Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Nov. 05, 2014 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'Shutterstock, Inc. | ' |
Entity Central Index Key | '0001549346 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 35,436,148 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $210,760 | $155,355 |
Short-term investments | 49,720 | 54,429 |
Credit card receivables | 3,758 | 2,083 |
Accounts receivable, net | 12,938 | 6,081 |
Prepaid expenses and other current assets | 14,462 | 19,809 |
Deferred tax assets, net | 4,951 | 5,431 |
Total current assets | 296,589 | 243,188 |
Property and equipment, net | 26,422 | 20,256 |
Intangible assets, net | 4,710 | 853 |
Goodwill | 10,186 | 1,423 |
Deferred tax assets, net | 16,193 | 10,720 |
Other assets | 1,903 | 2,048 |
Total assets | 356,003 | 278,488 |
Current liabilities: | ' | ' |
Accounts payable | 5,686 | 4,164 |
Accrued expenses | 22,394 | 23,638 |
Contributor royalties payable | 12,239 | 9,180 |
Deferred revenue | 71,850 | 52,100 |
Other liabilities | 1,901 | 2,846 |
Total current liabilities | 114,070 | 91,928 |
Other non-current liabilities | 11,700 | 3,961 |
Total liabilities | 125,770 | 95,889 |
Commitments and contingencies (Note 9) | ' | ' |
Stockholders' equity: | ' | ' |
Common stock, $0.01 par value; 200,000 shares authorized; 35,430 and 35,071 shares outstanding as of September 30, 2014 and December 31, 2013, respectively | 354 | 351 |
Additional paid-in capital | 160,099 | 127,443 |
Accumulated comprehensive (loss) income | -72 | 9 |
Retained earnings | 69,852 | 54,796 |
Total stockholders' equity | 230,233 | 182,599 |
Total liabilities and stockholders' equity | $356,003 | $278,488 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, except Per Share data, unless otherwise specified | ||
Consolidated Balance Sheets | ' | ' |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 200,000 | 200,000 |
Common stock, shares outstanding | 35,430 | 35,071 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Consolidated Statements of Operations | ' | ' | ' | ' |
Revenue | $83,730 | $59,558 | $236,745 | $167,484 |
Operating expenses: | ' | ' | ' | ' |
Cost of revenue | 33,260 | 22,936 | 94,419 | 64,525 |
Sales and marketing | 21,122 | 14,947 | 60,890 | 40,240 |
Product development | 9,870 | 5,685 | 26,922 | 15,300 |
General and administrative | 10,588 | 6,076 | 28,095 | 16,590 |
Total operating expenses | 74,840 | 49,644 | 210,326 | 136,655 |
Income from operations | 8,890 | 9,914 | 26,419 | 30,829 |
Other (expense) income, net | -50 | 20 | -48 | 29 |
Income before income taxes | 8,840 | 9,934 | 26,371 | 30,858 |
Provision for income taxes | 3,562 | 3,740 | 11,315 | 12,238 |
Net income | 5,278 | 6,194 | 15,056 | 18,620 |
Less: | ' | ' | ' | ' |
Undistributed earnings to participating stockholder | 9 | 18 | 31 | 59 |
Net income available to common stockholders | $5,269 | $6,176 | $15,025 | $18,561 |
Net income per basic share available to common stockholders: | ' | ' | ' | ' |
Undistributed (in dollars per share) | $0.15 | $0.18 | $0.43 | $0.55 |
Basic (in dollars per share) | $0.15 | $0.18 | $0.43 | $0.55 |
Net income per diluted share available to common stockholders: | ' | ' | ' | ' |
Undistributed (in dollars per share) | $0.15 | $0.18 | $0.42 | $0.55 |
Diluted (in dollars per share) | $0.15 | $0.18 | $0.42 | $0.55 |
Weighted average shares outstanding: | ' | ' | ' | ' |
Basic (in shares) | 35,304,066 | 33,692,876 | 35,161,644 | 33,522,289 |
Diluted (in shares) | 35,931,454 | 34,280,656 | 35,883,202 | 34,043,573 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive (Loss)/Income (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Consolidated Statements of Comprehensive (Loss)/Income | ' | ' | ' | ' |
Net income | $5,278 | $6,194 | $15,056 | $18,620 |
Foreign currency translation loss | -121 | ' | -105 | ' |
Unrealized gain on investments | 14 | ' | 24 | ' |
Other comprehensive loss | -107 | ' | -81 | ' |
Comprehensive income | $5,171 | $6,194 | $14,975 | $18,620 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
CASH FLOWS FROM OPERATING ACTIVITIES | ' | ' |
Net income | $15,056 | $18,620 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 5,757 | 2,738 |
Write-off of property and equipment | 367 | ' |
Deferred taxes | -4,181 | 15,086 |
Non-cash equity-based compensation | 15,728 | 4,422 |
Change in fair value of contingent consideration | 110 | ' |
Excess tax benefit from the exercise of stock options | -10,224 | -3,226 |
Bad debt reserve | 516 | 464 |
Chargeback and sales refund reserves | 170 | 85 |
Amortization of deferred financing fees | ' | 125 |
Changes in operating assets and liabilities: | ' | ' |
Credit card receivables | -1,704 | -1,153 |
Accounts receivable | -7,374 | -4,176 |
Prepaid expenses and other current and non-current assets | 15,574 | -20,508 |
Accounts payable and other current and non-current liabilities | 7,978 | 5,971 |
Contributor royalties payable | 3,059 | 2,018 |
Deferred revenue | 18,667 | 11,995 |
Net cash provided by operating activities | 59,499 | 32,461 |
CASH FLOWS FROM INVESTING ACTIVITIES | ' | ' |
Capital expenditures | -16,334 | -4,788 |
Purchase of investments | -214,506 | ' |
Sale and maturities of investments | 219,239 | ' |
Acquisition of business | -10,056 | ' |
Acquisition of digital content | -331 | ' |
Security deposit receipt/(payment) | 145 | -1,821 |
Net cash used in investing activities | -21,843 | -6,609 |
CASH FLOWS FROM FINANCING ACTIVITIES | ' | ' |
Net proceeds from issuance of common stock in follow-on offering | ' | 65,895 |
Proceeds from exercise of stock options | 6,673 | 4,003 |
Proceeds from issuance of common stock under Employee Stock Purchase Plan | 945 | 1,065 |
Excess tax benefit from the exercise of stock options | 10,224 | 3,226 |
Payment of term loan | ' | -6,000 |
Payment of offering fees | ' | -618 |
Net cash provided by financing activities | 17,842 | 67,571 |
Effect of foreign exchange rates changes on cash | -93 | ' |
Net increase in cash and cash equivalents | 55,405 | 93,423 |
Cash and cash equivalents-Beginning | 155,355 | 102,096 |
Cash and cash equivalents-Ending | 210,760 | 195,519 |
Cash paid for: | ' | ' |
Income taxes | 235 | 14,194 |
Interest | ' | 34 |
Supplemental Disclosure of Non-Cash Investing and Financing Activities: | ' | ' |
Capital expenditures in accounts payable and other liabilities | $4,436 | $1,160 |
Summary_of_Operations_and_Sign
Summary of Operations and Significant Accounting Policies | 9 Months Ended | |||||||||
Sep. 30, 2014 | ||||||||||
Summary of Operations and Significant Accounting Policies | ' | |||||||||
Summary of Operations and Significant Accounting Policies | ' | |||||||||
(1) Summary of Operations and Significant Accounting Policies | ||||||||||
Summary of Operations | ||||||||||
Shutterstock, Inc. (the “Company” or “Shutterstock”) operates an industry-leading global marketplace for commercial digital imagery and music. Commercial digital imagery consists of licensed photographs, illustrations and videos that companies use in their visual communications, such as websites, digital and print marketing materials, corporate communications, books, publications and video content while music consists of high-quality music tracks often used to complement the digital imagery. The Company licenses commercial digital imagery and music to its customers. Contributors upload their digital imagery and music tracks to the Company’s website in exchange for a royalty payment based on customer download activity. The Company is headquartered in New York City with offices in Amsterdam, Berlin, Chicago, Denver, London, Paris, and San Francisco. | ||||||||||
Principles of Consolidation | ||||||||||
The consolidated financial statements reflect the operations of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. | ||||||||||
Reorganization | ||||||||||
In May 2012, in connection with the filing of a registration statement for the Company’s initial public offering (the “IPO”), Shutterstock Images LLC, a New York limited liability company (the “LLC”) formed Shutterstock, Inc., a Delaware corporation, as a wholly-owned subsidiary of the LLC. On October 5, 2012, the LLC reorganized, by way of a merger of the LLC with and into Shutterstock, Inc. with Shutterstock, Inc. surviving in the merger (the “Reorganization”). In connection with the Reorganization, the preferred and common membership interests in the LLC, including any interests that vested upon the Reorganization, were exchanged for an aggregate of 28,338,281 shares of Shutterstock, Inc. common stock. | ||||||||||
Follow-On Offering | ||||||||||
On September 25, 2013, the Company completed a follow-on offering of 5,290,000 shares of its common stock, which included 690,000 shares of common stock sold by the Company and certain stockholders as a result of the underwriters’ exercise of their option to purchase additional shares, at a price of $60.00 per share. The Company sold 1,150,000 shares of common stock in the offering and the selling stockholders sold 4,140,000 shares of common stock in the offering. The aggregate offering price for shares sold by the Company in the offering resulted in net proceeds to the Company of $65,895 after deducting underwriting discounts and commissions, and before deducting total expenses incurred in connection with the offering of approximately $945. | ||||||||||
Unaudited Interim Financial Statements | ||||||||||
The interim consolidated balance sheet as of September 30, 2014, the consolidated statements of operations, comprehensive income and cash flows for the three and nine months ended September 30, 2014 and 2013 are unaudited. The unaudited interim financial statements have been prepared on a basis consistent with the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to state fairly the Company’s financial position as of September 30, 2014 and its results of consolidated operations, comprehensive income and cash flows for the three and nine months ended September 30, 2014 and 2013. The financial data and the other financial information disclosed in these notes to the financial statements related to these periods are also unaudited. The results of operations for the three and nine months ended September 30, 2014 are not necessarily indicative of the results to be expected for the year ending December 31, 2014 or for any other future annual or interim period. | ||||||||||
There have been no material changes in the significant accounting policies from those that were disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013 filed on February 28, 2014. These financial statements should also be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2013. Certain information and note disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted pursuant to such rules and regulations. The consolidated balance sheet as of December 31, 2013 included herein was derived from the audited financial statements as of that date, but does not include all disclosures required by GAAP. | ||||||||||
Acquisition of Virtual Moment, LLC | ||||||||||
On March 14, 2014, the Company acquired certain assets and certain liabilities of Virtual Moment, LLC (dba WebDAM) (“WebDAM”) pursuant to an asset purchase arrangement. The transaction was accounted for using the acquisition method, and accordingly, the results of the acquired business have been included in the Company’s results of operations from the acquisition date. | ||||||||||
WebDAM sells digital asset management software services through its cloud-based platform to marketing and creative enterprise organizations. WebDAM’s products help organizations manage, search, distribute and collaborate on creative digital files in order to grow its brands and reach new audiences. WebDAM’s offerings are particularly attractive to large enterprises, which make up a significant portion of their client base. The Company believes that this acquisition will strengthen its strategic position with its enterprise customers as well as broaden its product offerings to larger companies. | ||||||||||
The fair value of consideration transferred in this business combination was allocated to the intangible assets acquired and liabilities assumed at the acquisition date, with the remaining unallocated amount recorded as goodwill. The allocation of the purchase price for this acquisition has been prepared on a preliminary basis, and changes to those allocations may occur as additional information becomes available. | ||||||||||
The total purchase price of $12,416 consists of an initial cash payment of $10,056 and $2,360 in contingent consideration based on certain performance criteria of post-acquisition revenue. The fair value of the contingent consideration was determined using a Monte-Carlo simulation approach. The aggregate purchase price was allocated to the assets acquired and liabilities assumed as follows: | ||||||||||
Intangible assets: | ||||||||||
Trade name | $ | 500 | ||||||||
Customer relationships | 2,800 | |||||||||
Developed technology | 600 | |||||||||
Goodwill | 8,763 | |||||||||
Total assets acquired | 836 | |||||||||
Total liabilities assumed | (1,083 | ) | ||||||||
Total | $ | 12,416 | ||||||||
The identifiable intangible assets have a weighted average life of approximately seven years and are being amortized on a straight-line basis. The fair value of the customer relationships was determined using a variation of the income approach known as excess earnings method. The fair values of the trade name and developed technology were both determined using the relief-from-royalty method. The goodwill arising from the transaction is primarily attributable to expected operational synergies and is deductible for income tax purposes. As a result of the acquisition, the Company recorded approximately $400 of professional fees for the nine months ended September 30, 2014 which is included in general and administrative expense. There were no professional fees as a result of the acquisition recorded during the three months ended September 30, 2014. | ||||||||||
Pro forma results of operations have not been presented because the effect of this business combination was not material to the Company’s consolidated results of operations. | ||||||||||
Use of Estimates | ||||||||||
The preparation of the consolidated financial statements in conformity with GAAP requires the Company’s management to make a number of estimates and assumptions relating to the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the period. The Company evaluates its significant estimates on an ongoing basis, including, but not limited to allowance for doubtful accounts, contingent consideration, sales refund reserve, goodwill, intangibles, non-cash equity-based compensation, income tax provision and for certain non-income tax accruals. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. | ||||||||||
Restricted Cash | ||||||||||
The Company’s restricted cash relates to security deposits for leased office locations. As of September 30, 2014, the Company had $188 of restricted cash recorded in prepaid expenses and other current assets that related to a leased office location that expires in the next twelve months and had $1,829 of restricted cash recorded in other assets that related to a leased office location that expires in 2024. As of December 31, 2013, the Company had $243 of restricted cash recorded in prepaid expenses and other current assets and had $2,017 of restricted cash recorded in other assets. The carrying value of restricted cash approximates fair value. | ||||||||||
Deferred Rent | ||||||||||
The Company records rent expense on a straight-line basis over the term of the related lease. The difference between the rent expense recognized and the actual payments made in accordance with the lease agreement is recognized as a deferred rent liability on the Company’s balance sheet. As of September 30, 2014, the Company has recorded a deferred rent balance of $7,951, of which $673 is included in other liabilities and $7,278 is included in other non-current liabilities. As of December 31, 2013, the Company had recorded a deferred rent balance of $4,783, of which $2,406 is included in other liabilities and $2,377 is included in other non-current liabilities. | ||||||||||
Revenue Recognition | ||||||||||
The vast majority of the Company’s revenue, net of chargebacks and refunds, is generated from the license of digital content through subscription or usage based plans. The Company’s three primary plans are: subscription plans, On Demand plans, and credit pack plans. The Company recognizes revenue when all of the following basic criteria are met: there is persuasive evidence of an arrangement, performance or delivery of services has occurred, the sales price is fixed or determinable, and collectability is reasonably assured. The Company considers persuasive evidence of an arrangement to be an electronic order form, or a signed contract, which contains the fixed pricing terms. Performance or delivery is considered to have occurred upon the ratable passage of time for subscription plans, the download of digital content or the expiration of a contract period for which there are unused downloads or credits. Collectability is reasonably assured since most of the Company’s customers purchase products by making electronic payments at the time of a transaction with a credit card. The Company establishes a chargeback allowance and sales refund reserve allowance based on factors surrounding historical credit card chargeback trends, historical sales refund trends and other information. As of September 30, 2014 and December 31, 2013, the Company has recorded a combined chargeback allowance and sales refund allowance of $595 and $425, respectively, which is included in other liabilities. Collectability is assessed for customers who pay on credit based on a credit evaluation for new customers, when necessary, and transaction history with existing customers. Any cash received in advance of revenue recognition is recorded as deferred revenue. | ||||||||||
Subscription plans range in length from thirty days to one year. Subscription plan revenues are recognized on a straight-line basis using a daily convention method over the plan term. On Demand plans are typically for a one-year term and permit the customer to download up to a fixed amount of digital content. On Demand revenues are recognized at the time the customer downloads the digital content on a per unit basis. Revenue related to unused digital content, if any, is recognized in full at the end of the plan term assuming no further Company obligation remains. Credit pack plans are generally for a one-year term and enable the customer to purchase a fixed number of credits which can then be utilized to pay for downloaded digital content. The number of credits utilized for each download depends on the digital content size and format. Credit pack revenue is recognized based on customer usage on a per credit basis as digital content is downloaded. Revenue related to unused credits, if any, is recognized in full at the end of the plan term assuming no further Company obligation remains. Most plans automatically renew at the end of the plan term unless the customer elects not to renew. The Company recognizes revenue from its three types of plans on a gross basis in accordance with the authoritative guidance on principal-agent considerations as the Company is the primary obligor in the arrangement, has control in establishing the product’s price, performs a detailed review of the digital content before accepting it to its collection to ensure it is of high quality before it may be purchased by the customers, can reject contributor’s images in its sole discretion, and has credit risk. | ||||||||||
Customers typically pay in advance (or upon commencement of the term) via credit card, wire or check. Fees paid or invoiced in advance are deferred and recognized as described above. Customers that do not pay in advance are invoiced and are required to make payment under standard credit terms. The Company does not generally offer refunds or the right of return to customers. There are situations in which a customer may receive a refund but the determination is made on a case-by-case basis. | ||||||||||
The Company licenses digital content to customers through third party resellers. The Company contracts with third party resellers around the world to access markets where the Company does not have a significant presence. Third party resellers sell the Company’s products directly to end-user customers and remit a fixed amount to the Company based on the type of plan sold. The terms of the reseller program indicate that the third party reseller is the primary obligor to the end-user customer and bears the risks and rewards as principal in the transaction. In assessing whether the Company’s revenue should be reported on a gross or net basis with respect to our reseller program, the Company follows the authoritative guidance in ASC 605-45, “Principal Agent Considerations.” The Company recognizes revenue net of reseller commission in accordance with the type of plan sold, consistent with the plan descriptions above. The Company generally does not offer refunds or the right of return to resellers. | ||||||||||
The Company also generates revenue related to WebDAM from licensing its hosted software services through its cloud-based platform and related implementation and professional services. The Company enters into multiple element revenue arrangements in which a customer purchases a combination of hosted software, implementation and optional value added professional services. The Company recognizes revenue for the hosted services monthly provided that there is persuasive evidence of an arrangement, the service has been delivered, the fees are fixed and determinable, and collection is reasonably assured. ASC 605-25 establishes a selling price hierarchy for determining the selling price of a deliverable in multiple-element arrangements, which is based on: (a) vendor-specific objective evidence; (b) third-party evidence; or (c) best estimated selling price. The hosted software services are recognized ratably over the contractual period as this service is on-going over the hosting period which is generally a one-year term. The Company defers revenue for the delivered elements until the undelivered element is delivered and then recognizes the delivered element revenue ratably over the longer of the contractual term or the estimated customer relationship period which is currently three years. | ||||||||||
Equity-Based Compensation | ||||||||||
The Company measures and recognizes non-cash equity-based compensation expense for all equity-based awardsgranted to employees based on estimated fair values. The value portion of the award that is ultimately expected to vest is recognized as expense over the requisite service period. For awards with a change of control condition, an evaluation is made at the grant date and future periods as to the likelihood of the condition being met. Compensation expense is adjusted in future periods for subsequent changes in the expected outcome of the change of control conditions until the vesting date. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Compensation expense related to awards with a market condition is recognized ratably over the requisite service period regardless of the achievement of the market condition. | ||||||||||
The Company uses the Black Scholes option pricing model, the closing price of the Company’s common stock on the date of grant, and the Monte Carlo simulation model, if the award has a market condition, to determine the fair value of stock options and restricted stock units (“RSUs”), respectively, granted pursuant to the Value Appreciation Rights Plan (“VAR Plan”), 2012 Omnibus Equity Incentive Plan (the “2012 Plan”) and stock purchased pursuant to the Employee Stock Purchase Plan (“2012 ESPP”), which are discussed further in Note 11, Equity-Based Compensation. | ||||||||||
The determination of the grant date fair value using an option-pricing model and simulation model requires judgment as well as assumptions regarding a number of other complex and subjective variables. These variables include the Company’s fair value of the common ownership interest pre-IPO, the Company’s closing market price at the grant date post-IPO, the expected unit price volatility over the expected term of the awards, awards’ exercise and cancellation behaviors, risk-free interest rates, and expected dividends, which are estimated as follows: | ||||||||||
· | Fair Value of Common Membership Unit. Prior to completion of the IPO, the Company’s fair value of common ownership interest was estimated internally and approved by the Board of Managers (“BOM”) because the Company was not publicly traded. The Company’s intention upon granting VAR Plan awards was for the granted award to have exercisable price per unit that was not less than the per unit fair value of the Company’s common equity on the date of grant. The valuations of the Company’s common equity unit were prepared in accordance with the American Institute of Certified Public Accountants Statement on Standards for Valuation Services 1: Valuation of a Business, Business Ownership Interest, Security, or Intangible Asset . The assumptions used in the valuation model were based on future expectations combined with the Company’s judgment. In the absence of a public trading market, the Company exercised significant judgment and considered numerous objective and subjective factors to determine the fair value of the common equity unit as of the date of each VAR Plan award grant. Some but not all of these factors included operating and financial performance, current business conditions and projections, the hiring of key personnel, the Company’s history and introduction of new functionality and services, the Company’s stage of development, the likelihood of achieving a liquidity event for the common ownership interests, any adjustment necessary to recognize a lack of marketability for the common ownership interests, the market performance of comparable publicly traded companies, and U.S. and global capital market conditions. The Company also obtained independent third party valuations on a periodic basis. After October 11, 2012, the date the Company’s common stock began trading on the NYSE, the grant date fair value for stock-based awards is based on the closing price of the Company’s common stock on the NYSE on the date of grant and fair value for all other purposes related to stock-based awards shall be the closing price of the Company’s common stock on the NYSE on the relevant date. | |||||||||
· | Expected Term. The expected term is estimated using the simplified method allowed under Securities and Exchange Commission (“SEC”) guidance. | |||||||||
· | Volatility. As the Company does not have a trading history for its common ownership interest pre-IPO or a significant range of its common stock post-IPO, the expected price volatility for the common ownership interest and common stock was estimated by taking the average historic price volatility for industry peers based on daily price observations over a period equivalent to the expected term of the VAR Plan awards and stock options granted post-IPO. Industry peers consist of several public companies similar in size, stage of life cycle and financial leverage. The Company did not rely on implied volatilities of traded options in the industry peers’ common stock because the volume of activity was relatively low. The Company intends to continue to consistently apply this process using the same or similar public companies until a sufficient amount of historical information regarding the volatility of the Company’s own common stock becomes available, or unless circumstances change such that the identified companies are no longer similar to the Company, in which case, more suitable companies whose share prices are publicly available would be utilized in the calculation. | |||||||||
· | Risk-free Interest Rate. The risk-free interest rate is based on the yields of U.S. Treasury securities with maturities similar to the expected term of each award group. | |||||||||
· | Dividend Yield. Prior to the Reorganization, the Company has historically paid cash dividends or distributions to its members. Following the Reorganization, the Company has not paid cash distributions to its stockholders and it does not intend to do so for the foreseeable future. As a result, the Company used an expected dividend yield of zero. | |||||||||
If any of the assumptions used in the Black-Scholes pricing model or Monte Carlo simulation model changes significantly, the fair value for future awards may differ materially compared with the awards granted previously. The awards granted pursuant to the VAR Plan, the 2012 Plan, and the 2012 ESPP are subject to a time-based vesting requirement and for certain award grants are also based on a market condition. The majority of stock option awards granted under the 2012 Plan vest over four years while the majority of the restricted stock units granted under the 2012 Plan vest over three years. The 2012 ESPP provides for purchase periods approximately every six months and a participant must be employed on the purchase date to participate. The VAR Plan awards had a condition that a change of control (as defined in the VAR Plan) must occur for a payment to trigger with respect to the VAR Plan awards. In connection with the Company’s Reorganization, all of the VAR Plan awards were exchanged for options to purchase shares of common stock of Shutterstock, Inc. As of December 31, 2011, no equity-based compensation expense had been recognized with respect to the VAR Plan awards because the qualifying event had not occurred. As a result of the completion of the initial public offering (“IPO”) in October 2012, the Company began recording stock-based compensation expense using the accelerated attribution method, net of forfeitures, based on the grant date fair value of the VAR Plan awards that were exchanged for options to purchase shares of common stock of Shutterstock, Inc. as part of the Company’s Reorganization. | ||||||||||
For pre-IPO equity based awards that qualified for liability classification, the Company has elected to use the intrinsic value method to value the common membership interest in accordance with authoritative guidance on stock compensation. See Note 11, Equity-Based Compensation, for further information. | ||||||||||
Income Taxes | ||||||||||
The Company is a Delaware corporation and is therefore subject to federal and state income tax. Significant management judgment is required in projecting ordinary income/(loss) in order to determine the Company’s estimated effective tax rate. | ||||||||||
The Company accounts for unrecognized tax benefits using a more-likely-than-not threshold for financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. The Company establishes reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes may be due. The Company records an income tax liability, if any, for the difference between the benefit recognized and measured and the tax position taken or expected to be taken on the Company’s tax returns. To the extent that the assessment of such tax positions changes, the change in estimate is recorded in the period in which the determination is made. The reserves are adjusted in light of changing facts and circumstances, such as the outcome of a tax audit or lapses in statutes of limitations. Any reserve for uncertain tax provisions, if any, and related penalties and interest, if any, are included in the income tax provision. | ||||||||||
The Company assessed the realizability of deferred tax assets and determined that based on the available evidence, including a history of taxable income and estimates of future taxable income, it is more likely than not that the deferred tax assets will be realized. The Company will continue to evaluate its ability to realize deferred tax assets on a quarterly basis. Significant management judgment is required in determining the provision for income taxes and deferred tax assets and liabilities. In the event that actual results differ from these estimates, the Company will adjust these estimates in future periods which may result in a change in the effective tax rate in a future period. | ||||||||||
The Company is subject to compliance requirements for certain non income taxes, including value added taxes, sales taxes and royalty withholding taxes. Where appropriate, the Company has made accruals for these taxes, which are reflected in the Company’s consolidated financial statements. | ||||||||||
Net Income Per Share | ||||||||||
Basic net income per share is computed by dividing the net income attributable to common stockholders by the weighted average number of common shares outstanding during the period. The Company applies the two class method for calculating and presenting income per share. Under the two-class method, net income is allocated between shares of common stock and other participating securities based on their contractual participating rights to share in the earnings as if all of the earnings for the period have been distributed. Participating securities are defined as securities that participate in dividends with common stock according to a pre-determined formula or a contractual obligation to share in the income of the entity. Any potential issuance of common shares, including those that are contingent and do not participate in dividends, are excluded from weighted average number of common shares outstanding. Undistributed net income (loss) for a given period is apportioned to participating stockholders based on the weighted average number of shares for each class of securities outstanding during the applicable period as a percentage of the combined weighted average number of these securities outstanding during the period. Income available to common stockholders is computed by deducting dividends paid to preferred stockholders, accretion to redemption value on preferred members shares, less income allocated to participating securities including unvested shares for the restricted award holder since these unvested shares have participating rights. See Note 11, Equity-Based Compensation, for further discussion. | ||||||||||
Diluted net income per share is computed by dividing the net income available to common stockholders adjusted for any changes in income that would result from the assumed conversion of the potential common shares by the weighted average common shares outstanding and all potential common shares, if they are dilutive. Diluted net income available to common stockholders for the three and nine months ended September 30, 2014 includes the effect of 2,136,637 and 2,161,146 shares, respectively, while 617,250 and 472,977 shares, respectively, were excluded since they were anti-dilutive. Diluted net income available to common stockholders for the three and nine months ended September 30, 2013 includes the effect of 1,589,748 and 1,717,767 shares, respectively, while 376,550 and 229,367 shares, respectively, were excluded since they were anti-dilutive. | ||||||||||
A reconciliation of assumed exercised shares used in calculating basic and diluted net income per share available to common stockholders follows: | ||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||
2014 | 2013 | 2014 | 2013 | |||||||
Basic | 35,304,066 | 33,692,876 | 35,161,644 | 33,522,289 | ||||||
Stock options and employee stock purchase plan shares | 552,282 | 536,741 | 627,845 | 444,556 | ||||||
Unvested restricted stock awards | 75,106 | 51,039 | 93,713 | 76,728 | ||||||
Diluted | 35,931,454 | 34,280,656 | 35,883,202 | 34,043,573 | ||||||
Recently Issued Accounting Standard Updates | ||||||||||
In May 2014, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance related to revenue recognition. This new standard will replace all current GAAP guidance on this topic and will eliminate all industry-specific guidance. The new revenue recognition standard provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. This guidance will be effective beginning January 1, 2017 and can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The Company is evaluating the impact, if any, of adopting this new accounting standard on its financial statements. | ||||||||||
In June 2014, the FASB issued new guidance related to stock compensation. The new standard requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award. This update further clarifies that compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the periods for which the requisite service has already been rendered. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015 and can be applied either prospectively or retrospectively to all awards outstanding as of the beginning of the earliest annual period presented as an adjustment to opening retained earnings. Early adoption is permitted. The Company is evaluating the impact, if any, of adopting this new accounting standard on its financial statements. | ||||||||||
ShortTerm_Investments_and_Fair
Short-Term Investments and Fair Value Measurements | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Short-Term Investments and Fair Value Measurements | ' | |||||||||||||
Short-Term Investments and Fair Value Measurements | ' | |||||||||||||
(2) Short Term Investments and Fair Value Measurements | ||||||||||||||
Short term investments are summarized as follows: | ||||||||||||||
As of September 30, 2014 | ||||||||||||||
Amortized | Unrealized | Unrealized | Estimated | |||||||||||
Cost | Gains | Losses | Fair Market | |||||||||||
Value | ||||||||||||||
Commercial paper | $ | 49,722 | $ | — | $ | (2 | ) | $ | 49,720 | |||||
Total | $ | 49,722 | $ | — | $ | (2 | ) | $ | 49,720 | |||||
As of December 31, 2013 | ||||||||||||||
Amortized | Unrealized | Unrealized | Estimated | |||||||||||
Cost | Gains | Losses | Fair Market | |||||||||||
Value | ||||||||||||||
Commercial paper | $ | 54,431 | $ | — | $ | (2 | ) | $ | 54,429 | |||||
Total | $ | 54,431 | $ | — | $ | (2 | ) | $ | 54,429 | |||||
The following tables present the Company’s fair value hierarchy for its assets and liabilities: | ||||||||||||||
As of September 30, 2014 | ||||||||||||||
Aggregate Fair | Level 1 | Level 2 | Level 3 | |||||||||||
Value | ||||||||||||||
Assets: | ||||||||||||||
Money market accounts | $ | 86,342 | $ | 86,342 | $ | — | $ | — | ||||||
Commercial paper | 49,720 | — | 49,720 | — | ||||||||||
Total assets measured at fair value | $ | 136,062 | $ | 86,342 | $ | 49,720 | $ | — | ||||||
Liabilities: | ||||||||||||||
Acquisition related contingent consideration | $ | 2,470 | $ | — | $ | — | $ | 2,470 | ||||||
Total liabilities measured at fair value | $ | 2,470 | $ | — | $ | — | $ | 2,470 | ||||||
As of December 31, 2013 | ||||||||||||||
Aggregate Fair | Level 1 | Level 2 | Level 3 | |||||||||||
Value | ||||||||||||||
Assets: | ||||||||||||||
Money market accounts | $ | 81,548 | $ | 81,548 | $ | — | $ | — | ||||||
Commercial paper | 54,429 | — | 54,429 | — | ||||||||||
Total assets measured at fair value | $ | 135,977 | $ | 81,548 | $ | 54,429 | $ | — | ||||||
The Company’s investments classified as level 2 are priced using quoted market prices for identical assets which are subject to infrequent transactions. Cash equivalents consist of balances in money market accounts which are classified as a level 1 measurement based on bank reporting. The Company reassesses the fair value of contingent consideration to be settled in cash related to the WebDAM acquisition on a quarterly basis using the Monte-Carlo simulation approach. This contingency is considered a level 3 measurement. Significant assumptions used in the measurement include probabilities of achieving certain milestones and discount rates which are based on unobservable inputs that are supported by little or no market activity and reflect the Company’s own assumptions in measuring fair value. As a result of a shorter discounting period, the Company recorded a change in the fair value of the contingent consideration in the amount of $70 and $110 during the three and nine months ended September 30, 2014, respectively, which is included in other (expense) income, net. As of September 30, 2014, the fair value of the contingent consideration increased to $2,470 based on its current fair value and is included in other non-current liabilities. | ||||||||||||||
Cash, accounts receivable, restricted cash, accounts payable, accrued expenses and deferred revenue carrying amounts approximate fair value because of the short-term maturity of these instruments. The Company’s non-financial assets, which include property and equipment, intangible assets and goodwill, are not required to be measured at fair value on a recurring basis. However, if certain triggering events occur, or if an annual impairment test is required and the Company is required to evaluate the non-financial asset for impairment, a resulting asset impairment would require that the non-financial asset be recorded at the fair value. | ||||||||||||||
Information_About_Revenue_By_G
Information About Revenue By Geographic Areas | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Segment Reporting | ' | |||||||||||||
Information About Revenue By Geographic Areas | ' | |||||||||||||
(3) Information About Revenue By Geographic Area | ||||||||||||||
The following table presents the Company’s revenue based on customer location: | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
North America | $ | 31,569 | $ | 21,556 | $ | 87,896 | $ | 60,762 | ||||||
Europe | 28,519 | 20,746 | 83,452 | 59,927 | ||||||||||
Rest of the world | 23,642 | 17,256 | 65,397 | 46,795 | ||||||||||
Total revenue | $ | 83,730 | $ | 59,558 | $ | 236,745 | $ | 167,484 | ||||||
Included in North America is the United States which comprises 32% and 32% of total revenue for the three months ended September 30, 2014 and 2013, respectively, and 32% and 32% of total revenue for the nine months ended September 30, 2014 and 2013, respectively. No other country accounts for more than 10% of the Company’s revenue in any period. All long-lived assets are located in the United States. | ||||||||||||||
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Goodwill and Intangible Assets | ' | ||||||||||||
Goodwill and Intangible Assets | ' | ||||||||||||
(4) Goodwill and Intangible Assets | |||||||||||||
The Company’s goodwill balance is attributable to its Bigstockphoto, Inc. (“Bigstock”) and WebDAM reporting units and is tested for impairment at least annually on October 1 or upon a triggering event. The following table summarizes the changes in the Company’s goodwill balance through September 30, 2014: | |||||||||||||
Bigstock | WebDAM | Consolidated | |||||||||||
Balance as of December 31, 2013 | $ | 1,423 | $ | — | $ | 1,423 | |||||||
Goodwill related to acquisition | — | 8,763 | 8,763 | ||||||||||
Balance as of September 30, 2014 | $ | 1,423 | $ | 8,763 | $ | 10,186 | |||||||
Intangible assets consist of the following as of September 30, 2014 and December 31, 2013: | |||||||||||||
As of September 30, 2014 | |||||||||||||
Gross | Accumulated | Net | Weighted | ||||||||||
Carrying | Amortization | Carrying | Average Life | ||||||||||
Amount | Amount | (Years) | |||||||||||
Amortizing intangible assets: | |||||||||||||
Customer relationship | $ | 3,400 | $ | (821 | ) | $ | 2,579 | 6 | |||||
Trade name | 900 | (198 | ) | 702 | 9 | ||||||||
Developed technology | 600 | (47 | ) | 553 | 7 | ||||||||
Contributor content | 450 | (151 | ) | 299 | 15 | ||||||||
Patents | 193 | (27 | ) | 166 | 17 | ||||||||
Domain name | 97 | (17 | ) | 80 | 14 | ||||||||
Total(1) | $ | 5,640 | $ | (1,261 | ) | $ | 4,379 | ||||||
(1): During the three months ended September 30, 2014, the Company acquired the non-exclusive licensing rights to distribute digital content in perpetuity in the amount of $331. The Company has not yet placed the digital content into service and therefore is excluded from the table. | |||||||||||||
As of December 31, 2013 | |||||||||||||
Gross | Accumulated | Net | Weighted | ||||||||||
Carrying | Amortization | Carrying | Average Life | ||||||||||
Amount | Amount | (Years) | |||||||||||
Amortizing intangible assets: | |||||||||||||
Customer relationship | $ | 600 | $ | (600 | ) | $ | — | 4 | |||||
Trade name | 400 | (119 | ) | 281 | 14 | ||||||||
Contributor content | 450 | (127 | ) | 323 | 15 | ||||||||
Patents | 193 | (21 | ) | 172 | 17 | ||||||||
Domain name | 86 | (9 | ) | 77 | 15 | ||||||||
Total | $ | 1,729 | $ | (876 | ) | $ | 853 | ||||||
Amortization expense was $167 and $57 for the three months ended September 30, 2014 and 2013, respectively, and $384 and $169 for the nine months ended September 30, 2014 and 2013, respectively. The Company also determined that there was no indication of impairment for the intangible assets for all periods presented. Estimated amortization expense for the next five years is: $166 for the remaining three months of 2014, $665 in 2015, $665 in 2016, $665 in 2017, $634 in 2018 and $1,584 thereafter. | |||||||||||||
Property_and_Equipment
Property and Equipment | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Property and Equipment | ' | |||||||
Property and Equipment | ' | |||||||
(5) Property and Equipment | ||||||||
Property and equipment is summarized as follows: | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Computer equipment and software | $ | 22,075 | $ | 14,108 | ||||
Furniture and fixtures | 2,149 | 2,588 | ||||||
Leasehold improvements | 13,932 | 10,669 | ||||||
Property and equipment | 38,156 | 27,365 | ||||||
Less accumulated depreciation | (11,734 | ) | (7,109 | ) | ||||
Property and equipment, net | $ | 26,422 | $ | 20,256 | ||||
Depreciation expense amounted to $1,958 and $956 for the three months ended September 30, 2014 and 2013, respectively, and $5,373 and $2,569 for the nine months ended September 30, 2014 and 2013, respectively. Depreciation expense is included in cost of revenue and general and administrative expense based on the nature of the asset. In connection with its move to its new headquarters, the Company recorded a loss on disposal of certain fixed assets in the amount of $367 for the nine months ended September 30, 2014. There was no loss on disposal for the three months ended September 30, 2014 and 2013 and for the nine months ended 2013. | ||||||||
Accrued_Expenses
Accrued Expenses | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Accrued Expenses | ' | |||||||
Accrued Expenses | ' | |||||||
(6) Accrued Expenses | ||||||||
Accrued expenses consist of the following: | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Royalty tax withholdings | $ | 6,085 | $ | 5,305 | ||||
Compensation | 6,527 | 6,379 | ||||||
Non-income taxes | 4,287 | 3,994 | ||||||
Professional fees | 681 | 605 | ||||||
Marketing | 212 | 475 | ||||||
Construction costs | 98 | 4,501 | ||||||
Other expenses | 4,504 | 2,379 | ||||||
Total accrued expenses | $ | 22,394 | $ | 23,638 | ||||
Income_Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2014 | |
Income Taxes | ' |
Income Taxes | ' |
(7) Income Taxes | |
The Company’s effective tax rates for the three months ended September 30, 2014 and 2013 are 40.3% and 37.7%, respectively. The Company’s effective tax rates for the nine months ended September 30, 2014 and 2013 are 42.9% and 39.7%, respectively. The Company incurred a discrete tax expense relating to a change in its state apportionment percentage during the three and nine months ended September 30, 2014, which increased the effective tax rate by 0.1% and 2.3%, respectively. Excluding this discrete expense, the effective rate would have been 40.2% and 40.6%, respectively, for the three and nine months ended September 30, 2014. The Company has computed the provision for income taxes based on the estimated annual effective tax rates and the application of discrete items, if any, in the applicable period. The effective tax rate differs from the statutory tax rate due primarily to non-deductible expenses related to non-cash equity-based compensation, and meals and entertainment. | |
During the three and nine months ended September 30, 2014, the Company did not record additional unrecognized tax benefits. During the three and nine months ended 2013, the Company recorded an unrecognized tax benefit in the amount of $2 and $986, respectively, for uncertain tax positions taken in prior years. To the extent these unrecognized tax benefits are ultimately recognized, the Company’s effective tax rate may be impacted in future periods. | |
The Company recognizes interest expense and tax penalties related to unrecognized tax benefits in income tax expense in the consolidated statements of operations. The Company accrued interest and penalties in the amount of $25 and $2 related to unrecognized tax benefits for the three months ended September 30, 2014 and 2013, respectively, and during the nine months ended September 30, 2014 and 2013, the Company accrued interest and penalties in the amount of $72 and $13 related to unrecognized tax benefits. | |
It is the Company’s practice and intention to indefinitely reinvest the earnings of its foreign subsidiaries in those operations. As of September 30, 2014, the excess of the amount for financial reporting over the tax basis of investment in these foreign subsidiaries is insignificant and the unrecognized deferred tax liability is not material. | |
Term_Loan_Facility
Term Loan Facility | 9 Months Ended |
Sep. 30, 2014 | |
Term Loan Facility | ' |
Term Loan Facility | ' |
(8) Term Loan Facility | |
On September 21, 2012, the Company entered into a Loan and Security Agreement with Silicon Valley Bank providing for a $12,000 term loan facility, which the Company refers to as the term loan facility. On December 24, 2012, the Company paid down $6,000 of the term loan facility. On March 25, 2013, the Company paid off the remaining $6,000 of the loan facility. | |
The Company capitalizes costs directly associated with acquiring third party financing. During the three months ended March 31, 2013, the Company accelerated and recognized $125 as a result of paying off the term loan facility. | |
The Company was in compliance with the financial covenants and other covenants applicable to it under the term loan facility during the three months ended March 31, 2013 prior to paying off the term loan facility on March 25, 2013. | |
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2014 | |
Commitments and Contingencies. | ' |
Commitments and Contingencies | ' |
(9) Commitments and Contingencies | |
The Company leases facilities under agreements accounted for as operating leases. Rental expense, inclusive of operating leases, for the three months ended September 30, 2014 and 2013 was $999 and $801, respectively, and for the nine months ended September 30, 2014 and 2013 was $3,167 and $1,830, respectively. Some leases have defined escalating rent provisions, which are expensed over the term of the related lease on a straight-line basis commencing with the date of possession. Any rent allowance or abatement is netted in this calculation. All leases require payment of real estate taxes and operating expense increases. | |
On March 21, 2013, the Company entered into an operating lease agreement to lease its new office facility in New York, New York. The Company took possession of the premises during the third quarter of 2013, and as a result, the lease commenced. The Company also entered into a letter of credit in the amount of $1,829 as a security deposit for the leased facilities. The letter of credit was collateralized by $1,829 of cash as of September 30, 2014 and December 31, 2013, and as such, is considered to be restricted cash and is included in other assets on the consolidated balance sheet. The lease term is eleven years from the commencement date and aggregate future minimum lease payments are approximately $38,200. | |
Capital Expenditures | |
As of September 30, 2014, the Company had no significant purchase commitments related to capital expenditures. As of December 31, 2013, the Company had committed to purchase approximately $2,500 of data server equipment and $3,700 related to completion of its new office facility. | |
Unconditional Purchase Obligations | |
As of September 30, 2014 and December 31, 2013, the Company had unconditional purchase obligations in the amount of $8,453 and $5,864, respectively, which consisted primarily of contracts related to infrastructure services. | |
As of September 30, 2014, the Company’s unconditional purchase obligations for the remainder of 2014 and for the years ending December 31, 2015, 2016 and 2017 are $1,790, $5,021, $1,578 and $64, respectively. As of December 31, 2013, the Company’s unconditional purchase obligations for the years ending December 31, 2014, 2015 and 2016 are $3,454, $1,845 and $565, respectively. | |
Legal Matters | |
From time to time, the Company may become party to litigation in the ordinary course of business, including direct claims brought by or against the Company with respect to intellectual property, contracts, employment and other matters, as well as claims brought against the Company’s customers for whom the Company has a contractual indemnification obligation. The Company assesses the likelihood of any adverse judgments or outcomes with respect to these matters and determines loss contingency assessments on a gross basis after assessing the probability of incurrence of a loss and whether a loss is reasonably estimable. In addition, the Company considers other relevant factors that could impact its ability to reasonably estimate a loss. A determination of the amount of reserves required, if any, for these contingencies is made after analyzing each matter. The Company reviews reserves, if any, at least quarterly and may change the amount of any such reserve in the future due to new developments or changes in strategy in handling these matters. Although the results of litigation and threats of litigation, investigations and claims cannot be predicted with certainty, the Company currently believes that the final outcome of these matters will not have a material adverse effect on its business, consolidated financial position, results of operations, or cash flows. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors. The Company currently has no material active litigation matters and, as such, no material reserves related to litigation. | |
Indemnifications | |
In the ordinary course of business, the Company enters into contractual arrangements under which it agrees to provide indemnification of varying scope and terms to customers with respect to certain matters, including, but not limited to, losses arising out of the breach of Company’s intellectual property warranties for damages to the customer directly attributable to the Company’s breach. The Company is not responsible for any damages, costs, or losses to the extent such damages, costs or losses arise as a result of the modifications made by the customer, or the context in which an image is used. The standard maximum aggregate obligation and liability to any one customer for all claims is generally limited to $10. The Company offers certain of its customers greater levels of indemnification, including unlimited indemnification. As of September 30, 2014 and as of December 31, 2013, the Company has recorded no liabilities related to indemnification obligations in accordance with the authoritative guidance for loss contingencies. Additionally, the Company believes that it has the appropriate insurance coverage in place to adequately cover such indemnification obligations, if necessary. | |
Employment Agreements | |
The Company has entered into employment and change of control arrangements with certain executive officers and with certain employees. The agreements specify various employment-related matters, including annual compensation, performance incentive bonuses, and severance benefits in the event of termination with or without cause. | |
Employee_Benefit_Plans
Employee Benefit Plans | 9 Months Ended |
Sep. 30, 2014 | |
Employee Benefit Plans | ' |
Employee Benefit Plans | ' |
(10) Employee Benefit Plans | |
The Company has a 401(k) defined contribution plan (“401(k) Plan”) and provides for annual discretionary employer matching contributions not to exceed 3% of employees’ compensation per year. Matching contributions are fully vested and non-forfeitable at all times. | |
The Company recorded employer matching contributions of $264 and $186 for the three months ended September 30, 2014 and 2013, respectively, and $710 and $503 for the nine months ended September 30, 2014 and 2013, respectively. | |
EquityBased_Compensation
Equity-Based Compensation | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Equity-Based Compensation | ' | |||||||||||||
Equity-Based Compensation | ' | |||||||||||||
(11) Equity-Based Compensation | ||||||||||||||
Stock Option Awards | ||||||||||||||
The following table presents a summary of the Company’s stock option awards activity for the nine months ended September 30, 2014: | ||||||||||||||
Plan | Weighted Average | |||||||||||||
Options | Exercise Price | |||||||||||||
Options outstanding at December 31, 2013 | 1,861,761 | $ | 26.09 | |||||||||||
Options granted | 542,750 | 74.52 | ||||||||||||
Options exercised | (338,549 | ) | 19.72 | |||||||||||
Options cancelled or forfeited | (108,204 | ) | 44.57 | |||||||||||
Options outstanding at September 30, 2014 | 1,957,758 | $ | 39.62 | |||||||||||
Vested and exercisable at September 30, 2014 | 632,994 | $ | 20.56 | |||||||||||
The intrinsic value of the total stock options outstanding at September 30, 2014 and at December 31, 2013 was approximately $62,200 and $107,100, respectively. The intrinsic value of the total stock options vested and exercisable at September 30, 2014 and at December 31, 2013 was approximately $32,200 and $38,900, respectively. | ||||||||||||||
There were no stock options granted during the three months ended September 30, 2014. The following weighted average assumptions were used in the fair value calculation of stock options granted during the three and nine months ended September 30, 2014 and 2013: | ||||||||||||||
Three Months | Nine Months | |||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Expected term (in years) | — | 6.3 | 6.3-10 | 6.3 | ||||||||||
Volatility | — | % | 49 | % | 49 | % | 49 | % | ||||||
Risk-free interest rate | — | % | 1.0-1.5 | % | 2.1-2.8 | % | 1.0-1.5 | % | ||||||
Dividend yield | — | % | 0 | % | 0 | % | 0 | % | ||||||
On April 24, 2014, the Company granted 500,000 stock options with a market-based condition to its Chief Executive Officer (“CEO”). The stock options have an exercise price of $80.94 per share and will not vest or become exercisable unless (i) the CEO remains continuously employed by the Company until the fifth anniversary of the date of grant and (ii) the average 90-day closing price of the Company’s common stock equals or exceeds $161.88 for any 90 consecutive calendar days during the period commencing on the fifth anniversary of the date of grant and ending on the tenth anniversary of the date of grant, inclusive provided that the CEO remains continuously employed by the Company until the date of satisfaction of such condition. The derived requisite service period was determined to be six years based on a valuation technique. The total fair value of the grant is $21,630 and is being recognized over the derived requisite service period. In the event that the market condition remains unsatisfied upon completion of the requisite service period, no charge will be reversed. | ||||||||||||||
The Company recognized non-cash equity-based compensation expense of $2,197 and $1,425, net of forfeitures, in connection with the vesting of stock options during the three months ended September 30, 2014 and 2013, respectively. The Company recognized non-cash equity-based compensation expense of $5,925 and $3,169, net of forfeitures, in connection with the vesting of stock options during the nine months ended September 30, 2014 and 2013, respectively. As of September 30, 2014, the total unrecognized compensation charge related to 2012 Plan non-vested options is approximately $31,700, which is expected to be recognized through fiscal year 2020. | ||||||||||||||
Restricted Stock Unit and Restricted Stock Awards | ||||||||||||||
The following table presents a summary of the Company’s RSUs activity for the nine months ended September 30, 2014: | ||||||||||||||
Plan | Weighted Average | |||||||||||||
Options | Fair Value | |||||||||||||
Non-vested balance at December 31, 2013 | 10,000 | $ | 47.17 | |||||||||||
Units granted | 640,975 | 83.19 | ||||||||||||
Units vested | (3,125 | ) | 47.17 | |||||||||||
Units cancelled or forfeited | (18,850 | ) | 81.36 | |||||||||||
Non-vested balance at September 30, 2014 | 629,000 | $ | 82.85 | |||||||||||
The Company recognized non-cash stock-based compensation expense of $3,234 and $30, net of estimated forfeitures, in connection with the vesting of RSUs during the three months ended September 30, 2014 and 2013, respectively. The Company recognized non-cash stock-based compensation expense of $7,518 and $48, net of estimated forfeitures, in connection with the vesting of RSUs during the nine months ended September 30, 2014 and 2013, respectively. | ||||||||||||||
In connection with the Reorganization, membership interest in the LLC was exchanged for restricted and unrestricted shares of the Company’s stock. The Amended and Restated Restricted Stock Agreement entered into by the Company with an executive governs the terms of the restricted stock inclusive of service vesting terms. As the restricted shares vest, the award’s restrictions will be removed. The Company recognized non-cash equity-based compensation expense of $259, which is included in general and administrative expense, during the three months ended September 30, 2014 and 2013, in connection with the normal vesting of restricted stock. The Company recognized non-cash equity-based compensation expense of $777, which is included in general and administrative expense, during the nine months ended September 30, 2014 and 2013, in connection with the normal vesting of restricted stock. | ||||||||||||||
In connection with the WebDAM acquisition, in order to retain the services of certain former WebDAM employees, the Company granted non-vested RSUs that will vest over two years from the date of acquisition. As these equity awards are subject to post-acquisition employment, the Company accounts for them as compensation expense. A portion of these equity awards are accounted for as liability-classified awards, because the obligations are based on fixed monetary amounts that are known at the inception of the obligation, to be settled with a variable number of shares of the Company’s common stock when the equity awards vest. The Company recognized non-cash stock-based compensation expense of $419 and $910, respectively, in connection with the vesting of these obligations during the three and nine months ended September 30, 2014, respectively. There was no non-cash stock-based compensation expense related to these obligations during the three and nine months ended September 30, 2013. | ||||||||||||||
On April 24, 2014, the Company granted 100,000 RSUs with a market-based condition to its Chief Executive Officer (“CEO”). The RSUs will not vest or become exercisable unless (i) the CEO remains continuously employed by the Company until the fifth anniversary of the date of grant and (ii) the average 90-day closing price of the Company’s common stock equals or exceeds $161.88 for any 90 consecutive calendar days during the period commencing on the fifth anniversary of the date of grant and ending on the tenth anniversary of the date of grant, inclusive provided that the CEO remains continuously employed by the Company until the date of satisfaction of such condition. The derived requisite service period was determined to be six years based on a valuation technique. The total fair value of the grant is $5,870 and is being recognized over the derived requisite service period. In the event that the market condition remains unsatisfied upon completion of the requisite service period, no charge will be reversed. | ||||||||||||||
As of September 30, 2014, the total unrecognized non-cash stock-based compensation charge related to the 2012 Plan non-vested restricted stock and RSUs is approximately $47,300, which is expected to be recognized through fiscal year 2020. | ||||||||||||||
Employee Stock Purchase Plan | ||||||||||||||
On October 10, 2012, the Company’s 2012 ESPP became effective. The Company recognized non-cash stock-based compensation expense of $225 and $138, net of estimated forfeitures, for the three months ended September 30, 2014 and 2013, respectively. The Company recognized non-cash stock-based compensation expense of $598 and $428, net of estimated forfeitures, for the nine months ended September 30, 2014 and 2013. As of September 30, 2014, 112,030 shares of the Company’s common stock have been issued under the 2012 ESPP. | ||||||||||||||
The following table summarizes non-cash equity-based compensation expense included in the Company’s statement of operations for the three and nine months ended September 30, 2014 and 2013: | ||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Cost of revenue | $ | 336 | $ | 126 | $ | 953 | $ | 291 | ||||||
Sales and marketing | 819 | 358 | 2,689 | 865 | ||||||||||
Product development | 1,805 | 406 | 4,529 | 990 | ||||||||||
General and administrative | 3,374 | 962 | 7,557 | 2,276 | ||||||||||
Total | $ | 6,334 | $ | 1,852 | $ | 15,728 | $ | 4,422 | ||||||
Summary_of_Operations_and_Sign1
Summary of Operations and Significant Accounting Policies (Policies) | 9 Months Ended | |||||||||
Sep. 30, 2014 | ||||||||||
Summary of Operations and Significant Accounting Policies | ' | |||||||||
Principles of Consolidation | ' | |||||||||
Principles of Consolidation | ||||||||||
The consolidated financial statements reflect the operations of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. | ||||||||||
Reorganization | ' | |||||||||
Reorganization | ||||||||||
In May 2012, in connection with the filing of a registration statement for the Company’s initial public offering (the “IPO”), Shutterstock Images LLC, a New York limited liability company (the “LLC”) formed Shutterstock, Inc., a Delaware corporation, as a wholly-owned subsidiary of the LLC. On October 5, 2012, the LLC reorganized, by way of a merger of the LLC with and into Shutterstock, Inc. with Shutterstock, Inc. surviving in the merger (the “Reorganization”). In connection with the Reorganization, the preferred and common membership interests in the LLC, including any interests that vested upon the Reorganization, were exchanged for an aggregate of 28,338,281 shares of Shutterstock, Inc. common stock. | ||||||||||
Follow-On Offering | ' | |||||||||
Follow-On Offering | ||||||||||
On September 25, 2013, the Company completed a follow-on offering of 5,290,000 shares of its common stock, which included 690,000 shares of common stock sold by the Company and certain stockholders as a result of the underwriters’ exercise of their option to purchase additional shares, at a price of $60.00 per share. The Company sold 1,150,000 shares of common stock in the offering and the selling stockholders sold 4,140,000 shares of common stock in the offering. The aggregate offering price for shares sold by the Company in the offering resulted in net proceeds to the Company of $65,895 after deducting underwriting discounts and commissions, and before deducting total expenses incurred in connection with the offering of approximately $945. | ||||||||||
Unaudited Interim Financial Statements | ' | |||||||||
Unaudited Interim Financial Statements | ||||||||||
The interim consolidated balance sheet as of September 30, 2014, the consolidated statements of operations, comprehensive income and cash flows for the three and nine months ended September 30, 2014 and 2013 are unaudited. The unaudited interim financial statements have been prepared on a basis consistent with the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to state fairly the Company’s financial position as of September 30, 2014 and its results of consolidated operations, comprehensive income and cash flows for the three and nine months ended September 30, 2014 and 2013. The financial data and the other financial information disclosed in these notes to the financial statements related to these periods are also unaudited. The results of operations for the three and nine months ended September 30, 2014 are not necessarily indicative of the results to be expected for the year ending December 31, 2014 or for any other future annual or interim period. | ||||||||||
There have been no material changes in the significant accounting policies from those that were disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013 filed on February 28, 2014. These financial statements should also be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2013. Certain information and note disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted pursuant to such rules and regulations. The consolidated balance sheet as of December 31, 2013 included herein was derived from the audited financial statements as of that date, but does not include all disclosures required by GAAP. | ||||||||||
Acquisition of Virtual Moment, LLC | ' | |||||||||
Acquisition of Virtual Moment, LLC | ||||||||||
On March 14, 2014, the Company acquired certain assets and certain liabilities of Virtual Moment, LLC (dba WebDAM) (“WebDAM”) pursuant to an asset purchase arrangement. The transaction was accounted for using the acquisition method, and accordingly, the results of the acquired business have been included in the Company’s results of operations from the acquisition date. | ||||||||||
WebDAM sells digital asset management software services through its cloud-based platform to marketing and creative enterprise organizations. WebDAM’s products help organizations manage, search, distribute and collaborate on creative digital files in order to grow its brands and reach new audiences. WebDAM’s offerings are particularly attractive to large enterprises, which make up a significant portion of their client base. The Company believes that this acquisition will strengthen its strategic position with its enterprise customers as well as broaden its product offerings to larger companies. | ||||||||||
The fair value of consideration transferred in this business combination was allocated to the intangible assets acquired and liabilities assumed at the acquisition date, with the remaining unallocated amount recorded as goodwill. The allocation of the purchase price for this acquisition has been prepared on a preliminary basis, and changes to those allocations may occur as additional information becomes available. | ||||||||||
The total purchase price of $12,416 consists of an initial cash payment of $10,056 and $2,360 in contingent consideration based on certain performance criteria of post-acquisition revenue. The fair value of the contingent consideration was determined using a Monte-Carlo simulation approach. The aggregate purchase price was allocated to the assets acquired and liabilities assumed as follows: | ||||||||||
Intangible assets: | ||||||||||
Trade name | $ | 500 | ||||||||
Customer relationships | 2,800 | |||||||||
Developed technology | 600 | |||||||||
Goodwill | 8,763 | |||||||||
Total assets acquired | 836 | |||||||||
Total liabilities assumed | (1,083 | ) | ||||||||
Total | $ | 12,416 | ||||||||
The identifiable intangible assets have a weighted average life of approximately seven years and are being amortized on a straight-line basis. The fair value of the customer relationships was determined using a variation of the income approach known as excess earnings method. The fair values of the trade name and developed technology were both determined using the relief-from-royalty method. The goodwill arising from the transaction is primarily attributable to expected operational synergies and is deductible for income tax purposes. As a result of the acquisition, the Company recorded approximately $400 of professional fees for the nine months ended September 30, 2014 which is included in general and administrative expense. There were no professional fees as a result of the acquisition recorded during the three months ended September 30, 2014. | ||||||||||
Pro forma results of operations have not been presented because the effect of this business combination was not material to the Company’s consolidated results of operations. | ||||||||||
Use of Estimates | ' | |||||||||
Use of Estimates | ||||||||||
The preparation of the consolidated financial statements in conformity with GAAP requires the Company’s management to make a number of estimates and assumptions relating to the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the period. The Company evaluates its significant estimates on an ongoing basis, including, but not limited to allowance for doubtful accounts, contingent consideration, sales refund reserve, goodwill, intangibles, non-cash equity-based compensation, income tax provision and for certain non-income tax accruals. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. | ||||||||||
Restricted Cash | ' | |||||||||
Restricted Cash | ||||||||||
The Company’s restricted cash relates to security deposits for leased office locations. As of September 30, 2014, the Company had $188 of restricted cash recorded in prepaid expenses and other current assets that related to a leased office location that expires in the next twelve months and had $1,829 of restricted cash recorded in other assets that related to a leased office location that expires in 2024. As of December 31, 2013, the Company had $243 of restricted cash recorded in prepaid expenses and other current assets and had $2,017 of restricted cash recorded in other assets. The carrying value of restricted cash approximates fair value. | ||||||||||
Deferred Rent | ' | |||||||||
Deferred Rent | ||||||||||
The Company records rent expense on a straight-line basis over the term of the related lease. The difference between the rent expense recognized and the actual payments made in accordance with the lease agreement is recognized as a deferred rent liability on the Company’s balance sheet. As of September 30, 2014, the Company has recorded a deferred rent balance of $7,951, of which $673 is included in other liabilities and $7,278 is included in other non-current liabilities. As of December 31, 2013, the Company had recorded a deferred rent balance of $4,783, of which $2,406 is included in other liabilities and $2,377 is included in other non-current liabilities. | ||||||||||
Revenue Recognition | ' | |||||||||
Revenue Recognition | ||||||||||
The vast majority of the Company’s revenue, net of chargebacks and refunds, is generated from the license of digital content through subscription or usage based plans. The Company’s three primary plans are: subscription plans, On Demand plans, and credit pack plans. The Company recognizes revenue when all of the following basic criteria are met: there is persuasive evidence of an arrangement, performance or delivery of services has occurred, the sales price is fixed or determinable, and collectability is reasonably assured. The Company considers persuasive evidence of an arrangement to be an electronic order form, or a signed contract, which contains the fixed pricing terms. Performance or delivery is considered to have occurred upon the ratable passage of time for subscription plans, the download of digital content or the expiration of a contract period for which there are unused downloads or credits. Collectability is reasonably assured since most of the Company’s customers purchase products by making electronic payments at the time of a transaction with a credit card. The Company establishes a chargeback allowance and sales refund reserve allowance based on factors surrounding historical credit card chargeback trends, historical sales refund trends and other information. As of September 30, 2014 and December 31, 2013, the Company has recorded a combined chargeback allowance and sales refund allowance of $595 and $425, respectively, which is included in other liabilities. Collectability is assessed for customers who pay on credit based on a credit evaluation for new customers, when necessary, and transaction history with existing customers. Any cash received in advance of revenue recognition is recorded as deferred revenue. | ||||||||||
Subscription plans range in length from thirty days to one year. Subscription plan revenues are recognized on a straight-line basis using a daily convention method over the plan term. On Demand plans are typically for a one-year term and permit the customer to download up to a fixed amount of digital content. On Demand revenues are recognized at the time the customer downloads the digital content on a per unit basis. Revenue related to unused digital content, if any, is recognized in full at the end of the plan term assuming no further Company obligation remains. Credit pack plans are generally for a one-year term and enable the customer to purchase a fixed number of credits which can then be utilized to pay for downloaded digital content. The number of credits utilized for each download depends on the digital content size and format. Credit pack revenue is recognized based on customer usage on a per credit basis as digital content is downloaded. Revenue related to unused credits, if any, is recognized in full at the end of the plan term assuming no further Company obligation remains. Most plans automatically renew at the end of the plan term unless the customer elects not to renew. The Company recognizes revenue from its three types of plans on a gross basis in accordance with the authoritative guidance on principal-agent considerations as the Company is the primary obligor in the arrangement, has control in establishing the product’s price, performs a detailed review of the digital content before accepting it to its collection to ensure it is of high quality before it may be purchased by the customers, can reject contributor’s images in its sole discretion, and has credit risk. | ||||||||||
Customers typically pay in advance (or upon commencement of the term) via credit card, wire or check. Fees paid or invoiced in advance are deferred and recognized as described above. Customers that do not pay in advance are invoiced and are required to make payment under standard credit terms. The Company does not generally offer refunds or the right of return to customers. There are situations in which a customer may receive a refund but the determination is made on a case-by-case basis. | ||||||||||
The Company licenses digital content to customers through third party resellers. The Company contracts with third party resellers around the world to access markets where the Company does not have a significant presence. Third party resellers sell the Company’s products directly to end-user customers and remit a fixed amount to the Company based on the type of plan sold. The terms of the reseller program indicate that the third party reseller is the primary obligor to the end-user customer and bears the risks and rewards as principal in the transaction. In assessing whether the Company’s revenue should be reported on a gross or net basis with respect to our reseller program, the Company follows the authoritative guidance in ASC 605-45, “Principal Agent Considerations.” The Company recognizes revenue net of reseller commission in accordance with the type of plan sold, consistent with the plan descriptions above. The Company generally does not offer refunds or the right of return to resellers. | ||||||||||
The Company also generates revenue related to WebDAM from licensing its hosted software services through its cloud-based platform and related implementation and professional services. The Company enters into multiple element revenue arrangements in which a customer purchases a combination of hosted software, implementation and optional value added professional services. The Company recognizes revenue for the hosted services monthly provided that there is persuasive evidence of an arrangement, the service has been delivered, the fees are fixed and determinable, and collection is reasonably assured. ASC 605-25 establishes a selling price hierarchy for determining the selling price of a deliverable in multiple-element arrangements, which is based on: (a) vendor-specific objective evidence; (b) third-party evidence; or (c) best estimated selling price. The hosted software services are recognized ratably over the contractual period as this service is on-going over the hosting period which is generally a one-year term. The Company defers revenue for the delivered elements until the undelivered element is delivered and then recognizes the delivered element revenue ratably over the longer of the contractual term or the estimated customer relationship period which is currently three years. | ||||||||||
Equity-Based Compensation | ' | |||||||||
Equity-Based Compensation | ||||||||||
The Company measures and recognizes non-cash equity-based compensation expense for all equity-based awardsgranted to employees based on estimated fair values. The value portion of the award that is ultimately expected to vest is recognized as expense over the requisite service period. For awards with a change of control condition, an evaluation is made at the grant date and future periods as to the likelihood of the condition being met. Compensation expense is adjusted in future periods for subsequent changes in the expected outcome of the change of control conditions until the vesting date. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Compensation expense related to awards with a market condition is recognized ratably over the requisite service period regardless of the achievement of the market condition. | ||||||||||
The Company uses the Black Scholes option pricing model, the closing price of the Company’s common stock on the date of grant, and the Monte Carlo simulation model, if the award has a market condition, to determine the fair value of stock options and restricted stock units (“RSUs”), respectively, granted pursuant to the Value Appreciation Rights Plan (“VAR Plan”), 2012 Omnibus Equity Incentive Plan (the “2012 Plan”) and stock purchased pursuant to the Employee Stock Purchase Plan (“2012 ESPP”), which are discussed further in Note 11, Equity-Based Compensation. | ||||||||||
The determination of the grant date fair value using an option-pricing model and simulation model requires judgment as well as assumptions regarding a number of other complex and subjective variables. These variables include the Company’s fair value of the common ownership interest pre-IPO, the Company’s closing market price at the grant date post-IPO, the expected unit price volatility over the expected term of the awards, awards’ exercise and cancellation behaviors, risk-free interest rates, and expected dividends, which are estimated as follows: | ||||||||||
· | Fair Value of Common Membership Unit. Prior to completion of the IPO, the Company’s fair value of common ownership interest was estimated internally and approved by the Board of Managers (“BOM”) because the Company was not publicly traded. The Company’s intention upon granting VAR Plan awards was for the granted award to have exercisable price per unit that was not less than the per unit fair value of the Company’s common equity on the date of grant. The valuations of the Company’s common equity unit were prepared in accordance with the American Institute of Certified Public Accountants Statement on Standards for Valuation Services 1: Valuation of a Business, Business Ownership Interest, Security, or Intangible Asset . The assumptions used in the valuation model were based on future expectations combined with the Company’s judgment. In the absence of a public trading market, the Company exercised significant judgment and considered numerous objective and subjective factors to determine the fair value of the common equity unit as of the date of each VAR Plan award grant. Some but not all of these factors included operating and financial performance, current business conditions and projections, the hiring of key personnel, the Company’s history and introduction of new functionality and services, the Company’s stage of development, the likelihood of achieving a liquidity event for the common ownership interests, any adjustment necessary to recognize a lack of marketability for the common ownership interests, the market performance of comparable publicly traded companies, and U.S. and global capital market conditions. The Company also obtained independent third party valuations on a periodic basis. After October 11, 2012, the date the Company’s common stock began trading on the NYSE, the grant date fair value for stock-based awards is based on the closing price of the Company’s common stock on the NYSE on the date of grant and fair value for all other purposes related to stock-based awards shall be the closing price of the Company’s common stock on the NYSE on the relevant date. | |||||||||
· | Expected Term. The expected term is estimated using the simplified method allowed under Securities and Exchange Commission (“SEC”) guidance. | |||||||||
· | Volatility. As the Company does not have a trading history for its common ownership interest pre-IPO or a significant range of its common stock post-IPO, the expected price volatility for the common ownership interest and common stock was estimated by taking the average historic price volatility for industry peers based on daily price observations over a period equivalent to the expected term of the VAR Plan awards and stock options granted post-IPO. Industry peers consist of several public companies similar in size, stage of life cycle and financial leverage. The Company did not rely on implied volatilities of traded options in the industry peers’ common stock because the volume of activity was relatively low. The Company intends to continue to consistently apply this process using the same or similar public companies until a sufficient amount of historical information regarding the volatility of the Company’s own common stock becomes available, or unless circumstances change such that the identified companies are no longer similar to the Company, in which case, more suitable companies whose share prices are publicly available would be utilized in the calculation. | |||||||||
· | Risk-free Interest Rate. The risk-free interest rate is based on the yields of U.S. Treasury securities with maturities similar to the expected term of each award group. | |||||||||
· | Dividend Yield. Prior to the Reorganization, the Company has historically paid cash dividends or distributions to its members. Following the Reorganization, the Company has not paid cash distributions to its stockholders and it does not intend to do so for the foreseeable future. As a result, the Company used an expected dividend yield of zero. | |||||||||
If any of the assumptions used in the Black-Scholes pricing model or Monte Carlo simulation model changes significantly, the fair value for future awards may differ materially compared with the awards granted previously. The awards granted pursuant to the VAR Plan, the 2012 Plan, and the 2012 ESPP are subject to a time-based vesting requirement and for certain award grants are also based on a market condition. The majority of stock option awards granted under the 2012 Plan vest over four years while the majority of the restricted stock units granted under the 2012 Plan vest over three years. The 2012 ESPP provides for purchase periods approximately every six months and a participant must be employed on the purchase date to participate. The VAR Plan awards had a condition that a change of control (as defined in the VAR Plan) must occur for a payment to trigger with respect to the VAR Plan awards. In connection with the Company’s Reorganization, all of the VAR Plan awards were exchanged for options to purchase shares of common stock of Shutterstock, Inc. As of December 31, 2011, no equity-based compensation expense had been recognized with respect to the VAR Plan awards because the qualifying event had not occurred. As a result of the completion of the initial public offering (“IPO”) in October 2012, the Company began recording stock-based compensation expense using the accelerated attribution method, net of forfeitures, based on the grant date fair value of the VAR Plan awards that were exchanged for options to purchase shares of common stock of Shutterstock, Inc. as part of the Company’s Reorganization. | ||||||||||
For pre-IPO equity based awards that qualified for liability classification, the Company has elected to use the intrinsic value method to value the common membership interest in accordance with authoritative guidance on stock compensation. See Note 11, Equity-Based Compensation, for further information. | ||||||||||
Income Taxes | ' | |||||||||
Income Taxes | ||||||||||
The Company is a Delaware corporation and is therefore subject to federal and state income tax. Significant management judgment is required in projecting ordinary income/(loss) in order to determine the Company’s estimated effective tax rate. | ||||||||||
The Company accounts for unrecognized tax benefits using a more-likely-than-not threshold for financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. The Company establishes reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes may be due. The Company records an income tax liability, if any, for the difference between the benefit recognized and measured and the tax position taken or expected to be taken on the Company’s tax returns. To the extent that the assessment of such tax positions changes, the change in estimate is recorded in the period in which the determination is made. The reserves are adjusted in light of changing facts and circumstances, such as the outcome of a tax audit or lapses in statutes of limitations. Any reserve for uncertain tax provisions, if any, and related penalties and interest, if any, are included in the income tax provision. | ||||||||||
The Company assessed the realizability of deferred tax assets and determined that based on the available evidence, including a history of taxable income and estimates of future taxable income, it is more likely than not that the deferred tax assets will be realized. The Company will continue to evaluate its ability to realize deferred tax assets on a quarterly basis. Significant management judgment is required in determining the provision for income taxes and deferred tax assets and liabilities. In the event that actual results differ from these estimates, the Company will adjust these estimates in future periods which may result in a change in the effective tax rate in a future period. | ||||||||||
The Company is subject to compliance requirements for certain non income taxes, including value added taxes, sales taxes and royalty withholding taxes. Where appropriate, the Company has made accruals for these taxes, which are reflected in the Company’s consolidated financial statements. | ||||||||||
Net Income Per Share | ' | |||||||||
Net Income Per Share | ||||||||||
Basic net income per share is computed by dividing the net income attributable to common stockholders by the weighted average number of common shares outstanding during the period. The Company applies the two class method for calculating and presenting income per share. Under the two-class method, net income is allocated between shares of common stock and other participating securities based on their contractual participating rights to share in the earnings as if all of the earnings for the period have been distributed. Participating securities are defined as securities that participate in dividends with common stock according to a pre-determined formula or a contractual obligation to share in the income of the entity. Any potential issuance of common shares, including those that are contingent and do not participate in dividends, are excluded from weighted average number of common shares outstanding. Undistributed net income (loss) for a given period is apportioned to participating stockholders based on the weighted average number of shares for each class of securities outstanding during the applicable period as a percentage of the combined weighted average number of these securities outstanding during the period. Income available to common stockholders is computed by deducting dividends paid to preferred stockholders, accretion to redemption value on preferred members shares, less income allocated to participating securities including unvested shares for the restricted award holder since these unvested shares have participating rights. See Note 11, Equity-Based Compensation, for further discussion. | ||||||||||
Diluted net income per share is computed by dividing the net income available to common stockholders adjusted for any changes in income that would result from the assumed conversion of the potential common shares by the weighted average common shares outstanding and all potential common shares, if they are dilutive. Diluted net income available to common stockholders for the three and nine months ended September 30, 2014 includes the effect of 2,136,637 and 2,161,146 shares, respectively, while 617,250 and 472,977 shares, respectively, were excluded since they were anti-dilutive. Diluted net income available to common stockholders for the three and nine months ended September 30, 2013 includes the effect of 1,589,748 and 1,717,767 shares, respectively, while 376,550 and 229,367 shares, respectively, were excluded since they were anti-dilutive. | ||||||||||
A reconciliation of assumed exercised shares used in calculating basic and diluted net income per share available to common stockholders follows: | ||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||
2014 | 2013 | 2014 | 2013 | |||||||
Basic | 35,304,066 | 33,692,876 | 35,161,644 | 33,522,289 | ||||||
Stock options and employee stock purchase plan shares | 552,282 | 536,741 | 627,845 | 444,556 | ||||||
Unvested restricted stock awards | 75,106 | 51,039 | 93,713 | 76,728 | ||||||
Diluted | 35,931,454 | 34,280,656 | 35,883,202 | 34,043,573 | ||||||
Recently Issued Accounting Standard Updates | ' | |||||||||
Recently Issued Accounting Standard Updates | ||||||||||
In May 2014, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance related to revenue recognition. This new standard will replace all current GAAP guidance on this topic and will eliminate all industry-specific guidance. The new revenue recognition standard provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. This guidance will be effective beginning January 1, 2017 and can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The Company is evaluating the impact, if any, of adopting this new accounting standard on its financial statements. | ||||||||||
In June 2014, the FASB issued new guidance related to stock compensation. The new standard requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award. This update further clarifies that compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the periods for which the requisite service has already been rendered. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015 and can be applied either prospectively or retrospectively to all awards outstanding as of the beginning of the earliest annual period presented as an adjustment to opening retained earnings. Early adoption is permitted. The Company is evaluating the impact, if any, of adopting this new accounting standard on its financial statements. | ||||||||||
Summary_of_Operations_and_Sign2
Summary of Operations and Significant Accounting Policies (Tables) | 9 Months Ended | |||||||||
Sep. 30, 2014 | ||||||||||
Summary of Operations and Significant Accounting Policies | ' | |||||||||
Schedule of preliminary aggregate purchase price allocated to assets acquired and liabilities assumed | ' | |||||||||
Intangible assets: | ||||||||||
Trade name | $ | 500 | ||||||||
Customer relationships | 2,800 | |||||||||
Developed technology | 600 | |||||||||
Goodwill | 8,763 | |||||||||
Total assets acquired | 836 | |||||||||
Total liabilities assumed | (1,083 | ) | ||||||||
Total | $ | 12,416 | ||||||||
Schedule of reconciliation of assumed exercised shares used in calculating basic and diluted net income (loss) share available to common stockholders | ' | |||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||
2014 | 2013 | 2014 | 2013 | |||||||
Basic | 35,304,066 | 33,692,876 | 35,161,644 | 33,522,289 | ||||||
Stock options and employee stock purchase plan shares | 552,282 | 536,741 | 627,845 | 444,556 | ||||||
Unvested restricted stock awards | 75,106 | 51,039 | 93,713 | 76,728 | ||||||
Diluted | 35,931,454 | 34,280,656 | 35,883,202 | 34,043,573 | ||||||
ShortTerm_Investments_and_Fair1
Short-Term Investments and Fair Value Measurements (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Short-Term Investments and Fair Value Measurements | ' | |||||||||||||
Schedule of short-term investments | ' | |||||||||||||
As of September 30, 2014 | ||||||||||||||
Amortized | Unrealized | Unrealized | Estimated | |||||||||||
Cost | Gains | Losses | Fair Market | |||||||||||
Value | ||||||||||||||
Commercial paper | $ | 49,722 | $ | — | $ | (2 | ) | $ | 49,720 | |||||
Total | $ | 49,722 | $ | — | $ | (2 | ) | $ | 49,720 | |||||
As of December 31, 2013 | ||||||||||||||
Amortized | Unrealized | Unrealized | Estimated | |||||||||||
Cost | Gains | Losses | Fair Market | |||||||||||
Value | ||||||||||||||
Commercial paper | $ | 54,431 | $ | — | $ | (2 | ) | $ | 54,429 | |||||
Total | $ | 54,431 | $ | — | $ | (2 | ) | $ | 54,429 | |||||
Schedule of fair value measurements | ' | |||||||||||||
As of September 30, 2014 | ||||||||||||||
Aggregate Fair | Level 1 | Level 2 | Level 3 | |||||||||||
Value | ||||||||||||||
Assets: | ||||||||||||||
Money market accounts | $ | 86,342 | $ | 86,342 | $ | — | $ | — | ||||||
Commercial paper | 49,720 | — | 49,720 | — | ||||||||||
Total assets measured at fair value | $ | 136,062 | $ | 86,342 | $ | 49,720 | $ | — | ||||||
Liabilities: | ||||||||||||||
Acquisition related contingent consideration | $ | 2,470 | $ | — | $ | — | $ | 2,470 | ||||||
Total liabilities measured at fair value | $ | 2,470 | $ | — | $ | — | $ | 2,470 | ||||||
As of December 31, 2013 | ||||||||||||||
Aggregate Fair | Level 1 | Level 2 | Level 3 | |||||||||||
Value | ||||||||||||||
Assets: | ||||||||||||||
Money market accounts | $ | 81,548 | $ | 81,548 | $ | — | $ | — | ||||||
Commercial paper | 54,429 | — | 54,429 | — | ||||||||||
Total assets measured at fair value | $ | 135,977 | $ | 81,548 | $ | 54,429 | $ | — | ||||||
Information_About_Revenue_By_G1
Information About Revenue By Geographic Areas (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Segment Reporting | ' | |||||||||||||
Schedule of revenue based on customer location | ' | |||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
North America | $ | 31,569 | $ | 21,556 | $ | 87,896 | $ | 60,762 | ||||||
Europe | 28,519 | 20,746 | 83,452 | 59,927 | ||||||||||
Rest of the world | 23,642 | 17,256 | 65,397 | 46,795 | ||||||||||
Total revenue | $ | 83,730 | $ | 59,558 | $ | 236,745 | $ | 167,484 | ||||||
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Goodwill and Intangible Assets | ' | ||||||||||||
Schedule of changes in goodwill | ' | ||||||||||||
Bigstock | WebDAM | Consolidated | |||||||||||
Balance as of December 31, 2013 | $ | 1,423 | $ | — | $ | 1,423 | |||||||
Goodwill related to acquisition | — | 8,763 | 8,763 | ||||||||||
Balance as of September 30, 2014 | $ | 1,423 | $ | 8,763 | $ | 10,186 | |||||||
Schedule of intangible assets | ' | ||||||||||||
As of September 30, 2014 | |||||||||||||
Gross | Accumulated | Net | Weighted | ||||||||||
Carrying | Amortization | Carrying | Average Life | ||||||||||
Amount | Amount | (Years) | |||||||||||
Amortizing intangible assets: | |||||||||||||
Customer relationship | $ | 3,400 | $ | (821 | ) | $ | 2,579 | 6 | |||||
Trade name | 900 | (198 | ) | 702 | 9 | ||||||||
Developed technology | 600 | (47 | ) | 553 | 7 | ||||||||
Contributor content | 450 | (151 | ) | 299 | 15 | ||||||||
Patents | 193 | (27 | ) | 166 | 17 | ||||||||
Domain name | 97 | (17 | ) | 80 | 14 | ||||||||
Total(1) | $ | 5,640 | $ | (1,261 | ) | $ | 4,379 | ||||||
(1): During the three months ended September 30, 2014, the Company acquired the non-exclusive licensing rights to distribute digital content in perpetuity in the amount of $331. The Company has not yet placed the digital content into service and therefore is excluded from the table. | |||||||||||||
As of December 31, 2013 | |||||||||||||
Gross | Accumulated | Net | Weighted | ||||||||||
Carrying | Amortization | Carrying | Average Life | ||||||||||
Amount | Amount | (Years) | |||||||||||
Amortizing intangible assets: | |||||||||||||
Customer relationship | $ | 600 | $ | (600 | ) | $ | — | 4 | |||||
Trade name | 400 | (119 | ) | 281 | 14 | ||||||||
Contributor content | 450 | (127 | ) | 323 | 15 | ||||||||
Patents | 193 | (21 | ) | 172 | 17 | ||||||||
Domain name | 86 | (9 | ) | 77 | 15 | ||||||||
Total | $ | 1,729 | $ | (876 | ) | $ | 853 | ||||||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Property and Equipment | ' | |||||||
Summary of property and equipment | ' | |||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Computer equipment and software | $ | 22,075 | $ | 14,108 | ||||
Furniture and fixtures | 2,149 | 2,588 | ||||||
Leasehold improvements | 13,932 | 10,669 | ||||||
Property and equipment | 38,156 | 27,365 | ||||||
Less accumulated depreciation | (11,734 | ) | (7,109 | ) | ||||
Property and equipment, net | $ | 26,422 | $ | 20,256 | ||||
Accrued_Expenses_Tables
Accrued Expenses (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Accrued Expenses | ' | |||||||
Schedule of accrued expenses | ' | |||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Royalty tax withholdings | $ | 6,085 | $ | 5,305 | ||||
Compensation | 6,527 | 6,379 | ||||||
Non-income taxes | 4,287 | 3,994 | ||||||
Professional fees | 681 | 605 | ||||||
Marketing | 212 | 475 | ||||||
Construction costs | 98 | 4,501 | ||||||
Other expenses | 4,504 | 2,379 | ||||||
Total accrued expenses | $ | 22,394 | $ | 23,638 | ||||
EquityBased_Compensation_Table
Equity-Based Compensation (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Equity-Based Compensation | ' | |||||||||||||
Schedule of stock options awards activity | ' | |||||||||||||
Plan | Weighted Average | |||||||||||||
Options | Exercise Price | |||||||||||||
Options outstanding at December 31, 2013 | 1,861,761 | $ | 26.09 | |||||||||||
Options granted | 542,750 | 74.52 | ||||||||||||
Options exercised | (338,549 | ) | 19.72 | |||||||||||
Options cancelled or forfeited | (108,204 | ) | 44.57 | |||||||||||
Options outstanding at September 30, 2014 | 1,957,758 | $ | 39.62 | |||||||||||
Vested and exercisable at September 30, 2014 | 632,994 | $ | 20.56 | |||||||||||
Schedule of weighted average assumptions used in the fair value calculation | ' | |||||||||||||
Three Months | Nine Months | |||||||||||||
Ended September 30, | Ended September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Expected term (in years) | — | 6.3 | 6.3-10 | 6.3 | ||||||||||
Volatility | — | % | 49 | % | 49 | % | 49 | % | ||||||
Risk-free interest rate | — | % | 1.0-1.5 | % | 2.1-2.8 | % | 1.0-1.5 | % | ||||||
Dividend yield | — | % | 0 | % | 0 | % | 0 | % | ||||||
Schedule of restricted stock units ("RSUs") activity | ' | |||||||||||||
Plan | Weighted Average | |||||||||||||
Options | Fair Value | |||||||||||||
Non-vested balance at December 31, 2013 | 10,000 | $ | 47.17 | |||||||||||
Units granted | 640,975 | 83.19 | ||||||||||||
Units vested | (3,125 | ) | 47.17 | |||||||||||
Units cancelled or forfeited | (18,850 | ) | 81.36 | |||||||||||
Non-vested balance at September 30, 2014 | 629,000 | $ | 82.85 | |||||||||||
Summary of non-cash equity-based compensation expense included in the Company's statement of operations | ' | |||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Cost of revenue | $ | 336 | $ | 126 | $ | 953 | $ | 291 | ||||||
Sales and marketing | 819 | 358 | 2,689 | 865 | ||||||||||
Product development | 1,805 | 406 | 4,529 | 990 | ||||||||||
General and administrative | 3,374 | 962 | 7,557 | 2,276 | ||||||||||
Total | $ | 6,334 | $ | 1,852 | $ | 15,728 | $ | 4,422 | ||||||
Summary_of_Operations_and_Sign3
Summary of Operations and Significant Accounting Policies (Details) | 0 Months Ended |
Oct. 05, 2012 | |
Reorganization | ' |
Shares of common stock exchanged with preferred and common membership interests in connection with Reorganization | 28,338,281 |
Summary_of_Operations_and_Sign4
Summary of Operations and Significant Accounting Policies (Details 2) (USD $) | 9 Months Ended | 0 Months Ended | ||||||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 | Mar. 14, 2014 | Sep. 30, 2014 | Mar. 14, 2014 | Mar. 14, 2014 | Mar. 14, 2014 | Mar. 14, 2014 |
Virtual Moment, LLC | Virtual Moment, LLC | Virtual Moment, LLC | Virtual Moment, LLC | Virtual Moment, LLC | Virtual Moment, LLC | |||
Trade name | Customer relationships | Developed technology | ||||||
Acquisition of Virtual Moment, LLC | ' | ' | ' | ' | ' | ' | ' | ' |
Initial cash payment | $10,056 | ' | $10,056 | ' | ' | ' | ' | ' |
Contingent consideration | ' | ' | ' | ' | 2,360 | ' | ' | ' |
Allocation of preliminary aggregate purchase price to assets acquired and liabilities assumed | ' | ' | ' | ' | ' | ' | ' | ' |
Intangible assets: | ' | ' | ' | ' | ' | 500 | 2,800 | 600 |
Goodwill | 10,186 | 1,423 | ' | ' | 8,763 | ' | ' | ' |
Total assets acquired | ' | ' | ' | ' | 836 | ' | ' | ' |
Total liabilities assumed | ' | ' | ' | ' | -1,083 | ' | ' | ' |
Total | ' | ' | ' | ' | 12,416 | ' | ' | ' |
Weighted average life of identifiable intangible assets | ' | ' | '7 years | ' | ' | ' | ' | ' |
Professional fees | ' | ' | ' | $400 | ' | ' | ' | ' |
Summary_of_Operations_and_Sign5
Summary of Operations and Significant Accounting Policies (Details 3) (USD $) | 0 Months Ended | 9 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Sep. 25, 2013 | Sep. 30, 2013 | Sep. 25, 2013 |
Follow-On Offering | ' | ' | ' |
Total shares in follow-on offering | ' | ' | 5,290,000 |
Shares issued upon exercise of underwriters' option to purchase additional share | 690,000 | ' | ' |
Common stock, issue price (in dollars per share) | ' | ' | $60 |
Common stock sold by the entity (in shares) | 1,150,000 | ' | ' |
Common stock sold by shareholders (in shares) | 4,140,000 | ' | ' |
Net proceeds from issuance of common stock | ' | $65,895 | ' |
Offering expenses | $945 | ' | ' |
Summary_of_Operations_and_Sign6
Summary of Operations and Significant Accounting Policies (Details 4) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Prepaid expenses and other current assets | ' | ' |
Restricted Cash | ' | ' |
Restricted cash related to security deposits for leased office locations that expires in the next twelve months | $188 | $243 |
Other assets | ' | ' |
Restricted Cash | ' | ' |
Restricted cash related to security deposits for leased office location that expire in 2024 | $1,829 | $2,017 |
Summary_of_Operations_and_Sign7
Summary of Operations and Significant Accounting Policies (Details 5) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 |
item | ||
Revenue recognition | ' | ' |
Number of subscription or usage based plans | 3 | ' |
Chargeback and sales refund allowances | $595 | $425 |
Period of revenue recognition for undelivered elements | '1 year | ' |
Estimated customer relationship period | '3 years | ' |
Subscription plans | Minimum | ' | ' |
Revenue recognition | ' | ' |
Plan term | '30 days | ' |
Subscription plans | Maximum | ' | ' |
Revenue recognition | ' | ' |
Plan term | '1 year | ' |
On Demand plans | ' | ' |
Revenue recognition | ' | ' |
Plan term | '1 year | ' |
Credit-pack plans | ' | ' |
Revenue recognition | ' | ' |
Plan term | '1 year | ' |
Summary_of_Operations_and_Sign8
Summary of Operations and Significant Accounting Policies (Details 6) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Deferred Rent | ' | ' |
Deferred rent current balance | $673 | $2,406 |
Deferred rent non-current balance | 7,278 | 2,377 |
Deferred rent balance | $7,951 | $4,783 |
Summary_of_Operations_and_Sign9
Summary of Operations and Significant Accounting Policies (Details 7) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
VAR Plan | ' | ' | ' | ' |
Equity-Based Compensation | ' | ' | ' | ' |
Expected dividend yield (as a percent) | ' | ' | 0.00% | ' |
Stock Option | ' | ' | ' | ' |
Equity-Based Compensation | ' | ' | ' | ' |
Expected dividend yield (as a percent) | 0.00% | 0.00% | 0.00% | 0.00% |
Stock Option | 2012 Plan | ' | ' | ' | ' |
Equity-Based Compensation | ' | ' | ' | ' |
Vesting period | ' | ' | '4 years | ' |
Restricted stock units | 2012 Plan | ' | ' | ' | ' |
Equity-Based Compensation | ' | ' | ' | ' |
Vesting period | ' | ' | '3 years | ' |
Employee stock purchase plan | 2012 ESPP | ' | ' | ' | ' |
Equity-Based Compensation | ' | ' | ' | ' |
Vesting period | ' | ' | '6 months | ' |
Recovered_Sheet1
Summary of Operations and Significant Accounting Policies (Details 8) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Net Income Per Share | ' | ' | ' | ' |
Number of shares to purchase, the effect of which is included in diluted net income available to common stockholders/members | 2,136,637 | 1,589,748 | 2,161,146 | 1,717,767 |
Anti-dilutive shares excluded from diluted net income available to common stockholders/members | 617,250 | 376,550 | 472,977 | 229,367 |
Reconciliation of assumed exercised shares used in calculating basic and diluted net income (loss) share available to common shareholders/members | ' | ' | ' | ' |
Basic (in shares) | 35,304,066 | 33,692,876 | 35,161,644 | 33,522,289 |
Stock options and employee stock purchase plan shares | 552,282 | 536,741 | 627,845 | 444,556 |
Unvested restricted stock awards | 75,106 | 51,039 | 93,713 | 76,728 |
Diluted (in shares) | 35,931,454 | 34,280,656 | 35,883,202 | 34,043,573 |
ShortTerm_Investments_and_Fair2
Short-Term Investments and Fair Value Measurements (Details) (USD $) | 9 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 |
Short term investments and fair value measurements | ' | ' |
Amortized Cost | $49,722 | $54,431 |
Unrealized Losses | -2 | -2 |
Estimated Fair Market Value | 49,720 | 54,429 |
Commercial Paper | ' | ' |
Short term investments and fair value measurements | ' | ' |
Amortized Cost | 49,722 | 54,431 |
Unrealized Losses | -2 | -2 |
Estimated Fair Market Value | $49,720 | $54,429 |
ShortTerm_Investments_and_Fair3
Short-Term Investments and Fair Value Measurements (Details 2) (USD $) | 9 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||||||||||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 |
Recurring Basis | Recurring Basis | Recurring Basis | Recurring Basis | Recurring Basis | Recurring Basis | Recurring Basis | Recurring Basis | Recurring Basis | Recurring Basis | Recurring Basis | Recurring Basis | Recurring Basis | Recurring Basis | Recurring Basis | Recurring Basis | Recurring Basis | Recurring Basis | Recurring Basis | Recurring Basis | ||
Aggregate Fair Value | Aggregate Fair Value | Aggregate Fair Value | Aggregate Fair Value | Aggregate Fair Value | Aggregate Fair Value | Aggregate Fair Value | Aggregate Fair Value | Aggregate Fair Value | Level 1 | Level 1 | Level 1 | Level 1 | Level 2 | Level 2 | Level 2 | Level 2 | Level 3 | Level 3 | Level 3 | ||
WebDAM | WebDAM | Acquisition Related Contingent Consideration | Money Market Funds | Money Market Funds | Commercial Paper | Commercial Paper | Aggregate Fair Value | Aggregate Fair Value | Aggregate Fair Value | Aggregate Fair Value | Aggregate Fair Value | Aggregate Fair Value | Aggregate Fair Value | Aggregate Fair Value | Aggregate Fair Value | Aggregate Fair Value | Aggregate Fair Value | ||||
Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) | Money Market Funds | Money Market Funds | Commercial Paper | Commercial Paper | Acquisition Related Contingent Consideration | Acquisition Related Contingent Consideration | ||||||||||||||
WebDAM | |||||||||||||||||||||
Other Noncurrent Liabilities | |||||||||||||||||||||
Assets: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total assets measured at fair value | ' | $136,062 | $135,977 | ' | ' | ' | $86,342 | $81,548 | $49,720 | $54,429 | $86,342 | $81,548 | $86,342 | $81,548 | $49,720 | $54,429 | $49,720 | $54,429 | ' | ' | ' |
Liabilities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total liabilities measured at fair value | ' | 2,470 | ' | ' | ' | 2,470 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,470 | 2,470 | ' |
Contingent consideration | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Change in fair value of contingent consideration | 110 | ' | ' | 70 | 110 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of contingent consideration | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $2,470 |
Information_About_Revenue_By_G2
Information About Revenue By Geographic Areas (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Geographic revenue based on customer location | ' | ' | ' | ' |
Revenue | $83,730 | $59,558 | $236,745 | $167,484 |
North America | ' | ' | ' | ' |
Geographic revenue based on customer location | ' | ' | ' | ' |
Revenue | 31,569 | 21,556 | 87,896 | 60,762 |
United States | Total revenue | Geographic concentration | ' | ' | ' | ' |
Geographic revenue based on customer location | ' | ' | ' | ' |
Concentration risk percentage | 32.00% | 32.00% | 32.00% | 32.00% |
Europe | ' | ' | ' | ' |
Geographic revenue based on customer location | ' | ' | ' | ' |
Revenue | 28,519 | 20,746 | 83,452 | 59,927 |
Rest of the world | ' | ' | ' | ' |
Geographic revenue based on customer location | ' | ' | ' | ' |
Revenue | $23,642 | $17,256 | $65,397 | $46,795 |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets (Details) (USD $) | 9 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 |
Bigstockphoto Inc | Bigstockphoto Inc | WebDAM | ||
Changes in goodwill | ' | ' | ' | ' |
Balance at the beginning of the period | $1,423 | $1,423 | $1,423 | ' |
Goodwill related to acquisition | 8,763 | ' | ' | 8,763 |
Balance at the end of the period | $10,186 | $1,423 | $1,423 | $8,763 |
Goodwill_and_Intangible_Assets3
Goodwill and Intangible Assets (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | ||||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 |
Customer relationships | Customer relationships | Trade name | Trade name | Developed technology | Contributor content | Contributor content | Patents | Patents | Domain name | Domain name | Digital Content | ||||||
Amortizing intangible assets: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gross Carrying Amount | $5,640 | ' | $5,640 | ' | $1,729 | $3,400 | $600 | $900 | $400 | $600 | $450 | $450 | $193 | $193 | $97 | $86 | ' |
Accumulated Amortization | -1,261 | ' | -1,261 | ' | -876 | -821 | -600 | -198 | -119 | -47 | -151 | -127 | -27 | -21 | -17 | -9 | ' |
Net Carrying Amount | 4,379 | ' | 4,379 | ' | 853 | 2,579 | ' | 702 | 281 | 553 | 299 | 323 | 166 | 172 | 80 | 77 | ' |
Weighted Average Life | ' | ' | ' | ' | ' | '6 years | '4 years | '9 years | '14 years | '7 years | '15 years | '15 years | '17 years | '17 years | '14 years | '15 years | ' |
Acquisition of intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 331 |
Amortization expense | 167 | 57 | 384 | 169 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Estimated amortization expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Remaining three months of 2014 | 166 | ' | 166 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2015 | 665 | ' | 665 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2016 | 665 | ' | 665 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2017 | 665 | ' | 665 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2018 | 634 | ' | 634 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Thereafter | $1,584 | ' | $1,584 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 |
Property and Equipment | ' | ' | ' | ' | ' |
Property and equipment | $38,156 | ' | $38,156 | ' | $27,365 |
Less accumulated depreciation | -11,734 | ' | -11,734 | ' | -7,109 |
Property and equipment, net | 26,422 | ' | 26,422 | ' | 20,256 |
Depreciation | 1,958 | 956 | 5,373 | 2,569 | ' |
Loss on disposal | 0 | 0 | 367 | 0 | ' |
Computer equipment and software | ' | ' | ' | ' | ' |
Property and Equipment | ' | ' | ' | ' | ' |
Property and equipment | 22,075 | ' | 22,075 | ' | 14,108 |
Furniture and fixtures | ' | ' | ' | ' | ' |
Property and Equipment | ' | ' | ' | ' | ' |
Property and equipment | 2,149 | ' | 2,149 | ' | 2,588 |
Leasehold improvements | ' | ' | ' | ' | ' |
Property and Equipment | ' | ' | ' | ' | ' |
Property and equipment | $13,932 | ' | $13,932 | ' | $10,669 |
Accrued_Expenses_Details
Accrued Expenses (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accrued Expenses | ' | ' |
Royalty tax withholdings | $6,085 | $5,305 |
Compensation | 6,527 | 6,379 |
Non-income taxes | 4,287 | 3,994 |
Professional fees | 681 | 605 |
Marketing | 212 | 475 |
Construction costs | 98 | 4,501 |
Other expenses | 4,504 | 2,379 |
Total accrued expenses | $22,394 | $23,638 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Income Taxes | ' | ' | ' | ' |
Effective tax rate (as a percent) | 40.30% | 37.70% | 42.90% | 39.70% |
State and local taxes, net of federal benefit (as a percent) | 0.10% | ' | 2.30% | ' |
Effective tax rate before discrete tax expense relating to a change in state apportionment (as a percent) | 40.20% | ' | 40.60% | ' |
Gross additions for tax positions for prior years | ' | $2 | ' | $986 |
Unrecognized tax benefits, interest and penalties accrued | $25 | $2 | $72 | $13 |
Term_Loan_Facility_Details
Term Loan Facility (Details) (USD $) | 9 Months Ended | 0 Months Ended | 3 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Mar. 25, 2013 | Dec. 24, 2012 | Mar. 31, 2013 | Sep. 21, 2012 |
Term Loan | Term Loan | Term Loan | Term Loan | ||
Term Loan Facility | ' | ' | ' | ' | ' |
Amount borrowed | ' | ' | ' | ' | $12,000 |
Payment of term loan facility | 6,000 | 6,000 | 6,000 | ' | ' |
Amortization of financing costs | $125 | ' | ' | $125 | ' |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 |
Commitments and Contingencies. | ' | ' | ' | ' | ' |
Rental expense inclusive of operating leases | $999 | $801 | $3,167 | $1,830 | ' |
Letter of credit as a security deposit for the leased facilities | 1,829 | ' | 1,829 | ' | ' |
Letter of credit collateralized as restricted cash | 1,829 | ' | 1,829 | ' | 1,829 |
Term of lease | ' | ' | '11 years | ' | ' |
Total minimum lease payments | $38,200 | ' | $38,200 | ' | ' |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details 2) (USD $) | 3 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 |
Commitments and Contingencies. | ' | ' |
Purchase commitments | $0 | ' |
Commitment to purchase data server equipment | ' | 2,500 |
Commitment related to completion of its new office facility | ' | 3,700 |
Unconditional Purchase Obligations | ' | ' |
Unconditional purchase obligations for contracts related to infrastructure services and contractual commitments for marketing services | 8,453 | 5,864 |
Maturity of unconditional purchase obligations | ' | ' |
Remainder of 2014 | 1,790 | ' |
2014 | ' | 3,454 |
2015 | 5,021 | 1,845 |
2016 | 1,578 | 565 |
2017 | 64 | ' |
Indemnifications | ' | ' |
Standard maximum aggregate obligation and liability to any one customer for all claims | 10 | ' |
Indemnification obligation | $0 | $0 |
Employee_Benefit_Plans_Details
Employee Benefit Plans (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Employee Benefit Plans | ' | ' | ' | ' |
Annual discretionary employer matching contributions (as a percent) | ' | ' | 3.00% | ' |
Employer matching contributions | $264 | $186 | $710 | $503 |
EquityBased_Compensation_Detai
Equity-Based Compensation (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Apr. 24, 2014 | Apr. 24, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 |
Stock Option | Stock Option | Stock Option | Stock Option | Stock Option | Stock Option | Stock Option | Stock Option | Stock Option | Stock Option | Stock Option | Stock Option | Stock Option | Stock Option | |||||
Chief Executive Officer | Chief Executive Officer | Minimum | Minimum | Minimum | Maximum | Maximum | Maximum | 2012 Plan | ||||||||||
Plan Options | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Options/Units outstanding at the beginning of the period (in shares) | ' | ' | ' | ' | ' | ' | 1,861,761 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Options/Units granted (in shares) | ' | ' | ' | ' | 0 | ' | 542,750 | ' | ' | 500,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Options/Units exercised (in shares) | ' | ' | ' | ' | ' | ' | -338,549 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Options/Units cancelled or forfeited (in shares) | ' | ' | ' | ' | ' | ' | -108,204 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Options outstanding at the end of the period (in shares) | ' | ' | ' | ' | 1,957,758 | ' | 1,957,758 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Vested and exercisable at the end of the period (in shares) | ' | ' | ' | ' | 632,994 | ' | 632,994 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted Average Exercise Price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Options outstanding at the beginning of the period (in dollars per unit) | ' | ' | ' | ' | ' | ' | $26.09 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Options granted (in dollars per share) | ' | ' | ' | ' | ' | ' | $74.52 | ' | ' | $80.94 | ' | ' | ' | ' | ' | ' | ' | ' |
Options exercised (in dollars per share) | ' | ' | ' | ' | ' | ' | $19.72 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Options cancelled or forfeited (in dollars per share) | ' | ' | ' | ' | ' | ' | $44.57 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Options outstanding at the end of the period (in dollars per unit) | ' | ' | ' | ' | $39.62 | ' | $39.62 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Vested and exercisable at the end of the period (in dollars per share) | ' | ' | ' | ' | $20.56 | ' | $20.56 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Consideration period for awards granted | ' | ' | ' | ' | ' | ' | ' | ' | ' | '90 days | ' | ' | ' | ' | ' | ' | ' | ' |
Closing price of the common stock equals or exceeds for 90 consecutive calendar days | ' | ' | ' | ' | ' | ' | ' | ' | ' | $161.88 | ' | ' | ' | ' | ' | ' | ' | ' |
Service period for amortization of awards | ' | ' | ' | ' | ' | ' | ' | ' | ' | '6 years | ' | ' | ' | ' | ' | ' | ' | ' |
Total fair value of the grant | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $21,630 | ' | ' | ' | ' | ' | ' | ' |
Reversal of charge upon the completion of service period | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' |
Intrinsic values | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Intrinsic value of total stock options and notional units outstanding | ' | ' | ' | ' | 62,200 | ' | 62,200 | ' | 107,100 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Intrinsic value of total stock options vested and exercisable | ' | ' | ' | ' | 32,200 | ' | 32,200 | ' | 38,900 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average assumptions used in fair value calculation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected term | ' | ' | ' | ' | ' | '6 years 3 months 18 days | ' | '6 years 3 months 18 days | ' | ' | ' | ' | '6 years 3 months 18 days | ' | ' | '10 years | ' | ' |
Volatility (as a percent) | ' | ' | ' | ' | ' | 49.00% | 49.00% | 49.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Risk-free interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.00% | 2.10% | 1.00% | 1.50% | 2.80% | 1.50% | ' |
Dividend yield | ' | ' | ' | ' | 0.00% | 0.00% | 0.00% | 0.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional disclosures | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Non-cash stock-based compensation expense, net of estimated forfeitures | 6,334 | 1,852 | 15,728 | 4,422 | 2,197 | 1,425 | 5,925 | 3,169 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total unrecognized compensation charge related non-vested options | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $31,700 |
EquityBased_Compensation_Detai1
Equity-Based Compensation (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | ||||||||||||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Mar. 14, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Apr. 24, 2014 | Apr. 24, 2014 |
Restricted Stock Units and Restricted Stock Awards | Restricted stock | Restricted stock | Restricted stock | Restricted stock units | Restricted stock units | Restricted stock units | Restricted stock units | Restricted stock units | Restricted stock units | Restricted stock units | Restricted stock units | Restricted stock units | Restricted stock units | Employee stock purchase plan | Employee stock purchase plan | Employee stock purchase plan | Employee stock purchase plan | Chief Executive Officer | Chief Executive Officer | |||||
2012 Plan | Virtual Moment, LLC | Virtual Moment, LLC | Virtual Moment, LLC | Virtual Moment, LLC | Virtual Moment, LLC | 2012 Plan | 2012 ESPP | 2012 ESPP | 2012 ESPP | 2012 ESPP | Restricted stock units | Restricted stock units | ||||||||||||
Plan Options | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Non-vested balance at the beginning of the period (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Units granted (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 640,975 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100,000 | ' |
Units vested (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -3,125 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Units cancelled or forfeited (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -18,850 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Non-vested balance at the end of the period (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 629,000 | ' | 629,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted Average Fair Value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Non-vested balance at the beginning of the period (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $47.17 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Units granted (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $83.19 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Units vested (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $47.17 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Units cancelled or forfeited (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $81.36 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Non-vested balance at the end of the period (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | $82.85 | ' | $82.85 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Non-cash stock-based compensation expense net of estimated forfeitures recognized in connection with one-time acceleration charge | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $225 | $138 | $598 | $428 | ' | ' |
Recognized compensation charge | 6,334 | 1,852 | 15,728 | 4,422 | ' | 259 | 259 | 777 | 3,234 | 30 | 7,518 | 48 | ' | 419 | 0 | 910 | 0 | ' | ' | ' | ' | ' | ' | ' |
Vesting period of granted award | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '2 years | ' | ' | ' | ' | '3 years | ' | ' | '6 months | ' | ' | ' |
Consideration period for awards granted | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '90 days | ' |
Closing price of the common stock equals or exceeds for 90 consecutive calendar days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $161.88 | ' |
Service period for amortization of awards | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '6 years | ' |
Total fair value of the grant | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,870 |
Reversal of charge upon the completion of service period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | ' |
Unrecognized compensation charge | ' | ' | ' | ' | $47,300 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares issued under ESPP | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 112,030 | ' | ' | ' | ' | ' |
EquityBased_Compensation_Detai2
Equity-Based Compensation (Details 3) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Non-cash equity-based compensation expense related to the 2012 Plan and 2012 ESPP | ' | ' | ' | ' |
Total | $6,334 | $1,852 | $15,728 | $4,422 |
Cost of revenue | ' | ' | ' | ' |
Non-cash equity-based compensation expense related to the 2012 Plan and 2012 ESPP | ' | ' | ' | ' |
Total | 336 | 126 | 953 | 291 |
Sales and marketing | ' | ' | ' | ' |
Non-cash equity-based compensation expense related to the 2012 Plan and 2012 ESPP | ' | ' | ' | ' |
Total | 819 | 358 | 2,689 | 865 |
Product development | ' | ' | ' | ' |
Non-cash equity-based compensation expense related to the 2012 Plan and 2012 ESPP | ' | ' | ' | ' |
Total | 1,805 | 406 | 4,529 | 990 |
General and administrative | ' | ' | ' | ' |
Non-cash equity-based compensation expense related to the 2012 Plan and 2012 ESPP | ' | ' | ' | ' |
Total | $3,374 | $962 | $7,557 | $2,276 |