Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | Apr. 25, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | PAYC | |
Entity Registrant Name | Paycom Software, Inc. | |
Entity Central Index Key | 1,590,955 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 59,427,244 |
Consolidated Balance Sheets (un
Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 92,915 | $ 60,158 |
Accounts receivable | 1,847 | 1,339 |
Prepaid expenses | 5,413 | 4,475 |
Inventory | 499 | 675 |
Income tax receivable | 692 | |
Current assets before funds held for clients | 100,674 | 67,339 |
Funds held for clients | 950,980 | 858,244 |
Total current assets | 1,051,654 | 925,583 |
Property and equipment, net | 106,485 | 96,848 |
Deposits and other assets | 1,369 | 1,215 |
Goodwill | 51,889 | 51,889 |
Intangible assets, net | 1,468 | 1,871 |
Deferred income tax assets, net | 5,687 | 1,207 |
Total assets | 1,218,552 | 1,078,613 |
Current liabilities: | ||
Accounts payable | 3,134 | 3,737 |
Income tax payable | 16,577 | |
Accrued commissions and bonuses | 2,726 | 8,003 |
Accrued payroll and vacation | 7,688 | 4,769 |
Deferred revenue | 5,611 | 5,230 |
Current portion of long-term debt | 1,126 | 1,113 |
Accrued expenses and other current liabilities | 17,587 | 17,798 |
Current liabilities before client funds obligation | 54,449 | 40,650 |
Client funds obligation | 950,980 | 858,244 |
Total current liabilities | 1,005,429 | 898,894 |
Long-term deferred revenue | 36,555 | 34,481 |
Net long-term debt, less current portion | 30,389 | 28,711 |
Total long-term liabilities | 66,944 | 63,192 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock, $0.01 par value (100,000,000 shares authorized; 58,471,563 and 58,453,283 shares issued at March 31, 2017 and December 31, 2016, respectively; 57,349,302 and 57,331,022 shares outstanding at March 31, 2017 and December 31, 2016, respectively) | 585 | 585 |
Additional paid-in capital | 99,490 | 95,452 |
Retained earnings | 96,062 | 70,448 |
Treasury stock, at cost (1,122,261 shares at March 31, 2017 and December 31, 2016) | (49,958) | (49,958) |
Total stockholders' equity | 146,179 | 116,527 |
Total liabilities and stockholders' equity | $ 1,218,552 | $ 1,078,613 |
Consolidated Balance Sheets (u3
Consolidated Balance Sheets (unaudited) (Parenthetical) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
Statement Of Financial Position [Abstract] | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 58,471,563 | 58,453,283 |
Common stock, shares outstanding | 57,349,302 | 57,331,022 |
Treasury stock, shares | 1,122,261 | 1,122,261 |
Consolidated Statements of Inco
Consolidated Statements of Income (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Revenues | ||
Recurring | $ 117,914 | $ 88,904 |
Implementation and other | 1,594 | 1,222 |
Total revenues | 119,508 | 90,126 |
Cost of revenues | ||
Operating expenses | 15,086 | 10,785 |
Depreciation and amortization | 2,060 | 1,186 |
Total cost of revenues | 17,146 | 11,971 |
Administrative expenses | ||
Sales and marketing | 36,848 | 28,662 |
Research and development | 6,797 | 3,860 |
General and administrative | 17,826 | 15,206 |
Depreciation and amortization | 2,226 | 1,723 |
Total administrative expenses | 63,697 | 49,451 |
Total operating expenses | 80,843 | 61,422 |
Operating income | 38,665 | 28,704 |
Interest expense | (257) | (311) |
Other income, net | 95 | 34 |
Income before income taxes | 38,503 | 28,427 |
Provision for income taxes | 12,889 | 9,839 |
Net income | $ 25,614 | $ 18,588 |
Earnings per share, basic | $ 0.44 | $ 0.32 |
Earnings per share, diluted | $ 0.43 | $ 0.31 |
Weighted average shares outstanding: | ||
Basic | 57,307,187 | 57,132,909 |
Diluted | 58,525,980 | 58,362,040 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash flows from operating activities | ||
Net income | $ 25,614 | $ 18,588 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 4,286 | 2,909 |
Amortization of debt issuance costs | 23 | 32 |
Stock-based compensation expense | 3,625 | 1,223 |
Deferred income taxes, net | (4,480) | (3,644) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (508) | (226) |
Prepaid expenses | (938) | (1,262) |
Inventory | 176 | 423 |
Deposits and other assets | (154) | 420 |
Accounts payable | (1,349) | (1,170) |
Income taxes, net | 17,269 | 13,325 |
Accrued commissions and bonuses | (5,277) | (6,903) |
Accrued payroll and vacation | 2,919 | 2,339 |
Deferred revenue | 2,455 | 1,783 |
Accrued expenses and other current liabilities | (3,436) | 2,111 |
Net cash provided by operating activities | 40,225 | 29,948 |
Cash flows from investing activities | ||
Increase in funds held for clients | (92,736) | (428,916) |
Purchases of property and equipment | (9,136) | (8,363) |
Net cash used in investing activities | (101,872) | (437,279) |
Cash flows from financing activities | ||
Proceeds from issuance of long-term debt | 2,093 | |
Principal payments on long-term debt | (282) | (224) |
Increase in client funds obligation | 92,736 | 428,916 |
Payment of debt issuance costs | (143) | |
Net cash provided by financing activities | 94,404 | 428,692 |
Net increase in cash and cash equivalents | 32,757 | 21,361 |
Cash and cash equivalents | ||
Beginning of period | 60,158 | 50,714 |
End of period | $ 92,915 | $ 72,075 |
Description of Business and Bas
Description of Business and Basis of Presentation | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Description of Business and Basis of Presentation | 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Description of Business Paycom Software, Inc. (“Software”) and its wholly owned subsidiaries (collectively, the “Company”) is a leading provider of comprehensive, cloud-based human capital management (“HCM”) software delivered as Software-as-a-Service. Unless we state otherwise or the context otherwise requires, the terms “we”, “our”, “us” and the “Company” refer to Software and its consolidated subsidiaries. We provide functionality and data analytics that businesses need to manage the complete employment lifecycle, from recruitment to retirement. Our solution requires virtually no customization and is based on a core system of record maintained in a single database for all HCM functions, including talent acquisition, time and labor management, payroll, talent management and human resources (“HR”) management applications. Basis of Presentation The accompanying unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the SEC regarding interim financial statements that permit reduced disclosure for interim periods. In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments necessary for the fair presentation of our consolidated balance sheets as of March 31, 2017 and December 31, 2016, our consolidated statements of income for the three months ended March 31, 2017 and 2016 and our consolidated statements of cash flows for the three months ended March 31, 2017 and 2016. Such adjustments are of a normal recurring nature. The information in this Quarterly Report on Form 10-Q should be read in conjunction with our Annual Report on Form 10-K that was filed with the SEC on February 21, 2017. The results of operations for the three months ended March 31, 2017 are not necessarily indicative of the results expected for the full year. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Our significant accounting policies are discussed in “Note 2. Summary of Significant Accounting Policies” in our audited consolidated financial statements for the year ended December 31, 2016, included in the Annual Report on Form 10-K that was filed with the Securities and Exchange Commission (“SEC”) on February 21, 2017. Adoption of New Accounting Pronouncement In July 2015, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance which simplifies the measurement of inventory. Under the new guidance, an entity should measure inventory (as defined within the scope of the guidance) at the lower of cost or net realizable value. The new guidance applies to all inventory except inventory measured using last-in, first-out (LIFO) or the retail inventory method. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The new guidance is effective for public companies for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. We adopted the standard on January 1, 2017. The adoption did not have a material impact on our consolidated financial statements. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates include income taxes, contingencies, the useful life of property and equipment and intangible assets, the life of our client relationships, the fair value of our stock-based awards and the fair value of our financial instruments, intangible assets and goodwill. These estimates are based on historical experience where applicable and other assumptions that management believes are reasonable under the circumstances. As such, actual results could materially differ from these estimates. Employee Stock Purchase Plan An award issued under the Paycom Software, Inc. Employee Stock Purchase Plan (the “ESPP”) is classified as a share-based liability and recorded at the fair value of the award. Expense is recognized, net of estimated forfeitures, on a straight-line basis over the requisite service period. Funds Held for Clients and Client Funds Obligation As part of our payroll and tax filing application, we (i) collect client funds to satisfy their respective federal, state and local employment tax obligations, (ii) remit such funds to the appropriate taxing authorities and accounts designated by our clients, and (iii) manage client tax filings and any related correspondence with taxing authorities. During the interval between receipt and disbursement, we invest and earn interest on the amounts that we collect from clients for their federal, state and local employment taxes. As of March 31, 2017 and December 31, 2016, the funds held for clients were invested in money market funds, demand deposit accounts, commercial paper and certificates of deposit. These investments are shown in the consolidated balance sheets as funds held for clients and are classified as a current asset because the funds are held solely to satisfy the client funds obligation. The offsetting liability for the tax filings is shown as client funds obligation. The liability is recorded in the accompanying balance sheets at the time we obtain the funds from clients. The client funds obligation represents liabilities that will be repaid within one year of the balance sheet date. As of April 1, 2016, the interest income earned on funds held for clients is recorded in recurring revenues. Prior to April 1, 2016, the interest income earned on these funds was recorded in other income, net in the consolidated statements of income. Recently Issued Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” This authoritative guidance includes a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. The FASB has since issued several additional amendments to this guidance. In April 2015, the FASB proposed a one year deferral of the effective date of the new revenue recognition standard for public and non-public entities reporting under U.S. GAAP and on July 9, 2015, the FASB approved the one year deferral. The effective date of the amended standard will begin in periods beginning after December 15, 2017 and early adoption is permitted but no earlier than for reporting periods beginning after December 31, 2016. The Company has an ongoing project to assess the impact of the standard that has been conducted with the assistance of an international accounting firm. The Company has not fully determined the impact of the new revenue recognition standard on its systems, processes and consolidated financial statements; however, we expect the new standard will have a material impact on the manner in which we account for certain costs to acquire new contracts (i.e., selling and commission costs) and costs to fulfill contracts (i.e., costs related to implementation services performed). Generally, as it relates to these types of costs, the provisions of the new standard will result in the deferral of these costs on the consolidated balance sheets and subsequently the amortizing of these costs to the consolidated statements of income over the expected life of our client relationships, which we have determined to be an average of 10 years. The Company is still evaluating whether implementation services contain an implied performance obligation in the form of a material right to the customer and if so, what impact that would have on the recognition of implementation revenues. We expect to complete our assessment process, including selecting a transition method for adoption, by the end of the third quarter of 2017 and will complete our implementation process prior to the adoption of this ASU on January 1, 2018. In January 2016, the FASB issued authoritative guidance for the accounting for financial instruments. The amendments in this guidance require all equity investments to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under equity method of accounting or those that result in consolidation of the investee). The amendments in this guidance also require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. In addition, the amendments in this guidance eliminate the requirement to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet for public business entities. The new guidance is effective for us for fiscal years, and interim periods within those years, beginning after December 15, 2017 and early adoption is permitted. We are currently evaluating the impact that the standard will have on our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02 “Leases (Topic 842).” The purpose of the guidance is to increase the transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet as well as providing additional disclosure requirements related to leasing arrangements. The new guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, though early adoption is permitted. Full retrospective application is prohibited. We anticipate that the adoption of this accounting standard will materially affect our consolidated balance sheets and may require changes to the system and processes that we use to account for leases. We have not yet made any decision on the timing of adoption or method of adoption with respect to the optional practical expedients. In January 2017, the FASB issued authoritative guidance to simplify the subsequent measurement of goodwill. Under the new guidance, Step 2 of the goodwill impairment test will be eliminated. The guidance also eliminates the requirements of any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. This standard should be applied on a prospective basis with the nature of and reason for the change in accounting principle disclosed upon transition. The standard is effective for us in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We perform our goodwill impairment test as of June 30 annually and plan to adopt this guidance for the goodwill impairment test we will perform as of June 30, 2017. |
Property and Equipment, Net
Property and Equipment, Net | 3 Months Ended |
Mar. 31, 2017 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment, Net | 3. PROPERTY AND EQUIPMENT, NET Property and equipment and accumulated depreciation and amortization were as follows: March 31, December 31, 2017 2016 Property and equipment Buildings $ 48,250 $ 48,250 Software and capitalized software costs 26,866 23,879 Computer equipment 20,954 18,987 Rental clocks 10,963 10,669 Furniture, fixtures and equipment 6,886 6,695 Leasehold improvements 691 680 114,610 109,160 Less: accumulated depreciation and amortization (39,402 ) (35,833 ) 75,208 73,327 Land 8,993 8,993 Construction in progress 22,284 14,528 Property and equipment, net $ 106,485 $ 96,848 We capitalize computer software development costs related to software developed for internal use in accordance with Accounting Standards Codification (“ASC”) Topic 350-40. For the three months ended March 31, 2017 and 2016, we capitalized $2.9 million and $1.7 million, respectively, of computer software development costs related to software developed for internal use. Rental clocks included in property and equipment, net represent time clocks issued to clients under month-to-month operating leases. As such, these items are transferred from inventory to property and equipment and depreciated over their useful estimated lives. Included in the construction in progress balance at March 31, 2017 and December 31, 2016 is $0.9 million and $1.1 million in retainage, respectively. We capitalize interest incurred for indebtedness related to construction of our principal executive offices. For the three months ended March 31, 2017, we incurred interest costs of $0.4 million, $0.1 million of which was capitalized. For the three months ended March 31, 2106, we incurred interest costs of $0.3 million, less than $0.1 million of which was capitalized. Depreciation and amortization expense for property and equipment, net was $3.9 million and $2.5 million for the three months ended March 31, 2017 and 2016, respectively. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | 4. GOODWILL AND INTANGIBLE ASSETS, NET Goodwill represents the excess of cost over our net tangible and identified intangible assets. We had goodwill of $51.9 million as of March 31, 2017 and December 31, 2016 and determined there were no indicators of impairment at either date. We have selected June 30 as our annual goodwill impairment testing date and determined there was no impairment as of March 31, 2017 or June 30, 2016. All of our intangible assets other than goodwill are considered to have finite lives and, as such, are subject to amortization. The following tables provide the components of intangible assets: March 31, 2017 Weighted Average Remaining Accumulated Useful Life Gross Amortization Net (Years) Intangibles: Customer relationships 0.3 $ 13,997 $ (13,647 ) $ 350 Trade name 5.3 3,194 (2,076 ) 1,118 Total $ 17,191 $ (15,723 ) $ 1,468 December 31, 2016 Weighted Average Remaining Accumulated Useful Life Gross Amortization Net (Years) Intangibles: Customer relationships 0.5 $ 13,997 $ (13,297 ) $ 700 Trade name 5.5 3,194 (2,023 ) 1,171 Total $ 17,191 $ (15,320 ) $ 1,871 The weighted average remaining useful life of our intangible assets was 4.1 years as of March 31, 2017. Amortization of intangible assets for both the three months ended March 31, 2017 and 2016 was $0.4 million. |
Long-Term Debt, Net
Long-Term Debt, Net | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Long-Term Debt, Net | 5. LONG-TERM DEBT, NET As of the dates indicated, our long-term debt consisted of the following: March 31, 2017 December 31, 2016 Net term note to bank due May 30, 2021 $ 24,717 $ 24,950 Net term note to bank due August 31, 2023 4,842 4,874 Construction loan 1,956 — Total long-term debt (including current portion) 31,515 29,824 Less: Current portion (1,126 ) (1,113 ) Total long-term debt, net $ 30,389 $ 28,711 As of March 31, 2017, our indebtedness consisted of (i) a term note under the 2021 Consolidated Loan due to Kirkpatrick Bank (the “2021 Consolidated Loan”), (ii) an 84-month term loan from Kirkpatrick Bank (the “2023 Term Loan”), which we obtained by converting the $5.0 million outstanding principal balance of a construction loan that was used to partially finance the construction of our third headquarters building (the “2015 Construction Loan”), and (iii) a construction loan from Kirkpatrick Bank, which is available to finance the ongoing construction of a fourth headquarters building and a new parking garage (the “2016 Construction Loan”). The 2021 Consolidated Loan matures on May 30, 2021. Under the 2021 Consolidated Loan, interest is payable monthly and accrues at a fixed rate of 4.75% per annum. The 2021 Consolidated Loan is secured by a mortgage covering our headquarters and certain personal property relating to our headquarters. The 2021 Consolidated Loan includes certain financial covenants, including maintaining a fixed charge coverage ratio of EBITDA to fixed charges (defined as current maturities of long-term debt, interest expense, rent expense and distributions) of greater than 1.2 to 1.0, which is measured on a quarterly basis. We were in compliance with all of these covenants as of March 31, 2017. We entered into the 2015 Construction Loan with Kirkpatrick Bank on May 3, 2015 and converted the outstanding principal balance into the 2023 Term Loan on August 1, 2016. The 2015 Construction Loan allowed us to borrow a maximum aggregate principal amount equal to the lesser of (i) $11.0 million or (ii) 80% of the appraised value of the constructed property. The 2023 Term Loan matures on August 31, 2023 and is secured by a mortgage covering our headquarters and certain personal property relating to our headquarters. Interest on the 2023 Term Loan is payable monthly and accrues at a fixed rate of 3.4% per annum. The 2023 Term Loan includes the same covenants as those disclosed above with respect to the 2021 Consolidated Loan. We were in compliance with all of these covenants as of March 31, 2017. We entered into the 2016 Construction Loan with Kirkpatrick Bank on August 2, 2016. As of March 31, 2017, there was $2.0 million outstanding under the 2016 Construction Loan. The 2016 Construction Loan allows us to borrow a maximum aggregate principal amount equal to the lesser of (i) $28.6 million or (ii) 80% of the appraised value of the constructed properties. The 2016 Construction Loan matures on the earlier of the completion of construction or February 2, 2019, with interest accruing at the greater of (i) the prime rate, plus 50 basis points or (ii) 4.0%. At maturity, the outstanding principal balance of the 2016 Construction Loan, if any, will be automatically converted into an 84-month term loan that will accrue fixed interest at the prevailing 7/20 London Interbank Offered Rate swap interest rate in effect as of the commencement date, plus 225 basis points. As of March 31, 2017 and December 31, 2016, the carrying value of our total long-term debt, including current portion, was $31.5 million and $29.8 million, respectively, which approximated its fair value as of both dates. The fair value of our long-term debt is estimated based on the borrowing rates currently available to us for bank loans with similar terms and maturities. |
Employee Savings Plan
Employee Savings Plan | 3 Months Ended |
Mar. 31, 2017 | |
Compensation Related Costs [Abstract] | |
Employee Savings Plan and Employee Stock Purchase Plan | 6. EMPLOYEE SAVINGS PLAN AND EMPLOYEE STOCK PURCHASE PLAN Our employees that are over the age of 21 and have completed ninety (90) days of service are eligible to participate in our 401(k) plan. We have made a Qualified Automatic Contribution Arrangement (“QACA”) election, whereby we make a matching contribution for our employees equal to 100% of the first 1% of salary deferrals and 50% of salary deferrals between 2% and 6%, up to a maximum matching contribution of 3.5% of an employee’s salary each plan year. We are allowed to make additional discretionary matching contributions and discretionary profit sharing contributions. Employees are 100% vested in amounts attributable to salary deferrals and rollover contributions. The QACA matching contributions as well as the discretionary matching and profit sharing contributions vest 100% after two years of employment from the date of hire. Matching contributions amounted to $1.2 million and $1.0 million for the three months ended March 31, 2017 and 2016, respectively. The ESPP has overlapping offering periods, with each offering period lasting approximately 24 months. At the beginning of each offering period, eligible employees may elect to contribute, through payroll deductions, up to 10% of their compensation, subject to an annual per employee maximum. Eligible employees purchase shares of the Company’s common stock at a price equal to 85% of the fair market value of the shares on the exercise date. The maximum number of shares that may be purchased by a participant during each offering period is 2,000 shares, subject to IRS limits. The shares reserved for purposes of the ESPP are shares we purchase in the open market. The maximum aggregate number of shares of the Company’s common stock that may be purchased by all participants under the ESPP is 2,000,000 shares. Eligible employees purchased 32,822 and 60,267 shares of the Company’s common stock under the ESPP during the three months ended March 31, 2017 and 2016, respectively. Compensation expense related to the ESPP is recognized on a straight-line basis over the requisite service period. Our compensation expense related to the ESPP was $0.2 million for each of the three months ended March 31, 2017 and 2016. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 7. FAIR VALUE OF FINANCIAL INSTRUMENTS Our financial instruments consist primarily of cash and cash equivalents, accounts receivable, accounts payable, funds held for clients, client funds obligation and long-term debt. The carrying amount of cash and cash equivalents, accounts receivable, accounts payable, funds held for clients and client funds obligation approximates fair value because of the short-term nature of the instruments. We did not have any financial instruments that were measured on a recurring basis at either March 31, 2017 or December 31, 2016. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 8. EARNINGS PER SHARE Basic earnings per share is based on the weighted average number of shares of common stock outstanding for the period. Diluted earnings per share is computed in a similar manner to basic earnings per share after assuming the issuance of shares of common stock for all potentially dilutive shares of restricted stock whether or not they are vested. In accordance with ASC Topic 260 “Earnings Per Share”, the two-class method determines earnings for each class of common stock and participating securities according to an earnings allocation formula that adjusts the income available to common stockholders for dividends or dividend equivalents and participation rights in undistributed earnings. Certain unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents are participating securities and, therefore, are included in computing earnings per share pursuant to the two-class method. The outstanding shares of restricted stock granted in 2015 are considered participating securities, while all other outstanding shares of restricted stock are not considered participating securities. The following is a reconciliation of net income and the number of shares of common stock used in the computation of basic and diluted earnings per share: Three Months Ended March 31, 2017 March 31, 2016 Numerator: Net income $ 25,614 $ 18,588 Less: income allocable to participating securities (193 ) (232 ) Income allocable to common shares $ 25,421 $ 18,356 Add back: undistributed earnings allocable to participating securities $ 193 $ 232 Less: undistributed earnings reallocated to participating securities (189 ) (227 ) Numerator for diluted earnings per share $ 25,425 $ 18,361 Denominator: Weighted average common shares outstanding 50,315,455 50,315,455 Weighted average common shares repurchased (1,122,261 ) — Adjustment for vested restricted stock 8,113,993 6,817,454 Shares for calculating basic earnings per share 57,307,187 57,132,909 Dilutive effect of unvested restricted stock 1,218,793 1,229,131 Shares for calculating diluted earnings per share 58,525,980 58,362,040 Earnings per share: Basic $ 0.44 $ 0.32 Diluted $ 0.43 $ 0.31 |
Stockholders' Equity and Stock-
Stockholders' Equity and Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stockholders' Equity and Stock-Based Compensation | 9. STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION On January 1, 2014, we issued restricted shares of common stock (“2014 Restricted Stock”) under the Paycom Software, Inc. 2014 Long-Term Incentive Plan (the “LTIP”) that were subject to either time-based vesting conditions or market-based vesting conditions. Shares of 2014 Restricted Stock with time-based vesting conditions vest based on various schedules through 2018. The market-based vesting conditions were based on our total enterprise value exceeding certain specified thresholds and all shares that were subject to market-based vesting conditions have vested. Compensation expense related to the issuance of 2014 Restricted Stock with time-based vesting conditions was measured based on the fair value of the award on the grant date and is recognized over the requisite service period on a straight-line basis. Our total compensation expense related to 2014 Restricted Stock was less than $0.1 million for the three months ended March 31, 2017 and 2016. There was $0.1 million of total unrecognized compensation cost, net of estimated forfeitures, related to unvested shares of 2014 Restricted Stock with time-based vesting conditions outstanding as of March 31, 2017. The unrecognized compensation cost is expected to be recognized over a weighted average period of 1.3 years as of March 31, 2017. On July 8, 2015, we issued an aggregate of 741,931 restricted shares of common stock under the LTIP (“2015 Restricted Stock”) to each of our executive officers and certain other employees. On April 15, 2016, we issued an aggregate of 847,928 restricted shares of common stock under the LTIP (“April 2016 Restricted Stock”) to each of our executive officers and certain other employees. On October 4, 2016, we issued an aggregate of 721,100 restricted shares of common stock under the LTIP (“October 2016 Restricted Stock”) to each of our executive officers and certain other employees. On May 2, 2016, and November 10, 2016, we issued an aggregate of 5,132 and 1,269 restricted shares of common stock, respectively, under the LTIP to certain members of our Board of Directors, all of which are subject to time-based vesting conditions (“2016 Director Restricted Stock” and, collectively with all shares of 2015 Restricted Stock, April 2016 Restricted Stock and October 2016 Restricted Stock, the “Post-IPO Restricted Stock”). Certain shares of Post-IPO Restricted Stock are subject to market-based vesting conditions and certain shares of Post-IPO Restricted Stock are subject to time-based vesting conditions. Shares of Post-IPO Restricted Stock subject to time-based vesting conditions vest over periods of three or five years. Shares subject to market-based vesting conditions have vested when, or will vest if, the Company’s Total Enterprise Value (as defined in the applicable restricted stock award agreement) equals or exceeds certain predetermined thresholds. All shares of April 2016 Restricted Stock with market-based vesting conditions vested on July 28, 2016, when the Company’s Total Enterprise Value reached $2.65 billion. With respect to shares of 2015 Restricted Stock with market-based vesting conditions, 50% of the shares vested on August 1, 2016, when the Company’s Total Enterprise Value reached $2.65 billion, and the remaining 50% of the shares will vest if the Company’s Total Enterprise Value equals or exceeds $3.5 billion. There was a two-trading-day gap between the vesting of April 2016 Restricted Stock and 2015 Restricted Stock when the Company’s Total Enterprise Value reached $2.65 billion due to differences in the number of shares outstanding at the respective grant dates, which affected the Total Enterprise Value calculations. Shares of April 2016 Restricted Stock subject to market-based vesting conditions would have been forfeited if they did not vest within six years of the date of grant while shares of 2015 Restricted Stock subject to market-based vesting conditions are eligible for vesting indefinitely. With respect to shares of October 2016 Restricted Stock subject to market-based vesting conditions, 50% of the shares will vest if the Company’s Total Enterprise Value equals or exceeds $3.9 billion and 50% of the shares will vest if the Company’s Total Enterprise Value equals or exceeds $4.2 billion. Shares of October 2016 Restricted Stock subject to market-based vesting conditions will be forfeited if they do not vest within six years of the date of grant. Compensation expense for the shares of Post-IPO Restricted Stock with time-based vesting conditions was measured based on the fair value of the underlying shares on the grant date (which was equal to the closing price of our common stock on such grant date) and will be recognized over the requisite service periods on a straight-line basis. Compensation expense for shares of Post-IPO Restricted Stock with market-based vesting conditions was measured based on the fair value of the underlying shares on the grant date, which ranged from $21.76 to $33.62. The fair value of each share of Post-IPO Restricted Stock with market-based vesting conditions was estimated on the grant date using a Monte Carlo simulation model. This model considers a range of assumptions related to volatility, risk-free interest rate, expected life and expected dividend yield. Expected volatilities used in the model are based on historical volatilities of comparable guideline companies until a sufficient trading history in our common stock exists. We are required to estimate forfeitures and only record compensation costs for those awards that are expected to vest. Our total compensation expense related to Post-IPO Restricted Stock was $3.6 million and $1.3 million for the three months ended March 31, 2017 and 2016, respectively. There was $35.6 million of unrecognized compensation cost, net of estimated forfeitures, related to unvested shares of Post-IPO Restricted Stock outstanding as of March 31, 2017. The unrecognized compensation cost is expected to be recognized over a weighted average period of 2.0 years as of March 31, 2017. We capitalized stock-based compensation costs related to software developed for internal use of $0.3 million and $0.1 million for the three months ended March 31, 2017 and 2016, respectively. |
Related-Party Transactions
Related-Party Transactions | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | 10. RELATED-PARTY TRANSACTIONS Our Chief Sales Officer owned a .01% general partnership interest and a 10.49% limited partnership interest in 417 Oakbend, LP, a Texas limited partnership, until April 2016. For the three months ended March 31, 2016, we paid rent on our Dallas office space to 417 Oakbend, LP in the amount of $0.1 million. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 11. COMMITMENTS AND CONTINGENCIES Employment Agreements We have employment agreements with certain of our executive officers. The agreements allow for annual compensation, participation in executive benefit plans, and performance-based cash bonuses. Legal Proceedings We are involved in various legal proceedings in the ordinary course of business. Although we cannot predict the outcome of these proceedings, legal matters are subject to inherent uncertainties and there exists the possibility that the ultimate resolution of these matters could have a material adverse effect on our business, financial condition, results of operations and cash flows. Operating Leases and Deferred Rent We lease office space under several noncancellable operating leases with contractual terms expiring from 2018 to 2024. Minimum rent expenses are recognized over the lease term. The lease term is defined as the fixed noncancellable term of the lease plus all periods, if any, for which failure to renew the lease imposes a penalty on us in an amount that a renewal appears, at the inception of the lease, to be reasonably assured. When a lease contains a predetermined fixed escalation of the minimum rent, we recognize the related rent expense on a straight-line basis and record the difference between the recognized rent expense and the amount payable under the lease as a liability. We had $1.1 million, as of March 31, 2017 and December 31, 2016, recorded as a liability for deferred rent. Rent expense under operating leases for the three months ended March 31, 2017 and 2016 was $1.5 million and $1.3 million, respectively. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 12. INCOME TAXES The provision for income taxes is based on a current estimate of the annual effective income tax rate adjusted to reflect the impact of discrete items. Significant management judgment is required in estimating operating income in order to determine our effective income tax rate. Our effective income tax rate was 33.48% and 34.61% for the three months ended March 31, 2017 and 2016, respectively. The lower effective income tax rate for the three months ended March 31, 2017 is primarily a result of increases in the Section 199 qualified production activities deduction and the research and development tax credit. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | 13. SUBSEQUENT EVENTS On April 26, 2017, we issued an aggregate of 607,605 shares of restricted stock under the LTIP to our executive officers and certain other employees. Certain shares of restricted stock are subject to market-based vesting conditions and certain shares of restricted stock are subject to time-based vesting conditions. Shares subject to market-based vesting conditions will vest 50% if the Company’s Total Enterprise Value equals or exceeds $4.15 billion and 50% if the Company’s Total Enterprise Value equals or exceeds $4.45 billion. Shares subject to market-based vesting conditions will be forfeited if they do not vest within six years of the date of grant. Shares subject to time-based vesting conditions will vest over periods from 2 to 5 years. |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the SEC regarding interim financial statements that permit reduced disclosure for interim periods. In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments necessary for the fair presentation of our consolidated balance sheets as of March 31, 2017 and December 31, 2016, our consolidated statements of income for the three months ended March 31, 2017 and 2016 and our consolidated statements of cash flows for the three months ended March 31, 2017 and 2016. Such adjustments are of a normal recurring nature. The information in this Quarterly Report on Form 10-Q should be read in conjunction with our Annual Report on Form 10-K that was filed with the SEC on February 21, 2017. The results of operations for the three months ended March 31, 2017 are not necessarily indicative of the results expected for the full year. |
Adoption of New Accounting Pronouncement | Adoption of New Accounting Pronouncement In July 2015, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance which simplifies the measurement of inventory. Under the new guidance, an entity should measure inventory (as defined within the scope of the guidance) at the lower of cost or net realizable value. The new guidance applies to all inventory except inventory measured using last-in, first-out (LIFO) or the retail inventory method. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The new guidance is effective for public companies for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. We adopted the standard on January 1, 2017. The adoption did not have a material impact on our consolidated financial statements. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates include income taxes, contingencies, the useful life of property and equipment and intangible assets, the life of our client relationships, the fair value of our stock-based awards and the fair value of our financial instruments, intangible assets and goodwill. These estimates are based on historical experience where applicable and other assumptions that management believes are reasonable under the circumstances. As such, actual results could materially differ from these estimates. |
Employee Stock Purchase Plan | Employee Stock Purchase Plan An award issued under the Paycom Software, Inc. Employee Stock Purchase Plan (the “ESPP”) is classified as a share-based liability and recorded at the fair value of the award. Expense is recognized, net of estimated forfeitures, on a straight-line basis over the requisite service period. |
Funds Held for Clients and Client Funds Obligation | Funds Held for Clients and Client Funds Obligation As part of our payroll and tax filing application, we (i) collect client funds to satisfy their respective federal, state and local employment tax obligations, (ii) remit such funds to the appropriate taxing authorities and accounts designated by our clients, and (iii) manage client tax filings and any related correspondence with taxing authorities. During the interval between receipt and disbursement, we invest and earn interest on the amounts that we collect from clients for their federal, state and local employment taxes. As of March 31, 2017 and December 31, 2016, the funds held for clients were invested in money market funds, demand deposit accounts, commercial paper and certificates of deposit. These investments are shown in the consolidated balance sheets as funds held for clients and are classified as a current asset because the funds are held solely to satisfy the client funds obligation. The offsetting liability for the tax filings is shown as client funds obligation. The liability is recorded in the accompanying balance sheets at the time we obtain the funds from clients. The client funds obligation represents liabilities that will be repaid within one year of the balance sheet date. As of April 1, 2016, the interest income earned on funds held for clients is recorded in recurring revenues. Prior to April 1, 2016, the interest income earned on these funds was recorded in other income, net in the consolidated statements of income. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” This authoritative guidance includes a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. The FASB has since issued several additional amendments to this guidance. In April 2015, the FASB proposed a one year deferral of the effective date of the new revenue recognition standard for public and non-public entities reporting under U.S. GAAP and on July 9, 2015, the FASB approved the one year deferral. The effective date of the amended standard will begin in periods beginning after December 15, 2017 and early adoption is permitted but no earlier than for reporting periods beginning after December 31, 2016. The Company has an ongoing project to assess the impact of the standard that has been conducted with the assistance of an international accounting firm. The Company has not fully determined the impact of the new revenue recognition standard on its systems, processes and consolidated financial statements; however, we expect the new standard will have a material impact on the manner in which we account for certain costs to acquire new contracts (i.e., selling and commission costs) and costs to fulfill contracts (i.e., costs related to implementation services performed). Generally, as it relates to these types of costs, the provisions of the new standard will result in the deferral of these costs on the consolidated balance sheets and subsequently the amortizing of these costs to the consolidated statements of income over the expected life of our client relationships, which we have determined to be an average of 10 years. The Company is still evaluating whether implementation services contain an implied performance obligation in the form of a material right to the customer and if so, what impact that would have on the recognition of implementation revenues. We expect to complete our assessment process, including selecting a transition method for adoption, by the end of the third quarter of 2017 and will complete our implementation process prior to the adoption of this ASU on January 1, 2018. In January 2016, the FASB issued authoritative guidance for the accounting for financial instruments. The amendments in this guidance require all equity investments to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under equity method of accounting or those that result in consolidation of the investee). The amendments in this guidance also require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. In addition, the amendments in this guidance eliminate the requirement to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet for public business entities. The new guidance is effective for us for fiscal years, and interim periods within those years, beginning after December 15, 2017 and early adoption is permitted. We are currently evaluating the impact that the standard will have on our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02 “Leases (Topic 842).” The purpose of the guidance is to increase the transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet as well as providing additional disclosure requirements related to leasing arrangements. The new guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, though early adoption is permitted. Full retrospective application is prohibited. We anticipate that the adoption of this accounting standard will materially affect our consolidated balance sheets and may require changes to the system and processes that we use to account for leases. We have not yet made any decision on the timing of adoption or method of adoption with respect to the optional practical expedients. In January 2017, the FASB issued authoritative guidance to simplify the subsequent measurement of goodwill. Under the new guidance, Step 2 of the goodwill impairment test will be eliminated. The guidance also eliminates the requirements of any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. This standard should be applied on a prospective basis with the nature of and reason for the change in accounting principle disclosed upon transition. The standard is effective for us in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We perform our goodwill impairment test as of June 30 annually and plan to adopt this guidance for the goodwill impairment test we will perform as of June 30, 2017. |
Property and Equipment , Net (T
Property and Equipment , Net (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Property Plant And Equipment [Abstract] | |
Schedule of Property and Equipment and Accumulated Depreciation and Amortization | Property and equipment and accumulated depreciation and amortization were as follows: March 31, December 31, 2017 2016 Property and equipment Buildings $ 48,250 $ 48,250 Software and capitalized software costs 26,866 23,879 Computer equipment 20,954 18,987 Rental clocks 10,963 10,669 Furniture, fixtures and equipment 6,886 6,695 Leasehold improvements 691 680 114,610 109,160 Less: accumulated depreciation and amortization (39,402 ) (35,833 ) 75,208 73,327 Land 8,993 8,993 Construction in progress 22,284 14,528 Property and equipment, net $ 106,485 $ 96,848 |
Goodwill and Intangible Asset21
Goodwill and Intangible Assets, Net (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Components of Intangible Assets | All of our intangible assets other than goodwill are considered to have finite lives and, as such, are subject to amortization. The following tables provide the components of intangible assets: March 31, 2017 Weighted Average Remaining Accumulated Useful Life Gross Amortization Net (Years) Intangibles: Customer relationships 0.3 $ 13,997 $ (13,647 ) $ 350 Trade name 5.3 3,194 (2,076 ) 1,118 Total $ 17,191 $ (15,723 ) $ 1,468 December 31, 2016 Weighted Average Remaining Accumulated Useful Life Gross Amortization Net (Years) Intangibles: Customer relationships 0.5 $ 13,997 $ (13,297 ) $ 700 Trade name 5.5 3,194 (2,023 ) 1,171 Total $ 17,191 $ (15,320 ) $ 1,871 |
Long-Term Debt, Net (Tables)
Long-Term Debt, Net (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | As of the dates indicated, our long-term debt consisted of the following: March 31, 2017 December 31, 2016 Net term note to bank due May 30, 2021 $ 24,717 $ 24,950 Net term note to bank due August 31, 2023 4,842 4,874 Construction loan 1,956 — Total long-term debt (including current portion) 31,515 29,824 Less: Current portion (1,126 ) (1,113 ) Total long-term debt, net $ 30,389 $ 28,711 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Share | The following is a reconciliation of net income and the number of shares of common stock used in the computation of basic and diluted earnings per share: Three Months Ended March 31, 2017 March 31, 2016 Numerator: Net income $ 25,614 $ 18,588 Less: income allocable to participating securities (193 ) (232 ) Income allocable to common shares $ 25,421 $ 18,356 Add back: undistributed earnings allocable to participating securities $ 193 $ 232 Less: undistributed earnings reallocated to participating securities (189 ) (227 ) Numerator for diluted earnings per share $ 25,425 $ 18,361 Denominator: Weighted average common shares outstanding 50,315,455 50,315,455 Weighted average common shares repurchased (1,122,261 ) — Adjustment for vested restricted stock 8,113,993 6,817,454 Shares for calculating basic earnings per share 57,307,187 57,132,909 Dilutive effect of unvested restricted stock 1,218,793 1,229,131 Shares for calculating diluted earnings per share 58,525,980 58,362,040 Earnings per share: Basic $ 0.44 $ 0.32 Diluted $ 0.43 $ 0.31 |
Summary of Significant Accoun24
Summary of Significant Accounting Policies - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Expected life of client relationships | 10 years |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment and Associated Accumulated Depreciation and Amortization (Detail) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Property and Equipment [Line Items] | ||
Property and equipment, gross | $ 114,610 | $ 109,160 |
Less: accumulated depreciation and amortization | (39,402) | (35,833) |
Property and equipment, net | 106,485 | 96,848 |
Buildings [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, gross | 48,250 | 48,250 |
Software and Capitalized Software Costs [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, gross | 26,866 | 23,879 |
Computer Equipment [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, gross | 20,954 | 18,987 |
Rental Clocks [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, gross | 10,963 | 10,669 |
Furniture, Fixtures and Equipment [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, gross | 6,886 | 6,695 |
Leasehold Improvements [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, gross | 691 | 680 |
Excluded Land and Construction in Process [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, net | 75,208 | 73,327 |
Land [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, net | 8,993 | 8,993 |
Construction in Progress [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, net | $ 22,284 | $ 14,528 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Property and Equipment [Line Items] | |||
Computer software development costs capitalized | $ 2,900 | $ 1,700 | |
Retainage amount included in construction in progress | 900 | $ 1,100 | |
Interest cost paid | 400 | 300 | |
Interest costs capitalized | 100 | 100 | |
Depreciation and amortization | 2,226 | 1,723 | |
Property and Equipment [Member] | |||
Property and Equipment [Line Items] | |||
Depreciation and amortization | $ 3,900 | $ 2,500 |
Goodwill and Intangible Asset27
Goodwill and Intangible Assets, Net - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | Jun. 30, 2016 | Dec. 31, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||||
Goodwill | $ 51,889,000 | $ 51,889,000 | ||
Goodwill impairment amount | $ 0 | $ 0 | $ 0 | |
Weighted average remaining useful life | 4 years 1 month 6 days | |||
Amortization of intangible assets | $ 400,000 | $ 400,000 |
Goodwill and Intangible Asset28
Goodwill and Intangible Assets, Net - Components of Intangible Assets (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Finite Lived Intangible Assets [Line Items] | ||
Weighted average remaining useful life | 4 years 1 month 6 days | |
Gross | $ 17,191 | $ 17,191 |
Accumulated Amortization | (15,723) | (15,320) |
Net | $ 1,468 | $ 1,871 |
Customer Relationships [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted average remaining useful life | 3 months 18 days | 6 months |
Gross | $ 13,997 | $ 13,997 |
Accumulated Amortization | (13,647) | (13,297) |
Net | $ 350 | $ 700 |
Trade Name [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted average remaining useful life | 5 years 3 months 18 days | 5 years 6 months |
Gross | $ 3,194 | $ 3,194 |
Accumulated Amortization | (2,076) | (2,023) |
Net | $ 1,118 | $ 1,171 |
Long-Term Debt, Net - Schedule
Long-Term Debt, Net - Schedule of Long-Term Debt (Detail) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Schedule Of Capitalization Longterm Debt [Line Items] | ||
Total long-term debt (including current portion) | $ 31,515 | $ 29,824 |
Less: Current portion | (1,126) | (1,113) |
Total long-term debt, net | 30,389 | 28,711 |
Construction Loan [Member] | ||
Schedule Of Capitalization Longterm Debt [Line Items] | ||
Term note to bank | 1,956 | |
2021 Consolidated Loan [Member] | ||
Schedule Of Capitalization Longterm Debt [Line Items] | ||
Term note to bank | 24,717 | 24,950 |
2023 Consolidated Loan [Member] | ||
Schedule Of Capitalization Longterm Debt [Line Items] | ||
Term note to bank | $ 4,842 | $ 4,874 |
Long-Term Debt, Net - Additiona
Long-Term Debt, Net - Additional Information (Detail) - USD ($) | Aug. 02, 2016 | Aug. 01, 2016 | Mar. 31, 2017 | Dec. 31, 2016 | May 03, 2015 |
Debt Instrument [Line Items] | |||||
Total long-term debt, including current portion | $ 31,515,000 | $ 29,824,000 | |||
2021 Consolidated Loan [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument maturity date | May 30, 2021 | ||||
Debt instrument, interest rate | 4.75% | ||||
Debt instrument, restrictive covenants | maintaining a fixed charge coverage ratio of EBITDA to fixed charges (defined as current maturities of long-term debt, interest expense, rent expense and distributions) of greater than 1.2 to 1.0 | ||||
2021 Consolidated Loan [Member] | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt coverage ratio of indebtedness | 120.00% | ||||
2015 Construction Loan [Member] | |||||
Debt Instrument [Line Items] | |||||
Maturity period of term loan | 84 months | ||||
Converted outstanding principal balance | $ 5,000,000 | ||||
Loan, principal amount | $ 11,000,000 | ||||
Construction loan, percentage of appraised value of constructed property | 80.00% | ||||
2023 Term Loan [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument maturity date | Aug. 31, 2023 | ||||
Debt instrument, interest rate | 3.40% | ||||
2016 Construction Loan [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, interest rate | 4.00% | ||||
Loan, principal amount | $ 28,600,000 | ||||
Construction loan, percentage of appraised value of constructed property | 80.00% | ||||
Construction loan, outstanding borrowings | $ 2,000,000 | ||||
Construction loan, maturity date description | The 2016 Construction Loan matures on the earlier of the completion of construction or February 2, 2019, with interest accruing at the greater of (i) the prime rate, plus 50 basis points or (ii) 4.0%. | ||||
2016 Construction Loan [Member] | Prime Rate [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument basis spread on variable rate | 0.50% | ||||
2016 Construction Loan [Member] | Term Loan [Member] | |||||
Debt Instrument [Line Items] | |||||
Maturity period of term loan | 84 months | ||||
Construction loan, maturity date description | At maturity, the outstanding principal balance of the 2016 Construction Loan, if any, will be automatically converted into an 84-month term loan | ||||
2016 Construction Loan [Member] | Term Loan [Member] | London Interbank Offered Rate LIBOR [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument basis spread on variable rate | 2.25% |
Employee Savings Plan and Emplo
Employee Savings Plan and Employee Stock Purchase Plan - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Defined Contribution Plan Disclosure [Line Items] | ||
401(k) eligibility minimum service period | 90 days | |
401(k) description of plan contributions | contribution for our employees equal to 100% of the first 1% of salary deferrals and 50% of salary deferrals between 2% and 6%, up to a maximum matching contribution of 3.5% of an employee’s salary each plan year. | |
Employee vested percentage in salary deferrals and roll over contributions | 100.00% | |
Minimum period for vesting 100% contributions | 2 years | |
Minimum period for vesting of discretionary contributions | 2 years | |
Matching contribution amount | $ 1.2 | $ 1 |
Employee stock purchase plan overlapping offering period | 24 months | |
Employee Stock Purchase Plan [Member] | ||
Defined Contribution Plan Disclosure [Line Items] | ||
Employees Company's common stock shares purchase limit percentage | 10.00% | |
Maximum number of shares that may be purchased by a participant | 2,000 | |
Share of common stock purchase maximum | 2,000,000 | |
Purchase of shares of common stock | 32,822 | 60,267 |
Compensation expense related to ESPP | $ 0.2 | $ 0.2 |
After Two Years Of Employment [Member] | ||
Defined Contribution Plan Disclosure [Line Items] | ||
Matching contributions, vesting percentage | 100.00% | |
One Hundred Percent Match For Percent Of Participants Contribution [Member] | ||
Defined Contribution Plan Disclosure [Line Items] | ||
Employer contribution percentage | 100.00% | |
Percentage of salary deferrals | 1.00% | |
50% Matching Contribution [Member] | ||
Defined Contribution Plan Disclosure [Line Items] | ||
Employer contribution percentage | 50.00% | |
Minimum [Member] | ||
Defined Contribution Plan Disclosure [Line Items] | ||
401(k) eligible age of employee | 21 years | |
Minimum [Member] | 50% Matching Contribution [Member] | ||
Defined Contribution Plan Disclosure [Line Items] | ||
Percentage of salary deferrals | 2.00% | |
Maximum [Member] | ||
Defined Contribution Plan Disclosure [Line Items] | ||
Percentage of salary deferrals | 3.50% | |
Maximum [Member] | Employee Stock Purchase Plan [Member] | ||
Defined Contribution Plan Disclosure [Line Items] | ||
Purchase price of common stock expressed as a percentage of its fair market value | 85.00% | |
Maximum [Member] | 50% Matching Contribution [Member] | ||
Defined Contribution Plan Disclosure [Line Items] | ||
Percentage of salary deferrals | 6.00% |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Numerator: | ||
Net income | $ 25,614 | $ 18,588 |
Less: income allocable to participating securities | (193) | (232) |
Income allocable to common shares | 25,421 | 18,356 |
Add back: undistributed earnings allocable to participating securities | 193 | 232 |
Less: undistributed earnings reallocated to participating securities | (189) | (227) |
Numerator for diluted earnings per share | $ 25,425 | $ 18,361 |
Denominator: | ||
Weighted average common shares outstanding | 50,315,455 | 50,315,455 |
Weighted average common shares repurchased | (1,122,261) | |
Adjustment for vested restricted stock | 8,113,993 | 6,817,454 |
Shares for calculating basic earnings per share | 57,307,187 | 57,132,909 |
Dilutive effect of unvested restricted stock | 1,218,793 | 1,229,131 |
Shares for calculating diluted earnings per share | 58,525,980 | 58,362,040 |
Earnings per share: | ||
Basic | $ 0.44 | $ 0.32 |
Diluted | $ 0.43 | $ 0.31 |
Stockholders' Equity and Stoc33
Stockholders' Equity and Stock-Based Compensation - Additional Information (Detail) - USD ($) | Nov. 10, 2016 | Oct. 04, 2016 | Aug. 01, 2016 | May 02, 2016 | Apr. 15, 2016 | Jul. 08, 2015 | Mar. 31, 2017 | Mar. 31, 2016 | Jul. 28, 2016 |
Software and Capitalized Software Costs [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Capitalized compensation cost | $ 300,000 | $ 100,000 | |||||||
Vest 50% when Company reaches a Total Enterprise Value of $2.65 billion [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Market-based vesting percentage, restricted shares | 50.00% | ||||||||
Total enterprise value | $ 2,650,000,000 | ||||||||
2014 Restricted Stock [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Total unrecognized compensation cost related to unvested restricted stock | $ 100,000 | ||||||||
Unrecognized compensation expected to be recognized | 1 year 3 months 18 days | ||||||||
2014 Restricted Stock [Member] | Maximum [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Compensation expense recognized | $ 100,000 | 100,000 | |||||||
2015 Restricted Stock [Member] | Vest 50% when Company reaches a Total Enterprise Value of $3.5 billion [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Market-based vesting percentage, restricted shares | 50.00% | ||||||||
Total enterprise value | $ 3,500,000,000 | ||||||||
2015 Restricted Stock [Member] | LTIP [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Restricted shares of common stock issued | 741,931 | ||||||||
2015 Restricted Stock [Member] | Maximum [Member] | Time-based Vesting Conditions [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share-based compensation award vesting period | 5 years | ||||||||
2015 Restricted Stock [Member] | Minimum [Member] | Time-based Vesting Conditions [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share-based compensation award vesting period | 3 years | ||||||||
April 2016 Restricted Stock [Member] | LTIP [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Restricted shares of common stock issued | 847,928 | ||||||||
October 2016 Restricted Stock [Member] | Market-based Vesting Conditions [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Total enterprise value | $ 3,900,000,000 | ||||||||
Restricted common stock, expiration period | 6 years | ||||||||
October 2016 Restricted Stock [Member] | Vest 50% when Company reaches a Total Enterprise Value of $3.9 billion [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Market-based vesting percentage, restricted shares | 50.00% | ||||||||
Total enterprise value | $ 3,900,000,000 | ||||||||
October 2016 Restricted Stock [Member] | Vest 50% when Company reaches a Total Enterprise Value of $4.2 billion [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Market-based vesting percentage, restricted shares | 50.00% | ||||||||
Total enterprise value | $ 4,200,000,000 | ||||||||
October 2016 Restricted Stock [Member] | LTIP [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Restricted shares of common stock issued | 721,100 | ||||||||
Post-IPO Restricted Stock [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Compensation expense recognized | 3,600,000 | $ 1,300,000 | |||||||
Total unrecognized compensation cost related to unvested restricted stock | $ 35,600,000 | ||||||||
Unrecognized compensation expected to be recognized | 2 years | ||||||||
Post-IPO Restricted Stock [Member] | LTIP [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Restricted shares of common stock issued | 1,269 | 5,132 | |||||||
Post-IPO Restricted Stock [Member] | Maximum [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Restricted stock awards grant date fair value | $ 33.62 | ||||||||
Post-IPO Restricted Stock [Member] | Minimum [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Restricted stock awards grant date fair value | $ 21.76 | ||||||||
2016 Restricted Stock [Member] | Market-based Vesting Conditions [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Total enterprise value | $ 2,650,000,000 | ||||||||
Restricted common stock, expiration period | 6 years |
Related-Party Transactions - Ad
Related-Party Transactions - Additional Information (Detail) - 417 Oakbend, LP [Member] - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Apr. 30, 2016 | |
Related Party Transaction [Line Items] | ||
Payments for rent | $ 0.1 | |
Chief Sales Officer [Member] | ||
Related Party Transaction [Line Items] | ||
General partnership ownership interest in related party, percentage | 0.01% | |
Limited partnership interest in related party, percentage | 10.49% |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Other Commitments [Line Items] | |||
Liability for deferred rent | $ 1.1 | $ 1.1 | |
Operating lease rent expense | $ 1.5 | $ 1.3 | |
Minimum [Member] | |||
Other Commitments [Line Items] | |||
Operating lease expiration year | 2,018 | ||
Maximum [Member] | |||
Other Commitments [Line Items] | |||
Operating lease expiration year | 2,024 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 33.48% | 34.61% |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - Subsequent Event [Member] - Restricted Stock [Member] $ in Millions | Apr. 26, 2017USD ($)shares |
LTIP [Member] | |
Subsequent Event [Line Items] | |
Restricted shares of common stock issued | shares | 607,605 |
Vest 50% if Company's total enterprise value equals or exceeds $4.15 billion [Member] | |
Subsequent Event [Line Items] | |
Market-based vesting percentage, restricted shares | 50.00% |
Total enterprise value | $ 4,150 |
Vest 50% if Company's total enterprise value equals or exceeds $4.45 billion [Member] | |
Subsequent Event [Line Items] | |
Market-based vesting percentage, restricted shares | 50.00% |
Total enterprise value | $ 4,450 |
Market-based Vesting Conditions [Member] | |
Subsequent Event [Line Items] | |
Restricted common stock, expiration period | 6 years |
Time-based Vesting Conditions [Member] | Minimum [Member] | |
Subsequent Event [Line Items] | |
Share-based compensation award vesting period | 2 years |
Time-based Vesting Conditions [Member] | Maximum [Member] | |
Subsequent Event [Line Items] | |
Share-based compensation award vesting period | 5 years |