Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 24, 2019 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | PAYC | |
Entity Registrant Name | Paycom Software, Inc. | |
Entity Central Index Key | 0001590955 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 58,399,009 | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Security Exchange Name | NYSE | |
Entity File Number | 001-36393 | |
Entity Tax Identification Number | 80-0957485 | |
Entity Address, Address Line One | 7501 W. Memorial Road | |
Entity Address, City or Town | Oklahoma City | |
Entity Address, State or Province | OK | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Postal Zip Code | 73142 | |
City Area Code | 405 | |
Local Phone Number | 722-6900 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Document Quarterly Report | true | |
Document Transition Report | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 108,127 | $ 45,718 |
Accounts receivable | 2,609 | 3,414 |
Prepaid expenses | 12,724 | 7,658 |
Inventory | 700 | 797 |
Income tax receivable | 9,512 | 3,962 |
Deferred contract costs | 43,385 | 35,286 |
Current assets before funds held for clients | 177,057 | 96,835 |
Funds held for clients | 835,918 | 967,787 |
Total current assets | 1,012,975 | 1,064,622 |
Property and equipment, net | 224,035 | 176,962 |
Goodwill | 51,889 | 51,889 |
Long-term deferred contract costs | 272,783 | 225,459 |
Other assets | 30,345 | 2,994 |
Total assets | 1,592,027 | 1,521,926 |
Current liabilities: | ||
Accounts payable | 4,693 | 6,288 |
Accrued commissions and bonuses | 8,432 | 10,671 |
Accrued payroll and vacation | 17,672 | 10,741 |
Deferred revenue | 10,634 | 8,980 |
Current portion of long-term debt | 1,775 | 1,775 |
Accrued expenses and other current liabilities | 39,354 | 22,440 |
Current liabilities before client funds obligation | 82,560 | 60,895 |
Client funds obligation | 835,918 | 967,787 |
Total current liabilities | 918,478 | 1,028,682 |
Deferred income tax liabilities, net | 85,921 | 70,206 |
Long-term deferred revenue | 62,731 | 55,671 |
Net long-term debt, less current portion | 31,293 | 32,614 |
Other long-term liabilities | 18,706 | |
Total long-term liabilities | 198,651 | 158,491 |
Total liabilities | 1,117,129 | 1,187,173 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock, $0.01 par value (100,000 shares authorized, 61,346 and 60,747 shares issued at September 30, 2019 and December 31, 2018, respectively; 57,657 and 57,277 shares outstanding at September 30, 2019 and December 31, 2018, respectively) | 612 | 607 |
Additional paid-in capital | 250,853 | 203,680 |
Retained earnings | 530,786 | 395,590 |
Treasury stock, at cost (3,688 and 3,470 shares at September 30, 2019 and December 31, 2018, respectively) | (307,353) | (265,124) |
Total stockholders' equity | 474,898 | 334,753 |
Total liabilities and stockholders' equity | $ 1,592,027 | $ 1,521,926 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
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 | 61,346,000 | 60,747,000 |
Common stock, shares outstanding | 57,657,000 | 57,277,000 |
Treasury stock, shares | 3,688,000 | 3,470,000 |
Consolidated Statements of Inco
Consolidated Statements of Income (unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenues | ||||
Total revenues | $ 175,006 | $ 133,288 | $ 544,262 | $ 416,004 |
Cost of revenues | ||||
Operating expenses | 21,088 | 18,158 | 66,153 | 56,403 |
Depreciation and amortization | 5,304 | 3,967 | 14,796 | 10,258 |
Total cost of revenues | 26,392 | 22,125 | 80,949 | 66,661 |
Administrative expenses | ||||
Sales and marketing | 47,060 | 37,183 | 128,280 | 101,182 |
Research and development | 19,605 | 11,526 | 54,869 | 33,507 |
General and administrative | 25,728 | 22,048 | 98,386 | 73,700 |
Depreciation and amortization | 5,665 | 4,161 | 15,848 | 10,652 |
Total administrative expenses | 98,058 | 74,918 | 297,383 | 219,041 |
Total operating expenses | 124,450 | 97,043 | 378,332 | 285,702 |
Operating income | 50,556 | 36,245 | 165,930 | 130,302 |
Interest expense | (260) | (384) | (794) | (418) |
Other income (expense), net | 195 | 583 | (168) | 2,128 |
Income before income taxes | 50,491 | 36,444 | 164,968 | 132,012 |
Provision for income taxes | 11,339 | 7,675 | 29,772 | 26,361 |
Net income | $ 39,152 | $ 28,769 | $ 135,196 | $ 105,651 |
Earnings per share, basic | $ 0.68 | $ 0.50 | $ 2.35 | $ 1.83 |
Earnings per share, diluted | $ 0.67 | $ 0.49 | $ 2.31 | $ 1.80 |
Weighted average shares outstanding: | ||||
Basic | 57,654 | 57,727 | 57,528 | 57,785 |
Diluted | 58,383 | 58,545 | 58,403 | 58,724 |
Recurring [Member] | ||||
Revenues | ||||
Total revenues | $ 171,405 | $ 130,830 | $ 534,267 | $ 409,324 |
Implementation and Other [Member] | ||||
Revenues | ||||
Total revenues | $ 3,601 | $ 2,458 | $ 9,995 | $ 6,680 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity (unaudited) - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid in Capital [Member] | Retained Earnings [Member] | Treasury Stock [Member] |
Beginning balance, value at Dec. 31, 2017 | $ 281,247 | $ 601 | $ 161,809 | $ 258,525 | $ (139,688) |
Beginning balance, shares at Dec. 31, 2017 | 60,149,000 | 2,361,000 | |||
Vesting of restricted stock | $ 3 | (3) | |||
Vesting of restricted stock, shares | 298,000 | ||||
Stock-based compensation | 27,496 | 27,496 | |||
Repurchases of common stock | (16,870) | $ (16,870) | |||
Repurchases of common stock, shares | 169,000 | ||||
Net income | 41,160 | 41,160 | |||
Ending balance, value at Mar. 31, 2018 | 333,033 | $ 604 | 189,302 | 299,685 | $ (156,558) |
Ending balance, shares at Mar. 31, 2018 | 60,447,000 | 2,530,000 | |||
Beginning balance, value at Dec. 31, 2017 | 281,247 | $ 601 | 161,809 | 258,525 | $ (139,688) |
Beginning balance, shares at Dec. 31, 2017 | 60,149,000 | 2,361,000 | |||
Net income | 105,651 | ||||
Ending balance, value at Sep. 30, 2018 | 360,377 | $ 606 | 198,255 | 364,176 | $ (202,660) |
Ending balance, shares at Sep. 30, 2018 | 60,698,000 | 2,968,000 | |||
Beginning balance, value at Mar. 31, 2018 | 333,033 | $ 604 | 189,302 | 299,685 | $ (156,558) |
Beginning balance, shares at Mar. 31, 2018 | 60,447,000 | 2,530,000 | |||
Vesting of restricted stock | $ 2 | (2) | |||
Vesting of restricted stock, shares | 192,000 | ||||
Stock-based compensation | 3,988 | 3,988 | |||
Repurchases of common stock | (43,005) | $ (43,005) | |||
Repurchases of common stock, shares | 408,000 | ||||
Net income | 35,722 | 35,722 | |||
Ending balance, value at Jun. 30, 2018 | 329,738 | $ 606 | 193,288 | 335,407 | $ (199,563) |
Ending balance, shares at Jun. 30, 2018 | 60,639,000 | 2,938,000 | |||
Vesting of restricted stock, shares | 59,000 | ||||
Stock-based compensation | 4,967 | 4,967 | |||
Repurchases of common stock | (3,097) | $ (3,097) | |||
Repurchases of common stock, shares | 30,000 | ||||
Net income | 28,769 | 28,769 | |||
Ending balance, value at Sep. 30, 2018 | 360,377 | $ 606 | 198,255 | 364,176 | $ (202,660) |
Ending balance, shares at Sep. 30, 2018 | 60,698,000 | 2,968,000 | |||
Beginning balance, value at Dec. 31, 2018 | 334,753 | $ 607 | 203,680 | 395,590 | $ (265,124) |
Beginning balance, shares at Dec. 31, 2018 | 60,747,000 | 3,470,000 | |||
Vesting of restricted stock | $ 2 | (2) | |||
Vesting of restricted stock, shares | 280,000 | ||||
Stock-based compensation | 36,187 | 36,187 | |||
Repurchases of common stock | (19,669) | $ (19,669) | |||
Repurchases of common stock, shares | 110,000 | ||||
Net income | 47,282 | 47,282 | |||
Ending balance, value at Mar. 31, 2019 | 398,553 | $ 609 | 239,865 | 442,872 | $ (284,793) |
Ending balance, shares at Mar. 31, 2019 | 61,027,000 | 3,580,000 | |||
Beginning balance, value at Dec. 31, 2018 | 334,753 | $ 607 | 203,680 | 395,590 | $ (265,124) |
Beginning balance, shares at Dec. 31, 2018 | 60,747,000 | 3,470,000 | |||
Net income | 135,196 | ||||
Ending balance, value at Sep. 30, 2019 | 474,898 | $ 612 | 250,853 | 530,786 | $ (307,353) |
Ending balance, shares at Sep. 30, 2019 | 61,346,000 | 3,688,000 | |||
Beginning balance, value at Mar. 31, 2019 | 398,553 | $ 609 | 239,865 | 442,872 | $ (284,793) |
Beginning balance, shares at Mar. 31, 2019 | 61,027,000 | 3,580,000 | |||
Vesting of restricted stock | $ 3 | (3) | |||
Vesting of restricted stock, shares | 275,000 | ||||
Stock-based compensation | 6,207 | 6,207 | |||
Repurchases of common stock | (18,760) | $ (18,760) | |||
Repurchases of common stock, shares | 92,000 | ||||
Net income | 48,762 | 48,762 | |||
Ending balance, value at Jun. 30, 2019 | 434,762 | $ 612 | 246,069 | 491,634 | $ (303,553) |
Ending balance, shares at Jun. 30, 2019 | 61,302,000 | 3,672,000 | |||
Vesting of restricted stock, shares | 44,000 | ||||
Stock-based compensation | 4,784 | 4,784 | |||
Repurchases of common stock | (3,800) | $ (3,800) | |||
Repurchases of common stock, shares | 16,000 | ||||
Net income | 39,152 | 39,152 | |||
Ending balance, value at Sep. 30, 2019 | $ 474,898 | $ 612 | $ 250,853 | $ 530,786 | $ (307,353) |
Ending balance, shares at Sep. 30, 2019 | 61,346,000 | 3,688,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | |||
Cash flows from operating activities | ||||
Net income | $ 135,196 | $ 105,651 | [1] | |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization | 30,644 | 20,910 | [1] | |
Accretion of discounts on available-for-sale securities | (646) | (860) | [1] | |
Amortization of debt issuance costs | 26 | 24 | [1] | |
Stock-based compensation expense | 41,122 | 31,508 | [1] | |
Cash paid for derivative settlement | (26) | (168) | [1] | |
(Gain)/loss on derivative | 1,789 | (1,259) | [1] | |
Deferred income taxes, net | 15,715 | 15,077 | [1] | |
Changes in operating assets and liabilities: | ||||
Accounts receivable | 805 | (637) | [1] | |
Prepaid expenses | (5,066) | (2,952) | [1] | |
Inventory | (181) | (56) | [1] | |
Other assets | (2,367) | (111) | [1] | |
Deferred contract costs | (53,654) | (39,881) | [1] | |
Accounts payable | (970) | 1,789 | [1] | |
Income taxes, net | (5,550) | 591 | [1] | |
Accrued commissions and bonuses | (2,239) | (3,131) | [1] | |
Accrued payroll and vacation | 6,931 | 5,922 | [1] | |
Deferred revenue | 8,714 | 9,190 | [1] | |
Accrued expenses and other current liabilities | 6,176 | 4,242 | [1] | |
Net cash provided by operating activities | 176,419 | 145,849 | [1] | |
Cash flows from investing activities | ||||
Purchase of short-term investments from funds held for clients | (61,268) | (137,614) | [1] | |
Proceeds from maturities of short-term investments from funds held for clients | 54,200 | 95,500 | [1] | |
Purchases of property and equipment | (71,080) | (44,264) | [1] | |
Net cash used in investing activities | (78,148) | (86,378) | [1] | |
Cash flows from financing activities | ||||
Repurchases of common stock | [1] | (42,857) | ||
Withholding taxes paid related to net share settlement | (42,229) | (20,115) | [1] | |
Payments on long-term debt | (1,331) | (444) | [1] | |
Net change in client funds obligation | (131,869) | (186,454) | [1] | |
Payment of debt issuance costs | (16) | (58) | [1] | |
Net cash used in financing activities | (175,445) | (249,928) | [1] | |
Decrease in cash, cash equivalents, restricted cash and restricted cash equivalents | (77,174) | (190,457) | [1] | |
Cash, cash equivalents, restricted cash and restricted cash equivalents | ||||
Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of period | 986,464 | 1,098,860 | [1] | |
Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period | 909,290 | 908,403 | [1] | |
Cash and cash equivalents | 108,127 | 85,048 | [1] | |
Restricted cash included in funds held for clients | $ 801,163 | $ 823,355 | [1] | |
[1] | Amounts have been adjusted to reflect the adoption of Accounting Standards Update No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force).” See Note 2 for a summary of reclassifications and adjustments. |
Organization and Description of
Organization and Description of Business | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Organization and Description of Business | 1. ORGANIZATION AND 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
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 included in the Annual Report on Form 10-K for the year ended December 31, 2018 (the “Form 10-K”). Basis of Presentation The accompanying unaudited interim consolidated financial statements and notes 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, 2019 and our consolidated statements of income, stockholders’ equity and cash flows for the three and nine months ended September 30, 2019 and 2018. 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 the Form 10-K. The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the results expected for the full year. Reclassifications Certain prior period amounts have been reclassified in connection with the adoption of Accounting Standards Update (“ASU”) No. 2016-18, “Restricted Cash” (“ASU 2016-18”) as discussed below. In addition to these adjustments, in the consolidated balance sheets, we combined the line items “Intangible assets, net” and “Other assets” in the prior period in order to conform to the current period presentation. Recently Adopted Accounting Pronouncements In January 2019, we adopted ASU No. 2016-02, “Leases (Topic 842)” using the modified retrospective approach. Under this adoption method, we have not restated comparative prior periods and have carried forward the assessment of whether our contracts are or contain leases, the classification of our leases and the remaining lease terms. See Note 6 for a discussion of our adoption of this standard. In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, to eliminate or modify certain disclosure rules that are redundant, outdated, or duplicative of U.S. GAAP or other regulatory requirements. In addition, the amendments provide that disclosure requirements related to the analysis of stockholders' equity are expanded for interim financial statements. An analysis of the changes in each caption of stockholders' equity presented in the balance sheet is provided in the consolidated statement of stockholders’ equity. During the three months ended June 30, 2019, we adopted ASU 2016-18, which was effective on January 1, 2018. This guidance requires that the consolidated statements of cash flows explain the change during the reporting period of the totals of cash, cash equivalents, restricted cash and restricted cash equivalents. Therefore, amounts for restricted cash and restricted cash equivalents are to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the consolidated statements of cash flows. Accordingly, we applied the guidance using the retrospective transition method to each period presented, which adjusted the consolidated statements of cash flows to include restricted cash held to satisfy client funds obligations, as a component of cash, cash equivalents, restricted cash and restricted cash equivalents. Impact on Previously Reported Results As noted above, we adopted ASU 2016-18 during the three months ending June 30, 2019. We assessed the materiality of this presentation on prior periods’ consolidated financial statements in accordance with the SEC Staff Accounting Bulletin No. 99, “Materiality”, codified in Accounting Standards Codification (“ASC”) Topic 250, “Accounting Changes and Error Corrections.” Based on this assessment, we concluded that the correction is not material to any previously issued interim financial statements. The correction had no impact on our consolidated statements of income or consolidated balance sheets in previously issued consolidated financial statements. We will conform presentation of previously reported consolidated statements of cash flow information in future filings. The following tables present the unaudited consolidated statements of cash flows line items after giving effect to the adoption of ASU 2016-18: Nine Months Ended September 30, 2018 As previously reported ASU 2016-18 adjustments As adjusted Cash flows from operating activities Net cash provided by operating activities $ 145,849 $ — $ 145,849 Cash flows from investing activities Purchase of short-term investments from funds held for clients (137,561 ) (53 ) (137,614 ) Proceeds from maturities of short-term investments from funds held for clients 95,500 — 95,500 Net change in funds held for clients 229,375 (229,375 ) — Purchases of property and equipment (44,264 ) — (44,264 ) Net cash provided by (used in) investing activities 143,050 (229,428 ) (86,378 ) Cash flows from financing activities Net cash used in financing activities (249,928 ) — (249,928 ) Total increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents 38,971 (229,428 ) (190,457 ) Cash, cash equivalents, restricted cash and restricted cash equivalents Beginning of period 46,077 1,052,783 1,098,860 End of period $ 85,048 $ 823,355 $ 908,403 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, loss 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. 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. As 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 recognized 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 recognized in the accompanying consolidated 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 consolidated balance sheet date. As of September 30, 2019 and December 31, 2018, the funds held for clients were invested in money market funds, demand deposit accounts, commercial paper with a maturity duration less than three months and certificates of deposit. Short-term investments in commercial paper and certificates of deposit with an original 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 in the consolidated balance sheets. These available-for-sale securities are recognized in the consolidated balance sheets at fair value, which approximates the amortized cost of the securities. 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 and authorized new stock repurchase plans from time to time. Most recently, in November 2018, our Board of Directors authorized the repurchase of up to $150.0 million of our common stock. As of September 30, 2019, there was $119.7 million available for repurchases under our stock repurchase plan. 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. The current stock repurchase plan will expire on November 19, 2020. During the nine months ended September 30, 2019, we repurchased an aggregate of 218,446 shares of our common stock at an average cost of $193.32 per share to satisfy tax withholding obligations for certain employees upon the vesting of restricted stock. Recently Issued Accounting Pronouncements In August 2018, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2018-15, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force)” (“ASU 2018-15”). ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). This guidance is effective for fiscal years beginning after December 15, 2019, and for interim periods within those fiscal years, with early adoption permitted. The adoption of this guidance will not have a material impact on the consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). ASU 2018-13 modifies the disclosure requirements in Topic 820, “Fair Value Measurement,” based on the FASB Concepts Statement, “Conceptual Framework for Financial Reporting – Chapter 8: Notes to Financial Statements,” including consideration of costs and benefits. This guidance is effective for fiscal years beginning after December 15, 2019, and for interim periods within those fiscal years, with early adoption permitted. The adoption of this guidance will not have a material impact on the consolidated financial statements. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2019 | |
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. 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 the contract 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. Revenues from the sale of time clocks are recognized when control is transferred to the client upon delivery of the product. We estimate 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. Changes in deferred revenue related to material right performance obligations as of September 30, 2019 and 2018 were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Balance, beginning of period $ 70,004 $ 57,189 $ 64,651 $ 51,624 Deferral of revenue 6,631 5,643 17,651 14,902 Recognition of unearned revenue (3,270 ) (2,018 ) (8,937 ) (5,712 ) Balance, end of period $ 73,365 $ 60,814 $ 73,365 $ 60,814 We expect to recognize $2.8 million of deferred revenue related to material right performance obligations in the remainder of 2019, $10.5 million of such deferred revenue in 2020, and $60.1 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 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, 2019 Beginning Capitalization Ending Balance of Costs Amortization Balance Costs to obtain a contract $ 178,445 $ 11,315 $ (6,321 ) $ 183,439 Costs to fulfill a contract $ 121,664 $ 15,323 $ (4,258 ) $ 132,729 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, 2019 Beginning Capitalization Ending Balance of Costs Amortization Balance Costs to obtain a contract $ 158,989 $ 42,513 $ (18,063 ) $ 183,439 Costs to fulfill a contract $ 101,756 $ 42,614 $ (11,641 ) $ 132,729 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
Property and Equipment | 9 Months Ended |
Sep. 30, 2019 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment | 4. PROPERTY AND EQUIPMENT Property and equipment and accumulated depreciation and amortization were as follows: September 30, 2019 December 31, 2018 Property and equipment Buildings $ 101,681 $ 101,421 Software and capitalized software costs 90,606 66,634 Computer equipment 54,208 39,492 Rental clocks 19,829 16,950 Furniture, fixtures and equipment 17,848 16,474 Other 6,126 1,348 290,298 242,319 Less: accumulated depreciation and amortization (113,437 ) (82,969 ) 176,861 159,350 Construction in progress 18,140 8,589 Land 29,034 9,023 Property and equipment, net $ 224,035 $ 176,962 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, 2019, we capitalized $7.1 million and $22.7 million, respectively, of computer software development costs related to software developed for internal use. For the three and nine months ended September 30, 2018, we capitalized $5.2 million and $16.4 million, respectively, of computer software developments 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, 2019 and December 31, 2018 is $1.0 million and $0.1 million in retainage, respectively. We capitalize interest incurred for indebtedness related to construction in progress. For the three and nine months ended September 30, 2019, we incurred interest costs of $0.3 million and $1.1 million, respectively, of which we capitalized $0.2 million and $0.4 million, respectively. For the three and nine months ended September 30, 2018, we incurred interest costs of Depreciation and amortization expense for property and equipment was $10.9 million and $30.5 million, respectively, for the three and nine months ended September 30, 2019. 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. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | 5. GOODWILL AND INTANGIBLE ASSETS, NET As of both September 30, 2019 and December 31, 2018, goodwill was $51.9 million. We have selected June 30 as our annual goodwill impairment testing date. We have elected to perform a qualitative analysis of the fair value of our goodwill and determined there was no impairment as of June 30, 2019. As of September 30, 2019 and December 31, 2018, there were no indicators of impairment. All of our intangible assets other than goodwill are considered to have definite lives and, as such, are subject to amortization. The following tables provide the components of intangible assets, which are included in Other assets in our consolidated balance sheets: September 30, 2019 Weighted Average Remaining Accumulated Useful Life Gross Amortization Net (Years) Intangibles: Trade name 2.8 $ 3,194 $ (2,608 ) $ 586 Total $ 3,194 $ (2,608 ) $ 586 December 31, 2018 Weighted Average Remaining Accumulated Useful Life Gross Amortization Net (Years) Intangibles: Trade name 3.5 $ 3,194 $ (2,449 ) $ 745 Total $ 3,194 $ (2,449 ) $ 745 The weighted average remaining useful life of our intangible assets was 2.8 years as of September 30, 2019. Amortization of intangible assets for the three and nine months ended September 30, 2019 was $0.1 million and $0.2 million, respectively. Amortization of intangible assets for the three and nine months ended September 30, 2018 was $0.1 million and $0.2 million, respectively. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | 6. LEASES 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 in the consolidated balance sheets as well as providing additional disclosure requirements related to leasing arrangements. The new guidance was effective for us beginning January 1, 2019, which we adopted using a modified retrospective method and the transition relief guidance provided by the FASB in ASU 2018-11. Under this adoption method, we have not restated comparative prior periods and have carried forward the assessment of whether our contracts are or contain leases, the classification of our leases and the remaining lease terms. Based on our portfolio of leases at January 1, 2019, $21.6 million of lease assets and liabilities were recognized in our consolidated balance sheets, which related to operating leases for real estate. Under the transition relief guidance, we have elected the lease vs. non-lease components practical expedient relating to the asset class of real estate, the short-term lease exemption practical expedient and the package of practical expedients. In connection with the adoption of this standard, we updated our control framework and implemented changes to our existing controls to account for leases. The Company’s leases primarily consist of noncancellable operating leases for office space with contractual terms expiring from 2019 to 2025. All of our leases are operating leases and, as a lessee, we have not entered into any sublease agreements. 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 appears, at the inception of the lease, to be reasonably assured. While some of our leases include an option to extend the lease up to five years, it is not reasonably certain that any such options will be exercised due, in part, to the dynamic nature of our sales force and rate of growth. Some of our leases contain termination options that are not reasonably certain to be exercised. However, if a termination option is exercised, we remeasure the lease asset in the consolidated balance sheets using the updated lease period. None of our leases contain residual value guarantees, substantial restrictions or covenants. Lease assets of $25.3 million as of September 30, 2019 were included in Other assets in our consolidated balance sheets, which included a $1.5 million reduction to Other Assets for deferred rent. When a lease contains a predetermined fixed escalation of the minimum rent, we recognize the related lease expense on a straight-line basis and record the difference between the lease expense and the amount payable under the lease as an adjustment to the right-of-use asset. Short-term lease liabilities of $9.6 million as of September 30, 2019 were included in Accrued expenses and other current liabilities in our consolidated balance sheets. In addition, long-term lease liabilities of $17.2 million as of September 30, 2019 were recognized in Other long-term liabilities in our consolidated balance sheets. Rent expense associated with operating leases for the three and nine months ended September 30, 2019 was $2.6 million and $7.4 million, respectively. Rent expense associated with operating leases for the three and nine months ended September 30, 2018 was $1.9 million and $5.5 million, respectively. Cash paid for amounts included in the measurement of our operating lease liabilities was $2.7 million and $7.4 million for the three and nine months ended September 30, 2019, respectively. Because no implicit discount rates for our leases could be readily determined, the Company elected to use an estimated incremental borrowing rate to determine the present value of our leases. The weighted average discount rate related to our portfolio of leases at September 30, 2019 was 4.1%. The average remaining lease term for our leases was 2.8 years as of September 30, 2019. The undiscounted cash flows for the future annual maturities of our operating lease liabilities and the reconciliation of those total undiscounted cash flows to our lease liabilities as of September 30, 2019 were as follows: 2019 $ 2,526 2020 9,570 2021 6,397 2022 5,314 2023 3,666 Thereafter 1,382 Total undiscounted cash flows $ 28,855 Present value discount (2,027 ) Lease liabilities $ 26,828 The table above does not include any legally binding minimum lease payments for leases signed but not yet commenced. As of September 30, 2019, the present value of the operating lease liabilities that had not yet commenced was $5.0 million. |
Long-Term Debt, Net
Long-Term Debt, Net | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Debt, Net | 7. LONG-TERM DEBT, NET Long-term debt consisted of the following: September 30, 2019 December 31, 2018 Net term note to bank due September 7, 2025 $ 33,068 $ 34,389 Total long-term debt, net (including current portion) 33,068 34,389 Less: Current portion (1,775 ) (1,775 ) Total long-term debt, net $ 31,293 $ 32,614 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 made certain term loans to us (the “Term Loans”). Our obligations under the Term Loans are secured by a mortgage and first priority security interest in our headquarters property. 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%. As of September 30, 2019, our indebtedness of $31.3 million consisted solely of Term Loans made under the Term Credit Agreement. Unamortized debt issuance costs of $0.2 million as of both September 30, 2019 and December 31, 2018 are presented as a direct deduction from the carrying amount of the debt liability. 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, 2019, 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 provided for a senior secured revolving credit facility (the “Facility”) in the aggregate principal amount of $50.0 million (the “Revolving Commitment”), which could 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 was scheduled to mature on February 12, 2020. On April 15, 2019, we entered into the First Amendment to Revolving Credit Agreement (the “First Amendment”). Pursuant to the First Amendment, Wells Fargo Bank, N.A., was added as a lender and the Revolving Commitment was increased to $75.0 million, which may be further increased to $125.0 million subject to obtaining additional lender commitments and certain approvals and satisfying other conditions. The scheduled maturity date of the Facility was extended to April 15, 2022. 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, 2019, we did not have any borrowings outstanding 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, 2019, we were in compliance with all covenants related to the Revolving Credit Agreement. As of September 30, 2019 and December 31, 2018, 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, 2019 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | 8. DERIVATIVE INSTRUMENTS In December 2017, we entered into a floating-to-fixed interest rate swap agreement to limit the exposure to floating interest rate risk related to the Term Loans. We do not hold derivative instruments for trading or speculative purposes. The interest rate swap agreement 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 recognize all derivative instruments in 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 9, “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 recognized in our consolidated statements of income within Other income (expense), net. 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, 2019, we recorded a loss of $0.4 million and $1.8 million, respectively, for the change in fair value of the interest rate swap. For the three and nine months ended September 30, 2018, we recognized a gain of $0.3 million and $1.4 million, respectively, for the change in fair value of the interest rate swap. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 9. FAIR VALUE OF FINANCIAL INSTRUMENTS Our financial instruments consist primarily of cash and cash equivalents, accounts receivable, accounts payable, funds held for clients, client funds obligation and long-term debt. The carrying amount of cash and cash equivalents, accounts receivable, accounts payable, funds held for clients and client funds obligation approximates fair value due to the short-term nature of the instruments. See Note 7 for discussion of 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, and 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 an original 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 recognized in the consolidated balance sheets at fair value, which approximates the amortized cost of the securities. As of September 30, 2019 and December 31, 2018, all available-for-sale securities and certificates of deposit were due in one year or less. As discussed in Note 8, 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 recognized at 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 tables are the Company’s major categories of assets and liabilities measured at fair value on a recurring basis as of September 30, 2019 and December 31, 2018: September 30, 2019 Level 1 Level 2 Level 3 Total Assets: Commercial paper $ — $ 34,755 $ — $ 34,755 Liabilities: Interest rate swap $ — $ 1,746 $ — $ 1,746 December 31, 2018 Level 1 Level 2 Level 3 Total Assets: Commercial paper $ — $ 21,041 $ — $ 21,041 Certificates of deposit $ — $ 6,000 $ — $ 6,000 Interest rate swap $ — $ 17 $ — $ 17 |
Employee Savings Plan and Emplo
Employee Savings Plan and Employee Stock Purchase Plan | 9 Months Ended |
Sep. 30, 2019 | |
Compensation Related Costs [Abstract] | |
Employee Savings Plan and Employee Stock Purchase Plan | 10. EMPLOYEE SAVINGS PLAN AND EMPLOYEE STOCK PURCHASE PLAN Employees over the age of 18 who have completed ninety days of service are eligible to participate in our 401(k) plan. We have made a Qualified Automatic Contribution Arrangement (“QACA”) election, whereby the Company matches the contribution of 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 were $1.5 million and $4.8 million for the three and nine months ended September 30, 2019, respectively. Matching contributions were $1.2 million and $3.9 million for the three and nine months ended September 30, 2018, 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 of $25,000. 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 2.0 million shares. Eligible employees purchased 39,137 and 46,508 shares of the Company’s common stock under the ESPP during the nine months ended September 30, 2019 and 2018, 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 $1.3 million for the three and nine months ended September 30, 2019, respectively. 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. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 11. 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 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, 2019 2018 2019 2018 Numerator: Net income $ 39,152 $ 28,769 $ 135,196 $ 105,651 Less: income allocable to participating securities (18 ) (36 ) (62 ) (134 ) Income allocable to common shares $ 39,134 $ 28,733 $ 135,134 $ 105,517 Add back: undistributed earnings allocable to participating securities $ 18 $ 36 $ 62 $ 134 Less: undistributed earnings reallocated to participating securities (18 ) (36 ) (61 ) (132 ) Numerator for diluted earnings per share $ 39,134 $ 28,733 $ 135,135 $ 105,519 Denominator: Basic weighted average shares outstanding 57,654 57,727 57,528 57,785 Dilutive effect of unvested restricted stock 729 818 875 939 Diluted weighted average shares outstanding 58,383 58,545 58,403 58,724 Earnings per share: Basic $ 0.68 $ 0.50 $ 2.35 $ 1.83 Diluted $ 0.67 $ 0.49 $ 2.31 $ 1.80 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | 12. STOCK-BASED COMPENSATION The following table summarizes restricted stock awards activity for the nine months ended September 30, 2019: 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, 2018 806.5 $ 67.54 — $ — Granted 338.9 151.10 281.0 102.76 Vested (318.5 ) 64.06 (280.4 ) 102.76 Forfeited (77.8 ) 85.82 (0.6 ) 102.57 Unvested shares of restricted stock outstanding at September 30, 2019 749.1 $ 104.92 — $ — In January 2019, we issued an aggregate of 520,069 restricted shares of common stock to our executive officers, certain non-executive, non-sales employees and non-executive sales management employees under the Paycom Software, Inc. 2014 Long-Term Incentive Plan (the “LTIP”), consisting of 280,960 shares subject to market-based vesting conditions (“Market-Based Shares”) and 239,109 shares subject to time-based vesting conditions (“Time-Based Shares”). Market-Based Shares vested 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 $8.65 billion and 50% on the first date that the Company’s TEV equaled or exceeded $9.35 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 on the applicable vesting date. As shown in the table below, all Market-Based Shares issued in January 2019 have vested. On April 23, 2019, we issued an aggregate of 65,255 restricted shares of common stock to certain non-executive employees under the LTIP consisting of Time-Based Shares that will vest in either three or four equal tranches annually, generally beginning on the first anniversary of the grant date, On April 29, 2019, we issued an aggregate of 6,816 restricted shares of common 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. In May 2019, we issued an aggregate of 26,000 restricted shares of common stock to certain non-executive employees under the LTIP consisting of Time-Based Shares that will vest over periods ranging from two to four years, provided that the recipient is employed by, or providing services to, the Company on the applicable vesting date. The following table summarizes vesting activity for Market-Based Shares during the nine months ended September 30, 2019, 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 = $8.65 billion) February 13, 2019 140.2 $14,900 54.5 Market-based (TEV = $9.35 billion) February 22, 2019 140.2 $13,900 55.5 1 All shares withheld to satisfy tax withholding obligations are held as treasury stock. Time-Based Shares granted to certain non-executive employees in January 2019 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. Time-Based Shares granted to executive officers, sales management employees and certain non-executive employees will generally vest over periods ranging from two to four years beginning on a specified initial vesting date and thereafter on the anniversaries of such date, provided that the executive officer or employee is employed by, or providing services to, the Company on the applicable vesting date. For the three and nine months ended September 30, 2019, our total compensation expense related to restricted stock was $4.5 million and $41.1 million, respectively. 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. There was $62.6 million of unrecognized compensation cost, net of estimated forfeitures, related to unvested shares of restricted stock outstanding as of September 30, 2019. The unrecognized compensation cost for the unvested shares is expected to be recognized over a weighted average period of 2.4 years as of September 30, 2019. We capitalized stock-based compensation costs related to software developed for internal use of $0.3 million and $4.3 million for the three and nine months ended September 30, 2019, respectively. 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. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 13. COMMITMENTS AND CONTINGENCIES 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. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 14. INCOME TAXES The Company’s effective income tax rate was 18.0% and 20.0% for the nine months ended September 30, 2019 and 2018, respectively. The lower effective tax rate for the nine months ended September 30, 2019 is primarily related to an increase in excess tax benefits from stock-based compensation related to vesting events. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited interim consolidated financial statements and notes 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, 2019 and our consolidated statements of income, stockholders’ equity and cash flows for the three and nine months ended September 30, 2019 and 2018. 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 the Form 10-K. The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the results expected for the full year. |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified in connection with the adoption of Accounting Standards Update (“ASU”) No. 2016-18, “Restricted Cash” (“ASU 2016-18”) as discussed below. In addition to these adjustments, in the consolidated balance sheets, we combined the line items “Intangible assets, net” and “Other assets” in the prior period in order to conform to the current period presentation. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In January 2019, we adopted ASU No. 2016-02, “Leases (Topic 842)” using the modified retrospective approach. Under this adoption method, we have not restated comparative prior periods and have carried forward the assessment of whether our contracts are or contain leases, the classification of our leases and the remaining lease terms. See Note 6 for a discussion of our adoption of this standard. In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, to eliminate or modify certain disclosure rules that are redundant, outdated, or duplicative of U.S. GAAP or other regulatory requirements. In addition, the amendments provide that disclosure requirements related to the analysis of stockholders' equity are expanded for interim financial statements. An analysis of the changes in each caption of stockholders' equity presented in the balance sheet is provided in the consolidated statement of stockholders’ equity. During the three months ended June 30, 2019, we adopted ASU 2016-18, which was effective on January 1, 2018. This guidance requires that the consolidated statements of cash flows explain the change during the reporting period of the totals of cash, cash equivalents, restricted cash and restricted cash equivalents. Therefore, amounts for restricted cash and restricted cash equivalents are to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the consolidated statements of cash flows. Accordingly, we applied the guidance using the retrospective transition method to each period presented, which adjusted the consolidated statements of cash flows to include restricted cash held to satisfy client funds obligations, as a component of cash, cash equivalents, restricted cash and restricted cash equivalents. Impact on Previously Reported Results As noted above, we adopted ASU 2016-18 during the three months ending June 30, 2019. We assessed the materiality of this presentation on prior periods’ consolidated financial statements in accordance with the SEC Staff Accounting Bulletin No. 99, “Materiality”, codified in Accounting Standards Codification (“ASC”) Topic 250, “Accounting Changes and Error Corrections.” Based on this assessment, we concluded that the correction is not material to any previously issued interim financial statements. The correction had no impact on our consolidated statements of income or consolidated balance sheets in previously issued consolidated financial statements. We will conform presentation of previously reported consolidated statements of cash flow information in future filings. The following tables present the unaudited consolidated statements of cash flows line items after giving effect to the adoption of ASU 2016-18: Nine Months Ended September 30, 2018 As previously reported ASU 2016-18 adjustments As adjusted Cash flows from operating activities Net cash provided by operating activities $ 145,849 $ — $ 145,849 Cash flows from investing activities Purchase of short-term investments from funds held for clients (137,561 ) (53 ) (137,614 ) Proceeds from maturities of short-term investments from funds held for clients 95,500 — 95,500 Net change in funds held for clients 229,375 (229,375 ) — Purchases of property and equipment (44,264 ) — (44,264 ) Net cash provided by (used in) investing activities 143,050 (229,428 ) (86,378 ) Cash flows from financing activities Net cash used in financing activities (249,928 ) — (249,928 ) Total increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents 38,971 (229,428 ) (190,457 ) Cash, cash equivalents, restricted cash and restricted cash equivalents Beginning of period 46,077 1,052,783 1,098,860 End of period $ 85,048 $ 823,355 $ 908,403 |
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, loss 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. 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. As 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 recognized 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 recognized in the accompanying consolidated 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 consolidated balance sheet date. As of September 30, 2019 and December 31, 2018, the funds held for clients were invested in money market funds, demand deposit accounts, commercial paper with a maturity duration less than three months and certificates of deposit. Short-term investments in commercial paper and certificates of deposit with an original 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 in the consolidated balance sheets. These available-for-sale securities are recognized in the consolidated balance sheets at fair value, which approximates the amortized cost of the securities. 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 and authorized new stock repurchase plans from time to time. Most recently, in November 2018, our Board of Directors authorized the repurchase of up to $150.0 million of our common stock. As of September 30, 2019, there was $119.7 million available for repurchases under our stock repurchase plan. 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. The current stock repurchase plan will expire on November 19, 2020. During the nine months ended September 30, 2019, we repurchased an aggregate of 218,446 shares of our common stock at an average cost of $193.32 per share to satisfy tax withholding obligations for certain employees upon the vesting of restricted stock. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In August 2018, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2018-15, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force)” (“ASU 2018-15”). ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). This guidance is effective for fiscal years beginning after December 15, 2019, and for interim periods within those fiscal years, with early adoption permitted. The adoption of this guidance will not have a material impact on the consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). ASU 2018-13 modifies the disclosure requirements in Topic 820, “Fair Value Measurement,” based on the FASB Concepts Statement, “Conceptual Framework for Financial Reporting – Chapter 8: Notes to Financial Statements,” including consideration of costs and benefits. This guidance is effective for fiscal years beginning after December 15, 2019, and for interim periods within those fiscal years, with early adoption permitted. The adoption of this guidance will not have a material impact on the consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Newly Adopted Standards in Unaudited Consolidated Statement of Cash Flows | The following tables present the unaudited consolidated statements of cash flows line items after giving effect to the adoption of ASU 2016-18: Nine Months Ended September 30, 2018 As previously reported ASU 2016-18 adjustments As adjusted Cash flows from operating activities Net cash provided by operating activities $ 145,849 $ — $ 145,849 Cash flows from investing activities Purchase of short-term investments from funds held for clients (137,561 ) (53 ) (137,614 ) Proceeds from maturities of short-term investments from funds held for clients 95,500 — 95,500 Net change in funds held for clients 229,375 (229,375 ) — Purchases of property and equipment (44,264 ) — (44,264 ) Net cash provided by (used in) investing activities 143,050 (229,428 ) (86,378 ) Cash flows from financing activities Net cash used in financing activities (249,928 ) — (249,928 ) Total increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents 38,971 (229,428 ) (190,457 ) Cash, cash equivalents, restricted cash and restricted cash equivalents Beginning of period 46,077 1,052,783 1,098,860 End of period $ 85,048 $ 823,355 $ 908,403 |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Summary of Changes in Deferred Revenue Related to Material Right Performance Obligations | Changes in deferred revenue related to material right performance obligations as of September 30, 2019 and 2018 were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Balance, beginning of period $ 70,004 $ 57,189 $ 64,651 $ 51,624 Deferral of revenue 6,631 5,643 17,651 14,902 Recognition of unearned revenue (3,270 ) (2,018 ) (8,937 ) (5,712 ) Balance, end of period $ 73,365 $ 60,814 $ 73,365 $ 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, 2019 Beginning Capitalization Ending Balance of Costs Amortization Balance Costs to obtain a contract $ 178,445 $ 11,315 $ (6,321 ) $ 183,439 Costs to fulfill a contract $ 121,664 $ 15,323 $ (4,258 ) $ 132,729 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, 2019 Beginning Capitalization Ending Balance of Costs Amortization Balance Costs to obtain a contract $ 158,989 $ 42,513 $ (18,063 ) $ 183,439 Costs to fulfill a contract $ 101,756 $ 42,614 $ (11,641 ) $ 132,729 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 (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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, 2019 December 31, 2018 Property and equipment Buildings $ 101,681 $ 101,421 Software and capitalized software costs 90,606 66,634 Computer equipment 54,208 39,492 Rental clocks 19,829 16,950 Furniture, fixtures and equipment 17,848 16,474 Other 6,126 1,348 290,298 242,319 Less: accumulated depreciation and amortization (113,437 ) (82,969 ) 176,861 159,350 Construction in progress 18,140 8,589 Land 29,034 9,023 Property and equipment, net $ 224,035 $ 176,962 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, Net (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Components of Intangible Assets | All of our intangible assets other than goodwill are considered to have definite lives and, as such, are subject to amortization. The following tables provide the components of intangible assets, which are included in Other assets in our consolidated balance sheets: September 30, 2019 Weighted Average Remaining Accumulated Useful Life Gross Amortization Net (Years) Intangibles: Trade name 2.8 $ 3,194 $ (2,608 ) $ 586 Total $ 3,194 $ (2,608 ) $ 586 December 31, 2018 Weighted Average Remaining Accumulated Useful Life Gross Amortization Net (Years) Intangibles: Trade name 3.5 $ 3,194 $ (2,449 ) $ 745 Total $ 3,194 $ (2,449 ) $ 745 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Schedule of Undiscounted Cash Flows for Future Annual Maturities of Operating Lease Liabilities | The undiscounted cash flows for the future annual maturities of our operating lease liabilities and the reconciliation of those total undiscounted cash flows to our lease liabilities as of September 30, 2019 were as follows: 2019 $ 2,526 2020 9,570 2021 6,397 2022 5,314 2023 3,666 Thereafter 1,382 Total undiscounted cash flows $ 28,855 Present value discount (2,027 ) Lease liabilities $ 26,828 |
Long-Term Debt, Net (Tables)
Long-Term Debt, Net (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Long-term debt consisted of the following: September 30, 2019 December 31, 2018 Net term note to bank due September 7, 2025 $ 33,068 $ 34,389 Total long-term debt, net (including current portion) 33,068 34,389 Less: Current portion (1,775 ) (1,775 ) Total long-term debt, net $ 31,293 $ 32,614 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Major Categories of Assets and Liabilities Measured at Fair Value on Recurring Basis | Included in the following tables are the Company’s major categories of assets and liabilities measured at fair value on a recurring basis as of September 30, 2019 and December 31, 2018: September 30, 2019 Level 1 Level 2 Level 3 Total Assets: Commercial paper $ — $ 34,755 $ — $ 34,755 Liabilities: Interest rate swap $ — $ 1,746 $ — $ 1,746 December 31, 2018 Level 1 Level 2 Level 3 Total Assets: Commercial paper $ — $ 21,041 $ — $ 21,041 Certificates of deposit $ — $ 6,000 $ — $ 6,000 Interest rate swap $ — $ 17 $ — $ 17 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net Earnings Per Share | The following is a reconciliation of net income and the 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, 2019 2018 2019 2018 Numerator: Net income $ 39,152 $ 28,769 $ 135,196 $ 105,651 Less: income allocable to participating securities (18 ) (36 ) (62 ) (134 ) Income allocable to common shares $ 39,134 $ 28,733 $ 135,134 $ 105,517 Add back: undistributed earnings allocable to participating securities $ 18 $ 36 $ 62 $ 134 Less: undistributed earnings reallocated to participating securities (18 ) (36 ) (61 ) (132 ) Numerator for diluted earnings per share $ 39,134 $ 28,733 $ 135,135 $ 105,519 Denominator: Basic weighted average shares outstanding 57,654 57,727 57,528 57,785 Dilutive effect of unvested restricted stock 729 818 875 939 Diluted weighted average shares outstanding 58,383 58,545 58,403 58,724 Earnings per share: Basic $ 0.68 $ 0.50 $ 2.35 $ 1.83 Diluted $ 0.67 $ 0.49 $ 2.31 $ 1.80 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Summary of Nonvested Restricted Stock Awards Activity | The following table summarizes restricted stock awards activity for the nine months ended September 30, 2019: 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, 2018 806.5 $ 67.54 — $ — Granted 338.9 151.10 281.0 102.76 Vested (318.5 ) 64.06 (280.4 ) 102.76 Forfeited (77.8 ) 85.82 (0.6 ) 102.57 Unvested shares of restricted stock outstanding at September 30, 2019 749.1 $ 104.92 — $ — |
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, 2019, 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 = $8.65 billion) February 13, 2019 140.2 $14,900 54.5 Market-based (TEV = $9.35 billion) February 22, 2019 140.2 $13,900 55.5 1 All shares withheld to satisfy tax withholding obligations are held as treasury stock. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Summary of Newly Adopted Standards in Unaudited Consolidated Statement of Cash Flows (Detail) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | ||
Cash flows from operating activities | |||
Net cash provided by operating activities | $ 176,419 | $ 145,849 | [1] |
Cash flows from investing activities | |||
Purchase of short-term investments from funds held for clients | (61,268) | (137,614) | [1] |
Proceeds from maturities of short-term investments from funds held for clients | 54,200 | 95,500 | [1] |
Purchases of property and equipment | (71,080) | (44,264) | [1] |
Net cash used in investing activities | (78,148) | (86,378) | [1] |
Cash flows from financing activities | |||
Net cash used in financing activities | (175,445) | (249,928) | [1] |
Decrease in cash, cash equivalents, restricted cash and restricted cash equivalents | (77,174) | (190,457) | [1] |
Cash, cash equivalents, restricted cash and restricted cash equivalents | |||
Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of period | 986,464 | 1,098,860 | [1] |
Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period | $ 909,290 | 908,403 | [1] |
As Previously Reported [Member] | |||
Cash flows from operating activities | |||
Net cash provided by operating activities | 145,849 | ||
Cash flows from investing activities | |||
Purchase of short-term investments from funds held for clients | (137,561) | ||
Proceeds from maturities of short-term investments from funds held for clients | 95,500 | ||
Net change in funds held for clients | 229,375 | ||
Purchases of property and equipment | (44,264) | ||
Net cash used in investing activities | 143,050 | ||
Cash flows from financing activities | |||
Net cash used in financing activities | (249,928) | ||
Decrease in cash, cash equivalents, restricted cash and restricted cash equivalents | 38,971 | ||
Cash, cash equivalents, restricted cash and restricted cash equivalents | |||
Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of period | 46,077 | ||
Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period | 85,048 | ||
ASU 2016-18 [Member] | |||
Cash flows from operating activities | |||
Net cash provided by operating activities | 145,849 | ||
Cash flows from investing activities | |||
Purchase of short-term investments from funds held for clients | (137,614) | ||
Proceeds from maturities of short-term investments from funds held for clients | 95,500 | ||
Purchases of property and equipment | (44,264) | ||
Net cash used in investing activities | (86,378) | ||
Cash flows from financing activities | |||
Net cash used in financing activities | (249,928) | ||
Decrease in cash, cash equivalents, restricted cash and restricted cash equivalents | (190,457) | ||
Cash, cash equivalents, restricted cash and restricted cash equivalents | |||
Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of period | 1,098,860 | ||
Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period | 908,403 | ||
ASU 2016-18 [Member] | Adjustments [Member] | |||
Cash flows from investing activities | |||
Purchase of short-term investments from funds held for clients | (53) | ||
Net change in funds held for clients | (229,375) | ||
Net cash used in investing activities | (229,428) | ||
Cash flows from financing activities | |||
Decrease in cash, cash equivalents, restricted cash and restricted cash equivalents | (229,428) | ||
Cash, cash equivalents, restricted cash and restricted cash equivalents | |||
Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of period | 1,052,783 | ||
Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period | $ 823,355 | ||
[1] | Amounts have been adjusted to reflect the adoption of Accounting Standards Update No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force).” See Note 2 for a summary of reclassifications and adjustments. |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Additional Information (Detail) - Stock Repurchase Plan [Member] - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Nov. 30, 2018 | |
Summary Of Significant Accounting Policy [Line Items] | ||
Available authorized repurchase amount | $ 119,700,000 | |
Stock repurchase plan expiration date | Nov. 19, 2020 | |
Number of common stocks repurchased during the period | 218,446,000 | |
Stock repurchased, average costs per share | $ 193.32 | |
Maximum [Member] | ||
Summary Of Significant Accounting Policy [Line Items] | ||
Stock repurchase plan, authorized amount | $ 150,000,000 |
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, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue From Contract With Customer [Abstract] | ||||
Balance, beginning of period | $ 70,004 | $ 57,189 | $ 64,651 | $ 51,624 |
Deferral of revenue | 6,631 | 5,643 | 17,651 | 14,902 |
Recognition of unearned revenue | (3,270) | (2,018) | (8,937) | (5,712) |
Balance, end of period | $ 73,365 | $ 60,814 | $ 73,365 | $ 60,814 |
Revenue - Additional Informatio
Revenue - Additional Information (Detail 1) $ in Millions | Sep. 30, 2019USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2019-10-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Deferred revenue expect to recognize amount | $ 2.8 |
Deferred revenue expect to recognize period | 3 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2020-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Deferred revenue expect to recognize amount | $ 10.5 |
Deferred revenue expect to recognize period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2021-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Deferred revenue expect to recognize amount | $ 60.1 |
Deferred revenue expect to recognize period |
Revenue - Additional Informat_2
Revenue - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Deferred revenue expect to recognize description | We expect to recognize $2.8 million of deferred revenue related to material right performance obligations in the remainder of 2019, $10.5 million of such deferred revenue in 2020, and $60.1 million of such deferred revenue thereafter. |
Revenue - Summary of Asset Bala
Revenue - Summary of Asset Balances and Related Amortization Expense For Contract Costs (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Costs to Obtain a Contract [Member] | ||||
Capitalized Contract Cost [Line Items] | ||||
Beginning Balance | $ 178,445 | $ 140,119 | $ 158,989 | $ 126,207 |
Capitalization of Costs | 11,315 | 10,595 | 42,513 | 33,565 |
Amortization | (6,321) | (4,855) | (18,063) | (13,913) |
Ending Balance | 183,439 | 145,859 | 183,439 | 145,859 |
Costs to Fulfill a Contract [Member] | ||||
Capitalized Contract Cost [Line Items] | ||||
Beginning Balance | 121,664 | 87,199 | 101,756 | 72,061 |
Capitalization of Costs | 15,323 | 9,730 | 42,614 | 30,156 |
Amortization | (4,258) | (3,001) | (11,641) | (8,289) |
Ending Balance | $ 132,729 | $ 93,928 | $ 132,729 | $ 93,928 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment and Associated Accumulated Depreciation and Amortization (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Property and Equipment [Line Items] | ||
Property and equipment, gross | $ 290,298 | $ 242,319 |
Less: accumulated depreciation and amortization | (113,437) | (82,969) |
Property and equipment, net | 224,035 | 176,962 |
Buildings [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, gross | 101,681 | 101,421 |
Software and Capitalized Software Costs [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, gross | 90,606 | 66,634 |
Computer Equipment [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, gross | 54,208 | 39,492 |
Rental Clocks [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, gross | 19,829 | 16,950 |
Furniture, Fixtures and Equipment [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, gross | 17,848 | 16,474 |
Other [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, gross | 6,126 | 1,348 |
Excluded Land and Construction in Process [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, net | 176,861 | 159,350 |
Land [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, net | 29,034 | 9,023 |
Construction in Progress [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, net | $ 18,140 | $ 8,589 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Property and Equipment [Line Items] | |||||
Computer software development costs capitalized | $ 7,100,000 | $ 5,200,000 | $ 22,700,000 | $ 16,400,000 | |
Retainage amount included in construction in progress | 1,000,000 | 1,000,000 | $ 100,000 | ||
Interest cost Paid | 300,000 | 400,000 | 1,100,000 | 1,200,000 | |
Interest Costs Capitalized | 200,000 | 400,000 | 800,000 | ||
Depreciation and amortization | 5,665,000 | 4,161,000 | 15,848,000 | 10,652,000 | |
Property and Equipment [Member] | |||||
Property and Equipment [Line Items] | |||||
Depreciation and amortization | $ 10,900,000 | 8,100,000 | $ 30,500,000 | $ 20,800,000 | |
Maximum [Member] | |||||
Property and Equipment [Line Items] | |||||
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, 2019 | Sep. 30, 2018 | Jun. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
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 | 2 years 9 months 18 days | |||||
Amortization of intangible assets | $ 100,000 | $ 100,000 | $ 200,000 | $ 200,000 |
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, 2019 | Dec. 31, 2018 | |
Finite Lived Intangible Assets [Line Items] | ||
Gross | $ 3,194 | $ 3,194 |
Accumulated Amortization | (2,608) | (2,449) |
Net | $ 586 | 745 |
Weighted average remaining useful life | 2 years 9 months 18 days | |
Trade Name [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross | $ 3,194 | 3,194 |
Accumulated Amortization | (2,608) | (2,449) |
Net | $ 586 | $ 745 |
Weighted average remaining useful life | 2 years 9 months 18 days | 3 years 6 months |
Leases - Additional Information
Leases - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Jan. 01, 2019 | |
Lessee Lease Description [Line Items] | |||||
Operating lease, option to extend | true | ||||
Deferred rent | $ 1.5 | $ 1.5 | |||
Lease assets | $ 25.3 | $ 25.3 | |||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | us-gaap:OtherNoncurrentAssetsMember | us-gaap:OtherNoncurrentAssetsMember | |||
Short-term lease liabilities | $ 9.6 | $ 9.6 | |||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:AccruedLiabilitiesAndOtherLiabilities | us-gaap:AccruedLiabilitiesAndOtherLiabilities | |||
Long-term lease liabilities | $ 17.2 | $ 17.2 | |||
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilitiesNoncurrent | us-gaap:OtherLiabilitiesNoncurrent | |||
Operating lease rent expense | $ 2.6 | $ 1.9 | $ 7.4 | $ 5.5 | |
Cash paid of measurement of operating lease liabilities | $ 2.7 | $ 7.4 | |||
Weighted average discount rate of operating leases | 4.10% | 4.10% | |||
Average remaining operating lease term | 2 years 9 months 18 days | 2 years 9 months 18 days | |||
Operating lease liabilities, lease not yet commenced | $ 5 | $ 5 | |||
Minimum [Member] | |||||
Lessee Lease Description [Line Items] | |||||
Operating lease expiration year | 2019 | ||||
Maximum [Member] | |||||
Lessee Lease Description [Line Items] | |||||
Operating lease expiration year | 2025 | ||||
Operating lease option to extend lease term | five years | ||||
Accounting Standards Update 2016-02 [Member] | |||||
Lessee Lease Description [Line Items] | |||||
Estimated operating lease assets and liabilities to be recognized upon adoption | $ 21.6 |
Leases - Schedule of Undiscount
Leases - Schedule of Undiscounted Cash Flows for Future Annual Maturities of Operating Lease Liabilities (Detail) $ in Thousands | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
2019 | $ 2,526 |
2020 | 9,570 |
2021 | 6,397 |
2022 | 5,314 |
2023 | 3,666 |
Thereafter | 1,382 |
Total undiscounted cash flows | 28,855 |
Present value discount | (2,027) |
Lease liabilities | $ 26,828 |
Long-Term Debt, Net - Schedule
Long-Term Debt, Net - Schedule of Long-Term Debt (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Schedule Of Capitalization Longterm Debt [Line Items] | ||
Total long-term debt, net (including current portion) | $ 33,068 | $ 34,389 |
Less: Current portion | (1,775) | (1,775) |
Total long-term debt, net | 31,293 | 32,614 |
2025 Consolidated Loan [Member] | ||
Schedule Of Capitalization Longterm Debt [Line Items] | ||
Term note to bank | $ 33,068 | $ 34,389 |
Long-Term Debt, Net - Additiona
Long-Term Debt, Net - Additional Information (Detail) - USD ($) | Apr. 15, 2019 | Feb. 12, 2018 | Dec. 07, 2017 | Sep. 30, 2019 | Dec. 31, 2018 |
Revolving 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 | ||||
Line of credit facility agreement date | Feb. 12, 2018 | ||||
Line of credit facility, maximum borrowing capacity | $ 50,000,000 | ||||
Line of credit facility, maximum borrwoing capacity may increased subject to obtaining additional lender commitments and certain approvals and other conditions | $ 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, borrowings outstanding | $ 0 | ||||
Revolving Credit Agreement [Member] | Wells Fargo Bank, N.A. [Member] | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 75,000,000 | ||||
Line of credit facility, maximum borrwoing capacity may increased subject to obtaining additional lender commitments and certain approvals and other conditions | $ 125,000,000 | ||||
Line of credit facility, maturity date | Apr. 15, 2022 | ||||
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] | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Fixed charge coverage ratio required by covenants | 125.00% | ||||
Revolving Credit Agreement [Member] | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Funded indebtedness to EBITDA ratio required by covenants | 100.00% | ||||
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% | ||||
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] | 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] | |||||
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] | Term Loan [Member] | |||||
Debt Instrument [Line Items] | |||||
Indebtedness, term loans | $ 31,300,000 | ||||
Unamortized debt issuance cost | $ 200,000 | $ 200,000 |
Derivative Instruments - Additi
Derivative Instruments - Additional Information (Details) - Term Loan [Member] - Interest Rate Swap [Member] - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
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 (loss) under fair value | $ (0.4) | $ 0.3 | $ (1.8) | $ 1.4 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Additional Information (Detail) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
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, 2019 | Dec. 31, 2018 |
Commercial Paper [Member] | ||
Assets: | ||
Assets | $ 34,755 | $ 21,041 |
Certificates of Deposit [Member] | ||
Assets: | ||
Assets | 6,000 | |
Level 2 [Member] | Commercial Paper [Member] | ||
Assets: | ||
Assets | 34,755 | 21,041 |
Level 2 [Member] | Certificates of Deposit [Member] | ||
Assets: | ||
Assets | 6,000 | |
Interest Rate Swap [Member] | ||
Assets: | ||
Assets | 17 | |
Liabilities: | ||
Liabilities | 1,746 | |
Interest Rate Swap [Member] | Level 2 [Member] | ||
Assets: | ||
Assets | $ 17 | |
Liabilities: | ||
Liabilities | $ 1,746 |
Employee Savings Plan and Emp_2
Employee Savings Plan and Employee Stock Purchase Plan - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Defined Contribution Plan Disclosure [Line Items] | ||||
401(k) eligibility minimum service period | 90 days | |||
401(k) description of plan contributions | contribution of 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 | $ 1,500,000 | $ 1,200,000 | $ 4,800,000 | $ 3,900,000 |
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% | ||
Employees Company's common stock shares purchase limit amount | $ 25,000 | |||
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 | 39,137 | 46,508 | ||
Compensation expense related to ESPP | $ 400,000 | $ 400,000 | $ 1,300,000 | $ 900,000 |
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 Net Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Numerator: | ||||||||
Net income | $ 39,152 | $ 48,762 | $ 47,282 | $ 28,769 | $ 35,722 | $ 41,160 | $ 135,196 | $ 105,651 |
Less: income allocable to participating securities | (18) | (36) | (62) | (134) | ||||
Income allocable to common shares | 39,134 | 28,733 | 135,134 | 105,517 | ||||
Add back: undistributed earnings allocable to participating securities | 18 | 36 | 62 | 134 | ||||
Less: undistributed earnings reallocated to participating securities | (18) | (36) | (61) | (132) | ||||
Numerator for diluted earnings per share | $ 39,134 | $ 28,733 | $ 135,135 | $ 105,519 | ||||
Denominator: | ||||||||
Basic weighted average shares outstanding | 57,654 | 57,727 | 57,528 | 57,785 | ||||
Dilutive effect of unvested restricted stock | 729 | 818 | 875 | 939 | ||||
Diluted weighted average shares outstanding | 58,383 | 58,545 | 58,403 | 58,724 | ||||
Earnings per share: | ||||||||
Earnings per share, basic | $ 0.68 | $ 0.50 | $ 2.35 | $ 1.83 | ||||
Earnings per share, diluted | $ 0.67 | $ 0.49 | $ 2.31 | $ 1.80 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Nonvested Restricted Stock Awards Activity (Detail) | 9 Months Ended |
Sep. 30, 2019$ / 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 | 806,500 |
Restricted Stock Awards, Granted | shares | 338,900 |
Restricted Stock Awards, Vested | shares | (318,500) |
Restricted Stock Awards, Forfeited | shares | (77,800) |
Unvested shares of restricted stock outstanding at end of period | shares | 749,100 |
Unvested shares of restricted stock outstanding, Weighted Average Grant Date Fair Value, at beginning of period | $ / shares | $ 67.54 |
Granted, Weighted Average Grant Date Fair Value | $ / shares | 151.10 |
Vested, Weighted Average Grant Date Fair Value | $ / shares | 64.06 |
Forfeited, Weighted Average Grant Date Fair Value | $ / shares | 85.82 |
Unvested shares of restricted stock outstanding, Weighted Average Grant Date Fair Value, at end of period | $ / shares | $ 104.92 |
Market-Based Restricted Stock Awards [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
Restricted Stock Awards, Granted | shares | 281,000 |
Restricted Stock Awards, Vested | shares | (280,400) |
Restricted Stock Awards, Forfeited | shares | (600) |
Granted, Weighted Average Grant Date Fair Value | $ / shares | $ 102.76 |
Vested, Weighted Average Grant Date Fair Value | $ / shares | 102.76 |
Forfeited, Weighted Average Grant Date Fair Value | $ / shares | $ 102.57 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) $ in Millions | May 31, 2019 | Apr. 29, 2019 | Apr. 23, 2019 | Jan. 31, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 |
Software and Capitalized Software Costs [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||
Capitalized compensation cost | $ 0.3 | $ 0.4 | $ 4.3 | $ 3.3 | ||||
Restricted Stock [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||
Compensation expense related to ESPP | 4.5 | $ 4.5 | 41.1 | $ 31.5 | ||||
Total unrecognized compensation cost related to unvested restricted stock | $ 62.6 | $ 62.6 | ||||||
Unrecognized compensation expected for unvested shares to be recognized | 2 years 4 months 24 days | |||||||
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 | Time-Based Shares that will vest in either three or four equal tranches annually, generally beginning on the first anniversary of the grant date, provided that the recipient is employed by, or providing services to, the Company on the applicable vesting date | 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 | over periods ranging from two to four years beginning on a specified initial vesting date and thereafter on the anniversaries | |||||||
Restricted Stock [Member] | Executive Officers [Member] | Minimum [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 Period | 2 years | |||||||
Restricted Stock [Member] | Executive Officers [Member] | Maximum [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 Period | 4 years | |||||||
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 | 280,960 | |||||||
Restricted Stock [Member] | Vested 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 $8.65 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 | $ 8,650 | |||||||
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 | 239,109 | |||||||
Restricted Stock [Member] | Vest 50% on the first date that the Company's TEV equaled or exceeded $9.35 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 | $ 9,350 | |||||||
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 of common stock issued | 520,069 | |||||||
Restricted Stock [Member] | LTIP [Member] | Non Executive Employees [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||
Restricted shares of common stock issued | 26,000 | 65,255 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights | Time-Based Shares that will vest over periods ranging from two to four years, provided that the recipient is employed by, or providing services to, the Company on the applicable vesting date. | |||||||
Restricted Stock [Member] | LTIP [Member] | Non Executive Employees [Member] | Minimum [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 Period | 2 years | |||||||
Restricted Stock [Member] | LTIP [Member] | Non Executive Employees [Member] | Maximum [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 Period | 4 years | |||||||
Restricted Stock [Member] | LTIP [Member] | Non Employee Members [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||||
Restricted shares of common stock issued | 6,816 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights | 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 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Market-Based Shares Vesting Activity (Detail) - Market-Based Shares [Member] - Market-based [Member] $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($)shares | |
Vest Date February 13, 2019 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
Date Vested | Feb. 13, 2019 |
Number of Shares Vested | 140,200 |
Compensation Cost Recognized Upon Vesting | $ | $ 14,900 |
Shares Withheld for Taxes | 54,500 |
Vest Date February 22, 2019 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
Date Vested | Feb. 22, 2019 |
Number of Shares Vested | 140,200 |
Compensation Cost Recognized Upon Vesting | $ | $ 13,900 |
Shares Withheld for Taxes | 55,500 |
Stock-Based Compensation - Su_3
Stock-Based Compensation - Summary of Market-Based Shares Vesting Activity (Parenthetical) (Detail) - Market-Based Shares [Member] - Market-based [Member] $ in Millions | Sep. 30, 2019USD ($) |
Vest Date February 13, 2019 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
TEV | $ 8,650 |
Vest Date February 22, 2019 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
TEV | $ 9,350 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 18.00% | 20.00% |