Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Feb. 19, 2016 | Jun. 30, 2015 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | BNFT | ||
Entity Registrant Name | Benefitfocus,Inc. | ||
Entity Central Index Key | 1,576,169 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 29,206,901 | ||
Entity Public Float | $ 296,984,743 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 48,074 | $ 51,074 |
Marketable securities | 40,448 | 5,135 |
Accounts receivable, net | 27,616 | 21,311 |
Accounts receivable, related party | 2,082 | |
Prepaid expenses and other current assets | 5,725 | 4,242 |
Total current assets | 123,945 | 81,762 |
Property and equipment, net | 55,037 | 54,021 |
Intangible assets, net | 665 | 951 |
Goodwill | 1,634 | 1,634 |
Other non-current assets | 838 | 1,650 |
Total assets | 182,119 | 140,018 |
Current liabilities: | ||
Accounts payable | 7,953 | 5,589 |
Accrued expenses | 10,449 | 9,171 |
Accrued compensation and benefits | 20,684 | 17,374 |
Deferred revenue, current portion | 37,858 | 20,384 |
Revolving line of credit, current portion | 25,000 | |
Financing and capital lease obligations, current portion | 3,648 | 4,197 |
Total current liabilities | 105,592 | 56,715 |
Deferred revenue, net of current portion | 55,671 | 74,126 |
Revolving line of credit, net of current portion | 5,246 | 17,657 |
Financing and capital lease obligations, net of current portion | 31,183 | 32,240 |
Other non-current liabilities | 2,436 | 2,103 |
Total liabilities | $ 200,128 | $ 182,841 |
Commitments and contingencies | ||
Stockholders' deficit: | ||
Preferred stock, par value $0.001, 5,000,000 shares authorized, no shares issued and outstanding at December 31, 2015 and 2014 | ||
Common stock, par value $0.001, 50,000,000 shares authorized, 29,194,332 and 25,608,937 shares issued and outstanding at December 31, 2015 and 2014, respectively | $ 29 | $ 26 |
Additional paid-in capital | 310,304 | 223,409 |
Accumulated deficit | (328,342) | (266,258) |
Total stockholders' deficit | (18,009) | (42,823) |
Total liabilities and stockholders' deficit | $ 182,119 | $ 140,018 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 29,194,332 | 25,608,937 |
Common stock, shares outstanding | 29,194,332 | 25,608,937 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenue | $ 185,143 | $ 137,420 | $ 104,752 |
Cost of revenue | 102,851 | 87,470 | 62,411 |
Gross profit | 82,292 | 49,950 | 42,341 |
Operating expenses: | |||
Sales and marketing | 58,589 | 48,467 | 36,072 |
Research and development | 52,250 | 41,729 | 23,532 |
General and administrative | 25,727 | 18,657 | 10,974 |
Change in fair value of contingent consideration | (43) | ||
Total operating expenses | 136,566 | 108,853 | 70,535 |
Loss from operations | (54,274) | (58,903) | (28,194) |
Other income (expense): | |||
Interest income | 188 | 77 | 46 |
Interest expense on building lease financing obligations | (7,092) | (3,624) | (1,768) |
Interest expense on other borrowings | (877) | (682) | (381) |
Other expense | (4) | (22) | (95) |
Total other expense, net | (7,785) | (4,251) | (2,198) |
Loss before income taxes | (62,059) | (63,154) | (30,392) |
Income tax expense (benefit) | 25 | 25 | (31) |
Net loss | (62,084) | (63,179) | (30,361) |
Comprehensive loss | $ (62,084) | $ (63,179) | $ (30,361) |
Net loss per common share: | |||
Basic and diluted | $ (2.19) | $ (2.51) | $ (2.99) |
Weighted-average common shares outstanding: | |||
Basic and diluted | 28,344,680 | 25,207,099 | 10,144,243 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' (Deficit) Equity - USD ($) $ in Thousands | Total | Common Stock, No Par Value | Common Stock, $0.001 Par Value | Additional Paid-in Capital | Accumulated Deficit |
Balance (in shares) at Dec. 31, 2012 | 4,792,347 | ||||
Balance at Dec. 31, 2012 | $ (166,609) | $ 6,109 | $ (172,718) | ||
Exercise of stock options (in shares) | 71,694 | 129,750 | |||
Exercise of stock options | 699 | $ 168 | $ 531 | ||
Issuance of common stock (in shares) | 5,000 | ||||
Issuance of common stock | 68 | $ 68 | |||
Effects of corporate restructuring | $ (7,328) | $ 5 | 7,323 | ||
Effects of corporate restructuring (in shares) | (4,869,041) | 4,869,041 | |||
Initial public offering, net of issuance costs (in shares) | 3,000,000 | ||||
Initial public offering, net of issuance costs | 70,064 | $ 3 | 70,061 | ||
Conversion of redeemable convertible preferred stock (in shares) | 16,496,860 | ||||
Conversion of redeemable convertible preferred stock | 135,477 | $ 16 | 135,461 | ||
Stock-based compensation expense | 1,202 | $ 537 | 665 | ||
Accretion of customer warrant | 892 | $ 446 | 446 | ||
Net loss | (30,361) | (30,361) | |||
Balance (in shares) at Dec. 31, 2013 | 24,495,651 | ||||
Balance at Dec. 31, 2013 | 11,432 | $ 24 | 214,487 | (203,079) | |
Exercise of stock options (in shares) | 642,152 | ||||
Exercise of stock options | 2,818 | $ 1 | 2,817 | ||
Issuance of common stock upon vesting of restricted stock units, net of shares surrendered for taxes | (226) | (226) | |||
Issuance of common stock upon vesting of restricted stock units, net of shares surrendered for taxes (in shares) | 15,613 | ||||
Issuance of common stock for cashless exercise of warrant (in shares) | 455,521 | ||||
Issuance of common stock for cashless exercise of warrant | $ 1 | (1) | |||
Stock-based compensation expense | 5,588 | 5,588 | |||
Accretion of customer warrant | 744 | 744 | |||
Net loss | (63,179) | (63,179) | |||
Balance (in shares) at Dec. 31, 2014 | 25,608,937 | ||||
Balance at Dec. 31, 2014 | $ (42,823) | $ 26 | 223,409 | (266,258) | |
Exercise of stock options (in shares) | 656,043 | 656,043 | |||
Exercise of stock options | $ 4,229 | 4,229 | |||
Issuance of common stock upon vesting of restricted stock units, net of shares surrendered for taxes | (2,116) | (2,116) | |||
Issuance of common stock upon vesting of restricted stock units, net of shares surrendered for taxes (in shares) | 111,826 | ||||
Issuance of common stock and warrant, net of issuance costs | $ 74,331 | $ 3 | 74,328 | ||
Issuance of common stock and warrant, net of issuance costs (in shares) | 2,817,526 | ||||
Conversion of redeemable convertible preferred stock (in shares) | 16,496,860 | ||||
Stock-based compensation expense | $ 10,454 | 10,454 | |||
Net loss | (62,084) | (62,084) | |||
Balance (in shares) at Dec. 31, 2015 | 29,194,332 | ||||
Balance at Dec. 31, 2015 | $ (18,009) | $ 29 | $ 310,304 | $ (328,342) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities | |||
Net loss | $ (62,084) | $ (63,179) | $ (30,361) |
Adjustments to reconcile net loss to net cash and cash equivalents (used in) provided by operating activities: | |||
Depreciation and amortization | 11,664 | 9,493 | 8,172 |
Stock-based compensation expense | 10,454 | 5,588 | 1,202 |
Change in fair value and accretion of warrant | 744 | 892 | |
Interest accrual on financing obligation | 7,092 | 3,624 | 1,768 |
Change in fair value of contingent consideration | (17) | ||
Provision for doubtful accounts | 22 | (32) | |
Loss on disposal or impairment of property and equipment | 18 | 25 | 65 |
Changes in operating assets and liabilities: | |||
Accounts receivable, net | (7,800) | 2,357 | (10,264) |
Accrued interest on short-term investments | 205 | 162 | |
Prepaid expenses and other current assets | (1,328) | 833 | (1,440) |
Other non-current assets | 1,380 | 824 | |
Accounts payable | 3,418 | (199) | 2,625 |
Accrued expenses | 2,961 | 2,469 | 904 |
Accrued compensation and benefits | 3,310 | 3,192 | 4,521 |
Deferred revenue | (1,189) | 14,288 | 22,701 |
Other non-current liabilities | 332 | 901 | 331 |
Net cash and cash equivalents (used in) provided by operating activities | (31,545) | (18,878) | 1,067 |
Cash flows from investing activities | |||
Purchases of short-term investments held to maturity | (68,185) | (12,959) | (13,168) |
Proceeds from maturity of short-term investments held to maturity | 32,667 | 20,830 | |
Purchases of property and equipment | (14,727) | (9,824) | (8,918) |
Proceeds from sale of property and equipment | 9 | ||
Net cash and cash equivalents used in investing activities | (50,245) | (1,953) | (22,077) |
Cash flows from financing activities | |||
Proceeds from initial public offering, net of issuance costs | 70,064 | ||
Draws on revolving line of credit | 57,492 | 14,000 | 10,757 |
Payments on revolving line of credit | (44,903) | (2,100) | (5,000) |
Proceeds from notes payable borrowing | 1,465 | ||
Repayment of notes payable | (7,447) | ||
Proceeds from exercises of stock options | 4,229 | 2,817 | 699 |
Proceeds from issuance of common stock and warrant, net of issuance costs (Excluding IPO) | 74,538 | 68 | |
Payments of deferred financing costs and debt issuance costs | (566) | ||
Remittance of taxes upon vesting of restricted stock units | (2,116) | (226) | |
Payments of contingent consideration | (311) | ||
Payments on financing and capital lease obligations | (9,884) | (8,231) | (3,343) |
Net cash and cash equivalents provided by financing activities | 78,790 | 6,260 | 66,952 |
Net (decrease) increase in cash and cash equivalents | (3,000) | (14,571) | 45,942 |
Cash and cash equivalents, beginning of year | 51,074 | 65,645 | 19,703 |
Cash and cash equivalents, end of year | 48,074 | 51,074 | 65,645 |
Supplemental disclosure of non-cash investing and financing activities | |||
Property and equipment purchases in accounts payable and accrued expenses | 1,489 | 4,226 | 524 |
Property and equipment purchased with financing and capital lease obligations | 914 | 21,739 | 5,440 |
Post contract support purchased with financing obligations | 272 | 754 | 3,872 |
Allocation of proceeds to deferred revenue from issuance of common stock based on relative selling price | 207 | ||
Supplemental disclosure of cash flow information | |||
Income taxes paid | 18 | 38 | 169 |
Interest paid | $ 6,525 | $ 2,449 | $ 2,146 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2015 | |
Organization and Description of Business | 1. Organization and Description of Business Benefitfocus, Inc. (the “Company”) provides a leading cloud-based benefits management platform for consumers, employers, insurance carriers and brokers under a software-as-a-service (“SaaS”) model. The financial statements of the Company include the financial position and operations of its wholly owned subsidiaries, Benefitfocus.com, Inc., Benefit Informatics, Inc. and BenefitStore, Inc. Benefit Informatics, Inc. was dissolved on December 31, 2015. Corporate restructuring The Company, a Delaware corporation, was originally a wholly owned subsidiary of Benefitfocus.com, Inc., the South Carolina corporation that conducts the business of the Company. On March 13, 2013, the board of directors of each of Benefitfocus, Inc. and Benefitfocus.com, Inc. approved a corporate restructuring to be effected prior to the completion of the Company’s initial public offering (“IPO”) of shares of its common stock. On September 13, 2013, the Company restructured its organization by merging Benefitfocus.com, Inc. with a newly formed South Carolina corporation, which was a wholly owned subsidiary of the Company. As a result of the corporate restructuring, Benefitfocus.com, Inc. became a wholly owned operating subsidiary of the Company. Additionally, the common and preferred stockholders of Benefitfocus.com, Inc. became common and preferred stockholders, respectively, of Benefitfocus, Inc. and warrants that were exercisable for common shares of Benefitfocus.com, Inc. became exercisable for common shares of Benefitfocus, Inc. Similarly, holders of options to purchase common shares of Benefitfocus.com, Inc. became holders of options to purchase shares of common stock of Benefitfocus, Inc. Initial Public Offering In September 2013, the Company completed its IPO in which it issued and sold 3,000,000 shares of common stock and existing shareholders sold 2,675,250 shares of common stock at a public offering price of $26.50 per share. The Company did not receive any proceeds from the sale of common stock by the existing shareholders. The Company received net proceeds of $70,064 after deducting underwriting discounts and commissions of $5,565 and other offering expenses of $3,871. Upon the closing of the IPO, all shares of the Company’s then-outstanding redeemable convertible preferred stock automatically converted into 16,496,860 shares of its $0.001 par value common stock. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Principles of Consolidation These consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. We are not the primary beneficiary of, nor do we have a controlling financial interest in, any variable interest entity. Accordingly, we have not consolidated any variable interest entity. Use of Estimates The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Such estimates include revenue recognition and the customer relationship period, allowances for doubtful accounts and returns, valuations of deferred income taxes, long-lived assets, warrants, capitalizable software development costs and the related amortization, contingent consideration, stock-based compensation, the determination of the useful lives of assets and the recognition and impairment assessment of acquired intangibles and goodwill. Determination of these transactions and account balances are based on the Company’s estimates and judgments. These estimates are based on the Company’s knowledge of current events and actions it may undertake in the future as well as on various other assumptions that it believes to be reasonable. Actual results could differ materially from these estimates. Revenue and Deferred Revenue The Company derives the majority of its revenue from software services fees, which consist primarily of monthly subscription fees paid by customers for access to and usage of the Company’s cloud-based benefits software solutions for a specified contract term. The Company also derives revenue from professional services which primarily include fees related to the integration of customers’ systems with the Company’s platform, which typically includes discovery, configuration, deployment, testing, and training. The Company recognizes revenue when there is persuasive evidence of an arrangement, the service has been provided, the fees to be paid by the customer are fixed and determinable and collectability is reasonably assured. The Company considers delivery of its cloud-based software services has commenced once it has granted the customer access to its platform. The Company’s arrangements generally contain multiple elements comprised of software services and professional services. The Company evaluates each element in an arrangement to determine whether it represents a separate unit of accounting. An element constitutes a separate unit of accounting when the delivered item has standalone value and delivery of the undelivered element is probable and within the Company’s control. When multiple deliverables included in an arrangement are separable into different units of accounting, the arrangement consideration is allocated to the identified units of accounting based on their relative selling price. Multiple deliverable arrangements accounting guidance provides a hierarchy to use when determining the relative selling price for each unit of accounting. Vendor-specific objective evidence (“VSOE”) of selling price, based on the price at which the item is regularly sold by the vendor on a standalone basis, should be used if it exists. If VSOE of selling price is not available, third-party evidence (“TPE”) of selling price is used to establish the selling price if it exists. VSOE and TPE do not currently exist for any of the Company’s deliverables. Accordingly, for arrangements with multiple deliverables that can be separated into different units of accounting, the arrangement consideration is allocated to the separate units of accounting based on the Company’s best estimate of selling price. The amount of arrangement consideration allocated is limited by contingent revenues, if any. Effective July 1, 2015, the Company determined it had established standalone value for Benefitfocus Marketplace implementation services in the Employer segment as they are now sold separately from the software services. This was primarily due to the system integrators that have been trained and certified to perform these implementation services, the successful completion of an implementation by a trained system integrator, and the sale of several software subscription arrangements to customers in the Employer segment without the Company’s implementation services. Accordingly, revenues related to implementation services for the Benefitfocus Marketplace solution in the Employer segment that are delivered after July 1, 2015 are recognized separately from the revenues earned from the Employer software subscription services. Revenues related to such implementation services are recognized at the time that the professional services have been completed. Prior to July 1, 2015, the Company did not have standalone value for implementation services related to the Benefitfocus Marketplace solution as the Company had historically performed these services to support the customers’ implementation of this solution. Revenue from implementation services with standalone value was $2,401 for the year ended December 31, 2015. Certain of the Company’s other professional services, including implementation services related to the Carrier segment, are not sold separately from the software services and there is no alternative use for them. As such, the Company has determined that those professional services do not have standalone value. Accordingly, software services and professional services are combined and recognized as a single unit of accounting. The Company generally recognizes software services fees monthly based on the number of employees covered by the relevant benefits plans at contracted rates for a specified period of time, once the criteria for revenue recognition described above have been satisfied. The Company recognizes revenue on Benefitfocus Marketplace implementation services in the Employer segment that have standalone value at the time the services have been completed and the related software services have commenced. The Company defers recognition of revenue for fees from professional services that do not have standalone value and begins recognizing such revenue once the services are delivered and the related software services have commenced, ratably over the longer of the contract term or the estimated expected life of the customer relationship. Costs incurred by the Company in connection with providing such professional services are charged to expense as incurred and are included in “Cost of revenue.” In January 2015, the Company adjusted the estimated expected life of its customer relationship. This change in estimate was the result of analyzing quantitative and qualitative observations in the market and the Company’s business. This change shortens the term over which deferred revenue will be recognized from 10 to 7 years and will be applied prospectively to unamortized professional services fees over the longer of the contract term or the adjusted estimated expected life of the customer relationship. The change in the customer relationship period increased the amount of revenue recognized during the year ended December 31, 2015, which decreased both loss from continuing operations and net loss by $6,207, and decreased loss per share by $0.22 for the year ended December 31, 2015. As a result of the change in the customer relationship period, Employer and Carrier revenue increased by $1,137 and $5,070, respectively, for the year ended December 31, 2015. Cost of Revenue Cost of revenue primarily consists of employee compensation, professional services, data center co-location costs, networking expenses, depreciation expense for computer equipment directly associated with generating revenue, amortization expense for capitalized software development costs, and infrastructure maintenance costs. In addition, the Company allocates a portion of overhead, such as rent, additional depreciation and amortization expense, and employee benefit costs, to cost of revenue based on headcount. Cash and Cash Equivalents Cash and cash equivalents consist of bank checking accounts and money market accounts. The Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. Marketable Securities Marketable securities consist of short-term investments in corporate securities. To reflect its intention, the Company classifies its marketable securities as held-to-maturity at the time of purchase. As a result, the marketable securities are recorded at amortized cost and any gains or losses realized upon maturity are reported in other expense, net in the consolidated statements of operations and comprehensive loss. Concentrations of Credit Risk The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash equivalents, marketable securities and accounts receivable. All of the Company’s cash and cash equivalents are held at financial institutions that management believes to be of high credit quality. The bank deposits of the Company might, at times, exceed federally insured limits and are generally uninsured and uncollateralized. The Company has not experienced any losses on cash and cash equivalents to date. To manage credit risk related to marketable securities, the Company invests in various types of highly rated corporate bonds, commercial paper, and various United States backed securities with maturities of less than two years. The weighted average maturity of the portfolio of investments must not exceed nine months, per the Company’s investment policy. To manage accounts receivable risk, the Company evaluates the creditworthiness of its customers and maintains an allowance for doubtful accounts. Accounts receivable were unsecured and were derived from revenue earned from customers located in the United States. Accounts receivable from one customer, North Carolina State Health Plan, represented 22.2% of the total accounts receivable at December 31, 2015. Accounts receivable from one customer, Aetna, represented 13.3% of the total accounts receivable at December 31, 2014. No customer represented more than 10% of total revenue for the years ended December 31, 2015 and 2014. Accounts Receivable and Allowance for Doubtful Accounts and Returns Accounts receivable are stated at realizable value, net of allowances for doubtful accounts and returns. The Company utilizes the allowance method to provide for doubtful accounts based on management’s evaluation of the collectability of amounts due, and other relevant factors. Bad debt expense is recorded in general and administrative expense on the consolidated statements of operations and comprehensive loss. The Company’s estimate is based on historical collection experience and a review of the current status of accounts receivable. Historically, actual write-offs for uncollectible accounts have not significantly differed from the Company’s estimates. The Company removes recorded receivables and the associated allowances when they are deemed permanently uncollectible. However, higher than expected bad debts may result in future write-offs that are greater than the Company’s estimates. The allowance for doubtful accounts was $32 and $10 as of December 31, 2015 and 2014, respectively. The allowances for returns are accounted for as reductions of revenue and are estimated based on the Company’s periodic assessment of historical experience and trends. The Company considers factors such as the time lag since the initiation of revenue recognition, historical reasons for adjustments, new customer volume, complexity of billing arrangements, timing of software availability, and past due customer billings. The allowance for returns was $2,553 and $1,653 as of December 31, 2015 and 2014, respectively. Property and Equipment Property and equipment, including capitalized software development costs, are stated at cost less accumulated depreciation and amortization. Expenditures for major additions and improvements are capitalized. Depreciation and amortization is recognized over the estimated useful lives of the related assets using the straight-line method. The estimated useful lives for significant property and equipment categories are generally as follows: Computers and related equipment 3-5 years Furniture and fixtures 7 years Other equipment 5-12 years Purchased software and licenses 1-7 years Vehicles 5 years Buildings 30 years Leasehold improvements Lesser of estimated useful life of asset or lease term Useful lives of significant assets are periodically reviewed and adjusted prospectively to reflect the Company’s current estimates of the respective assets’ expected utility. Costs associated with maintenance and repairs are expensed as incurred. In the event the Company has been deemed the owner for accounting purposes of construction projects in build-to-suit lease arrangements, the estimated construction costs incurred to date are recorded as assets in Property and Equipment, net. Upon occupancy of facilities under build-to-suit leases, the Company assesses whether arrangements qualify for sales recognition under the sale-leaseback accounting guidance. If the Company continues to be the deemed owner for accounting purposes, the cost of the building is depreciated over its estimated useful life. Capitalized Software Development Costs The Company capitalizes certain costs related to its software developed or obtained for internal use. Costs related to preliminary project activities and post-implementation activities are expensed as incurred. Internal and external costs incurred during the application development stage, including upgrades and enhancements representing modifications that will result in significant additional functionality, are capitalized. Software maintenance and training costs are expensed as incurred. Capitalized costs are recorded as part of property and equipment and are amortized on a straight-line basis over the software’s estimated useful life which is three years. The Company evaluates these assets for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. Identifiable Intangible Assets Identifiable intangible assets with finite lives are recorded at their fair values at the date of acquisition and are amortized on a straight-line basis over their respective estimated useful lives, which is the period over which the asset is expected to contribute directly or indirectly to future cash flows. The estimated remaining useful life used in computing amortization is 2.6 years. Impairment of Long-Lived Assets and Goodwill The Company reviews long-lived assets and definite-lived intangible assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset might not be recoverable. Recoverability of the long-lived asset is measured by a comparison of the carrying amount of the asset or asset group to future undiscounted net cash flows expected to be generated. If such assets are not recoverable, the impairment to be recognized, if any, is measured as the amount by which the carrying amount of the assets exceeds the estimated fair value (discounted cash flow) of the assets or asset group. Assets held for sale are reported at the lower of the carrying amount or fair value, less costs to sell. Goodwill represents the excess of the aggregate of the fair value of consideration transferred in a business combination over the fair value of assets acquired, net of liabilities assumed. Goodwill is not amortized; rather, goodwill is tested for impairment at the reporting unit level as of October 31 of each year, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. The Company performs a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value before performing a two-step approach to testing goodwill for impairment for each reporting unit. The reporting units are determined by the components of the Company’s operating segments that constitute a business for which both (1) discrete financial information is available and (2) segment management regularly reviews the operating results of that component. If it is more likely than not that the fair value of a reporting unit is less than its carrying value, the Company performs the impairment test by applying a fair-value-based test. The first step measures for impairment by applying fair-value-based tests at the reporting unit level. The second step (if necessary) measures the amount of impairment by applying fair-value-based tests to the individual assets and liabilities within each reporting unit. As part of determining its reporting units, the Company has identified two operating segments, Employer and Carrier. To determine the fair value of the Company’s reporting units, the Company has used a discounted cash flow analysis, which requires significant assumptions and estimates about future operations. Significant judgments inherent in this analysis include the determination of an appropriate discount rate, estimated terminal value and the amount and timing of expected future cash flows. The Company may also determine fair value of its reporting units using a market approach by applying multiples of earnings of peer companies to its operating results. Financing Obligations In its build-to-suit lease arrangements where the Company is involved in the construction of its buildings, the Company is deemed the owner for accounting purposes during the construction period. The Company records an asset for the amount of the total project costs in Property and Equipment, net and the related financing obligation in Financing and Capital Lease Obligations on the Consolidated Balance Sheet. Once construction is complete, the Company determines if the asset qualifies for sale-leaseback accounting treatment. If the arrangement does not qualify for sale-lease back treatment, the Company continues to reduce the obligation over the lease term as payments are made and depreciates the asset over its useful life. The Company does not report rent expense for the portion of the rent payment determined to be related to the assets that it owns for accounting purposes. Rather, this portion of the rent payment under the lease is recognized as a reduction of the financing obligation and as interest expense. Financing obligations also include liabilities for service agreements related to property and equipment under capital leases. Sales Commissions Sales commissions are expensed when the sales contract is executed by the customer. Advertising The Company expenses advertising costs as they are incurred. Direct advertising costs for 2015, 2014, and 2013 were $435, 394, and $265, respectively. Comprehensive Loss The Company’s net loss equals comprehensive loss for all periods presented. Stock-Based Employee Compensation Stock-based employee compensation is measured based on the grant-date fair value of the awards and recognized in the Consolidated Statements of Operations and Comprehensive Loss over the period during which the award holder is required to perform services in exchange for the award, which is the vesting period. Compensation expense is recognized over the vesting period of the applicable award using the straight-line method. Compensation expense related to performance based restricted stock units, which are accounted for as equity awards, is recognized when it is probable that the performance measure will be met. Compensation costs related to restricted stock units (“RSUs”) is recorded based on the market price on the grant date. The Company uses the Black-Scholes option pricing model for estimating the fair value of stock options. The use of the option valuation model requires the input of subjective assumptions, including the estimated fair value of the Company’s common stock in the periods preceding the IPO, the expected life of the option and the expected stock price volatility based on peer companies. Additionally, the recognition of stock-based compensation expense requires the estimation of the number of options and RSUs that will ultimately vest and the number of options and RSUs that will ultimately be forfeited. Income Taxes The Company uses the asset and liability method for income tax accounting. This method requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, as well as for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled. Valuation allowances are recorded to reduce deferred tax assets to the amount the Company believes is more likely than not to be realized. The tax benefits of uncertain tax positions are recognized only when the Company believes it is more likely than not that the tax position will be upheld on examination by the taxing authorities based on the merits of the position. The Company recognizes interest and penalties, if any, related to unrecognized income tax benefits in income tax expense. In December 2015, the Company adopted ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes (ASU 2015-17). This standard simplifies the presentation of the deferred tax assets and liabilities on the balance sheet and requires companies to classify all deferred tax assets and liabilities as noncurrent. The Company prospectively applied this standard which had no impact on the consolidated balance sheets. Basic and Diluted Net Loss per Common Share The Company uses the two-class method to compute net loss per common share because the Company has issued securities, other than common stock, that contractually entitle the holders to participate in dividends and earnings of the Company. The two-class method requires earnings for the period to be allocated between common stock and participating securities based upon their respective rights to receive distributed and undistributed earnings. Holders of each series of the Company’s redeemable convertible preferred stock were entitled to participate in distributions, when and if declared by the board of directors that are made to common stockholders, and as a result are considered participating securities. Under the two-class method, for periods with net income, basic net income per common share is computed by dividing the net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Net income attributable to common stockholders is computed by subtracting from net income the portion of current year earnings that the participating securities would have been entitled to receive pursuant to their dividend rights had all of the year’s earnings been distributed. No such adjustment to earnings is made during periods with a net loss, as the holders of the participating securities have no obligation to fund losses. Diluted net loss per common share is computed under the two-class method by using the weighted-average number of shares of common stock outstanding plus, for periods with net income attributable to common stockholders, the potential dilutive effects of stock awards and warrants. In addition, the Company analyzes the potential dilutive effect of the outstanding participating securities under the “if-converted” method when calculating diluted earnings per share, in which it is assumed that the outstanding participating securities convert into common stock at the beginning of the period. The Company reports the more dilutive of the approaches (two-class or “if-converted”) as its diluted net income per share during the period. Due to net losses for the years ended December 31, 2015, 2014, and 2013 basic and diluted loss per share were the same, as the effect of potentially dilutive securities would have been anti-dilutive. Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09 “Revenue from Contracts with Customers”, which amends the revenue recognition requirements in the FASB Accounting Standards Codification. This statement requires that an entity 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. The statement shall be applied using one of two methods: retrospectively to each prior reporting period presented, or retrospectively with the cumulative effect of initially applying this statement recognized at the date of initial application. The Company has not yet determined which method it will apply. This guidance will be effective for the Company beginning January 1, 2018, with an option to early adopt. The Company is currently evaluating the impact of this guidance on its consolidated financial position and results of operations. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements- Going Concern (Subtopic 205-40). ASU 2015-11 provides guidance in GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. This guidance is effective for the Company beginning January 1, 2017. The Company does not believe the adoption of this standard will have a material effect on its consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-03, “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.” The amendments in this ASU require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This guidance is effective for annual and interim reporting periods of public entities beginning after December 15, 2015, with an option to early adopt. The adoption of this standard will not have an impact on the Company’s consolidated financial position. |
Net Loss Per Common Share
Net Loss Per Common Share | 12 Months Ended |
Dec. 31, 2015 | |
Net Loss Per Common Share | 3. Net Loss Per Common Share Diluted loss per common share is the same as basic loss per common share for all periods presented because the effects of potentially dilutive items were anti-dilutive given the Company’s net loss. The following common share equivalent securities have been excluded from the calculation of weighted-average common shares outstanding because the effect is anti-dilutive for the periods presented: Year Ended December 31, Anti-Dilutive Common Share Equivalents 2015 2014 2013 Redeemable convertible preferred stock: Series A — — — Series B — — — Restricted stock units 1,017,450 720,370 97,700 Stock options 1,684,843 2,382,881 3,058,795 Warrant to purchase common stock 580,813 — 500,000 Total anti-dilutive common share equivalents 3,283,106 3,103,251 3,656,495 Basic and diluted net loss per common share is calculated as follows: Year Ended December 31, 2015 2014 2013 Numerator: Net loss $ (62,084 ) $ (63,179 ) $ (30,361 ) Net loss attributable to common stockholders $ (62,084 ) $ (63,179 ) $ (30,361 ) Denominator: Weighted-average common shares outstanding, basic and diluted 28,344,680 25,207,099 10,144,243 Net loss per common share, basic and diluted $ (2.19 ) $ (2.51 ) $ (2.99 ) |
Marketable Securities
Marketable Securities | 12 Months Ended |
Dec. 31, 2015 | |
Marketable Securities | 4. Marketable Securities Marketable securities consist of corporate bonds and are classified as held-to-maturity. Corporate bonds held in marketable securities had contractual maturities of between 1 and 11 months as of December 31, 2015. The following presents information about the Company’s marketable securities as of December 31: 2015 2014 Aggregate cost basis and net carrying amount $ 40,448 $ 5,135 Gross unrealized holding gains 1 — Gross unrealized holding losses (26 ) (1 ) Aggregate fair value determined by Level 2 inputs $ 40,423 $ 5,134 The following table presents information about the Company’s investments that were in an unrealized loss position and for which an other-than-temporary impairment had not been recognized in earnings as of December 31: 2015 2014 Aggregate fair value of investments with unrealized losses (1) $ 27,070 $ 5,134 Aggregate amount of unrealized losses $ (26 ) $ (1 ) (1) Investments have been in a continuous loss position for less than 12 months |
Fair Value Measurement
Fair Value Measurement | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Measurement | 5. Fair Value Measurement The carrying amounts of certain of the Company’s financial instruments, including cash and cash equivalents, net accounts receivable, accounts payable and other accrued liabilities, and accrued compensation and benefits, approximate fair value due to their short-term nature. The carrying value of the Company’s financing obligations and revolving line of credit approximates fair value, considering the borrowing rates currently available to the Company for financing obligations with similar terms and credit risks. The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires the Company to use observable inputs when available, and to minimize the use of unobservable inputs when determining fair value. The three tiers are defined as follows: Level 1. Level 2. Level 3. Assets and Liabilities Measured at Fair Value on a Recurring Basis The Company evaluates its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level to classify them for each reporting period. This determination requires significant judgments to be made. The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis using the above categories, as of December 31, 2015 and 2014. December 31, 2015 Description Level 1 Level 2 Level 3 Total Cash Equivalents: Money market mutual funds (1) $ 46,905 $ — $ — $ 46,905 Total assets $ 46,905 $ — $ — $ 46,905 December 31, 2014 Description Level 1 Level 2 Level 3 Total Cash Equivalents: Money market mutual funds (1) $ 50,695 $ — $ — $ 50,695 Total assets $ 50,695 $ — $ — $ 50,695 (1) Money market funds are classified as cash equivalents in the Company’s consolidated balance sheets. As short-term, highly liquid investments readily convertible to known amounts of cash, with remaining maturities of three months or less at the time of purchase, the Company’s cash equivalent money market funds have carrying values that approximate fair value. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2015 | |
Property and Equipment | 6. Property and Equipment Property and equipment consists of the following as of December 31: 2015 2014 Buildings, leased $ 29,291 $ 7,965 Computers and related equipment 24,505 18,871 Purchased software and licenses 23,354 20,392 Software developed 20,900 18,397 Furniture and fixtures 6,651 3,834 Leasehold improvements 4,101 3,334 Other equipment 2,117 2,009 Vehicles 111 111 Construction in progress 412 24,296 Total property and equipment, at cost 111,442 99,209 Accumulated depreciation and amortization (56,405 ) (45,188 ) Property and equipment, net $ 55,037 $ 54,021 Depreciation and amortization expense on property and equipment was $11,378, $9,188 and $7,849, for the years ended December 31, 2015, 2014 and 2013, respectively. Property and equipment at December 31, 2015 and 2014 includes fixed assets acquired under capital lease agreements of $9,131 and $8,569, respectively. Accumulated depreciation of assets under capital leases totaled $3,126 and $1,521 as of December 31, 2015 and 2014, respectively. Amortization of assets under capital leases is included in depreciation expense. The Company capitalized software development costs of $2,503 and $2,215 for the years ended December 31, 2015 and 2014, respectively. Amortization of capitalized software development costs totaled $2,587, $2,257 and $2,618 during the years ended December 31, 2015, 2014 and 2013, respectively. The net book value of capitalized software development costs was $4,049 and $4,134 at December 31, 2015, and 2014, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets | 7. Goodwill and Intangible Assets The Company’s goodwill balance of $1,634 is solely attributable to the Employer reporting unit. The gross carrying amount and accumulated impairment losses were $3,304 and $(1,670), respectively, for the beginning and ending balances in all periods presented. There were no changes in the carrying amount of goodwill in the years ended December 31, 2015 and 2014. Information regarding the Company’s acquisition-related intangible assets is as follows: As of December 31, 2015 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted- Average Remaining Useful Life (in years) Trademarks $ 240 $ (240 ) $ — — Customer agreements 2,060 (1,395 ) 665 2.6 Non-compete agreements 126 (126 ) — — Total $ 2,426 $ (1,761 ) $ 665 2.6 As of December 31, 2014 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted- Average Remaining Useful Life (in years) Trademarks $ 240 $ (212 ) $ 28 0.6 Customer agreements 2,060 (1,137 ) 923 3.6 Non-compete agreements 126 (126 ) — — Total $ 2,426 $ (1,475 ) $ 951 3.5 Amortization expense of acquisition-related intangible assets for the years ended December 31, 2015, 2014 and 2013 was $286, $305 and $323, respectively. As of December 31, 2015, expected amortization expense for the intangible assets for each of the next five years and thereafter was as follows: 2015 $ 258 2016 257 2017 150 2018 — 2019 — Total $ 665 There were no impairments of intangible assets during the years ended December 31, 2015, 2014 and 2013. |
Revolving Line of Credit
Revolving Line of Credit | 12 Months Ended |
Dec. 31, 2015 | |
Revolving Line of Credit | 8. Revolving Line of Credit On August 27, 2013, the Company executed a loan and security agreement with Silicon Valley Bank for a revolving line of credit (“Revolver”) of up to $35,000 for working capital, to fund general business requirements, and to repay the indebtedness under its existing master credit facility and other senior secured promissory notes. At the beginning of 2014, the borrowing limit under the Revolver increased from $15,000 to $35,000 in accordance with the terms of the agreement as amended on December 10, 2013. Borrowing capacity under the line of credit is subject to a borrowing base limit that is a function of the Company’s monthly recurring revenue as adjusted to reflect lost customer revenue during the previous quarter. Therefore, credit available under the line of credit may be less than the specified limit. In 2013, the Company borrowed $5,757 under the Revolver, which it used to repay all of the amounts outstanding under its credit facility and promissory notes with a previous lender. In September 2013, the Company borrowed and repaid an additional $5,000 under the Revolver. In 2014, the Company borrowed $14,000 under the Revolver, which was used to fund the general operations of the Company and repaid $2,100 under the Revolver In February 2015, the Company replaced its Revolver with a senior revolving line of credit (“Senior Revolver”) with a syndicate of lenders led by Silicon Valley Bank. The Company borrowed $18,246 under the Senior Revolver, of which $17,657 repaid the principal of the Revolver and $589 paid accrued interest, as well as administrative and legal fees related to the issuance of the Senior Revolver. Debt issuance fees of $591 were capitalized in the Company’s balance sheet and are amortized over the life of the Senior Revolver. The three-year Senior Revolver has a borrowing limit of $60,000. Borrowing capacity under the Senior Revolver is subject to a borrowing base limit that is a function of the Company’s monthly recurring revenue as adjusted to reflect lost customer revenue during the previous three calendar months. Therefore, credit available under the Senior Revolver may be less than the $60,000 borrowing limit. Interest is payable monthly. Advances under the Senior Revolver bear interest at the prime rate as published in the Wall Street Journal plus a margin based on the Company’s liquidity that ranges between 1.0% and 1.5%. The Company is charged for amounts unused under this arrangement at a rate based on its liquidity of 0.300% to 0.375% per year. Any outstanding principal is due at the end of the term. The Company is bound by customary affirmative and negative covenants in connection with the Senior Revolver, including financial covenants related to liquidity and EBITDA. In the event of a default, the lenders may declare all obligations immediately due and stop advancing money or extending credit under the line of credit. The line of credit is collateralized by substantially all of the Company’s tangible and intangible assets, including intellectual property and the equity of subsidiaries. During 2015, the Company borrowed an aggregate of $39,246 under the Senior Revolver for general operating purposes and repaid an aggregate of $27,246. As of December 31, 2015, the amount outstanding under the Senior Revolver was $30,246 and the amount available to borrow was $29,754. The amount outstanding, which represents principal and currently bears interest at 4.50%, is due February 2018. No other principal amounts are due in any other year. |
Commitment and Contingencies
Commitment and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitment and Contingencies | 9. Commitment and Contingencies Operating Lease Commitments The Company leases office facilities under various non-cancelable operating lease agreements with original lease periods expiring between 2016 and 2029. Some of the leases provide for renewal terms at the Company’s option. Certain future minimum lease payments due under these operating lease agreements contain free rent periods or escalating rent payment provisions. These leases generally do not contain purchase options. Rent expense on these operating leases is recognized over the term of the lease on a straight-line basis. In April 2015, the Company entered into an amendment to a 2012 office lease agreement for its facility in Tulsa, Oklahoma. Under the terms of the lease agreement, the Company has committed to extend its lease term to April 2016 with annual rent expense of $186. In September 2014, the Company entered into an amendment to its operating lease for office space in Greenville, South Carolina. The amendment expands the space leased, extends the term of the lease for five years to February 2020, and grants the Company the right to extend the lease for five additional one-year periods. The amended lease contains a free-rent period and a provision for escalating rent payments. Accordingly, rent expense will be recognized on a straight-line basis over the lease term. Monthly lease payments under the amended lease began February 2015. Expenses under this lease will total approximately $95 per quarter. Rent expense totaled $4,376, $4,099 and $2,517 for the years ended December 31, 2015, 2014 and 2013, respectively. Future minimum lease payments are as follows: Operating Leases Year Ending December 31, 2016 $ 4,019 2017 3,980 2018 3,794 2019 3,890 2020 3,671 Thereafter 17,015 Total minimum lease payments $ 36,369 Financing and Capital Lease Obligations The Company has entered into various capital lease arrangements to obtain property and equipment for operations. Certain capital lease arrangements contain payments for support services which the Company records as financing obligations. These agreements range from 12 months to 3 years with interest rates ranging from 0% to 12.4%. The leases are secured by the underlying leased property and equipment. In April 2014, the Company entered into a lease with a 3-year term for data processing equipment and software. The total payments under the lease are $3,779, including a down payment of $1,340 and aggregate monthly payments of $2,439. The lease provides for a bargain purchase option at the end of its 3 year term. As of December 31, 2015, capital lease obligations include amounts under this lease of $1,052. Related to the April 2014 capital lease, the Company recorded a financing obligation for support services for data processing equipment. Total payments under this three-year arrangement are $629, including a down payment of $223 and aggregate monthly payments of $406. As of December 31, 2015 and 2014, financing obligations include $175 and $300 under this agreement, respectively. During 2013, the Company entered into two leases with a term of 3 years each to finance data processing equipment and software. The total payments under these leases are $5,277. The Company accounts for these leases as capital leases as they meet the criteria for capitalization. As of December 31, 2015 and 2014, capital lease obligations include amounts under this lease of $1,116 and $2,803, respectively. Related to a 2013 capital lease, the Company entered into a 3 year financing obligation for support services of data and processing equipment. The total payments under the arrangement are $4,039. The Company accounts for this arrangement as a financing obligation. As of December 31, 2015 and 2014, financing obligations include $995 and $2,287, respectively, under this agreement. The Company entered into additional various leases with terms ranging from one year or less to three years to finance data processing equipment and software. The leases contain terms that either provide for the title to pass to the Company at the end of its term, or the lease term exceeds 75% of economic life of the asset, or the present value of the minimum lease payments exceeds 90% of the fair value of assets leased. The Company accounts for these arrangements as capital leases. Certain of these leases contain payments for support which are recorded in financing obligations. The total payments under these leases are $697. The leases are through September 30, 2018. As of December 31, 2015 and 2014, capital lease obligations include amounts under these leases of $574 and $135, respectively. Financing obligations were $32,089 and $31,697, as of December 31, 2015 and 2014, respectively, and consist of obligations for build-to-suit lease arrangements, a software financing agreement and the support components of software financing arrangements. The aggregate amount of future minimum payments for financing obligations was $82,101 at December 31, 2015 which includes aggregate payments of $12,406 related to the headquarters building build-to-suit arrangement and $68,079 related to additional office space under a build-to-suit lease entered into in December 2013. Details of the build-to-suit lease arrangements are disclosed in Note 15. Financing obligations are allocated as follows: As of December 31, 2015 2014 Buildings, build-to-suit $ 30,494 $ 8,873 Software support 1,595 2,700 Construction in progress, build-to-suit — 20,124 Total financing obligations $ 32,089 $ 31,697 Less: current portion (1,577 ) (1,720 ) Financing obligations, net of current portion $ 30,512 $ 29,977 Future minimum lease payments are as follows: Capital Leases Financing Obligations Year Ending December 31, 2016 $ 2,126 $ 7,313 2017 500 6,360 2018 178 6,471 2019 — 6,550 2020 — 6,747 Thereafter — 48,660 Total minimum lease and financing obligation payments 2,804 82,101 Less: imputed interest (62 ) Less: current portion (2,071 ) Capital lease obligations, net of current portion $ 671 Contractual Commitments In connection with a 2013 lease for office space, the Company entered into an option to lease space in two additional adjacent buildings. The option term is 36 months and requires the Company to incur costs annually prior to the exercise of the option in the amount of up to $466 per year. If the Company terminates the option or does not exercise the option prior to expiration it will incur termination fees pro-rated through the dates of termination or expiration. The maximum liability for termination fees is $757. The commitment for the lease and pro-rated termination fees is not accrued in the consolidated balance sheet of the Company. Had the Company terminated the options effective December 31, 2015, the liability for the termination fee would have been $517. The pro-rated commitment for the annual option expense is accrued in current liabilities in the balance sheet. The Company also has $8,916 of non-cancellable contractual commitments as of December 31, 2015 related to the purchase of software and colocation services. These commitments are not accrued in the consolidated balance sheet of the Company. Legal Contingencies The Company may become a party to a variety of legal proceedings that arise in the normal course of business. While the results of such normal course legal proceedings cannot be predicted with certainty, management believes, based on current knowledge, that the final outcome of any matters will not have a material adverse effect on the Company’s business, financial position, results of operations or cash flows. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2015 | |
Stock-Based Compensation | 10. Stock-Based Compensation Employee Stock-based Compensation Plan The Company maintains the Amended and Restated Benefitfocus.com, Inc. 2000 Stock Option Plan (the “2000 Plan”) and the Benefitfocus.com, Inc. 2012 Stock Plan, as amended (the “2012 Plan”), pursuant to which the Company has reserved 4,243,675 shares of its common stock for issuance to its employees, directors and non-employee third parties. The 2012 Plan, effective on January 31, 2012, serves as the successor to the 2000 Plan and permits the granting of incentive stock options, non-statutory stock options, stock bonuses, stock purchase rights, stock appreciation rights, and restricted stock units and awards. No new awards can be issued under the 2000 Plan after the effective date of the 2012 Plan. Outstanding awards under the 2000 Plan continue to be subject to the terms and conditions of the 2000 Plan. Shares available for grant under the 2000 Plan, which were reserved but not issued or subject to outstanding awards under the 2000 Plan as of the effective date, were added to the reserves of the 2012 Plan. As of December 31, 2015, the Company had 1,541,382 shares allocated to the 2012 Plan, but not yet issued. Stock options are granted at exercise prices not less than the estimated fair market value of the Company’s common stock at the date of grant. The grant date value of restricted stock units is equal to the closing price of the Company’s stock on the date of grant, or, if not a trading day, the closing price of the previous trading day. Generally, the Company issues previously unissued shares for the exercise of stock options or exchange of restricted stock units; however, previously acquired shares may be reissued to satisfy future issuances. The options and restricted stock unit awards typically vest over a four-year period. The options expire 10 years from the grant date. Compensation expense for the fair value of the stock-based awards at their grant date is recognized ratably over the vesting period. The Company has issued two types of awards under these plans: stock options and restricted stock units. Stock options were not issued in 2015 and 2014. The following table sets forth the number of awards outstanding for each award type is as follows: Outstanding at December 31, Award type 2015 2014 2013 Stock options 1,684,843 2,382,881 3,058,795 Restricted stock units 1,017,450 720,370 97,700 Compensation expense related to stock-based awards is included in the following line items in the accompanying consolidated statements of operations and comprehensive loss for the years ended December 31: 2015 2014 2013 Cost of revenue $ 1,950 $ 986 $ 274 Sales and marketing 2,861 1,395 171 Research and development 2,399 1,376 255 General and administrative 3,244 1,831 502 $ 10,454 $ 5,588 $ 1,202 The total compensation cost related to non-vested awards not yet recognized as of December 31, 2015 was $27,990 and will be recognized over a weighted-average period of approximately 2.85 years. Restricted Stock Units During 2015, the Company granted restricted stock units under the 2012 Plan. Restricted stock units granted to employees vest in equal annual installments generally over 4 years from the grant date. The fair value of the stock at the time of grant is amortized based on a straight-line basis over the vesting period. In 2015, the Company issued performance restricted stock units for which vesting is contingent upon meeting various financial targets to support growth initiatives. These awards vest on December 31, 2017 if performance targets are achieved and are included in the table below. The actual number of shares issued upon vesting could range from 0% to 100%. As of December 31, 2015, there were 40,000 performance restricted stock units outstanding with a grant-date fair value of $39.69 per unit. The summary of unvested restricted stock units is as follows: Restricted stock units Weighted average grant date fair value Unvested at December 31, 2014 720,370 $ 38.63 Granted 607,553 35.18 Forfeited (140,338 ) 33.67 Vested (170,135 ) 40.54 Unvested at December 31, 2015 1,017,450 $ 36.90 As of December 31, 2015, the number and intrinsic value of restricted stock units expected to vest was 908,143 and $33,047, respectively. The aggregate fair value of restricted stock units vested during the year ended December 31, 2015 and 2014 was $6,261 and $661, respectively. No restricted stock units vested during 2013. Stock options The following is a summary of the option activity for the year ended December 31, 2015: Number of Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Outstanding balance at December 31, 2014 2,382,881 $ 7.39 Granted — — Exercised (656,043 ) 6.45 Forfeited (36,532 ) 12.46 Expired (5,463 ) 0.92 Outstanding balance at December 31, 2015 1,684,843 $ 7.66 3.1 $ 48,400 Exercisable at December 31, 2015 1,580,160 $ 7.41 2.8 $ 45,786 Vested and expected to vest at December 31, 2015 1,683,542 $ 7.66 3.1 $ 48,368 The aggregate intrinsic value of employee options exercised during the years ended December 31, 2015, 2014, and 2013 was $18,873, $23,397 and $6,448, respectively. The Company values stock options using the Black-Scholes option-pricing model, which requires the input of subjective assumptions, including the per share fair value as a private company, risk-free interest rate, expected life, expected stock price volatility and dividend yield. Prior to the IPO, the Company was a private company with no active public market for its common stock. The Company has periodically determined for financial reporting purposes the estimated per share fair value of its common stock at various dates using contemporaneous valuations performed in accordance with the guidance outlined in the American Institute of Certified Public Accountants Practice Aid, “Valuation of Privately Held Company Equity Securities Issued as Compensation.” When determining the fair market value of its common stock, the Company considered what it believes to be comparable publicly traded companies, discounted free cash flows, and an analysis of its enterprise value. The risk-free interest rate assumption is based upon observed interest rates for constant maturity U.S. Treasury securities consistent with the expected term of the Company’s employee stock options. The expected life represents the period of time the stock options are expected to be outstanding and is based on the simplified method. Under the simplified method, the expected life of an option is presumed to be the mid-point between the vesting date and the end of the contractual term. The Company used the simplified method due to the lack of sufficient historical exercise data to provide a reasonable basis upon which to otherwise estimate the expected life of the stock options. When the Company had a limited history of trading as a public company, therefore expected volatility was based on historical volatilities for publicly traded stock of comparable companies over the estimated expected life of the stock options. The Company assumed no dividend yield because it does not expect to pay dividends in the near future, which is consistent with the Company’s history of not paying dividends. The following table summarizes the assumptions used for estimating the fair value of stock options granted for the period indicated (no options granted in 2015 or 2014): Year Ended December 31, 2013 Risk-free interest rate 1.0% - 1.7% Expected term (years) 6.08 Expected volatility 52% Expected dividend yield 0% Weighted-average grant date fair value per share $ 7.71 |
Stockholders' Deficit
Stockholders' Deficit | 12 Months Ended |
Dec. 31, 2015 | |
Stockholders' Deficit | 11. Stockholders’ Deficit Preferred stock Upon the closing of the IPO in September 2013, all shares of the Company’s then-outstanding redeemable convertible preferred stock automatically converted into 16,496,860 shares of its $0.001 par value common stock. Subsequent to this conversion, the Company restated its certificate of incorporation and reduced number of authorized shares of preferred stock from 21,496,860 to 5,000,000. The Company’s preferred stock is undesignated. Common Stock The holders of common stock are entitled to one vote for each share. The voting, dividend and liquidation rights of the holders of common stock are subject to and qualified by the rights, powers and preferences of the holders of preferred stock. At December 31, 2015, the Company had reserved a total of 4,824,488 of its authorized 50,000,000 shares of common stock for future issuance as follows: Outstanding stock options 1,684,843 Restricted stock units 1,017,450 Possible future issuance under stock option plans 1,541,382 Warrant to purchase common stock 580,813 Total common shares reserved for future issuance 4,824,488 On February 24, 2015 and in conjunction with the amendment to the commercial contract described in Note 15, the Company entered into a Securities Purchase Agreement to sell shares of its common stock to Mercer, LLC (“Mercer”), a customer of the Company. Pursuant to the agreement, on the same date, the Company sold 2,817,526 shares of its common stock to Mercer for $26.50 per share or an aggregate of $74,664. At the same time, the Company also issued Mercer a warrant to purchase up to an additional 580,813 shares of its common stock for $26.50 per share at any time during the 30-month term of the warrant. The agreement, among other things, includes certain standstill provisions and prevents Mercer from disposing of its shares of Company common stock until the earlier of December 31, 2017, the expiration or termination of the Mercer Exchange Software as a Service Agreement, as amended between the Company and Mercer Health & Benefits, LLC, the date on which Mercer and its affiliates own less than 75% of the shares it purchased pursuant to the Securities Purchase Agreement, and the date on which Mercer and its affiliates own less than 5% of the outstanding common stock of the Company. The Company received all of the proceeds from this sale of shares and is using the proceeds for working capital and other general corporate purposes. The Stock Purchase Agreement, warrant agreement and amended commercial contract are considered part of a single arrangement and accounted for in accordance with the multiple-element arrangement guidance outlined in ASC 605-25, Revenue: Multiple-Element Arrangements. The aggregate consideration from the arrangement was allocated to the units of accounting in the arrangement based on their estimated relative selling price, which resulted in $74,331 of consideration being allocated to common stock and warrant net of issuance costs. During 2009, in connection with a new five-year contract executed with a major customer, the Company issued a warrant to the customer for the right to purchase 500,000 shares of common stock at $5.48 per share. The warrant was issued from the incentive stock option pool of shares approved by the Company’s board of directors and had a term of 10 years. The customer was originally entitled to exercise the warrant in its entirety in 9.5 years. Earlier exercise rights for all or part of the warrants are triggered under certain conditions, the most relevant of which are, on or after the third anniversary date of the issuance date if an IPO has occurred and immediately prior to the closing of a defined Corporate Transaction. In the event the customer cancelled the contract prior to the end of the five-year term, one half of the warrants would have been forfeited. In March 2013, the Company made this warrant fully exercisable. In March 2014, the customer exercised the warrant through a cashless exercise in accordance with the warrant’s terms. The Company issued 455,521 shares to satisfy its obligation under the warrant. The Company used an option pricing model to determine the fair value of the common stock warrant. Significant inputs included an estimate of the fair value of the Company’s common stock, the remaining contractual life of the warrant, an estimate of the probability and timing of a liquidity event, a risk-free rate of interest and an estimate of the Company’s stock volatility using the volatilities of guideline peer companies. The value of the exercisable portion of the warrant is not dependent on the customer’s fulfillment of the contract and was measured on the issuance date, with the total fair value at issuance being recognized as a reduction to revenue over the contract period on the straight line basis. The remaining half of the warrant that was dependent on contract fulfillment by the customer was re-measured each quarter, with the resulting increment or decrement in value recognized as a revenue reduction on the straight line basis beginning in the quarter of the revaluation through the end of the contract. The related reduction of revenue during the years ended December 31, 2014 and 2013 was $744 and $892, respectively. As of October 31, 2014, the fair value of the warrant had been fully recognized. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2015 | |
Employee Benefit Plan | 12. Employee Benefit Plan The Company maintains a qualified defined contribution plan under Section 401(k) of the U.S. Internal Revenue Code (the “401(k) Plan”) covering substantially all employees. Employees are eligible to participate in the 401(k) Plan after one day of service and upon attainment of age 21, and may elect to defer an amount or percentage of their annual compensation up to amounts prescribed by law. The Company makes discretionary matching contributions to employee plan accounts. During each of the years ended December 31, 2015, 2014 and 2013, the Company matched 50% of the employees’ contribution, with the match limited to 3% of qualifying compensation. Employee vesting in matching company contributions occurs at a rate of 20% per year after achieving two years of service. Starting in 2014, employees vesting in company contributions began after one year of service. During the years ended December 31, 2015, 2014, and 2013, employer matching contributions were $2,570, $2,083 and $1,339, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes | 13. Income Taxes The Company files income tax returns in the U.S. for federal and various state jurisdictions. The Company is subject to U.S. federal income tax examination for calendar tax years 2008 through 2014 as well as state income tax examinations for various years depending on statutes of limitations of those jurisdictions. The following summarizes the components of income tax expense (benefit) for the years ended December 31: 2015 2014 2013 Current: Federal $ — $ — $ — State and local 25 25 (31 ) Total current expense (benefit) $ 25 $ 25 $ (31 ) Deferred: Federal $ — $ — $ — State and local — — — Total deferred taxes $ — $ — $ — Reconciliation between the effect of applying the federal statutory rate and the effective income tax rate used to calculate the Company’s income tax provision is as follows for the years ended December 31: 2015 2014 2013 Federal statutory rate 34.0 % 34.0 % 34.0 % Effect of: State income taxes, net of federal benefit 6.0 % 4.8 % 3.2 % Change in tax rates 1.7 % 0.4 % 0.4 % State tax credits 2.5 % 0.4 % 0.9 % Change in valuation allowance (42.7 %) (39.3 %) (33.5 %) Uncertain tax positions 0.0 % 0.0 % (0.9 %) Stock-based compensation (0.2 %) (0.2 %) (0.9 %) Other permanent items (0.7 %) (0.1 %) (0.4 %) Deferred true-up (0.6 %) 0.0 % (2.7 %) Income tax provision effective rate 0.0 % 0.0 % 0.1 % The significant components of the Company’s deferred tax asset and liability were as follows as of December 31: 2015 2014 Deferred tax assets relating to: Net operating loss carryforwards $ 41,605 $ 26,132 Deferred revenue 26,563 23,612 Commissions and incentive accrual 2,777 1,771 Deferred rent 962 816 State tax credits 4,727 3,195 Stock-based compensation 4,802 1,993 Compensation and other accruals 5,099 3,964 Total gross deferred tax assets 86,535 61,483 Deferred tax liabilities Property and equipment and intangible assets $ (1,087 ) $ (2,514 ) Total gross deferred tax liabilities (1,087 ) (2,514 ) Deferred tax assets less liabilities 85,448 58,969 Less: valuation allowance (85,448 ) (58,969 ) Net deferred tax asset (liability) $ — $ — As of December 31, 2015 and 2014, the Company’s gross deferred tax was reduced by a valuation allowance of $85,448 and $58,969 respectively. The valuation allowance increased by $26,479 and $24,547 during the years ended December 31, 2015 and 2014, respectively. The valuation allowance increase resulted primarily from changes in the deferred tax assets related to the net operating loss carryforwards and deferred revenue. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely than not that the Company will not realize the benefits of these deductible differences in the future. In recognition of this risk, the Company has provided a full valuation allowance on the deferred tax assets relating to net operating loss carryforwards. The Company’s Federal and state net operating losses include $17,901 of excess tax benefits related to deductions from the exercise of nonqualified stock options. The tax benefit of these deductions has not been recognized in deferred tax assets. If utilized, $6,949 of benefits from these deductions will be recorded as adjustments to taxes payable and additional paid in capital. Net operating loss carryforwards for federal income tax purposes were approximately $122,761 and $68,235 at December 31, 2015 and 2014, respectively. State net operating loss carryforwards were $126,570 and $61,583 at December 31, 2015 and 2014, respectively. The federal net operating loss carryforwards will expire at various dates beginning in 2022 through 2034, if not utilized. Net operating loss carryforwards and credit carryforwards reflected above may be limited due to historical and future ownership changes. South Carolina jobs tax credit and headquarters tax credit carryovers of $7,598 and $5,277 were available at December 31, 2015 and 2014, respectively. Headquarters credits are expected to be used to offset future state income tax license fees. The credits expire in various amounts during 2020 through 2028. The Company follows FASB ASC 740-10 for accounting for unrecognized tax benefits. As of December 31, 2015, the Company had gross unrecognized tax benefits of $437. A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows for the years ended December 31: 2015 2014 2013 Balance at beginning of year $ 437 $ 437 $ — Additions based on tax positions related to the current year — — — Additions for tax positions in prior years — — 437 Reductions for tax positions of prior years — — — Reductions for tax positions due to lapse of statute — — — Settlements — — — Balance at end of year $ 437 $ 437 $ 437 At December 31, 2015 and 2014, none of the $437 liabilities for unrecognized tax benefits could impact the Company’s effective tax rate, if recognized. The Company does not expect the unrecognized tax benefits to change within the next twelve months. The Company is subject to U.S. income taxes, as well as various taxes state and local jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state, and local income tax examinations by tax authorities for years before the tax year ended December 31, 2012, although carryforward attributes that were generated prior to 2012 may still be adjusted upon examination by the taxing authorities if they either have been used or will be used in a future period. |
Segments and Geographic Informa
Segments and Geographic Information | 12 Months Ended |
Dec. 31, 2015 | |
Segments and Geographic Information | 14. Segments and Geographic Information Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) for purposes of allocating resources and evaluating financial performance. The Company’s CODM, the Chief Executive Officer, reviews financial information presented on a consolidated basis, accompanied by information about operating segments, for purposes of allocating resources and evaluating financial performance. The Company’s reportable segments are based on the type of customer. The Company determined its operating segments to be: Employer, which derives substantially all of its revenue from customers that use the Company’s services for the provision of benefits to their employees, and administrators acting on behalf of employers; and Carrier, which derives substantially all of its revenue from insurance companies that provide coverage at their own risk. Segments are evaluated based on gross profit. The Company does not allocate interest income, interest expense or income tax expense by segment. Accordingly, the Company does not report such information. Additionally, Employer and Carrier segments share the majority of the Company’s assets. Therefore, no segment asset information is reported. Year Ended December 31, 2015 2014 2013 Revenue from external customers by segment: Employer $ 94,842 $ 62,016 $ 40,656 Carrier 90,301 75,404 64,096 Total net revenue from external customers $ 185,143 $ 137,420 $ 104,752 Depreciation and amortization by segment: Employer $ 6,024 $ 4,392 $ 3,035 Carrier 5,640 5,101 5,137 Total depreciation and amortization $ 11,664 $ 9,493 $ 8,172 Gross profit by segment Employer $ 33,655 $ 16,186 $ 13,316 Carrier 48,637 33,764 29,025 Total gross profit by segment $ 82,292 $ 49,950 $ 42,341 Substantially all assets were held and all revenue was generated in the United States during the years ended December 31, 2015, 2014 and 2013. |
Related Parties
Related Parties | 12 Months Ended |
Dec. 31, 2015 | |
Related Parties | 15. Related Parties Related Party Leasing Arrangements The Company leases its office space at its Charleston, South Carolina headquarters campus under the terms of three non-cancellable leases from entities with which two of the Company’s directors, significant stockholders, and executives are affiliated. The Company’s headquarters building and an additional building are accounted for as build-to-suit leases and recorded as financing obligations in the Consolidated Balance Sheets. The remaining lease, also for office space, is accounted for as an operating lease. The financing obligations have 15-year terms that started in 2006 and 2015. The operating lease has a 15-year term that started in 2009. The leases contain options to renew the leases for five additional years. The arrangements provide for 3.0% fixed annual rent increases. During January 2015, the Company began to occupy office space constructed under the 15-year build-to-suit lease signed in December 2013. During the construction of the premises, the Company was deemed the “owner” for accounting purposes due to its extensive involvement in the construction process. Upon completion, the Company was also deemed the “owner” for accounting purposes due to its continuing involvement. As such, costs included in construction-in-progress for the building and related assets were recorded in “Property and equipment, net” and the related financing obligation remained recorded in the Company’s consolidated balance sheets. In February 2013, the Company entered into an amendment to a 2009 operating lease agreement. Under terms of the agreement, the Company committed to rent additional space under the agreement. Payments for the additional space commenced in January 2014. Furthermore, as disclosed in Note 9, payments for the December 2013 build-to-suit lease commenced in January 2015. In connection with this agreement, the Company has options to lease two additional office facilities from the leasing entity with which two of the Company’s directors, significant stockholders and executives are affiliated. The leasing entity meets the criteria to be a variable interest entity. The Company is not the primary beneficiary of the leasing entity, as the activities that are most significant to the leasing entity’s economic performance, consisting of financing, development, management, and sale of office facilities, are directed by another party. As such, the Company is not required to consolidate the entity as the primary beneficiary. The lease terms would not include a residual value guarantee, fixed-price purchase option, or similar feature that would obligate the Company to absorb decreases in value or would entitle the Company to participate in increases in the value of the office facilities. The Company has not and does not intend to provide financial or other support to the leasing entity. The Company’s maximum exposure, assuming the exercise of the options, would consist of carrying fees paid for the options, rent to be paid over the 15-year term of the leases, construction cost overruns, and operating expenses in excess of a certain threshold. The Company’s maximum exposure currently cannot be quantified. Payments related to these agreements were $11,940, $5,634, and $3,729 for the years ended December 31, 2015, 2014 and 2013, respectively. Amounts due to the related parties were $1,116 and $1,807 as of December 31, 2015 and 2014, respectively. Amounts due to the related parties were recorded in “Accrued Expenses” as of December 31, 2015 and $949 in “Accounts Payable” and $858 in “Accrued Expenses” as of December 31, 2014. Related Party Travel Expenses The Company utilizes the services of a private air transportation companies that are owned and controlled by one of the Company’s significant stockholders and executives. Expenses related to these companies were $127, $438 and $345 for the years ended December 31, 2015, 2014 and 2013 respectively, and consist of air travel related to the operations of the business. No amounts were due to the related party as of December 31, 2015 and $44 were due as of December 31, 2014. Related Party Revenues As disclosed in Note 11, the Company entered into a Stock Purchase Agreement with Mercer, a customer, on February 24, 2015. As a result of this transaction, Mercer became a related party by virtue of beneficially owning more than 10% of the voting interest of the Company. At the same time, the Company entered into an amendment of its commercial contract with Mercer. The amendment to the commercial contract, among other things, expands certain terms and conditions of the existing relationship between the Company and Mercer and its affiliates. Revenue from Mercer was $8,147 for the year ended December 31, 2015 from the time they became a related party and was reflected in “Revenues,” within the accompanying statements of operations. The amounts due from Mercer were $2,082 as of December 31, 2015. The amount of deferred revenue associated with Mercer was $9,128 as of December 31, 2015 and was reflected in the balances of deferred revenue in the consolidated balance sheets. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
Selected Quarterly Financial Data (unaudited) | 16. Selected Quarterly Financial Data (unaudited) The following tables set forth selected unaudited quarterly statements of operations data for each of the eight quarters in the years ended December 31, 2015 and 2014. Quarter Ended December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31, Consolidated Statements of Operations Data: Revenue $ 54,340 $ 45,426 $ 42,708 $ 42,669 $ 40,187 $ 34,200 $ 32,337 $ 30,696 Gross profit 23,857 19,161 19,068 20,206 16,335 10,845 11,300 11,470 Total operating expenses 34,482 33,953 35,468 32,663 28,241 28,607 28,711 23,294 Operating loss (10,625 ) (14,792 ) (16,400 ) (12,457 ) (11,906 ) (17,762 ) (17,411 ) (11,824 ) Net loss $ (12,487 ) $ (16,664 ) $ (18,284 ) $ (14,649 ) $ (13,689 ) $ (18,888 ) $ (18,200 ) $ (12,402 ) Net loss per common share (a) $ (0.43 ) $ (0.58 ) $ (0.64 ) $ (0.55 ) $ (0.54 ) $ (0.74 ) $ (0.72 ) $ (0.51 ) Weighted-average common shares outstanding— basic and diluted 29,120,171 28,847,493 28,633,992 26,745,444 25,569,203 25,503,194 25,200,093 24,541,359 (a) Quarterly and year-to-date computations of per share amounts are made independently. Therefore, the sum of the per-share amounts for the quarters may not agree with per share amounts for the year. (b) During the fourth quarter of 2014, the Company recorded a cumulative adjustment to correct prior period errors that related to an overstatement of amortization of certain capitalized software costs. The impact of these items on the Company’s Consolidated Statement of Operations decreased cost of revenue, increased gross profit, and decreased loss from operations, loss before income taxes, and net loss by $628. The Company did not adjust the prior periods as it concluded that such adjustments were not material to the current or prior period Consolidated Financial Statements. The quarterly unaudited consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements included in this report and include all adjustments, consisting only of normal recurring adjustments, that we consider necessary for a fair presentation of such information when read in conjunction with our annual audited consolidated financial statements (as restated) and notes appearing in this report. The operating results for any quarter do not necessarily indicate the results for any subsequent period or for the entire fiscal year. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events | 17. Subsequent Events Restricted Stock Units During January 2016, the Company granted 31,233 restricted stock units to employees with an aggregate grant date fair value of $1,091. These restricted stock units generally vest in equal annual installments generally over 4 years from the grant date. The Company amortizes the fair value of the stock subject to the restricted stock units at the time of grant on a straight-line basis over the period of vesting. Additionally, the Company granted 237,562 performance restricted stock units to management with an aggregate grant date fair value of $7,335. Vesting is contingent upon meeting various financial targets to support growth initiatives. These awards vest on December 31, 2017. The actual number of shares issued upon vesting could range from 0% to 100%. Financing and Capital Leases Obligations In January 2016, the Company entered into a financing agreement with a 2-year term for data processing equipment and software and support. The total payments under the agreement are $1,885, including a down payment of $356. Related to this agreement, the Company recorded property and equipment and other assets in the amount of $1,781. Revolving Line of Credit In January 2016, the Company repaid $25,000 that was previously borrowed under the Senior Revolver. |
Schedule II-Valuation and Quali
Schedule II-Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2015 | |
Schedule II-Valuation and Qualifying Accounts | Schedule II—Valuation and Qualifying Accounts (in thousands) Balance at Beginning of Period Additions Charged To Expense Additions Charged Against Revenue Deductions Balance at End of Period Allowance for doubtful accounts and returns: Year Ended December 31, 2015 $ 1,663 $ 22 $ 7,646 $ (6,746 ) $ 2,585 Year Ended December 31, 2014 $ 810 $ 94 $ 4,585 $ (3,826 ) $ 1,663 Year Ended December 31, 2013 $ 900 $ (22 ) $ 2,315 $ (2,383 ) $ 810 Balance at Beginning of Period Additions Charged To Costs and Expenses (1) Deductions Balance at End of Period Deferred tax asset valuation allowance: Year Ended December 31, 2015 $ 58,969 $ 26,479 $ — $ 85,448 Year Ended December 31, 2014 $ 34,422 $ 24,547 $ — $ 58,969 Year Ended December 31, 2013 $ 24,231 $ 10,191 $ — $ 34,422 (1) Increase in valuation allowance is related to the generation of net operating losses and other deferred tax assets. |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Principles of Consolidation | Principles of Consolidation These consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. We are not the primary beneficiary of, nor do we have a controlling financial interest in, any variable interest entity. Accordingly, we have not consolidated any variable interest entity. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Such estimates include revenue recognition and the customer relationship period, allowances for doubtful accounts and returns, valuations of deferred income taxes, long-lived assets, warrants, capitalizable software development costs and the related amortization, contingent consideration, stock-based compensation, the determination of the useful lives of assets and the recognition and impairment assessment of acquired intangibles and goodwill. Determination of these transactions and account balances are based on the Company’s estimates and judgments. These estimates are based on the Company’s knowledge of current events and actions it may undertake in the future as well as on various other assumptions that it believes to be reasonable. Actual results could differ materially from these estimates. |
Revenue and Deferred Revenue | Revenue and Deferred Revenue The Company derives the majority of its revenue from software services fees, which consist primarily of monthly subscription fees paid by customers for access to and usage of the Company’s cloud-based benefits software solutions for a specified contract term. The Company also derives revenue from professional services which primarily include fees related to the integration of customers’ systems with the Company’s platform, which typically includes discovery, configuration, deployment, testing, and training. The Company recognizes revenue when there is persuasive evidence of an arrangement, the service has been provided, the fees to be paid by the customer are fixed and determinable and collectability is reasonably assured. The Company considers delivery of its cloud-based software services has commenced once it has granted the customer access to its platform. The Company’s arrangements generally contain multiple elements comprised of software services and professional services. The Company evaluates each element in an arrangement to determine whether it represents a separate unit of accounting. An element constitutes a separate unit of accounting when the delivered item has standalone value and delivery of the undelivered element is probable and within the Company’s control. When multiple deliverables included in an arrangement are separable into different units of accounting, the arrangement consideration is allocated to the identified units of accounting based on their relative selling price. Multiple deliverable arrangements accounting guidance provides a hierarchy to use when determining the relative selling price for each unit of accounting. Vendor-specific objective evidence (“VSOE”) of selling price, based on the price at which the item is regularly sold by the vendor on a standalone basis, should be used if it exists. If VSOE of selling price is not available, third-party evidence (“TPE”) of selling price is used to establish the selling price if it exists. VSOE and TPE do not currently exist for any of the Company’s deliverables. Accordingly, for arrangements with multiple deliverables that can be separated into different units of accounting, the arrangement consideration is allocated to the separate units of accounting based on the Company’s best estimate of selling price. The amount of arrangement consideration allocated is limited by contingent revenues, if any. Effective July 1, 2015, the Company determined it had established standalone value for Benefitfocus Marketplace implementation services in the Employer segment as they are now sold separately from the software services. This was primarily due to the system integrators that have been trained and certified to perform these implementation services, the successful completion of an implementation by a trained system integrator, and the sale of several software subscription arrangements to customers in the Employer segment without the Company’s implementation services. Accordingly, revenues related to implementation services for the Benefitfocus Marketplace solution in the Employer segment that are delivered after July 1, 2015 are recognized separately from the revenues earned from the Employer software subscription services. Revenues related to such implementation services are recognized at the time that the professional services have been completed. Prior to July 1, 2015, the Company did not have standalone value for implementation services related to the Benefitfocus Marketplace solution as the Company had historically performed these services to support the customers’ implementation of this solution. Revenue from implementation services with standalone value was $2,401 for the year ended December 31, 2015. Certain of the Company’s other professional services, including implementation services related to the Carrier segment, are not sold separately from the software services and there is no alternative use for them. As such, the Company has determined that those professional services do not have standalone value. Accordingly, software services and professional services are combined and recognized as a single unit of accounting. The Company generally recognizes software services fees monthly based on the number of employees covered by the relevant benefits plans at contracted rates for a specified period of time, once the criteria for revenue recognition described above have been satisfied. The Company recognizes revenue on Benefitfocus Marketplace implementation services in the Employer segment that have standalone value at the time the services have been completed and the related software services have commenced. The Company defers recognition of revenue for fees from professional services that do not have standalone value and begins recognizing such revenue once the services are delivered and the related software services have commenced, ratably over the longer of the contract term or the estimated expected life of the customer relationship. Costs incurred by the Company in connection with providing such professional services are charged to expense as incurred and are included in “Cost of revenue.” In January 2015, the Company adjusted the estimated expected life of its customer relationship. This change in estimate was the result of analyzing quantitative and qualitative observations in the market and the Company’s business. This change shortens the term over which deferred revenue will be recognized from 10 to 7 years and will be applied prospectively to unamortized professional services fees over the longer of the contract term or the adjusted estimated expected life of the customer relationship. The change in the customer relationship period increased the amount of revenue recognized during the year ended December 31, 2015, which decreased both loss from continuing operations and net loss by $6,207, and decreased loss per share by $0.22 for the year ended December 31, 2015. As a result of the change in the customer relationship period, Employer and Carrier revenue increased by $1,137 and $5,070, respectively, for the year ended December 31, 2015. |
Cost of Revenue | Cost of Revenue Cost of revenue primarily consists of employee compensation, professional services, data center co-location costs, networking expenses, depreciation expense for computer equipment directly associated with generating revenue, amortization expense for capitalized software development costs, and infrastructure maintenance costs. In addition, the Company allocates a portion of overhead, such as rent, additional depreciation and amortization expense, and employee benefit costs, to cost of revenue based on headcount. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of bank checking accounts and money market accounts. The Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. |
Marketable Securities | Marketable Securities Marketable securities consist of short-term investments in corporate securities. To reflect its intention, the Company classifies its marketable securities as held-to-maturity at the time of purchase. As a result, the marketable securities are recorded at amortized cost and any gains or losses realized upon maturity are reported in other expense, net in the consolidated statements of operations and comprehensive loss. |
Concentrations of Credit Risk | Concentrations of Credit Risk The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash equivalents, marketable securities and accounts receivable. All of the Company’s cash and cash equivalents are held at financial institutions that management believes to be of high credit quality. The bank deposits of the Company might, at times, exceed federally insured limits and are generally uninsured and uncollateralized. The Company has not experienced any losses on cash and cash equivalents to date. To manage credit risk related to marketable securities, the Company invests in various types of highly rated corporate bonds, commercial paper, and various United States backed securities with maturities of less than two years. The weighted average maturity of the portfolio of investments must not exceed nine months, per the Company’s investment policy. To manage accounts receivable risk, the Company evaluates the creditworthiness of its customers and maintains an allowance for doubtful accounts. Accounts receivable were unsecured and were derived from revenue earned from customers located in the United States. Accounts receivable from one customer, North Carolina State Health Plan, represented 22.2% of the total accounts receivable at December 31, 2015. Accounts receivable from one customer, Aetna, represented 13.3% of the total accounts receivable at December 31, 2014. No customer represented more than 10% of total revenue for the years ended December 31, 2015 and 2014. |
Accounts Receivable and Allowance for Doubtful Accounts and Returns | Accounts Receivable and Allowance for Doubtful Accounts and Returns Accounts receivable are stated at realizable value, net of allowances for doubtful accounts and returns. The Company utilizes the allowance method to provide for doubtful accounts based on management’s evaluation of the collectability of amounts due, and other relevant factors. Bad debt expense is recorded in general and administrative expense on the consolidated statements of operations and comprehensive loss. The Company’s estimate is based on historical collection experience and a review of the current status of accounts receivable. Historically, actual write-offs for uncollectible accounts have not significantly differed from the Company’s estimates. The Company removes recorded receivables and the associated allowances when they are deemed permanently uncollectible. However, higher than expected bad debts may result in future write-offs that are greater than the Company’s estimates. The allowance for doubtful accounts was $32 and $10 as of December 31, 2015 and 2014, respectively. The allowances for returns are accounted for as reductions of revenue and are estimated based on the Company’s periodic assessment of historical experience and trends. The Company considers factors such as the time lag since the initiation of revenue recognition, historical reasons for adjustments, new customer volume, complexity of billing arrangements, timing of software availability, and past due customer billings. The allowance for returns was $2,553 and $1,653 as of December 31, 2015 and 2014, respectively. |
Property and Equipment | Property and Equipment Property and equipment, including capitalized software development costs, are stated at cost less accumulated depreciation and amortization. Expenditures for major additions and improvements are capitalized. Depreciation and amortization is recognized over the estimated useful lives of the related assets using the straight-line method. The estimated useful lives for significant property and equipment categories are generally as follows: Computers and related equipment 3-5 years Furniture and fixtures 7 years Other equipment 5-12 years Purchased software and licenses 1-7 years Vehicles 5 years Buildings 30 years Leasehold improvements Lesser of estimated useful life of asset or lease term Useful lives of significant assets are periodically reviewed and adjusted prospectively to reflect the Company’s current estimates of the respective assets’ expected utility. Costs associated with maintenance and repairs are expensed as incurred. In the event the Company has been deemed the owner for accounting purposes of construction projects in build-to-suit lease arrangements, the estimated construction costs incurred to date are recorded as assets in Property and Equipment, net. Upon occupancy of facilities under build-to-suit leases, the Company assesses whether arrangements qualify for sales recognition under the sale-leaseback accounting guidance. If the Company continues to be the deemed owner for accounting purposes, the cost of the building is depreciated over its estimated useful life. |
Capitalized Software Development Costs | Capitalized Software Development Costs The Company capitalizes certain costs related to its software developed or obtained for internal use. Costs related to preliminary project activities and post-implementation activities are expensed as incurred. Internal and external costs incurred during the application development stage, including upgrades and enhancements representing modifications that will result in significant additional functionality, are capitalized. Software maintenance and training costs are expensed as incurred. Capitalized costs are recorded as part of property and equipment and are amortized on a straight-line basis over the software’s estimated useful life which is three years. The Company evaluates these assets for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. |
Identifiable Intangible Assets | Identifiable Intangible Assets Identifiable intangible assets with finite lives are recorded at their fair values at the date of acquisition and are amortized on a straight-line basis over their respective estimated useful lives, which is the period over which the asset is expected to contribute directly or indirectly to future cash flows. The estimated remaining useful life used in computing amortization is 2.6 years. |
Impairment of Long-Lived Assets and Goodwill | Impairment of Long-Lived Assets and Goodwill The Company reviews long-lived assets and definite-lived intangible assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset might not be recoverable. Recoverability of the long-lived asset is measured by a comparison of the carrying amount of the asset or asset group to future undiscounted net cash flows expected to be generated. If such assets are not recoverable, the impairment to be recognized, if any, is measured as the amount by which the carrying amount of the assets exceeds the estimated fair value (discounted cash flow) of the assets or asset group. Assets held for sale are reported at the lower of the carrying amount or fair value, less costs to sell. Goodwill represents the excess of the aggregate of the fair value of consideration transferred in a business combination over the fair value of assets acquired, net of liabilities assumed. Goodwill is not amortized; rather, goodwill is tested for impairment at the reporting unit level as of October 31 of each year, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. The Company performs a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value before performing a two-step approach to testing goodwill for impairment for each reporting unit. The reporting units are determined by the components of the Company’s operating segments that constitute a business for which both (1) discrete financial information is available and (2) segment management regularly reviews the operating results of that component. If it is more likely than not that the fair value of a reporting unit is less than its carrying value, the Company performs the impairment test by applying a fair-value-based test. The first step measures for impairment by applying fair-value-based tests at the reporting unit level. The second step (if necessary) measures the amount of impairment by applying fair-value-based tests to the individual assets and liabilities within each reporting unit. As part of determining its reporting units, the Company has identified two operating segments, Employer and Carrier. To determine the fair value of the Company’s reporting units, the Company has used a discounted cash flow analysis, which requires significant assumptions and estimates about future operations. Significant judgments inherent in this analysis include the determination of an appropriate discount rate, estimated terminal value and the amount and timing of expected future cash flows. The Company may also determine fair value of its reporting units using a market approach by applying multiples of earnings of peer companies to its operating results. |
Financing Obligations | Financing Obligations In its build-to-suit lease arrangements where the Company is involved in the construction of its buildings, the Company is deemed the owner for accounting purposes during the construction period. The Company records an asset for the amount of the total project costs in Property and Equipment, net and the related financing obligation in Financing and Capital Lease Obligations on the Consolidated Balance Sheet. Once construction is complete, the Company determines if the asset qualifies for sale-leaseback accounting treatment. If the arrangement does not qualify for sale-lease back treatment, the Company continues to reduce the obligation over the lease term as payments are made and depreciates the asset over its useful life. The Company does not report rent expense for the portion of the rent payment determined to be related to the assets that it owns for accounting purposes. Rather, this portion of the rent payment under the lease is recognized as a reduction of the financing obligation and as interest expense. Financing obligations also include liabilities for service agreements related to property and equipment under capital leases. |
Sales Commissions | Sales Commissions Sales commissions are expensed when the sales contract is executed by the customer. |
Advertising | Advertising The Company expenses advertising costs as they are incurred. Direct advertising costs for 2015, 2014, and 2013 were $435, 394, and $265, respectively. |
Comprehensive Loss | Comprehensive Loss The Company’s net loss equals comprehensive loss for all periods presented. |
Stock-Based Employee Compensation | Stock-Based Employee Compensation Stock-based employee compensation is measured based on the grant-date fair value of the awards and recognized in the Consolidated Statements of Operations and Comprehensive Loss over the period during which the award holder is required to perform services in exchange for the award, which is the vesting period. Compensation expense is recognized over the vesting period of the applicable award using the straight-line method. Compensation expense related to performance based restricted stock units, which are accounted for as equity awards, is recognized when it is probable that the performance measure will be met. Compensation costs related to restricted stock units (“RSUs”) is recorded based on the market price on the grant date. The Company uses the Black-Scholes option pricing model for estimating the fair value of stock options. The use of the option valuation model requires the input of subjective assumptions, including the estimated fair value of the Company’s common stock in the periods preceding the IPO, the expected life of the option and the expected stock price volatility based on peer companies. Additionally, the recognition of stock-based compensation expense requires the estimation of the number of options and RSUs that will ultimately vest and the number of options and RSUs that will ultimately be forfeited. |
Income Taxes | Income Taxes The Company uses the asset and liability method for income tax accounting. This method requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, as well as for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled. Valuation allowances are recorded to reduce deferred tax assets to the amount the Company believes is more likely than not to be realized. The tax benefits of uncertain tax positions are recognized only when the Company believes it is more likely than not that the tax position will be upheld on examination by the taxing authorities based on the merits of the position. The Company recognizes interest and penalties, if any, related to unrecognized income tax benefits in income tax expense. In December 2015, the Company adopted ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes (ASU 2015-17). This standard simplifies the presentation of the deferred tax assets and liabilities on the balance sheet and requires companies to classify all deferred tax assets and liabilities as noncurrent. The Company prospectively applied this standard which had no impact on the consolidated balance sheets. |
Basic and Diluted Net Loss per Common Share | Basic and Diluted Net Loss per Common Share The Company uses the two-class method to compute net loss per common share because the Company has issued securities, other than common stock, that contractually entitle the holders to participate in dividends and earnings of the Company. The two-class method requires earnings for the period to be allocated between common stock and participating securities based upon their respective rights to receive distributed and undistributed earnings. Holders of each series of the Company’s redeemable convertible preferred stock were entitled to participate in distributions, when and if declared by the board of directors that are made to common stockholders, and as a result are considered participating securities. Under the two-class method, for periods with net income, basic net income per common share is computed by dividing the net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Net income attributable to common stockholders is computed by subtracting from net income the portion of current year earnings that the participating securities would have been entitled to receive pursuant to their dividend rights had all of the year’s earnings been distributed. No such adjustment to earnings is made during periods with a net loss, as the holders of the participating securities have no obligation to fund losses. Diluted net loss per common share is computed under the two-class method by using the weighted-average number of shares of common stock outstanding plus, for periods with net income attributable to common stockholders, the potential dilutive effects of stock awards and warrants. In addition, the Company analyzes the potential dilutive effect of the outstanding participating securities under the “if-converted” method when calculating diluted earnings per share, in which it is assumed that the outstanding participating securities convert into common stock at the beginning of the period. The Company reports the more dilutive of the approaches (two-class or “if-converted”) as its diluted net income per share during the period. Due to net losses for the years ended December 31, 2015, 2014, and 2013 basic and diluted loss per share were the same, as the effect of potentially dilutive securities would have been anti-dilutive. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09 “Revenue from Contracts with Customers”, which amends the revenue recognition requirements in the FASB Accounting Standards Codification. This statement requires that an entity 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. The statement shall be applied using one of two methods: retrospectively to each prior reporting period presented, or retrospectively with the cumulative effect of initially applying this statement recognized at the date of initial application. The Company has not yet determined which method it will apply. This guidance will be effective for the Company beginning January 1, 2018, with an option to early adopt. The Company is currently evaluating the impact of this guidance on its consolidated financial position and results of operations. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements- Going Concern (Subtopic 205-40). ASU 2015-11 provides guidance in GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. This guidance is effective for the Company beginning January 1, 2017. The Company does not believe the adoption of this standard will have a material effect on its consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-03, “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.” The amendments in this ASU require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This guidance is effective for annual and interim reporting periods of public entities beginning after December 15, 2015, with an option to early adopt. The adoption of this standard will not have an impact on the Company’s consolidated financial position. |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Estimated Useful Lives for Significant Property and Equipment | The estimated useful lives for significant property and equipment categories are generally as follows: Computers and related equipment 3-5 years Furniture and fixtures 7 years Other equipment 5-12 years Purchased software and licenses 1-7 years Vehicles 5 years Buildings 30 years Leasehold improvements Lesser of estimated useful life of asset or lease term |
Net Loss Per Common Share (Tabl
Net Loss Per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Common Share Equivalent Securities Excluded from Calculation of Weighted-Average Common Shares Outstanding | The following common share equivalent securities have been excluded from the calculation of weighted-average common shares outstanding because the effect is anti-dilutive for the periods presented: Year Ended December 31, Anti-Dilutive Common Share Equivalents 2015 2014 2013 Redeemable convertible preferred stock: Series A — — — Series B — — — Restricted stock units 1,017,450 720,370 97,700 Stock options 1,684,843 2,382,881 3,058,795 Warrant to purchase common stock 580,813 — 500,000 Total anti-dilutive common share equivalents 3,283,106 3,103,251 3,656,495 |
Basic and Diluted Net Loss per Common Share | Basic and diluted net loss per common share is calculated as follows: Year Ended December 31, 2015 2014 2013 Numerator: Net loss $ (62,084 ) $ (63,179 ) $ (30,361 ) Net loss attributable to common stockholders $ (62,084 ) $ (63,179 ) $ (30,361 ) Denominator: Weighted-average common shares outstanding, basic and diluted 28,344,680 25,207,099 10,144,243 Net loss per common share, basic and diluted $ (2.19 ) $ (2.51 ) $ (2.99 ) |
Marketable Securities (Tables)
Marketable Securities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Schedule of Marketable Securities | The following presents information about the Company’s marketable securities as of December 31: 2015 2014 Aggregate cost basis and net carrying amount $ 40,448 $ 5,135 Gross unrealized holding gains 1 — Gross unrealized holding losses (26 ) (1 ) Aggregate fair value determined by Level 2 inputs $ 40,423 $ 5,134 |
Investments In Unrealized Loss Position For Which Other-Than-Temporary Impairment not Recognized in Earnings | The following table presents information about the Company’s investments that were in an unrealized loss position and for which an other-than-temporary impairment had not been recognized in earnings as of December 31: 2015 2014 Aggregate fair value of investments with unrealized losses (1) $ 27,070 $ 5,134 Aggregate amount of unrealized losses $ (26 ) $ (1 ) (1) Investments have been in a continuous loss position for less than 12 months |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Assets and Liabilities Measured at Fair Value on Recurring Basis | The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis using the above categories, as of December 31, 2015 and 2014. December 31, 2015 Description Level 1 Level 2 Level 3 Total Cash Equivalents: Money market mutual funds (1) $ 46,905 $ — $ — $ 46,905 Total assets $ 46,905 $ — $ — $ 46,905 December 31, 2014 Description Level 1 Level 2 Level 3 Total Cash Equivalents: Money market mutual funds (1) $ 50,695 $ — $ — $ 50,695 Total assets $ 50,695 $ — $ — $ 50,695 (1) Money market funds are classified as cash equivalents in the Company’s consolidated balance sheets. As short-term, highly liquid investments readily convertible to known amounts of cash, with remaining maturities of three months or less at the time of purchase, the Company’s cash equivalent money market funds have carrying values that approximate fair value. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property and Equipment | Property and equipment consists of the following as of December 31: 2015 2014 Buildings, leased $ 29,291 $ 7,965 Computers and related equipment 24,505 18,871 Purchased software and licenses 23,354 20,392 Software developed 20,900 18,397 Furniture and fixtures 6,651 3,834 Leasehold improvements 4,101 3,334 Other equipment 2,117 2,009 Vehicles 111 111 Construction in progress 412 24,296 Total property and equipment, at cost 111,442 99,209 Accumulated depreciation and amortization (56,405 ) (45,188 ) Property and equipment, net $ 55,037 $ 54,021 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Acquisition-Related Intangible Assets | Information regarding the Company’s acquisition-related intangible assets is as follows: As of December 31, 2015 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted- Average Remaining Useful Life (in years) Trademarks $ 240 $ (240 ) $ — — Customer agreements 2,060 (1,395 ) 665 2.6 Non-compete agreements 126 (126 ) — — Total $ 2,426 $ (1,761 ) $ 665 2.6 As of December 31, 2014 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted- Average Remaining Useful Life (in years) Trademarks $ 240 $ (212 ) $ 28 0.6 Customer agreements 2,060 (1,137 ) 923 3.6 Non-compete agreements 126 (126 ) — — Total $ 2,426 $ (1,475 ) $ 951 3.5 |
Expected Amortization Expense for the Intangible Assets | As of December 31, 2015, expected amortization expense for the intangible assets for each of the next five years and thereafter was as follows: 2015 $ 258 2016 257 2017 150 2018 — 2019 — Total $ 665 |
Commitment and Contingencies (T
Commitment and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Future Minimum Operating Lease Payments | Future minimum lease payments are as follows: Operating Leases Year Ending December 31, 2016 $ 4,019 2017 3,980 2018 3,794 2019 3,890 2020 3,671 Thereafter 17,015 Total minimum lease payments $ 36,369 |
Financing Obligations | Financing obligations are allocated as follows: As of December 31, 2015 2014 Buildings, build-to-suit $ 30,494 $ 8,873 Software support 1,595 2,700 Construction in progress, build-to-suit — 20,124 Total financing obligations $ 32,089 $ 31,697 Less: current portion (1,577 ) (1,720 ) Financing obligations, net of current portion $ 30,512 $ 29,977 |
Future Minimum Lease Payments | Future minimum lease payments are as follows: Capital Leases Financing Obligations Year Ending December 31, 2016 $ 2,126 $ 7,313 2017 500 6,360 2018 178 6,471 2019 — 6,550 2020 — 6,747 Thereafter — 48,660 Total minimum lease and financing obligation payments 2,804 82,101 Less: imputed interest (62 ) Less: current portion (2,071 ) Capital lease obligations, net of current portion $ 671 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Number of Awards Outstanding | The Company has issued two types of awards under these plans: stock options and restricted stock units. Stock options were not issued in 2015 and 2014. The following table sets forth the number of awards outstanding for each award type is as follows: Outstanding at December 31, Award type 2015 2014 2013 Stock options 1,684,843 2,382,881 3,058,795 Restricted stock units 1,017,450 720,370 97,700 |
Compensation Expense Related to Stock Options | Compensation expense related to stock-based awards is included in the following line items in the accompanying consolidated statements of operations and comprehensive loss for the years ended December 31: 2015 2014 2013 Cost of revenue $ 1,950 $ 986 $ 274 Sales and marketing 2,861 1,395 171 Research and development 2,399 1,376 255 General and administrative 3,244 1,831 502 $ 10,454 $ 5,588 $ 1,202 |
Summary of Unvested Restricted Stock Units Activity | The summary of unvested restricted stock units is as follows: Restricted stock units Weighted average grant date fair value Unvested at December 31, 2014 720,370 $ 38.63 Granted 607,553 35.18 Forfeited (140,338 ) 33.67 Vested (170,135 ) 40.54 Unvested at December 31, 2015 1,017,450 $ 36.90 |
Summary of Option Activity | The following is a summary of the option activity for the year ended December 31, 2015: Number of Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Outstanding balance at December 31, 2014 2,382,881 $ 7.39 Granted — — Exercised (656,043 ) 6.45 Forfeited (36,532 ) 12.46 Expired (5,463 ) 0.92 Outstanding balance at December 31, 2015 1,684,843 $ 7.66 3.1 $ 48,400 Exercisable at December 31, 2015 1,580,160 $ 7.41 2.8 $ 45,786 Vested and expected to vest at December 31, 2015 1,683,542 $ 7.66 3.1 $ 48,368 |
Assumptions Used for Estimating Fair Value of Stock Options | The following table summarizes the assumptions used for estimating the fair value of stock options granted for the period indicated (no options granted in 2015 or 2014): Year Ended December 31, 2013 Risk-free interest rate 1.0% - 1.7% Expected term (years) 6.08 Expected volatility 52% Expected dividend yield 0% Weighted-average grant date fair value per share $ 7.71 |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Shares of Common Stock Reserved for Future Issuance | At December 31, 2015, the Company had reserved a total of 4,824,488 of its authorized 50,000,000 shares of common stock for future issuance as follows: Outstanding stock options 1,684,843 Restricted stock units 1,017,450 Possible future issuance under stock option plans 1,541,382 Warrant to purchase common stock 580,813 Total common shares reserved for future issuance 4,824,488 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Components of Income Tax Expense (Benefit) | The following summarizes the components of income tax expense (benefit) for the years ended December 31: 2015 2014 2013 Current: Federal $ — $ — $ — State and local 25 25 (31 ) Total current expense (benefit) $ 25 $ 25 $ (31 ) Deferred: Federal $ — $ — $ — State and local — — — Total deferred taxes $ — $ — $ — |
Reconciliation Between Effect of Applying Federal Statutory Rate and Effective Income Tax Rate Used to Calculate Income Tax Provision | Reconciliation between the effect of applying the federal statutory rate and the effective income tax rate used to calculate the Company’s income tax provision is as follows for the years ended December 31: 2015 2014 2013 Federal statutory rate 34.0 % 34.0 % 34.0 % Effect of: State income taxes, net of federal benefit 6.0 % 4.8 % 3.2 % Change in tax rates 1.7 % 0.4 % 0.4 % State tax credits 2.5 % 0.4 % 0.9 % Change in valuation allowance (42.7 %) (39.3 %) (33.5 %) Uncertain tax positions 0.0 % 0.0 % (0.9 %) Stock-based compensation (0.2 %) (0.2 %) (0.9 %) Other permanent items (0.7 %) (0.1 %) (0.4 %) Deferred true-up (0.6 %) 0.0 % (2.7 %) Income tax provision effective rate 0.0 % 0.0 % 0.1 % |
Components of Deferred Tax Asset and Liability | The significant components of the Company’s deferred tax asset and liability were as follows as of December 31: 2015 2014 Deferred tax assets relating to: Net operating loss carryforwards $ 41,605 $ 26,132 Deferred revenue 26,563 23,612 Commissions and incentive accrual 2,777 1,771 Deferred rent 962 816 State tax credits 4,727 3,195 Stock-based compensation 4,802 1,993 Compensation and other accruals 5,099 3,964 Total gross deferred tax assets 86,535 61,483 Deferred tax liabilities Property and equipment and intangible assets $ (1,087 ) $ (2,514 ) Total gross deferred tax liabilities (1,087 ) (2,514 ) Deferred tax assets less liabilities 85,448 58,969 Less: valuation allowance (85,448 ) (58,969 ) Net deferred tax asset (liability) $ — $ — |
Reconciliation of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows for the years ended December 31: 2015 2014 2013 Balance at beginning of year $ 437 $ 437 $ — Additions based on tax positions related to the current year — — — Additions for tax positions in prior years — — 437 Reductions for tax positions of prior years — — — Reductions for tax positions due to lapse of statute — — — Settlements — — — Balance at end of year $ 437 $ 437 $ 437 |
Segments and Geographic Infor36
Segments and Geographic Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segments and Geographic Information | Year Ended December 31, 2015 2014 2013 Revenue from external customers by segment: Employer $ 94,842 $ 62,016 $ 40,656 Carrier 90,301 75,404 64,096 Total net revenue from external customers $ 185,143 $ 137,420 $ 104,752 Depreciation and amortization by segment: Employer $ 6,024 $ 4,392 $ 3,035 Carrier 5,640 5,101 5,137 Total depreciation and amortization $ 11,664 $ 9,493 $ 8,172 Gross profit by segment Employer $ 33,655 $ 16,186 $ 13,316 Carrier 48,637 33,764 29,025 Total gross profit by segment $ 82,292 $ 49,950 $ 42,341 |
Selected Quarterly Financial 37
Selected Quarterly Financial Data (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Unaudited Quarterly Statements of Operations Data | The following tables set forth selected unaudited quarterly statements of operations data for each of the eight quarters in the years ended December 31, 2015 and 2014. Quarter Ended December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31, Consolidated Statements of Operations Data: Revenue $ 54,340 $ 45,426 $ 42,708 $ 42,669 $ 40,187 $ 34,200 $ 32,337 $ 30,696 Gross profit 23,857 19,161 19,068 20,206 16,335 10,845 11,300 11,470 Total operating expenses 34,482 33,953 35,468 32,663 28,241 28,607 28,711 23,294 Operating loss (10,625 ) (14,792 ) (16,400 ) (12,457 ) (11,906 ) (17,762 ) (17,411 ) (11,824 ) Net loss $ (12,487 ) $ (16,664 ) $ (18,284 ) $ (14,649 ) $ (13,689 ) $ (18,888 ) $ (18,200 ) $ (12,402 ) Net loss per common share (a) $ (0.43 ) $ (0.58 ) $ (0.64 ) $ (0.55 ) $ (0.54 ) $ (0.74 ) $ (0.72 ) $ (0.51 ) Weighted-average common shares outstanding— basic and diluted 29,120,171 28,847,493 28,633,992 26,745,444 25,569,203 25,503,194 25,200,093 24,541,359 (a) Quarterly and year-to-date computations of per share amounts are made independently. Therefore, the sum of the per-share amounts for the quarters may not agree with per share amounts for the year. (b) During the fourth quarter of 2014, the Company recorded a cumulative adjustment to correct prior period errors that related to an overstatement of amortization of certain capitalized software costs. The impact of these items on the Company’s Consolidated Statement of Operations decreased cost of revenue, increased gross profit, and decreased loss from operations, loss before income taxes, and net loss by $628. The Company did not adjust the prior periods as it concluded that such adjustments were not material to the current or prior period Consolidated Financial Statements. |
Organization and Description 38
Organization and Description of Business - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Sep. 30, 2013 | Dec. 31, 2015 | Dec. 31, 2013 | Dec. 31, 2014 | |
Organization And Description Of Business [Line Items] | ||||
Proceeds from initial public offering, net of issuance costs | $ 70,064 | $ 70,064 | ||
Underwriting discounts and commissions | 5,565 | |||
Other offering expenses | $ 3,871 | |||
Conversion of redeemable convertible preferred units into common stock | 16,496,860 | 16,496,860 | ||
Common stock par value | $ 0.001 | $ 0.001 | $ 0.001 | |
IPO | ||||
Organization And Description Of Business [Line Items] | ||||
Stock issued, shares | 3,000,000 | |||
Stock issued, public offering price | $ 26.50 | |||
Existing shareholders | ||||
Organization And Description Of Business [Line Items] | ||||
Stock issued, shares | 2,675,250 |
Summary of Significant Accoun39
Summary of Significant Accounting Policies - Additional Information (Detail) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||||||||||
Jan. 31, 2015 | Dec. 31, 2015USD ($)$ / shares | Sep. 30, 2015USD ($)$ / shares | Jun. 30, 2015USD ($)$ / shares | Mar. 31, 2015USD ($)$ / shares | Dec. 31, 2014USD ($)$ / shares | Sep. 30, 2014USD ($)$ / shares | Jun. 30, 2014USD ($)$ / shares | Mar. 31, 2014USD ($)$ / shares | Dec. 31, 2015USD ($)CustomerSegment$ / shares | Dec. 31, 2014USD ($)Customer$ / shares | Dec. 31, 2013USD ($)$ / shares | |||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||||||||
Revenue from implementation services | $ 2,401 | |||||||||||||||||||
Loss before income taxes | (62,059) | $ (63,154) | $ (30,392) | |||||||||||||||||
Net loss | $ (12,487) | $ (16,664) | $ (18,284) | $ (14,649) | $ (13,689) | [1] | $ (18,888) | $ (18,200) | $ (12,402) | $ (62,084) | $ (63,179) | $ (30,361) | ||||||||
Net loss per common share, basic and diluted | $ / shares | $ (0.43) | [2] | $ (0.58) | [2] | $ (0.64) | [2] | $ (0.55) | [2] | $ (0.54) | [1],[2] | $ (0.74) | [2] | $ (0.72) | [2] | $ (0.51) | [2] | $ (2.19) | $ (2.51) | $ (2.99) | |
Revenue | $ 54,340 | $ 45,426 | $ 42,708 | $ 42,669 | $ 40,187 | [1] | $ 34,200 | $ 32,337 | $ 30,696 | $ 185,143 | $ 137,420 | $ 104,752 | ||||||||
Allowance for doubtful accounts | 32 | 10 | $ 32 | 10 | ||||||||||||||||
Finite lived intangibles, useful life | 2 years 7 months 6 days | |||||||||||||||||||
Number of operating segments | Segment | 2 | |||||||||||||||||||
Advertising costs | $ 435 | 394 | 265 | |||||||||||||||||
Employer | ||||||||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||||||||
Revenue | 94,842 | 62,016 | 40,656 | |||||||||||||||||
Carrier | ||||||||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||||||||
Revenue | $ 90,301 | 75,404 | $ 64,096 | |||||||||||||||||
Capitalized Software Development Costs | ||||||||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||||||||
Useful lives for property and equipment | 3 years | |||||||||||||||||||
Allowance for Returns | ||||||||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||||||||
Allowance for returns | $ 2,553 | $ 1,653 | $ 2,553 | $ 1,653 | ||||||||||||||||
Customer Concentration Risk | Accounts Receivable | Aetna | ||||||||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||||||||
Concentration risk, percentage | 13.30% | |||||||||||||||||||
Customer Concentration Risk | Accounts Receivable | Carolina State Health Plan | ||||||||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||||||||
Concentration risk, percentage | 22.20% | |||||||||||||||||||
Customer Concentration Risk | Total Revenue | ||||||||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||||||||
Number of customers exceeded 10% of total revenue | Customer | 0 | 0 | ||||||||||||||||||
Change in Customer Relationship Period | ||||||||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||||||||
Loss before income taxes | $ 6,207 | |||||||||||||||||||
Net loss | $ (6,207) | |||||||||||||||||||
Net loss per common share, basic and diluted | $ / shares | $ (0.22) | |||||||||||||||||||
Change in Customer Relationship Period | Employer | ||||||||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||||||||
Revenue | $ 1,137 | |||||||||||||||||||
Change in Customer Relationship Period | Carrier | ||||||||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||||||||
Revenue | $ 5,070 | |||||||||||||||||||
Maximum | ||||||||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||||||||
Deferred revenue recognition period | 10 years | |||||||||||||||||||
Cash equivalents maturity period | 3 months | |||||||||||||||||||
Highly rated marketable securities | 2 years | |||||||||||||||||||
Minimum | ||||||||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||||||||
Deferred revenue recognition period | 7 years | |||||||||||||||||||
Weighted average maturity of portfolio of investments | 9 months | |||||||||||||||||||
[1] | During the fourth quarter of 2014, the Company recorded a cumulative adjustment to correct prior period errors that related to an overstatement of amortization of certain capitalized software costs. The impact of these items on the Company's Consolidated Statement of Operations decreased cost of revenue, increased gross profit, and decreased loss from operations, loss before income taxes, and net loss by $628. The Company did not adjust the prior periods as it concluded that such adjustments were not material to the current or prior period Consolidated Financial Statements. | |||||||||||||||||||
[2] | Quarterly and year-to-date computations of per share amounts are made independently. Therefore, the sum of the per-share amounts for the quarters may not agree with per share amounts for the year. |
Estimated Useful Lives for Sign
Estimated Useful Lives for Significant Property and Equipment (Detail) | 12 Months Ended |
Dec. 31, 2015 | |
Computers and Related Equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful lives for property and equipment | 3 years |
Computers and Related Equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful lives for property and equipment | 5 years |
Furniture and Fixtures | |
Property, Plant and Equipment [Line Items] | |
Useful lives for property and equipment | 7 years |
Other Equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful lives for property and equipment | 5 years |
Other Equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful lives for property and equipment | 12 years |
Purchased Software and Licenses | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful lives for property and equipment | 1 year |
Purchased Software and Licenses | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful lives for property and equipment | 7 years |
Vehicles | |
Property, Plant and Equipment [Line Items] | |
Useful lives for property and equipment | 5 years |
Buildings | |
Property, Plant and Equipment [Line Items] | |
Useful lives for property and equipment | 30 years |
Leasehold Improvements | |
Property, Plant and Equipment [Line Items] | |
Useful lives for property and equipment | Lesser of estimated useful life of asset or lease term |
Common Share Equivalents Securi
Common Share Equivalents Securities Excluded From Calculation of Weighted Average Common Share Outstanding (Detail) - shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive common share equivalents | 3,283,106 | 3,103,251 | 3,656,495 |
Restricted Stock Units (RSUs) | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive common share equivalents | 1,017,450 | 720,370 | 97,700 |
Stock Options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive common share equivalents | 1,684,843 | 2,382,881 | 3,058,795 |
Warrant to Purchase Common Stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive common share equivalents | 580,813 | 500,000 |
Basic and Diluted Net Loss per
Basic and Diluted Net Loss per Common Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | [1] | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||||||||
Numerator: | |||||||||||||||||||
Net loss | $ (12,487) | $ (16,664) | $ (18,284) | $ (14,649) | $ (13,689) | $ (18,888) | $ (18,200) | $ (12,402) | $ (62,084) | $ (63,179) | $ (30,361) | ||||||||
Net loss attributable to common stockholders | $ (62,084) | $ (63,179) | $ (30,361) | ||||||||||||||||
Denominator: | |||||||||||||||||||
Weighted-average common shares outstanding, basic and diluted | 29,120,171 | 28,847,493 | 28,633,992 | 26,745,444 | 25,569,203 | 25,503,194 | 25,200,093 | 24,541,359 | 28,344,680 | 25,207,099 | 10,144,243 | ||||||||
Net loss per common share, basic and diluted | $ (0.43) | [2] | $ (0.58) | [2] | $ (0.64) | [2] | $ (0.55) | [2] | $ (0.54) | [2] | $ (0.74) | [2] | $ (0.72) | [2] | $ (0.51) | [2] | $ (2.19) | $ (2.51) | $ (2.99) |
[1] | During the fourth quarter of 2014, the Company recorded a cumulative adjustment to correct prior period errors that related to an overstatement of amortization of certain capitalized software costs. The impact of these items on the Company's Consolidated Statement of Operations decreased cost of revenue, increased gross profit, and decreased loss from operations, loss before income taxes, and net loss by $628. The Company did not adjust the prior periods as it concluded that such adjustments were not material to the current or prior period Consolidated Financial Statements. | ||||||||||||||||||
[2] | Quarterly and year-to-date computations of per share amounts are made independently. Therefore, the sum of the per-share amounts for the quarters may not agree with per share amounts for the year. |
Marketable Securities - Additio
Marketable Securities - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2015 | |
Minimum | |
Gain (Loss) on Investments [Line Items] | |
Held-to-maturity securities, contractual maturity period | 1 month |
Maximum | |
Gain (Loss) on Investments [Line Items] | |
Held-to-maturity securities, contractual maturity period | 11 months |
Marketable Securities (Detail)
Marketable Securities (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Gain (Loss) on Investments [Line Items] | ||
Aggregate cost basis and net carrying amount | $ 40,448 | $ 5,135 |
Gross unrealized holding gains | 1 | |
Gross unrealized holding losses | (26) | (1) |
Aggregate fair value determined by Level 2 inputs | $ 40,423 | $ 5,134 |
Unrealized Loss Position of Inv
Unrealized Loss Position of Investments Other-Than-Temporary Impairment not Recognized in Earnings (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | |
Gain (Loss) on Investments [Line Items] | |||
Aggregate fair value of investments with unrealized losses | [1] | $ 27,070 | $ 5,134 |
Aggregate amount of unrealized losses | $ (26) | $ (1) | |
[1] | Investments have been in a continuous loss position for less than 12 months |
Assets and Liabilities Measured
Assets and Liabilities Measured at Fair Value on a Recurring Basis (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total assets | $ 46,905 | $ 50,695 | |
Money market mutual funds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash Equivalents | [1] | 46,905 | 50,695 |
Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total assets | 46,905 | 50,695 | |
Level 1 | Money market mutual funds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash Equivalents | [1] | $ 46,905 | $ 50,695 |
[1] | Money market funds are classified as cash equivalents in the Company's consolidated balance sheets. As short-term, highly liquid investments readily convertible to known amounts of cash, with remaining maturities of three months or less at the time of purchase, the Company's cash equivalent money market funds have carrying values that approximate fair value. |
Property and Equipment (Detail)
Property and Equipment (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 111,442 | $ 99,209 |
Accumulated depreciation and amortization | (56,405) | (45,188) |
Property and equipment, net | 55,037 | 54,021 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 29,291 | 7,965 |
Computers and Related Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 24,505 | 18,871 |
Purchased Software and Licenses | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 23,354 | 20,392 |
Software Developed | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 20,900 | 18,397 |
Furniture and Fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 6,651 | 3,834 |
Leasehold Improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 4,101 | 3,334 |
Other Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 2,117 | 2,009 |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 111 | 111 |
Construction in progress, build-to-suit | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 412 | $ 24,296 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation and amortization | $ 11,664 | $ 9,493 | $ 8,172 |
Fixed assets acquired under capital lease | 9,131 | 8,569 | |
Accumulated depreciation of assets under capital leases | 3,126 | 1,521 | |
Capitalized software cost gross | 2,503 | 2,215 | |
Amortization of capitalized software cost | 2,587 | 2,257 | 2,618 |
Capitalized software cost net | 4,049 | 4,134 | |
Property and Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation and amortization | $ 11,378 | $ 9,188 | $ 7,849 |
Goodwill and Intangible Asset49
Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Finite-Lived Intangible Assets [Line Items] | |||
Goodwill | $ 1,634,000 | $ 1,634,000 | |
Goodwill gross carrying amount | 3,304,000 | 3,304,000 | |
Goodwill accumulated impairment losses | (1,670,000) | (1,670,000) | |
Amortization expense related to acquisition of intangible assets | 286,000 | 305,000 | $ 323,000 |
Impairment of intangible assets | $ 0 | $ 0 | $ 0 |
Acquisition-Related Intangible
Acquisition-Related Intangible Assets (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 2,426 | $ 2,426 |
Accumulated Amortization | (1,761) | (1,475) |
Net Carrying Amount | $ 665 | $ 951 |
Weighted- Average Remaining Useful Life (in years) | 2 years 7 months 6 days | 3 years 6 months |
Trademarks | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 240 | $ 240 |
Accumulated Amortization | (240) | (212) |
Net Carrying Amount | $ 28 | |
Weighted- Average Remaining Useful Life (in years) | 7 months 6 days | |
Customer Agreements | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 2,060 | $ 2,060 |
Accumulated Amortization | (1,395) | (1,137) |
Net Carrying Amount | $ 665 | $ 923 |
Weighted- Average Remaining Useful Life (in years) | 2 years 7 months 6 days | 3 years 7 months 6 days |
Non-compete Agreements | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 126 | $ 126 |
Accumulated Amortization | $ (126) | $ (126) |
Expected Amortization Expense f
Expected Amortization Expense for Intangible Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Estimated Amortization Expense [Line Items] | ||
2,015 | $ 258 | |
2,016 | 257 | |
2,017 | 150 | |
2,018 | 0 | |
2,019 | 0 | |
Net Carrying Amount | $ 665 | $ 951 |
Revolving Line of Credit - Addi
Revolving Line of Credit - Additional Information (Detail) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Feb. 28, 2015 | Sep. 30, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Aug. 27, 2013 | |
Line of Credit Facility [Line Items] | ||||||
Proceeds from line of credit borrowing | $ 57,492,000 | $ 14,000,000 | $ 10,757,000 | |||
Payments on revolving line of credit | 44,903,000 | 2,100,000 | 5,000,000 | |||
Hardware And Software | ||||||
Line of Credit Facility [Line Items] | ||||||
Proceeds from line of credit borrowing | 39,246,000 | 14,000,000 | ||||
Payments on revolving line of credit | 27,246,000 | $ 2,100,000 | ||||
Revolving Line of Credit | ||||||
Line of Credit Facility [Line Items] | ||||||
Line of credit facility maximum borrowing capacity | $ 35,000,000 | |||||
Proceeds from line of credit borrowing | 5,757,000 | |||||
Payments on revolving line of credit | $ 5,000,000 | |||||
Senior Revolving Line of Credit | ||||||
Line of Credit Facility [Line Items] | ||||||
Line of credit facility maximum borrowing capacity | $ 60,000,000 | |||||
Proceeds from line of credit borrowing | 18,246,000 | |||||
Payments on revolving line of credit | 17,657,000 | |||||
Administrative and legal fees related to the issuance of line of credit | 589,000 | |||||
Debt issuance fees capitalized | $ 591,000 | |||||
Line of credit facility, expiration period | 3 years | |||||
Amount outstanding under credit facility | 30,246,000 | |||||
Amount available to borrow under line of credit | $ 29,754,000 | |||||
Line of credit facility interest rate | 4.50% | |||||
Line of credit facility expiration date | Feb. 28, 2018 | |||||
Senior Revolving Line of Credit | Maximum | ||||||
Line of Credit Facility [Line Items] | ||||||
Amount under revolving line of credit available to company | $ 60,000,000 | |||||
Interest rate margin to be added on prime rate | 1.50% | |||||
Line of credit facility, unused capacity, commitment fee percentage | 0.375% | |||||
Senior Revolving Line of Credit | Minimum | ||||||
Line of Credit Facility [Line Items] | ||||||
Interest rate margin to be added on prime rate | 1.00% | |||||
Line of credit facility, unused capacity, commitment fee percentage | 0.30% | |||||
After Amendment | ||||||
Line of Credit Facility [Line Items] | ||||||
Line of credit facility maximum borrowing capacity | 35,000,000 | |||||
Before Amendment | ||||||
Line of Credit Facility [Line Items] | ||||||
Line of credit facility maximum borrowing capacity | $ 15,000,000 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Apr. 30, 2015USD ($) | Sep. 30, 2014USD ($)Option | Apr. 30, 2014USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($)Lease_Agreements | |
Commitments and Contingencies Disclosure [Line Items] | ||||||
Operating lease expiration date | 2016-04 | |||||
Lease yearly expenses | $ 186 | $ 4,376 | $ 4,099 | $ 2,517 | ||
Operating lease term | 15 years | |||||
Operating lease renewal option term | 5 years | |||||
Total payment under capital lease | $ 9,884 | 8,231 | $ 3,343 | |||
Minimum | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Operating lease expiration year | 2,016 | |||||
Maximum | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Operating lease expiration year | 2,029 | |||||
Software and Colocation Services | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Financing obligation | $ 8,916 | |||||
Lease and financing arrangement | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Financing obligation | 32,089 | 31,697 | ||||
Financing Obligation | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Financing obligation | 82,101 | |||||
Data Processing Equipment and Software | April 2014 Lease Agreement | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Capital lease agreement period | 3 years | |||||
Total payment under capital lease | $ 3,779 | |||||
Capital lease down payment | 1,340 | |||||
Capital lease aggregate monthly payment | $ 2,439 | |||||
Capital lease obligation | 1,052 | |||||
Financing obligation term | 3 years | |||||
Total payment under financing obligation | $ 629 | |||||
Financing obligation down payment | 223 | |||||
Financing obligation aggregate monthly payment | $ 406 | |||||
Financing obligation | 175 | 300 | ||||
Data Processing Equipment and Software | November 2013 Lease Agreement | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Capital lease agreement period | 3 years | |||||
Total payment under capital lease | $ 5,277 | |||||
Capital lease obligation | 1,116 | 2,803 | ||||
Financing obligation term | 3 years | |||||
Total payment under financing obligation | $ 4,039 | |||||
Financing obligation | 995 | 2,287 | ||||
Number of Lease agreements | Lease_Agreements | 2 | |||||
Data Processing Equipment and Software | 2013 and 2012 Lease Agreement | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Total payment under capital lease | 697 | |||||
Capital lease obligation | $ 574 | 135 | ||||
Percentage of present value of minimum lease payments at beginning of lease term of fair value of leased property | 90.00% | |||||
Data Processing Equipment and Software | 2013 and 2012 Lease Agreement | Minimum | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Capital lease agreement period | 1 year | |||||
Percentage of economic life that will initiate the passage of title to the Company | 75.00% | |||||
Data Processing Equipment and Software | 2013 and 2012 Lease Agreement | Maximum | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Capital lease agreement period | 3 years | |||||
Property and Equipment | Minimum | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Capital lease agreement period | 12 months | |||||
Interest rate under lease agreement | 0.00% | |||||
Property and Equipment | Maximum | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Capital lease agreement period | 3 years | |||||
Interest rate under lease agreement | 12.40% | |||||
Headquarters building, build-to-suit | Lease and financing arrangement | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Financing obligation | $ 30,494 | 8,873 | ||||
Headquarters building, build-to-suit | Financing Obligation | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Financing obligation | 12,406 | |||||
Construction in progress, build-to-suit | Lease and financing arrangement | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Financing obligation | $ 20,124 | |||||
Construction in progress, build-to-suit | Financing Obligation | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Financing obligation | $ 68,079 | |||||
Office Space Operating Leases | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Operating lease expiration date | 2020-02 | |||||
Operating lease term | 5 years | |||||
Number of options to extend operating lease | Option | 5 | |||||
Operating lease renewal option term | 1 year | |||||
Operating lease commencement date | 2015-02 | |||||
Office Space Operating Leases | Quarterly fee | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Lease yearly expenses | $ 95 | |||||
Build-to-suit Lease | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Operating lease term | 15 years | |||||
Option to extend lease term | 36 months | |||||
Pro-rated termination fee if the company terminates the option | $ 517 | |||||
Build-to-suit Lease | Maximum | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Annual costs prior to exercise of an option to lease space in two additional adjacent buildings | $ 466 | |||||
Termination fee if the company terminates an option to lease space in two additional adjacent buildings | $ 757 |
Future Minimum Operating Lease
Future Minimum Operating Lease Payments (Detail) $ in Thousands | Dec. 31, 2015USD ($) |
Operating Leased Assets [Line Items] | |
2,016 | $ 4,019 |
2,017 | 3,980 |
2,018 | 3,794 |
2,019 | 3,890 |
2,020 | 3,671 |
Thereafter | 17,015 |
Total minimum lease payments | $ 36,369 |
Financing Obligations (Detail)
Financing Obligations (Detail) - Lease and financing arrangement - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Contractual Obligation [Line Items] | ||
Financing obligations | $ 32,089 | $ 31,697 |
Less: current portion | (1,577) | (1,720) |
Financing obligations, net of current portion | 30,512 | 29,977 |
Headquarters building, build-to-suit | ||
Contractual Obligation [Line Items] | ||
Financing obligations | 30,494 | 8,873 |
Software support | ||
Contractual Obligation [Line Items] | ||
Financing obligations | $ 1,595 | 2,700 |
Construction in progress, build-to-suit | ||
Contractual Obligation [Line Items] | ||
Financing obligations | $ 20,124 |
Future Minimum Lease Payments (
Future Minimum Lease Payments (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Capital Leases | ||
2,016 | $ 2,126 | |
2,017 | 500 | |
2,018 | 178 | |
2,019 | 0 | |
2,020 | 0 | |
Thereafter | 0 | |
Total minimum lease payments | 2,804 | |
Less: imputed interest | (62) | |
Less: current portion | (3,648) | $ (4,197) |
Capital lease obligations, net of current portion | 671 | |
Capital Lease Obligations | ||
Capital Leases | ||
Less: current portion | (2,071) | |
Financing Obligation | ||
Financing Obligations | ||
2,016 | 7,313 | |
2,017 | 6,360 | |
2,018 | 6,471 | |
2,019 | 6,550 | |
2,020 | 6,747 | |
Thereafter | 48,660 | |
Total minimum lease and financing obligation payments | $ 82,101 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Jan. 31, 2012 | |
Share Based Compensation Arrangements By Share Based Payment Award Options [Line Items] | ||||
Number of common shares reserved for issuance under stock plans | 4,243,675 | |||
Share allocated to stock option plan | 1,541,382 | |||
Total compensation cost related to nonvested awards not yet recognized | $ 27,990 | |||
Total compensation cost related to nonvested awards not yet recognized period | 2 years 10 months 6 days | |||
Restricted stock units granted vesting period description | Restricted stock units granted to employees vest in equal annual installments generally over 4 years from the grant date. | |||
Number of restricted stock units outstanding | 1,017,450 | 720,370 | 97,700 | |
Restricted stock units, aggregate grant date fair value | $ 35.18 | |||
Intrinsic value of restricted stock units expected to vest | $ 33,047 | |||
Number of restricted stock units expected to vest | 908,143 | |||
Aggregate fair value of restricted stock units vested | $ 6,261 | $ 661 | ||
Restricted stock units vested | 170,135 | 0 | ||
Aggregate intrinsic value of employee options exercised | $ 18,873 | $ 23,397 | $ 6,448 | |
Stock-based compensation, option granted | 0 | 0 | ||
Restricted Stock Units (RSUs) | ||||
Share Based Compensation Arrangements By Share Based Payment Award Options [Line Items] | ||||
Stock plan vesting period | 4 years | |||
Awards vesting date | Dec. 31, 2017 | |||
Number of restricted stock units outstanding | 40,000 | |||
Restricted stock units, aggregate grant date fair value | $ 39.69 | |||
Restricted Stock Units (RSUs) | Vest on December 31,2017 | Minimum | ||||
Share Based Compensation Arrangements By Share Based Payment Award Options [Line Items] | ||||
Shares issued vesting range | 0.00% | |||
Restricted Stock Units (RSUs) | Vest on December 31,2017 | Maximum | ||||
Share Based Compensation Arrangements By Share Based Payment Award Options [Line Items] | ||||
Shares issued vesting range | 100.00% | |||
2012 Plan | ||||
Share Based Compensation Arrangements By Share Based Payment Award Options [Line Items] | ||||
Share allocated to stock option plan | 1,541,382 | |||
Stock plan vesting period | 4 years | |||
Stock plan expiration period from grant date | 10 years |
Number of Awards Outstanding (D
Number of Awards Outstanding (Detail) - shares | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of stock options outstanding | 1,684,843 | 2,382,881 | 3,058,795 |
Number of restricted stock units expected to vest | 1,017,450 | 720,370 | 97,700 |
Compensation Expense Related to
Compensation Expense Related to Stock Options (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | $ 10,454 | $ 5,588 | $ 1,202 |
Cost of revenue | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | 1,950 | 986 | 274 |
Sales and marketing | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | 2,861 | 1,395 | 171 |
Research and development | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | 2,399 | 1,376 | 255 |
General and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | $ 3,244 | $ 1,831 | $ 502 |
Summary of Unvested Restricted
Summary of Unvested Restricted Stock Units Activity (Detail) - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2013 | |
Restricted stock units | ||
Restricted stock units, beginning balance | 720,370 | |
Restricted stock units, granted | 607,553 | |
Restricted stock units, Forfeited | (140,338) | |
Restricted stock units, Vested | (170,135) | 0 |
Restricted stock units, ending balance | 1,017,450 | 97,700 |
Weighted average grant date fair value | ||
Weighted average grant date fair value, beginning balance | $ 38.63 | |
Weighted average grant date fair value, granted | 35.18 | |
Weighted average grant date fair value, Forfeited | 33.67 | |
Weighted average grant date fair value, Vested | 40.54 | |
Weighted average grant date fair value, ending balance | $ 36.90 |
Summary of Option Activity (Det
Summary of Option Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Stock options | ||
Beginning Balance | 2,382,881 | 3,058,795 |
Granted | 0 | 0 |
Exercised | (656,043) | |
Forfeited | (36,532) | |
Expired | (5,463) | |
Ending Balance | 1,684,843 | 2,382,881 |
Exercisable | 1,580,160 | |
Vested and expected to vest | 1,683,542 | |
Weighted Average Exercise Price | ||
Beginning Balance | $ 7.39 | |
Granted | 0 | |
Exercised | 6.45 | |
Forfeited | 12.46 | |
Expired | 0.92 | |
Ending Balance | 7.66 | $ 7.39 |
Exercisable | 7.41 | |
Vested and expected to vest | $ 7.66 | |
Weighted Average Remaining Contractual Term | ||
Outstanding | 3 years 1 month 6 days | |
Exercisable | 2 years 9 months 18 days | |
Vested and Expected to Vest | 3 years 1 month 6 days | |
Aggregate Intrinsic Value | ||
Outstanding | $ 48,400 | |
Exercisable | 45,786 | |
Vested and Expected to vest | $ 48,368 |
Assumptions Used For Estimating
Assumptions Used For Estimating Fair Value of Stock Options Granted (Detail) | 12 Months Ended |
Dec. 31, 2015$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate, minimum | 1.00% |
Risk-free interest rate, maximum | 1.70% |
Expected term (years) | 6 years 29 days |
Expected volatility | 52.00% |
Expected dividend yield | 0.00% |
Weighted-average grant date fair value per share | $ 7.71 |
Stockholders' Deficit - Additio
Stockholders' Deficit - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Feb. 24, 2015 | Mar. 31, 2014 | Sep. 30, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2009 |
Schedule Of Stockholders Equity [Line Items] | |||||||
Conversion of redeemable convertible preferred units into common stock | 16,496,860 | 16,496,860 | |||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Preferred stock, shares authorized before amendment | 21,496,860 | ||||||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | |||||
Common stock, authorized shares reserved for future issuance | 4,824,488 | ||||||
Common stock, shares authorized | 50,000,000 | 50,000,000 | |||||
Stock issued, value | $ 70,064 | ||||||
Maximum number of shares to be issued under warrant agreement | 500,000 | ||||||
Warrant exercise price per share | $ 5.48 | ||||||
Proceeds from issuance of common stock and warrant, net of issuance costs | $ 74,538 | 68 | |||||
Warrant contract term | 5 years | ||||||
Warrant issued, expiration term | 10 years | ||||||
Warrant issued, exercise period | 9 years 6 months | ||||||
Issuance of common stock for cashless exercise of warrant | 455,521 | ||||||
Accretion of customer warrant | $ 744 | $ 892 | |||||
Mercer LLC | |||||||
Schedule Of Stockholders Equity [Line Items] | |||||||
Stock issued, shares | 2,817,526 | ||||||
Stock issued, price per share | $ 26.50 | ||||||
Stock issued, value | $ 74,664 | ||||||
Warrant term | 30 months | ||||||
Maximum number of shares to be issued under warrant agreement | 580,813 | ||||||
Warrant exercise price per share | $ 26.50 | ||||||
Proceeds from issuance of common stock and warrant, net of issuance costs | $ 74,331 | ||||||
Mercer LLC | Maximum | |||||||
Schedule Of Stockholders Equity [Line Items] | |||||||
Common stock ownership percentage in Mercer Health & Benefits, LLC | 75.00% | ||||||
Outstanding common stock ownership percentage | 5.00% |
Common Stock for Future Issuanc
Common Stock for Future Issuance (Detail) - shares | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Common Stock [Line Items] | |||
Outstanding stock options | 1,684,843 | 2,382,881 | 3,058,795 |
Restricted stock units | 1,017,450 | 720,370 | 97,700 |
Possible future issuance under stock option plans | 1,541,382 | ||
Warrant to purchase common stock | 580,813 | ||
Total common shares reserved for future issuance | 4,824,488 |
Employee Benefit Plan - Additio
Employee Benefit Plan - Additional Information (Detail) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Defined Contribution Plan Disclosure [Line Items] | ||||
Defined benefit plan service period of employees to be eligible to participate in 401(k) plan | 1 day | |||
Eligible age of participation in 401 (k) plan | Employees are eligible to participate in the 401(k) Plan after one day of service and upon attainment of age 21 | |||
Employers matching contribution, percent | 50.00% | 50.00% | 50.00% | |
Percentage of employee vesting amount on matching company contribution | 20.00% | 20.00% | 20.00% | |
Employee's service requisite period for vesting matching company contribution | 1 year | 2 years | 2 years | 2 years |
Employers matching contribution | $ 2,570 | $ 2,083 | $ 1,339 | |
Maximum | ||||
Defined Contribution Plan Disclosure [Line Items] | ||||
Employers matching contribution percent of qualifying compensation | 3.00% | 3.00% | 3.00% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule Of Income Taxes [Line Items] | |||
Deferred tax valuation allowance | $ 85,448,000 | $ 58,969,000 | |
Increase in valuation allowance | 26,479,000 | 24,547,000 | |
Federal and state net operating loss carryforwards | 17,901,000 | ||
Excess tax benefits from deductions from exercise of nonqualified stock options | 6,949,000 | ||
Gross unrecognized tax benefits | 437,000 | 437,000 | $ 437,000 |
Portion of unrecognized tax benefits for Company's effective tax rate | 0 | ||
SOUTH CAROLINA | |||
Schedule Of Income Taxes [Line Items] | |||
Tax credit carryovers | 7,598,000 | 5,277,000 | |
Corporate Headquarters | |||
Schedule Of Income Taxes [Line Items] | |||
Tax credit carryovers | $ 7,598,000 | 5,277,000 | |
Expiration of tax credit carryforward, beginning year | 2,020 | ||
Expiration of tax credit carryforward, ending year | 2,028 | ||
Unrecognized Tax Benefit | |||
Schedule Of Income Taxes [Line Items] | |||
Gross unrecognized tax benefits | $ 437,000 | ||
Federal | |||
Schedule Of Income Taxes [Line Items] | |||
Net operating loss carryforwards | $ 122,761,000 | 68,235,000 | |
Net operating loss carryforwards expiration, beginning year | 2,022 | ||
Net operating loss carryforwards expiration, ending year | 2,034 | ||
State and Local Jurisdiction | |||
Schedule Of Income Taxes [Line Items] | |||
Net operating loss carryforwards | $ 126,570,000 | $ 61,583,000 | |
Minimum | |||
Schedule Of Income Taxes [Line Items] | |||
U.S. federal income tax examination year | 2,008 | ||
Maximum | |||
Schedule Of Income Taxes [Line Items] | |||
U.S. federal income tax examination year | 2,014 |
Summary of Components of Income
Summary of Components of Income Tax (Benefit) Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Components Of Income Tax Expense Benefit [Line Items] | |||
Federal | $ 0 | $ 0 | $ 0 |
State and local | 25 | 25 | (31) |
Total current expense (benefit) | 25 | 25 | (31) |
Federal | 0 | 0 | 0 |
State and local | 0 | 0 | 0 |
Total deferred taxes | $ 0 | $ 0 | $ 0 |
Reconciliation between Effect o
Reconciliation between Effect of Applying Federal Statutory Rate and Effective Income Tax Rate (Detail) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule of Effective Tax Rate Reconciliation [Line Items] | |||
Federal statutory rate | 34.00% | 34.00% | 34.00% |
State income taxes, net of federal benefit | 6.00% | 4.80% | 3.20% |
Change in tax rates | 1.70% | 0.40% | 0.40% |
State tax credits | 2.50% | 0.40% | 0.90% |
Change in valuation allowance | (42.70%) | (39.30%) | (33.50%) |
Uncertain tax positions | 0.00% | 0.00% | (0.90%) |
Stock-based compensation | (0.20%) | (0.20%) | (0.90%) |
Other permanent items | (0.70%) | (0.10%) | (0.40%) |
Deferred true-up | (0.60%) | 0.00% | (2.70%) |
Income tax provision effective rate | 0.00% | 0.00% | 0.10% |
Components of Deferred Tax Asse
Components of Deferred Tax Asset and Liability (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets relating to: | ||
Net operating loss carryforwards | $ 41,605 | $ 26,132 |
Deferred revenue | 26,563 | 23,612 |
Commissions and incentive accrual | 2,777 | 1,771 |
Deferred rent | 962 | 816 |
State tax credits | 4,727 | 3,195 |
Stock-based compensation | 4,802 | 1,993 |
Compensation and other accruals | 5,099 | 3,964 |
Total gross deferred tax assets | 86,535 | 61,483 |
Deferred tax liabilities | ||
Property and equipment and intangible assets | (1,087) | (2,514) |
Total gross deferred tax liabilities | (1,087) | (2,514) |
Deferred tax assets less liabilities | 85,448 | 58,969 |
Less: valuation allowance | (85,448) | (58,969) |
Net deferred tax asset (liability) | $ 0 | $ 0 |
Reconciliation of Unrecognized
Reconciliation of Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Contingency [Line Items] | |||
Beginning balance | $ 437 | $ 437 | |
Additions based on tax positions related to the current year | 0 | 0 | $ 0 |
Additions for tax positions in prior years | 437 | ||
Reductions for tax positions of prior years | 0 | 0 | 0 |
Reductions for tax positions due to lapse of statute | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 |
Ending balance | $ 437 | $ 437 | $ 437 |
Segment and Geographic Informat
Segment and Geographic Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | [1] | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Segment Reporting Information [Line Items] | ||||||||||||
Net revenue from external customers | $ 54,340 | $ 45,426 | $ 42,708 | $ 42,669 | $ 40,187 | $ 34,200 | $ 32,337 | $ 30,696 | $ 185,143 | $ 137,420 | $ 104,752 | |
Depreciation and amortization | 11,664 | 9,493 | 8,172 | |||||||||
Gross profit | $ 23,857 | $ 19,161 | $ 19,068 | $ 20,206 | $ 16,335 | $ 10,845 | $ 11,300 | $ 11,470 | 82,292 | 49,950 | 42,341 | |
Employer | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net revenue from external customers | 94,842 | 62,016 | 40,656 | |||||||||
Depreciation and amortization | 6,024 | 4,392 | 3,035 | |||||||||
Gross profit | 33,655 | 16,186 | 13,316 | |||||||||
Carrier | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net revenue from external customers | 90,301 | 75,404 | 64,096 | |||||||||
Depreciation and amortization | 5,640 | 5,101 | 5,137 | |||||||||
Gross profit | $ 48,637 | $ 33,764 | $ 29,025 | |||||||||
[1] | During the fourth quarter of 2014, the Company recorded a cumulative adjustment to correct prior period errors that related to an overstatement of amortization of certain capitalized software costs. The impact of these items on the Company's Consolidated Statement of Operations decreased cost of revenue, increased gross profit, and decreased loss from operations, loss before income taxes, and net loss by $628. The Company did not adjust the prior periods as it concluded that such adjustments were not material to the current or prior period Consolidated Financial Statements. |
Related Parties - Additional In
Related Parties - Additional Information (Detail) | 12 Months Ended | ||
Dec. 31, 2015USD ($)FacilityPerson | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Related Party Transaction [Line Items] | |||
Financing obligations and operating lease agreement period | 15 years | ||
Financing obligation and lease renewal option term | 5 years | ||
Percentage of fixed annual rent increases | 3.00% | ||
Number of office facilities | Facility | 2 | ||
Number of stockholders and executives affiliated to leasing entity | Person | 2 | ||
Lease operating expenses | $ 11,940,000 | $ 5,634,000 | $ 3,729,000 |
Due to related party | 1,116,000 | 1,807,000 | |
Accounts receivable, related party | $ 2,082,000 | ||
Build-to-suit Lease | |||
Related Party Transaction [Line Items] | |||
Financing obligations and operating lease agreement period | 15 years | ||
Mercer LLC | |||
Related Party Transaction [Line Items] | |||
Revenue from related parties | $ 8,147,000 | ||
Accounts receivable, related party | 2,082,000 | ||
Deferred revenue | $ 9,128,000 | ||
Mercer LLC | Minimum | |||
Related Party Transaction [Line Items] | |||
Percentage of voting interest owned | 10.00% | ||
Stockholders and Executives | |||
Related Party Transaction [Line Items] | |||
Transportation service from related party | $ 127,000 | 438,000 | $ 345,000 |
Due to related party, current | $ 0 | 44,000 | |
Accounts Payable | |||
Related Party Transaction [Line Items] | |||
Due to related party | 949,000 | ||
Accrued Expenses | |||
Related Party Transaction [Line Items] | |||
Due to related party | $ 858,000 |
Unaudited Quarterly Statements
Unaudited Quarterly Statements of Operations Data (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | [1] | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||||||||
Schedule Of Quarterly Financial Data [Line Items] | |||||||||||||||||||
Revenue | $ 54,340 | $ 45,426 | $ 42,708 | $ 42,669 | $ 40,187 | $ 34,200 | $ 32,337 | $ 30,696 | $ 185,143 | $ 137,420 | $ 104,752 | ||||||||
Gross profit | 23,857 | 19,161 | 19,068 | 20,206 | 16,335 | 10,845 | 11,300 | 11,470 | 82,292 | 49,950 | 42,341 | ||||||||
Total operating expenses | 34,482 | 33,953 | 35,468 | 32,663 | 28,241 | 28,607 | 28,711 | 23,294 | 136,566 | 108,853 | 70,535 | ||||||||
Operating loss | (10,625) | (14,792) | (16,400) | (12,457) | (11,906) | (17,762) | (17,411) | (11,824) | (54,274) | (58,903) | (28,194) | ||||||||
Net loss | $ (12,487) | $ (16,664) | $ (18,284) | $ (14,649) | $ (13,689) | $ (18,888) | $ (18,200) | $ (12,402) | $ (62,084) | $ (63,179) | $ (30,361) | ||||||||
Net loss per common share | $ (0.43) | [2] | $ (0.58) | [2] | $ (0.64) | [2] | $ (0.55) | [2] | $ (0.54) | [2] | $ (0.74) | [2] | $ (0.72) | [2] | $ (0.51) | [2] | $ (2.19) | $ (2.51) | $ (2.99) |
Weighted-average common shares outstanding- basic and diluted | 29,120,171 | 28,847,493 | 28,633,992 | 26,745,444 | 25,569,203 | 25,503,194 | 25,200,093 | 24,541,359 | 28,344,680 | 25,207,099 | 10,144,243 | ||||||||
[1] | During the fourth quarter of 2014, the Company recorded a cumulative adjustment to correct prior period errors that related to an overstatement of amortization of certain capitalized software costs. The impact of these items on the Company's Consolidated Statement of Operations decreased cost of revenue, increased gross profit, and decreased loss from operations, loss before income taxes, and net loss by $628. The Company did not adjust the prior periods as it concluded that such adjustments were not material to the current or prior period Consolidated Financial Statements. | ||||||||||||||||||
[2] | Quarterly and year-to-date computations of per share amounts are made independently. Therefore, the sum of the per-share amounts for the quarters may not agree with per share amounts for the year. |
Unaudited Quarterly Statement74
Unaudited Quarterly Statements of Operations Data (Parenthetical) (Detail) $ in Thousands | 3 Months Ended |
Dec. 31, 2014USD ($) | |
Adjustment | |
Schedule Of Quarterly Financial Data [Line Items] | |
Amount of error corrections and prior period adjustments | $ 628 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Jan. 31, 2016 | Feb. 28, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Subsequent Event [Line Items] | |||||
Number of restricted stock units, granted | 607,553 | ||||
Total payment under capital lease agreement | $ 9,884 | $ 8,231 | $ 3,343 | ||
Payments on revolving line of credit | $ 44,903 | $ 2,100 | $ 5,000 | ||
Senior Revolving Line of Credit | |||||
Subsequent Event [Line Items] | |||||
Payments on revolving line of credit | $ 17,657 | ||||
Restricted Stock Units (RSUs) | |||||
Subsequent Event [Line Items] | |||||
Vesting period of restricted stock awards | 4 years | ||||
Awards vesting date | Dec. 31, 2017 | ||||
Restricted Stock Units (RSUs) | Vest on December 31,2017 | Minimum | |||||
Subsequent Event [Line Items] | |||||
Shares issued vesting range | 0.00% | ||||
Restricted Stock Units (RSUs) | Vest on December 31,2017 | Maximum | |||||
Subsequent Event [Line Items] | |||||
Shares issued vesting range | 100.00% | ||||
Subsequent Event | Senior Revolving Line of Credit | |||||
Subsequent Event [Line Items] | |||||
Payments on revolving line of credit | $ 25,000 | ||||
Subsequent Event | Data Processing Equipment and Software | |||||
Subsequent Event [Line Items] | |||||
Financing agreement period | 2 years | ||||
Total payment under capital lease agreement | $ 1,885 | ||||
Capital lease down payment | 356 | ||||
Recorded property and equipment and other assets | $ 1,781 | ||||
Subsequent Event | Restricted Stock Units (RSUs) | |||||
Subsequent Event [Line Items] | |||||
Number of restricted stock units, granted | 31,233 | ||||
Restricted stock units, aggregate grant date fair value | $ 1,091 | ||||
Vesting period of restricted stock awards | 4 years | ||||
Subsequent Event | Performance Based Restricted Stock Units R S Us | |||||
Subsequent Event [Line Items] | |||||
Number of restricted stock units, granted | 237,562 | ||||
Restricted stock units, aggregate grant date fair value | $ 7,335 | ||||
Awards vesting date | Dec. 31, 2017 | ||||
Subsequent Event | Performance Based Restricted Stock Units R S Us | Vest on December 31,2017 | Minimum | |||||
Subsequent Event [Line Items] | |||||
Shares issued vesting range | 0.00% | ||||
Subsequent Event | Performance Based Restricted Stock Units R S Us | Vest on December 31,2017 | Maximum | |||||
Subsequent Event [Line Items] | |||||
Shares issued vesting range | 100.00% |
Valuation and Qualifying Accoun
Valuation and Qualifying Accounts (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 24, 2013 | ||
Allowance for doubtful accounts and returns | |||||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||||
Balance at Beginning of Period | $ 1,663 | $ 810 | $ 900 | $ 900 | |
Additions Charged To Expense | 22 | 94 | (22) | ||
Additions Charged Against Revenue | 7,646 | 4,585 | 2,315 | ||
Deductions | (6,746) | (3,826) | (2,383) | ||
Balance at End of Period | 2,585 | 1,663 | 810 | 810 | |
Deferred tax asset valuation allowance | |||||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||||
Balance at Beginning of Period | 58,969 | 34,422 | 24,231 | $ 24,231 | |
Additions Charged To Costs and Expenses | [1] | 26,479 | 24,547 | 10,191 | |
Balance at End of Period | $ 85,448 | $ 58,969 | $ 34,422 | ||
[1] | Increase in valuation allowance is related to the generation of net operating losses and other deferred tax assets. |