Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2014 |
Accounting Policies [Abstract] | ' |
Summary of Significant Accounting Policies | ' |
Summary of Significant Accounting Policies |
Basis of Presentation and Principles of Consolidation |
These unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (‘‘U.S. GAAP’’). In accordance with U.S. GAAP requirements for interim financial statements, these condensed consolidated financial statements do not include certain information and note disclosures that are normally included in annual financial statements prepared in conformity with U.S. GAAP. Accordingly, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto as of September 30, 2013 and 2012 and for each of the three years in the period ended September 30, 2013 included in the Company's Annual Report on Form 10-K filed on November 26, 2013 and with the condensed consolidated financial statements and the notes thereto as of and for the three months ended December 31, 2013 included in the Company's Transition Report on Form 10-Q filed on May 9, 2014. In the Company’s opinion, the condensed consolidated financial statements contain all adjustments (which are of a normal, recurring nature) necessary to present fairly, in all material respects, the Company’s consolidated financial position, results of operations and cash flows for the periods presented. Interim results may not be indicative of results that may be realized for the full year. |
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In October 2012, the Company and Minter Ellison, a law firm in Australia, formed a joint venture, Textura Australasia, Pty. Ltd. (the “Joint Venture”), to offer the Company’s construction collaboration software solutions to the Australia and New Zealand markets. Both parties had contributed cash of $400, denominated in Australian dollars, for their respective 50% interests in the Joint Venture, and both parties had loaned the Joint Venture $100, denominated in Australian dollars, to fund its ongoing operations. The Company had consolidated the financial results of the Joint Venture because the Company had determined that the Joint Venture was a variable interest entity and that it was the primary beneficiary. The Company was the primary beneficiary of the Joint Venture due to its controlling financial interest through its authority with regard to hiring key employees and decision making of its central operations. Due to certain redemption provisions in the joint venture agreement, the Company had reflected Minter Ellison’s financial interest as redeemable non-controlling interest in the condensed consolidated balance sheet at its redemption value. On June 30, 2014, the Company purchased Minter Ellison’s interest in the Joint Venture for cash consideration of $1,743; including an equity buyout of $1,563, repayment of Minter Ellison's loan of $100 to the Joint Venture, denominated in Australian dollars, and the payment of all outstanding payables owed by the Joint Venture to Minter Ellison, resulting in Textura's 100% ownership of Textura Australasia, Pty. Ltd. The equity buyout and the payoff of the Minter Ellison loan were accounted for as financing activities in the cash flow statement and reflected within additional paid-in capital on our balance sheet. The payment of outstanding payables owed to Minter Ellison was reflected within operating activities in the cash flow statement. |
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Segment Reporting |
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The Company has one operating segment, providing on-demand business collaboration software solutions to the commercial construction industry. The Company’s chief operating decision maker, the Chief Executive Officer, manages the Company’s operations based on consolidated financial information for purposes of evaluating financial performance and allocating resources. |
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Use of Estimates |
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The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The estimates and assumptions used in the accompanying financial statements are based upon management’s evaluation of the relevant facts and circumstances at the balance sheet date. Actual results could differ from those estimates. Significant estimates are involved in the Company’s revenue recognition, depreciation, amortization and assumptions for share‑based payments. |
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Revenue Recognition |
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For the Company’s CPM, Submittal Exchange and Greengrade solutions, the Company earns revenue from owners/developers, general contractors and architects in the form of monthly fees, project fees and subscription fees; and from subcontractors in the form of usage fees. For the Company’s GradeBeam, PQM and BidOrganizer solutions, the Company earns revenue in the form of subscription fees. For the LATISTA solution, which was acquired by the Company in December 2013 (see Note 3), the Company earns revenue from subscription fees and related professional services. The Company’s arrangements do not contain general rights of return and do not provide customers with the right to take possession of the software supporting the solutions and, as a result, are accounted for as service contracts. |
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The Company’s on-demand solutions often include implementation, training and support. The Company evaluates whether the individual deliverables in its arrangements qualify as separate units of accounting. In order to treat deliverables in a multiple deliverable arrangement as separate units of accounting, the deliverables must have standalone value upon delivery. In determining whether deliverables have standalone value, the Company considers whether solutions are sold to new customers without implementation, training and support, the nature of these services provided and the availability of these services from other vendors. The Company concluded that implementation, training and support do not have standalone value because for the majority of its solutions, they are never sold separately, do not have value to the customer without the solution and are not available from other vendors. Accordingly, the total consideration for each arrangement is generally treated as a single unit of accounting. |
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The Company recognizes this revenue when there is evidence that an agreement exists with the customer and the customer has begun deriving benefit from use of the solution, the fee is fixed and determinable, delivery of services has occurred, and collection of payment from the project participant is reasonably assured. The Company recognizes project fees and usage fees ratably over the average estimated life of the project and contract, respectively, and recognizes subscription fees over the subscription period. The average estimated life of the project and contract is estimated by management based on periodic review and analysis of historical data. The applicable estimated life is based on the project or contract value falling within certain predetermined ranges, as well as the solution on which the project is being managed. The Company performs periodic reviews of actual project and contract data and revises estimates as necessary. Estimated project life durations range from 6 to 29 months, and estimated contract life durations range from 4 to 18 months. Subscription periods typically range from 6 to 36 months. |
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For its PlanSwift solution, the Company earns revenue from the sale of software licenses and related maintenance and training. License revenue is recognized upon delivery of the license, maintenance revenue is recognized ratably over the period of the maintenance contract, which is generally one year, and training revenue is recognized when the services are delivered to the client. For multiple-element arrangements that include a perpetual license for which the Company has not established vendor-specific objective evidence of fair value ("VSOE") and either maintenance or both maintenance and training, the Company uses the residual method to determine the amount of license revenue to be recognized. Under the residual method, consideration is allocated to the undelivered elements based upon VSOE of those elements with the residual of the arrangement fee allocated to and recognized as license revenue. For multiple-element arrangements that include a perpetual license for which the Company has established VSOE and either maintenance or both maintenance and training, the Company allocates the revenue among the different elements of the arrangement based on each element's relative VSOE. For subscription-based licenses, which include maintenance, the Company recognizes the subscription fees ratably over the subscription periods, which typically range from 1 to 6 months. |
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The Company has established VSOE based on its historical pricing and discounting practices for maintenance, training and certain software licenses when sold separately. In establishing VSOE, the Company requires that a substantial majority of the selling prices for these services fall within a reasonably narrow pricing range. The application of VSOE methodologies requires judgment, including the identification of individual elements in multiple element arrangements and whether there is VSOE of fair value for some or all elements. |
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Goodwill |
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Goodwill represents the excess of the purchase price of an acquired business over the fair value of the net assets acquired and is not amortized. Goodwill is subject to impairment testing at least annually, unless it is determined after a qualitative assessment that it is more likely than not that the fair value of the reporting unit is greater than its carrying amount. On an annual basis, or in interim periods if indicators of potential impairment exist, goodwill is measured for impairment. The Company tests goodwill for impairment at a single reporting unit level and it has not reported any goodwill impairments to date. |
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The Company evaluated both qualitative and quantitative characteristics in determining its reporting units. Based on this evaluation, it determined that it has one reporting unit. The Company's management team reviews historical profit and loss information and metrics on a consolidated basis. The Company believes that goodwill is recoverable from the overall operations given the economies of scale and leveraging capabilities of the various components. |
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The Company conducts its annual test for goodwill impairment in the third calendar quarter. In the quarter ended September 30, 2014, the Company performed a qualitative assessment to determine whether it was more likely than not that the fair value of goodwill was less than its carrying amount. After consideration of market capitalization, the health and growth of our business and overall macroeconomic factors, the Company determined that it was more likely than not that the fair value of goodwill exceeded its carrying amount and further analysis was not necessary. |
Foreign Currency Transactions |
The functional currency of the Company is the United States Dollar. Asset and liability balances denominated in a foreign currency are remeasured to U.S. dollars at end-of-period exchange rates. Foreign currency income and expenses are remeasured at average exchange rates in effect during the period. Foreign currency translation differences have not been material to date and have been included in the statement of operations as incurred through March 31, 2013. Beginning in the quarter ended June 30, 2013, the Company recorded foreign currency translation differences in accumulated other comprehensive income (loss). |
Net Loss Per Share |
Basic net loss per share available to Textura Corporation common stockholders is calculated by dividing the net loss available to Textura Corporation common stockholders by the weighted average number of common shares outstanding, less any treasury shares, during the period. |
Prior to the completion of the Company's initial public offering in June 2013 (the ‘‘IPO’’), in calculating net loss available to common stockholders, cumulative undeclared preferred stock dividends on the Series A-2 preferred stock and accretion in the redemption value of the redeemable Series A-1 preferred stock and redeemable non-controlling interest were deducted from net loss attributable to Textura Corporation stockholders. Although the redeemable Series A-1 preferred stock, Series A-2 preferred stock, and non-controlling interest were participating securities, there was no allocation of the Company’s net losses to these participating securities under the two-class method because they were not contractually required to share in the Company’s losses. Subsequent to the IPO, which resulted in the automatic conversion of the outstanding preferred stock into common stock, the Company only deducts the redeemable non-controlling interest accretion from net loss attributable to Textura Corporation stockholders. |
The following outstanding securities were excluded from the computation of diluted net loss per share available to Textura Corporation common stockholders as their inclusion would have been anti-dilutive: |
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| As of September 30, |
| 2014 | | 2013 |
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Outstanding restricted stock units | 70 | | | 709 | |
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Outstanding stock options | 3,391 | | | 3,302 | |
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Outstanding common and preferred warrants | 1,273 | | | 1,321 | |
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Outstanding employee stock purchase plan units | 3 | | | — | |
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Total excluded securities | 4,737 | | | 5,332 | |
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Preferred stock, Submittal Exchange Holdings Class A preferred units and restricted stock units were considered contingently issuable common shares prior to the IPO and, accordingly, were not included in diluted earnings per share because the contingency had not been met. The table also excludes conversion of 2011 Debentures (see Note 10), because the number of shares upon conversion could not be calculated until an initial public offering. |
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Recently Issued Accounting Standards |
In August 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-15 (‘‘ASU 2014-15’’), “Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern.’’ Under the new guidance, management will be required to assess an entity's ability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. The provisions of ASU 2014-15 are effective for annual reporting periods beginning after December 15, 2016, and for annual and interim periods thereafter. |
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In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-09 (‘‘ASU 2014-09’’), “Revenue from Contracts with Customers.” ASU 2014-09 supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605)”, and requires entities to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is not permitted. The Company is currently in the process of evaluating the impact of the adoption of ASU 2014-09 on its consolidated financial statements. |
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Changes in Estimates |
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During the nine months ended September 30, 2014, the Company recorded a change in estimate of $375 to bonus expense that it recorded during the three months ended December 31, 2013. As a result, during the nine months ended September 30, 2014, net loss decreased by $375, and net loss per share decreased by $0.01. |