Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 24, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
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 Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 58,613,653 |
Consolidated Balance Sheets (un
Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 85,048 | $ 46,077 |
Accounts receivable | 2,213 | 1,576 |
Prepaid expenses | 7,934 | 4,982 |
Inventory | 574 | 979 |
Income tax receivable | 6,456 | 7,047 |
Derivative asset | 97 | |
Deferred contract costs | 32,465 | 26,403 |
Current assets before funds held for clients | 134,787 | 87,064 |
Funds held for clients | 902,747 | 1,089,201 |
Total current assets | 1,037,534 | 1,176,265 |
Property and equipment, net | 168,397 | 147,705 |
Deposits and other assets | 1,567 | 1,456 |
Goodwill | 51,889 | 51,889 |
Intangible assets, net | 798 | 958 |
Long-term derivative asset | 679 | |
Long-term deferred contract costs | 207,322 | 171,865 |
Total assets | 1,468,186 | 1,550,138 |
Current liabilities: | ||
Accounts payable | 6,173 | 6,490 |
Accrued commissions and bonuses | 6,454 | 9,585 |
Accrued payroll and vacation | 12,937 | 7,015 |
Deferred revenue | 8,409 | 6,982 |
Current portion of long-term debt | 1,775 | 888 |
Accrued expenses and other current liabilities | 19,654 | 19,991 |
Current liabilities before client funds obligation | 55,402 | 50,951 |
Client funds obligation | 902,747 | 1,089,201 |
Total current liabilities | 958,149 | 1,140,152 |
Deferred income tax liabilities, net | 64,206 | 49,129 |
Long-term derivative liability | 554 | |
Long-term deferred revenue | 52,405 | 44,642 |
Net long-term debt, less current portion | 33,049 | 34,414 |
Total long-term liabilities | 149,660 | 128,739 |
Commitments and contingencies (Note 12) | ||
Stockholders' equity: | ||
Common stock, $0.01 par value (100,000,000 shares authorized, 60,698,352 and 60,149,411 shares issued at September 30, 2018 and December 31, 2017, respectively; 57,730,356 and 57,788,573 shares outstanding at September 30, 2018 and December 31, 2017, respectively) | 606 | 601 |
Additional paid-in capital | 198,255 | 161,809 |
Retained earnings | 364,176 | 258,525 |
Treasury stock, at cost (2,967,996 and 2,360,838 shares at September 30, 2018 and December 31, 2017, respectively) | (202,660) | (139,688) |
Total stockholders' equity | 360,377 | 281,247 |
Total liabilities and stockholders' equity | $ 1,468,186 | $ 1,550,138 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (unaudited) (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
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 | 60,698,352 | 60,149,411 |
Common stock, shares outstanding | 57,730,356 | 57,788,573 |
Treasury stock, shares | 2,967,996 | 2,360,838 |
Consolidated Statements of Inco
Consolidated Statements of Income (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues | ||||
Total revenues | $ 133,288 | $ 101,287 | $ 416,004 | $ 319,022 |
Cost of revenues | ||||
Operating expenses | 18,158 | 15,324 | 56,403 | 46,019 |
Depreciation and amortization | 3,967 | 2,502 | 10,258 | 6,829 |
Total cost of revenues | 22,125 | 17,826 | 66,661 | 52,848 |
Administrative expenses | ||||
Sales and marketing | 37,183 | 27,732 | 101,182 | 80,741 |
Research and development | 11,526 | 8,112 | 33,507 | 23,004 |
General and administrative | 22,048 | 23,207 | 73,700 | 62,051 |
Depreciation and amortization | 4,161 | 2,403 | 10,652 | 7,069 |
Total administrative expenses | 74,918 | 61,454 | 219,041 | 172,865 |
Total operating expenses | 97,043 | 79,280 | 285,702 | 225,713 |
Operating income | 36,245 | 22,007 | 130,302 | 93,309 |
Interest expense | (384) | (220) | (418) | (758) |
Other income, net | 583 | 118 | 2,128 | 362 |
Income before income taxes | 36,444 | 21,905 | 132,012 | 92,913 |
Provision for income taxes | 7,675 | 995 | 26,361 | 18,293 |
Net income | $ 28,769 | $ 20,910 | $ 105,651 | $ 74,620 |
Earnings per share, basic | $ 0.50 | $ 0.36 | $ 1.83 | $ 1.29 |
Earnings per share, diluted | $ 0.49 | $ 0.35 | $ 1.80 | $ 1.26 |
Weighted average shares outstanding: | ||||
Basic | 57,726,790 | 58,003,222 | 57,785,466 | 57,751,204 |
Diluted | 58,545,061 | 58,873,502 | 58,724,228 | 58,839,771 |
Recurring [Member] | ||||
Revenues | ||||
Total revenues | $ 130,830 | $ 99,498 | $ 409,324 | $ 313,763 |
Implementation and Other [Member] | ||||
Revenues | ||||
Total revenues | $ 2,458 | $ 1,789 | $ 6,680 | $ 5,259 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities | ||
Net income | $ 105,651 | $ 74,620 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 20,910 | 13,898 |
Accretion of discount on available-for-sale securities | (860) | (371) |
Loss on disposition of property and equipment | 21 | |
Amortization of debt issuance costs | 24 | 92 |
Stock-based compensation expense | 31,508 | 29,663 |
Cash paid for derivative settlement | (168) | |
Gain on derivative | (1,259) | |
Deferred income taxes, net | 15,077 | 9,167 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (637) | (105) |
Prepaid expenses | (2,952) | (1,230) |
Inventory | (56) | (75) |
Deposits and other assets | (111) | (126) |
Deferred contract costs | (39,881) | (32,024) |
Accounts payable | 1,789 | (1,463) |
Income taxes, net | 591 | (8,555) |
Accrued commissions and bonuses | (3,131) | (1,221) |
Accrued payroll and vacation | 5,922 | 4,327 |
Deferred revenue | 9,190 | 8,656 |
Accrued expenses and other current liabilities | 4,242 | (3,225) |
Net cash provided by operating activities | 145,849 | 92,049 |
Cash flows from investing activities | ||
Purchase of short-term investments from funds held for clients | (137,561) | (49,325) |
Proceeds from maturities of short-term investments from funds held for clients | 95,500 | 111,705 |
Net change in funds held for clients' cash and cash equivalents | 229,375 | 3,501 |
Purchases of property and equipment | (44,264) | (42,926) |
Net cash provided by investing activities | 143,050 | 22,955 |
Cash flows from financing activities | ||
Proceeds from issuance of long-term debt | 5,440 | |
Repurchases of common stock | (42,857) | (19,391) |
Withholding taxes paid related to net share settlement | (20,115) | (28,105) |
Principal payments on long-term debt | (444) | (843) |
Net change in client funds obligation | (186,454) | (65,510) |
Payment of debt issuance costs | (58) | (143) |
Net cash used in financing activities | (249,928) | (108,552) |
Increase in cash and cash equivalents | 38,971 | 6,452 |
Cash and cash equivalents | ||
Beginning of period | 46,077 | 60,158 |
End of period | $ 85,048 | $ 66,610 |
Description of Business and Bas
Description of Business and Basis of Presentation | 9 Months Ended |
Sep. 30, 2018 | |
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 Securities and Exchange Commission (“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 September 30, 2018 and December 31, 2017, our consolidated statements of income for the three and nine months ended September 30, 2018 and 2017 and our consolidated statements of cash flows for the nine months ended September 30, 2018 and 2017. Such adjustments are of a normal recurring nature. The information in this Quarterly Report on Form 10-Q (this “Form 10-Q”) should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2017 that was filed with the SEC on February 14, 2018 (the “Form 10-K”). The results of operations for the nine months ended September 30, 2018 are not necessarily indicative of the results expected for the full year. Effective January 1, 2018, we adopted the requirements of Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” as discussed in Note 2. All amounts and disclosures set forth in this Form 10-Q have been updated to comply with the new standards, as indicated by the “as adjusted” footnote. Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on reported net income and did not result in any material change to operating cash flows. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
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 the notes to our audited consolidated financial statements for the year ended December 31, 2017, included in the Form 10-K. Recently Adopted New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). 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. ASU 2014-09 also includes Accounting Standards Codification (“ASC”) 340-40, “Other Assets and Deferred Costs – Contracts with Customers” (“ASC 340-40”), which codifies the guidance on other assets and deferred costs relating to Impact on Previously Reported Results The provisions of ASU 2014-09 do not materially impact the timing or amount of revenue we recognize. The primary impact of adopting the new standard is the manner in which we account for certain costs to obtain new contracts (i.e., selling and commission costs) and costs to fulfill contracts (i.e., costs related to upfront implementation activities performed), which we had previously expensed as incurred. We also determined that the nonrefundable upfront fee charged to our clients, coupled with the option to renew, represents an implied performance obligation in the form of a material right. However, as these fees are deferred and recognized ratably over the ten-year estimated client life, consistent with our prior accounting policy, there is no change in revenue recognition. See Note 3 for further details. The following table presents a recast of selected unaudited consolidated statement of income line items after giving effect to the adoption of ASU 2014-09: Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017 As previously reported Adjustments As Adjusted As previously reported Adjustments As Adjusted Administrative expenses Sales and marketing $ 35,542 $ (7,810 ) $ 27,732 $ 106,460 $ (25,719 ) $ 80,741 General and administrative $ 25,967 $ (2,760 ) $ 23,207 $ 70,450 $ (8,399 ) $ 62,051 Operating income $ 11,437 $ 10,570 $ 22,007 $ 59,191 $ 34,118 $ 93,309 Provision for income taxes $ (2,732 ) $ 3,727 $ 995 $ 4,893 $ 13,400 $ 18,293 Net income $ 14,067 $ 6,843 $ 20,910 $ 53,902 $ 20,718 $ 74,620 Earnings per share, basic $ 0.24 $ 0.12 $ 0.36 $ 0.93 $ 0.36 $ 1.29 Earnings per share, diluted $ 0.24 $ 0.11 $ 0.35 $ 0.91 $ 0.35 $ 1.26 The following table presents a recast of selected unaudited consolidated balance sheet line items after giving effect to the adoption of ASU 2014-09: December 31, 2017 As previously reported Adjustments As Adjusted Assets Deferred contract costs $ — $ 26,403 $ 26,403 Deferred income tax assets, net $ 3,294 $ (3,294 ) $ — Long-term deferred contract costs $ — $ 171,865 $ 171,865 Liabilities and Stockholders' Equity Deferred income tax liabilities, net $ — $ 49,129 $ 49,129 Additional paid-in capital $ 137,234 $ 24,575 $ 161,809 Retained earnings $ 137,255 $ 121,270 $ 258,525 The following table presents a recast of selected unaudited consolidated statement of cash flows line items after giving effect to the adoption of ASU 2014-09: Nine Months Ended September 30, 2017 As previously reported Adjustments As Adjusted Cash flows from operating activities Net income $ 53,902 $ 20,718 $ 74,620 Stock-based compensation expense $ 31,757 $ (2,094 ) $ 29,663 Deferred income taxes, net $ (4,233 ) $ 13,400 $ 9,167 Deferred contract costs $ — $ (32,024 ) $ (32,024 ) Net cash provided by operating activities $ 92,049 $ — $ 92,049 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. Seasonality Our revenues are seasonal in nature. Recurring revenues include revenues relating to the annual processing of payroll forms, such as Form W-2, Form 1099, and Form 1095 and revenues from processing unscheduled payroll runs (such as bonuses) for our clients. Because payroll forms are typically processed in the first quarter of the year, first quarter revenues and margins are generally higher than in subsequent quarters. These seasonal fluctuations in revenues can also have an impact on gross profits. Historical results impacted by these seasonal trends should not be considered a reliable indicator of our future results of operations. 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. Amounts collected by us from clients for their federal, state and local employment taxes are invested by us, and we earn interest on these funds during the interval between receipt and disbursement. These investments are shown in our consolidated balance sheets as funds held for clients, and 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 September 30, 2018 and December 31, 2017, the funds held for clients were invested in money market funds, demand deposit accounts, commercial paper and certificates of deposit. Funds held for clients are classified as a current asset in the consolidated balance sheets because the funds are held solely to satisfy the client funds obligation. Stock Repurchase Plan In May 2016, our Board of Directors authorized a stock repurchase plan allowing for the repurchase of shares of our common stock in open market transactions at prevailing market prices, in privately negotiated transactions or by other means in accordance with federal securities laws, including Rule 10b5-1 programs. Since the initial authorization of the stock repurchase plan, our Board of Directors has amended and extended the stock repurchase plan from time to time. Most recently, on February 13, 2018, we announced that our Board of Directors authorized the repurchase of up to an additional $100.0 million of common stock. Our stock repurchase plan may be suspended or discontinued at any time. The actual timing, number and value of shares repurchased depends on a number of factors, including the market price of our common stock, general market and economic conditions, shares withheld for taxes associated with the vesting of restricted stock and other corporate considerations. During the nine months ended September 30, 2018, we repurchased an aggregate of 607,158 shares of our common stock at an average cost of $103.72 per share, including 185,116 shares withheld to satisfy tax withholding obligations for certain employees upon the vesting of restricted stock. As of September 30, 2018, there was $74.4 million available for repurchases. The stock repurchase plan will expire on February 12, 2020. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” The purpose of this new 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 us beginning January 1, 2019, which we plan to adopt using a modified retrospective method and the transition relief guidance provided by the FASB in ASU 2018-11. Under this adoption method, we will not restate comparative prior periods and we will carry forward the assessment of whether our contracts are or contain leases, the classification of our leases and the remaining lease terms. Based on our current portfolio of leases, we estimate approximately $20.0 million of lease assets and liabilities will be recognized on our balance sheet upon adoption, primarily relating to operating leases for real estate. This estimate is subject to change prior to the effective date of adoption based on factors including, but not limited to, entering into new leases or modifying existing leases and changes in applicable discount rates. In addition, we are in the process of completing our evaluation of available practical expedients and the impact of this new guidance on our systems, processes and controls that we use to account for leases. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2018 | |
Revenue From Contract With Customer [Abstract] | |
Revenue | 3. REVENUE Revenues are recognized when control of the promised goods or services is transferred to our clients in an amount that reflects the consideration we expect to be entitled to for those goods or services. Substantially all of our revenues are comprised of revenue from contracts with clients. Sales and other applicable taxes are excluded from revenues. The following table, consistent with our consolidated statements of income, disaggregates revenue by recurring and implementation and other revenues, which we believe represent the major categories of revenues: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Revenues Recurring $ 130,830 $ 99,498 $ 409,324 $ 313,763 Implementation and other 2,458 1,789 6,680 5,259 Total revenues $ 133,288 $ 101,287 $ 416,004 $ 319,022 Recurring Revenues Recurring revenues are derived primarily from our talent acquisition, time and labor management, payroll, talent management and HR management applications as well as fees charged for form filings and delivery of client payroll checks and reports. Talent acquisition includes our applicant tracking, candidate tracker, background check, on-boarding, e-verify and tax credit services applications. Time and labor management includes time and attendance, scheduling/schedule exchange, time-off requests, labor allocation, labor management reports/push reporting and geofencing/geotracking. Payroll includes our payroll and tax management, Paycom Pay, expense management, garnishment management and GL Concierge applications. Talent management includes our employee self-service, compensation budgeting, performance management, executive dashboard and Paycom learning and course content applications. HR management includes our document and task management, government and compliance, benefits administration, COBRA administration, personnel action forms, surveys and enhanced Affordable Care Act applications. The performance obligations related to recurring revenues are satisfied during each client’s payroll period, with the agreed-upon fee being charged and collected as part of our processing of the client’s payroll. Recurring revenues are recognized at the conclusion of processing of each client’s payroll period, when each respective payroll client is billed. Collectability is reasonably assured as the fees are collected through an automated clearing house as part of the client’s payroll cycle or through direct wire transfer, which minimizes the default risk. The contract period for substantially all contracts associated with these revenues is one month due to the fact that both we and the client have the unilateral right to terminate a wholly unperformed contract without compensating the other party by providing 30 days’ notice of termination. Our payroll application is the foundation of our solution, and all of our clients are required to utilize this application in order to access our other applications. For clients who purchase multiple applications, due to the short-term nature of our contracts, we do not believe it is meaningful to separately assess and identify whether or not each application potentially represents its own, individual, performance obligation as the revenue generated from each application is recognized within the same month as the revenue from the core payroll application. Similarly, we do not believe it is meaningful to individually determine the standalone selling price for each application. We consider the total price charged to a client in a given period to be indicative of the standalone selling price, as the total amount charged is within a reasonable range of prices typically charged for our goods and services for comparable classes of client groups. Implementation and Other Revenues Implementation and other revenues consist of nonrefundable upfront conversion fees which are charged to new clients to offset the expense of new client set-up as well as revenues from the sale of time clocks as part of our employee time and attendance services. Although these revenues are related to our recurring revenues, they represent distinct performance obligations. Implementation activities primarily represent administrative activities that allow us to fulfill future performance obligations for our clients and do not represent services transferred to the client. However, the nonrefundable upfront fee charged to our clients results in an implied performance obligation in the form of a material right to the client related to the client’s option to renew at the end of each 30-day contract period. Further, given that all other services within the contract are sold at a total price indicative of the standalone selling price, coupled with the fact that the upfront fees are consistent with upfront fees charged in similar contracts that we have with clients, the standalone selling price of the client’s option to renew approximates the dollar amount of the nonrefundable upfront fee. The nonrefundable upfront fee is typically included on the client’s first invoice, and is deferred and recognized ratably over the estimated renewal period (i.e. the ten-year estimated client life). Revenue from the sale of time clocks is recognized when control is transferred to the client upon delivery of the product. We estimated the standalone selling price for the time clocks by maximizing the use of observable inputs such as our specific pricing practices for time clocks. Contract Balances The timing of revenue recognition for recurring services is consistent with the invoicing of clients as they both occur during the respective client payroll period for which the services are provided. Therefore, we do not recognize a contract asset or liability resulting from the timing of revenue recognition and invoicing. We have elected to apply the practical expedient not to disclose the value of unsatisfied performance obligations for contracts that are less than one year in length. However, this expedient cannot be applied to initial 30-day contracts with a client that also contain an implied performance obligation in the form of a material right as the material right performance obligation is being recognized over the expected client life which exceeds one year. For these contracts, we determined that the core, non-material right, performance obligations are generally satisfied in full by the end of each reporting period as most of our contracts with clients start at the beginning of a calendar month. For the material right performance obligation, as discussed above, we defer the amounts allocated and recognize them ratably over the estimated client life of ten years. Finally, we have also elected to apply the transition expedient that allows for all reporting periods presented before the date of initial application to exclude disclosure of the amounts of transaction price allocated to the remaining unsatisfied performance obligations. Accordingly, the table below is only for the three and nine months ended September 30, 2018. Changes in deferred revenue related to material right performance obligations were as follows: Three Months Ended Nine Months Ended September 30, 2018 September 30, 2018 Balance, beginning of period $ 57,189 $ 51,624 Deferral of revenue 5,643 14,902 Recognition of unearned revenue (2,018 ) (5,712 ) Balance, end of period $ 60,814 $ 60,814 We expect to recognize $2.0 million of deferred revenue related to material right performance obligations in the remainder of 2018, $8.2 million of such deferred revenue in 2019, and $50.6 million of such deferred revenue thereafter. Assets Recognized from the Costs to Obtain and Costs to Fulfill Revenue Contracts We recognize an asset for the incremental costs of obtaining a contract with a client if we expect the amortization period to be longer than one year. We have determined that certain selling and commission costs meet the capitalization criteria under ASC 340-40, which prior to the adoption of ASU 2014-09 we had previously expensed as incurred. We also recognize an asset for the costs to fulfill a contract with a client if such costs are specifically identifiable, generate or enhance resources used to satisfy future performance obligations, and are expected to be recovered. We have determined that substantially all costs related to implementation activities are administrative in nature and also meet the capitalization criteria under ASC 340-40. These capitalized costs to fulfill principally relate to upfront direct costs that are expected to be recovered through margin and that enhance our ability to satisfy future performance obligations. The assets related to both costs to obtain, and costs to fulfill, contracts with clients are accounted for utilizing a portfolio approach, and are capitalized and amortized over the expected period of benefit, which we have determined to be the estimated client relationship of ten years. The expected period of benefit has been determined to be the estimated life of the client relationship primarily because we incur no new costs to obtain, or costs to fulfill, a contract upon renewal of such contract. Additional commission costs may be incurred when an existing client purchases additional applications; however, these commission costs relate solely to the additional applications purchased and are not related to contract renewal. Furthermore, additional fulfillment costs associated with existing clients purchasing additional applications are minimized by our seamless single-database platform. These assets are presented as deferred contract costs in the accompanying consolidated balance sheets. Amortization expense related to costs to obtain and costs to fulfill a contract are included in the “sales and marketing” and “general and administrative” line items in the accompanying consolidated statements of income. The following tables present the asset balances and related amortization expense for these contract costs: As of and for the Three Months Ended September 30, 2018 Beginning Capitalization Ending Balance of Costs Amortization Balance Costs to obtain a contract $ 140,119 $ 10,595 $ (4,855 ) $ 145,859 Costs to fulfill a contract $ 87,199 $ 9,730 $ (3,001 ) $ 93,928 As of and for the Nine Months Ended September 30, 2018 Beginning Capitalization Ending Balance of Costs Amortization Balance Costs to obtain a contract $ 126,207 $ 33,565 $ (13,913 ) $ 145,859 Costs to fulfill a contract $ 72,061 $ 30,156 $ (8,289 ) $ 93,928 |
Property and Equipment, Net
Property and Equipment, Net | 9 Months Ended |
Sep. 30, 2018 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment, Net | 4. PROPERTY AND EQUIPMENT, NET Property and equipment and accumulated depreciation and amortization were as follows: September 30, December 31, 2018 2017 Property and equipment Buildings $ 101,334 $ 60,441 Software and capitalized software costs 60,619 41,996 Computer equipment 36,781 27,928 Rental clocks 15,442 13,131 Furniture, fixtures and equipment 15,955 7,528 Leasehold improvements 1,171 767 Vehicles 74 — 231,376 151,791 Less: accumulated depreciation and amortization (74,275 ) (53,525 ) 157,101 98,266 Construction in progress 2,273 40,446 Land 9,023 8,993 Property and equipment, net $ 168,397 $ 147,705 We capitalize computer software development costs related to software developed for internal use in accordance with ASC 350-40. For the three and nine months ended September 30, 2018, we capitalized $5.2 million and $16.4 million, respectively, of computer software development costs related to software developed for internal use. For the three and nine months ended September 30, 2017, we capitalized $4.7 million and $11.0 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 estimated useful lives. Included in the construction in progress balance at September 30, 2018 and December 31, 2017 is less than $0.1 million and $2.0 million in retainage, respectively. We capitalize interest incurred for indebtedness related to construction of our fourth headquarters building. For the three and nine months ended September 30, 2018, we incurred interest costs of $0.4 million and $1.2 million, respectively, of which we capitalized less than $0.1 million and $0.8 million, respectively. For the three and nine months ended September 30, 2017, we incurred interest costs of $0.4 million and $1.2 million, respectively, of which we capitalized $0.3 million and $0.5 million, respectively. Depreciation and amortization expense for property and equipment, was $8.1 million and $20.8 million, respectively, for the three and nine months ended September 30, 2018. Depreciation and amortization expense for property and equipment, net was $4.8 million and $13.0 million, respectively, for the three and nine months ended September 30, 2017. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | 5. GOODWILL AND INTANGIBLE ASSETS, NET Goodwill represents the excess of cost over our net tangible and identified intangible assets. As of both September 30, 2018 and December 31, 2017, we had goodwill of $51.9 million. We have selected June 30 as our annual goodwill impairment testing date and determined there was no impairment as of June 30, 2018. As of September 30, 2018 and December 31, 2017, there were no indicators of impairment. 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: September 30, 2018 Weighted Average Remaining Accumulated Useful Life Gross Amortization Net (Years) Intangibles: Trade name 3.8 $ 3,194 $ (2,396 ) $ 798 Total $ 3,194 $ (2,396 ) $ 798 December 31, 2017 Weighted Average Remaining Accumulated Useful Life Gross Amortization Net (Years) Intangibles: Trade name 4.5 $ 3,194 $ (2,236 ) $ 958 Total $ 3,194 $ (2,236 ) $ 958 The weighted average remaining useful life of our intangible assets was 3.8 years as of September 30, 2018. Amortization of intangible assets for the three and nine months ended September 30, 2018 was $0.1 million and $0.2 million, respectively. Amortization of intangible assets for the three and nine months ended September 30, 2017 was $0.1 million and $0.9 million, respectively. |
Long-Term Debt, Net
Long-Term Debt, Net | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Long-Term Debt, Net | 6. LONG-TERM DEBT, NET As of the dates indicated, our long-term debt consisted of the following: September 30, 2018 December 31, 2017 Net term note to bank due September 7, 2025 $ 34,824 $ 35,302 Total long-term debt (including current portion) 34,824 35,302 Less: Current portion (1,775 ) (888 ) Total long-term debt, net $ 33,049 $ 34,414 On December 7, 2017, we entered into a senior secured term credit agreement (as amended from time to time, the “Term Credit Agreement”), pursuant to which JPMorgan Chase Bank N.A., Bank of America, N.A. and Kirkpatrick Bank agreed to make certain term loans to us (the “Term Loans”) from time to time during the period beginning December 7, 2017 and ending September 7, 2018 (the “Term Loan Draw Expiration Date”) in an aggregate principal amount of up to $60.0 million. On September 12, 2018, we entered into the First Amendment to the Term Credit Agreement dated effective as of September 7, 2018, which extended the Term Loan Draw Expiration Date to March 7, 2019. As of September 30, 2018, our indebtedness consisted solely of Term Loans made under the Term Credit Agreement. Unamortized debt issuance costs of $0.2 million as of both September 30, 2018 and December 31, 2017 are presented as a direct deduction from the carrying amount of the debt liability. After giving effect to the Term Loans made on December 7, 2017, there was $24.5 million of borrowing capacity remaining under the Term Credit Agreement as of September 30, 2018. Our obligations under the Term Loans are secured by a mortgage and first priority security interest in our headquarters property. Term Loans made after December 7, 2017 may be used to finance hard and soft costs related to the completion of construction of our fourth headquarters building and any landscaping, groundwork, parking lots and roads reasonably incidental thereto. The Term Loans mature on September 7, 2025 and bear interest, at our option, at either (a) a prime rate plus 1.0% or (b) an adjusted LIBOR rate for the interest period in effect for such Term Loan plus 1.5%. Under the Term Credit Agreement, we are subject to two material financial covenants, which require us to maintain a fixed charge coverage ratio of not less than 1.25 to 1.0 and a funded indebtedness to EBITDA ratio of not greater than 2.0 to 1.0. As of September 30, 2018, we were in compliance with these covenants. On February 12, 2018, we entered into a senior secured revolving credit agreement (the “Revolving Credit Agreement”) with JPMorgan Chase Bank, N.A. and Bank of America, N.A. that provides for a senior secured revolving credit facility (the “Facility”) in the aggregate principal amount of $50.0 million, which may be increased to up to $100.0 million, subject to obtaining additional lender commitments and certain approvals and satisfying certain other conditions. The Facility includes a $5.0 million sublimit for swingline loans and a $2.5 million sublimit for letters of credit. The Facility is scheduled to mature on February 12, 2020. Borrowings under the Facility will generally bear interest at a prime rate plus 1.0% or, at our option, an adjusted LIBOR rate for the interest period in effect for such borrowing plus 1.5%. The proceeds of the loans and letters of credit under the Facility are to be used only for our general business purposes and working capital. Letters of credit are to be issued only to support our business operations. As of September 30, 2018, we have not made any draws under the Facility. Under the Revolving Credit Agreement, we are required to maintain a fixed charge coverage ratio of not less than 1.25 to 1.0 and a funded indebtedness to EBITDA ratio of not greater than 2.0 to 1.0. Additionally, the Revolving Credit Agreement contains customary affirmative and negative covenants, including covenants limiting our ability to, among other things, grant liens, incur debt, effect certain mergers, make certain investments, dispose of assets, enter into certain transactions, including swap agreements and sale and leaseback transactions, pay dividends or distributions on our capital stock, and enter into transactions with affiliates, in each case subject to customary exceptions for a facility of the size and type of the Facility. As of September 30, 2018 and December 31, 2017, the carrying value of our total long-term debt approximated its fair value as of such date. 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. |
Derivative Instruments
Derivative Instruments | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | 7. DERIVATIVE INSTRUMENTS In December 2017, we entered into a floating-to-fixed interest rate swap agreement to limit the exposure to interest rate risk related to the Term Loans. We do not hold derivative instruments for trading or speculative purposes. The interest rate swap effectively converts a portion of the variable interest rate payments to fixed interest rate payments. We account for our derivatives under ASC Topic 815, “Derivatives and Hedging,” and record all derivative instruments on the consolidated balance sheets at fair value as either short-term or long-term assets or liabilities based on their anticipated settlement date. See Note 8, “Fair Value of Financial Instruments”. We have elected not to designate our interest rate swap as a hedge; therefore, changes in the fair value of the derivative instrument are being recognized in our consolidated statements of income. The objective of the interest rate swap is to reduce the variability in the forecasted interest payments of the Term Loans, which is based on a one-month LIBOR rate versus a fixed interest rate of 2.54% on a notional value of $35.5 million. Under the terms of the interest rate swap agreement, we will receive quarterly variable interest payments based on the LIBOR rate and will pay interest at a fixed rate. The interest rate swap agreement has a maturity date of September 7, 2025. For the three and nine months ended September 30, 2018, we recorded a gain of $0.3 million and $1.4 million, respectively, for the change in fair value of the interest rate swap, which is included in Other income, net in the consolidated statements of income. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 8. 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 fund obligation approximates fair value because of the short-term nature of the instruments. See Note 6 for discussion on the fair value of our debt. As discussed in Note 2, we invest the funds held for clients in money market funds, demand deposit accounts, commercial paper with a maturity duration less than three months and certificates of deposit, which we classify as cash and cash equivalents within the funds held for clients line item in the consolidated balance sheets. Short-term investments in commercial paper and certificates of deposit with a maturity duration greater than three months are classified as available-for-sale securities, and are also included within the funds held for clients line item. These available-for-sale securities are recorded on the balance sheet at fair value, which approximates the amortized cost of the securities. As of September 30, 2018 and December 31, 2017, all available-for-sale securities and certificates of deposit were due in one year or less. As discussed in Note 7, during the year ended December 31, 2017, we entered into an interest rate swap. The interest rate swap is measured on a recurring basis based on quoted prices for similar financial instruments and other observable inputs that approximate fair value. The accounting standard for fair value measurements establishes a three-level fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: • Level 1 – Observable inputs such as quoted prices in active markets • Level 2 – Inputs other than quoted prices in active markets for identical assets or liabilities that are observable either directly or indirectly or quoted prices that are not active • Level 3 – Unobservable inputs in which there is little or no market data Included in the following table are the Company’s major categories of assets and liabilities measured at fair value on a recurring basis as of September 30, 2018 and December 31, 2017: September 30, 2018 Level 1 Level 2 Level 3 Total Assets: Commercial paper $ — $ 68,392 $ — $ 68,392 Certificates of deposit $ — $ 11,000 $ — $ 11,000 Interest rate swap $ — $ 776 $ — $ 776 December 31, 2017 Level 1 Level 2 Level 3 Total Assets: Commercial paper $ — $ 14,918 $ — $ 14,918 Certificates of deposit $ — $ 21,500 $ — $ 21,500 Liabilities: Interest rate swap $ — $ 649 $ — $ 649 |
Employee Savings Plan and Emplo
Employee Savings Plan and Employee Stock Purchase Plan | 9 Months Ended |
Sep. 30, 2018 | |
Compensation Related Costs [Abstract] | |
Employee Savings Plan and Employee Stock Purchase Plan | 9. EMPLOYEE SAVINGS PLAN AND EMPLOYEE STOCK PURCHASE PLAN Our employees that are over the age of 18 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 $3.9 million for the three and nine months ended September 30, 2018, respectively. Matching contributions amounted to $0.7 million and $2.8 million for the three and nine months ended September 30, 2017, 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 limits specified by the Internal Revenue Service. 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 46,508 and 61,021 shares of the Company’s common stock under the ESPP during the nine months ended September 30, 2018 and 2017, 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 $0.4 million and $0.9 million for the three and nine months ended September 30, 2018, respectively. Our compensation expense related to the ESPP was $0.2 million and $0.5 million for the three and nine months ended September 30, 2017, respectively. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 10. 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 unvested shares of restricted stock granted in 2015 are considered participating securities, while all other unvested 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 September 30, Nine Months Ended September 30, 2018 2017 *As Adjusted 2018 2017 *As Adjusted Numerator: Net income $ 28,769 $ 20,910 $ 105,651 $ 74,620 Less: income allocable to participating securities (36 ) (58 ) (134 ) (207 ) Income allocable to common shares $ 28,733 $ 20,852 $ 105,517 $ 74,413 Add back: undistributed earnings allocable to participating securities $ 36 $ 58 $ 134 $ 207 Less: undistributed earnings reallocated to participating securities (36 ) (57 ) (132 ) (203 ) Numerator for diluted earnings per share $ 28,733 $ 20,853 $ 105,519 $ 74,417 Denominator: Basic weighted average shares outstanding 57,726,790 58,003,222 57,785,466 57,751,204 Dilutive effect of unvested restricted stock 818,271 870,280 938,762 1,088,567 Diluted weighted average shares outstanding 58,545,061 58,873,502 58,724,228 58,839,771 Earnings per share: Basic $ 0.50 $ 0.36 $ 1.83 $ 1.29 Diluted $ 0.49 $ 0.35 $ 1.80 $ 1.26 * Prior year amounts have been recast to reflect the adoption of ASU 2014-09. See Note 2 for description of adjustments. |
Stockholders' Equity and Stock-
Stockholders' Equity and Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stockholders' Equity and Stock-Based Compensation | 11. STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION See the Form 10-K for a detailed description of the Company’s stock-based compensation awards, including information related to vesting terms and service and performance conditions. The following table summarizes restricted stock awards activity for the nine months ended September 30, 2018: Time-Based Market-Based Restricted Stock Awards Restricted Stock Awards Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Unvested shares of restricted stock outstanding at December 31, 2017 888,680 $ 42.17 — $ — Granted 333,750 $ 99.53 284,118 $ 82.84 Vested (265,861 ) $ 39.67 (283,080 ) $ 82.84 Forfeited (70,460 ) $ 55.53 (1,038 ) $ 82.64 Unvested shares of restricted stock outstanding at September 30, 2018 886,109 $ 63.47 — $ — On January 26, 2018, we issued an aggregate of 511,361 shares of restricted stock to our executive officers and certain non-executive, non-sales employees under the Paycom Software, Inc. 2014 Long-Term Incentive Plan (the “LTIP”), consisting of 284,118 shares subject to market-based vesting conditions (“Market-Based Shares”) and 227,243 shares subject to time-based vesting conditions (“Time-Based Shares”). The Market-Based Shares were scheduled to vest 50% on the first date that the Company’s total enterprise value (“TEV”) (calculated as defined in the applicable restricted stock award agreement) equaled or exceeded $5.9 billion and 50% on the first date that the Company’s TEV equaled or exceeded $6.2 billion, in each case provided that (i) such date occurred on or before the sixth anniversary of the grant date and (ii) the recipient was employed by, or providing services to, the Company or a subsidiary on the applicable vesting date. As shown in the table below, all Market-Based Shares issued on January 26, 2018 have vested. The following table summarizes vesting activity for Market-Based Shares during the nine months ended September 30, 2018, the associated compensation cost recognized in connection with each vesting event and the number of shares withheld to satisfy tax withholding obligations: Vesting Condition Date Vested Number of Shares Vested Compensation Cost Recognized Upon Vesting Shares Withheld for Taxes 1 Market-based (TEV = $5.9 billion) March 14, 2018 141,599 $9.7 million 54,000 Market-based (TEV = $6.2 billion) March 23, 2018 141,481 $10.1 million 54,909 1 The Time-Based Shares issued to non-executive employees in January 2018 will vest 25% on a specified initial vesting date and 25% on each of the first three anniversaries of such initial vesting date, provided that the recipient is employed by, or providing services to, the Company or a subsidiary on the applicable vesting date. The Time-Based Shares issued to executive officers in January 2018 will vest in three equal annual tranches beginning on a specified initial vesting date and thereafter on the first and second anniversaries of such date, provided that the executive officer is employed by, or providing services to, the Company or a subsidiary on the applicable vesting date. On April 23, 2018 and July 30, 2018, we issued an aggregate of 92,061 and 3,600 Time-Based Shares, respectively, under the LTIP to certain non-executive employees. One-third of such Time-Based Shares will vest on a specified initial vesting date, an additional one-third of such Time-Based Shares will vest on the first anniversary of the specified initial vesting date, and the remaining one-third of such Time-Based Shares will vest on the second anniversary of the specified initial vesting date, provided that the recipient is employed by, or providing services to, the Company or a subsidiary on the applicable vesting date. On April 30, 2018, we issued an aggregate of 9,846 shares of restricted stock under the LTIP to the non-employee members of our Board of Directors. Such shares of restricted stock will cliff-vest on the seventh day following the first anniversary of the date of grant, provided that such director is providing services to the Company through the applicable vesting date. For the three and nine months ended September 30, 2018, our total compensation expense related to restricted stock was $4.5 million and $31.5 million, respectively. For the three and nine months ended September 30, 2017, our total compensation expense related to restricted stock was $13.4 million and $29.7 million, respectively, as adjusted to reflect the adoption of ASU 2014-09. There was $46.4 million of unrecognized compensation cost, net of estimated forfeitures, related to unvested shares of restricted stock outstanding as of September 30, 2018. The unrecognized compensation cost for the unvested shares is expected to be recognized over a weighted average period of 1.8 years as of September 30, 2018. We capitalized stock-based compensation costs related to software developed for internal use of $0.4 million and $3.3 million for the three and nine months ended September 30, 2018, respectively. We capitalized stock-based compensation costs related to software developed for internal use of $1.3 million and $2.6 million for the three and nine months ended September 30, 2017, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 12. 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. Incentive Plan On May 2, 2016, our stockholders approved the Paycom Software, Inc. Annual Incentive Plan (the “Incentive Plan”). The Incentive Plan provides for payment of incentive compensation that is not subject to certain federal income tax deduction limitations. Participation in the Incentive Plan is limited to certain of our employees designated by the Compensation Committee of our Board of Directors. 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 Our leases primarily consist of several noncancellable operating leases for office space 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 $1.4 million and $1.3 million as of September 30, 2018 and December 31, 2017, respectively, recorded as a liability for deferred rent. Rent expense under operating leases for the three and nine months ended September 30, 2018 was $1.9 million and $5.5 million, respectively. Rent expense under operating leases for the three and nine months ended September 30, 2017 was $1.4 million and $4.3 million, respectively. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 13. 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 20.0% and 19.7% for the nine months ended September 30, 2018 and 2017, respectively. The higher effective tax rate for the nine months ended September 30, 2018 is primarily a result of a reduction in the excess tax benefit recognized, partially offset by the decrease in the federal corporate tax rate during the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
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 Securities and Exchange Commission (“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 September 30, 2018 and December 31, 2017, our consolidated statements of income for the three and nine months ended September 30, 2018 and 2017 and our consolidated statements of cash flows for the nine months ended September 30, 2018 and 2017. Such adjustments are of a normal recurring nature. The information in this Quarterly Report on Form 10-Q (this “Form 10-Q”) should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2017 that was filed with the SEC on February 14, 2018 (the “Form 10-K”). The results of operations for the nine months ended September 30, 2018 are not necessarily indicative of the results expected for the full year. Effective January 1, 2018, we adopted the requirements of Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” as discussed in Note 2. All amounts and disclosures set forth in this Form 10-Q have been updated to comply with the new standards, as indicated by the “as adjusted” footnote. |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on reported net income and did not result in any material change to operating cash flows. |
Recently Adopted New Accounting Pronouncements | Recently Adopted New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). 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. ASU 2014-09 also includes Accounting Standards Codification (“ASC”) 340-40, “Other Assets and Deferred Costs – Contracts with Customers” (“ASC 340-40”), which codifies the guidance on other assets and deferred costs relating to Impact on Previously Reported Results The provisions of ASU 2014-09 do not materially impact the timing or amount of revenue we recognize. The primary impact of adopting the new standard is the manner in which we account for certain costs to obtain new contracts (i.e., selling and commission costs) and costs to fulfill contracts (i.e., costs related to upfront implementation activities performed), which we had previously expensed as incurred. We also determined that the nonrefundable upfront fee charged to our clients, coupled with the option to renew, represents an implied performance obligation in the form of a material right. However, as these fees are deferred and recognized ratably over the ten-year estimated client life, consistent with our prior accounting policy, there is no change in revenue recognition. See Note 3 for further details. The following table presents a recast of selected unaudited consolidated statement of income line items after giving effect to the adoption of ASU 2014-09: Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017 As previously reported Adjustments As Adjusted As previously reported Adjustments As Adjusted Administrative expenses Sales and marketing $ 35,542 $ (7,810 ) $ 27,732 $ 106,460 $ (25,719 ) $ 80,741 General and administrative $ 25,967 $ (2,760 ) $ 23,207 $ 70,450 $ (8,399 ) $ 62,051 Operating income $ 11,437 $ 10,570 $ 22,007 $ 59,191 $ 34,118 $ 93,309 Provision for income taxes $ (2,732 ) $ 3,727 $ 995 $ 4,893 $ 13,400 $ 18,293 Net income $ 14,067 $ 6,843 $ 20,910 $ 53,902 $ 20,718 $ 74,620 Earnings per share, basic $ 0.24 $ 0.12 $ 0.36 $ 0.93 $ 0.36 $ 1.29 Earnings per share, diluted $ 0.24 $ 0.11 $ 0.35 $ 0.91 $ 0.35 $ 1.26 The following table presents a recast of selected unaudited consolidated balance sheet line items after giving effect to the adoption of ASU 2014-09: December 31, 2017 As previously reported Adjustments As Adjusted Assets Deferred contract costs $ — $ 26,403 $ 26,403 Deferred income tax assets, net $ 3,294 $ (3,294 ) $ — Long-term deferred contract costs $ — $ 171,865 $ 171,865 Liabilities and Stockholders' Equity Deferred income tax liabilities, net $ — $ 49,129 $ 49,129 Additional paid-in capital $ 137,234 $ 24,575 $ 161,809 Retained earnings $ 137,255 $ 121,270 $ 258,525 The following table presents a recast of selected unaudited consolidated statement of cash flows line items after giving effect to the adoption of ASU 2014-09: Nine Months Ended September 30, 2017 As previously reported Adjustments As Adjusted Cash flows from operating activities Net income $ 53,902 $ 20,718 $ 74,620 Stock-based compensation expense $ 31,757 $ (2,094 ) $ 29,663 Deferred income taxes, net $ (4,233 ) $ 13,400 $ 9,167 Deferred contract costs $ — $ (32,024 ) $ (32,024 ) Net cash provided by operating activities $ 92,049 $ — $ 92,049 |
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. |
Seasonality | Seasonality Our revenues are seasonal in nature. Recurring revenues include revenues relating to the annual processing of payroll forms, such as Form W-2, Form 1099, and Form 1095 and revenues from processing unscheduled payroll runs (such as bonuses) for our clients. Because payroll forms are typically processed in the first quarter of the year, first quarter revenues and margins are generally higher than in subsequent quarters. These seasonal fluctuations in revenues can also have an impact on gross profits. Historical results impacted by these seasonal trends should not be considered a reliable indicator of our future results of operations. |
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. Amounts collected by us from clients for their federal, state and local employment taxes are invested by us, and we earn interest on these funds during the interval between receipt and disbursement. These investments are shown in our consolidated balance sheets as funds held for clients, and 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 September 30, 2018 and December 31, 2017, the funds held for clients were invested in money market funds, demand deposit accounts, commercial paper and certificates of deposit. Funds held for clients are classified as a current asset in the consolidated balance sheets because the funds are held solely to satisfy the client funds obligation. |
Stock Repurchase Plan | Stock Repurchase Plan In May 2016, our Board of Directors authorized a stock repurchase plan allowing for the repurchase of shares of our common stock in open market transactions at prevailing market prices, in privately negotiated transactions or by other means in accordance with federal securities laws, including Rule 10b5-1 programs. Since the initial authorization of the stock repurchase plan, our Board of Directors has amended and extended the stock repurchase plan from time to time. Most recently, on February 13, 2018, we announced that our Board of Directors authorized the repurchase of up to an additional $100.0 million of common stock. Our stock repurchase plan may be suspended or discontinued at any time. The actual timing, number and value of shares repurchased depends on a number of factors, including the market price of our common stock, general market and economic conditions, shares withheld for taxes associated with the vesting of restricted stock and other corporate considerations. During the nine months ended September 30, 2018, we repurchased an aggregate of 607,158 shares of our common stock at an average cost of $103.72 per share, including 185,116 shares withheld to satisfy tax withholding obligations for certain employees upon the vesting of restricted stock. As of September 30, 2018, there was $74.4 million available for repurchases. The stock repurchase plan will expire on February 12, 2020. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” The purpose of this new 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 us beginning January 1, 2019, which we plan to adopt using a modified retrospective method and the transition relief guidance provided by the FASB in ASU 2018-11. Under this adoption method, we will not restate comparative prior periods and we will carry forward the assessment of whether our contracts are or contain leases, the classification of our leases and the remaining lease terms. Based on our current portfolio of leases, we estimate approximately $20.0 million of lease assets and liabilities will be recognized on our balance sheet upon adoption, primarily relating to operating leases for real estate. This estimate is subject to change prior to the effective date of adoption based on factors including, but not limited to, entering into new leases or modifying existing leases and changes in applicable discount rates. In addition, we are in the process of completing our evaluation of available practical expedients and the impact of this new guidance on our systems, processes and controls that we use to account for leases. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Reflection of New Adopted Standards in Selected Consolidated Statements Line Items | The following table presents a recast of selected unaudited consolidated statement of income line items after giving effect to the adoption of ASU 2014-09: Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017 As previously reported Adjustments As Adjusted As previously reported Adjustments As Adjusted Administrative expenses Sales and marketing $ 35,542 $ (7,810 ) $ 27,732 $ 106,460 $ (25,719 ) $ 80,741 General and administrative $ 25,967 $ (2,760 ) $ 23,207 $ 70,450 $ (8,399 ) $ 62,051 Operating income $ 11,437 $ 10,570 $ 22,007 $ 59,191 $ 34,118 $ 93,309 Provision for income taxes $ (2,732 ) $ 3,727 $ 995 $ 4,893 $ 13,400 $ 18,293 Net income $ 14,067 $ 6,843 $ 20,910 $ 53,902 $ 20,718 $ 74,620 Earnings per share, basic $ 0.24 $ 0.12 $ 0.36 $ 0.93 $ 0.36 $ 1.29 Earnings per share, diluted $ 0.24 $ 0.11 $ 0.35 $ 0.91 $ 0.35 $ 1.26 The following table presents a recast of selected unaudited consolidated balance sheet line items after giving effect to the adoption of ASU 2014-09: December 31, 2017 As previously reported Adjustments As Adjusted Assets Deferred contract costs $ — $ 26,403 $ 26,403 Deferred income tax assets, net $ 3,294 $ (3,294 ) $ — Long-term deferred contract costs $ — $ 171,865 $ 171,865 Liabilities and Stockholders' Equity Deferred income tax liabilities, net $ — $ 49,129 $ 49,129 Additional paid-in capital $ 137,234 $ 24,575 $ 161,809 Retained earnings $ 137,255 $ 121,270 $ 258,525 The following table presents a recast of selected unaudited consolidated statement of cash flows line items after giving effect to the adoption of ASU 2014-09: Nine Months Ended September 30, 2017 As previously reported Adjustments As Adjusted Cash flows from operating activities Net income $ 53,902 $ 20,718 $ 74,620 Stock-based compensation expense $ 31,757 $ (2,094 ) $ 29,663 Deferred income taxes, net $ (4,233 ) $ 13,400 $ 9,167 Deferred contract costs $ — $ (32,024 ) $ (32,024 ) Net cash provided by operating activities $ 92,049 $ — $ 92,049 |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue From Contract With Customer [Abstract] | |
Summary of Disaggregates Major Categories of Revenues | The following table, consistent with our consolidated statements of income, disaggregates revenue by recurring and implementation and other revenues, which we believe represent the major categories of revenues: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Revenues Recurring $ 130,830 $ 99,498 $ 409,324 $ 313,763 Implementation and other 2,458 1,789 6,680 5,259 Total revenues $ 133,288 $ 101,287 $ 416,004 $ 319,022 |
Summary of Changes in Deferred Revenue Related to Material Right Performance Obligations | Changes in deferred revenue related to material right performance obligations were as follows: Three Months Ended Nine Months Ended September 30, 2018 September 30, 2018 Balance, beginning of period $ 57,189 $ 51,624 Deferral of revenue 5,643 14,902 Recognition of unearned revenue (2,018 ) (5,712 ) Balance, end of period $ 60,814 $ 60,814 |
Summary of Asset Balances and Related Amortization Expense For Contract Costs | The following tables present the asset balances and related amortization expense for these contract costs: As of and for the Three Months Ended September 30, 2018 Beginning Capitalization Ending Balance of Costs Amortization Balance Costs to obtain a contract $ 140,119 $ 10,595 $ (4,855 ) $ 145,859 Costs to fulfill a contract $ 87,199 $ 9,730 $ (3,001 ) $ 93,928 As of and for the Nine Months Ended September 30, 2018 Beginning Capitalization Ending Balance of Costs Amortization Balance Costs to obtain a contract $ 126,207 $ 33,565 $ (13,913 ) $ 145,859 Costs to fulfill a contract $ 72,061 $ 30,156 $ (8,289 ) $ 93,928 |
Property and Equipment , Net (T
Property and Equipment , Net (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Property Plant And Equipment [Abstract] | |
Schedule of Property and Equipment and Associated Accumulated Depreciation and Amortization | Property and equipment and accumulated depreciation and amortization were as follows: September 30, December 31, 2018 2017 Property and equipment Buildings $ 101,334 $ 60,441 Software and capitalized software costs 60,619 41,996 Computer equipment 36,781 27,928 Rental clocks 15,442 13,131 Furniture, fixtures and equipment 15,955 7,528 Leasehold improvements 1,171 767 Vehicles 74 — 231,376 151,791 Less: accumulated depreciation and amortization (74,275 ) (53,525 ) 157,101 98,266 Construction in progress 2,273 40,446 Land 9,023 8,993 Property and equipment, net $ 168,397 $ 147,705 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, Net (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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: September 30, 2018 Weighted Average Remaining Accumulated Useful Life Gross Amortization Net (Years) Intangibles: Trade name 3.8 $ 3,194 $ (2,396 ) $ 798 Total $ 3,194 $ (2,396 ) $ 798 December 31, 2017 Weighted Average Remaining Accumulated Useful Life Gross Amortization Net (Years) Intangibles: Trade name 4.5 $ 3,194 $ (2,236 ) $ 958 Total $ 3,194 $ (2,236 ) $ 958 |
Long-Term Debt, Net (Tables)
Long-Term Debt, Net (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | As of the dates indicated, our long-term debt consisted of the following: September 30, 2018 December 31, 2017 Net term note to bank due September 7, 2025 $ 34,824 $ 35,302 Total long-term debt (including current portion) 34,824 35,302 Less: Current portion (1,775 ) (888 ) Total long-term debt, net $ 33,049 $ 34,414 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Major Categories of Assets and Liabilities Measured at Fair Value on Recurring Basis | Included in the following table are the Company’s major categories of assets and liabilities measured at fair value on a recurring basis as of September 30, 2018 and December 31, 2017: September 30, 2018 Level 1 Level 2 Level 3 Total Assets: Commercial paper $ — $ 68,392 $ — $ 68,392 Certificates of deposit $ — $ 11,000 $ — $ 11,000 Interest rate swap $ — $ 776 $ — $ 776 December 31, 2017 Level 1 Level 2 Level 3 Total Assets: Commercial paper $ — $ 14,918 $ — $ 14,918 Certificates of deposit $ — $ 21,500 $ — $ 21,500 Liabilities: Interest rate swap $ — $ 649 $ — $ 649 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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 September 30, Nine Months Ended September 30, 2018 2017 *As Adjusted 2018 2017 *As Adjusted Numerator: Net income $ 28,769 $ 20,910 $ 105,651 $ 74,620 Less: income allocable to participating securities (36 ) (58 ) (134 ) (207 ) Income allocable to common shares $ 28,733 $ 20,852 $ 105,517 $ 74,413 Add back: undistributed earnings allocable to participating securities $ 36 $ 58 $ 134 $ 207 Less: undistributed earnings reallocated to participating securities (36 ) (57 ) (132 ) (203 ) Numerator for diluted earnings per share $ 28,733 $ 20,853 $ 105,519 $ 74,417 Denominator: Basic weighted average shares outstanding 57,726,790 58,003,222 57,785,466 57,751,204 Dilutive effect of unvested restricted stock 818,271 870,280 938,762 1,088,567 Diluted weighted average shares outstanding 58,545,061 58,873,502 58,724,228 58,839,771 Earnings per share: Basic $ 0.50 $ 0.36 $ 1.83 $ 1.29 Diluted $ 0.49 $ 0.35 $ 1.80 $ 1.26 * Prior year amounts have been recast to reflect the adoption of ASU 2014-09. See Note 2 for description of adjustments. |
Stockholders' Equity and Stoc_2
Stockholders' Equity and Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Summary of Nonvested Restricted Stock Awards Activity | The following table summarizes restricted stock awards activity for the nine months ended September 30, 2018: Time-Based Market-Based Restricted Stock Awards Restricted Stock Awards Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Unvested shares of restricted stock outstanding at December 31, 2017 888,680 $ 42.17 — $ — Granted 333,750 $ 99.53 284,118 $ 82.84 Vested (265,861 ) $ 39.67 (283,080 ) $ 82.84 Forfeited (70,460 ) $ 55.53 (1,038 ) $ 82.64 Unvested shares of restricted stock outstanding at September 30, 2018 886,109 $ 63.47 — $ — |
Market-Based Shares [Member] | |
Summary of Market-Based Shares Vesting Activity | The following table summarizes vesting activity for Market-Based Shares during the nine months ended September 30, 2018, the associated compensation cost recognized in connection with each vesting event and the number of shares withheld to satisfy tax withholding obligations: Vesting Condition Date Vested Number of Shares Vested Compensation Cost Recognized Upon Vesting Shares Withheld for Taxes 1 Market-based (TEV = $5.9 billion) March 14, 2018 141,599 $9.7 million 54,000 Market-based (TEV = $6.2 billion) March 23, 2018 141,481 $10.1 million 54,909 1 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) | 9 Months Ended | ||
Sep. 30, 2018 | Feb. 13, 2018 | Jan. 01, 2016 | |
Summary Of Significant Accounting Policy [Line Items] | |||
Expected life of client relationships | 10 years | ||
Stock Repurchase Plan [Member] | |||
Summary Of Significant Accounting Policy [Line Items] | |||
Number of common stocks repurchased during the period | 607,158 | ||
Stock repurchased, average costs per share | $ 103.72 | ||
Available authorized repurchase amount | $ 74,400,000 | ||
Stock repurchase plan expiration date | Feb. 12, 2020 | ||
Stock Repurchase Plan [Member] | Restricted Stock [Member] | |||
Summary Of Significant Accounting Policy [Line Items] | |||
Shares withheld to satisfy tax withholding obligations | 185,116 | ||
Maximum [Member] | Stock Repurchase Plan [Member] | |||
Summary Of Significant Accounting Policy [Line Items] | |||
Stock repurchase plan, authorized amount | $ 100,000,000 | ||
Accounting Standards Update 2014-09 [Member] | |||
Summary Of Significant Accounting Policy [Line Items] | |||
Cumulative adjustment, increase in stockholders’ equity | $ 103,400,000 | ||
Accounting Standards Update 2016-02 [Member] | |||
Summary Of Significant Accounting Policy [Line Items] | |||
Estimated operating lease assets and liabilities to be recognized upon adoption | $ 20,000,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Summary of Reflection of New Adopted Standards in Selected Consolidated Statement of Operations Line Items (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Administrative expenses | ||||
Sales and marketing | $ 37,183 | $ 27,732 | $ 101,182 | $ 80,741 |
General and administrative | 22,048 | 23,207 | 73,700 | 62,051 |
Operating income | 36,245 | 22,007 | 130,302 | 93,309 |
Provision for income taxes | 7,675 | 995 | 26,361 | 18,293 |
Net income | $ 28,769 | $ 20,910 | $ 105,651 | $ 74,620 |
Earnings per share, basic | $ 0.50 | $ 0.36 | $ 1.83 | $ 1.29 |
Earnings per share, diluted | $ 0.49 | $ 0.35 | $ 1.80 | $ 1.26 |
As Previously Reported [Member] | ||||
Administrative expenses | ||||
Sales and marketing | $ 35,542 | $ 106,460 | ||
General and administrative | 25,967 | 70,450 | ||
Operating income | 11,437 | 59,191 | ||
Provision for income taxes | (2,732) | 4,893 | ||
Net income | $ 14,067 | $ 53,902 | ||
Earnings per share, basic | $ 0.24 | $ 0.93 | ||
Earnings per share, diluted | $ 0.24 | $ 0.91 | ||
Adjustments [Member] | ||||
Administrative expenses | ||||
Sales and marketing | $ (7,810) | $ (25,719) | ||
General and administrative | (2,760) | (8,399) | ||
Operating income | 10,570 | 34,118 | ||
Provision for income taxes | 3,727 | 13,400 | ||
Net income | $ 6,843 | $ 20,718 | ||
Earnings per share, basic | $ 0.12 | $ 0.36 | ||
Earnings per share, diluted | $ 0.11 | $ 0.35 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Summary of Reflection of New Adopted Standards in Selected Consolidated Balance Sheet Line Items (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Assets | ||
Deferred contract costs | $ 32,465 | $ 26,403 |
Long-term deferred contract costs | 207,322 | 171,865 |
Liabilities and Stockholders' Equity | ||
Deferred income tax liabilities, net | 49,129 | |
Additional paid-in capital | 198,255 | 161,809 |
Retained earnings | $ 364,176 | 258,525 |
As Previously Reported [Member] | ||
Assets | ||
Deferred income tax assets, net | 3,294 | |
Liabilities and Stockholders' Equity | ||
Additional paid-in capital | 137,234 | |
Retained earnings | 137,255 | |
Adjustments [Member] | ||
Assets | ||
Deferred contract costs | 26,403 | |
Deferred income tax assets, net | (3,294) | |
Long-term deferred contract costs | 171,865 | |
Liabilities and Stockholders' Equity | ||
Deferred income tax liabilities, net | 49,129 | |
Additional paid-in capital | 24,575 | |
Retained earnings | $ 121,270 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Summary of Reflection of New Adopted Standards in Selected Consolidated Statement of Cash Flows (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities | ||||
Net income | $ 28,769 | $ 20,910 | $ 105,651 | $ 74,620 |
Stock-based compensation expense | 31,508 | 29,663 | ||
Deferred income taxes, net | 15,077 | 9,167 | ||
Deferred contract costs | $ (39,881) | (32,024) | ||
Net cash provided by operating activities | 92,049 | |||
As Previously Reported [Member] | ||||
Cash flows from operating activities | ||||
Net income | 14,067 | 53,902 | ||
Stock-based compensation expense | 31,757 | |||
Deferred income taxes, net | (4,233) | |||
Net cash provided by operating activities | 92,049 | |||
Adjustments [Member] | ||||
Cash flows from operating activities | ||||
Net income | $ 6,843 | 20,718 | ||
Stock-based compensation expense | (2,094) | |||
Deferred income taxes, net | 13,400 | |||
Deferred contract costs | $ (32,024) |
Revenue - Summary of Disaggrega
Revenue - Summary of Disaggregates Major Categories of Revenues (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues | ||||
Total revenues | $ 133,288 | $ 101,287 | $ 416,004 | $ 319,022 |
Recurring [Member] | ||||
Revenues | ||||
Total revenues | 130,830 | 99,498 | 409,324 | 313,763 |
Implementation and Other [Member] | ||||
Revenues | ||||
Total revenues | $ 2,458 | $ 1,789 | $ 6,680 | $ 5,259 |
Revenue - Additional Informatio
Revenue - Additional Information (Detail) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2018-10-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Deferred revenue expect to recognize amount | $ 2 |
Deferred revenue expect to recognize period | 3 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2019-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Deferred revenue expect to recognize amount | $ 8.2 |
Deferred revenue expect to recognize period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2020-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue practical expedient remaining performance obligation description | We have elected to apply the practical expedient not to disclose the value of unsatisfied performance obligations for contracts that are less than one year in length. However, this expedient cannot be applied to initial 30-day contracts with a client that also contain an implied performance obligation in the form of a material right as the material right performance obligation is being recognized over the expected client life which exceeds one year |
Revenue practical expedient performance obligation estimated client life | 10 years |
Deferred revenue expect to recognize amount | $ 50.6 |
Deferred revenue expect to recognize description | We expect to recognize $2.0 million of deferred revenue related to material right performance obligations in the remainder of 2018, $8.2 million of such deferred revenue in 2019, and $50.6 million of such deferred revenue thereafter |
Revenue - Summary of Changes in
Revenue - Summary of Changes in Deferred Revenue Related to Material Right Performance Obligations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018 | Sep. 30, 2018 | |
Revenue From Contract With Customer [Abstract] | ||
Balance, beginning of period | $ 57,189 | $ 51,624 |
Deferral of revenue | 5,643 | 14,902 |
Recognition of unearned revenue | (2,018) | (5,712) |
Balance, end of period | $ 60,814 | $ 60,814 |
Revenue - Summary of Asset Bala
Revenue - Summary of Asset Balances and Related Amortization Expense For Contract Costs (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018 | Sep. 30, 2018 | |
Costs to Obtain a Contract [Member] | ||
Capitalized Contract Cost [Line Items] | ||
Beginning Balance | $ 140,119 | $ 126,207 |
Capitalization of Costs | 10,595 | 33,565 |
Amortization | (4,855) | (13,913) |
Ending Balance | 145,859 | 145,859 |
Costs to Fulfill a Contract [Member] | ||
Capitalized Contract Cost [Line Items] | ||
Beginning Balance | 87,199 | 72,061 |
Capitalization of Costs | 9,730 | 30,156 |
Amortization | (3,001) | (8,289) |
Ending Balance | $ 93,928 | $ 93,928 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment and Associated Accumulated Depreciation and Amortization (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Property and Equipment [Line Items] | ||
Property and equipment, gross | $ 231,376 | $ 151,791 |
Less: accumulated depreciation and amortization | (74,275) | (53,525) |
Property and equipment, net | 168,397 | 147,705 |
Buildings [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, gross | 101,334 | 60,441 |
Software and Capitalized Software Costs [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, gross | 60,619 | 41,996 |
Computer Equipment [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, gross | 36,781 | 27,928 |
Rental Clocks [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, gross | 15,442 | 13,131 |
Furniture, Fixtures and Equipment [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, gross | 15,955 | 7,528 |
Leasehold Improvements [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, gross | 1,171 | 767 |
Vehicles [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, gross | 74 | |
Excluded Land and Construction in Process [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, net | 157,101 | 98,266 |
Land [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, net | 9,023 | 8,993 |
Construction in Progress [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, net | $ 2,273 | $ 40,446 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Property and Equipment [Line Items] | |||||
Computer software development costs capitalized | $ 5,200,000 | $ 4,700,000 | $ 16,400,000 | $ 11,000,000 | |
Retainage amount included in construction in progress | $ 2,000,000 | ||||
Interest cost Paid | 400,000 | 400,000 | 1,200,000 | 1,200,000 | |
Interest Costs Capitalized | 300,000 | 800,000 | 500,000 | ||
Depreciation and amortization | 4,161,000 | 2,403,000 | 10,652,000 | 7,069,000 | |
Property and Equipment [Member] | |||||
Property and Equipment [Line Items] | |||||
Depreciation and amortization | 8,100,000 | $ 4,800,000 | 20,800,000 | $ 13,000,000 | |
Maximum [Member] | |||||
Property and Equipment [Line Items] | |||||
Retainage amount included in construction in progress | 100,000 | $ 100,000 | |||
Interest Costs Capitalized | $ 100,000 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, Net - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||||||
Goodwill | $ 51,889,000 | $ 51,889,000 | $ 51,889,000 | |||
Goodwill impairment amount | $ 0 | $ 0 | $ 0 | |||
Weighted average remaining useful life | 3 years 9 months 18 days | |||||
Amortization of intangible assets | $ 100,000 | $ 100,000 | $ 200,000 | $ 900,000 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, Net - Components of Intangible Assets (Detail) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Finite Lived Intangible Assets [Line Items] | ||
Gross | $ 3,194 | $ 3,194 |
Accumulated Amortization | (2,396) | (2,236) |
Net | $ 798 | 958 |
Weighted average remaining useful life | 3 years 9 months 18 days | |
Trade Name [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross | $ 3,194 | 3,194 |
Accumulated Amortization | (2,396) | (2,236) |
Net | $ 798 | $ 958 |
Weighted average remaining useful life | 3 years 9 months 18 days | 4 years 6 months |
Long-Term Debt, Net - Schedule
Long-Term Debt, Net - Schedule of Long-Term Debt (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Schedule Of Capitalization Longterm Debt [Line Items] | ||
Total long-term debt (including current portion) | $ 34,824 | $ 35,302 |
Less: Current portion | (1,775) | (888) |
Total long-term debt, net | 33,049 | 34,414 |
2025 Consolidated Loan [Member] | ||
Schedule Of Capitalization Longterm Debt [Line Items] | ||
Term note to bank | $ 34,824 | $ 35,302 |
Long-Term Debt, Net - Additiona
Long-Term Debt, Net - Additional Information (Detail) - USD ($) | Sep. 12, 2018 | Feb. 12, 2018 | Dec. 07, 2017 | Sep. 30, 2018 | Dec. 31, 2017 |
Revolving Credit Agreement [Member] | |||||
Debt Instrument [Line Items] | |||||
Loan, principal amount | $ 50,000,000 | ||||
Debt instrument, restrictive covenants | maintain a fixed charge coverage ratio of not less than 1.25 to 1.0 and a funded indebtedness to EBITDA ratio of not greater than 2.0 to 1.0. | ||||
Line of credit facility agreement date | Feb. 12, 2018 | ||||
Line of credit facility, maximum borrowing capacity | $ 100,000,000 | ||||
Line of credit facility, maturity date | Feb. 12, 2020 | ||||
Line of credit facility, interest rate description | Borrowings under the Facility will generally bear interest at a prime rate plus 1.0% or, at our option, an adjusted LIBOR rate for the interest period in effect for such borrowing plus 1.5%. | ||||
Line of credit facility, drawn amount | $ 0 | ||||
Revolving Credit Agreement [Member] | Swingline Loans [Member] | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 5,000,000 | ||||
Revolving Credit Agreement [Member] | Letters of Credit [Member] | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 2,500,000 | ||||
Revolving Credit Agreement [Member] | Prime Rate [Member] | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, outstanding borrowings interest | 1.00% | ||||
Revolving Credit Agreement [Member] | LIBOR [Member] | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, outstanding borrowings interest | 1.50% | ||||
Maximum [Member] | Revolving Credit Agreement [Member] | |||||
Debt Instrument [Line Items] | |||||
Fixed charge coverage ratio required by covenants | 125.00% | ||||
Minimum [Member] | Revolving Credit Agreement [Member] | |||||
Debt Instrument [Line Items] | |||||
Funded indebtedness to EBITDA ratio required by covenants | 100.00% | ||||
New Credit Agreement [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, restrictive covenants | maintain a fixed charge coverage ratio of not less than 1.25 to 1.0 and a funded indebtedness to EBITDA ratio of not greater than 2.0 to 1.0. | ||||
New Credit Agreement [Member] | Term Loan [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument maturity date | Sep. 7, 2025 | ||||
Term loan, maturity date description | The Term Loans mature on September 7, 2025 and bear interest, at our option, at either (a) a prime rate plus 1.0% or (b) an adjusted LIBOR rate for the interest period in effect for such Term Loan plus 1.5%. | ||||
New Credit Agreement [Member] | Term Loan [Member] | Prime Rate [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument basis spread on variable rate | 1.00% | ||||
New Credit Agreement [Member] | Term Loan [Member] | Adjusted London Interbank Offered Rate LIBOR [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument basis spread on variable rate | 1.50% | ||||
New Credit Agreement [Member] | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Fixed charge coverage ratio required by covenants | 125.00% | ||||
New Credit Agreement [Member] | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Funded indebtedness to EBITDA ratio required by covenants | 100.00% | ||||
New Credit Agreement [Member] | Term Loan [Member] | |||||
Debt Instrument [Line Items] | |||||
Unamortized debt issuance cost | $ 200,000 | $ 200,000 | |||
Loan draw expiration, start date | Dec. 7, 2017 | ||||
Loan draw expiration, end date | Sep. 7, 2018 | ||||
Debt instrument maturity date | Mar. 7, 2019 | ||||
Remaining borrowing capacity | $ 24,500,000 | ||||
New Credit Agreement [Member] | Term Loan [Member] | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Loan, principal amount | $ 60,000,000 |
Derivative Instruments - Additi
Derivative Instruments - Additional Information (Details) - Term Loan [Member] - Interest Rate Swap [Member] $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018USD ($) | Sep. 30, 2018USD ($) | |
Derivative [Line Items] | ||
Debt instrument maturity date | Sep. 7, 2025 | |
Description of variable rate basis | one-month LIBOR | |
Debt Instrument, Interest Rate, Stated Percentage | 2.54% | 2.54% |
Derivative Instrument, notional value | $ 35.5 | $ 35.5 |
Interest rate payment description | The objective of the interest rate swap is to reduce the variability in the forecasted interest payments of the Term Loans, which is based on a one-month LIBOR rate versus a fixed interest rate of 2.54% on a notional value of $35.5 million. Under the terms of the interest rate swap agreement, we will receive quarterly variable interest payments based on the LIBOR rate and will pay interest at a fixed rate | |
Derivative instrument gain under fair value | $ 0.3 | $ 1.4 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Additional Information (Detail) | Sep. 30, 2018 | Dec. 31, 2017 |
Available-for-sale Securities [Member] | Certificates of Deposit [Member] | Maximum [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Financial instruments maturity period | 1 year | 1 year |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Schedule of Major Categories of Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Commercial Paper [Member] | ||
Assets: | ||
Assets | $ 68,392 | $ 14,918 |
Certificates of Deposit [Member] | ||
Assets: | ||
Assets | 11,000 | 21,500 |
Level 2 [Member] | Commercial Paper [Member] | ||
Assets: | ||
Assets | 68,392 | 14,918 |
Level 2 [Member] | Certificates of Deposit [Member] | ||
Assets: | ||
Assets | 11,000 | 21,500 |
Interest Rate Swap [Member] | ||
Assets: | ||
Assets | 776 | |
Liabilities: | ||
Liabilities | 649 | |
Interest Rate Swap [Member] | Level 2 [Member] | ||
Assets: | ||
Assets | $ 776 | |
Liabilities: | ||
Liabilities | $ 649 |
Employee Savings Plan and Emp_2
Employee Savings Plan and Employee Stock Purchase Plan - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
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 | $ 0.7 | $ 3.9 | $ 2.8 |
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% | 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 | 46,508 | 61,021 | ||
Compensation expense related to ESPP | $ 0.4 | $ 0.2 | $ 0.9 | $ 0.5 |
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 | 18 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 | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Numerator: | ||||
Net income | $ 28,769 | $ 20,910 | $ 105,651 | $ 74,620 |
Less: income allocable to participating securities | (36) | (58) | (134) | (207) |
Income allocable to common shares | 28,733 | 20,852 | 105,517 | 74,413 |
Add back: undistributed earnings allocable to participating securities | 36 | 58 | 134 | 207 |
Less: undistributed earnings reallocated to participating securities | (36) | (57) | (132) | (203) |
Numerator for diluted earnings per share | $ 28,733 | $ 20,853 | $ 105,519 | $ 74,417 |
Denominator: | ||||
Basic weighted average shares outstanding | 57,726,790 | 58,003,222 | 57,785,466 | 57,751,204 |
Dilutive effect of unvested restricted stock | 818,271 | 870,280 | 938,762 | 1,088,567 |
Diluted weighted average shares outstanding | 58,545,061 | 58,873,502 | 58,724,228 | 58,839,771 |
Earnings per share: | ||||
Earnings per share, basic | $ 0.50 | $ 0.36 | $ 1.83 | $ 1.29 |
Earnings per share, diluted | $ 0.49 | $ 0.35 | $ 1.80 | $ 1.26 |
Stockholders' Equity and Stoc_3
Stockholders' Equity and Stock-Based Compensation - Summary of Nonvested Restricted Stock Awards Activity (Detail) | 9 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Time-Based Restricted Stock Awards [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
Unvested shares of restricted stock outstanding at beginning of period | shares | 888,680 |
Restricted Stock Awards, Granted | shares | 333,750 |
Restricted Stock Awards, Vested | shares | (265,861) |
Restricted Stock Awards, Forfeited | shares | (70,460) |
Unvested shares of restricted stock outstanding at end of period | shares | 886,109 |
Unvested shares of restricted stock outstanding, Weighted Average Grant Date Fair Value, at beginning of period | $ / shares | $ 42.17 |
Granted, Weighted Average Grant Date Fair Value | $ / shares | 99.53 |
Vested, Weighted Average Grant Date Fair Value | $ / shares | 39.67 |
Forfeited, Weighted Average Grant Date Fair Value | $ / shares | 55.53 |
Unvested shares of restricted stock outstanding, Weighted Average Grant Date Fair Value, at end of period | $ / shares | $ 63.47 |
Market-Based Restricted Stock Awards [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
Restricted Stock Awards, Granted | shares | 284,118 |
Restricted Stock Awards, Vested | shares | (283,080) |
Restricted Stock Awards, Forfeited | shares | (1,038) |
Granted, Weighted Average Grant Date Fair Value | $ / shares | $ 82.84 |
Vested, Weighted Average Grant Date Fair Value | $ / shares | 82.84 |
Forfeited, Weighted Average Grant Date Fair Value | $ / shares | $ 82.64 |
Stockholders' Equity and Stoc_4
Stockholders' Equity and Stock-Based Compensation - Additional Information (Detail) - USD ($) $ in Millions | Jul. 30, 2018 | Apr. 30, 2018 | Apr. 23, 2018 | Jan. 26, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 |
Software and Capitalized Software Costs [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||
Capitalized compensation cost | $ 0.4 | $ 1.3 | $ 3.3 | $ 2.6 | ||||
Restricted Stock [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||
Total unrecognized compensation cost related to unvested restricted stock | 46.4 | $ 46.4 | ||||||
Unrecognized compensation expected for unvested shares to be recognized | 1 year 9 months 18 days | |||||||
Restricted Stock [Member] | Accounting Standards Update 2014-09 [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||
Compensation expense related to ESPP | $ 4.5 | $ 13.4 | $ 31.5 | $ 29.7 | ||||
Restricted Stock [Member] | Non Executive Employees [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights | first three anniversaries | |||||||
Restricted Stock [Member] | Executive Officers [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights | three equal annual tranches beginning on a specified initial vesting date and thereafter on the first and second anniversaries | |||||||
Restricted Stock [Member] | Market-based Vesting Conditions [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||
Number of shares vested | 284,118 | |||||||
Restricted Stock [Member] | vest 50% on the first date that the Company’s total enterprise value ("TEV") (calculated as defined in the applicable restricted stock award agreement) equaled or exceeded $5.9 billion [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||
Market-based vesting percentage, restricted shares | 50.00% | |||||||
Total enterprise value | $ 5,900 | |||||||
Restricted Stock [Member] | Time-based Vesting Conditions [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||
Number of shares vested | 227,243 | |||||||
Restricted Stock [Member] | Vest 50% on the first date that the Company’s TEV equaled or exceeded $6.2 billion [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||
Market-based vesting percentage, restricted shares | 50.00% | |||||||
Total enterprise value | $ 6,200 | |||||||
Restricted Stock [Member] | Tranche One [Member] | Non Executive Employees [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||
Market-based vesting percentage, restricted shares | 25.00% | |||||||
Restricted Stock [Member] | Tranche Two [Member] | Non Executive Employees [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||
Market-based vesting percentage, restricted shares | 25.00% | |||||||
Restricted Stock [Member] | LTIP [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||
Restricted shares issued | 9,846 | 511,361 | ||||||
Time-Based Shares [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||
Restricted shares issued | 333,750 | |||||||
Number of shares vested | 265,861 | |||||||
Time-Based Shares [Member] | LTIP [Member] | Non Executive Employees [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||
Restricted shares issued | 3,600 | 92,061 |
Stockholders' Equity and Stoc_5
Stockholders' Equity and Stock-Based Compensation - Summary of Market-Based Shares Vesting Activity (Detail) - Market-Based Shares [Member] - Market-based [Member] $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($)shares | |
Vest Date March 14, 2018 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
Date Vested | Mar. 14, 2018 |
Number of Shares Vested | 141,599 |
Compensation Cost Recognized Upon Vesting | $ | $ 9.7 |
Shares withheld to satisfy tax withholding obligations | 54,000 |
Vest Date March 23, 2018 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
Date Vested | Mar. 23, 2018 |
Number of Shares Vested | 141,481 |
Compensation Cost Recognized Upon Vesting | $ | $ 10.1 |
Shares withheld to satisfy tax withholding obligations | 54,909 |
Stockholders' Equity and Stoc_6
Stockholders' Equity and Stock-Based Compensation - Summary of Market-Based Shares Vesting Activity (Parenthetical) (Detail) - Market-Based Shares [Member] - Market-based [Member] $ in Billions | Sep. 30, 2018USD ($) |
Vest Date March 14, 2018 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
TEV | $ 5.9 |
Vest Date March 23, 2018 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
TEV | $ 6.2 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Other Commitments [Line Items] | |||||
Liability for deferred rent | $ 1.4 | $ 1.4 | $ 1.3 | ||
Operating lease rent expense | $ 1.9 | $ 1.4 | $ 5.5 | $ 4.3 | |
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) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 20.00% | 19.70% |