Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 22, 2019 | Jun. 30, 2018 | |
Document and Entity Information | |||
Entity Registrant Name | Shutterstock, Inc. | ||
Entity Central Index Key | 1,549,346 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 889,122,569 | ||
Entity Common Stock, Shares Outstanding | 35,081,109 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 230,852 | $ 253,428 |
Accounts receivable, net | 41,028 | 49,932 |
Prepaid expenses and other current assets | 34,841 | 37,109 |
Total current assets | 306,721 | 340,469 |
Property and equipment, net | 76,188 | 85,698 |
Intangible assets, net | 29,540 | 34,197 |
Goodwill | 88,576 | 98,654 |
Deferred tax assets, net | 12,375 | 9,761 |
Other assets | 18,088 | 8,997 |
Total assets | 531,488 | 577,776 |
Current liabilities: | ||
Accounts payable | 7,212 | 7,160 |
Accrued expenses | 51,385 | 58,734 |
Contributor royalties payable | 22,971 | 20,088 |
Deferred revenue | 139,604 | 157,803 |
Other liabilities | 2,131 | 1,957 |
Total current liabilities | 223,303 | 245,742 |
Deferred tax liability, net | 77 | 1,486 |
Other non-current liabilities | 21,441 | 15,963 |
Total liabilities | 244,821 | 263,191 |
Commitments and contingencies (Note 15) | ||
Stockholders’ equity: | ||
Common stock, $0.01 par value; 200,000 shares authorized; 37,618 and 37,270 shares issued and 35,060 and 34,712 shares outstanding as of December 31, 2018 and December 31, 2017, respectively | 376 | 373 |
Additional paid-in capital | 291,710 | 272,657 |
Treasury stock, at cost; 2,558 shares as of December 31, 2018 and December 31, 2017 | (100,027) | (100,027) |
Accumulated other comprehensive loss | (6,471) | (3,557) |
Retained earnings | 101,079 | 145,139 |
Total stockholders’ equity | 286,667 | 314,585 |
Total liabilities and stockholders’ equity | $ 531,488 | $ 577,776 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 37,618,000 | 37,270,000 |
Common stock, shares outstanding (in shares) | 35,060,000 | 34,712,000 |
Treasury stock, shares (in shares) | 2,558,000 | 2,558,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | ||||||||||||
Revenue | $ 162,072 | $ 151,575 | $ 156,584 | $ 153,019 | $ 151,829 | $ 141,063 | $ 133,995 | $ 130,224 | $ 557,111 | $ 623,250 | $ 557,111 | $ 494,317 |
Operating expenses: | ||||||||||||
Cost of revenue | 68,829 | 66,461 | 67,891 | 64,490 | 64,590 | 58,812 | 57,289 | 52,411 | 267,671 | 233,102 | 203,129 | |
Sales and marketing | 43,034 | 41,028 | 42,018 | 40,368 | 40,844 | 36,008 | 37,109 | 32,503 | 166,448 | 146,464 | 126,626 | |
Product development | 11,689 | 14,032 | 16,728 | 16,448 | 15,210 | 13,340 | 12,892 | 11,044 | 58,897 | 52,486 | 47,789 | |
General and administrative | 22,881 | 23,355 | 24,322 | 27,224 | 23,994 | 27,333 | 23,420 | 23,963 | 97,782 | 98,710 | 70,987 | |
Total operating expenses | 146,433 | 144,876 | 150,959 | 148,530 | 144,638 | 135,493 | 130,710 | 119,921 | 590,798 | 530,762 | 448,531 | |
Income from operations | 15,639 | 6,699 | 5,625 | 4,489 | 7,191 | 5,570 | 3,285 | 10,303 | 32,452 | 26,349 | 45,786 | |
Gain on Sale of Webdam | 0 | 0 | 0 | 38,613 | 0 | 0 | 0 | 0 | 38,613 | 0 | 0 | |
Other (expense) / income, net | 1,048 | 217 | (7,019) | 802 | 1,637 | 130 | 1,510 | 455 | (4,952) | 3,732 | (1,289) | |
Income before income taxes | 16,687 | 6,916 | (1,394) | 5,291 | 8,828 | 5,700 | 4,795 | 10,758 | 66,113 | 30,081 | 44,497 | |
Provision for income taxes | $ 1,774 | $ (531) | $ (1,140) | $ 11,323 | $ 6,772 | $ 698 | $ 1,729 | $ 4,155 | 11,426 | 13,354 | 11,869 | |
Net income | $ 54,687 | $ 16,727 | $ 32,628 | |||||||||
Earnings per share: | ||||||||||||
Basic (in dollars per share) | $ 0.43 | $ 0.21 | $ (0.01) | $ 0.94 | $ 0.06 | $ 0.14 | $ 0.09 | $ 0.19 | $ 1.57 | $ 0.48 | $ 0.93 | |
Diluted (in dollars per share) | $ 0.42 | $ 0.21 | $ (0.01) | $ 0.92 | $ 0.06 | $ 0.14 | $ 0.09 | $ 0.19 | $ 1.54 | $ 0.47 | $ 0.91 | |
Weighted average shares outstanding: | ||||||||||||
Basic (in shares) | 35,047 | 34,991 | 34,913 | 34,784 | 34,686 | 34,643 | 34,581 | 34,597 | 34,935 | 34,627 | 35,114 | |
Diluted (in shares) | 35,421 | 35,570 | 34,913 | 35,318 | 35,149 | 35,177 | 35,250 | 35,595 | 35,420 | 35,291 | 35,861 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 54,687 | $ 16,727 | $ 32,628 |
Foreign currency translation (loss) / gain | (2,914) | 13,504 | (10,612) |
Other comprehensive (loss) / income | (2,914) | 13,504 | (10,612) |
Comprehensive income | $ 51,773 | $ 30,231 | $ 22,016 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Retained Earnings |
Balance at Dec. 31, 2015 | $ 288,566 | $ 361 | $ (15,635) | $ 213,851 | $ (6,449) | $ 96,437 |
Balance (in shares) at Dec. 31, 2015 | 36,146 | 460 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Equity-based compensation | 28,987 | 28,987 | ||||
Issuance of common stock in connection with employee stock option exercises and RSU vesting | 8,714 | $ 7 | 8,707 | |||
Issuance of common stock in connection with employee stock option exercises and RSU vesting (in shares) | 745 | |||||
Common shares withheld for settlement of taxes in connection with equity-based compensation | (1,032) | $ 0 | (1,032) | |||
Common shares withheld for settlement of taxes in connection with equity-based compensation (in shares) | (18) | |||||
Issuance of common stock in connection with employee stock purchase plan | 1,803 | $ 1 | 1,802 | |||
Issuance of common stock in connection with employee stock purchase plan (in shares) | 54 | |||||
Tax effect from employee stock option exercises and RSU vesting | (425) | (425) | ||||
Repurchase of Treasury Shares | (61,932) | $ (61,932) | ||||
Repurchase of Treasury Shares (in shares) | 1,650 | |||||
Other comprehensive income | (10,612) | (10,612) | ||||
Net income | 32,628 | 32,628 | ||||
Balance at Dec. 31, 2016 | 286,696 | $ 369 | $ (77,567) | 251,890 | (17,061) | 129,065 |
Balance (in shares) at Dec. 31, 2016 | 36,926 | 2,110 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Cumulative Effect of Accounting Change (See Note 1) | 326 | 979 | (653) | |||
Adjusted beginning balance | 287,022 | $ 369 | $ (77,567) | 252,869 | (17,061) | 128,412 |
Equity-based compensation | 24,958 | 24,958 | ||||
Issuance of common stock in connection with employee stock option exercises and RSU vesting | 1,682 | $ 6 | 1,677 | |||
Issuance of common stock in connection with employee stock option exercises and RSU vesting (in shares) | 503 | |||||
Common shares withheld for settlement of taxes in connection with equity-based compensation | (6,848) | $ (2) | (6,846) | |||
Common shares withheld for settlement of taxes in connection with equity-based compensation (in shares) | (159) | |||||
Repurchase of Treasury Shares | (22,460) | $ (22,460) | ||||
Repurchase of Treasury Shares (in shares) | 449 | |||||
Other comprehensive income | 13,504 | 13,504 | ||||
Net income | 16,727 | 16,727 | ||||
Balance at Dec. 31, 2017 | 314,585 | $ 373 | $ (100,027) | 272,657 | (3,557) | 145,139 |
Balance (in shares) at Dec. 31, 2017 | 37,270 | 2,558 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Cumulative Effect of Accounting Change (See Note 1) | 6,178 | 0 | 6,178 | |||
Adjusted beginning balance | 320,763 | $ 373 | $ (100,027) | 272,657 | (3,557) | 151,317 |
Equity-based compensation | 23,869 | 23,869 | ||||
Issuance of common stock in connection with employee stock option exercises and RSU vesting | 2,455 | $ 5 | 2,449 | |||
Issuance of common stock in connection with employee stock option exercises and RSU vesting (in shares) | 498 | |||||
Common shares withheld for settlement of taxes in connection with equity-based compensation | (7,268) | $ (2) | (7,266) | |||
Common shares withheld for settlement of taxes in connection with equity-based compensation (in shares) | (150) | |||||
Payment of Special Dividend | (104,925) | (104,925) | ||||
Other comprehensive income | (2,914) | (2,914) | ||||
Net income | 54,687 | 54,687 | ||||
Balance at Dec. 31, 2018 | $ 286,667 | $ 376 | $ (100,027) | $ 291,710 | $ (6,471) | $ 101,079 |
Balance (in shares) at Dec. 31, 2018 | 37,618 | 2,558 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net income | $ 54,687 | $ 16,727 | $ 32,628 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 45,652 | 35,490 | 19,946 |
Deferred taxes | (6,270) | 12,491 | 1,767 |
Non-cash equity-based compensation | 23,869 | 24,958 | 28,080 |
Change in fair value of contingent consideration | 0 | 0 | 2,925 |
Settlement of contingent consideration liability in excess of acquisition-date fair value | 0 | (6,255) | (1,640) |
Gain on Sale of Webdam | (38,613) | 0 | 0 |
Loss on impairment of long-term investment | 5,881 | 0 | 0 |
Bad debt reserve | 1,175 | 1,292 | 2,992 |
Chargeback and sales refund reserves | 0 | 0 | (30) |
Changes in operating assets and liabilities: | |||
Accounts receivable | 2,641 | (10,015) | (13,232) |
Prepaid expenses and other current and non-current assets | 113 | (6,734) | (2,412) |
Accounts payable and other current and non-current liabilities | 6,388 | 12,044 | 1,612 |
Contributor royalties payable | 3,021 | (685) | 3,118 |
Deferred revenue | 3,658 | 28,724 | 24,969 |
Net cash provided by operating activities | 102,202 | 108,037 | 100,723 |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Capital expenditures | (34,890) | (55,062) | (39,959) |
Investment sales, net | 0 | 55,286 | (7,673) |
Acquisitions of businesses, net of cash acquired | (845) | (49,571) | 0 |
Proceeds from Sale of Webdam, net | 41,804 | 0 | 0 |
Other investments / advances | (15,000) | (5,087) | (660) |
Acquisition of digital content | (3,838) | (2,961) | (8,045) |
Security deposit (payment)/release | (58) | 30 | (71) |
Net cash used in investing activities | (12,827) | (57,365) | (56,408) |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Proceeds from exercise of stock options | 2,454 | 1,682 | 8,711 |
Proceeds from issuance of common stock under Employee Stock Purchase Plan | 0 | 0 | 1,803 |
Cash paid related to settlement of employee taxes related to RSU vesting | (7,268) | (6,848) | (1,032) |
Cash paid for Special Dividend | (104,925) | 0 | 0 |
Settlement of contingent consideration liability | 0 | (3,745) | (2,360) |
Repurchase of treasury shares | 0 | (24,977) | (60,232) |
Net cash used in financing activities | (109,739) | (33,888) | (53,110) |
Effect of foreign exchange rate changes on cash | (2,212) | 12,454 | (7,535) |
Net (decrease) / increase in cash, cash equivalents and restricted cash | (22,576) | 29,238 | (16,330) |
Cash, cash equivalents and restricted cash, beginning of period | 256,041 | 226,803 | 243,133 |
Cash, cash equivalents and restricted cash, end of period | 233,465 | 256,041 | 226,803 |
Supplemental Disclosure of Cash Information: | |||
Cash paid for income taxes | $ 580 | $ 4,984 | $ 19,186 |
Summary of Operations and Signi
Summary of Operations and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Operations and Significant Accounting Policies | Summary of Operations and Significant Accounting Policies Description of Business Shutterstock (the “Company” or “Shutterstock”) is a global technology company offering a creative platform, which provides high-quality digital content, tools and services to creative professionals. The digital content licensed by the Company’s customers includes: (a) imagery, consisting of licensed photographs, vectors, illustrations and video clips, which is used in visual communications, such as websites, digital and print marketing materials, corporate communications, books, publications and video content; and (b) music, consisting of high-quality music tracks and sound effects, which is often used to complement digital imagery. The Company licenses content to its customers. Contributors upload their content to the Company’s web properties in exchange for royalty payments based on customer download activity. The Company also offered digital asset management services through its cloud-based digital asset management platform (“Webdam”). As discussed in Note 4, on February 26, 2018, the Company completed a sale transaction, pursuant to which the buyer in the transaction acquired certain assets and assumed certain contracts and liabilities which constituted the Company’s digital asset management business (the “Sale of Webdam”). Principles of Consolidation and Basis of Presentation The consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Certain immaterial changes in presentation have been made to conform the prior period presentation to current period reporting. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements. Actual results could differ from those estimates. Such estimates include, but are not limited to, the determination of the allowance for doubtful accounts, the assessment of recoverability of property and equipment, the fair value of acquired goodwill and intangible assets, the grant-date fair value of non-cash equity-based compensation, the assessment of recoverability of deferred tax assets and the measurement of certain income tax and non-income tax liabilities. Concentration of Risk Financial instruments that are exposed to concentration of credit risk consist primarily of cash and cash equivalents and accounts receivable balances. Cash and cash equivalents are held with financial institutions of high quality. Balances may exceed the amount of insurance provided on such deposits. The majority of the Company’s revenues are derived from customers who license content using electronic payments at the time of a transaction. The Company’s accounts receivable are primarily from enterprise customers who require invoicing. The Company performs initial and ongoing credit reviews on these customers, which involve consideration of the customers’ financial information, their location, and other factors to assess the customers’ ability to pay. The Company also performs ongoing financial condition evaluations for its existing customers. As of December 31, 2018 and 2017 , no single customer accounted for or exceeded 10% of accounts receivable. Additionally, no single customer accounted for or exceeded 10% of revenue for the years ended December 31, 2018 , 2017 or 2016 . Cash, Cash Equivalents and Restricted Cash The following represents the Company’s cash, cash equivalents and restricted cash as of December 31, 2018 and 2017 (in thousands): As of December 31, 2018 As of December 31, 2017 Cash and cash equivalents $ 230,852 $ 253,428 Restricted cash 2,613 2,613 Total cash, cash equivalents and restricted cash $ 233,465 $ 256,041 The Company’s cash and cash equivalents consist primarily of (i) cash on hand and bank deposits and (ii) money market accounts, which are stated at cost, which approximates fair value. The Company’s restricted cash relates to security deposits related to the lease for its headquarters in New York City, which expires in 2029 . The carrying value of restricted cash approximates fair value. Restricted cash is included as a component of other assets on the Consolidated Balance Sheets. Fair Value Measurements The Company records its financial assets and liabilities at fair value. Fair value is determined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the reporting date. Fair value is estimated by applying inputs which are classified into the following levels of a three-tier hierarchy as follows: Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2- inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and Level 3 - unobservable inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions regarding what market participants would use in pricing. Accounts Receivable and Allowance for Doubtful Accounts The Company’s accounts receivable consists of customer obligations due under normal trade terms, carried at their face value less an allowance for doubtful accounts, if required. The Company determines its allowance for doubtful accounts based on an evaluation of the aging of its accounts receivable and on a customer-by-customer basis where appropriate. The Company’s reserve analysis contemplates the Company’s historical loss rate on receivables, specific customer situations and the economic environments in which the Company operates. The following table presents the changes in the Company’s allowance for doubtful accounts (in thousands): Year Ended December 31, 2018 2017 2016 Balance, beginning of period $ 4,088 $ 5,495 $ 3,768 Add: bad debt expense 1,175 1,292 2,992 Less: write-offs, net of recoveries and other adjustments (566 ) (2,699 ) (1,265 ) Balance, end of period $ 4,697 $ 4,088 $ 5,495 Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization is calculated using the straight-line method over the estimated useful lives of the related assets. Generally, the useful lives are as follows: Equipment 3 years Furniture and fixtures 7 years Software 3 years Leasehold improvements Shorter of expected useful life or lease term Capitalized Internal Use Software The Company capitalizes the qualifying costs of computer software developed for internal use, which are incurred during the application development stage, and amortizes them over the software’s estimated useful life. Costs incurred in the preliminary and post-implementation stages of the Company’s products are expensed as incurred. The amounts capitalized include employee’s payroll and payroll-related costs directly associated with the development activities as well as external direct costs of services used in developing internal-use software. The Company’s policy is to amortize capitalized costs using the straight-line method over the estimated useful life, which is currently three years, beginning when the software is substantially complete and ready for its intended use. Impairment of Long-Lived Assets Long-lived assets, inclusive of definite lived intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying value of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying value of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized in the amount by which the carrying value of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying value or the fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet. There were no long-lived asset impairment charges in 2018 , 2017 or 2016 . Goodwill and Intangible Assets Goodwill and intangible assets acquired in a business combination and determined to have an indefinite useful life are not amortized, but instead tested for impairment at least annually on October 1 of each fiscal year or more frequently if events occur or circumstances exist that indicate that the fair value of a reporting unit may be below its carrying value. Goodwill has been allocated to the Company’s reporting units, for the purposes of preparing the impairment analysis, based on a specific identification basis. Since inception through December 31, 2018 , the Company did not have any goodwill or indefinite lived intangible asset impairment. Revenue Recognition The majority of the Company’s revenue is earned from the license of digital content. Digital content licenses are generally purchased on a monthly or annual subscription basis, whereby a customer pays for a predetermined quantity of content that may be downloaded over a specific period of time, or, on a transactional basis, whereby a customer pays for individual content licenses at the time of download. Prior to the Sale of Webdam, the Company also earned revenue from licensing hosted software services through Webdam’s cloud-based tools for businesses, which were purchased as part of a subscription. Prior to the adoption of Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”) on January 1, 2018, and reflected in the reported revenue amounts for the years ended December 31, 2017 and 2016, the Company recognized revenue when all of the following basic criteria were met: there was persuasive evidence of an arrangement, performance or delivery of services had occurred, the sales price was fixed or determinable, and collectability was reasonably assured. The Company considered persuasive evidence of an arrangement to be an electronic order form, or a signed contract, which contained the fixed pricing terms. Performance or delivery for digital content licenses was considered to have occurred upon the download of the licensed content. Subscription revenue was recognized upon each download using an effective per-license rate and revenue associated with any unused licenses was recognized at the subscription expiration. Revenue attributable to the hosted software services was recognized ratably during the license subscription. Effective January 1, 2018, subsequent to the adoption of ASU 2014-09, the Company recognizes revenue upon the satisfaction of performance obligations, which occurs when (i) digital content is downloaded by a customer or (ii) hosted software services are provisioned and available to a customer. For digital content licenses, the Company recognizes revenue on both its subscription-based and transaction-based sales when content is downloaded, at which time the license is provided. In addition, management estimates expected unused licenses for subscription-based products and recognizes the revenue associated with the unused licenses throughout the subscription period. The estimate of unused licenses is based on historical download activity and future changes in the estimate could impact the timing of revenue recognition of the Company’s subscription products. Revenue associated with hosted software services is recognized ratably over the term of the license. ASU 2014-09 has resulted in a change in the timing of recognizing revenue on the Company’s digital content license subscription products. ASU 2014-09 did not impact revenue recognition on digital content licenses sold on a transactional basis or license revenue associated with hosted software services. Prior to the adoption of ASU 2014-09, the Company deferred certain acquisition costs that were then amortized over a period of less than one year. Effective January 1, 2018, the Company expenses contract acquisition costs as incurred, to the extent that the amortization period would otherwise be one year or less. Collectability is reasonably assured at the time the electronic order or contract is entered. The majority of the Company’s customers purchase products by making electronic payments at the time of the transaction with a credit card. The Company establishes an allowance for credit card chargebacks and a sales refund reserve based on factors surrounding historical chargeback and sales refund trends and other information. Customer payments received in advance of revenue recognition are contract liabilities and are recorded as deferred revenue. Customers that do not pay in advance are invoiced and are required to make payments under standard credit terms. Collectability for customers who pay on credit terms allowing for payment beyond the date at which service commences, is based on a credit evaluation for certain new customers and transaction history with existing customers. As of December 31, 2018 and 2017 , the Company had recorded an allowance for chargebacks and sales refunds of $0.3 million and $0.4 million , respectively, which is included in other liabilities. The Company recognizes revenue gross of contributor royalties because the Company is the principal in the transaction as it is the party responsible for the performance obligation and it controls the product or service before transferring it to the customer. The Company also licenses content to customers through third-party resellers. Third-party resellers sell the Company’s products directly to customers as the principal in those transactions. Accordingly, the Company recognizes revenue net of costs paid to resellers. Cost of Revenue The Company’s cost of revenue includes contributor royalties, credit card processing fees, content reviewer expenses, hosting and bandwidth expenses, content personnel salaries, non-cash equity-based compensation, amortization of content and technology intangible assets, and depreciation of network equipment, which are the direct costs related to providing content and service to customers. Additionally, the Company includes an allocation of overhead costs primarily related to payroll, insurance, and facilities expenses based on headcount. Contributor Royalties and Internal Sales Commissions The Company expenses contributor royalties in the period a customer download occurs and includes the corresponding contributor royalties in cost of revenue. Contributor royalties are generally paid weekly or monthly. The Company advances certain contributor royalties which are initially deferred and expensed based on the contractual royalty rate at the time of customer download or when the Company determines future recovery is not probable. For the years ended December 31, 2018 , 2017 and 2016 , the Company deferred $6.2 million , $4.7 million and $5.0 million , respectively, in royalty advances and amortized $6.1 million , $4.9 million and $5.5 million , respectively, in royalty advance expense which is included in cost of revenue. As of December 31, 2018 and 2017 , the Company has deferred contributor royalties of $2.6 million and $2.5 million , respectively, which is included in prepaid expenses and other current assets in the Consolidated Balance Sheets. Internal sales commissions are generally paid in the month following collection or invoicing of the commissioned receivable and is reported in sales and marketing expense. Effective January 1, 2018, upon the adoption of ASU 2014-09, the Company expenses contract acquisition costs, including internal sales commissions as incurred, to the extent that the amortization period would otherwise be one year or less. Prior to the adoption of ASU 2014-09, i nternal sales commissions were deferred and recognized over the expected future revenue stream which was generally up to 12 months . For the years ended, December 31, 2017 and 2016 , the Company deferred $5.5 million and $4.5 million , respectively, and amortized $5.0 million and $4.7 million , respectively, in internal sales commission expense which was included in sales and marketing expense on the Consolidated Statements of Operations. As of December 31, 2017 , the Company had deferred internal sales commission of $1.9 million , which was included in prepaid expenses and other current assets in the Consolidated Balance Sheets. Product Development The Company expenses product development costs as incurred, except for costs that are capitalized for certain internal software development projects. Product development costs are primarily comprised of development personnel salaries, non-cash equity-based compensation, equipment costs as well as allocated occupancy costs and related overhead. Advertising Costs The Company expenses the cost of advertising and promoting its products as incurred. Such costs totaled $91.5 million , $76.6 million and $64.9 million for the years ended December 31, 2018 , 2017 and 2016 , respectively, which are included in sales and marketing expense in the Consolidated Statements of Operations. 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 December 31, 2018 and 2017 , the Company had deferred rent of $11.3 million , and $11.1 million , respectively, which is included in other non-current liabilities in the Consolidated Balance Sheets. Equity-Based Compensation The Company measures and recognizes non-cash equity-based compensation expense for all stock-based awards granted 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. Forfeitures are accounted for as they occur. 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. 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 2012 Omnibus Equity Incentive Plan (the “2012 Plan”) and stock purchased pursuant to the 2012 Employee Stock Purchase Plan (“2012 ESPP”), which are discussed further in Note 10, 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 closing market price at the grant date, the expected stock 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 Stock. 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. In certain cases for market based awards, the Company’s expected term is based on a combination of historical data and estimates of the period of time the award will be outstanding. • Volatility. The volatility is estimated based on historical price volatility of the Company’s common stock. • 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. The Company has not paid recurring 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 2012 Plan, and stock purchased pursuant to the 2012 ESPP are subject to a time-based vesting requirement and certain award grants may also include market based vesting conditions. 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 Company adopted ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employees Share-Based Payment Accounting (“ASU 2016-09”) on January 1, 2017. Upon adoption of this standard, all income tax effects related to settlements of share-based payment awards are now reported as an increase or decrease to the provision for income taxes. In addition, starting January 1, 2017, the Company accounted for forfeitures as they occurred and, as of January 1, 2017, recognized a $0.7 million reduction to retained earnings as the cumulative effect of the change in accounting principle. The Company adopted the cash flow presentation component of ASU 2016-09 retrospectively, and accordingly, decreased cash flows from operating activities by $0.4 million and increased cash flows from financing activities by $0.4 million for the year ended December 31, 2016 from amounts previously reported. Employee Benefit Plans The Company offers a 401(k) defined contribution plan and provides for discretionary employer matching contributions. Matching contributions are fully vested, non-forfeitable at all times and are recognized as an expense in the Statement of Operations, as incurred. The Company recorded employer matching contributions of $3.2 million , $1.8 million and $1.7 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. Income Taxes The Company’s income tax expense includes U.S. (federal and state) and foreign income taxes. Deferred income tax balances reflect the effects of temporary differences between the carrying amounts of assets and liabilities and their tax basis, and are stated at enacted tax rates expected to be in effect when taxes are actually paid or recovered. 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 for the difference, if any, 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 outcomes of tax audits or lapses in statutes of limitations. Any reserve for uncertain tax provisions and related penalties and interest is included in the income tax provision. The Company assessed the realizability of deferred tax assets and determined, based on the available evidence including a history of taxable income, estimates of future taxable income and planning strategies, that 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. Except as required under U.S. tax laws, the Company does not provide for U.S. taxes on the undistributed earnings of its foreign subsidiaries. With the enactment of the H.R.1 (commonly referred to as the Tax Cuts and Jobs Act of 2017 (the “TCJA”)), the Company is required to treat the undistributed earnings and profits of its foreign subsidiaries accumulated through a measurement period that should not extend more than one year beyond the date of the enactment of the TCJA as if they were repatriated to the U.S., and pay a current U.S. tax amount as a result of such “deemed” repatriation. The Company’s tax expense for the year ended December 31, 2017 included a provisional amount for such taxes. The Company has not recorded any provision for potential deferred U.S. income taxes or foreign withholding taxes that otherwise may be payable if it were to repatriate such earnings, since the Company does not intend to repatriate such amounts. In January 2018, the FASB released guidance on the accounting for tax on the global intangible low-taxed income (“GILTI”) provisions of the TCJA. The GILTI provisions impose a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations. In the first quarter of 2018, the Company elected to treat any potential GILTI inclusions as a period cost. The Company previously recorded provisional estimates for the accounting impacts of the TCJA, including the transition tax, deferred tax re-measurements, and other items, due to the uncertainty regarding how these provisions were to be implemented and additional anticipated forthcoming guidance. Management completed its analysis of the TCJA, and has not made any significant adjustments to estimates previously recorded. The Company continues to assess the impacts of the TCJA on future fiscal years and is monitoring the Internal Revenue Service guidance intended to interpret the provisions of the TCJA. Other Non-income Taxes The Company is subject to 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. These accruals are subject to statute of limitations requirements and review by governmental authorities. Treasury Stock The Company accounts for treasury stock under the cost method and is included as a component of stockholders’ equity. Treasury stock held by the Company may be reissued in the future. The Company’s policy is to account for reissued shares as a reduction of Treasury stock on a first-in, first-out basis. 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. Any potential issuance of common shares, including those that are contingent and do not participate in dividends, is excluded from weighted average number of common shares outstanding. Income available to common stockholders is computed by deducting income allocated to participating securities, if any, including unvested shares for the restricted award holder since these unvested shares have participating rights. Diluted net income per share is computed by dividing the net income attributable to common stockholders by the weighted average common shares outstanding and all potential common shares, if they are dilutive. Reportable Segments For the year ended December 31, 2018 , the Company has identified one operating segment, which has also been determined to be the Company’s primary reportable business segment. Operating segments are defined as components of an enterprise for which separate financial information is available and is evaluated regularly by the Company’s chief operating decision maker (“CODM”), or decision-making group, in deciding how to allocate resources and in assessing performance. The non-reportable segment classified in the Other Category previously included the Company’s digital asset management operating segment, which fails to meet the quantitative or qualitative thresholds for separate segment reporting and was sold on February 26, 2018. Contingent Consideration The Company records a liability for contingent consideration at the date of a business combination and reassesses the fair value of the liability each period until it is settled. Upon settlement of these liabilities, the portion of the contingent consideration payment that is attributable to the initial amount recorded as part of the business combination is classified as a cash flow from financing activities and the portion of the settlement that is attributable to subsequent changes in the fair value of the contingent consideration is classified as a cash flow from operating activities in the Consolidated Statement of Cash Flows. Foreign Currency The functional currency of the Company’s foreign subsidiaries is generally the respective local currency. Monetary assets and liabilities that are denominated in currencies other than each entity’s functional currency are remeasured into the functional currency at the period-end exchange rates and result in transactional gains and losses. The net impact of foreign currency transactional gains and losses on the Company’s results of operations was a loss of $2.2 million in 2018 and gains of $2.6 million and $1.0 million in 2017 and 2016 , respectively. Translation adjustments resulting from converting the foreign subsidiaries financial statements into U.S. dollars using the period-end exchange rates for balance sheet accounts and the period average exchange rate for the Statements of Operations are recorded as a component of accumulated other comprehensive income / (loss) within stockholders’ equity. Recently Adopted Accounting Standard Updates In March 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-05, Income Taxes (Topic 740) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (“ASU 2018-05”). ASU 2018-05 codifies existing SEC guidance contained in SEC Staff Accounting Bulletin No. 118 (“SAB 118”), which expresses the view of the staff regarding application of existing guidance for the accounting for income taxes as it relates to the enactment of the TCJA, which was signed into law in the fourth quarter of 2017. In accordance with ASU 2018-05, the Company had previously recorded provisional estimates for the accounting impacts of the TCJA, including the transition tax, deferred tax re-measurements, and other items, due to the uncertainty regarding how these provisions were to be implemented and additional anticipated forthcoming guidance. The Company completed its analysis of the TCJA, which included the lowering of the Company’s statutory federal income tax rate and the enactment of a one-time transition tax on accumulated undistributed earnings of foreign subsidiaries and have not made any significant adjustments to estimates previously recorded. The Company continues to assess the impacts of the TCJA on future fiscal years and monitors the Internal Revenue Service guidance intended to interpret the provisions of the TCJA. In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment , which simplifies the accounting for goodwill impairments by eliminating step 2 from the goodwill |
Fair Value Measurements and Oth
Fair Value Measurements and Other Long-term Investments | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements and Other Long-term Investments | Fair Value Measurements and Other Long-term Investments Fair Value Measurements The following table presents the Company’s fair value hierarchy for its assets as of December 31, 2017 (in thousands). The Company had no assets or liabilities requiring fair value hierarchy disclosures as of December 31, 2018 . As of December 31, 2017 Aggregate Level 1 Level 2 Level 3 Assets: Money market accounts $ 55,775 $ 55,775 $ — $ — Total assets measured at fair value $ 55,775 $ 55,775 $ — $ — Money Market Accounts Cash equivalents include money market accounts and are classified as a level 1 measurement based on quoted prices in active markets for identical assets that the reporting entity can access at the measurement date. Acquisition-Related Contingent Consideration The Company reassesses the fair value of contingent consideration to be settled in cash related to certain of the Company’s acquisitions using the Black-Scholes model until the settlement amount of the cash flow is determinable. These contingencies are considered level 3 measurements. Significant assumptions used in measuring the fair value include probabilities of achieving certain revenue milestones based on the Company’s expectations and a discount rate which is based on an unobservable input that is supported by little or no market activity. As of January 1, 2017, the settlement amount of the contingent consideration related to the Company’s acquisition of PremiumBeat was determined to be $10 million and was included in other liabilities. No changes in fair value were recorded during the year ended December 31, 2017 . The contingent consideration of $10 million was paid in the first quarter of 2017 . Other Fair Value Measurements Cash, accounts receivable, restricted cash, accounts payable and accrued expenses carrying amounts approximate fair value because of the short-term nature 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. Other Long-term Investments Long-term Lending Facility and Note Receivable On October 20, 2016, the Company entered into a multi-part transaction, as amended in March 2017, with SilverHub Media Limited (“SHM”), an unrelated third-party contributor. The amended transaction included the following components: (a) a revolving credit facility pursuant to which the Company would be obligated to lend up to $3.3 million under certain conditions, (the “Facility”) to SHM, which was fully drawn as of November 2017; (b) a $1.6 million investment in a convertible note issued by SHM, which had a maturity date of October 20, 2021; (c) a distribution agreement, under which the Company is the exclusive distributor of SHM’s content in certain markets subject to certain limitations; and (d) an option to acquire SHM at any time after the third anniversary of the Facility or to match any third-party acquisition offer with respect to SHM at any time until the fifth anniversary of the Facility. In June 2018, SHM breached certain provisions of the distribution agreement, which constituted an event of default under the Facility. As a result of the occurrence of one or more events of default, the Company provided notice to SHM to demand immediate payment of all outstanding borrowings under the Facility and the convertible note, including accrued interest. SHM was unable to pay the outstanding borrowings and accrued interest and therefore, an administrator was appointed and SHM entered into United Kingdom administration (bankruptcy) proceedings. The Company has determined that its investments in SHM, including the Facility, the convertible note, accrued interest and a minor equity investment, experienced an other-than-temporary impairment and therefore, the Company recorded a $5.9 million impairment charge during the three months ended June 30, 2018 in order to reduce the fair value of the Company’s investment in SHM to zero . This charge was recorded in Other (expense)/income, net in the Consolidated Statements of Operations. The investment was previously reported within Other assets on the Consolidated Balance Sheet. Investment in ZCool Technologies Limited (“ZCool”) On January 4, 2018, the Company invested $15.0 million in convertible preferred shares issued by ZCool (the “Preferred Shares”), which is equivalent to a 25% fully diluted equity ownership interest. ZCool’s primary business is the operation of an e-commerce platform in China whereby customers can pay to license content contributed by creative professionals. ZCool has been the exclusive distributor of Shutterstock content in China since 2014. ZCool is a variable interest entity that is not consolidated because the Company is not the primary beneficiary. The Preferred Shares are not deemed to be in-substance common stock and will be accounted for using the measurement alternative for equity investments with no readily determinable fair value. The Preferred Shares will be reported at cost, adjusted for impairments or any observable price changes in ordinary transactions with identical or similar investments issued by ZCool. As of December 31, 2018, the Company’s total investment in ZCool is approximately $15 million , which is reported within Other assets on the Consolidated Balance Sheet. |
Acquisition Activity
Acquisition Activity | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Acquisition Activity | Acquisition Activity Acquisition Activity in 2017 Flashstock Technology, Inc. On July 7, 2017, the Company acquired all of the shares of Flashstock Technology, Inc. (“Flashstock”) pursuant to a stock purchase agreement. 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. Flashstock is a Toronto-based company that enables the creation of custom content through a propriety software platform. The Company believes this acquisition will strengthen the Company’s strategic position and serve as the foundation for the Company to bring a comprehensive custom content offering to market. The fair value of consideration transferred in this business combination was allocated to the intangible and tangible assets acquired and liabilities assumed at the acquisition date, with the remaining unallocated amount recorded as goodwill. The Company considered the intangible assets acquired in the transaction, and determined customer relationships and acquired developed technology meet the separability criteria. The total purchase price was $51.7 million of which $50.9 million was paid with existing cash on hand during the year ended December 31, 2017, and $0.8 million which was paid in the first quarter of 2018 for the settlement of working capital adjustments. The unpaid portion of the purchase price was included in accrued expenses as of December 31, 2017. The aggregate purchase price was allocated to the assets acquired and liabilities assumed as follows (in thousands): Assets: Cash and cash equivalents $ 1,330 Accounts receivable 3,105 Prepaid expenses and other current assets 155 Intangible Assets: Customer relationships 3,000 Developed technology 2,200 Goodwill 46,217 Total assets acquired 56,007 Liabilities: Accrued expenses (279 ) Accounts payable (99 ) Deferred tax liability, net (333 ) Deferred revenue (3,550 ) Total liabilities acquired (4,261 ) Net assets acquired $ 51,746 Fair value adjustments relating to this acquisition were finalized as of December 31, 2017, which were within the allowable measurement period. 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 the multiple-period excess earnings method. The fair value of the developed technology was determined using the relief-from-royalty method. The goodwill arising from the transaction is primarily attributable to assembled workforce, future growth opportunities in the custom content market, potential economies of scale arising from the combined entity’s ability to leverage the Company’s existing global sales and marketing reach, and potential synergies arising from the addition of custom content offerings for the Company’s existing customer base. Approximately 26% of goodwill will be deductible for income tax purposes. In connection with the acquisition, the Company recorded approximately $0.8 million of professional fees in the year ended December 31, 2017. The professional fees are included in general and administrative expense. The Company has performance-based bonus arrangements with certain Flashstock employees who are now employees of Shutterstock. These employees are entitled to additional compensation if: (i) the custom content business achieves certain financial targets for the 2019 calendar year and (ii) the individual is employed by Shutterstock as of December 31, 2019. These performance-based bonuses will be reported as period expenses within general and administrative expenses in the Consolidated Statements of Operations, and are not considered part of the Flashstock purchase price. Acquisition Activity in 2016 The Picture Desk Limited On September 1, 2016, the Company acquired content assets and intellectual property of The Picture Desk Limited, which includes over 700,000 images from two image collections: The Art Archive and The Kobal Collection, pursuant to an asset purchase agreement. The total purchase price consisted of a cash payment of $3.9 million including transaction costs, which has been recorded as an addition to intangible assets, of which $3.6 million has been recorded under contributor content with an estimated useful life of 15 years , and the remainder has been recorded under trade name with an estimated useful life of 7 years . |
Sale of Webdam
Sale of Webdam | 12 Months Ended |
Dec. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Sale of Webdam | Sale of Webdam Sale of Digital Asset Management Business On February 26, 2018, the Company completed the Sale of Webdam for an aggregate purchase price of $49.1 million . Total cash received during 2018, net of $4.6 million transaction costs paid, was $41.8 million with an additional $2.5 million receivable remaining in escrow at the balance sheet date. The funds in escrow are included as a component of other current assets on the Consolidated Balance Sheet as of December 31, 2018 and are expected to be released to the Company in the first quarter of 2019. The Company recognized a pre-tax gain on sale of approximately $38.6 million . |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment is summarized as follows (in thousands): December 31, 2018 2017 Computer equipment and software $ 148,104 $ 118,493 Furniture and fixtures 10,020 9,970 Leasehold improvements 18,822 18,487 Property and equipment 176,946 146,950 Less: accumulated depreciation (100,758 ) (61,252 ) Property and equipment, net $ 76,188 $ 85,698 Depreciation and amortization expense related to property and equipment amounted to $40.1 million , $29.2 million and $14.9 million , for the years ended December 31, 2018 , 2017 and 2016 , respectively. Depreciation and amortization expense is included in cost of revenue and general and administrative expense based on the nature of the asset. There was no loss on disposal for the years ended December 31, 2018 , 2017 and 2016 , respectively. Capitalized Internal-Use Software The Company capitalized costs related to the development of internal-use software of $27.7 million , $39.2 million and $20.0 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. Capitalized amounts are included as a component of property and equipment under computer equipment and software. During 2017 and 2018 , the Company invested significantly in its product development and hosting infrastructure to enhance its customer experience and increase the efficiency with which management deploys new products and features. The portion of total depreciation expense related to capitalized internal-use software was $24.9 million , $14.1 million and $3.6 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. Depreciation expense related to capitalized internal-use software is included in cost of revenue and general and administrative expense based on the nature of the asset. As of December 31, 2018 and 2017 , the Company had capitalized internal-use software of $48.5 million and $45.4 million , respectively, net of accumulated depreciation, which was included in property and equipment, net. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill The Company’s goodwill balance is attributable to its Bigstock, Editorial, Images and Music reporting units and is tested for impairment at least annually on October 1 or upon a triggering event. Bigstock, Editorial, Images and Music are included in the Company’s Content Business reportable segment. Webdam was included in the non-reportable Other Category until the completion of the Sale of Webdam. The following table summarizes the changes in the Company’s goodwill balance by reportable and non-reportable segments for the year ended December 31, 2018 (in thousands): Content Other Consolidated Balance as of December 31, 2017 $ 89,891 $ 8,763 $ 98,654 Foreign currency translation adjustment (1,315 ) — (1,315 ) Sale of Webdam — (8,763 ) (8,763 ) Balance as of December 31, 2018 $ 88,576 $ — $ 88,576 The Company performed its annual goodwill assessment as of October 1, 2018 and concluded that the fair values of its reporting units were greater than their carrying amounts, and therefore, no adjustment to the carrying value of goodwill was necessary. The Company utilized a qualitative assessment of its Bigstock, Images and Music reporting units to determine whether a quantitative assessment was necessary and determined there were no indicators of potential impairment. For its Editorial reporting unit, which represents approximately $12.6 million of the goodwill balance, management elected to perform a quantitative goodwill impairment assessment. In performing the quantitative goodwill impairment assessment of the Editorial reporting unit, the Company prepared a discounted cash flow analysis which incorporated various estimates and assumptions. The most significant of these assumptions were projected revenue growth rates, future royalty rates, a discount rate of 15% and a terminal growth rate of 3% . These estimates are based on the Company’s historical experience and projections of future activity, factoring in customer demand and a cost structure necessary to achieve related revenue. Based on the results of the impairment analysis, the fair value of the Editorial reporting unit exceeded its carrying value by approximately 13% . The valuation is sensitive to the discount rate, the future cash flows and the terminal growth rate. A hypothetical increase in the discount rate used in the cash flow analysis by more than 5% could have resulted in an impairment of goodwill. Future unfavorable changes in estimated cash flows, the discount rate, or the terminal growth rate could result in the Company impairing its Editorial reporting unit’s goodwill balance. There were no impairments of goodwill in any of the periods presented in the consolidated financial statements. Intangible Assets Intangible assets, all of which are subject to amortization, consist of the following as of December 31, 2018 and 2017 (in thousands): As of December 31, 2018 As of December 31, 2017 Gross Accumulated Net Weighted Gross Accumulated Net Customer relationships $ 17,360 $ (7,135 ) $ 10,225 9 $ 21,008 $ (6,996 ) $ 14,012 Trade name 6,372 (3,719 ) 2,653 7 7,159 (3,299 ) 3,860 Developed technology 4,780 (3,633 ) 1,147 4 5,528 (3,450 ) 2,078 Contributor content 19,912 (4,653 ) 15,259 10 17,041 (3,066 ) 13,975 Patents 259 (84 ) 175 18 259 (68 ) 191 Domain name 160 (79 ) 81 13 160 (79 ) 81 Total $ 48,843 $ (19,303 ) $ 29,540 $ 51,155 $ (16,958 ) $ 34,197 Amortization expense related to the intangible assets was $5.5 million , $6.3 million and $5.1 million for the years ended December 31, 2018 , 2017 and 2016 , 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: $6.3 million in 2019 , $5.7 million in 2020 , $5.0 million in 2021 , $3.0 million in 2022 , $2.8 million in 2023 and $6.8 million thereafter. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses Accrued expenses consisted of the following (in thousands): December 31, 2018 2017 Compensation $ 15,153 $ 19,897 Non-income taxes 7,885 6,895 Royalty tax withholdings 5,618 7,566 Other expenses 22,729 24,376 Total accrued expenses $ 51,385 $ 58,734 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Special Dividend On August 1, 2018, the Company’s Board of Directors declared a special cash dividend of $3.00 per share (the “Special Dividend”), which was paid on August 29, 2018 to stockholders of record at the close of business on August 15, 2018. The aggregate payment made in connection with the Special Dividend was $104.9 million . In connection with the Special Dividend, and in accordance with the terms of the Company’s Amended and Restated 2012 Omnibus Equity Incentive Plan (the “2012 Plan”), the Company adjusted outstanding equity awards in order to prevent dilution of such awards. Accordingly, the Company prevented dilution from the impact of the Special Dividend by adjusting the number of outstanding unvested RSUs and outstanding stock options, as well as the exercise price of such outstanding stock options, using a conversion ratio of 1.055 , which was determined using a ratio of the closing and opening stock price of the Company’s common stock immediately prior to, and on, the ex-dividend date (the “Special Dividend Adjustment”). Common Stock The holders of common stock are entitled to one vote for each share held of record on all matters submitted to a vote of the stockholders. Subject to preferences that may be applicable to any outstanding preferred stock, holders of common stock are entitled to receive ratably such dividends as may be declared by the Board of Directors out of funds legally available for that purpose. In the event of liquidation, dissolution or winding up of the Company, the holders of common stock are entitled to share ratably in all assets remaining after payment of liabilities, subject to the prior distribution rights of any outstanding preferred stock. The common stock has no preemptive or conversion rights or other subscription rights. The outstanding shares of common stock are fully paid and non-assessable. Under the amended and restated certificate of incorporation, which became effective upon completion of the IPO, the Company’s certificate of incorporation authorized 200,000,000 shares of $0.01 per share par value common stock. Preferred Stock Under the amended and restated certificate of incorporation, which became effective upon completion of the IPO, the Company’s Board of Directors has the authority, without further action by the stockholders, to issue up to 5,000,000 shares of preferred stock, $0.01 par value, in one or more series. The Board of Directors also has the authority to designate the rights, preferences, privileges and restrictions of each such series, including dividend rights, dividend rates, conversion rights, voting rights, terms of redemption, redemption prices, liquidation preferences and the number of shares constituting any series. The issuance of preferred stock may have the effect of delaying, deferring or preventing a change in control of Shutterstock without further action by the stockholders. The issuance of preferred stock with voting and conversion rights may also adversely affect the voting power of the holders of common stock. In certain circumstances, an issuance of preferred stock could have the effect of decreasing the market price of the common stock. As of December 31, 2018 , the Company has not issued and has no plans to issue any shares of preferred stock. Treasury Stock In October 2015, the Company’s Board of Directors approved a share repurchase program, authorizing the Company to purchase up to $100 million of its common stock. In February 2017, the Company’s Board of Directors approved an increase to the share repurchase program, authorizing the Company to purchase an additional $100 million of its common stock. As of December 31, 2018 , the Company has repurchased approximately 2,558,000 shares of its common stock under the share repurchase program at an average per-share cost of approximately $39.09 . As of December 31, 2018 , there is $100 million of remaining authorization for purchases under the share repurchase program. The Company expects to fund repurchases through a combination of cash on hand, cash generated by operations and future financing transactions, if appropriate. Accordingly, the share repurchase program is subject to the Company having available cash to fund repurchases. Under the share repurchase program, management is authorized to purchase shares of the Company’s common stock from time to time through open market purchases or privately negotiated transactions at prevailing prices as permitted by securities laws and other legal requirements, and subject to market conditions and other factors. |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue The Company distributes its digital content offerings through two primary channels: E-commerce: The majority of the Company’s customers license content directly through the Company’s self-service web properties. E-commerce customers have the flexibility to purchase a subscription-based plan that is paid on a monthly or annual basis or to license content on a transactional basis. These customers generally license content under the Company’s standard or enhanced licenses, with additional licensing options available to meet customers’ individual needs. E-commerce customers typically pay the full amount of the purchase price in advance or at the time of license, generally with a credit card. Enterprise: Enterprise customers are mainly composed of creative professionals and large organizations with unique content, licensing and workflow needs. Customers of this size benefit from communication with dedicated sales professionals, service and research teams which provide a number of tailored enhancements to their creative workflows including non-standard licensing rights, multi-seat access, ability to pay on credit terms, multi-brand licensing packages, increased indemnification protection and content licensed for use-cases outside of those available on the e-commerce platform. In addition to the Company’s digital content offerings, the Company has historically generated revenue through other channels: Digital asset management: The Company provided tools to help organizations manage, search, distribute and collaborate on creative and other brand-buildings activities through Webdam. Effective February 26, 2018, the Company completed the Sale of Webdam. See Note 4 for further information on the Sale of Webdam. The following table summarizes the Company’s revenue by distribution channel for the years ended December 31, 2018 , 2017 and 2016 (in thousands): Year Ended December 31, 2018 2017 (1) 2016 (1) E-Commerce $ 365,730 $ 332,376 $ 318,916 Enterprise 254,809 208,713 164,384 Digital asset management (2) 2,711 16,022 11,017 Total Revenues $ 623,250 $ 557,111 $ 494,317 (1) As previously discussed in Note 1, the Company adopted ASU 2014-09 effective January 1, 2018 using the modified retrospective approach. Historical revenue amounts reflect those previously reported and have not been restated. (2) As previously discussed in Note 4, on February 26, 2018, the Company completed the Sale of Webdam. 2018 amounts include revenue earned during the period from January 1, 2018 through February 26, 2018. The Company’s deferred revenue balance decreased from $157.8 million at December 31, 2017 to $139.6 million at December 31, 2018 . This decrease was primarily the result of (i) the adoption of ASC 2014-09 which reduced deferred revenue by $9.9 million on January 1, 2018, and (ii) $10.2 million resulting from the Sale of Webdam, partially offset by an increase in deferred revenue due to the ongoing operations of the Company. The December 31, 2018 deferred revenue balance will be earned as digital content is downloaded or upon the expiration of subscription-based products, and nearly all is expected to be earned within the next twelve months. $133.3 million of total revenue recognized for the year ended December 31, 2018 was reflected in deferred revenue as of January 1, 2018 . |
Equity-Based Compensation
Equity-Based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Equity-Based Compensation | Equity-Based Compensation The Company recognizes stock-based compensation expense for all share-based payment awards including employee stock options, RSUs granted under the 2012 Plan and sales of shares of common stock under the 2012 ESPP, based on the fair value of each award on the grant date. The following table summarizes non-cash equity-based compensation expense, net of forfeitures, by line item included in the Company’s Consolidated Statements of Operations for the years ended December 31, 2018 , 2017 and 2016 (in thousands): Year Ended December 31, 2018 2017 2016 Cost of revenue $ 523 $ 795 $ 1,938 Sales and marketing 2,218 4,452 5,444 Product development 5,815 6,162 7,681 General and administrative 15,313 13,549 13,017 Total $ 23,869 $ 24,958 $ 28,080 The following table summarizes non-cash equity-based compensation expense, net of forfeitures, by award type included in the Company’s Consolidated Statements of Operations for the years ended December 31, 2018 , 2017 and 2016 (in thousands): Year Ended December 31, 2018 2017 2016 Stock Options $ 6,009 $ 6,364 $ 7,295 Restricted Stock Units 17,860 18,594 20,179 ESPP — — 606 Total $ 23,869 $ 24,958 $ 28,080 2012 Omnibus Equity Incentive Plan On October 10, 2012, the Company’s 2012 Plan became effective. The 2012 Plan provides for the grant of incentive stock options to Company employees, and for the grant of non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units, performance units and performance shares to employees, directors and consultants. The maximum aggregate number of shares that may be issued under the 2012 Plan was initially 6,750,000 shares of common stock. The number of shares available for issuance under the 2012 Plan will be increased annually commencing January 1, 2013 by an amount equal to the lesser of 1,500,000 shares of common stock, 3% of the outstanding shares of common stock as of the last day of the immediately preceding fiscal year, or such other amount as determined by the Company’s Board of Directors. Any awards issued under the 2012 Plan that are forfeited by the participant will become available for future grant under the 2012 Plan. The number of shares of common stock available under the 2012 Plan was automatically increased by approximately 1,041,000 and 1,044,000 shares on January 1, 2018 and 2017, respectively, pursuant to the automatic increase provisions of the 2012 Plan. Stock Option Awards The following is a summary of stock option awards and weighted average exercise price per option: Plan Weighted Average Options outstanding at December 31, 2017 1,183,130 $ 55.14 Options granted 19,041 47.80 Special Dividend Adjustment 59,074 — Options exercised (91,205 ) 26.91 Options canceled or expired (43,585 ) 53.85 Options outstanding at December 31, 2018 1,126,455 $ 54.46 Options exercisable at December 31, 2018 343,624 $ 33.91 Intrinsic value of stock options is calculated as the excess of market price of the Company’s common stock over the strike price of the stock options, multiplied by the number of stock options. The intrinsic value of the Company’s stock options is as follows (in thousands): As of December 31, 2018 2017 Stock options outstanding $ 2,500 $ 6,400 Stock options exercisable 1,800 3,600 Stock options vested and expected to vest $ 2,500 $ 6,400 The intrinsic value of stock options exercised for the years ended December 31, 2018 , 2017 and 2016 was approximately $2.0 million , $1.6 million and $10.6 million , respectively. The following weighted average assumptions were used in the fair value calculation for the years ended December 31, 2018 , 2017 and 2016 : Year Ended Year Ended December 31, 2018 2017 2016 Expected term (in years) 6.3 6.2 6.3 Volatility 47.8 % 50.0 % 52.5 % Risk-free interest rate 2.625 % 2.15 % 1.48 % Dividend yield — — — Valuation Data: Weighted average fair value per share granted $ 23.64 $ 24.19 $ 19.03 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 per share 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 $21.6 million 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. In conjunction with the Special Dividend Adjustment, the Company adjusted the number of stock options to approximately 527,000 from 500,000 and the exercise price of each option to $76.73 , from $80.94 pursuant to the anti-dilution provisions of the 2012 Plan. The market-based conditions required for vesting remain unchanged. As of December 31, 2018 , the total unrecognized compensation charge related to 2012 Plan non-vested options is approximately $7.9 million , which is expected to be recognized through fiscal year 2022 . Restricted Stock Units Awards The following table presents a summary of the Company’s RSUs activity for the year ended December 31, 2018 : Plan Weighted Average Non-vested balance at December 31, 2017 1,173,160 $ 43.79 Units granted 576,192 47.92 Special Dividend Adjustment 59,888 — Units vested (402,734 ) 42.18 Units canceled or forfeited (343,181 ) 43.56 Non-vested balance at December 31, 2018 1,063,325 $ 44.23 Non-vested and deferred balance at December 31, 2018 1,084,453 $ 44.49 On April 24, 2014, the Company granted 100,000 restricted stock units with a market-based condition to its CEO. The restricted stock units will vest only if (i) the reporting person 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 reporting person 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 $5.8 million 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. In conjunction with the Special Dividend Adjustment, the Company adjusted the number of restricted stock units to approximately 105,000 from 100,000 , pursuant to the anti-dilution provisions of the 2012 Plan. The market-based conditions required for vesting remain unchanged. As of December 31, 2018 , the total unrecognized compensation charge related to the restricted stock units is approximately $30.2 million , which is expected to be recognized through fiscal 2022 . Employee Stock Purchase Plan On October 10, 2012, the Company’s 2012 ESPP became effective and on December 1, 2016, the Company suspended the plan. The 2012 ESPP provided participating employees with the option to purchase common stock through payroll deductions of up to 15% of eligible compensation and a maximum purchase of 1,000 shares during each offering period. The common stock was purchased at 85% of the lower of the fair market value of common stock on (1) the first trading day of the offering period, or (2) the last day of the offering period. The offering periods generally started on the first trading day on or after June 1 and December 1 of each year. From inception to date, approximately 233,000 shares have been issued under the 2012 ESPP. The Company estimated the fair value of purchase rights under the 2012 ESPP on the date of grant using the Black-Scholes valuation model and the straight-line attribution approach with the following weighted-average assumptions: Year Ended Year Ended December 31, 2016 Expected term (in years) 0.5 Volatility 59.1 % Risk-free interest rate 0.46 % Dividend yield — |
Other (Expense)_Income, net
Other (Expense)/Income, net | 12 Months Ended |
Dec. 31, 2018 | |
Other Nonoperating Income (Expense) [Abstract] | |
Other (Expense)/Income, net | Other (Expense)/Income, net The following table presents a summary of the Company’s other (expense) / income activity included in the accompanying Consolidated Statements of Operations (in thousands): Year Ended December 31, 2018 2017 2016 Foreign currency (loss) / gain $ (1,807 ) $ 2,841 $ (167 ) Change in contingent consideration fair value — — (1,271 ) Impairment of long-term investment asset (5,881 ) — — Interest income 2,736 891 149 Other (expense) / income, net $ (4,952 ) $ 3,732 $ (1,289 ) |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s geographical breakdown of its income before income taxes is as follows (in thousands): Year Ended December 31, 2018 2017 2016 Domestic $ 68,596 $ 24,558 $ 38,549 Foreign (2,483 ) 5,523 5,948 Income before income taxes $ 66,113 $ 30,081 $ 44,497 The following table summarizes the consolidated provision for income taxes (in thousands): Year Ended December 31, 2018 2017 2016 Current provision (benefit): Federal $ 7,670 $ (4,813 ) $ 6,389 State and local 4,800 112 852 Foreign 5,226 5,564 2,861 Deferred provision (benefit): Federal (2,901 ) 14,578 3,376 State and local (164 ) 523 (34 ) Foreign (3,205 ) (2,610 ) (1,575 ) Provision for income taxes $ 11,426 $ 13,354 $ 11,869 The provision for income taxes differs from statutory income tax rate as follows: Year Ended December 31, 2018 2017 2016 U.S. income tax at federal statutory rate 21.0 % 35.0 % 35.0 % Tax credits (5.4 ) (4.0 ) (12.0 ) State and local taxes, net of federal benefit 1.9 2.1 2.9 Equity-based compensation (1) (0.4 ) 1.9 2.1 Foreign rate differential 0.5 (2.3 ) (1.8 ) Foreign-derived intangible income deduction (3.7 ) — — Uncertain tax positions 3.6 5.2 (0.4 ) Transition tax related to TCJA (0.3 ) 2.6 — U.S. Federal rate change related to TCJA — 12.4 — Domestic production activities deduction — (9.8 ) — Non-deductible—other 0.1 1.3 0.9 Total provision for income taxes 17.3 % 44.4 % 26.7 % (1) Included in this amount for the years ended December 31, 2018 and 2017 is the impact of windfall/shortfall related to stock option exercises and RSU vestings that were reflected in additional paid-in capital, prior to the adoption of ASU 2016-09 on January 1, 2017. All periods presented include the impact of non-deductible stock-based compensation expenses. On December 22, 2017, the U.S. enacted the TCJA, which lowered the Company’s U.S. statutory federal income tax rate from 35% to 21% effective January 1, 2018, while also imposing a one-time “transition tax” on undistributed earnings of foreign subsidiaries. The Company’s effective tax rate for the year ended December 31, 2017 includes an expense of $3.7 million related to the impact of remeasuring the Company’s deferred tax balances to reflect the new tax rate and an expense of $0.8 million for the transition tax. The tax effect of the Company’s temporary differences that give rise to deferred tax assets and liabilities are presented below (in thousands): Year Ended 2018 2017 Deferred tax assets: Non-cash equity-based compensation $ 9,383 $ 8,342 Intangible amortization 3,252 4,555 Non-income tax accruals 3,087 2,887 Deferred rent 2,537 2,484 Other liabilities 6,523 2,895 Deferred tax assets 24,782 21,163 Deferred tax liabilities: Depreciation and amortization (12,484 ) (12,888 ) Net deferred tax assets $ 12,298 $ 8,275 The non-cash equity-based compensation for the Company includes a deferred tax asset of $5.6 million associated with the performance-based grant of stock options and restricted stock units to the Company’s Chief Executive Officer. The following table summarizes changes to the Company’s unrecognized tax benefits as follows (in thousands): Year Ended December 31, 2018 2017 2016 Balance of unrecognized tax benefits at January 1 $ 2,966 $ 1,455 $ 1,479 Gross additions for tax positions for prior years 332 1,412 886 Gross additions for tax positions for current year 3,476 273 360 Gross expirations (928 ) (174 ) (1,270 ) Balance of unrecognized tax benefits at December 31 $ 5,846 $ 2,966 $ 1,455 The total amount of gross unrecognized tax benefits was $5.4 million , which, if recognized, would impact the Company’s effective tax rate in future periods. The liability for unrecognized tax benefits is included in other non-current liabilities. The Company recognizes interest expense and tax penalties related to unrecognized tax benefits as a component of income tax expense in the Consolidated Statements of Operations. Interest and penalties included in the company’s provision for income taxes were not material in all the periods presented. The Company and its subsidiaries file income tax returns in the U.S. and various foreign jurisdictions. The Company is currently under examination by the German Tax Office for years 2013 - 2015, by New York City for 2015 - 2017 and Illinois for 2015 - 2016. The Company is no longer subject to U.S. federal or state and local tax examinations by tax authorities for years before 2013. The Company anticipates that the total unrecognized tax benefits to reverse in the next fiscal year will not be material. As of December 31, 2018 , the Company has $9.1 million and $7.8 million in tax net operating loss carryforwards in Canada and the U.K., respectively, which are available to reduce future income taxes, none of which are expected to expire un-utilized. As of December 31, 2018 , the Company had approximately $12.7 million of undistributed earnings attributable to its foreign subsidiaries. It is the Company’s practice and intention to indefinitely reinvest the earnings of its foreign subsidiaries in those operations. The Company has not provided deferred U.S. income taxes or foreign withholding taxes on temporary differences resulting from the earnings indefinitely reinvested outside the United States. An estimate of the associated unrecognized deferred tax liability related to these undistributed earnings is $1.3 million . |
Net Income Per Share
Net Income Per Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Net Income Per Share Basic net income per share is computed using the weighted average number of common shares outstanding for the period, excluding unvested RSUs and stock options. Diluted net income per share is based upon the weighted average common shares outstanding for the period plus dilutive potential common shares, including unvested RSUs and stock options using the treasury stock method. The following table sets forth the computation of basic and diluted net income per share for fiscal 2018, 2017 and 2016 (in thousands): Year Ended December 31, 2018 2017 2016 Net income $ 54,687 $ 16,727 $ 32,628 Shares used to compute basic net income per share 34,935 34,627 35,114 Dilutive potential common shares: Stock options and employee stock purchase plan shares 117 388 441 Unvested restricted stock awards 368 276 306 Shares used to compute diluted net income per share 35,420 35,291 35,861 Basic net income per share $ 1.57 $ 0.48 $ 0.93 Diluted net income per share $ 1.54 $ 0.47 $ 0.91 Potentially dilutive shares included in the calculation 1,285 1,384 1,954 Anti-dilutive shares excluded from the calculation 1,020 1,325 999 |
Segment and Geographic Informat
Segment and Geographic Information | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | Segment and Geographic Information Segment Financial Information The following table summarizes segment information for the years ended December 31, 2018 , 2017 and 2016 (in thousands): Content Segment Other and Corporate Consolidated December 31, 2018 Revenue (1) $ 620,539 $ 2,711 $ 623,250 Operating Expenses (2) 490,985 99,813 590,798 Income from Operations 129,554 (97,102 ) 32,452 December 31, 2017 Revenue (1) 541,088 16,023 557,111 Operating Expenses (2) 417,507 113,255 530,762 Income from Operations 123,581 (97,232 ) 26,349 December 31, 2016 Revenue (1) 483,278 11,039 494,317 Operating Expenses (2) 364,631 83,900 448,531 Income from Operations $ 118,647 $ (72,861 ) $ 45,786 (1) Effective January 1, 2018 the Company adopted ASU 2014-09 using the modified retrospective approach. Historical revenue totals reflect those previously reported and have not been restated. (2) Other and corporate operating expenses include unallocated corporate expenses of approximately $97.8 million , $96.5 million and $67.7 million for the years ended December 31, 2018 , 2017 , and 2016 , respectively. Unallocated corporate expenses primarily relate to shared operational support functions and general and administrative functions of human resources, legal, finance and information technology. Asset information on a segment basis is not disclosed as this information is not separately identified or internally reported to the Company’s CODM. Geographic Financial Information The following represents the Company’s geographic revenue based on customer location (in thousands): Year Ended December 31, 2018 2017 2016 North America $ 230,890 $ 218,865 $ 197,650 Europe 207,634 181,693 161,906 Rest of the world 184,726 156,553 134,761 Total revenue $ 623,250 $ 557,111 $ 494,317 Included in North America is the United States which comprises approximately 34% of total revenue for the year ended December 31, 2018 , and 35% of total revenue for the years ended December 31, 2017 and 2016 . Included in Europe is the United Kingdom which accounts for approximately 8% of total revenue for the year ended December 31, 2018 . No other country accounts for more than 10% of the Company’s revenue in any period presented. The Company’s long-lived tangible assets were located as follows (in thousands): December 31, 2018 2017 North America $ 71,758 $ 83,027 Europe 4,371 2,599 Rest of world 59 72 Total long-lived tangible assets $ 76,188 $ 85,698 Included in North America is the United States, which comprises 88% and 92% of total long-lived tangible assets as of December 31, 2018 and 2017 , respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Lease Commitments and Other Obligations Future minimum lease payments under non-cancelable operating leases and other unconditional cash obligations as of December 31, 2018 are as follows (in thousands): Year Ending December 31, Operating Other Obligations 2019 $ 9,913 $ 29,758 2020 8,762 27,056 2021 7,493 13,770 2022 6,829 3,333 2023 6,082 — Thereafter 39,481 — Total minimum lease payments $ 78,560 $ 73,917 Lease Commitments The Company leases facilities under agreements accounted for as operating leases. Rental expense for operating leases for the years ended December 31, 2018 , 2017 and 2016 was approximately $9.2 million , $8.5 million and $7.2 million , 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. The majority of leases require payment of real estate taxes and operating expense increases. The Company leases its corporate headquarters in New York, New York, which lease is scheduled to expire in 2029 and the aggregate future minimum lease payments are approximately $67.4 million . The Company also entered into a letter of credit in the amount of $2.6 million as a security deposit for the corporate headquarters’ lease. The letter of credit is collateralized by $2.6 million of cash and as such, is deemed to be restricted cash and is included in other assets on the Consolidated Balance Sheets as of December 31, 2018 . Other Obligations As of December 31, 2018 , the Company had other obligations of approximately $73.9 million , which consisted primarily of unconditional purchase obligations related to contracts for cloud-based services, infrastructure and other business services as well as minimum royalty guarantees in connection with certain content licenses. 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, accordingly, no material reserves related to litigation. Customer 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 the 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 ten thousand dollars. The Company offers certain of its customers greater levels of indemnification, including unlimited indemnification. As of December 31, 2018 , the Company has recorded no liabilities related to indemnification 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 and Indemnification Agreements The Company has entered into employment arrangements and indemnification agreements 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. |
Unaudited Quarterly Financial D
Unaudited Quarterly Financial Data | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Unaudited Quarterly Financial Data | Unaudited Quarterly Financial Data The following table sets forth, for the periods indicated, the Company’s financial information for the eight most recent quarters ended December 31, 2018 . In the Company’s opinion, this unaudited information has been prepared on a basis consistent with the annual consolidated financial statements and includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the unaudited information for the periods presented. Three Months Ended Dec 31, 2018 Sep 30, 2018 Jun 30, 2018 Mar 31, 2018 Dec 31, 2017 Sep 30, 2017 Jun 30, 2017 Mar 31, 2017 (in thousands, except per share data) Revenue (1) (2) $ 162,072 $ 151,575 $ 156,584 $ 153,019 $ 151,829 $ 141,063 $ 133,995 $ 130,224 Operating expenses (3) : Cost of revenue 68,829 66,461 67,891 64,490 64,590 58,812 57,289 52,411 Sales & marketing 43,034 41,028 42,018 40,368 40,844 36,008 37,109 32,503 Product development 11,689 14,032 16,728 16,448 15,210 13,340 12,892 11,044 General and administrative 22,881 23,355 24,322 27,224 23,994 27,333 23,420 23,963 Total operating expenses 146,433 144,876 150,959 148,530 144,638 135,493 130,710 119,921 Income from operations 15,639 6,699 5,625 4,489 7,191 5,570 3,285 10,303 Gain on Sale of Webdam — — — 38,613 — — — — Other income / (expense), net (4) 1,048 217 (7,019 ) 802 1,637 130 1,510 455 Income / (Loss) before income taxes 16,687 6,916 (1,394 ) 5,291 8,828 5,700 4,795 10,758 Provision / (Benefit) for income tax (5) 1,774 (531 ) (1,140 ) 11,323 6,772 698 1,729 4,155 Net income available to common stockholders $ 14,913 $ 7,447 $ (254 ) $ (6,032 ) $ 2,056 $ 5,002 $ 3,066 $ 6,603 Net income per common share available to common stockholders: Basic $ 0.43 $ 0.21 $ (0.01 ) $ 0.94 $ 0.06 $ 0.14 $ 0.09 $ 0.19 Diluted $ 0.42 $ 0.21 $ (0.01 ) $ 0.92 $ 0.06 $ 0.14 $ 0.09 $ 0.19 Weighted average common shares outstanding: Basic 35,047 34,991 34,913 34,784 34,686 34,643 34,581 34,597 Diluted 35,421 35,570 34,913 35,318 35,149 35,177 35,250 35,595 ____________________________________________________________________________ (1) The Company has recorded certain immaterial adjustments to its unaudited consolidated financial statements for the correction of errors related to prior periods, as follows: (i) During the third quarter of 2018, to decrease enterprise revenue by approximately $0.8 million ; (ii) During the second quarter of 2018 to increase enterprise revenue by approximately $0.4 million and to increase general and administrative expense by approximately $0.8 million ; (iii) During the third quarter of 2017, to increase enterprise revenue by approximately $0.9 million ; and, (iv) During the second quarter of 2017, to reduce enterprise revenue by approximately $0.6 million and increase general and administrative expense by approximately $0.1 million . The Company has concluded that the impact of the adjustments recorded during 2018 but related to prior years is not material to the results of operations or financial position for the periods in which these adjustments were recorded nor any prior period financial statements. (2) Effective January 1, 2018 the Company adopted ASU 2014-09 using the modified retrospective approach. Historical revenue totals reflect those previously reported and have not been restated. (3) Includes non-cash equity-based compensation of $23,869 and $24,958 for the years ended December 31, 2018 and 2017 , respectively. (4) Includes the impairment of a long-term investment asset; changes in fair value of contingent consideration related to the PremiumBeat acquisition; transaction gains and losses primarily related to cash balances of subsidiaries denominated in a currency other than the subsidiaries’ functional currencies; and interest income and expense, which is not material in any period presented. (5) Included in the provision for income taxes for the three months ended December 31, 2017 is approximately $3.7 million of non-cash charges related to a remeasurement of deferred tax assets related to the change in U.S. tax rates from 35% to 21% and approximately $0.8 million of cash charges related to a one-time U.S. cash tax for unrepatriated foreign earnings related to the TCJA. |
Summary of Operations and Sig_2
Summary of Operations and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Certain immaterial changes in presentation have been made to conform the prior period presentation to current period reporting. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements. Actual results could differ from those estimates. Such estimates include, but are not limited to, the determination of the allowance for doubtful accounts, the assessment of recoverability of property and equipment, the fair value of acquired goodwill and intangible assets, the grant-date fair value of non-cash equity-based compensation, the assessment of recoverability of deferred tax assets and the measurement of certain income tax and non-income tax liabilities. |
Concentration of Risk | Concentration of Risk Financial instruments that are exposed to concentration of credit risk consist primarily of cash and cash equivalents and accounts receivable balances. Cash and cash equivalents are held with financial institutions of high quality. Balances may exceed the amount of insurance provided on such deposits. The majority of the Company’s revenues are derived from customers who license content using electronic payments at the time of a transaction. The Company’s accounts receivable are primarily from enterprise customers who require invoicing. The Company performs initial and ongoing credit reviews on these customers, which involve consideration of the customers’ financial information, their location, and other factors to assess the customers’ ability to pay. The Company also performs ongoing financial condition evaluations for its existing customers. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash The following represents the Company’s cash, cash equivalents and restricted cash as of December 31, 2018 and 2017 (in thousands): As of December 31, 2018 As of December 31, 2017 Cash and cash equivalents $ 230,852 $ 253,428 Restricted cash 2,613 2,613 Total cash, cash equivalents and restricted cash $ 233,465 $ 256,041 The Company’s cash and cash equivalents consist primarily of (i) cash on hand and bank deposits and (ii) money market accounts, which are stated at cost, which approximates fair value. The Company’s restricted cash relates to security deposits related to the lease for its headquarters in New York City, which expires in 2029 . The carrying value of restricted cash approximates fair value. Restricted cash is included as a component of other assets on the Consolidated Balance Sheets. |
Fair Value Measurements | Fair Value Measurements The Company records its financial assets and liabilities at fair value. Fair value is determined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the reporting date. Fair value is estimated by applying inputs which are classified into the following levels of a three-tier hierarchy as follows: Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2- inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and Level 3 - unobservable inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions regarding what market participants would use in pricing. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts The Company’s accounts receivable consists of customer obligations due under normal trade terms, carried at their face value less an allowance for doubtful accounts, if required. The Company determines its allowance for doubtful accounts based on an evaluation of the aging of its accounts receivable and on a customer-by-customer basis where appropriate. The Company’s reserve analysis contemplates the Company’s historical loss rate on receivables, specific customer situations and the economic environments in which the Company operates. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization is calculated using the straight-line method over the estimated useful lives of the related assets. Generally, the useful lives are as follows: Equipment 3 years Furniture and fixtures 7 years Software 3 years Leasehold improvements Shorter of expected useful life or lease term |
Capitalized Internal Use Software | Capitalized Internal Use Software The Company capitalizes the qualifying costs of computer software developed for internal use, which are incurred during the application development stage, and amortizes them over the software’s estimated useful life. Costs incurred in the preliminary and post-implementation stages of the Company’s products are expensed as incurred. The amounts capitalized include employee’s payroll and payroll-related costs directly associated with the development activities as well as external direct costs of services used in developing internal-use software. The Company’s policy is to amortize capitalized costs using the straight-line method over the estimated useful life, which is currently three years, beginning when the software is substantially complete and ready for its intended use. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets, inclusive of definite lived intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying value of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying value of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized in the amount by which the carrying value of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying value or the fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill and intangible assets acquired in a business combination and determined to have an indefinite useful life are not amortized, but instead tested for impairment at least annually on October 1 of each fiscal year or more frequently if events occur or circumstances exist that indicate that the fair value of a reporting unit may be below its carrying value. Goodwill has been allocated to the Company’s reporting units, for the purposes of preparing the impairment analysis, based on a specific identification basis. |
Revenue Recognition and Cost of Revenues | Revenue Recognition The majority of the Company’s revenue is earned from the license of digital content. Digital content licenses are generally purchased on a monthly or annual subscription basis, whereby a customer pays for a predetermined quantity of content that may be downloaded over a specific period of time, or, on a transactional basis, whereby a customer pays for individual content licenses at the time of download. Prior to the Sale of Webdam, the Company also earned revenue from licensing hosted software services through Webdam’s cloud-based tools for businesses, which were purchased as part of a subscription. Prior to the adoption of Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”) on January 1, 2018, and reflected in the reported revenue amounts for the years ended December 31, 2017 and 2016, the Company recognized revenue when all of the following basic criteria were met: there was persuasive evidence of an arrangement, performance or delivery of services had occurred, the sales price was fixed or determinable, and collectability was reasonably assured. The Company considered persuasive evidence of an arrangement to be an electronic order form, or a signed contract, which contained the fixed pricing terms. Performance or delivery for digital content licenses was considered to have occurred upon the download of the licensed content. Subscription revenue was recognized upon each download using an effective per-license rate and revenue associated with any unused licenses was recognized at the subscription expiration. Revenue attributable to the hosted software services was recognized ratably during the license subscription. Effective January 1, 2018, subsequent to the adoption of ASU 2014-09, the Company recognizes revenue upon the satisfaction of performance obligations, which occurs when (i) digital content is downloaded by a customer or (ii) hosted software services are provisioned and available to a customer. For digital content licenses, the Company recognizes revenue on both its subscription-based and transaction-based sales when content is downloaded, at which time the license is provided. In addition, management estimates expected unused licenses for subscription-based products and recognizes the revenue associated with the unused licenses throughout the subscription period. The estimate of unused licenses is based on historical download activity and future changes in the estimate could impact the timing of revenue recognition of the Company’s subscription products. Revenue associated with hosted software services is recognized ratably over the term of the license. ASU 2014-09 has resulted in a change in the timing of recognizing revenue on the Company’s digital content license subscription products. ASU 2014-09 did not impact revenue recognition on digital content licenses sold on a transactional basis or license revenue associated with hosted software services. Prior to the adoption of ASU 2014-09, the Company deferred certain acquisition costs that were then amortized over a period of less than one year. Effective January 1, 2018, the Company expenses contract acquisition costs as incurred, to the extent that the amortization period would otherwise be one year or less. Collectability is reasonably assured at the time the electronic order or contract is entered. The majority of the Company’s customers purchase products by making electronic payments at the time of the transaction with a credit card. The Company establishes an allowance for credit card chargebacks and a sales refund reserve based on factors surrounding historical chargeback and sales refund trends and other information. Customer payments received in advance of revenue recognition are contract liabilities and are recorded as deferred revenue. Customers that do not pay in advance are invoiced and are required to make payments under standard credit terms. Collectability for customers who pay on credit terms allowing for payment beyond the date at which service commences, is based on a credit evaluation for certain new customers and transaction history with existing customers. As of December 31, 2018 and 2017 , the Company had recorded an allowance for chargebacks and sales refunds of $0.3 million and $0.4 million , respectively, which is included in other liabilities. The Company recognizes revenue gross of contributor royalties because the Company is the principal in the transaction as it is the party responsible for the performance obligation and it controls the product or service before transferring it to the customer. The Company also licenses content to customers through third-party resellers. Third-party resellers sell the Company’s products directly to customers as the principal in those transactions. Accordingly, the Company recognizes revenue net of costs paid to resellers. Cost of Revenue The Company’s cost of revenue includes contributor royalties, credit card processing fees, content reviewer expenses, hosting and bandwidth expenses, content personnel salaries, non-cash equity-based compensation, amortization of content and technology intangible assets, and depreciation of network equipment, which are the direct costs related to providing content and service to customers. Additionally, the Company includes an allocation of overhead costs primarily related to payroll, insurance, and facilities expenses based on headcount. |
Contributor Royalties and Internal Sales Commissions | Contributor Royalties and Internal Sales Commissions The Company expenses contributor royalties in the period a customer download occurs and includes the corresponding contributor royalties in cost of revenue. Contributor royalties are generally paid weekly or monthly. The Company advances certain contributor royalties which are initially deferred and expensed based on the contractual royalty rate at the time of customer download or when the Company determines future recovery is not probable. For the years ended December 31, 2018 , 2017 and 2016 , the Company deferred $6.2 million , $4.7 million and $5.0 million , respectively, in royalty advances and amortized $6.1 million , $4.9 million and $5.5 million , respectively, in royalty advance expense which is included in cost of revenue. As of December 31, 2018 and 2017 , the Company has deferred contributor royalties of $2.6 million and $2.5 million , respectively, which is included in prepaid expenses and other current assets in the Consolidated Balance Sheets. Internal sales commissions are generally paid in the month following collection or invoicing of the commissioned receivable and is reported in sales and marketing expense. Effective January 1, 2018, upon the adoption of ASU 2014-09, the Company expenses contract acquisition costs, including internal sales commissions as incurred, to the extent that the amortization period would otherwise be one year or less. Prior to the adoption of ASU 2014-09, i nternal sales commissions were deferred and recognized over the expected future revenue stream which was generally up to 12 months . For the years ended, December 31, 2017 and 2016 , the Company deferred $5.5 million and $4.5 million , respectively, and amortized $5.0 million and $4.7 million , respectively, in internal sales commission expense which was included in sales and marketing expense on the Consolidated Statements of Operations. As of December 31, 2017 , the Company had deferred internal sales commission of $1.9 million , which was included in prepaid expenses and other current assets in the Consolidated Balance Sheets. |
Product Development | Product Development The Company expenses product development costs as incurred, except for costs that are capitalized for certain internal software development projects. Product development costs are primarily comprised of development personnel salaries, non-cash equity-based compensation, equipment costs as well as allocated occupancy costs and related overhead. |
Advertising Costs | Advertising Costs The Company expenses the cost of advertising and promoting its products as incurred. |
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. |
Equity-Based Compensation | Equity-Based Compensation The Company measures and recognizes non-cash equity-based compensation expense for all stock-based awards granted 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. Forfeitures are accounted for as they occur. 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. 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 2012 Omnibus Equity Incentive Plan (the “2012 Plan”) and stock purchased pursuant to the 2012 Employee Stock Purchase Plan (“2012 ESPP”), which are discussed further in Note 10, 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 closing market price at the grant date, the expected stock 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 Stock. 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. In certain cases for market based awards, the Company’s expected term is based on a combination of historical data and estimates of the period of time the award will be outstanding. • Volatility. The volatility is estimated based on historical price volatility of the Company’s common stock. • 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. The Company has not paid recurring 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 2012 Plan, and stock purchased pursuant to the 2012 ESPP are subject to a time-based vesting requirement and certain award grants may also include market based vesting conditions. 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. |
Employee Benefit Plans | Employee Benefit Plans The Company offers a 401(k) defined contribution plan and provides for discretionary employer matching contributions. Matching contributions are fully vested, non-forfeitable at all times and are recognized as an expense in the Statement of Operations, as incurred. |
Income Taxes and Other Non-income Taxes | Income Taxes The Company’s income tax expense includes U.S. (federal and state) and foreign income taxes. Deferred income tax balances reflect the effects of temporary differences between the carrying amounts of assets and liabilities and their tax basis, and are stated at enacted tax rates expected to be in effect when taxes are actually paid or recovered. 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 for the difference, if any, 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 outcomes of tax audits or lapses in statutes of limitations. Any reserve for uncertain tax provisions and related penalties and interest is included in the income tax provision. The Company assessed the realizability of deferred tax assets and determined, based on the available evidence including a history of taxable income, estimates of future taxable income and planning strategies, that 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. Except as required under U.S. tax laws, the Company does not provide for U.S. taxes on the undistributed earnings of its foreign subsidiaries. With the enactment of the H.R.1 (commonly referred to as the Tax Cuts and Jobs Act of 2017 (the “TCJA”)), the Company is required to treat the undistributed earnings and profits of its foreign subsidiaries accumulated through a measurement period that should not extend more than one year beyond the date of the enactment of the TCJA as if they were repatriated to the U.S., and pay a current U.S. tax amount as a result of such “deemed” repatriation. The Company’s tax expense for the year ended December 31, 2017 included a provisional amount for such taxes. The Company has not recorded any provision for potential deferred U.S. income taxes or foreign withholding taxes that otherwise may be payable if it were to repatriate such earnings, since the Company does not intend to repatriate such amounts. In January 2018, the FASB released guidance on the accounting for tax on the global intangible low-taxed income (“GILTI”) provisions of the TCJA. The GILTI provisions impose a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations. In the first quarter of 2018, the Company elected to treat any potential GILTI inclusions as a period cost. The Company previously recorded provisional estimates for the accounting impacts of the TCJA, including the transition tax, deferred tax re-measurements, and other items, due to the uncertainty regarding how these provisions were to be implemented and additional anticipated forthcoming guidance. Management completed its analysis of the TCJA, and has not made any significant adjustments to estimates previously recorded. The Company continues to assess the impacts of the TCJA on future fiscal years and is monitoring the Internal Revenue Service guidance intended to interpret the provisions of the TCJA. Other Non-income Taxes The Company is subject to 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. These accruals are subject to statute of limitations requirements and review by governmental authorities. |
Treasury Stock | Treasury Stock The Company accounts for treasury stock under the cost method and is included as a component of stockholders’ equity. Treasury stock held by the Company may be reissued in the future. The Company’s policy is to account for reissued shares as a reduction of Treasury stock on a first-in, first-out basis. |
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. Any potential issuance of common shares, including those that are contingent and do not participate in dividends, is excluded from weighted average number of common shares outstanding. Income available to common stockholders is computed by deducting income allocated to participating securities, if any, including unvested shares for the restricted award holder since these unvested shares have participating rights. Diluted net income per share is computed by dividing the net income attributable to common stockholders by the weighted average common shares outstanding and all potential common shares, if they are dilutive. |
Reportable Segments | Reportable Segments For the year ended December 31, 2018 , the Company has identified one operating segment, which has also been determined to be the Company’s primary reportable business segment. Operating segments are defined as components of an enterprise for which separate financial information is available and is evaluated regularly by the Company’s chief operating decision maker (“CODM”), or decision-making group, in deciding how to allocate resources and in assessing performance. The non-reportable segment classified in the Other Category previously included the Company’s digital asset management operating segment, which fails to meet the quantitative or qualitative thresholds for separate segment reporting and was sold on February 26, 2018. |
Contingent Consideration | Contingent Consideration The Company records a liability for contingent consideration at the date of a business combination and reassesses the fair value of the liability each period until it is settled. Upon settlement of these liabilities, the portion of the contingent consideration payment that is attributable to the initial amount recorded as part of the business combination is classified as a cash flow from financing activities and the portion of the settlement that is attributable to subsequent changes in the fair value of the contingent consideration is classified as a cash flow from operating activities in the Consolidated Statement of Cash Flows. |
Foreign Currency | Foreign Currency The functional currency of the Company’s foreign subsidiaries is generally the respective local currency. Monetary assets and liabilities that are denominated in currencies other than each entity’s functional currency are remeasured into the functional currency at the period-end exchange rates and result in transactional gains and losses. |
Recently Adopted and Issued Accounting Standard Updates | Recently Adopted Accounting Standard Updates In March 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-05, Income Taxes (Topic 740) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (“ASU 2018-05”). ASU 2018-05 codifies existing SEC guidance contained in SEC Staff Accounting Bulletin No. 118 (“SAB 118”), which expresses the view of the staff regarding application of existing guidance for the accounting for income taxes as it relates to the enactment of the TCJA, which was signed into law in the fourth quarter of 2017. In accordance with ASU 2018-05, the Company had previously recorded provisional estimates for the accounting impacts of the TCJA, including the transition tax, deferred tax re-measurements, and other items, due to the uncertainty regarding how these provisions were to be implemented and additional anticipated forthcoming guidance. The Company completed its analysis of the TCJA, which included the lowering of the Company’s statutory federal income tax rate and the enactment of a one-time transition tax on accumulated undistributed earnings of foreign subsidiaries and have not made any significant adjustments to estimates previously recorded. The Company continues to assess the impacts of the TCJA on future fiscal years and monitors the Internal Revenue Service guidance intended to interpret the provisions of the TCJA. In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment , which simplifies the accounting for goodwill impairments by eliminating step 2 from the goodwill impairment test. The Company elected to early adopt the amended guidance in the fourth quarter of fiscal 2018. The early adoption of this guidance did not have an impact on the Company's Consolidated Financial Statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations - Clarifying the Definition of a Business . ASU 2017-01 provides additional guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. Effective January 1, 2018, the Company adopted ASU 2017-01 on a prospective basis. Adoption of ASU 2017-01 had no effect on the Company’s consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statements of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”), which requires entities to present restricted cash with cash and cash equivalents on the statement of cash flows when reconciling the total beginning and ending amounts for the periods shown on the statement of cash flows. The Company adopted ASU 2016-18 retrospectively on January 1, 2018. As a result of this adoption, the Company has revised the presentation of its statement of cash flows for the twelve months ended December 31, 2017 , to reflect restricted cash of $2.6 million in both the beginning and ending balances of cash, cash equivalents and restricted cash. There were no changes to previously reported amounts of cash used or provided by operating activities, investing activities or financing activities during the period. In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”), which requires entities to measure all investments in equity securities at fair value and recognize any changes in fair value within the statement of operations. Under the standard, equity investments that do not have readily determinable fair values are eligible for a measurement alternative that allows for these investments to be recorded at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The Company adopted ASU 2016-01 on January 1, 2018. Adoption of ASU 2016-01 had no effect on the Company’s consolidated financial statements. ASU 2016-01 may increase the volatility in the statement of operations upon the occurrence of observable price changes or impairments in the equity securities. In May 2014, the FASB issued ASU 2014-09. ASU 2014-09, together with its related amendments, provides a unified model to determine when and how revenue is recognized and requires certain additional disclosures around the nature, amount, timing, and uncertainty of revenue and cash flows arising from customers. 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 to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires deferral of incremental costs associated with the cost of acquiring a customer contract, such as sales commissions, and amortization of such amounts over the contract term. However, as a practical expedient, if the amortization period of the deferred cost would be one year or less, the entity is permitted to expense these costs as incurred. The Company adopted ASU 2014-09 on January 1, 2018 using the modified retrospective approach, and prior period amounts were not restated. This standard resulted in a change in the timing of recognizing revenue on the Company’s digital content license subscription products. The Company has elected to utilize the practical expedient with regard to recognition of expense related to deferred contract acquisition costs, which resulted in a change in the timing of the recognition of such expenses. The effect of adoption of this new guidance on the Consolidated Balance Sheet as of January 1, 2018 was to reduce prepaid expenses and other current assets and to reduce deferred revenues, with an offsetting increase in 2018 opening retained earnings, as follows (in thousands): As Reported December 31, 2017 Adjustment Revised January 1, 2018 Prepaid expenses and other current assets (1) 37,109 (3,733 ) 33,376 Deferred revenue 157,803 (9,911 ) 147,892 Retained earnings 145,139 6,178 151,317 (1) Prepaid expenses and other current assets adjustment is attributable to the reduction in deferred commissions and income tax receivables. The effect of adoption of this new guidance on the Company’s reported balance sheet and statements of operations is as follows (in thousands): As Reported Under ASU 2014-09 Impact of Adoption Under Legacy Guidance For the twelve months ended December 31, 2018: Revenue 623,250 (1,359 ) 621,891 Cost of revenue 267,671 (185 ) 267,486 Provision for income taxes 11,426 (188 ) 11,238 Net income 54,687 986 55,673 As of December 31, 2018: Prepaid expenses and other current assets 34,841 4,106 38,947 Deferred revenue 139,604 11,270 150,874 Retained Earnings 101,079 (7,164 ) 93,915 Recently Issued Accounting Standard Updates In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . ASU 2016-02 requires that the rights and obligations created by leases with a duration greater than 12 months be recorded as assets and liabilities on the balance sheet of the lessee. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company plans to adopt this standard as of January 1, 2019 using the modified retrospective approach for all leases entered into before the effective date. The Company has also elected the option, as permitted in ASU 2018-11, Leases (Topic 842): Targeted Improvements , whereby initial application of the new leases standard would occur at the adoption date and a cumulative-effect adjustment would be recognized to the opening balance of retained earnings in the period of adoption. For comparability purposes, the Company will continue to comply with existing disclosure requirements in accordance with existing lease guidance for all periods presented in the year of adoption. The Company will elect the practical expedients permitted under the transition guidance which enables: (1) the carryforward of the historical lease classification; (2) the re-assessment about whether expired or existing contracts are or contain leases; and, (3) the re-assessment of initial direct costs for existing leases. In addition, the Company will make an accounting policy election to keep leases with an initial term of 12 months or less off the balance sheet. Upon adoption of this standard, the Company will recognize a lease liability in the range of $55 million to $60 million , representing the present value of the minimum rental payments remaining as of the adoption date. In addition, the Company will recognize a right of use asset in the range of $45 million to $50 million . The Company is still finalizing the impact of adopting this new accounting standard on its financial statements. The Company’s significant long-term leases relate primarily to its office facilities, which are described in Note 15, Commitments and Contingencies. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments (“ASU 2016-13”) . ASU 2016-13 replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses. The ASU is intended to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. Adoption of this guidance is required, prospectively, for annual periods beginning after December 15, 2019, with early adoption permitted for annual periods beginning after December 15, 2018. The Company is evaluating the impact of adopting this new accounting standard on its financial statements. In August 2018, the FASB issued ASU 2018-13, Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurements (“ASU 2018-13”), which eliminates, adds and modifies certain disclosure requirements for fair value measurements as part of the FASB’s disclosure framework project. Adoption of this guidance is required for fiscal years and interim periods within those fiscal years, beginning after December 15, 2019. The Company is evaluating the impact of adopting this new standard on its financial statements. In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting For Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU 2018-15”), which aligns the requirements for capitalizing implementation costs in a cloud computing arrangement with the requirements for capitalizing implementation costs incurred for an internal-use software license. Adoption of this guidance is required for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years and early adoption is permitted. Entities are permitted to choose to adopt the new guidance (1) prospectively for eligible costs incurred on or after the date this guidance is first applied or (2) retrospectively. The Company is evaluating the impact of this new accounting standard on its financial statements. |
Summary of Operations and Sig_3
Summary of Operations and Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of restricted cash | The following represents the Company’s cash, cash equivalents and restricted cash as of December 31, 2018 and 2017 (in thousands): As of December 31, 2018 As of December 31, 2017 Cash and cash equivalents $ 230,852 $ 253,428 Restricted cash 2,613 2,613 Total cash, cash equivalents and restricted cash $ 233,465 $ 256,041 |
Schedule of cash and cash equivalents | The following represents the Company’s cash, cash equivalents and restricted cash as of December 31, 2018 and 2017 (in thousands): As of December 31, 2018 As of December 31, 2017 Cash and cash equivalents $ 230,852 $ 253,428 Restricted cash 2,613 2,613 Total cash, cash equivalents and restricted cash $ 233,465 $ 256,041 |
Schedule of changes in the allowance for doubtful accounts | The following table presents the changes in the Company’s allowance for doubtful accounts (in thousands): Year Ended December 31, 2018 2017 2016 Balance, beginning of period $ 4,088 $ 5,495 $ 3,768 Add: bad debt expense 1,175 1,292 2,992 Less: write-offs, net of recoveries and other adjustments (566 ) (2,699 ) (1,265 ) Balance, end of period $ 4,697 $ 4,088 $ 5,495 |
Summary of property and equipment | Generally, the useful lives are as follows: Equipment 3 years Furniture and fixtures 7 years Software 3 years Leasehold improvements Shorter of expected useful life or lease term Property and equipment is summarized as follows (in thousands): December 31, 2018 2017 Computer equipment and software $ 148,104 $ 118,493 Furniture and fixtures 10,020 9,970 Leasehold improvements 18,822 18,487 Property and equipment 176,946 146,950 Less: accumulated depreciation (100,758 ) (61,252 ) Property and equipment, net $ 76,188 $ 85,698 |
Schedule of effects of adoption of new guidance | The effect of adoption of this new guidance on the Consolidated Balance Sheet as of January 1, 2018 was to reduce prepaid expenses and other current assets and to reduce deferred revenues, with an offsetting increase in 2018 opening retained earnings, as follows (in thousands): As Reported December 31, 2017 Adjustment Revised January 1, 2018 Prepaid expenses and other current assets (1) 37,109 (3,733 ) 33,376 Deferred revenue 157,803 (9,911 ) 147,892 Retained earnings 145,139 6,178 151,317 (1) Prepaid expenses and other current assets adjustment is attributable to the reduction in deferred commissions and income tax receivables. The effect of adoption of this new guidance on the Company’s reported balance sheet and statements of operations is as follows (in thousands): As Reported Under ASU 2014-09 Impact of Adoption Under Legacy Guidance For the twelve months ended December 31, 2018: Revenue 623,250 (1,359 ) 621,891 Cost of revenue 267,671 (185 ) 267,486 Provision for income taxes 11,426 (188 ) 11,238 Net income 54,687 986 55,673 As of December 31, 2018: Prepaid expenses and other current assets 34,841 4,106 38,947 Deferred revenue 139,604 11,270 150,874 Retained Earnings 101,079 (7,164 ) 93,915 |
Fair Value Measurements and O_2
Fair Value Measurements and Other Long-term Investments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value measurements | The following table presents the Company’s fair value hierarchy for its assets as of December 31, 2017 (in thousands). The Company had no assets or liabilities requiring fair value hierarchy disclosures as of December 31, 2018 . As of December 31, 2017 Aggregate Level 1 Level 2 Level 3 Assets: Money market accounts $ 55,775 $ 55,775 $ — $ — Total assets measured at fair value $ 55,775 $ 55,775 $ — $ — |
Acquisition Activity (Tables)
Acquisition Activity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Aggregate purchase price allocation, assets acquired liabilities assumed schedule | The aggregate purchase price was allocated to the assets acquired and liabilities assumed as follows (in thousands): Assets: Cash and cash equivalents $ 1,330 Accounts receivable 3,105 Prepaid expenses and other current assets 155 Intangible Assets: Customer relationships 3,000 Developed technology 2,200 Goodwill 46,217 Total assets acquired 56,007 Liabilities: Accrued expenses (279 ) Accounts payable (99 ) Deferred tax liability, net (333 ) Deferred revenue (3,550 ) Total liabilities acquired (4,261 ) Net assets acquired $ 51,746 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Summary of property and equipment | Generally, the useful lives are as follows: Equipment 3 years Furniture and fixtures 7 years Software 3 years Leasehold improvements Shorter of expected useful life or lease term Property and equipment is summarized as follows (in thousands): December 31, 2018 2017 Computer equipment and software $ 148,104 $ 118,493 Furniture and fixtures 10,020 9,970 Leasehold improvements 18,822 18,487 Property and equipment 176,946 146,950 Less: accumulated depreciation (100,758 ) (61,252 ) Property and equipment, net $ 76,188 $ 85,698 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in goodwill | The following table summarizes the changes in the Company’s goodwill balance by reportable and non-reportable segments for the year ended December 31, 2018 (in thousands): Content Other Consolidated Balance as of December 31, 2017 $ 89,891 $ 8,763 $ 98,654 Foreign currency translation adjustment (1,315 ) — (1,315 ) Sale of Webdam — (8,763 ) (8,763 ) Balance as of December 31, 2018 $ 88,576 $ — $ 88,576 |
Schedule of intangible assets | Intangible assets, all of which are subject to amortization, consist of the following as of December 31, 2018 and 2017 (in thousands): As of December 31, 2018 As of December 31, 2017 Gross Accumulated Net Weighted Gross Accumulated Net Customer relationships $ 17,360 $ (7,135 ) $ 10,225 9 $ 21,008 $ (6,996 ) $ 14,012 Trade name 6,372 (3,719 ) 2,653 7 7,159 (3,299 ) 3,860 Developed technology 4,780 (3,633 ) 1,147 4 5,528 (3,450 ) 2,078 Contributor content 19,912 (4,653 ) 15,259 10 17,041 (3,066 ) 13,975 Patents 259 (84 ) 175 18 259 (68 ) 191 Domain name 160 (79 ) 81 13 160 (79 ) 81 Total $ 48,843 $ (19,303 ) $ 29,540 $ 51,155 $ (16,958 ) $ 34,197 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses | Accrued expenses consisted of the following (in thousands): December 31, 2018 2017 Compensation $ 15,153 $ 19,897 Non-income taxes 7,885 6,895 Royalty tax withholdings 5,618 7,566 Other expenses 22,729 24,376 Total accrued expenses $ 51,385 $ 58,734 |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table summarizes the Company’s revenue by distribution channel for the years ended December 31, 2018 , 2017 and 2016 (in thousands): Year Ended December 31, 2018 2017 (1) 2016 (1) E-Commerce $ 365,730 $ 332,376 $ 318,916 Enterprise 254,809 208,713 164,384 Digital asset management (2) 2,711 16,022 11,017 Total Revenues $ 623,250 $ 557,111 $ 494,317 (1) As previously discussed in Note 1, the Company adopted ASU 2014-09 effective January 1, 2018 using the modified retrospective approach. Historical revenue amounts reflect those previously reported and have not been restated. (2) As previously discussed in Note 4, on February 26, 2018, the Company completed the Sale of Webdam. 2018 amounts include revenue earned during the period from January 1, 2018 through February 26, 2018. |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of non-cash equity-based compensation expense included in the Company's statement of operations | The following table summarizes non-cash equity-based compensation expense, net of forfeitures, by line item included in the Company’s Consolidated Statements of Operations for the years ended December 31, 2018 , 2017 and 2016 (in thousands): Year Ended December 31, 2018 2017 2016 Cost of revenue $ 523 $ 795 $ 1,938 Sales and marketing 2,218 4,452 5,444 Product development 5,815 6,162 7,681 General and administrative 15,313 13,549 13,017 Total $ 23,869 $ 24,958 $ 28,080 The following table summarizes non-cash equity-based compensation expense, net of forfeitures, by award type included in the Company’s Consolidated Statements of Operations for the years ended December 31, 2018 , 2017 and 2016 (in thousands): Year Ended December 31, 2018 2017 2016 Stock Options $ 6,009 $ 6,364 $ 7,295 Restricted Stock Units 17,860 18,594 20,179 ESPP — — 606 Total $ 23,869 $ 24,958 $ 28,080 Intrinsic value of stock options is calculated as the excess of market price of the Company’s common stock over the strike price of the stock options, multiplied by the number of stock options. The intrinsic value of the Company’s stock options is as follows (in thousands): As of December 31, 2018 2017 Stock options outstanding $ 2,500 $ 6,400 Stock options exercisable 1,800 3,600 Stock options vested and expected to vest $ 2,500 $ 6,400 |
Schedule of stock options awards activity | The following is a summary of stock option awards and weighted average exercise price per option: Plan Weighted Average Options outstanding at December 31, 2017 1,183,130 $ 55.14 Options granted 19,041 47.80 Special Dividend Adjustment 59,074 — Options exercised (91,205 ) 26.91 Options canceled or expired (43,585 ) 53.85 Options outstanding at December 31, 2018 1,126,455 $ 54.46 Options exercisable at December 31, 2018 343,624 $ 33.91 |
Schedule of weighted average assumptions used in the fair value calculation | The Company estimated the fair value of purchase rights under the 2012 ESPP on the date of grant using the Black-Scholes valuation model and the straight-line attribution approach with the following weighted-average assumptions: Year Ended Year Ended December 31, 2016 Expected term (in years) 0.5 Volatility 59.1 % Risk-free interest rate 0.46 % Dividend yield — The following weighted average assumptions were used in the fair value calculation for the years ended December 31, 2018 , 2017 and 2016 : Year Ended Year Ended December 31, 2018 2017 2016 Expected term (in years) 6.3 6.2 6.3 Volatility 47.8 % 50.0 % 52.5 % Risk-free interest rate 2.625 % 2.15 % 1.48 % Dividend yield — — — Valuation Data: Weighted average fair value per share granted $ 23.64 $ 24.19 $ 19.03 |
Schedule of restricted stock units ("RSUs") activity | The following table presents a summary of the Company’s RSUs activity for the year ended December 31, 2018 : Plan Weighted Average Non-vested balance at December 31, 2017 1,173,160 $ 43.79 Units granted 576,192 47.92 Special Dividend Adjustment 59,888 — Units vested (402,734 ) 42.18 Units canceled or forfeited (343,181 ) 43.56 Non-vested balance at December 31, 2018 1,063,325 $ 44.23 Non-vested and deferred balance at December 31, 2018 1,084,453 $ 44.49 |
Other (Expense)_Income, net (Ta
Other (Expense)/Income, net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Nonoperating Income (Expense) [Abstract] | |
Summary of the Company’s other (expense)/income activity | The following table presents a summary of the Company’s other (expense) / income activity included in the accompanying Consolidated Statements of Operations (in thousands): Year Ended December 31, 2018 2017 2016 Foreign currency (loss) / gain $ (1,807 ) $ 2,841 $ (167 ) Change in contingent consideration fair value — — (1,271 ) Impairment of long-term investment asset (5,881 ) — — Interest income 2,736 891 149 Other (expense) / income, net $ (4,952 ) $ 3,732 $ (1,289 ) |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of the Company's geographical breakdown of its income before income taxes | The Company’s geographical breakdown of its income before income taxes is as follows (in thousands): Year Ended December 31, 2018 2017 2016 Domestic $ 68,596 $ 24,558 $ 38,549 Foreign (2,483 ) 5,523 5,948 Income before income taxes $ 66,113 $ 30,081 $ 44,497 |
Summary of consolidated provision (benefit) for income taxes | The following table summarizes the consolidated provision for income taxes (in thousands): Year Ended December 31, 2018 2017 2016 Current provision (benefit): Federal $ 7,670 $ (4,813 ) $ 6,389 State and local 4,800 112 852 Foreign 5,226 5,564 2,861 Deferred provision (benefit): Federal (2,901 ) 14,578 3,376 State and local (164 ) 523 (34 ) Foreign (3,205 ) (2,610 ) (1,575 ) Provision for income taxes $ 11,426 $ 13,354 $ 11,869 |
Schedule of provision for income taxes differs from statutory income tax rate | The provision for income taxes differs from statutory income tax rate as follows: Year Ended December 31, 2018 2017 2016 U.S. income tax at federal statutory rate 21.0 % 35.0 % 35.0 % Tax credits (5.4 ) (4.0 ) (12.0 ) State and local taxes, net of federal benefit 1.9 2.1 2.9 Equity-based compensation (1) (0.4 ) 1.9 2.1 Foreign rate differential 0.5 (2.3 ) (1.8 ) Foreign-derived intangible income deduction (3.7 ) — — Uncertain tax positions 3.6 5.2 (0.4 ) Transition tax related to TCJA (0.3 ) 2.6 — U.S. Federal rate change related to TCJA — 12.4 — Domestic production activities deduction — (9.8 ) — Non-deductible—other 0.1 1.3 0.9 Total provision for income taxes 17.3 % 44.4 % 26.7 % (1) Included in this amount for the years ended December 31, 2018 and 2017 is the impact of windfall/shortfall related to stock option exercises and RSU vestings that were reflected in additional paid-in capital, prior to the adoption of ASU 2016-09 on January 1, 2017. All periods presented include the impact of non-deductible stock-based compensation expenses. |
Schedule of the Company's tax effects of temporary differences and tax carryforwards that give rise to significant portions of the deferred tax assets | The tax effect of the Company’s temporary differences that give rise to deferred tax assets and liabilities are presented below (in thousands): Year Ended 2018 2017 Deferred tax assets: Non-cash equity-based compensation $ 9,383 $ 8,342 Intangible amortization 3,252 4,555 Non-income tax accruals 3,087 2,887 Deferred rent 2,537 2,484 Other liabilities 6,523 2,895 Deferred tax assets 24,782 21,163 Deferred tax liabilities: Depreciation and amortization (12,484 ) (12,888 ) Net deferred tax assets $ 12,298 $ 8,275 |
Summary of changes to the Company's unrecognized tax benefits | The following table summarizes changes to the Company’s unrecognized tax benefits as follows (in thousands): Year Ended December 31, 2018 2017 2016 Balance of unrecognized tax benefits at January 1 $ 2,966 $ 1,455 $ 1,479 Gross additions for tax positions for prior years 332 1,412 886 Gross additions for tax positions for current year 3,476 273 360 Gross expirations (928 ) (174 ) (1,270 ) Balance of unrecognized tax benefits at December 31 $ 5,846 $ 2,966 $ 1,455 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of net income per share | The following table sets forth the computation of basic and diluted net income per share for fiscal 2018, 2017 and 2016 (in thousands): Year Ended December 31, 2018 2017 2016 Net income $ 54,687 $ 16,727 $ 32,628 Shares used to compute basic net income per share 34,935 34,627 35,114 Dilutive potential common shares: Stock options and employee stock purchase plan shares 117 388 441 Unvested restricted stock awards 368 276 306 Shares used to compute diluted net income per share 35,420 35,291 35,861 Basic net income per share $ 1.57 $ 0.48 $ 0.93 Diluted net income per share $ 1.54 $ 0.47 $ 0.91 Potentially dilutive shares included in the calculation 1,285 1,384 1,954 Anti-dilutive shares excluded from the calculation 1,020 1,325 999 |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Summarized segment information | The following table summarizes segment information for the years ended December 31, 2018 , 2017 and 2016 (in thousands): Content Segment Other and Corporate Consolidated December 31, 2018 Revenue (1) $ 620,539 $ 2,711 $ 623,250 Operating Expenses (2) 490,985 99,813 590,798 Income from Operations 129,554 (97,102 ) 32,452 December 31, 2017 Revenue (1) 541,088 16,023 557,111 Operating Expenses (2) 417,507 113,255 530,762 Income from Operations 123,581 (97,232 ) 26,349 December 31, 2016 Revenue (1) 483,278 11,039 494,317 Operating Expenses (2) 364,631 83,900 448,531 Income from Operations $ 118,647 $ (72,861 ) $ 45,786 (1) Effective January 1, 2018 the Company adopted ASU 2014-09 using the modified retrospective approach. Historical revenue totals reflect those previously reported and have not been restated. (2) Other and corporate operating expenses include unallocated corporate expenses of approximately $97.8 million , $96.5 million and $67.7 million for the years ended December 31, 2018 , 2017 , and 2016 , respectively. Unallocated corporate expenses primarily relate to shared operational support functions and general and administrative functions of human resources, legal, finance and information technology. |
Schedule of geographic revenue | The following represents the Company’s geographic revenue based on customer location (in thousands): Year Ended December 31, 2018 2017 2016 North America $ 230,890 $ 218,865 $ 197,650 Europe 207,634 181,693 161,906 Rest of the world 184,726 156,553 134,761 Total revenue $ 623,250 $ 557,111 $ 494,317 |
Schedule of long-lived tangible assets | The Company’s long-lived tangible assets were located as follows (in thousands): December 31, 2018 2017 North America $ 71,758 $ 83,027 Europe 4,371 2,599 Rest of world 59 72 Total long-lived tangible assets $ 76,188 $ 85,698 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum lease payments under non-cancelable operating leases | Future minimum lease payments under non-cancelable operating leases and other unconditional cash obligations as of December 31, 2018 are as follows (in thousands): Year Ending December 31, Operating Other Obligations 2019 $ 9,913 $ 29,758 2020 8,762 27,056 2021 7,493 13,770 2022 6,829 3,333 2023 6,082 — Thereafter 39,481 — Total minimum lease payments $ 78,560 $ 73,917 |
Unaudited Quarterly Financial_2
Unaudited Quarterly Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of company's financial information for the eight most recent quarters | The following table sets forth, for the periods indicated, the Company’s financial information for the eight most recent quarters ended December 31, 2018 . In the Company’s opinion, this unaudited information has been prepared on a basis consistent with the annual consolidated financial statements and includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the unaudited information for the periods presented. Three Months Ended Dec 31, 2018 Sep 30, 2018 Jun 30, 2018 Mar 31, 2018 Dec 31, 2017 Sep 30, 2017 Jun 30, 2017 Mar 31, 2017 (in thousands, except per share data) Revenue (1) (2) $ 162,072 $ 151,575 $ 156,584 $ 153,019 $ 151,829 $ 141,063 $ 133,995 $ 130,224 Operating expenses (3) : Cost of revenue 68,829 66,461 67,891 64,490 64,590 58,812 57,289 52,411 Sales & marketing 43,034 41,028 42,018 40,368 40,844 36,008 37,109 32,503 Product development 11,689 14,032 16,728 16,448 15,210 13,340 12,892 11,044 General and administrative 22,881 23,355 24,322 27,224 23,994 27,333 23,420 23,963 Total operating expenses 146,433 144,876 150,959 148,530 144,638 135,493 130,710 119,921 Income from operations 15,639 6,699 5,625 4,489 7,191 5,570 3,285 10,303 Gain on Sale of Webdam — — — 38,613 — — — — Other income / (expense), net (4) 1,048 217 (7,019 ) 802 1,637 130 1,510 455 Income / (Loss) before income taxes 16,687 6,916 (1,394 ) 5,291 8,828 5,700 4,795 10,758 Provision / (Benefit) for income tax (5) 1,774 (531 ) (1,140 ) 11,323 6,772 698 1,729 4,155 Net income available to common stockholders $ 14,913 $ 7,447 $ (254 ) $ (6,032 ) $ 2,056 $ 5,002 $ 3,066 $ 6,603 Net income per common share available to common stockholders: Basic $ 0.43 $ 0.21 $ (0.01 ) $ 0.94 $ 0.06 $ 0.14 $ 0.09 $ 0.19 Diluted $ 0.42 $ 0.21 $ (0.01 ) $ 0.92 $ 0.06 $ 0.14 $ 0.09 $ 0.19 Weighted average common shares outstanding: Basic 35,047 34,991 34,913 34,784 34,686 34,643 34,581 34,597 Diluted 35,421 35,570 34,913 35,318 35,149 35,177 35,250 35,595 ____________________________________________________________________________ (1) The Company has recorded certain immaterial adjustments to its unaudited consolidated financial statements for the correction of errors related to prior periods, as follows: (i) During the third quarter of 2018, to decrease enterprise revenue by approximately $0.8 million ; (ii) During the second quarter of 2018 to increase enterprise revenue by approximately $0.4 million and to increase general and administrative expense by approximately $0.8 million ; (iii) During the third quarter of 2017, to increase enterprise revenue by approximately $0.9 million ; and, (iv) During the second quarter of 2017, to reduce enterprise revenue by approximately $0.6 million and increase general and administrative expense by approximately $0.1 million . The Company has concluded that the impact of the adjustments recorded during 2018 but related to prior years is not material to the results of operations or financial position for the periods in which these adjustments were recorded nor any prior period financial statements. (2) Effective January 1, 2018 the Company adopted ASU 2014-09 using the modified retrospective approach. Historical revenue totals reflect those previously reported and have not been restated. (3) Includes non-cash equity-based compensation of $23,869 and $24,958 for the years ended December 31, 2018 and 2017 , respectively. (4) Includes the impairment of a long-term investment asset; changes in fair value of contingent consideration related to the PremiumBeat acquisition; transaction gains and losses primarily related to cash balances of subsidiaries denominated in a currency other than the subsidiaries’ functional currencies; and interest income and expense, which is not material in any period presented. (5) Included in the provision for income taxes for the three months ended December 31, 2017 is approximately $3.7 million of non-cash charges related to a remeasurement of deferred tax assets related to the change in U.S. tax rates from 35% to 21% and approximately $0.8 million of cash charges related to a one-time U.S. cash tax for unrepatriated foreign earnings related to the TCJA. |
Summary of Operations and Sig_4
Summary of Operations and Significant Accounting Policies - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Cash and Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 230,852 | $ 253,428 | ||
Restricted cash | 2,613 | 2,613 | ||
Total cash, cash equivalents and restricted cash | $ 233,465 | $ 256,041 | $ 226,803 | $ 243,133 |
Summary of Operations and Sig_5
Summary of Operations and Significant Accounting Policies - Accounts Receivable and Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Allowance for doubtful accounts: | |||
Balance, beginning of period | $ 4,088 | $ 5,495 | $ 3,768 |
Add: bad debt expense | 1,175 | 1,292 | 2,992 |
Less: write-offs, net of recoveries and other adjustments | (566) | (2,699) | (1,265) |
Balance, end of period | $ 4,697 | $ 4,088 | $ 5,495 |
Summary of Operations and Sig_6
Summary of Operations and Significant Accounting Policies - Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Equipment | |
Property and Equipment | |
Useful lives | 3 years |
Furniture and fixtures | |
Property and Equipment | |
Useful lives | 7 years |
Software | |
Property and Equipment | |
Useful lives | 3 years |
Summary of Operations and Sig_7
Summary of Operations and Significant Accounting Policies - Capitalized Internal Use Software and Impairment of Long-Lived Assets (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Impairment of Long-Lived Assets | |||
Impairment charges | $ 0 | $ 0 | $ 0 |
Software | |||
Property, Plant and Equipment [Line Items] | |||
Useful lives | 3 years |
Summary of Operations and Sig_8
Summary of Operations and Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Accounting Policies [Abstract] | ||
Chargeback and sales refund allowances | $ 0.3 | $ 0.4 |
Summary of Operations and Sig_9
Summary of Operations and Significant Accounting Policies - Contributor Royalties and Internal Sales Commissions (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Deferred Revenue Arrangement [Line Items] | |||
Deferred royalty advances | $ 6.2 | $ 4.7 | $ 5 |
Amortization of advance royalty | $ (6.1) | (4.9) | (5.5) |
Maximum period over which internal sales commissions get deferred and recognized | 12 months | ||
Amortized internal sales commission expense | (5) | (4.7) | |
Prepaid expenses and other current assets | |||
Deferred Revenue Arrangement [Line Items] | |||
Deferred contributor royalties | $ 2.6 | 2.5 | |
Deferred internal sales commission | 1.9 | ||
Sales Commission | |||
Deferred Revenue Arrangement [Line Items] | |||
Deferred internal sales commissions | $ 5.5 | $ 4.5 |
Summary of Operations and Si_10
Summary of Operations and Significant Accounting Policies - Advertising Costs and Deferred Rent (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Advertising Costs | |||
Advertising costs | $ 91.5 | $ 76.6 | $ 64.9 |
Deferred Rent | |||
Deferred rent | $ 11.3 | $ 11.1 |
Summary of Operations and Si_11
Summary of Operations and Significant Accounting Policies - Equity-Based Compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Equity-Based Compensation | |||
Reduction to retained earnings | $ 6,178 | $ 326 | |
Increase (decrease) from operating activity | $ 102,202 | 108,037 | 100,723 |
Increase (decrease) from financing activity | $ (109,739) | (33,888) | (53,110) |
2012 Plan | Stock Options | |||
Equity-Based Compensation | |||
Vesting period | 4 years | ||
2012 Plan | Restricted Stock Units | |||
Equity-Based Compensation | |||
Vesting period | 3 years | ||
2012 ESPP | ESPP | |||
Equity-Based Compensation | |||
Vesting period | 6 months | ||
Retained Earnings | |||
Equity-Based Compensation | |||
Reduction to retained earnings | 6,178 | (653) | |
Accounting Standards Update 2016-09, Excess Tax Benefit Component | New Accounting Pronouncement, Early Adoption, Effect | |||
Equity-Based Compensation | |||
Increase (decrease) from operating activity | (400) | ||
Increase (decrease) from financing activity | $ 400 | ||
Accounting Standards Update 2016-09, Excess Tax Benefit Component | Retained Earnings | New Accounting Pronouncement, Early Adoption, Effect | |||
Equity-Based Compensation | |||
Reduction to retained earnings | $ (700) |
Summary of Operations and Si_12
Summary of Operations and Significant Accounting Policies - Employee Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Retirement Benefits [Abstract] | |||
Employer matching contributions | $ 3.2 | $ 1.8 | $ 1.7 |
Summary of Operations and Si_13
Summary of Operations and Significant Accounting Policies - Reportable Segments (Details) | 12 Months Ended |
Dec. 31, 2018segment | |
Accounting Policies [Abstract] | |
Number of operating segments | 1 |
Summary of Operations and Si_14
Summary of Operations and Significant Accounting Policies - Foreign Currency (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | |||
Foreign currency transactional gains (losses) | $ (2.2) | $ 2.6 | $ 1 |
Summary of Operations and Si_15
Summary of Operations and Significant Accounting Policies - Recently Adopted Accounting Standard Update (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2019 | Jan. 01, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||
Prepaid expenses and other current assets | $ 34,841 | $ 37,109 | $ 34,841 | $ 37,109 | $ 33,376 | |||||||||
Deferred revenue | 139,604 | 157,803 | 139,604 | 157,803 | 147,892 | |||||||||
Retained earnings | 101,079 | 145,139 | 101,079 | 145,139 | 151,317 | |||||||||
Revenue | 162,072 | $ 151,575 | $ 156,584 | $ 153,019 | 151,829 | $ 141,063 | $ 133,995 | $ 130,224 | $ 557,111 | 623,250 | 557,111 | $ 494,317 | ||
Cost of revenue | 68,829 | 66,461 | 67,891 | 64,490 | 64,590 | 58,812 | 57,289 | 52,411 | 267,671 | 233,102 | 203,129 | |||
Provision for income taxes | 1,774 | $ (531) | $ (1,140) | $ 11,323 | 6,772 | $ 698 | $ 1,729 | $ 4,155 | 11,426 | 13,354 | 11,869 | |||
Net income | 54,687 | 16,727 | $ 32,628 | |||||||||||
Accounting Standards Update 2014-09 | ||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||
Deferred revenue | $ (9,900) | |||||||||||||
Restatement Adjustment | Accounting Standards Update 2014-09 | ||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||
Prepaid expenses and other current assets | 4,106 | (3,733) | 4,106 | (3,733) | ||||||||||
Deferred revenue | 11,270 | (9,911) | 11,270 | (9,911) | ||||||||||
Retained earnings | (7,164) | $ 6,178 | (7,164) | $ 6,178 | ||||||||||
Revenue | (1,359) | |||||||||||||
Cost of revenue | (185) | |||||||||||||
Provision for income taxes | (188) | |||||||||||||
Net income | 986 | |||||||||||||
Under Legacy Guidance | ||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||
Prepaid expenses and other current assets | 38,947 | 38,947 | ||||||||||||
Deferred revenue | 150,874 | 150,874 | ||||||||||||
Retained earnings | $ 93,915 | 93,915 | ||||||||||||
Revenue | 621,891 | |||||||||||||
Cost of revenue | 267,486 | |||||||||||||
Provision for income taxes | 11,238 | |||||||||||||
Net income | $ 55,673 | |||||||||||||
Minimum | Scenario, Forecast | Accounting Standards Update 2016-02 | ||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||
Lease liability | $ 55,000 | |||||||||||||
Right-of-use asset | 45,000 | |||||||||||||
Maximum | Scenario, Forecast | Accounting Standards Update 2016-02 | ||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||
Lease liability | 60,000 | |||||||||||||
Right-of-use asset | $ 50,000 |
Fair Value Measurements and O_3
Fair Value Measurements and Other Long-term Investments - Schedule of fair value measurements (Details) - Aggregate Fair Value - Recurring Basis $ in Thousands | Dec. 31, 2017USD ($) |
Assets: | |
Total assets measured at fair value | $ 55,775 |
Money market accounts | |
Assets: | |
Total assets measured at fair value | 55,775 |
Level 1 | |
Assets: | |
Total assets measured at fair value | 55,775 |
Level 1 | Money market accounts | |
Assets: | |
Total assets measured at fair value | 55,775 |
Level 2 | |
Assets: | |
Total assets measured at fair value | 0 |
Level 2 | Money market accounts | |
Assets: | |
Total assets measured at fair value | 0 |
Level 3 | |
Assets: | |
Total assets measured at fair value | 0 |
Level 3 | Money market accounts | |
Assets: | |
Total assets measured at fair value | $ 0 |
Fair Value Measurements and O_4
Fair Value Measurements and Other Long-term Investments - Narrative (Details) - USD ($) | Jan. 04, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Jan. 01, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Other than temporary impairment | $ 5,900,000 | ||||
Virtual Moment L L C | Acquisition related contingent consideration | Level 3 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Changes in fair value | $ 0 | ||||
Aggregate Fair Value | Other Current Liabilities | PremiumBeat | Acquisition related contingent consideration | Recurring Basis | Level 3 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Fair value contingent consideration | $ 10,000,000 | $ 10,000,000 | |||
Revolving Credit Facility | Indirect Guarantee of Indebtedness | The Facility | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Obligation to lend, maximum exposure | 3,300,000 | ||||
Convertible Notes Payable | Indirect Guarantee of Indebtedness | Convertible Note Maturing October 2021 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Obligation to lend, maximum exposure | $ 1,600,000 | ||||
SilverHub Media Limited | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Fair value in equity method investment | $ 0 | ||||
Zcool Network Technology Limited | Convertible Preferred Stock | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Purchase of convertible preferred stock | $ 15,000,000 | ||||
Equity ownership interest | 25.00% | ||||
Variable Interest Entity, Not Primary Beneficiary [Member] | Zcool Network Technology Limited | Convertible Preferred Stock | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Purchase of convertible preferred stock | $ 15,000,000 |
Acquisition Activity - Narrativ
Acquisition Activity - Narrative (Details) image in Thousands, $ in Thousands | Jul. 07, 2017USD ($) | Sep. 01, 2016USD ($)imageimage_collection | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Business Acquisition [Line Items] | ||||||
Cash payment | $ 845 | $ 49,571 | $ 0 | |||
FlashStock Technology, Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Purchase price | $ 51,700 | |||||
Cash payment | $ 800 | 50,900 | ||||
Estimated useful life | 7 years | |||||
Portion of goodwill deductible for income tax purposes | 26.00% | |||||
Professional fees | $ 800 | |||||
The Picture Desk | ||||||
Business Acquisition [Line Items] | ||||||
Cash payment | $ 3,900 | |||||
Minimum number of images | image | 700 | |||||
Number of image collections | image_collection | 2 | |||||
Trade name | The Picture Desk | ||||||
Business Acquisition [Line Items] | ||||||
Estimated useful life | 7 years | |||||
Contributor content | $ 3,600 | |||||
Images | The Picture Desk | ||||||
Business Acquisition [Line Items] | ||||||
Estimated useful life | 15 years |
Acquisition Activity - Schedule
Acquisition Activity - Schedule of Acquisition (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Jul. 07, 2017 |
Intangible Assets: | |||
Goodwill | $ 88,576 | $ 98,654 | |
FlashStock Technology, Inc. | |||
Assets: | |||
Cash | $ 1,330 | ||
Accounts receivables | 3,105 | ||
Prepaid expenses and other current assets | 155 | ||
Intangible Assets: | |||
Goodwill | 46,217 | ||
Total assets acquired | 56,007 | ||
Liabilities: | |||
Accrued expenses | (279) | ||
Accounts payable | (99) | ||
Deferred tax liability, net | (333) | ||
Deferred revenue | (3,550) | ||
Total liabilities assumed | (4,261) | ||
Total | 51,746 | ||
FlashStock Technology, Inc. | Customer relationships | |||
Intangible Assets: | |||
Intangible assets | 3,000 | ||
FlashStock Technology, Inc. | Developed technology | |||
Intangible Assets: | |||
Intangible assets | $ 2,200 |
Sale of Webdam (Details)
Sale of Webdam (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Feb. 26, 2018 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Total cash received, net of transaction costs paid | $ 41,804 | $ 0 | $ 0 | |||||||||
Gain on sale of Webdam | $ 0 | $ 0 | $ 0 | $ 38,613 | $ 0 | $ 0 | $ 0 | $ 0 | 38,613 | $ 0 | $ 0 | |
Webdam | ||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Gain on sale of Webdam | 38,600 | |||||||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Webdam | ||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Asset purchase price | $ 49,100 | |||||||||||
Transaction costs paid | $ 4,600 | |||||||||||
Total cash received, net of transaction costs paid | 41,800 | |||||||||||
Cash received placed in escrow | $ 2,500 |
Property and Equipment - Summar
Property and Equipment - Summary of property and equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property and Equipment | ||
Property and equipment | $ 176,946 | $ 146,950 |
Less: accumulated depreciation | (100,758) | (61,252) |
Property and equipment, net | 76,188 | 85,698 |
Computer equipment and software | ||
Property and Equipment | ||
Property and equipment | 148,104 | 118,493 |
Furniture and fixtures | ||
Property and Equipment | ||
Property and equipment | 10,020 | 9,970 |
Leasehold improvements | ||
Property and Equipment | ||
Property and equipment | $ 18,822 | $ 18,487 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation and amortization expense | $ 40,100,000 | $ 29,200,000 | $ 14,900,000 |
Loss on disposal | 0 | 0 | 0 |
Capitalized costs | 27,700,000 | 39,200,000 | 20,000,000 |
Portion of depreciation expense capitalized internal-use software | 24,900,000 | 14,100,000 | $ 3,600,000 |
Capitalized internal-use software | $ 48,500,000 | $ 45,400,000 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Changes in goodwill | |
December 31, 2017 | $ 98,654 |
Foreign currency translation adjustment | (1,315) |
Sale of Webdam | (8,763) |
December 31, 2018 | 88,576 |
Content Business | |
Changes in goodwill | |
December 31, 2017 | 89,891 |
Foreign currency translation adjustment | (1,315) |
Sale of Webdam | 0 |
December 31, 2018 | 88,576 |
Other Category | |
Changes in goodwill | |
December 31, 2017 | 8,763 |
Foreign currency translation adjustment | 0 |
Sale of Webdam | (8,763) |
December 31, 2018 | $ 0 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Amortizing intangible assets: | ||
Gross Carrying Amount | $ 48,843 | $ 51,155 |
Accumulated Amortization | (19,303) | (16,958) |
Net Carrying Amount | 29,540 | 34,197 |
Customer relationships | ||
Amortizing intangible assets: | ||
Gross Carrying Amount | 17,360 | 21,008 |
Accumulated Amortization | (7,135) | (6,996) |
Net Carrying Amount | $ 10,225 | 14,012 |
Weighted Average Life (Years) | 9 years | |
Trade name | ||
Amortizing intangible assets: | ||
Gross Carrying Amount | $ 6,372 | 7,159 |
Accumulated Amortization | (3,719) | (3,299) |
Net Carrying Amount | $ 2,653 | 3,860 |
Weighted Average Life (Years) | 7 years | |
Developed technology | ||
Amortizing intangible assets: | ||
Gross Carrying Amount | $ 4,780 | 5,528 |
Accumulated Amortization | (3,633) | (3,450) |
Net Carrying Amount | $ 1,147 | 2,078 |
Weighted Average Life (Years) | 4 years | |
Contributor content | ||
Amortizing intangible assets: | ||
Gross Carrying Amount | $ 19,912 | 17,041 |
Accumulated Amortization | (4,653) | (3,066) |
Net Carrying Amount | $ 15,259 | 13,975 |
Weighted Average Life (Years) | 10 years | |
Patents | ||
Amortizing intangible assets: | ||
Gross Carrying Amount | $ 259 | 259 |
Accumulated Amortization | (84) | (68) |
Net Carrying Amount | $ 175 | 191 |
Weighted Average Life (Years) | 18 years | |
Domain name | ||
Amortizing intangible assets: | ||
Gross Carrying Amount | $ 160 | 160 |
Accumulated Amortization | (79) | (79) |
Net Carrying Amount | $ 81 | $ 81 |
Weighted Average Life (Years) | 13 years |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Narrative (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Oct. 01, 2018 | |
Goodwill | ||||
Goodwill | $ 88,576,000 | $ 98,654,000 | ||
Impairment of goodwill | 0 | 0 | $ 0 | |
Amortization expense | 5,500,000 | $ 6,300,000 | $ 5,100,000 | |
2,019 | 6,300,000 | |||
2,020 | 5,700,000 | |||
2,021 | 5,000,000 | |||
2,022 | 3,000,000 | |||
2,023 | 2,800,000 | |||
Thereafter | $ 6,800,000 | |||
Editorial | ||||
Goodwill | ||||
Goodwill | $ 12,600,000 | |||
Weighted average cost of capital | 15.00% | |||
Terminal growth rate | 3.00% | |||
Percentage of fair value, in excess of carrying amount | 13.00% |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Compensation | $ 15,153 | $ 19,897 |
Non-income taxes | 7,885 | 6,895 |
Royalty tax withholdings | 5,618 | 7,566 |
Other expenses | 22,729 | 24,376 |
Total accrued expenses | $ 51,385 | $ 58,734 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) | Aug. 29, 2018USD ($) | Aug. 01, 2018$ / shares | Dec. 31, 2018USD ($)Vote$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($) | Feb. 28, 2017USD ($) | Oct. 31, 2015USD ($) |
Special Dividend | |||||||
Special cash dividend (in dollars per share) | $ / shares | $ 3 | ||||||
Payment of Special Dividend | $ | $ 104,900,000 | $ 104,925,000 | $ 0 | $ 0 | |||
Conversion ratio (in dollars per share) | 1.055 | ||||||
Common Stock | |||||||
Number of votes for each share | Vote | 1 | ||||||
Number of authorized shares of common stock (in shares) | shares | 200,000,000 | 200,000,000 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | |||||
Preferred Stock | |||||||
Preferred stock, authorized shares (in shares) | shares | 5,000,000 | ||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.01 | ||||||
Treasury Stock | |||||||
Number of shares acquired | shares | 2,558,000 | 2,558,000 | |||||
Common Stock | |||||||
Treasury Stock | |||||||
Authorized repurchase amount | $ | $ 100,000,000 | $ 100,000,000 | |||||
Number of shares acquired | shares | 2,558,000 | ||||||
Average per-share cost (in dollars per share) | $ / shares | $ 39.09 | ||||||
Share value remaining for repurchase | $ | $ 100,000,000 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Thousands | Jan. 01, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Segment Reporting Information [Line Items] | |||
Decrease in deferred revenue due to adoption of ASC 2014-09 | $ 147,892 | $ 139,604 | $ 157,803 |
Disposal group deferred revenue | $ 133,300 | ||
Accounting Standards Update 2014-09 | |||
Segment Reporting Information [Line Items] | |||
Decrease in deferred revenue due to adoption of ASC 2014-09 | (9,900) | ||
Webdam | Disposal Group, Not Discontinued Operations | |||
Segment Reporting Information [Line Items] | |||
Deferred revenue decrease | $ 10,200 |
Revenue - Revenue by Distributi
Revenue - Revenue by Distribution Channel (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disaggregation of Revenue [Line Items] | ||||||||||||
Total Revenues | $ 162,072 | $ 151,575 | $ 156,584 | $ 153,019 | $ 151,829 | $ 141,063 | $ 133,995 | $ 130,224 | $ 557,111 | $ 623,250 | $ 557,111 | $ 494,317 |
E-Commerce | ||||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||||
Total Revenues | 332,376 | 365,730 | 318,916 | |||||||||
Enterprise | ||||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||||
Total Revenues | 208,713 | 254,809 | 164,384 | |||||||||
Digital Asset Management | ||||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||||
Total Revenues | $ 16,022 | $ 2,711 | $ 11,017 |
Equity-Based Compensation - Sum
Equity-Based Compensation - Summary of non-cash equity-based compensation expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Non-cash equity-based compensation expense related to the 2012 Plan and 2012 ESPP | |||
Total | $ 23,869 | $ 24,958 | $ 28,080 |
Stock Options | |||
Non-cash equity-based compensation expense related to the 2012 Plan and 2012 ESPP | |||
Total | 6,009 | 6,364 | 7,295 |
Restricted Stock Units | |||
Non-cash equity-based compensation expense related to the 2012 Plan and 2012 ESPP | |||
Total | 17,860 | 18,594 | 20,179 |
ESPP | |||
Non-cash equity-based compensation expense related to the 2012 Plan and 2012 ESPP | |||
Total | 0 | 0 | 606 |
Cost of revenue | |||
Non-cash equity-based compensation expense related to the 2012 Plan and 2012 ESPP | |||
Total | 523 | 795 | 1,938 |
Sales and marketing | |||
Non-cash equity-based compensation expense related to the 2012 Plan and 2012 ESPP | |||
Total | 2,218 | 4,452 | 5,444 |
Product development | |||
Non-cash equity-based compensation expense related to the 2012 Plan and 2012 ESPP | |||
Total | 5,815 | 6,162 | 7,681 |
General and administrative | |||
Non-cash equity-based compensation expense related to the 2012 Plan and 2012 ESPP | |||
Total | $ 15,313 | $ 13,549 | $ 13,017 |
Equity-Based Compensation - S_2
Equity-Based Compensation - Summary of stock option awards and weighted average exercise price per option (Details) | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Plan Options | |
Options outstanding at the beginning of the period (in shares) | shares | 1,183,130 |
Options granted (in shares) | shares | 19,041 |
Special Dividend Adjustment (in shares) | shares | 59,074 |
Options exercised (in shares) | shares | (91,205) |
Options cancelled or expired (in shares) | shares | (43,585) |
Options outstanding at the end of the period (in shares) | shares | 1,126,455 |
Options vested and expected to vest at the end of the period (in shares) | shares | 343,624 |
Weighted Average Exercise Price | |
Options outstanding at the beginning of the period (in dollars per unit) | $ / shares | $ 55.14 |
Options granted (in dollars per share) | $ / shares | 47.80 |
Special Dividend Adjustment (in dollars per share) | $ / shares | 0 |
Options exercised (in dollars per share) | $ / shares | 26.91 |
Options cancelled or expired (in dollars per share) | $ / shares | 53.85 |
Options outstanding at the end of the period (in dollars per unit) | $ / shares | 54.46 |
Options vested and expected to vest at the end of the period (in dollars per shares) | $ / shares | $ 33.91 |
Equity-Based Compensation - Int
Equity-Based Compensation - Intrinsic value of the Company's stock options (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Stock options outstanding | $ 2,500 | $ 6,400 |
Stock options exercisable | 1,800 | 3,600 |
Stock options vested and expected to vest | $ 2,500 | $ 6,400 |
Equity-Based Compensation - Wei
Equity-Based Compensation - Weighted average assumptions (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 6 years 3 months 12 days | 6 years 2 months 12 days | 6 years 3 months 18 days |
Volatility | 47.80% | 50.00% | 52.50% |
Risk-free interest rate | 2.625% | 2.15% | 1.48% |
Dividend yield | 0.00% | 0.00% | 0.00% |
Weighted average fair value per share granted (in dollars per share) | $ 23.64 | $ 24.19 | $ 19.03 |
2012 ESPP | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 6 months | ||
Volatility | 59.10% | ||
Risk-free interest rate | 0.46% | ||
Dividend yield | 0.00% |
Equity-Based Compensation - S_3
Equity-Based Compensation - Summary of the Company's RSUs activity (Details) - Restricted Stock Units | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Plan RSUs | |
Non-vested balance at the beginning of the period (in shares) | shares | 1,173,160 |
Units granted (in shares) | shares | 576,192 |
Special Dividend Adjustment (in shares) | shares | 59,888 |
Units vested (in shares) | shares | (402,734) |
Units cancelled or forfeited (in shares) | shares | (343,181) |
Non-vested balance at the end of the period (in shares) | shares | 1,063,325 |
Non-vested and deferred balance (in dollars per share) | shares | 1,084,453 |
Weighted Average Fair Value | |
Non-vested balance at the beginning of the period (in dollars per share) | $ / shares | $ 43.79 |
Units granted (in dollars per share) | $ / shares | 47.92 |
Special Dividend Adjustment (in dollars per share) | $ / shares | 0 |
Units vested (in dollars per share) | $ / shares | 42.18 |
Units cancelled or forfeited (in dollars per share) | $ / shares | 43.56 |
Non-vested balance at the end of the period (in dollars per share) | $ / shares | 44.23 |
Non-vested and deferred balance (in shares) | $ / shares | $ 44.49 |
Equity-Based Compensation - Nar
Equity-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | Aug. 01, 2018 | Jan. 01, 2018 | Jan. 01, 2017 | Apr. 24, 2014 | Oct. 10, 2012 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Intrinsic value of total stock options exercised | $ 2 | $ 1.6 | $ 10.6 | |||||
Options granted (in shares) | 19,041 | |||||||
Options granted (in dollars per share) | $ 47.80 | |||||||
Stock Options | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Unrecognized compensation charge | $ 7.9 | |||||||
Stock Options | Chief Executive Officer | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Options granted (in shares) | 527,000 | 500,000 | ||||||
Options granted (in dollars per share) | $ 76.73 | $ 80.94 | ||||||
Closing price of the common stock (in dollars per share) | $ 161.88 | |||||||
Consideration period for awards granted | 90 days | |||||||
Service period for amortization of awards | 6 years | |||||||
Total fair value of the grant | $ 21.6 | |||||||
Restricted Stock Units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Units granted (in shares) | 576,192 | |||||||
Unrecognized compensation charge | $ 30.2 | |||||||
Restricted Stock Units | Chief Executive Officer | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Units granted (in shares) | 105,000 | 100,000 | ||||||
Closing price of the common stock (in dollars per share) | $ 161.88 | |||||||
Consideration period for awards granted | 90 days | |||||||
Total fair value of the grant | $ 5.8 | |||||||
2012 Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Maximum number of shares/notional units available for issuance (shares) | 6,750,000 | |||||||
Annual increase in shares available for issuance (shares) | 1,500,000 | |||||||
Annual increase in the shares available for issuance as a percentage of common stock outstanding as of the last day of immediately preceding fiscal year | 3.00% | |||||||
2012 Plan | Stock Options | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Automatic increase (in shares) | 1,041,000 | 1,044,000 | ||||||
2012 ESPP | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Maximum percentage of eligible compensation considered for payroll deduction to purchase the common stock | 15.00% | |||||||
Maximum purchase of shares by participating employees during each offering period | 1,000 | |||||||
Percentage of lower of fair market value of common stock | 85.00% | |||||||
Number of shares issued under ESPP | 233,000 |
Other (Expense)_Income, net (De
Other (Expense)/Income, net (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Other Nonoperating Income (Expense) [Abstract] | |||||||||||
Foreign currency (loss) / gain | $ (1,807) | $ 2,841 | $ (167) | ||||||||
Change in contingent consideration fair value | 0 | 0 | (1,271) | ||||||||
Impairment of long-term investment asset | (5,881) | 0 | 0 | ||||||||
Interest income | 2,736 | 891 | 149 | ||||||||
Other (expense) / income, net | $ 1,048 | $ 217 | $ (7,019) | $ 802 | $ 1,637 | $ 130 | $ 1,510 | $ 455 | $ (4,952) | $ 3,732 | $ (1,289) |
Income Taxes - Income Before In
Income Taxes - Income Before Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||||||||||
Domestic | $ 68,596 | $ 24,558 | $ 38,549 | ||||||||
Foreign | (2,483) | 5,523 | 5,948 | ||||||||
Income before income taxes | $ 16,687 | $ 6,916 | $ (1,394) | $ 5,291 | $ 8,828 | $ 5,700 | $ 4,795 | $ 10,758 | $ 66,113 | $ 30,081 | $ 44,497 |
Income Taxes - Consolidated Pro
Income Taxes - Consolidated Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current provision (benefit): | |||
Federal | $ 7,670 | $ (4,813) | $ 6,389 |
State and local | 4,800 | 112 | 852 |
Foreign | 5,226 | 5,564 | 2,861 |
Deferred provision (benefit): | |||
Federal | (2,901) | 14,578 | 3,376 |
State and local | (164) | 523 | (34) |
Foreign | (3,205) | (2,610) | (1,575) |
Provision for income taxes | $ 11,426 | $ 13,354 | $ 11,869 |
Income Taxes - Tax Rate Reconci
Income Taxes - Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Effective income tax rate reconciliation: | |||
U.S. income tax at federal statutory rate | 21.00% | 35.00% | 35.00% |
Tax credits | (5.40%) | (4.00%) | (12.00%) |
State and local taxes, net of federal benefit | 1.90% | 2.10% | 2.90% |
Equity-based compensation | (0.40%) | 1.90% | 2.10% |
Foreign rate differential | 0.50% | (2.30%) | (1.80%) |
Foreign-derived intangible income deduction | (3.70%) | 0.00% | 0.00% |
Uncertain tax positions | 3.60% | 5.20% | (0.40%) |
Transition tax related to TCJA | (0.30%) | 2.60% | 0.00% |
U.S. Federal rate change related to TCJA | 0.00% | 12.40% | 0.00% |
Domestic production activities deduction | (0.00%) | (9.80%) | (0.00%) |
Non-deductible—other | 0.10% | 1.30% | 0.90% |
Total provision for income taxes | 17.30% | 44.40% | 26.70% |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Non-cash equity-based compensation | $ 9,383 | $ 8,342 |
Intangible amortization | 3,252 | 4,555 |
Non-income tax accruals | 3,087 | 2,887 |
Deferred rent | 2,537 | 2,484 |
Other liabilities | 6,523 | 2,895 |
Deferred tax assets | 24,782 | 21,163 |
Deferred tax liabilities: | ||
Depreciation and amortization | (12,484) | (12,888) |
Net deferred tax assets | $ 12,298 | $ 8,275 |
Income Taxes - Changes in Unrec
Income Taxes - Changes in Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of unrecognized tax benefits | |||
Balance of unrecognized tax benefits at January 1 | $ 2,966 | $ 1,455 | $ 1,479 |
Gross additions for tax positions for prior years | 332 | 1,412 | 886 |
Gross additions for tax positions for current year | 3,476 | 273 | 360 |
Gross expirations | (928) | (174) | (1,270) |
Balance of unrecognized tax benefits at December 31 | $ 5,846 | $ 2,966 | $ 1,455 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Impact of remeasuring deferred tax balances | $ 3,700 | |
Transition tax expense | 800 | |
Non-cash equity-based compensation | 9,383 | $ 8,342 |
Impact on effective tax rate on recognition of unrecognized tax benefits | 5,400 | |
Undistributed earnings attributable to its foreign subsidiaries | 12,700 | |
Unrecognized deferred tax liability related to undistributed earnings | 1,300 | |
Chief Executive Officer | Performance Shares And Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Non-cash equity-based compensation | 5,600 | |
Canada | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Operating loss carryforwards | 9,100 | |
U.K. | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Operating loss carryforwards | $ 7,800 |
Net Income Per Share (Details)
Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |||||||||||
Net income | $ 54,687 | $ 16,727 | $ 32,628 | ||||||||
Shares used to compute basic net income per share (in shares) | 35,047 | 34,991 | 34,913 | 34,784 | 34,686 | 34,643 | 34,581 | 34,597 | 34,935 | 34,627 | 35,114 |
Dilutive potential common shares: | |||||||||||
Stock options and employee stock purchase plan shares (in shares) | 117 | 388 | 441 | ||||||||
Unvested restricted stock awards (in shares) | 368 | 276 | 306 | ||||||||
Shares used to compute diluted net income per share (in shares) | 35,421 | 35,570 | 34,913 | 35,318 | 35,149 | 35,177 | 35,250 | 35,595 | 35,420 | 35,291 | 35,861 |
Basic net income per share (in dollars per share) | $ 0.43 | $ 0.21 | $ (0.01) | $ 0.94 | $ 0.06 | $ 0.14 | $ 0.09 | $ 0.19 | $ 1.57 | $ 0.48 | $ 0.93 |
Diluted net income per share (in dollars per share) | $ 0.42 | $ 0.21 | $ (0.01) | $ 0.92 | $ 0.06 | $ 0.14 | $ 0.09 | $ 0.19 | $ 1.54 | $ 0.47 | $ 0.91 |
Potentially dilutive shares included in the calculation (in shares) | 1,285 | 1,384 | 1,954 | ||||||||
Anti-dilutive shares excluded from the calculation (in shares) | 1,020 | 1,325 | 999 |
Segment and Geographic Inform_3
Segment and Geographic Information - Schedule of Segment Reporting Information, by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | ||||||||||||
Revenue | $ 162,072 | $ 151,575 | $ 156,584 | $ 153,019 | $ 151,829 | $ 141,063 | $ 133,995 | $ 130,224 | $ 557,111 | $ 623,250 | $ 557,111 | $ 494,317 |
Operating Expenses | 146,433 | 144,876 | 150,959 | 148,530 | 144,638 | 135,493 | 130,710 | 119,921 | 590,798 | 530,762 | 448,531 | |
Income from operations | $ 15,639 | $ 6,699 | $ 5,625 | $ 4,489 | $ 7,191 | $ 5,570 | $ 3,285 | $ 10,303 | 32,452 | 26,349 | 45,786 | |
Unallocated corporate expenses | 97,800 | 96,500 | 67,700 | |||||||||
Content Segment | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenue | 620,539 | 541,088 | 483,278 | |||||||||
Operating Expenses | 490,985 | 417,507 | 364,631 | |||||||||
Income from operations | 129,554 | 123,581 | 118,647 | |||||||||
Corporate | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenue | 2,711 | 16,023 | 11,039 | |||||||||
Operating Expenses | 99,813 | 113,255 | 83,900 | |||||||||
Income from operations | $ (97,102) | $ (97,232) | $ (72,861) |
Segment and Geographic Inform_4
Segment and Geographic Information - Revenue from External Customers by Geographic Areas (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | ||||||||||||
Revenue | $ 162,072 | $ 151,575 | $ 156,584 | $ 153,019 | $ 151,829 | $ 141,063 | $ 133,995 | $ 130,224 | $ 557,111 | $ 623,250 | $ 557,111 | $ 494,317 |
North America | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenue | 230,890 | 218,865 | 197,650 | |||||||||
Europe | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenue | 207,634 | 181,693 | 161,906 | |||||||||
Rest of the world | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenue | $ 184,726 | $ 156,553 | $ 134,761 |
Segment and Geographic Inform_5
Segment and Geographic Information - Narrative (Details) - Geographic Concentration Risk | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Sales Revenue, Services, Net | United States | |||
Concentration Risk [Line Items] | |||
Revenue percent | 34.00% | 35.00% | |
Sales Revenue, Services, Net | United Kingdom | |||
Concentration Risk [Line Items] | |||
Revenue percent | 8.00% | ||
Long-Lived Tangible Assets | United States | |||
Concentration Risk [Line Items] | |||
Revenue percent | 88.00% | 92.00% |
Segment and Geographic Inform_6
Segment and Geographic Information - Long-lived Assets by Geographic Areas (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total long-lived tangible assets | $ 76,188 | $ 85,698 |
North America | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total long-lived tangible assets | 71,758 | 83,027 |
Europe | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total long-lived tangible assets | 4,371 | 2,599 |
Rest of the world | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total long-lived tangible assets | $ 59 | $ 72 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of future minimum lease payments under non-cancelable operating leases (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Operating Leases | |
2,019 | $ 9,913 |
2,020 | 8,762 |
2,021 | 7,493 |
2,022 | 6,829 |
2,023 | 6,082 |
Thereafter | 39,481 |
Total minimum lease payments | 78,560 |
Other Obligations | |
2,019 | 29,758 |
2,020 | 27,056 |
2,021 | 13,770 |
2,022 | 3,333 |
2,023 | 0 |
Thereafter | 0 |
Total other obligations | $ 73,917 |
Commitments and Contingencies_2
Commitments and Contingencies - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Loss Contingencies [Line Items] | |||
Rental expense inclusive of operating leases | $ 9,200,000 | $ 8,500,000 | $ 7,200,000 |
Total minimum lease payments | 78,560,000 | ||
Letter of credit as a security deposit for the leased facilities | 2,600,000 | ||
Cash collateral | 2,600,000 | ||
Other obligations | 73,917,000 | ||
Maximum aggregate obligation liability | 10,000 | ||
Recorded liabilities | 0 | ||
Corporate Headquarters | |||
Loss Contingencies [Line Items] | |||
Total minimum lease payments | $ 67,400,000 |
Unaudited Quarterly Financial_3
Unaudited Quarterly Financial Data (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||||||
Revenue | $ 162,072 | $ 151,575 | $ 156,584 | $ 153,019 | $ 151,829 | $ 141,063 | $ 133,995 | $ 130,224 | $ 557,111 | $ 623,250 | $ 557,111 | $ 494,317 |
Operating expenses: | ||||||||||||
Cost of revenue | 68,829 | 66,461 | 67,891 | 64,490 | 64,590 | 58,812 | 57,289 | 52,411 | 267,671 | 233,102 | 203,129 | |
Sales & marketing | 43,034 | 41,028 | 42,018 | 40,368 | 40,844 | 36,008 | 37,109 | 32,503 | 166,448 | 146,464 | 126,626 | |
Product development | 11,689 | 14,032 | 16,728 | 16,448 | 15,210 | 13,340 | 12,892 | 11,044 | 58,897 | 52,486 | 47,789 | |
General and administrative | 22,881 | 23,355 | 24,322 | 27,224 | 23,994 | 27,333 | 23,420 | 23,963 | 97,782 | 98,710 | 70,987 | |
Total operating expenses | 146,433 | 144,876 | 150,959 | 148,530 | 144,638 | 135,493 | 130,710 | 119,921 | 590,798 | 530,762 | 448,531 | |
Income from operations | 15,639 | 6,699 | 5,625 | 4,489 | 7,191 | 5,570 | 3,285 | 10,303 | 32,452 | 26,349 | 45,786 | |
Gain on Sale of Webdam | 0 | 0 | 0 | 38,613 | 0 | 0 | 0 | 0 | 38,613 | 0 | 0 | |
Other (expense) / income, net | 1,048 | 217 | (7,019) | 802 | 1,637 | 130 | 1,510 | 455 | (4,952) | 3,732 | (1,289) | |
Income before income taxes | 16,687 | 6,916 | (1,394) | 5,291 | 8,828 | 5,700 | 4,795 | 10,758 | 66,113 | 30,081 | 44,497 | |
Provision for income taxes | 1,774 | (531) | (1,140) | 11,323 | 6,772 | 698 | 1,729 | 4,155 | $ 11,426 | $ 13,354 | $ 11,869 | |
Net income available to common stockholders | $ 14,913 | $ 7,447 | $ (254) | $ (6,032) | $ 2,056 | $ 5,002 | $ 3,066 | $ 6,603 | ||||
Net income per common share available to common stockholders: | ||||||||||||
Basic (in dollars per share) | $ 0.43 | $ 0.21 | $ (0.01) | $ 0.94 | $ 0.06 | $ 0.14 | $ 0.09 | $ 0.19 | $ 1.57 | $ 0.48 | $ 0.93 | |
Diluted (in dollars per share) | $ 0.42 | $ 0.21 | $ (0.01) | $ 0.92 | $ 0.06 | $ 0.14 | $ 0.09 | $ 0.19 | $ 1.54 | $ 0.47 | $ 0.91 | |
Weighted average shares outstanding: | ||||||||||||
Basic (in shares) | 35,047 | 34,991 | 34,913 | 34,784 | 34,686 | 34,643 | 34,581 | 34,597 | 34,935 | 34,627 | 35,114 | |
Diluted (in shares) | 35,421 | 35,570 | 34,913 | 35,318 | 35,149 | 35,177 | 35,250 | 35,595 | 35,420 | 35,291 | 35,861 | |
Equity based compensation | $ 23,869 | $ 24,958 | $ 28,080 | |||||||||
Impact of remeasuring deferred tax balances | 3,700 | |||||||||||
Transition tax expense | 800 | |||||||||||
Restatement Adjustment | ||||||||||||
Operating expenses: | ||||||||||||
General and administrative | $ 800 | $ 100 | ||||||||||
Enterprise | ||||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||||||
Revenue | $ 208,713 | $ 254,809 | $ 164,384 | |||||||||
Enterprise | Restatement Adjustment | ||||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||||||
Revenue | $ (800) | $ 400 | $ 900 | $ (600) |