Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Dec. 31, 2014 | Jan. 30, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | Paylocity Holding Corp | |
Entity Central Index Key | 1591698 | |
Document Type | 10-Q | |
Document Period End Date | 31-Dec-14 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -24 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 50,486,538 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q2 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Jun. 30, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $89,480 | $78,848 |
Accounts receivable, net | 1,030 | 756 |
Prepaid expenses and other | 2,978 | 2,694 |
Deferred income tax assets, net | 684 | 706 |
Total current assets before funds held for clients | 94,172 | 83,004 |
Funds held for clients | 858,139 | 417,261 |
Total current assets | 952,311 | 500,265 |
Long-term prepaid expenses | 222 | 313 |
Capitalized software, net | 5,704 | 5,093 |
Property and equipment, net | 15,216 | 13,125 |
Intangible assets, net | 5,940 | 6,320 |
Goodwill | 3,035 | 3,035 |
Total assets | 982,428 | 528,151 |
Current liabilities: | ||
Accounts payable | 3,373 | 2,133 |
Taxes payable | 19 | 5 |
Consideration related to acquisition | 400 | 2,985 |
Accrued expenses | 11,720 | 10,744 |
Total current liabilities before client fund obligations | 15,512 | 15,867 |
Client fund obligations | 858,139 | 417,261 |
Total current liabilities | 873,651 | 433,128 |
Deferred rent | 2,905 | 3,175 |
Deferred income tax liabilities, net | 731 | 714 |
Total liabilities | 877,287 | 437,017 |
Stockholders' equity: | ||
Preferred stock, $0.001 par value, 5,000 shares authorized, no shares issued and outstanding at June 30, 2014 and December 31, 2014 | ||
Common stock, $0.001 par value, 155,000 shares authorized at June 30, and December 31, 2014, 49,564 shares issued and outstanding at June 30, 2014; and 50,487 shares issued and outstanding at December 31, 2014 | 50 | 50 |
Additional paid-in capital | 150,557 | 125,255 |
Accumulated deficit | -45,466 | -34,171 |
Total stockholders' equity | 105,141 | 91,134 |
Total liabilities and stockholders' equity | $982,428 | $528,151 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Jun. 30, 2014 |
In Thousands, except Per Share data, unless otherwise specified | ||
Consolidated Balance Sheets | ||
Preferred Stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred Stock, shares authorized | 5,000 | 5,000 |
Preferred Stock, shares issued | 0 | 0 |
Preferred Stock, shares outstanding | 0 | 0 |
Common Stock, par value (in dollars per share) | $0.00 | $0.00 |
Common Stock, shares authorized | 155,000 | 155,000 |
Common Stock, shares issued | 50,487 | 49,564 |
Common Stock, shares outstanding | 50,487 | 49,564 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 |
Revenues: | ||||
Recurring fees | $32,055 | $22,145 | $61,197 | $42,883 |
Interest income on funds held for clients | 390 | 378 | 753 | 731 |
Total recurring revenues | 32,445 | 22,523 | 61,950 | 43,614 |
Implementation services and other | 1,868 | 1,382 | 3,472 | 2,660 |
Total revenues | 34,313 | 23,905 | 65,422 | 46,274 |
Cost of revenues: | ||||
Recurring revenues | 11,953 | 9,081 | 22,010 | 17,074 |
Implementation services and other | 6,093 | 4,237 | 11,488 | 7,991 |
Total cost of revenues | 18,046 | 13,318 | 33,498 | 25,065 |
Gross profit | 16,267 | 10,587 | 31,924 | 21,209 |
Operating expenses: | ||||
Sales and marketing | 9,401 | 5,423 | 18,479 | 10,612 |
Research and development | 5,271 | 2,347 | 9,298 | 4,303 |
General and administrative | 8,061 | 5,228 | 15,509 | 9,139 |
Total operating expenses | 22,733 | 12,998 | 43,286 | 24,054 |
Operating loss | -6,466 | -2,411 | -11,362 | -2,845 |
Other income (expense) | 80 | 22 | 129 | 50 |
Loss before income taxes | -6,386 | -2,389 | -11,233 | -2,795 |
Income tax (benefit) expense | 34 | -877 | 62 | -1,239 |
Net loss | -6,420 | -1,512 | -11,295 | -1,556 |
Net loss attributable to common stockholders | ($6,420) | ($2,293) | ($11,295) | ($3,118) |
Net loss per share attributable to common stockholders, basic and diluted | ($0.13) | ($0.07) | ($0.23) | ($0.10) |
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted | 49,775 | 31,988 | 49,670 | 31,988 |
Consolidated_Statements_of_Cha
Consolidated Statements of Changes in Stockholders' Equity (Deficit) (USD $) | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
In Thousands, except Share data, unless otherwise specified | ||||
Balance at Jun. 30, 2014 | $50 | $125,255 | ($34,171) | $91,134 |
Balance (in shares) at Jun. 30, 2014 | 49,564,000 | 49,564,000 | ||
Increase (Decrease) in Stockholders' Equity | ||||
Follow-on offering, net of issuance costs | 18,384 | 18,384 | ||
Follow-on offering, net of issuance costs (in shares) | 750,000 | |||
Stock-based compensation expense | 7,447 | 7,447 | ||
Stock options exercised | 617 | 617 | ||
Stock options exercised (in shares) | 104,000 | |||
Issuance of common stock upon vesting of restricted stock units (in shares) | 100,000 | |||
Issuance of common stock under employee stock purchase plan | 670 | 670 | ||
Issuance of common stock under employee stock purchase plan (in shares) | 36,000 | |||
Net settlement for taxes and/or exercise price related to equity awards | -1,816 | -1,816 | ||
Net settlement for taxes and/or exercise price related to equity awards | -67,000 | |||
Net loss | -11,295 | -11,295 | ||
Balance at Dec. 31, 2014 | $50 | $150,557 | ($45,466) | $105,141 |
Balance (in shares) at Dec. 31, 2014 | 50,487,000 | 50,487,000 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Cash flows from operating activities: | ||
Net loss | ($11,295) | ($1,556) |
Adjustments to reconcile to net cash provided by operating activities: | ||
Stock-based compensation | 7,137 | 349 |
Depreciation and amortization | 4,160 | 2,924 |
Deferred income tax (benefit) expense | 39 | -1,239 |
Provision for doubtful accounts | 71 | 6 |
Loss on disposal of equipment | 42 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | -345 | 50 |
Prepaid expenses | -193 | -715 |
Trade accounts payable | 697 | 778 |
Accrued expenses | 536 | 295 |
Net cash provided by operating activities | 849 | 892 |
Cash flows from investing activities: | ||
Capitalized internally developed software costs | -1,579 | -1,859 |
Purchases of property and equipment | -4,165 | -2,787 |
Payments for acquisition | -2,585 | |
Net change in funds held for clients | -440,878 | -135,858 |
Net cash used in investing activities | -449,207 | -140,504 |
Cash flows from financing activities: | ||
Net change in client funds obligation | 440,878 | 135,858 |
Proceeds from follow-on offering, net of cash paid for issuance costs | -18,716 | |
Payments on initial public offering costs | -75 | -698 |
Proceeds from exercise of stock options | -181 | |
Proceeds from employee stock purchase plan | 670 | |
Taxes paid related to net share settlement of equity awards | -1,380 | |
Principal payments on long-term debt | -313 | |
Net cash provided by financing activities | 458,990 | 134,847 |
Net Change in Cash and Cash Equivalents | 10,632 | -4,765 |
Cash and Cash Equivalents-Beginning of Year | 78,848 | 7,594 |
Cash and Cash Equivalents-End of Year | 89,480 | 2,829 |
Supplemental disclosure of non-cash investing and financing activities | ||
Build-out allowance received from landlord | 580 | |
Deferred offering costs included in accounts payable | 863 | |
Unpaid follow-on offering costs included in accrued expenses | 332 | |
Purchases of property and equipment, accrued but not paid | 1,366 | 759 |
Supplemental disclosure of cash flow information | ||
Cash paid for income taxes | 26 | 195 |
Cash paid for interest | $48 |
Organization_and_Description_o
Organization and Description of Business | 6 Months Ended |
Dec. 31, 2014 | |
Organization and Description of Business | |
Organization and Description of Business | (1) Organization and Description of Business |
Paylocity Holding Corporation (the “Company”), through its wholly owned subsidiary, Paylocity Corporation, is a cloud-based provider of payroll and human capital management software solutions for medium-sized organizations. Services are provided in a Software-as-a-Service (“SaaS”) delivery model utilizing the Company’s cloud-based platform. Payroll services include collection, remittance and reporting of payroll liabilities to the appropriate federal, state and local authorities. | |
Follow-On Offering | |
In December 2014, the Company completed a follow-on offering in which it issued and sold 750 shares of common stock and existing shareholders sold 3,850 shares of common stock at a public offering price of $26.25 per share. The Company did not receive any proceeds from the sale of common stock by the existing shareholders. The Company received net proceeds of $18,384 after deducting underwriting discounts and commissions of $935 and other offering expenses of $368. | |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 6 Months Ended |
Dec. 31, 2014 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | (2) Summary of Significant Accounting Policies |
(a) Consolidation and Use of Estimates | |
These unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The unaudited consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All intercompany accounts and transactions have been eliminated in consolidation. | |
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the allowance for doubtful accounts, software developed for internal use, valuation and useful lives of long-lived assets, definite-lived intangibles, goodwill, stock-based compensation, valuation of net deferred income tax assets and the best estimate of selling price for revenue recognition purposes. Future events and their effects cannot be predicted with certainty; accordingly, accounting estimates require the exercise of judgment. Accounting estimates used in the preparation of these consolidated financial statements change as new events occur, as more experience is acquired, as additional information is obtained and as the operating environment changes. | |
(b) Interim Unaudited Consolidated Financial Information | |
The accompanying unaudited consolidated financial statements and notes have been prepared in accordance with GAAP and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, the interim financial information includes all adjustments of a normal recurring nature necessary for a fair presentation of the results of operations, financial position, changes in stockholders’ equity and cash flows. The results of operations for the three-month and six-month periods ended December 31, 2014 are not necessarily indicative of the results for the full year or the results for any future periods. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes for the year ended June 30, 2014 included in the Company’s Annual Report on Form 10-K filed with the SEC on August 22, 2014. | |
(c) Income Taxes | |
Differences in the normal relationship between the income tax expense (benefit) and pre-tax income (loss) materially result from the existence of a valuation allowance recorded against the preponderance of the net deferred tax assets. | |
(d) Stock-Based Compensation | |
The Company recognizes all employee stock-based compensation as a cost in the financial statements. Equity-classified awards, including those under the 2014 Employee Stock Purchase Plan (“ESPP”), are measured at the grant date fair value of the award and expense is recognized, net of assumed forfeitures, on a straight-line basis over the requisite service period for each separately vesting portion of the award. The Company estimates grant date fair value using the Black-Scholes option-pricing model and periodically updates the assumed forfeiture rates for actual experience over the option vesting term or the term of the ESPP purchase period. | |
(e) Recently Issued Accounting Standards | |
In May 2014, the Financial Accounting Standard Board (FASB) issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). ASU 2014-09 supersedes a majority of existing revenue recognition guidance under US GAAP, and requires companies to recognize revenue when it transfers goods or services to a customer in an amount that reflects the consideration to which a company expects to be entitled. Companies may need to apply more judgment and estimation techniques or methods while recognizing revenue, which could result in additional disclosures to the financial statements. Topic 606 allows for either a “full retrospective” adoption or a “modified retrospective” adoption. The Company is currently evaluating which adoption method it will use. Early application is not permitted. The Company plans on adopting ASU 2014-09 beginning July 1, 2017 and is currently assessing the potential effects of these changes to its consolidated financial statements. | |
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s consolidated financial statements upon adoption. | |
Balance_Sheet_Information
Balance Sheet Information | 6 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Balance Sheet Information | ||||||||||
Balance Sheet Information | (3) Balance Sheet Information | |||||||||
The following tables provide details of selected consolidated balance sheet items: | ||||||||||
Activity in the allowance for doubtful accounts was as follows: | ||||||||||
Balance at June 30, 2014 | $ | 126 | ||||||||
Charged to expense | 71 | |||||||||
Write-offs | (39 | ) | ||||||||
Balance at December 31, 2014 | $ | 158 | ||||||||
Capitalized software and accumulated amortization were as follows: | ||||||||||
June 30, | December 31, | |||||||||
2014 | 2014 | |||||||||
Internally developed software | $ | 19,863 | $ | 21,752 | ||||||
Accumulated amortization | (14,770 | ) | (16,048 | ) | ||||||
Capitalized software, net | $ | 5,093 | $ | 5,704 | ||||||
Amortization of capitalized internal-use software costs is included in Cost of Revenues-Recurring Revenues and amounted to $624 and $685 for the three months ended December 31, 2013 and 2014, respectively and $1,229 and $1,278 for the six months ended December 31, 2013 and 2014, respectively. | ||||||||||
Property and equipment consist of the following: | ||||||||||
June 30, | December 31, | |||||||||
2014 | 2014 | |||||||||
Office equipment | $ | 1,449 | $ | 1,716 | ||||||
Computer equipment | 7,726 | 11,059 | ||||||||
Furniture and fixtures | 2,317 | 2,351 | ||||||||
Software | 4,963 | 5,133 | ||||||||
Leasehold improvements | 6,059 | 6,390 | ||||||||
Time clocks rented by clients | 2,360 | 2,698 | ||||||||
24,874 | 29,347 | |||||||||
Accumulated depreciation | (11,749 | ) | (14,131 | ) | ||||||
Property and equipment, net | $ | 13,125 | $ | 15,216 | ||||||
Depreciation expense amounted to $909 and $1,354 for the three months ended December 31, 2013 and 2014, respectively and $1,695 and $2,502 for the six months ended December 31, 2013 and 2014, respectively. | ||||||||||
The components of accrued expenses were as follows: | ||||||||||
June 30, | December 31, | |||||||||
2014 | 2014 | |||||||||
Accrued payroll and personnel costs | $ | 8,781 | $ | 9,481 | ||||||
Current portion of deferred rent | 577 | 669 | ||||||||
Other | 1,386 | 1,570 | ||||||||
Total accrued expenses | $ | 10,744 | 11,720 | |||||||
Intangible assets consist of the following: | ||||||||||
June | December | Weighted | ||||||||
30, 2014 | 31, 2014 | Average | ||||||||
Useful | ||||||||||
Life | ||||||||||
Client relationships | $ | 6,180 | $ | 6,180 | 9 years | |||||
Non-solicitation agreement | 220 | 220 | 3 years | |||||||
Total | 6,400 | 6,400 | ||||||||
Accumulated amortization | (80 | ) | (460 | ) | ||||||
Intangible assets, net | $ | 6,320 | $ | 5,940 | ||||||
There was no amortization expense for acquired intangible assets for the three months or six months ended December 31, 2013. Amortization expense for acquired intangible assets was $190 for the three months and $380 for the six months ended December 31, 2014. | ||||||||||
Fair_Value_Measurement
Fair Value Measurement | 6 Months Ended |
Dec. 31, 2014 | |
Fair Value Measurement | |
Fair Value Measurement | (4) Fair Value Measurement |
The Company applies the fair value measurement and disclosure provisions of ASC 820, Fair Value Measurements and Disclosures, and ASU 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: | |
Level 1—Quoted prices in active markets for identical assets and liabilities. | |
Level 2—Quoted prices in active markets for similar assets and liabilities, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. | |
Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. | |
Substantially all of the Company’s assets that are measured at fair value on a recurring basis are measured using Level 1 inputs. The Company considers the recorded value of its financial assets and liabilities, which consist primarily of cash and cash equivalents, accounts receivable, and accounts payable, to approximate the fair value of the respective assets and liabilities at June 30, 2014 and December 31, 2014 based upon the short-term nature of the assets and liabilities. | |
Benefit_Plans
Benefit Plans | 6 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Benefit Plans | ||||||||||||||
Benefit Plans | (5) Benefit Plans | |||||||||||||
(a) Equity Incentive Plan | ||||||||||||||
The Company maintains a 2008 Equity Incentive Plan (the “2008 Plan”) and a 2014 Equity Incentive Plan (the “2014 Plan”) pursuant to which the Company has reserved 6,800 shares of its common stock for issuance to its employees, directors and non-employee third parties. The 2014 Plan serves as the successor to the 2008 plan and permits the granting of options to purchase common stock and other equity incentives at the discretion the compensation committee of the Company’s board of directors. No new awards will be issued under the 2008 Plan as of the effective date of the 2014 Plan. Outstanding awards under the 2008 Plan continue to be subject to the terms and conditions of the 2008 Plan. | ||||||||||||||
Under the 2008 and 2014 Plans, the exercise price of each option is not less than the fair value of a share of common stock on the grant date. As of December 31, 2014, the Company had 2,036 shares allocated to the 2014 Plan, but not yet issued or subject to outstanding options or awards. Generally, the Company issues previously unissued shares for the exercise of stock options; however, previously acquired shares may be reissued to satisfy future issuances. The options typically vest ratably over a three or four year period and expire 10 years from the grant date. Compensation expense for the fair value of the options at their grant date is recognized ratably over the vesting schedule. | ||||||||||||||
Stock-based compensation expense related to stock options and the vesting of Restricted Stock Awards (“RSAs”) and Restricted Stock Units (“RSUs”) is included in the following line items in the accompanying unaudited consolidated statements of operations: | ||||||||||||||
Three months ended | Six months ended | |||||||||||||
December 31, | December 31, | |||||||||||||
2013 | 2014 | 2013 | 2014 | |||||||||||
Cost of revenue — recurring | $ | — | $ | 466 | $ | — | $ | 814 | ||||||
Cost of revenue — non-recurring | — | 386 | — | 677 | ||||||||||
Sales and marketing | — | 894 | — | 1,778 | ||||||||||
Research and development | — | 849 | — | 1,384 | ||||||||||
General and administrative | 168 | 1,259 | 349 | 2,484 | ||||||||||
Total stock-based compensation | $ | 168 | $ | 3,854 | $ | 349 | $ | 7,137 | ||||||
In addition, the Company capitalized $148 and $310 of stock compensation costs in its internal use software in the three-month and six-month periods ended December 31, 2014, respectively. No such amounts were capitalized in internal use software in the three and six month periods ended December 31, 2013. | ||||||||||||||
The Company values stock options using the Black-Scholes option-pricing model, which requires the input of subjective assumptions, including the risk-free rate, expected life, expected stock price volatility and dividend yield. The risk-free interest rate assumption is based upon observed interest rates for U.S. Treasury securities consistent with the expected term of the Company’s employee stock options. The expected life represents the period of time the stock options are expected to be outstanding and is based on the simplified method. Under the simplified method, the expected life of an option is presumed to be the mid-point between the vesting date and the end of the contractual term. The Company utilizes the simplified method due to the lack of sufficient historical exercise data to provide a reasonable basis upon which to otherwise estimate the expected life of the stock options. The Company has a limited history of trading as a public company. Therefore, the expected volatility is based on historical volatilities for publicly traded stock of comparable companies over the estimated expected life of the stock options. The Company assumed no dividend yield because it does not expect to pay dividends in the near future, which is consistent with the Company’s history of not paying dividends. | ||||||||||||||
The following table summarizes the assumptions used for estimating the fair value of stock options granted for the six months ended December 31: | ||||||||||||||
Period ended | ||||||||||||||
December 31, | ||||||||||||||
2013 | 2014 | |||||||||||||
Valuation assumptions: | ||||||||||||||
Expected dividend yield | 0 | % | 0 | % | ||||||||||
Expected volatility | 29.5 | % | 43.9 | % | ||||||||||
Expected term (years) | 4.0 | 6.25 | ||||||||||||
Risk-free interest rate | 0.52 | % | 1.91 | % | ||||||||||
The following table summarizes changes during the quarter in the number of shares available for grant under our equity incentive plans: | ||||||||||||||
Number of | ||||||||||||||
Shares | ||||||||||||||
Available for grant at July 1, 2014 | 2,581 | |||||||||||||
RSU’s granted | (384 | ) | ||||||||||||
Options granted | (322 | ) | ||||||||||||
Shares withheld in settlement of taxes and exercise price | 67 | |||||||||||||
Forfeitures | 228 | |||||||||||||
Shares removed | (134 | ) | ||||||||||||
Available for grant at December 31, 2014 | 2,036 | |||||||||||||
Shares removed represents forfeitures of shares and shares withheld in settlement of taxes and payment of exercise price related to grants made under the 2008 Plan. As noted above, no new awards will be issued under the 2008 Plan. | ||||||||||||||
The table below presents stock option activity during the six months ended December 31, 2014: | ||||||||||||||
Outstanding Options | ||||||||||||||
Number of | Weighted | Weighted | Aggregate | |||||||||||
shares | average | average | intrinsic | |||||||||||
exercise | remaining | value | ||||||||||||
price | contractual | |||||||||||||
term | ||||||||||||||
Balance at July 1, 2014 | 4,388 | $ | 10 | 8.58 | $ | 51,017 | ||||||||
Options granted | 322 | 24.8 | ||||||||||||
Options forfeited | (219 | ) | 12.62 | |||||||||||
Options exercised | (104 | ) | 5.98 | |||||||||||
Balance at December 31, 2014 | 4,387 | $ | 11.05 | 8.15 | $ | 66,065 | ||||||||
Options exercisable at December 31, 2014 | 1,341 | $ | 2.91 | 6.49 | $ | 31,102 | ||||||||
Options vested and expected to vest at December 31, 2014 | 4,192 | $ | 10.77 | 8.1 | $ | 64,319 | ||||||||
There were no options granted during the three-month periods ended December 31, 2013 and 2014, respectively. The weighted average grant date fair value of options granted during the six-month periods ended December 31, 2013 and 2014 was $1.71 and $11.15, respectively. The total intrinsic value of options exercised during the three and six month periods ended December 31, 2014 was $1,839 and $2,063, respectively. There were no options exercised in the three-month or six-month periods ended December 31, 2013. At December 31, 2014, there was $9,640 of total unrecognized compensation cost, net of estimated forfeitures, related to unvested stock option granted under the Plan. That cost is expected to be recognized over a weighted average period of 1.73 years. | ||||||||||||||
The Company may also grant RSAs and RSUs under the 2014 Plan with terms determined at the discretion of the Compensation Committee of the Company’s Board of Directors. The following table represents restricted stock unit activity during the six months ended December 31, 2014: | ||||||||||||||
Units | Weighted | |||||||||||||
average | ||||||||||||||
grant date | ||||||||||||||
fair value | ||||||||||||||
RSU balance at July 1, 2014 | 102 | $ | 17 | |||||||||||
RSUs granted | 384 | 24.75 | ||||||||||||
RSUs vested | (100 | ) | 17.57 | |||||||||||
RSUs cancelled/forfeited | (9 | ) | 24.8 | |||||||||||
RSU balance at December 31, 2014 | 377 | $ | 24.57 | |||||||||||
RSUs expected to vest at December 31, 2014 | 342 | $ | 24.55 | |||||||||||
At December 31, 2014, there was $6,483 of total unrecognized compensation cost, net of estimated forfeitures, related to unvested restricted stock awards granted under the Plan. That cost is expected to be recognized over a weighted average period of 2.13 years. | ||||||||||||||
(b) Employee Stock Purchase Plan | ||||||||||||||
The Company’s 2014 Employee Stock Purchase Plan (“ESPP”) was adopted by the Board of Directors and approved by the stockholders on February 6, 2014 and was effective upon completion of the Company’s initial public offering. | ||||||||||||||
Under the Company’s ESPP, the Company can grant stock purchase rights to all eligible employees during specific offering periods not to exceed twenty-seven months. Each offering period will begin on the first trading day on or after May 16 and November 16 of each year, effective after the first offering period after the Company’s initial public offering (“IPO”). Shares are purchased through employees’ payroll deductions, up to a maximum of 10% of employees’ compensation for each purchase period, at a purchase price equal to 85% of the lesser of the fair market value of the Company’s common stock at the first trading day of the applicable offering period or the purchase date. Participants may purchase up to $25 worth of common stock or 2 shares of common stock in any one year. The ESPP is considered compensatory and results in compensation expense. | ||||||||||||||
A total of one-million shares of common stock were reserved for future issuance under the ESPP, of which 36 have been issued as of December 31, 2014. The number of shares of common stock reserved for issuance under the ESPP will increase automatically each year, beginning on January 1, 2015 and continuing through and including January 1, 2024. The number of shares added each year will be equal to the lesser of (a) 400, (b) seventy-five one hundredths percent (0.75%) of the number of shares of common stock of the Company issued and outstanding on the immediately preceding December 31, or (c) an amount determined by the Company’s board of directors. | ||||||||||||||
The Company commenced its initial ESPP four-month offering period on July 16, 2014 and commenced a six-month offering period on November 16, 2014. The Company recorded compensation expense attributable to the ESPP of $154 and $284 for the three-month and six-month periods ended December 31, 2014, respectively, which is included in the summary of stock-based compensation expense above. The grant date fair value of the ESPP offering periods was estimated using the following weighted average assumptions: | ||||||||||||||
Period ended | ||||||||||||||
December 31, | ||||||||||||||
2013 | 2014 | |||||||||||||
Valuation assumptions: | ||||||||||||||
Expected dividend yield | N/A | 0% | ||||||||||||
Expected volatility | N/A | 35.5 – 41.7% | ||||||||||||
Expected term (years) | N/A | 0.3 – 0.5 | ||||||||||||
Risk-free interest rate | N/A | 0.04 – 0.06% | ||||||||||||
(c) 401(k) Plan | ||||||||||||||
The Company maintains a 401(k) plan with a safe harbor matching provision that covers all eligible employees. The Company matches 50% of the employees’ contributions up to 6% of their gross pay. Contributions were approximately $229 and $327 for the three-month periods ended December 31, 2013 and 2014, respectively and were approximately $477 and $709 for the six-month periods ended December 31, 2013 and 2014, respectively. | ||||||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 6 Months Ended |
Dec. 31, 2014 | |
Commitments and Contingencies | |
Commitments and Contingencies | (6) Commitments and Contingencies |
Reseller Agreements | |
The Company had agreements with two organizations that sell the Company’s offerings and services in defined areas of the country, one of which was terminated in May 2014. The Company exercised its right to terminate the first reseller agreement and acquired substantially all of the assets of the reseller in May 2014 as described in Note 5 of the audited consolidated financial statements and related notes for the year ended June 30, 2014 included in the Company’s Annual Report on Form 10-K filed with the SEC on August 22, 2014. The Company paid the first reseller $737 and $1,351 during the three and six months ended December 31, 2013, respectively, under the terminated reseller agreement. The Company paid the first reseller $200 and $2,585 during the three and six months ended December 31, 2014, respectively, under the terms of the asset purchase agreement signed at closing in May 2014. | |
The initial term of the second reseller agreement commenced in June 2009 and is set to expire in June 2016 unless renewed or terminated. The second reseller agreement originally provided that the reseller may terminate the agreement by providing nine months’ prior notice or upon an initial public offering by the Company. The Company amended this agreement in December of 2013 to provide that the reseller may not give a nine-month termination notice until after the earlier of (i) six months following the closing of an initial public offering by the Company or (ii) December 31, 2014. In addition, the Company, but not the reseller, has the right to terminate the agreement at any time. If a termination were to occur, the purchase price of the assets would be equal to 3.3 times the net revenues of the reseller for the 12 months preceding the termination effective date. The Company paid the second reseller $471 and $695 during the three-month periods ended December 31, 2013 and 2014, respectively and $963 and $1,330 during the six-month periods ended December 31, 2013 and 2014, respectively. | |
Earnings_Per_Share
Earnings Per Share | 6 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Earnings Per Share | ||||||||||||||
Earnings Per Share | (7) Earnings Per Share | |||||||||||||
For the periods presented prior to the Company’s IPO, basic and diluted net loss per common share is presented in conformity with the two-class method required for participating securities. Concurrently with the closing of the Company’s IPO on March 24, 2014, all shares of outstanding Redeemable Convertible Preferred Stock automatically converted into 11,933 shares of the Company’s common stock. Following the date of the IPO, the two-class method was no longer required as the Company has one class of securities issued and outstanding. | ||||||||||||||
Prior to the conversion of the Redeemable Convertible Preferred Stock, holders of Series A and Series B Redeemable Convertible Preferred Stock each were entitled to liquidation preferences payable prior and in preference to any dividends on any shares of the Company’s common stock. In the event a dividend was paid on common stock, the holders of Redeemable Convertible Preferred Stock were entitled to a proportionate share of any such dividend as if they were holders of common stock (on an as-if converted basis). The holders of the Company’s Redeemable Convertible Preferred Stock did not have a contractual obligation to share in the losses of the Company. The Company considered its Redeemable Convertible Preferred Stock to be participating securities and, in accordance with the two-class method, earnings allocated to Redeemable Convertible Preferred Stock and the related number of outstanding shares of Redeemable Convertible Preferred Stock have been excluded from the computation of basic and diluted net loss per common share. | ||||||||||||||
Under the two-class method, net loss attributable to common stockholders is determined by allocating undistributed earnings, calculated as net loss less current period Redeemable Convertible Preferred Stock cumulative dividends, between common stock and Redeemable Convertible Preferred Stock. In computing diluted net loss attributable to common stockholders, undistributed earnings are re-allocated to reflect the potential impact of dilutive securities. | ||||||||||||||
Basic net loss per common share is computed using the weighted-average number of common shares outstanding during the period. Since the Series A and Series B Redeemable Convertible Preferred Stock were entitled to participate should any common stock dividends have been declared but were not obligated to participate in any losses generated by the Company, basic net income per share is computed using the weighted-average number of common shares outstanding during the period plus the Series A and Series B Redeemable Convertible Preferred Stock on a weighted-average basis. | ||||||||||||||
Diluted net loss per share is computed using the weighted-average number of common shares outstanding during the period and, if dilutive, potential common shares outstanding during the period. Since the Series A and Series B Redeemable Convertible Preferred Stock were entitled to participate should any common stock dividends be declared but were not obligated to participate in any losses generated by the Company, diluted net income per share is computed using the weighted-average number of common shares plus the Series A and Series B Redeemable Convertible Preferred Stock on a weighted-average basis and, if dilutive, potential common shares outstanding during the period. The Company’s potential common shares consist of the incremental common shares issuable upon the exercise of stock options. The dilutive effect of outstanding stock options is reflected in diluted earnings per share by application of the treasury stock method. | ||||||||||||||
The following table presents the calculation of basic and diluted net loss per share: | ||||||||||||||
Three months ended | Six months ended | |||||||||||||
December 31, | December 31, | |||||||||||||
2013 | 2014 | 2013 | 2014 | |||||||||||
Basic net loss per share: | ||||||||||||||
Numerator: | ||||||||||||||
Net Loss | $ | (1,512 | ) | $ | (6,420 | ) | $ | (1,556 | ) | $ | (11,295 | ) | ||
Less: Preferred dividend rights attributable to participating securities | (781 | ) | — | (1,562 | ) | — | ||||||||
Net loss attributable to common stockholders | $ | (2,293 | ) | $ | (6,420 | ) | $ | (3,118 | ) | $ | (11,295 | ) | ||
Denominator: | ||||||||||||||
Weighted-average shares used in computing net loss per share attributable to common stockholders: | ||||||||||||||
Basic (in thousands) | 31,988 | 49,775 | 31,988 | 49,670 | ||||||||||
Weighted-average effect of potentially dilutive shares: | ||||||||||||||
Employee stock options and restricted stock units (in thousands) | — | — | — | — | ||||||||||
Diluted (in thousands) | 31,988 | 49,775 | 31,988 | 49,670 | ||||||||||
Net loss per share attributable to common stockholders, basic and diluted | $ | (0.07 | ) | $ | (0.13 | ) | $ | (0.10 | ) | $ | (0.23 | ) | ||
The following table summarizes the outstanding employee stock options, restricted stock units, shares purchasable via the employee stock purchase plan as of the balance sheet date, and redeemable convertible preferred stock that were excluded from the diluted per share calculation for the periods presented because to include them would have been anti-dilutive: | ||||||||||||||
Three months ended | Six months ended | |||||||||||||
December 31, | December 31, | |||||||||||||
2013 | 2014 | 2013 | 2014 | |||||||||||
Redeemable convertible preferred stock | 11,933 | — | 11,933 | — | ||||||||||
Restricted stock units | — | 377 | — | 377 | ||||||||||
Employee stock purchase plan shares | — | 12 | — | 12 | ||||||||||
Employee stock options | 2,376 | 4,387 | 2,376 | 4,387 | ||||||||||
Total | 14,309 | 4,776 | 14,309 | 4,776 | ||||||||||
RSAs were excluded from both basic and diluted earnings per share calculations for the three-month and six-month periods ended December 31, 2013 as the vesting conditions had not been met as of that date. | ||||||||||||||
Income_Taxes
Income Taxes | 6 Months Ended |
Dec. 31, 2014 | |
Income Taxes | |
Income Taxes | (8) Income Taxes |
The Company’s quarterly provision for income taxes is based on an estimated annual income tax rate. The Company’s quarterly provision for income taxes also includes the tax impact of certain unusual or infrequently occurring items, if any, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, in the interim period in which they occur. | |
The Company recorded income tax (benefit) expense of $(877) and $34 for the three-month periods ended December 31, 2013 and 2014, respectively and $(1,239) and $62 for the six-month periods ended December 31, 2013 and 2014, respectively. The Company’s effective rate for the three and six months ended December 31, 2013 differed from statutory rates primarily due to federal and state research and development credits and expenses not deductible for income tax reporting purposes. The Company’s effective tax rate for the three and six months ended December 31, 2014 differ from statutory rates primarily due to the existence of a valuation allowance recorded against the preponderance of the net deferred tax assets. | |
The Company reviews the likelihood that it will realize the benefit of its deferred tax assets and, therefore, the need for a valuation allowance on a quarterly basis. It established a valuation allowance on all of its net deferred tax assets except for deferred tax liabilities associated with indefinite-lived intangible assets during fiscal 2014, given that the company determined that it was more likely than not that the Company would not recognize the benefits of its net operating loss carryforwards prior to their expiration. As of December 31, 2014, the Company had no unrecognized tax benefits. | |
On September 13, 2013, the IRS issued final regulations and re-proposed regulations that provide guidance with respect to (i) the treatment of materials and supplies, (ii) capitalization of amounts paid to acquire or produce tangible property, (iii) the determination of whether an expenditure with respect to tangible property is a deductible repair or a capital expenditure, and (iv) dispositions of MACRS property. The final regulations will be effective for the fiscal year ending June 30, 2015. Management is reviewing the regulations, but does not believe there will be a material impact on the Company’s results of operations, financial position, or cash flows. | |
Related_Party_Transactions
Related Party Transactions | 6 Months Ended |
Dec. 31, 2014 | |
Related Party Transactions | |
Related Party Transactions | (9) Related Party Transactions |
The Company has a Memorandum of Understanding (“Memorandum”) and a Non-Competition and Non-Solicitation Agreement (“Non-Compete”) with its Chairman Steve Sarowitz and Blue Marble, a separate legal entity owned by Mr. Sarowitz. | |
The Memorandum established the ongoing market based terms between the Company and Blue Marble for services provided to or on behalf of each other. In addition, Paylocity obtained a right of first refusal on the sale of Blue Marble, an option exercisable starting three years from the date of the Memorandum to purchase Blue Marble, and the right of first refusal to purchase any acquisition target of Blue Marble outside the United States of America, all at fair market value. The Memorandum requires Blue Marble to obtain written consent from Paylocity should Blue Marble intend to acquire an entity that provides or partners with other service providers to provide products and services to clients located in the United States of America. The Company provides no management guidance to the entity, has no equity interest in the entity, no obligation or intention to fund any of the entity’s operational shortfalls, and no right to any operational surpluses generated by the entity. | |
The Non-Compete agreement outlines the permissible activities and ongoing responsibilities of Mr. Sarowitz and Blue Marble including an obligation not to compete with services offered by Paylocity and an obligation not to solicit employees of Paylocity. | |
Subsequent_events
Subsequent events | 6 Months Ended |
Dec. 31, 2014 | |
Subsequent events | |
Subsequent events | (10) Subsequent Events |
On January 1, 2015, pursuant to the provisions of the 2014 Equity Incentive Plan, the number of common shares in reserve increased by 2,272 shares automatically and, pursuant to the provisions of the 2014 Employee Stock Purchase Plan, the number of common shares in reserve increased by 137 shares as determined by the Board of Directors. | |
In January 2015, the underwriters for the Company’s follow-on offering exercised their option to purchase 360 additional shares from certain shareholders of the Company of the 690 available as described in the final prospectus filed with the SEC on December 12, 2014. The Company did not receive any proceeds from the sale of common stock by the existing shareholders. | |
The Company has evaluated subsequent events from the balance sheet date through February 6, 2015, the date at which the financial statements were available to be issued and has determined that there are no such events that would have a material impact on the financial statements. | |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Dec. 31, 2014 | |
Summary of Significant Accounting Policies | |
Consolidation and Use of Estimates | (a) Consolidation and Use of Estimates |
These unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The unaudited consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All intercompany accounts and transactions have been eliminated in consolidation. | |
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the allowance for doubtful accounts, software developed for internal use, valuation and useful lives of long-lived assets, definite-lived intangibles, goodwill, stock-based compensation, valuation of net deferred income tax assets and the best estimate of selling price for revenue recognition purposes. Future events and their effects cannot be predicted with certainty; accordingly, accounting estimates require the exercise of judgment. Accounting estimates used in the preparation of these consolidated financial statements change as new events occur, as more experience is acquired, as additional information is obtained and as the operating environment changes. | |
Interim Unaudited Consolidated Financial Information | (b) Interim Unaudited Consolidated Financial Information |
The accompanying unaudited consolidated financial statements and notes have been prepared in accordance with GAAP and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, the interim financial information includes all adjustments of a normal recurring nature necessary for a fair presentation of the results of operations, financial position, changes in stockholders’ equity and cash flows. The results of operations for the three-month and six-month periods ended December 31, 2014 are not necessarily indicative of the results for the full year or the results for any future periods. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes for the year ended June 30, 2014 included in the Company’s Annual Report on Form 10-K filed with the SEC on August 22, 2014. | |
Income Taxes | (c) Income Taxes |
Differences in the normal relationship between the income tax expense (benefit) and pre-tax income (loss) materially result from the existence of a valuation allowance recorded against the preponderance of the net deferred tax assets. | |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | (d) Stock-Based Compensation |
The Company recognizes all employee stock-based compensation as a cost in the financial statements. Equity-classified awards, including those under the 2014 Employee Stock Purchase Plan (“ESPP”), are measured at the grant date fair value of the award and expense is recognized, net of assumed forfeitures, on a straight-line basis over the requisite service period for each separately vesting portion of the award. The Company estimates grant date fair value using the Black-Scholes option-pricing model and periodically updates the assumed forfeiture rates for actual experience over the option vesting term or the term of the ESPP purchase period. | |
Recently Issued Accounting Standards | (e) Recently Issued Accounting Standards |
In May 2014, the Financial Accounting Standard Board (FASB) issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). ASU 2014-09 supersedes a majority of existing revenue recognition guidance under US GAAP, and requires companies to recognize revenue when it transfers goods or services to a customer in an amount that reflects the consideration to which a company expects to be entitled. Companies may need to apply more judgment and estimation techniques or methods while recognizing revenue, which could result in additional disclosures to the financial statements. Topic 606 allows for either a “full retrospective” adoption or a “modified retrospective” adoption. The Company is currently evaluating which adoption method it will use. Early application is not permitted. The Company plans on adopting ASU 2014-09 beginning July 1, 2017 and is currently assessing the potential effects of these changes to its consolidated financial statements. | |
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s consolidated financial statements upon adoption. | |
Balance_Sheet_Information_Tabl
Balance Sheet Information (Tables) | 6 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Balance Sheet Information | ||||||||||
Schedule of activity in allowance for doubtful accounts | ||||||||||
Balance at June 30, 2014 | $ | 126 | ||||||||
Charged to expense | 71 | |||||||||
Write-offs | (39 | ) | ||||||||
Balance at December 31, 2014 | $ | 158 | ||||||||
Schedule of capitalized software and accumulated amortization | ||||||||||
June 30, | December 31, | |||||||||
2014 | 2014 | |||||||||
Internally developed software | $ | 19,863 | $ | 21,752 | ||||||
Accumulated amortization | (14,770 | ) | (16,048 | ) | ||||||
Capitalized software, net | $ | 5,093 | $ | 5,704 | ||||||
Schedule of property and equipment | ||||||||||
June 30, | December 31, | |||||||||
2014 | 2014 | |||||||||
Office equipment | $ | 1,449 | $ | 1,716 | ||||||
Computer equipment | 7,726 | 11,059 | ||||||||
Furniture and fixtures | 2,317 | 2,351 | ||||||||
Software | 4,963 | 5,133 | ||||||||
Leasehold improvements | 6,059 | 6,390 | ||||||||
Time clocks rented by clients | 2,360 | 2,698 | ||||||||
24,874 | 29,347 | |||||||||
Accumulated depreciation | (11,749 | ) | (14,131 | ) | ||||||
Property and equipment, net | $ | 13,125 | $ | 15,216 | ||||||
Schedule of components of accrued expenses | ||||||||||
June 30, | December 31, | |||||||||
2014 | 2014 | |||||||||
Accrued payroll and personnel costs | $ | 8,781 | $ | 9,481 | ||||||
Current portion of deferred rent | 577 | 669 | ||||||||
Other | 1,386 | 1,570 | ||||||||
Total accrued expenses | $ | 10,744 | 11,720 | |||||||
Schedule of intangible assets | ||||||||||
June | December | Weighted | ||||||||
30, 2014 | 31, 2014 | Average | ||||||||
Useful | ||||||||||
Life | ||||||||||
Client relationships | $ | 6,180 | $ | 6,180 | 9 years | |||||
Non-solicitation agreement | 220 | 220 | 3 years | |||||||
Total | 6,400 | 6,400 | ||||||||
Accumulated amortization | (80 | ) | (460 | ) | ||||||
Intangible assets, net | $ | 6,320 | $ | 5,940 | ||||||
Benefit_Plans_Tables
Benefit Plans (Tables) | 6 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Benefit Plans | ||||||||||||||
Schedule of stock-based compensation expense related to stock options and the vesting of Restricted Stock Awards ("RSAs") and Restricted Stock Units ("RSUs") | Three months ended | Six months ended | ||||||||||||
December 31, | December 31, | |||||||||||||
2013 | 2014 | 2013 | 2014 | |||||||||||
Cost of revenue — recurring | $ | — | $ | 466 | $ | — | $ | 814 | ||||||
Cost of revenue — non-recurring | — | 386 | — | 677 | ||||||||||
Sales and marketing | — | 894 | — | 1,778 | ||||||||||
Research and development | — | 849 | — | 1,384 | ||||||||||
General and administrative | 168 | 1,259 | 349 | 2,484 | ||||||||||
Total stock-based compensation | $ | 168 | $ | 3,854 | $ | 349 | $ | 7,137 | ||||||
Summary of the assumptions used for estimating the fair value of stock options granted | Period ended | |||||||||||||
December 31, | ||||||||||||||
2013 | 2014 | |||||||||||||
Valuation assumptions: | ||||||||||||||
Expected dividend yield | 0 | % | 0 | % | ||||||||||
Expected volatility | 29.5 | % | 43.9 | % | ||||||||||
Expected term (years) | 4.0 | 6.25 | ||||||||||||
Risk-free interest rate | 0.52 | % | 1.91 | % | ||||||||||
Summary of shares available for grant under our equity incentive plans | Number of | |||||||||||||
Shares | ||||||||||||||
Available for grant at July 1, 2014 | 2,581 | |||||||||||||
RSU’s granted | (384 | ) | ||||||||||||
Options granted | (322 | ) | ||||||||||||
Shares withheld in settlement of taxes and exercise price | 67 | |||||||||||||
Forfeitures | 228 | |||||||||||||
Shares removed | (134 | ) | ||||||||||||
Available for grant at December 31, 2014 | 2,036 | |||||||||||||
Schedule of stock option activity | Outstanding Options | |||||||||||||
Number of | Weighted | Weighted | Aggregate | |||||||||||
shares | average | average | intrinsic | |||||||||||
exercise | remaining | value | ||||||||||||
price | contractual | |||||||||||||
term | ||||||||||||||
Balance at July 1, 2014 | 4,388 | $ | 10 | 8.58 | $ | 51,017 | ||||||||
Options granted | 322 | 24.8 | ||||||||||||
Options forfeited | (219 | ) | 12.62 | |||||||||||
Options exercised | (104 | ) | 5.98 | |||||||||||
Balance at December 31, 2014 | 4,387 | $ | 11.05 | 8.15 | $ | 66,065 | ||||||||
Options exercisable at December 31, 2014 | 1,341 | $ | 2.91 | 6.49 | $ | 31,102 | ||||||||
Options vested and expected to vest at December 31, 2014 | 4,192 | $ | 10.77 | 8.1 | $ | 64,319 | ||||||||
Schedule of Restricted stock unit activity | Units | Weighted | ||||||||||||
average | ||||||||||||||
grant date | ||||||||||||||
fair value | ||||||||||||||
RSU balance at July 1, 2014 | 102 | $ | 17 | |||||||||||
RSUs granted | 384 | 24.75 | ||||||||||||
RSUs vested | (100 | ) | 17.57 | |||||||||||
RSUs cancelled/forfeited | (9 | ) | 24.8 | |||||||||||
RSU balance at December 31, 2014 | 377 | $ | 24.57 | |||||||||||
RSUs expected to vest at December 31, 2014 | 342 | $ | 24.55 | |||||||||||
Schedule of estimated grant date fair value of ESPP offering period using weighted average assumptions | Period ended | |||||||||||||
December 31, | ||||||||||||||
2013 | 2014 | |||||||||||||
Valuation assumptions: | ||||||||||||||
Expected dividend yield | N/A | 0% | ||||||||||||
Expected volatility | N/A | 35.5 – 41.7% | ||||||||||||
Expected term (years) | N/A | 0.3 – 0.5 | ||||||||||||
Risk-free interest rate | N/A | 0.04 – 0.06% | ||||||||||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 6 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Earnings Per Share | ||||||||||||||
Schedule of calculation of basic and diluted net loss per share | Three months ended | Six months ended | ||||||||||||
December 31, | December 31, | |||||||||||||
2013 | 2014 | 2013 | 2014 | |||||||||||
Basic net loss per share: | ||||||||||||||
Numerator: | ||||||||||||||
Net Loss | $ | (1,512 | ) | $ | (6,420 | ) | $ | (1,556 | ) | $ | (11,295 | ) | ||
Less: Preferred dividend rights attributable to participating securities | (781 | ) | — | (1,562 | ) | — | ||||||||
Net loss attributable to common stockholders | $ | (2,293 | ) | $ | (6,420 | ) | $ | (3,118 | ) | $ | (11,295 | ) | ||
Denominator: | ||||||||||||||
Weighted-average shares used in computing net loss per share attributable to common stockholders: | ||||||||||||||
Basic (in thousands) | 31,988 | 49,775 | 31,988 | 49,670 | ||||||||||
Weighted-average effect of potentially dilutive shares: | ||||||||||||||
Employee stock options and restricted stock units (in thousands) | — | — | — | — | ||||||||||
Diluted (in thousands) | 31,988 | 49,775 | 31,988 | 49,670 | ||||||||||
Net loss per share attributable to common stockholders, basic and diluted | $ | (0.07 | ) | $ | (0.13 | ) | $ | (0.10 | ) | $ | (0.23 | ) | ||
Summary of outstanding employee stock options and redeemable convertible preferred stock excluded from the diluted per share calculation because to include them would have been anti-dilutive | Three months ended | Six months ended | ||||||||||||
December 31, | December 31, | |||||||||||||
2013 | 2014 | 2013 | 2014 | |||||||||||
Redeemable convertible preferred stock | 11,933 | — | 11,933 | — | ||||||||||
Restricted stock units | — | 377 | — | 377 | ||||||||||
Employee stock purchase plan shares | — | 12 | — | 12 | ||||||||||
Employee stock options | 2,376 | 4,387 | 2,376 | 4,387 | ||||||||||
Total | 14,309 | 4,776 | 14,309 | 4,776 | ||||||||||
Organization_and_Description_o1
Organization and Description of Business (Detail) (USD $) | 1 Months Ended | 6 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2014 |
Follow-on offering | ||
Number of shares of common stock issued and sold | 750 | |
Public offering price (in dollar per share) | $26.25 | 26.25 |
Net proceeds after deducting underwriting discounts and commissions and other offering expenses | $18,384 | |
Underwriting discounts and commissions | 935 | |
Other offering expenses | $368 | |
Common Stock | ||
Follow-on offering | ||
Number of shares of common stock issued and sold | 750 | |
Existing shareholders | ||
Follow-on offering | ||
Number of shares of common stock issued and sold | 3,850 |
Balance_Sheet_Information_Deta
Balance Sheet Information (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2014 |
Activity in allowance for doubtful accounts | |||||
Balance at beginning of period | $126 | ||||
Charged to expense | 71 | 6 | |||
Write-offs | -39 | ||||
Balance at end of period | 158 | 158 | |||
Capitalized software and accumulated amortization | |||||
Internally developed software | 21,752 | 21,752 | 19,863 | ||
Accumulated amortization | -16,048 | -16,048 | -14,770 | ||
Capitalized software, net | 5,704 | 5,704 | 5,093 | ||
Amortization of capitalized internal-use software costs | 685 | 624 | 1,278 | 1,229 | |
Property and equipment | |||||
Property and equipment, gross | 29,347 | 29,347 | 24,874 | ||
Accumulated depreciation | -14,131 | -14,131 | -11,749 | ||
Property and equipment, net | 15,216 | 15,216 | 13,125 | ||
Depreciation expense | 1,354 | 909 | 2,502 | 1,695 | |
Components of accrued expenses | |||||
Accrued payroll and personnel costs | 9,481 | 9,481 | 8,781 | ||
Current portion of deferred rent | 669 | 669 | 577 | ||
Other | 1,570 | 1,570 | 1,386 | ||
Total accrued expenses | 11,720 | 11,720 | 10,744 | ||
Office equipment | |||||
Property and equipment | |||||
Property and equipment, gross | 1,716 | 1,716 | 1,449 | ||
Computer equipment | |||||
Property and equipment | |||||
Property and equipment, gross | 11,059 | 11,059 | 7,726 | ||
Furniture and fixtures | |||||
Property and equipment | |||||
Property and equipment, gross | 2,351 | 2,351 | 2,317 | ||
Software | |||||
Property and equipment | |||||
Property and equipment, gross | 5,133 | 5,133 | 4,963 | ||
Leasehold improvements | |||||
Property and equipment | |||||
Property and equipment, gross | 6,390 | 6,390 | 6,059 | ||
Time clocks rented by clients | |||||
Property and equipment | |||||
Property and equipment, gross | $2,698 | $2,698 | $2,360 |
Balance_Sheet_Information_Deta1
Balance Sheet Information (Details 2) (USD $) | 3 Months Ended | 6 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2014 |
Intangible Assets | |||||
Intangible assets | $6,400 | $6,400 | $6,400 | ||
Intangible assets, accumulated amortization | -460 | -460 | -80 | ||
Intangible assets, net | 5,940 | 5,940 | 6,320 | ||
Amortization expense | 190 | 0 | 380 | 0 | |
Client relationships | |||||
Intangible Assets | |||||
Intangible assets | 6,180 | 6,180 | 6,180 | ||
Useful life | 9 years | ||||
Non-solicitation agreement | |||||
Intangible Assets | |||||
Intangible assets | $220 | $220 | $220 | ||
Useful life | 3 years |
Benefit_Plans_Details
Benefit Plans (Details) | 6 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Equity Incentive Plans | |
Number of shares of common stock reserved for issuance | 6,800 |
Stock options | |
Equity Incentive Plans | |
Expiration period | 10 years |
Stock options | Minimum | |
Equity Incentive Plans | |
Vesting period | 3 years |
Stock options | Maximum | |
Equity Incentive Plans | |
Vesting period | 4 years |
2008 Plan | |
Equity Incentive Plans | |
Awards issued (in shares) | 0 |
2014 Plan | |
Equity Incentive Plans | |
Number of shares allocated but not yet issued or subject to outstanding options or awards | 2,036 |
Benefit_Plans_Details_2
Benefit Plans (Details 2) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 |
Benefit Plans | ||||
Total stock-based compensation expense | $3,854 | $168 | $7,137 | $349 |
Stock compensation costs capitalized | 148 | 0 | 310 | 0 |
Cost of revenue - recurring | ||||
Benefit Plans | ||||
Total stock-based compensation expense | 466 | 814 | ||
Cost of revenue - non-recurring | ||||
Benefit Plans | ||||
Total stock-based compensation expense | 386 | 677 | ||
Sales and marketing | ||||
Benefit Plans | ||||
Total stock-based compensation expense | 894 | 1,778 | ||
Research and development | ||||
Benefit Plans | ||||
Total stock-based compensation expense | 849 | 1,384 | ||
General and administrative | ||||
Benefit Plans | ||||
Total stock-based compensation expense | $1,259 | $168 | $2,484 | $349 |
Benefit_Plans_Details_3
Benefit Plans (Details 3) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2014 |
Equity Incentive Plan Member | ||||||
Shares Available for Grant | ||||||
Balance at the beginning of the period (in shares) | 2,581,000 | 2,581,000 | ||||
RSU's granted (in shares) | -384,000 | |||||
Shares withheld in settlement of taxes and exercise price | 67,000 | |||||
Forfeitures (in shares) | 228,000 | |||||
Shares removed | -134,000 | |||||
Balance at the end of the period (in shares) | 2,036,000 | 2,036,000 | ||||
Number of shares | ||||||
Options forfeited (in shares) | -228,000 | |||||
Units | ||||||
RSU's granted (in shares) | 384,000 | |||||
Stock options | ||||||
Valuation assumptions: | ||||||
Expected dividend yield (as a percent) | 0.00% | 0.00% | ||||
Expected volatility (as a percent) | 43.90% | 29.50% | ||||
Expected term (years) | 6 years 3 months | 4 years | ||||
Risk-free interest rate (as a percent) | 1.91% | 0.52% | ||||
Shares Available for Grant | ||||||
Options granted (in shares) | 0 | 0 | -322,000 | |||
Forfeitures (in shares) | 219,000 | |||||
Number of shares | ||||||
Balance at the beginning of the period (in shares) | 4,388,000 | 4,388,000 | ||||
Options granted (in shares) | 0 | 0 | 322,000 | |||
Options forfeited (in shares) | -219,000 | |||||
Options exercised (in shares) | 0 | -104,000 | 0 | |||
Balance at the end of the period (in shares) | 4,387,000 | 4,387,000 | 4,388,000 | |||
Options exercisable at the end of the period (in shares) | 1,341,000 | 1,341,000 | ||||
Options vested and expected to vest at the end of the period (in shares) | 4,192,000 | 4,192,000 | ||||
Weighted average exercise price | ||||||
Balance at the beginning of the period (in dollars per share) | $10 | $10 | ||||
Options granted (in dollars per share) | $24.80 | |||||
Options forfeited (in dollars per share) | $12.62 | |||||
Options exercised (in dollars per share) | $5.98 | |||||
Balance at the end of the period (in dollars per share) | $11.05 | $11.05 | $10 | |||
Options exercisable at the end of the period (in dollars per share) | $2.91 | $2.91 | ||||
Options vested and expected to vest at the end of the period (in dollars per share) | $10.77 | $10.77 | ||||
Weighted average remaining contractual term | ||||||
Balance at the beginning of the period | 8 years 1 month 24 days | 8 years 6 months 29 days | ||||
Balance at the end of the period | 8 years 1 month 24 days | 8 years 6 months 29 days | ||||
Options exercisable at the end of the period | 6 years 5 months 27 days | |||||
Options vested and expected to vest at the end of the period | 8 years 1 month 6 days | |||||
Aggregate intrinsic value | ||||||
Balance at the beginning of the period | $51,017 | $51,017 | ||||
Balance at the end of the period (in dollars) | 66,065 | 66,065 | 51,017 | |||
Options exercisable at the end of the period | 31,102 | 31,102 | ||||
Options vested and expected to vest at the end of the period | 64,319 | 64,319 | ||||
Weighted average grant date fair value of options granted (in dollars per share) | $11.15 | $11.15 | $1.71 | |||
Total intrinsic value of options exercised | 1,839 | 2,063 | ||||
Weighted average grant date fair value | ||||||
Total unrecognized compensation cost, net of estimated forfeitures | 9,640 | 9,640 | ||||
Weighted average period to recognize unrecognized compensation cost | 1 year 8 months 23 days | |||||
Stock options | Equity Incentive Plan Member | ||||||
Shares Available for Grant | ||||||
Options granted (in shares) | -322,000 | |||||
Number of shares | ||||||
Options granted (in shares) | 322,000 | |||||
RSUs | ||||||
Shares Available for Grant | ||||||
RSU's granted (in shares) | -384,000 | |||||
Units | ||||||
RSU Balance at the beginning of the period (in shares) | 102,000 | 102,000 | ||||
RSU's granted (in shares) | 384,000 | |||||
RSUs vested (in shares) | -100,000 | |||||
RSUs cancelled/forfeited (in shares) | -9,000 | |||||
RSU Balance at the end of the period (in shares) | 377,000 | 377,000 | ||||
RSUs expected to vest at the end of the period (in shares) | 342,000 | 342,000 | ||||
Weighted average grant date fair value | ||||||
RSU Balance at the beginning of the period (in dollars per share) | $17 | $17 | ||||
RSU's granted (in dollars per share) | $24.75 | |||||
RSUs vested (in dollars per share) | $17.57 | |||||
RSUs cancelled/forfeited (in dollars per share) | $24.80 | |||||
RSU Balance at the end of the period (in dollars per share) | $24.57 | $24.57 | ||||
RSUs expected to vest at the end of the period (in dollars per share) | $24.55 | $24.55 | ||||
Total unrecognized compensation cost, net of estimated forfeitures | $6,483 | $6,483 | ||||
Weighted average period to recognize unrecognized compensation cost | 2 years 1 month 17 days |
Benefit_Plans_Details_4
Benefit Plans (Details 4) (USD $) | 3 Months Ended | 6 Months Ended | 0 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Jul. 16, 2014 | Feb. 06, 2014 |
Equity Incentive Plans | ||||||
Compensation expense (in dollars) | $3,854 | $168 | $7,137 | $349 | ||
Employee Stock Purchase Plan | ||||||
Equity Incentive Plans | ||||||
Offering period | 4 months | |||||
Percentage of employee compensation, maximum | 10.00% | |||||
Percentage of fair market value as a purchase price | 85.00% | |||||
Value of shares per employee, maximum | 25 | |||||
Number of shares per employee, maximum | 2,000 | |||||
Number of periods during which shares can be purchased | 1 year | |||||
Number of shares authorized | 1,000,000 | 1,000,000 | ||||
Number of shares issued | 36 | |||||
Additional number of shares reserved for issuance each year | 400,000 | |||||
Percentage of additional number of shares reserved for issuance each year | 0.75% | |||||
Compensation expense (in dollars) | $154 | $284 | ||||
Employee Stock Purchase Plan | Minimum | ||||||
Valuation assumptions: | ||||||
Expected volatility | 35.50% | |||||
Expected term (years) | 3 months 18 days | |||||
Risk-free interest rate | 0.04% | |||||
Employee Stock Purchase Plan | Maximum | ||||||
Equity Incentive Plans | ||||||
Offering period | 27 months | |||||
Valuation assumptions: | ||||||
Expected dividend yield | 0.00% | |||||
Expected volatility | 41.70% | |||||
Expected term (years) | 6 months | |||||
Risk-free interest rate | 0.06% |
Benefit_Plans_Details_5
Benefit Plans (Details 5) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 |
Benefit Plans | ||||
Matching contributions by the Company as percentage of employees' contributions | 50.00% | |||
Maximum contributions as percentage of employees' gross pay | 6.00% | |||
Contributions | $327 | $229 | $709 | $477 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (USD $) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | 31-May-14 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 |
Commitments and Contingencies | |||||
Number of reseller organizations | 2 | 2 | |||
First reseller agreement | |||||
Reseller agreements | |||||
Reseller agreements terminated | 1 | ||||
Amount paid to reseller per terms of our resale agreement | $737 | $1,351 | |||
Amount paid under the terms of an asset purchase agreement | 200 | 2,585 | |||
Second reseller agreement | |||||
Reseller agreements | |||||
Amount paid to reseller per terms of our resale agreement | $695 | $471 | $1,330 | $963 | |
Prior notice period to terminate the agreement by resellers | 9 months | ||||
Minimum period after closing of initial public offering to provide prior notice by the reseller for termination of agreement | 6 months | ||||
Purchase price of assets as multiplier of net revenues of reseller for 12 months preceding termination effective date | 3.3 | 3.3 | |||
Period considered for multiplier of annual revenues to calculate purchase price of assets | 12 months |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Mar. 24, 2014 |
Earnings Per Share | |||||
Number of shares of common stock issued on automatic conversion of outstanding preferred stock | 11,933 | ||||
Numerator: | |||||
Net loss | ($6,420) | ($1,512) | ($11,295) | ($1,556) | |
Less: Preferred dividend rights attributable to participating securities | -781 | -1,562 | |||
Net loss attributable to common stockholders | ($6,420) | ($2,293) | ($11,295) | ($3,118) | |
Weighted-average shares used in computing net loss per share attributable to common stockholders: | |||||
Basic (in shares) | 49,775 | 31,988 | 49,670 | 31,988 | |
Weighted-average effect of potentially dilutive shares: | |||||
Diluted (in shares) | 49,775 | 31,988 | 49,670 | 31,988 | |
Net loss per share attributable to common stockholders: | |||||
Net loss per share attributable to common stockholders, basic and diluted | ($0.13) | ($0.07) | ($0.23) | ($0.10) | |
Anti-dilutive securities excluded from diluted per share calculation | |||||
Total (in shares) | 4,776 | 14,309 | 4,776 | 14,309 | |
Redeemable convertible preferred stock | |||||
Anti-dilutive securities excluded from diluted per share calculation | |||||
Total (in shares) | 11,933 | 11,933 | |||
RSUs | |||||
Anti-dilutive securities excluded from diluted per share calculation | |||||
Total (in shares) | 377 | 377 | |||
Employee Stock Purchase Plan | |||||
Anti-dilutive securities excluded from diluted per share calculation | |||||
Total (in shares) | 12 | 12 | |||
Employee stock options | |||||
Anti-dilutive securities excluded from diluted per share calculation | |||||
Total (in shares) | 4,387 | 2,376 | 4,387 | 2,376 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 |
Income Taxes | ||||
Amount of tax provision (benefit) recorded | $34 | ($877) | $62 | ($1,239) |
Unrecognized tax benefits | $0 | $0 |
Related_Party_Transactions_Det
Related Party Transactions (Details) | 6 Months Ended |
Dec. 31, 2014 | |
Related party transactions | |
Exercise period for right of first refusal option on sale of Blue Marble | 3 years |
Blue Marble Member | |
Related party transactions | |
Equity interest (as a percent) | 0.00% |
Subsequent_events_Details
Subsequent events (Details) | 1 Months Ended | ||
In Thousands, unless otherwise specified | Jan. 31, 2015 | Dec. 31, 2014 | Jan. 01, 2015 |
Subsequent events | |||
Number of shares of common stock reserved for issuance | 6,800 | ||
Subsequent event | |||
Subsequent events | |||
Follow on offering exercised by underwriters (in shares) | 360 | ||
Shares available for grant | 690 | ||
Subsequent event | 2014 Plan | |||
Subsequent events | |||
Additional shares available for grant | 2,272 | ||
Subsequent event | Employee Purchase Plan 2014 | |||
Subsequent events | |||
Additional shares available for grant | 137 |