340 | 106,890 | 75,441 | 55,726 |
Loss from operations | (4,791) | 347 | (691) | (459) | (2,390) | (2,327) | (2,803) | (3,616) | (5,594) | (11,136) | (8,524) |
Interest expense, net | (4,518) | (3,118) | (3,143) | (2,494) | (2,210) | (2,277) | (1,160) | (935) | (13,273) | (6,582) | (2,781) |
Gain (loss) on debt extinguishment | 0 | 0 | 0 | 0 | 0 | 1,634 | (1,634) | 0 | |||
Other income (expense), net | (816) | (744) | (524) | 303 | 549 | (130) | (18) | (112) | (1,781) | 289 | (678) |
Total other expense | (5,334) | (3,862) | (3,667) | (2,191) | (1,661) | (773) | (2,812) | (1,047) | (15,054) | (6,293) | (3,459) |
Loss before provision for income taxes | (10,125) | (3,515) | (4,358) | (2,650) | (4,051) | (3,100) | (5,615) | (4,663) | (20,648) | (17,429) | (11,983) |
Benefit from (provision for) income taxes | 11,927 | (735) | (872) | (511) | (257) | (406) | (196) | (951) | 9,809 | (1,296) | (1,530) |
Net income (loss) | $ 1,802 | $ (4,250) | $ (5,230) | $ (3,161) | $ (3,794) | $ (3,506) | $ (5,811) | $ (5,614) | (10,839) | (18,725) | (13,513) |
Net income (loss) per common share: | |||||||||||
Basic (in dollars per share) | $ 0.09 | $ (0.21) | $ (0.26) | $ (0.16) | $ (0.19) | $ (0.18) | $ (0.33) | $ (0.33) | |||
Diluted (in dollars per share) | $ 0.09 | $ (0.21) | $ (0.26) | $ (0.16) | $ (0.19) | $ (0.18) | $ (0.33) | $ (0.33) | |||
Deferred tax assets, previously offset by valuation allowance | $ 10,100 | 10,100 | |||||||||
Subscription and support | |||||||||||
Condensed Income Statements, Captions [Line Items] | |||||||||||
Revenue | 41,776 | $ 33,919 | $ 33,154 | $ 27,729 | $ 24,756 | $ 23,169 | $ 19,407 | $ 18,135 | 136,578 | 85,467 | 65,552 |
Cost of revenue | 13,486 | 10,566 | 9,580 | 9,249 | 8,148 | 7,737 | 6,676 | 5,893 | 42,881 | 28,454 | 22,734 |
Perpetual license | |||||||||||
Condensed Income Statements, Captions [Line Items] | |||||||||||
Revenue | 678 | 915 | 683 | 1,626 | 1,050 | 856 | 1,746 | 694 | 3,902 | 4,346 | 1,650 |
Cost of revenue | 5,708 | 5,193 | 4,831 | ||||||||
Total product revenue | |||||||||||
Condensed Income Statements, Captions [Line Items] | |||||||||||
Revenue | 42,454 | 34,834 | 33,837 | 29,355 | 25,806 | 24,025 | 21,153 | 18,829 | 140,480 | 89,813 | 67,202 |
Professional services | |||||||||||
Condensed Income Statements, Captions [Line Items] | |||||||||||
Revenue | 2,726 | 2,310 | 2,109 | 2,260 | 2,041 | 2,047 | 2,128 | 1,923 | $ 9,405 | $ 8,139 | $ 7,565 |
Cost of revenue | $ 1,526 | $ 1,517 | $ 1,269 | $ 1,396 | $ 1,355 | $ 1,376 | $ 1,327 | $ 1,135 |
Uncategorized Items - upld-2018
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 6,292,000 |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 6,292,000 |