Rightside (NAME) 10-Q 9 Nov 16 2016 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Nov. 03, 2016
Document And Entity Information [Abstract]
Entity Registrant Name	RIGHTSIDE GROUP, LTD.
Entity Central Index Key	1,589,094
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Trading Symbol	NAME
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		19,422,512
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q3

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Current assets
Cash and cash equivalents	$ 47,285	$ 45,095
Accounts receivable, net	11,248	11,306
Prepaid expenses and other current assets	5,764	7,256
Deferred registration costs	76,082	75,435
Total current assets	140,379	139,092
Deferred registration costs, less current portion	16,063	15,700
Property and equipment, net	11,392	13,298
Intangible assets, net	50,575	54,328
Goodwill	103,042	103,042
gTLD deposits	2,323	8,139
Other assets	939	1,428
Total assets	324,713	335,027
Current liabilities
Accounts payable	7,886	7,162
Accrued expenses and other current liabilities	20,525	24,691
Debt	1,500	1,500
Capital lease obligation	1,101	1,193
Deferred revenue	98,823	96,278
Total current liabilities	129,835	130,824
Deferred revenue, less current portion	22,811	21,802
Debt, less current portion	21,772	21,701
Capital lease obligation, less current portion	142	811
Deferred tax liabilities, net	14,589	15,477
Other liabilities	786	1,125
Total liabilities	189,935	191,740
Commitments and contingencies (Note 6)
Stockholders’ equity
Preferred stock, $0.0001 par value per share; 20,000 shares authorized Shares issued and outstanding: 0 and 0	0	0
Common stock, $0.0001 par value per share; 100,000 shares authorized Shares issued and outstanding: 19,417 and 19,099	2	2
Additional paid-in capital	150,973	147,475
Accumulated deficit	(16,197)	(4,190)
Total stockholders’ equity	134,778	143,287
Total liabilities and stockholders’ equity	$ 324,713	$ 335,027

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2016	Dec. 31, 2015
Statement Of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	20,000,000	20,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, authorized shares	100,000,000	100,000,000
Common stock, shares issued	19,417,000	19,099,000
Common stock, shares outstanding	19,417,000	19,099,000

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Income Statement [Abstract]
Revenue	$ 53,267	$ 54,119	$ 162,428	$ 156,821
Cost of revenue (excluding depreciation and amortization)	40,356	41,583	122,971	120,870
Sales and marketing	2,702	2,591	8,046	7,618
Technology and development	4,571	5,355	15,196	15,737
General and administrative	5,413	5,195	15,617	15,082
Depreciation and amortization	3,871	4,237	12,120	12,317
Gain on other assets, net	(29)	(1,721)	(2,247)	(8,682)
Interest expense	1,211	1,225	3,664	3,695
Other (income) expense, net	(8)	4	(98)	2
Loss before income tax	(4,820)	(4,350)	(12,841)	(9,818)
Income tax benefit	(391)	(946)	(834)	(2,617)
Net loss and comprehensive loss	$ (4,429)	$ (3,404)	$ (12,007)	$ (7,201)
Net loss per share attributable to common stockholders:
Net loss per share attributable to common stockholders - Basic (in earnings per share)	$ (0.23)	$ (0.18)	$ (0.62)	$ (0.38)
Net loss per share attributable to common stockholders - Diluted (in earnings per share)	$ (0.23)	$ (0.18)	$ (0.62)	$ (0.38)
Weighted average number of shares outstanding:
Weighted average shares outstanding, basic	19,358	18,916	19,251	18,809
Weighted average shares outstanding, diluted	19,358	18,916	19,251	18,809

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash flows from operating activities
Net loss	$ (12,007)	$ (7,201)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	12,120	12,317
Amortization of discount and issuance costs on debt	1,346	1,405
Deferred income taxes	(834)	(2,617)
Stock-based compensation expense	4,864	4,643
Gain on gTLD application withdrawals, net	(947)	(8,682)
Gain on sale and disposal of assets	(1,582)	(193)
Change in operating assets and liabilities:
Accounts receivable	73	(441)
Prepaid expenses and other current assets	742	(1,460)
Deferred registration costs	(1,011)	(4,546)
Other long-term assets	(105)	(467)
Accounts payable	724	994
Accrued expenses and other liabilities	(4,679)	1,144
Deferred revenue	3,554	8,006
Net cash provided by operating activities	2,258	2,902
Cash flows from investing activities
Purchases of property and equipment	(3,136)	(4,159)
Purchases of intangible assets	(571)	(1,256)
Payments, deposits and returns of deposits for gTLD applications	3,119	(10,273)
Proceeds from gTLD withdrawals	1,250	9,031
Proceeds from repayment of note receivable	750	1,500
Proceeds from sale of assets	1,771	270
Net cash provided by (used in) investing activities	3,183	(4,887)
Cash flows from financing activities
Principal payments on capital lease obligations	(760)	0
Principal payments on debt	(1,125)	(1,125)
Proceeds from stock option exercises	19	46
Minimum tax withholding on restricted stock awards	(1,385)	(823)
Net cash used in financing activities	(3,251)	(1,902)
Change in cash and cash equivalents	2,190	(3,887)
Cash and cash equivalents, beginning of period	45,095	49,743
Cash and cash equivalents, end of period	47,285	45,856
Supplemental disclosure of cash flows
Cash paid for interest	2,220	2,361
Cash paid for income taxes	$ 99	$ 61

Company Background and Basis of

Company Background and Basis of Presentation	9 Months Ended
	Sep. 30, 2016
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Company Background and Basis of Presentation	1. Company Background and Basis of Presentation Description of Business Rightside Group, Ltd. (together with its subsidiaries, “Rightside,” the “Company,” “our,” “we,” or “us”) provides domain name registration and related value‑added service subscriptions to third parties. We are also an accredited registry for new generic Top Level Domains (“gTLDs”) made available by the expansion of new gTLDs (the “New gTLD Program”) by the Internet Corporation for Assigned Names and Numbers (“ICANN”). Basis of Presentation Our consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). All significant intercompany accounts and transactions have been eliminated in consolidation. We will refer to our consolidated financial statements as “financial statements,” “balance sheets,” “statements of operations and comprehensive loss,” and “statements of cash flows” herein. We had no significant components of other comprehensive income (loss) during any of the periods presented, as such, a separate consolidated statement of comprehensive income (loss) is not presented. In addition, we had no significant changes in equity, as such, a consolidated statement of stockholders’ equity is not presented. Interim Financial Statements We have prepared the unaudited condensed consolidated interim financial statements on the same basis as the audited financial statements and have included all adjustments, consisting of normal recurring adjustments and accruals, necessary for the fair statement of our financial statements. The results for the three and nine months ended September 30, 2016 are not necessarily indicative of the results expected for the full year. The unaudited condensed consolidated interim financial statements have been prepared in accordance with GAAP. They do not include all of the information and footnotes required by GAAP for complete financial statements. The year-end balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. Therefore, these condensed consolidated financial statements should be read in conjunction with our audited financial statements and notes thereto included in our Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on March 11, 2016. Reclassifications Certain amounts previously presented for prior periods have been reclassified to conform to current presentation. These reclassifications did not affect consolidated net income or equity for the years presented. We reclassified $1.6 million of other assets, representing debt issue costs, to noncurrent debt on our balance sheet as of December 31, 2015, in accordance with our retrospective adoption of the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Update (“ASU”) 2015-03. We also reclassified $0.7 million of prepaid expenses and other current assets to the current portion of deferred revenue on our balance sheet as of December 31, 2015. We corrected the classification of deferred revenue on our balance sheet as of December 31, 2015 to reclassify $1.3 million from current deferred revenue to noncurrent deferred revenue. We also corrected the classification of $0.1 million of unpaid invoices on our balance sheet as of December 31, 2015 that were incorrectly reclassified out of accrued expenses and other current liabilities rather than out of accounts payable. Related to the December 31, 2015 misclassification of current and noncurrent deferred revenue, we determined that there was a misclassification between prepaid expenses and other current assets and the current portion of deferred revenue that affected the statement of cash flows for the nine months ended September 30, 2015. The misclassification resulted in an overstatement of the prepaid expenses and other current assets outflow of $0.7 million and an overstatement of the deferred revenue inflow of $0.7 million, which resulted in no impact on the total net cash provided by (used in) operating activities. We revised our statements of cash flows for the nine months ended September 30, 2015 accordingly.

Summary of Significant Accounti

Summary of Significant Accounting Policies and Accounting Pronouncements	9 Months Ended
	Sep. 30, 2016
Accounting Policies [Abstract]
Summary of Significant Accounting Policies and Accounting Pronouncements	2. Summary of Significant Accounting Policies and Accounting Pronouncements Refer to our audited financial statements included in our Form 10-K as filed with the SEC on March 11, 2016, for a complete discussion of all significant accounting policies. Adoption of New Accounting Pronouncements In April 2015, the FASB issued ASU 2015-05, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. In April 2015, the FASB issued ASU 2015-03, Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. In August 2015, the FASB issued ASU 2015-15, “Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements.” d $0.3 million of debt issuance costs that remained classified as an other asset on our balance sheets because it is related to our line of credit agreement In January 2015, the FASB issued ASU 2015-01, Income Statement—Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items. Accounting Pronouncements Not Yet Adopted In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In March 2016, the FASB issued ASU 2016-09, Compensation — Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern In May 2014, the FASB issued ASU 2014‑09, Revenue from Contracts with Customers (Topic 606 “Deferral of the Effective Date,” “Principal versus Agent Considerations (Reporting Revenue Gross versus Net) ” “Identifying Performance Obligations and Licensing ” “Narrow-Scope Improvements and Practical Expedients,”

Intangible Assets

Intangible Assets	9 Months Ended
	Sep. 30, 2016
Intangible Assets Net Excluding Goodwill [Abstract]
Intangible Assets	3. Intangible Assets Intangible assets consisted of the following (in thousands): September 30, 2016 December 31, 2015 Gross Gross carrying Accumulated carrying Accumulated amount amortization Net amount amortization Net Owned website names $ 14,303 $ (11,489 ) $ 2,814 $ 14,977 $ (11,628 ) $ 3,349 Customer relationships 20,842 (20,471 ) 371 20,842 (19,515 ) 1,327 Technology 7,953 (7,948 ) 5 7,953 (7,934 ) 19 Non-compete agreements 207 (153 ) 54 207 (122 ) 85 Trade names 5,466 (2,703 ) 2,763 5,466 (2,465 ) 3,001 gTLDs 54,348 (9,780 ) 44,568 51,988 (5,441 ) 46,547 Total $ 103,119 $ (52,544 ) $ 50,575 $ 101,433 $ (47,105 ) $ 54,328 Amortization expense of intangible assets was $2.2 million and $2.5 million for the three months ended September 30, 2016 and 2015, respectively, and $7.0 million and $7.3 million for the nine months ended September 30, 2016 and 2015, respectively. Estimated future amortization expense related to intangible assets held as of September 30, 2016 (in thousands): Years Ending December 31, Amount 2016 (October 1, 2016 to December 31, 2016) $ 2,142 2017 6,931 2018 6,668 2019 6,359 2020 6,118 Thereafter 22,357 Total $ 50,575

gTLD Deposits

gTLD Deposits	9 Months Ended
	Sep. 30, 2016
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract]
gTLD Deposits	4. gTLD Deposits As of September 30, 2016 and December 31, 2015, our gTLD deposits were $2.3 million and $8.1 million, respectively. During the nine months ended September 30, 2016, we received $3.1 million related to the settlement of certain gTLD applications under the New gTLD Program. Payments, deposits and returns of deposits for gTLD applications represent amounts paid directly to ICANN or third parties in the pursuit of gTLD operator rights, the majority of which was paid to Donuts Inc. These deposits would be applied to the purchase of the gTLD if we are awarded the gTLD operator rights or these deposits may be returned to us if we withdraw our interest in the gTLD application. Gains on the sale of our interest in gTLDs applications are recognized when realized, while losses are recognized when deemed probable. The settlement of our interest in certain gTLD applications resulted in a net loss of $0.2 million for the three months ended September 30, 2016 and the withdrawal of our interest in certain gTLD applications resulted in a net gain of $1.7 million for the three months ended September 30, 2015. The withdrawal of our interest in certain gTLD applications resulted in a net gain of $0.9 million and $8.7 million for the nine months ended September 30, 2016 and 2015, respectively. We recorded these gains and losses in (gain) loss on other assets, net, on the statements of operations and comprehensive loss. In April 2016, we sold the majority of our non-core registrar credentials. Registrars are required to be accredited by ICANN in order to register domain names. The registrar credentials that were sold were mainly used to increase our ability to register newly deleted domain names the instant they became available. They were part of a business on which we are no longer focusing. Instead, we continue to focus on utilizing alternative channels to obtain domain names for our Aftermarket business. The sale of these credentials resulted in a net gain of $0.2 million and $1.3 million for the three and nine months ended September 30, 2016. We recorded this gain in (gain) loss on other assets, net, on the statements of operations and comprehensive loss.

Debt

Debt	9 Months Ended
	Sep. 30, 2016
Debt Disclosure [Abstract]
Debt	5. Debt Silicon Valley Bank Credit Facility In March 2016, we entered into Amendment No. 3 to Credit Agreement (“Amendment”) with Silicon Valley Bank. The Amendment revises the terms of our existing Credit Agreement (“SVB Credit Facility”). The Amendment revises the financial condition covenants, including the consolidated net leverage ratio, minimum liquidity ratio, and minimum consolidated EBITDA. The Amendment removes the consolidated fixed charge coverage ratio, consolidated senior leverage ratio and minimum liquidity. Additionally, the Amendment approves a one-time distribution of $10.0 million for the partial prepayment of our term loan with Tennenbaum Capital Partners LLC. As of September 30, 2016, we were in compliance with all covenants.

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2016
Commitments And Contingencies Disclosure [Abstract]
Commitments and Contingencies	6. Commitments and Contingencies From time to time, we are party to various litigation matters incidental to the conduct of our business. There is no pending or threatened legal proceeding to which we are a party that, in our belief, could have a material adverse effect on our future financial results.

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2016
Income Tax Disclosure [Abstract]
Income Taxes	7. Income Taxes Our effective tax rate differs from the U.S. Federal statutory rate primarily as a result of state taxes, stock-based compensation shortfall and implementing a domestic valuation allowance. The effective tax rate was 8.1% and 21.7% for the three months ended September 30, 2016 and 2015, respectively, and was 6.5% and 26.6% for the nine months ended September 30, 2016 and 2015, respectively. We recorded an income tax benefit of $0.4 million during three months ended September 30, 2016, compared to $0.9 million during the same period in 2015. The decreased benefit was primarily due to stock-based compensation shortfalls and the impact of implementing a valuation allowance on projected excess deferred tax assets in the current period. We recorded an income tax benefit of $0.8 million during the nine months ended September 30, 2016, compared to $2.6 million during the same period in 2015. The decreased benefit was primarily due to stock-based compensation shortfalls and the impact of implementing a valuation allowance on projected excess deferred tax assets in the current period. We currently have a net deferred tax liability related to our U.S. activities. However, projected future growth in our deferred tax assets indicates that we will have net deferred tax assets in the U.S. by the end of the current year, which will require a valuation allowance as it is more likely than not that those net deferred tax assets will not be realized. When calculating the annual effective income tax rate for the three and nine months ended September 30, 2016, we have included the anticipated valuation allowance in the effective tax rate to ensure that the tax benefit recorded on the year-to-date losses would not exceed the amount expected to be generated during the current year. We are subject to the accounting guidance for uncertain income tax positions. We believe that our income tax positions and deductions will be sustained on audit and do not anticipate any adjustments that will result in a material adverse effect on our financial condition, results of operations, or cash flows. Our policy for recording interest and penalties associated with audits and uncertain tax positions is to record such items as a component of income tax expense, and amounts recognized to date are insignificant. No uncertain income tax positions were recorded during the three and nine months ended September 30, 2016 or 2015, and we do not expect our uncertain tax position to change materially during the next 12 months. We file a U.S. federal tax return as well as tax returns in many states and multiple foreign jurisdictions. All tax years since our incorporation remain subject to examination by the Internal Revenue Service and various state authorities.

Fair Value of Financial Instrum

Fair Value of Financial Instruments	9 Months Ended
	Sep. 30, 2016
Fair Value Disclosures [Abstract]
Fair Value of Financial Instruments	8. Fair Value of Financial Instruments We measure our financial assets and liabilities in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. • Level 1—valuations for assets and liabilities traded in active exchange markets, or interest in open‑end mutual funds that allow a company to sell its ownership interest back at net asset value on a daily basis. Valuations are obtained from readily available pricing sources for market transactions involving identical assets, liabilities or funds. • Level 2—valuations for assets and liabilities traded in less active dealer, or broker markets, such as quoted prices for similar assets or liabilities or quoted prices in markets that are not active. Level 2 includes U.S. Treasury, U.S. government and agency debt securities, and certain corporate obligations. Valuations are usually obtained from third-party pricing services for identical or comparable assets or liabilities. • Level 3—valuations for assets and liabilities that are derived from other valuation methodologies, such as option pricing models, discounted cash flow models and similar techniques, and not based on market exchange, dealer, or broker traded transactions. Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities. Financial assets and financial liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurements. In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and consider counterparty credit risk in our assessment of fair value. Our assessment of the significance of a particular input to the fair value measurements requires judgment, and may affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy. Assets and liabilities not carried at fair value in our financial statements, but for which the fair value is disclosed, are summarized below (in thousands): Carrying Fair Value Measurement Using Total As of September 30, 2016 Value Level 1 Level 2 Level 3 Fair Value Assets: Note receivable $ 10 $ — $ — $ 10 $ 10 Liabilities: Debt $ 23,272 $ — $ — $ 30,410 $ 30,410 Carrying Fair Value Measurement Using Total As of December 31, 2015 Value Level 1 Level 2 Level 3 Fair Value Assets: Note receivable $ 760 $ — $ — $ 760 $ 760 Liabilities: Debt $ 23,201 $ — $ — $ 31,489 $ 31,489 Our note receivable is short-term in nature and its carrying value approximates fair value. This is classified as a Level 3 measurement. The fair value of our debt is estimated based on the discounted cash flow approach, using the current cost of debt available to us with similar loan terms and remaining maturities. As of September 30, 2016, the current cost of debt available to us was 5%. Because these estimates utilize significant unobservable inputs, we classify our debt as a Level 3 measurement. The current cost of debt is considered a significant unobservable input used in the fair value measurement of our debt. This significant unobservable input would have a direct impact on the fair value of our debt if it were adjusted. Consequently, significant increases or decreases in the cost of debt would result in a significantly higher or lower fair value. At September 30, 2016 and December 31, 2015, a hypothetical 10% increase or decrease in the cost of debt would change the fair value of our debt, classified as Level 3 within the fair value hierarchy, by $0.3 million and $0.5 million, respectively. The following table presents a reconciliation of our debt measured at fair value using unobservable inputs (Level 3) (in thousands): Amount Balance as of December 31, 2015 $ 31,489 Principal and interest payments on debt (3,025 ) Change in fair value of future payments on debt 1,946 Balance as of September 30, 2016 $ 30,410 The following table presents a reconciliation of our note receivable measured at fair value using unobservable inputs (Level 3) (in thousands): Amount Balance as of December 31, 2015 $ 760 Repayments on note receivable (750 ) Balance as of September 30, 2016 $ 10

Business Segments

Business Segments	9 Months Ended
	Sep. 30, 2016
Segment Reporting [Abstract]
Business Segments	9. Business Segments We follow the authoritative literature that established annual and interim reporting standards for an entity’s operating segments and related disclosures about its products and services, geographic regions and major customers. We operate in one operating segment. Our chief operating decision maker (“CODM”) manages our operations on a global basis for purposes of evaluating financial performance and allocating resources. The CODM reviews separate revenue information for our Registrar services, Registry services, and Aftermarket and other services. All other financial information is reviewed by the CODM on a global basis. Our operations are located in the United States, Ireland, Canada, Australia, and Cayman Islands. We also have a wholly foreign-owned enterprise in China. Revenue derived from our Registrar services, Registry services, and Aftermarket and other offerings are as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Registrar services $ 44,800 $ 43,953 $ 132,975 $ 129,233 Registry services 3,012 2,382 8,583 5,912 Aftermarket and other 6,327 8,547 23,435 23,423 Eliminations (872 ) (763 ) (2,565 ) (1,747 ) Total revenue $ 53,267 $ 54,119 $ 162,428 $ 156,821 Amounts in the Eliminations line reflect the elimination of intercompany charges between our Registrar and Registry services businesses. Revenue by geographic location is as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 United States $ 39,095 $ 39,522 $ 118,818 $ 113,962 International 14,172 14,597 43,610 42,859 Total $ 53,267 $ 54,119 $ 162,428 $ 156,821 No international country represented more than 10% of total revenue in any period presented.

Loss Per Share

Loss Per Share	9 Months Ended
	Sep. 30, 2016
Earnings Per Share [Abstract]
Loss Per Share	10. Loss Per Share Basic and diluted loss per share were calculated using the following (in thousands, except per share amounts): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Net loss $ (4,429 ) $ (3,404 ) $ (12,007 ) $ (7,201 ) Weighted average number of shares outstanding: Basic 19,358 18,916 19,251 18,809 Diluted 19,358 18,916 19,251 18,809 Net loss per share attributable to common stockholders: Basic $ (0.23 ) $ (0.18 ) $ (0.62 ) $ (0.38 ) Diluted (0.23 ) (0.18 ) (0.62 ) (0.38 ) For the three months ended September 30, 2016 and 2015, we excluded approximately 391 thousand and 15 thousand shares, respectively, of restricted stock units and stock options from the calculation of diluted weighted average shares outstanding as their inclusion would have been antidilutive. For the nine months ended September 30, 2016 and 2015, we excluded approximately 248 thousand and 26 thousand shares, respectively, of restricted stock units and stock options from the calculation of diluted weighted average shares outstanding as their inclusion would have been antidilutive. The $15.05 exercise price per share on the stock warrants related to the Tennenbaum Credit Facility did not have a dilutive effect for any period presented.

Subsequent Events

Subsequent Events	9 Months Ended
	Sep. 30, 2016
Subsequent Events [Abstract]
Subsequent Events	11. Subsequent Events In November 2016, we drew $12.8 million on our existing revolving credit facility with Silicon Valley Bank and fully paid off and extinguished the aggregate outstanding principal amount of $27.4 million of our

Summary of Significant Accoun17

Summary of Significant Accounting Policies and Accounting Pronouncements (Policies)	9 Months Ended
	Sep. 30, 2016
Accounting Policies [Abstract]
Reclassifications	Reclassifications Certain amounts previously presented for prior periods have been reclassified to conform to current presentation. These reclassifications did not affect consolidated net income or equity for the years presented. We reclassified $1.6 million of other assets, representing debt issue costs, to noncurrent debt on our balance sheet as of December 31, 2015, in accordance with our retrospective adoption of the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Update (“ASU”) 2015-03. We also reclassified $0.7 million of prepaid expenses and other current assets to the current portion of deferred revenue on our balance sheet as of December 31, 2015. We corrected the classification of deferred revenue on our balance sheet as of December 31, 2015 to reclassify $1.3 million from current deferred revenue to noncurrent deferred revenue. We also corrected the classification of $0.1 million of unpaid invoices on our balance sheet as of December 31, 2015 that were incorrectly reclassified out of accrued expenses and other current liabilities rather than out of accounts payable. Related to the December 31, 2015 misclassification of current and noncurrent deferred revenue, we determined that there was a misclassification between prepaid expenses and other current assets and the current portion of deferred revenue that affected the statement of cash flows for the nine months ended September 30, 2015. The misclassification resulted in an overstatement of the prepaid expenses and other current assets outflow of $0.7 million and an overstatement of the deferred revenue inflow of $0.7 million, which resulted in no impact on the total net cash provided by (used in) operating activities. We revised our statements of cash flows for the nine months ended September 30, 2015 accordingly.
Adoption of New Accounting Pronouncements	Adoption of New Accounting Pronouncements In April 2015, the FASB issued ASU 2015-05, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. In April 2015, the FASB issued ASU 2015-03, Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. In August 2015, the FASB issued ASU 2015-15, “Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements.” d $0.3 million of debt issuance costs that remained classified as an other asset on our balance sheets because it is related to our line of credit agreement In January 2015, the FASB issued ASU 2015-01, Income Statement—Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items.
Accounting Pronouncements Not Yet Adopted	Accounting Pronouncements Not Yet Adopted In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In March 2016, the FASB issued ASU 2016-09, Compensation — Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern In May 2014, the FASB issued ASU 2014‑09, Revenue from Contracts with Customers (Topic 606 “Deferral of the Effective Date,” “Principal versus Agent Considerations (Reporting Revenue Gross versus Net) ” “Identifying Performance Obligations and Licensing ” “Narrow-Scope Improvements and Practical Expedients,”
Fair Value of Financial Instruments	We measure our financial assets and liabilities in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. • Level 1—valuations for assets and liabilities traded in active exchange markets, or interest in open‑end mutual funds that allow a company to sell its ownership interest back at net asset value on a daily basis. Valuations are obtained from readily available pricing sources for market transactions involving identical assets, liabilities or funds. • Level 2—valuations for assets and liabilities traded in less active dealer, or broker markets, such as quoted prices for similar assets or liabilities or quoted prices in markets that are not active. Level 2 includes U.S. Treasury, U.S. government and agency debt securities, and certain corporate obligations. Valuations are usually obtained from third-party pricing services for identical or comparable assets or liabilities. • Level 3—valuations for assets and liabilities that are derived from other valuation methodologies, such as option pricing models, discounted cash flow models and similar techniques, and not based on market exchange, dealer, or broker traded transactions. Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities. Financial assets and financial liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurements. In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and consider counterparty credit risk in our assessment of fair value. Our assessment of the significance of a particular input to the fair value measurements requires judgment, and may affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy.
Segment Reporting	We follow the authoritative literature that established annual and interim reporting standards for an entity’s operating segments and related disclosures about its products and services, geographic regions and major customers.

Intangible Assets (Tables)

Intangible Assets (Tables)	9 Months Ended
	Sep. 30, 2016
Intangible Assets Net Excluding Goodwill [Abstract]
Schedule of Intangible Assets	Intangible assets consisted of the following (in thousands): September 30, 2016 December 31, 2015 Gross Gross carrying Accumulated carrying Accumulated amount amortization Net amount amortization Net Owned website names $ 14,303 $ (11,489 ) $ 2,814 $ 14,977 $ (11,628 ) $ 3,349 Customer relationships 20,842 (20,471 ) 371 20,842 (19,515 ) 1,327 Technology 7,953 (7,948 ) 5 7,953 (7,934 ) 19 Non-compete agreements 207 (153 ) 54 207 (122 ) 85 Trade names 5,466 (2,703 ) 2,763 5,466 (2,465 ) 3,001 gTLDs 54,348 (9,780 ) 44,568 51,988 (5,441 ) 46,547 Total $ 103,119 $ (52,544 ) $ 50,575 $ 101,433 $ (47,105 ) $ 54,328
Estimated Future Amortization Expense	Estimated future amortization expense related to intangible assets held as of September 30, 2016 (in thousands): Years Ending December 31, Amount 2016 (October 1, 2016 to December 31, 2016) $ 2,142 2017 6,931 2018 6,668 2019 6,359 2020 6,118 Thereafter 22,357 Total $ 50,575

Fair Value of Financial Instr19

Fair Value of Financial Instruments (Tables)	9 Months Ended
	Sep. 30, 2016
Fair Value Disclosures [Abstract]
Schedule of Assets and Liabilities Measured at Fair Value	Assets and liabilities not carried at fair value in our financial statements, but for which the fair value is disclosed, are summarized below (in thousands): Carrying Fair Value Measurement Using Total As of September 30, 2016 Value Level 1 Level 2 Level 3 Fair Value Assets: Note receivable $ 10 $ — $ — $ 10 $ 10 Liabilities: Debt $ 23,272 $ — $ — $ 30,410 $ 30,410 Carrying Fair Value Measurement Using Total As of December 31, 2015 Value Level 1 Level 2 Level 3 Fair Value Assets: Note receivable $ 760 $ — $ — $ 760 $ 760 Liabilities: Debt $ 23,201 $ — $ — $ 31,489 $ 31,489
Schedule of Reconciliation of Debt Fair Value Using Unobservable Inputs	The following table presents a reconciliation of our debt measured at fair value using unobservable inputs (Level 3) (in thousands): Amount Balance as of December 31, 2015 $ 31,489 Principal and interest payments on debt (3,025 ) Change in fair value of future payments on debt 1,946 Balance as of September 30, 2016 $ 30,410
Schedule of Reconciliation of Note Receivable Fair Value Using Unobservable Inputs	The following table presents a reconciliation of our note receivable measured at fair value using unobservable inputs (Level 3) (in thousands): Amount Balance as of December 31, 2015 $ 760 Repayments on note receivable (750 ) Balance as of September 30, 2016 $ 10

Business Segments (Tables)

Business Segments (Tables)	9 Months Ended
	Sep. 30, 2016
Segment Reporting [Abstract]
Schedule of revenue derived from segments	Revenue derived from our Registrar services, Registry services, and Aftermarket and other offerings are as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Registrar services $ 44,800 $ 43,953 $ 132,975 $ 129,233 Registry services 3,012 2,382 8,583 5,912 Aftermarket and other 6,327 8,547 23,435 23,423 Eliminations (872 ) (763 ) (2,565 ) (1,747 ) Total revenue $ 53,267 $ 54,119 $ 162,428 $ 156,821
Schedule of revenue by location	Revenue by geographic location is as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 United States $ 39,095 $ 39,522 $ 118,818 $ 113,962 International 14,172 14,597 43,610 42,859 Total $ 53,267 $ 54,119 $ 162,428 $ 156,821

Loss Per Share (Tables)

Loss Per Share (Tables)	9 Months Ended
	Sep. 30, 2016
Earnings Per Share [Abstract]
Schedule of loss per share	Basic and diluted loss per share were calculated using the following (in thousands, except per share amounts): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Net loss $ (4,429 ) $ (3,404 ) $ (12,007 ) $ (7,201 ) Weighted average number of shares outstanding: Basic 19,358 18,916 19,251 18,809 Diluted 19,358 18,916 19,251 18,809 Net loss per share attributable to common stockholders: Basic $ (0.23 ) $ (0.18 ) $ (0.62 ) $ (0.38 ) Diluted (0.23 ) (0.18 ) (0.62 ) (0.38 )

Company Background and Basis 22

Company Background and Basis of Presentation - Additional Information (Details) - USD ($) $ in Thousands	9 Months Ended		12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Reclassification of prepaid expenses and other current assets to current portion of deferred revenue			$ 700
Deferred revenue, current	$ 98,823		96,278
Deferred revenue, less current portion	22,811		21,802
Accrued expenses and other current liabilities	20,525		24,691
Accounts payable	7,886		7,162
Prepaid expenses and other current assets	(742)	$ 1,460
Deferred revenue	$ 3,554	$ 8,006
Restatement Adjustment
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Deferred revenue, current			(1,300)
Deferred revenue, less current portion			1,300
Accrued expenses and other current liabilities			100
Accounts payable			(100)
Prepaid expenses and other current assets			700
Deferred revenue			(700)
ASU 2015-03
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Reclassification of other assets, representing debt issue cost to noncurrent debt			$ 1,600

Summary of Significant Accoun23

Summary of Significant Accounting Policies and Accounting Pronouncements (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
ASU 2015-03 | Pro Forma
Summary Of Significant Accounting Policies And Recent Accounting Pronouncements [Line Items]
Debt issuance costs classified as other assets		$ 1.6
ASU 2015-15 | Pro Forma
Summary Of Significant Accounting Policies And Recent Accounting Pronouncements [Line Items]
Debt issuance costs classified as other assets		$ 0.3
ASU 2016-02
Summary Of Significant Accounting Policies And Recent Accounting Pronouncements [Line Items]
Description Of Lessee Leasing Arrangements Operating Leases	The new standard brings substantially all leases on the balance sheets for operating lease arrangements with lease terms greater than 12 months for lessees.

Intangible Assets - Schedule of

Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	$ 103,119	$ 101,433
Accumulated amortization	(52,544)	(47,105)
Total	50,575	54,328
Owned website names
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	14,303	14,977
Accumulated amortization	(11,489)	(11,628)
Total	2,814	3,349
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	20,842	20,842
Accumulated amortization	(20,471)	(19,515)
Total	371	1,327
Technology
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	7,953	7,953
Accumulated amortization	(7,948)	(7,934)
Total	5	19
Noncompete agreements
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	207	207
Accumulated amortization	(153)	(122)
Total	54	85
Trade names
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	5,466	5,466
Accumulated amortization	(2,703)	(2,465)
Total	2,763	3,001
gTLDs
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	54,348	51,988
Accumulated amortization	(9,780)	(5,441)
Total	$ 44,568	$ 46,547

Intangible Assets - Additional

Intangible Assets - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Intangible Assets Net Excluding Goodwill [Abstract]
Amortization expense of intangible assets	$ 2.2	$ 2.5	$ 7	$ 7.3

Intangible Assets - Estimated F

Intangible Assets - Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Finite-Lived Intangible Assets, Net, Amortization Expense, Rolling Maturity [Abstract]
2016 (October 1, 2016 to December 31, 2016)	$ 2,142
2,017	6,931
2,018	6,668
2,019	6,359
2,020	6,118
Thereafter	22,357
Total	$ 50,575	$ 54,328

gTLD Deposits - Additional Info

gTLD Deposits - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Line Items]
gTLD deposits	$ 2,323		$ 2,323		$ 8,139
Receipts and payments for gTLD applications			3,119	$ (10,273)
Gain (loss) on other assets, net	29	$ 1,721	2,247	8,682
Registrar Credentials
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Line Items]
Gain (loss) on other assets, net	200		1,300
gTLDs
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Line Items]
Gain (loss) on other assets, net	$ (200)	$ 1,700	$ 900	$ 8,700

Debt - Additional Information (

Debt - Additional Information (Details)	Sep. 30, 2016USD ($)
Silicon Valley Bank | Line of Credit
Line Of Credit Facility [Line Items]
Debt instrument restrictive covenant relief for term loan payment	$ 10,000,000

Income Taxes - Additional Infor

Income Taxes - Additional Information (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Income Tax Disclosure [Abstract]
Effective income tax rate	8.10%	21.70%	6.50%	26.60%
Income tax benefit	$ (391,000)	$ (946,000)	$ (834,000)	$ (2,617,000)
Uncertain income tax positions	$ 0	$ 0	$ 0	$ 0

Fair Value of Financial Instr30

Fair Value of Financial Instruments - Schedule of Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Note receivable, carrying value	$ 10	$ 760
Debt, carrying value	23,272	23,201
Note receivable, fair value	10	760
Debt, fair value	30,410	31,489
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Note receivable, fair value	0	0
Debt, fair value	0	0
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Note receivable, fair value	0	0
Debt, fair value	0	0
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Note receivable, fair value	10	760
Debt, fair value	$ 30,410	$ 31,489

Fair Value of Financial Instr31

Fair Value of Financial Instruments - Additional Information (Details) - Level 3 - USD ($) $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Current cost of debt	5.00%
Percentage of change in cost of debt	10.00%	10.00%
Change in fair value of debt	$ 0.3	$ 0.5

Fair Value of Financial Instr32

Fair Value of Financial Instruments - Schedule of Reconciliation of Debt Fair Value Using Unobservable Inputs (Details) - Level 3 $ in Thousands	9 Months Ended
	Sep. 30, 2016USD ($)
Reconciliation of debt measured at fair value using unobservable inputs (Level 3)
Beginning balance	$ 31,489
Principal and interest payments on debt	(3,025)
Change in fair value of future payments on debt	1,946
Ending balance	$ 30,410

Fair Value of Financial Instr33

Fair Value of Financial Instruments - Schedule of Reconciliation of Note Receivable Fair Value Using Unobservable Inputs (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2016USD ($)
Reconciliation of note receivable measured at fair value using unobservable inputs (Level 3)
Beginning balance	$ 760
Ending balance	10
Level 3
Reconciliation of note receivable measured at fair value using unobservable inputs (Level 3)
Beginning balance	760
Repayments on note receivable	(750)
Ending balance	$ 10

Business Segments - Additional

Business Segments - Additional Information (Details) - segment	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Segment Reporting Information [Line Items]
Number of Operating Segments			1
International | Customer Concentration Risk | Sales Revenue Net
Segment Reporting Information [Line Items]
Concentration percentage	10.00%	10.00%	10.00%	10.00%

Business Segments - Schedule of

Business Segments - Schedule of Revenue Derived From Segments (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Segment Reporting Information [Line Items]
Total Revenue	$ 53,267	$ 54,119	$ 162,428	$ 156,821
Eliminations
Segment Reporting Information [Line Items]
Total Revenue	(872)	(763)	(2,565)	(1,747)
Registrar services | Operating segment
Segment Reporting Information [Line Items]
Total Revenue	44,800	43,953	132,975	129,233
Registry services | Operating segment
Segment Reporting Information [Line Items]
Total Revenue	3,012	2,382	8,583	5,912
Aftermarket and other | Operating segment
Segment Reporting Information [Line Items]
Total Revenue	$ 6,327	$ 8,547	$ 23,435	$ 23,423

Business Segments - Schedule 36

Business Segments - Schedule of Revenue by Location (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Segment Reporting Information [Line Items]
Total Revenue	$ 53,267	$ 54,119	$ 162,428	$ 156,821
United States
Segment Reporting Information [Line Items]
Total Revenue	39,095	39,522	118,818	113,962
International
Segment Reporting Information [Line Items]
Total Revenue	$ 14,172	$ 14,597	$ 43,610	$ 42,859

Loss Per Share - Schedule of Lo

Loss Per Share - Schedule of Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Earnings Per Share [Abstract]
Net loss	$ (4,429)	$ (3,404)	$ (12,007)	$ (7,201)
Weighted average number of shares outstanding:
Weighted average shares outstanding, basic	19,358	18,916	19,251	18,809
Weighted average shares outstanding, diluted	19,358	18,916	19,251	18,809
Net loss per share attributable to common stockholders:
Net loss per share attributable to common stockholders - Basic (in earnings per share)	$ (0.23)	$ (0.18)	$ (0.62)	$ (0.38)
Net loss per share attributable to common stockholders - Diluted (in earnings per share)	$ (0.23)	$ (0.18)	$ (0.62)	$ (0.38)

Loss Per Share - Additional Inf

Loss Per Share - Additional Information (Details) - $ / shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Earnings Loss Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	391	15	248	26
Tennenbaum Credit Facility Warrants
Earnings Loss Per Share [Line Items]
Warrants exercise price	$ 15.05	$ 15.05	$ 15.05	$ 15.05

Subsequent Events - Additional

Subsequent Events - Additional Information (Details) - Subsequent Event $ in Millions	Nov. 09, 2016USD ($)
Silicon Valley Bank | Revolving Credit Facility
Subsequent Event [Line Items]
Line of credit, amount drawn	$ 12.8
Tennenbaum | Term Loan Credit Facility
Subsequent Event [Line Items]
Debt extinguishment aggregate principal amount outstanding	27.4
Write-off of unamortized debt discounts and issuance cost	$ 4