Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Oct. 31, 2015 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | TRINET GROUP INC | |
Trading Symbol | TNET | |
Entity Central Index Key | 937,098 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 70,022,338 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 146,315 | $ 134,341 |
Restricted cash | 14,554 | 14,543 |
Prepaid income taxes | 21,071 | 26,711 |
Prepaid expenses | 12,794 | 9,336 |
Deferred loan costs and other current assets | 4,014 | 4,271 |
Worksite employee related assets | 867,126 | 1,635,136 |
Total current assets | 1,065,874 | 1,824,338 |
Workers compensation receivable | 28,974 | 31,905 |
Restricted cash and investments | 104,348 | 69,447 |
Property and equipment, net | 36,352 | 32,298 |
Goodwill | 290,507 | 288,857 |
Other intangible assets, net | 52,534 | 81,718 |
Deferred and other long term income taxes | 21,705 | 7,184 |
Deferred loan costs and other assets | 9,277 | 12,017 |
Total assets | 1,609,571 | 2,347,764 |
Current liabilities: | ||
Accounts payable | 14,863 | 12,273 |
Accrued corporate wages | 34,559 | 29,179 |
Deferred income taxes | 69,228 | 65,713 |
Current portion of notes payable and borrowings under capital leases | 20,274 | 20,738 |
Other current liabilities | 10,537 | 10,303 |
Worksite employee related liabilities | 862,003 | 1,630,555 |
Total current liabilities | 1,011,464 | 1,768,761 |
Notes payable and borrowings under capital leases, less current portion | 484,484 | 524,412 |
Workers compensation liabilities | 121,028 | 75,448 |
Other liabilities | 6,694 | 4,902 |
Total liabilities | $ 1,623,670 | $ 2,373,523 |
Commitments and contingencies | ||
Stockholders’ deficit: | ||
Preferred stock, $.000025 per share stated value; 20,000,000 shares authorized; no shares issued and outstanding at September 30, 2015 and December 31, 2014 | $ 0 | $ 0 |
Common stock, $.000025 per share stated value; 750,000,000 shares authorized; 69,989,672 and 69,811,326 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively | 485,873 | 442,682 |
Accumulated deficit | (499,467) | (468,127) |
Accumulated other comprehensive loss | (505) | (314) |
Total stockholders’ deficit | (14,099) | (25,759) |
Total liabilities and stockholders’ deficit | $ 1,609,571 | $ 2,347,764 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Preferred stock, per share stated value | $ 0.000025 | $ 0.000025 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, per share stated value | $ 0.000025 | $ 0.000025 |
Common stock, shares authorized | 750,000,000 | 750,000,000 |
Common stock, shares issued | 69,989,672 | 69,811,326 |
Common stock, shares outstanding | 69,989,672 | 69,811,326 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Statement [Abstract] | ||||
Professional service revenues | $ 99,473 | $ 86,864 | $ 294,288 | $ 251,999 |
Insurance service revenues | 568,535 | 469,087 | 1,639,305 | 1,337,870 |
Total revenues | 668,008 | 555,951 | 1,933,593 | 1,589,869 |
Costs and operating expenses: | ||||
Insurance costs | 534,481 | 428,184 | 1,535,678 | 1,209,536 |
Cost of providing services (exclusive of depreciation and amortization of intangible assets) | 37,540 | 32,575 | 111,582 | 100,252 |
Sales and marketing | 44,997 | 37,396 | 123,740 | 104,225 |
General and administrative | 17,726 | 13,766 | 48,991 | 40,785 |
Systems development and programming costs | 6,991 | 6,776 | 21,849 | 19,235 |
Amortization of intangible assets | 10,459 | 12,743 | 32,284 | 39,559 |
Depreciation | 4,132 | 3,265 | 10,761 | 9,725 |
Total costs and operating expenses | 656,326 | 534,705 | 1,884,885 | 1,523,317 |
Operating income | 11,682 | 21,246 | 48,708 | 66,552 |
Other income (expense): | ||||
Interest expense and bank fees | (4,685) | (18,462) | (14,653) | (49,174) |
Other, net | 355 | 179 | 873 | 257 |
Income before provision for income taxes | 7,352 | 2,963 | 34,928 | 17,635 |
Provision for income taxes | 4,255 | 2,238 | 17,328 | 9,149 |
Net income | $ 3,097 | $ 725 | $ 17,600 | $ 8,486 |
Net income per share: | ||||
Basic (in dollars per share) | $ 0.04 | $ 0.01 | $ 0.25 | $ 0.13 |
Diluted (in dollars per share) | $ 0.04 | $ 0.01 | $ 0.24 | $ 0.13 |
Weighted average shares: | ||||
Basic (in shares) | 70,237,737 | 69,134,908 | 70,247,035 | 51,654,608 |
Diluted (in shares) | 72,087,917 | 72,954,352 | 72,757,277 | 55,003,651 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 3,097 | $ 725 | $ 17,600 | $ 8,486 |
Other comprehensive income (loss), net of tax | ||||
Unrealized gains on investments | 11 | (10) | 48 | 10 |
Foreign currency translation adjustments | (130) | (63) | (239) | (62) |
Total other comprehensive loss, net of tax | (119) | (73) | (191) | (52) |
Comprehensive income | $ 2,978 | $ 652 | $ 17,409 | $ 8,434 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Operating activities | ||
Net income | $ 17,600 | $ 8,486 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 42,559 | 67,754 |
Deferred income taxes | 1,835 | 27,180 |
Stock-based compensation | 12,991 | 8,251 |
Excess tax benefit from equity incentive plan activity | (20,327) | 0 |
Accretion of workers compensation and leases fair value adjustment | (523) | (969) |
Changes in operating assets and liabilities: | ||
Restricted cash and investments | (21,198) | (7,968) |
Prepaid expenses and other current assets | (3,201) | (7,899) |
Workers compensation receivables | 3,294 | (11,775) |
Other assets | (14,585) | 8,166 |
Accounts payable | 2,522 | 4,826 |
Prepaid income taxes | 27,574 | (29,642) |
Other current liabilities | 9,103 | 11,321 |
Other liabilities | 47,419 | 22,196 |
Worksite employee related assets | 768,010 | 75,390 |
Worksite employee related liabilities | (768,552) | (76,921) |
Net cash provided by operating activities | 104,521 | 98,396 |
Investing activities | ||
Acquisitions of businesses | (4,750) | 0 |
Purchase of debt securities | (14,989) | (16,789) |
Proceeds from maturity of debt securities | 1,275 | 0 |
Purchase of property and equipment | (14,747) | (17,082) |
Net cash used in investing activities | (33,211) | (33,871) |
Financing activities | ||
Proceeds from issuance of common stock, net of issuance costs | 0 | 218,572 |
Realized tax benefit of deductible IPO transaction costs | 822 | 585 |
Proceeds from issuance of common stock on exercised options | 6,464 | 1,146 |
Proceeds from issuance of common stock on employee stock purchase plan | 2,723 | 0 |
Excess tax benefit from equity incentive plan activity | 20,327 | 0 |
Repayment of notes payable | (40,249) | (268,425) |
Payment of debt issuance costs | 0 | (11,060) |
Repayments under capital leases | (244) | (263) |
Repurchase of common stock | (48,940) | (1,422) |
Net cash used in financing activities | (59,097) | (60,867) |
Effect of exchange rate changes on cash and cash equivalents | (239) | (62) |
Net increase in cash and cash equivalents | 11,974 | 3,596 |
Cash and cash equivalents at beginning of period | 134,341 | 94,356 |
Cash and cash equivalents at end of period | 146,315 | 97,952 |
Supplemental disclosures of cash flow information | ||
Cash paid for interest | 11,378 | 25,662 |
Cash paid for income taxes, net | 1,467 | 10,969 |
Supplemental schedule of noncash investing and financing activities | ||
Payable for purchase of property and equipment | $ 68 | $ 826 |
Description of Business and Sig
Description of Business and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Significant Accounting Policies | DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES Description of Business TriNet Group, Inc. (the Company or TriNet), a Delaware corporation incorporated in January 2000, provides a comprehensive human resources solution for small to medium-sized businesses. The Company’s solution includes payroll processing, human capital consulting, employment law compliance and employee benefits, including health insurance, retirement plans and workers compensation insurance. The Company provides its services through co-employment relationships with its customers, under which the Company and its customers each take responsibility for certain portions of the employer-employee relationship for worksite employees (WSEs). The Company is the employer of record for most administrative and regulatory purposes, including the following: (i) compensation through wages and salaries; (ii) employer payroll-related taxes payment; (iii) employee payroll-related taxes withholding and payment; (iv) employee benefit programs including health and life insurance, and others; and (v) workers compensation coverage. Segment Information The Company operates in one reportable segment in accordance with Accounting Standard Codification (ASC) 280 – Segment Reporting, issued by the Financial Accounting Standards Board (FASB). All of the Company’s service revenues are generated from external customers. Less than 1% of revenues is generated outside of the United States of America (U.S.). Substantially all of the Company’s long-lived assets are located in the U.S. Basis of Presentation The accompanying unaudited consolidated financial statements and footnotes thereto of the Company and its wholly owned subsidiaries have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) and applicable rules and regulations of the Securities and Exchange Commission (SEC) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 , filed with the SEC on March 30, 2015. There have been no changes to the Company’s significant accounting policies described in such Annual Report that have had a material impact on its consolidated financial statements and related notes. All intercompany accounts and transactions have been eliminated in consolidation. The accompanying unaudited consolidated balance sheets present the current assets and current liabilities directly related to the processing of human resources transactions as WSE-related assets and WSE-related liabilities, respectively. WSE-related assets are comprised of cash and investments restricted for current workers compensation claim payments, payroll funds collected, accounts receivable, unbilled service revenues, and refundable or prepaid amounts related to the Company-sponsored workers compensation and health plan programs. WSE-related liabilities are comprised of customer prepayments, wages and payroll taxes accrued and payable, and liabilities related to the Company-sponsored workers compensation and health plan programs resulting from workers compensation case reserves, premium amounts due to providers for enrolled employees, and workers compensation and health reserves that are expected to be disbursed within the next 12 months. The unaudited interim financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, necessary for fair presentation. Certain prior period amounts in the consolidated statement of cash flows and in Note 3 have been reclassified to conform to the current presentation. The results of the nine months ended September 30, 2015 are not necessarily indicative of the results to be expected for the year ending December 31, 2015 . Seasonality and Insurance Variability Historically, the Company has experienced its highest monthly addition of WSEs, as well as its highest monthly levels of client attrition, in the month of January, primarily because clients that change their payroll and benefits service providers tend to do so at the beginning of a calendar year. In addition, the Company experiences higher levels of client attrition during the fourth quarter and, to a lesser extent, during the first quarter of the calendar year, in connection with renewals of the health insurance it provides for its WSEs, in the event that such renewals result in increased premiums that it passes on to its clients. The Company has also historically experienced higher insurance claim volumes in the second and third quarters of a fiscal year than in the first and fourth quarters of a fiscal year, as WSEs typically access their health care providers more often in the second and third quarters of a fiscal year, which has negatively impacted the Company’s insurance costs in these quarters. The Company has also experienced variability on a quarterly basis in the amount of insurance costs due to the number and severity of insurance claims being unpredictable. These historical trends may change, and other seasonal trends and variability may develop that make it more difficult for the Company to manage its business. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. These estimates include, but are not limited to, allowances for accounts receivable, workers compensation-related assets and liabilities, health plan assets and liabilities, recoverability of goodwill and other intangible assets, income taxes, stock-based compensation and other contingent liabilities. Such estimates are based on historical experience and on various other assumptions that Company management believes to be reasonable under the circumstances. Actual results could differ from those estimates. Recent Accounting Pronouncements In September 2015, the FASB issued Accounting Standards Update (ASU) 2015-16— Business Combinations , as part of its initiative to reduce complexity in accounting standards (the Simplification Initiative). The amendment eliminates the requirement to retrospectively apply adjustments made to provisional amounts recognized in a business combination. The amendment is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. The Company expects to adopt this guidance in the current fiscal year. The Company does not expect this guidance to have a material effect on its consolidated financial statements. In April 2015, the FASB issued ASU 2015-05— Intangibles—Goodwill and Other—Internal-Use Software , as part of the Simplification Initiative. The amendment provides guidance to clarify the customer’s accounting for fees paid in a cloud computing arrangement. The amendment is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. The Company expects to adopt this guidance in 2016. The Company does not expect this guidance to have a material effect on its consolidated financial statements. In April 2015, the FASB issued ASU 2015-03— Interest—Imputation of Interest, as part of its Simplification Initiative. The amendment requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The amendment is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted for financial statements that have not been previously issued. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements. In August 2014, the FASB issued ASU 2014-15— Presentation of Financial Statements—Going Concern ( Subtopic 205-40), which addresses management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. Management’s evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued. The standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2016. Early adoption is permitted. The Company does not expect to adopt this guidance early and does not believe that the adoption of this guidance will have a material effect on its consolidated financial statements. In June 2014, the FASB issued ASU 2014-12— Compensation — Stock Compensation , which requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. ASU 2014-12 is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2015. Early adoption is permitted. The amendments may be applied prospectively to all awards granted or modified after the effective date or retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented . The Company does not expect this guidance to have a material effect on its consolidated financial statements. The Company expects to adopt this guidance in 2016. In May 2014, the FASB issued ASU 2014-09— Revenue from Contracts with Customers , which will replace most existing revenue recognition guidance under GAAP. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard provides a five-step analysis of transactions to determine when and how revenue is recognized. In July 2015, the FASB deferred the effective date to annual reporting periods, and interim periods within those years, beginning after December 15, 2017. Early adoption at the original effective date of December 15, 2016 is permitted. The amendments may be applied retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company has not yet selected a method of adoption and is currently evaluating the effect that the amendments will have on the consolidated financial statements. |
Worksite Employee-Related Asset
Worksite Employee-Related Assets and Liabilities | 9 Months Ended |
Sep. 30, 2015 | |
Other Industries [Abstract] | |
Worksite Employee-Related Assets and Liabilities | WORKSITE EMPLOYEE-RELATED ASSETS AND LIABILITIES The following schedule presents the components of the Company’s WSE-related assets and WSE-related liabilities (in thousands): September 30, December 31, Worksite employee-related assets: Restricted cash $ 80,943 $ 64,890 Restricted investments 2,319 4,555 Payroll funds collected 479,368 1,336,994 Unbilled revenue, net of advance collections of $114,259 and $113,190 at September 30, 2015 and December 31, 2014, respectively 281,100 203,599 Accounts receivable, net of allowance for doubtful accounts of $817 and $388 at September 30, 2015 and December 31, 2014, respectively 7,122 5,193 Prepaid health plan expenses 5,545 4,932 Refundable workers compensation premiums 2,751 7,975 Prepaid workers compensation expenses 4,177 1,256 Other payroll assets 3,801 5,742 Total worksite employee-related assets $ 867,126 $ 1,635,136 Worksite employee-related liabilities: Unbilled wages accrual $ 365,771 $ 292,906 Payroll taxes payable 240,583 1,119,427 Health benefits payable 120,792 104,220 Customer prepayments 67,377 53,770 Workers compensation payable 38,246 36,778 Other payroll deductions 29,234 23,454 Total worksite employee-related liabilities $ 862,003 $ 1,630,555 |
Workers Compensation
Workers Compensation | 9 Months Ended |
Sep. 30, 2015 | |
Insurance [Abstract] | |
Workers Compensation | WORKERS COMPENSATION The Company has agreements with various insurance carriers to provide workers compensation insurance coverage for worksite employees. Insurance carriers are responsible for administrating and paying claims. The Company is responsible for reimbursing each carrier up to a deductible limit per occurrence. The following summarizes the activities in the liability for unpaid claims and claims adjustment expenses (in thousands): For the nine months ended September 30, 2015 For the year ended December 31, 2014 Liability for unpaid claims and claims adjustment at beginning of period $ 92,406 $ 58,610 Incurred related to: Current year 64,094 61,669 Prior years 3,824 (4,725 ) Total incurred 67,918 56,944 Paid related to: Current year (11,113 ) (11,003 ) Prior years (22,509 ) (12,145 ) Total paid (33,622 ) (23,148 ) Reclassification from workers compensation receivable 5,087 — Liability for unpaid claims and claims adjustment at end of period 131,789 92,406 Other premiums and collateral liabilities 27,485 19,820 Total workers compensation liabilities at end of period $ 159,274 $ 112,226 Current portion included in worksite employee- related liability 38,246 36,778 Long term portion $ 121,028 $ 75,448 Under the terms of its agreements with its workers compensation insurance carriers, the Company collects and holds premiums in restricted accounts pending claims payments by the claims administrator. As of September 30, 2015 and December 31, 2014 , such restricted amounts of $37.8 million and $36.5 million , respectively, are presented as restricted cash and restricted investments within WSE-related assets in the accompanying consolidated balance sheets. In addition, at September 30, 2015 and December 31, 2014 , $104.3 million and $69.4 million , respectively, are presented as restricted long-term investments. The reclassification from workers compensation receivable resulted from the return of collateral to the Company following a negotiated amendment of the underlying contract with a carrier. |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Business Combinations | BUSINESS COMBINATIONS Periodically, as part of the Company's strategic objectives, the Company may acquire other companies or may acquire strategic technologies which may be considered an acquisition of a business. During the three months ended September 30, 2015, the Company's strategic acquisition activity resulted in the payment of aggregate purchase consideration of approximately $4.8 million , consisting solely of cash. The allocation of the aggregate purchase consideration in the quarter resulted in intangible assets of $3.1 million and goodwill of $1.7 million . The intangible assets have a useful life of 5 years. The condensed consolidated financial statements include the operating results of strategic acquisitions considered to be a business since the respective date of the acquisition. Pro forma results of operations have not been presented as the acquisition activity is not material to the Company. |
Property and Equipment, Net
Property and Equipment, Net | 9 Months Ended |
Sep. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | PROPERTY AND EQUIPMENT, NET Property and equipment, net, consist of the following (in thousands): September 30, December 31, Software $ 62,342 $ 53,349 Office equipment, including data processing equipment 19,779 18,550 Leasehold improvements 9,761 7,092 Furniture, fixtures, and equipment 6,946 6,450 Projects in progress 6,119 6,786 104,947 92,227 Accumulated depreciation (68,595 ) (59,929 ) Property and equipment, net $ 36,352 $ 32,298 Software and furniture, fixtures, and equipment include amounts for assets under capital leases of $0.2 million and $1.4 million at September 30, 2015 and December 31, 2014 , respectively. Accumulated depreciation of these assets was de minimis and $0.9 million at September 30, 2015 and December 31, 2014 , respectively. Amortization of assets held under capital leases is included with depreciation expense in the accompanying consolidated statements of operations. Projects in progress consist primarily of software development costs. The Company capitalizes software development costs intended for internal use. The Company recognized depreciation expense for capitalized internally developed software of $3.7 million and $4.0 million for the nine months ended September 30, 2015 and 2014 , respectively. Accumulated depreciation for these assets was $32.8 million and $29.4 million at September 30, 2015 and December 31, 2014 , respectively. The Company periodically assesses the likelihood of unsuccessful completion of projects in progress, as well as monitoring events or changes in circumstances, which might suggest that impairment has occurred and recoverability should be evaluated. An impairment loss is recognized if the carrying amount of the asset is not recoverable and exceeds the future net cash flows expected to be generated by the asset. There was $0.4 million and $0.1 million of losses recognized on internally developed software for the nine months ended September 30, 2015 and September 30, 2014 , respectively. |
Marketable Securities and Fair
Marketable Securities and Fair Value Measurements | 9 Months Ended |
Sep. 30, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
Marketable Securities and Fair Value Measurements | MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS The Company’s noncurrent restricted cash and investments include $64.2 million of available-for-sale marketable securities and $40.1 million of cash collateral at September 30, 2015 . The Company’s restricted investments within WSE-related assets include $2.3 million of certificates of deposit as of September 30, 2015 . The available-for-sale marketable securities as of September 30, 2015 and December 31, 2014 consist of the following (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value September 30, 2015: U.S. treasuries $ 63,596 $ 89 $ — $ 63,685 Mutual funds 500 6 — 506 Total investments $ 64,096 $ 95 $ — $ 64,191 December 31, 2014: U.S. treasuries $ 50,075 $ 22 $ (15 ) $ 50,082 Mutual funds 500 6 — 506 Total investments $ 50,575 $ 28 $ (15 ) $ 50,588 There were no realized gains or losses for the nine months ended September 30, 2015 and 2014 . As of September 30, 2015 and December 31, 2014 , the contractual maturities of the U.S. treasuries were two to three years. As of September 30, 2015 , none of the Company’s U.S. treasuries were in an unrealized loss position. Unrealized losses are principally due to changes in interest rates. In analyzing an issuer’s financial condition, the Company considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and industry analysts’ reports. The fair value of these securities in an unrealized loss position represented 0% and 59% of the total fair value of all securities available for sale as of September 30, 2015 and December 31, 2014 , respectively, and their unrealized losses were de minimis as of September 30, 2015 and December 31, 2014 . As the Company has the ability and intent to hold debt securities until maturity, or for the foreseeable future as classified as available for sale, no decline was deemed to be other-than-temporary. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, the Company uses a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows: • Level I—observable inputs such as quoted prices in active markets • Level II—inputs other than the quoted prices in active markets that are observable either directly or indirectly • Level III—unobservable inputs in which there is little or no market data, which requires the Company to develop its own assumptions This hierarchy requires the Company to use observable market data when available and to minimize the use of unobservable inputs when determining fair value. The following table summarizes the Company’s financial assets measured at fair value on a recurring basis (in thousands): Total Fair Value Level I Level II Level III September 30, 2015: Certificates of deposit $ 2,319 $ 2,319 $ — $ — U.S. treasuries 63,685 63,685 — — Mutual funds 506 506 — — Total $ 66,510 $ 66,510 $ — $ — December 31, 2014: Certificates of deposit $ 2,318 $ 2,318 $ — $ — U.S. treasuries 50,082 50,082 — — Mutual funds 506 506 — — Interest rate cap 1 — 1 — Total $ 52,907 $ 52,906 $ 1 $ — There were no transfers between Level I and Level II assets during the nine months ended September 30, 2015 or the year ended December 31, 2014 . As of September 30, 2015 and December 31, 2014 , certificates of deposit consisted of certificates of deposit held by domestic financial institutions, which are presented as restricted investments within WSE-related assets in the accompanying consolidated balance sheets. The carrying value of the Company’s financial instruments not measured at fair value, including cash, restricted cash, WSE-related assets and liabilities, line of credit and accrued corporate wages, approximates fair value due to the relatively short maturity, cash repayments or market interest rates of such instruments. The fair value of such financial instruments, other than cash and restricted cash, is determined using the income approach based on the present value of estimated future cash flows. The fair value of all of these instruments would be categorized as Level II of the fair value hierarchy, with the exception of cash and cash equivalents, which would be categorized as Level I. At September 30, 2015 and December 31, 2014 , the carrying value of the Company’s notes payable of $504.6 million and $544.9 million , respectively, approximated fair value. The estimated fair values of the Company’s notes payable are considered a Level II valuation in the hierarchy for fair value measurement and are based on a cash flow model discounted at market interest rates that considers the underlying risks of unsecured debt. |
Notes Payable and Borrowings un
Notes Payable and Borrowings under Capital Leases | 9 Months Ended |
Sep. 30, 2015 | |
Line of Credit Facility [Abstract] | |
Notes Payable and Borrowings under Capital Leases | NOTES PAYABLE AND BORROWINGS UNDER CAPITAL LEASES The following schedule summarizes the components of the Company’s notes payable and borrowings under capital leases balances (in thousands): September 30, December 31, Notes payable under credit facility $ 504,626 $ 544,875 Capital leases 132 275 Less current portion (20,274 ) (20,738 ) $ 484,484 $ 524,412 In March 2014, the proceeds from the Company’s initial public offering (IPO) were used to fully repay its existing $190.0 million second lien credit facility, which resulted in a prepayment premium of $3.8 million , and to repay $25.0 million of its existing first lien tranche B-1 term loan. Additionally, the remaining balance of the loan fees associated with the second lien credit facility and a portion of the loan fees associated with the first lien credit facility were fully amortized in March 2014 for a charge of $5.0 million . In May 2014, the Company repaid $25.0 million of the first lien tranche B-1 term loan. As a result, a portion of the loan fees associated with the first lien credit facility was fully amortized in May 2014 for a charge of $0.5 million . In July 2014, the Company amended and restated its first lien credit facility pursuant to an amended and restated first lien credit agreement (the Amended and Restated Credit Agreement). The Amended and Restated Credit Agreement provides for: (i) $375 million principal amount of tranche A term loans, (ii) $200 million principal amount of tranche B term loans, and (iii) a revolving credit facility of $75 million . The proceeds of the tranche A term loans were used to refinance in part the tranche B-2 term loans outstanding under the original first lien credit facility. The proceeds of the tranche B term loans were used to (i) refinance the remaining tranche B-2 term loans outstanding under the original first lien credit facility, (ii) refinance other amounts outstanding under the original first lien credit facility and (iii) pay fees and expenses related thereto. The revolving credit facility replaced the revolving credit facility under the original first lien credit facility. The tranche A term loans and the revolving credit facility will mature on July 9, 2019 . The tranche B term loans will mature on July 9, 2017 . Loans under the revolving credit facility are expected to be used for working capital and other general corporate purposes. The tranche A term loans and loans under the revolving credit facility bear interest, at the Company’s option, at a rate equal to either the LIBOR rate, plus an applicable margin equal to 2.75% per annum, or the prime lending rate, plus an applicable margin equal to 1.75% per annum. The applicable margins for the tranche A term loans and loans under the revolving credit facility are subject to reduction by 0.25% or 0.50% , or increase by 0.25% , based upon the Company’s total leverage ratio. The tranche B term loans bear interest, at the Company’s option, at a rate equal to either the LIBOR rate, plus an applicable margin equal to 2.75% per annum or the prime lending rate, plus an applicable margin equal to 1.75% per annum. The Company is required to pay a commitment fee of 0.50% , subject to decrease to 0.375% based on its total leverage ratio, on the daily unused amount of the commitments under the revolving credit facility, as well as fronting fees and other customary fees for letters of credit issued under the revolving credit facility. The Company is permitted to make voluntary prepayments at any time without payment of a premium. The Company is required to make mandatory prepayments of term loans (without payment of a premium) with (i) net cash proceeds from issuances of debt (other than certain permitted debt), (ii) net cash proceeds from certain non-ordinary course asset sales and casualty and condemnation proceeds (subject to reinvestment rights and other exceptions), and (iii) beginning with the fiscal year ending December 31, 2015, 50% of its excess cash flow (subject to decrease to (x) 25% if its total leverage ratio as of the last day of such fiscal year is less than 3.75 to 1.0 and equal to or greater than 3.00 to 1.0, and (y) 0% if the total leverage ratio as of the last day of such fiscal year is less than 3.00 to 1.0), provided that the Company may defer prepayments based on excess cash flow to the extent such payments would result in the working capital being less than $10 million (after giving effect to such prepayments). The tranche A term loans will be paid in equal quarterly installments in an aggregate annual amount equal to: (i) beginning on December 31, 2014 to December 31, 2016 , 5% of the original principal amount thereof, (ii) beginning on December 31, 2016 to December 31, 2018 , 7.5% of the original principal amount thereof, and (iii) beginning on December 31, 2018 to June 30, 2019 , 10% of the original principal amount thereof with any remaining balance payable on the final maturity date of the tranche A term loans. The tranche B term loans will be paid in equal quarterly installments in an aggregate annual amount equal to 1% of the original principal amount thereof, with any remaining balance payable on the final maturity date of the tranche B term loans. The $75.0 million revolving credit facility includes capacity for a $30.0 million letter of credit facility and a $10.0 million swingline facility. The total unused portion of the revolving credit facility was $59.5 million as of September 30, 2015 . In connection with the Amended and Restated Credit Agreement, the Company incurred $11.1 million of debt issuance costs. The Company deferred $8.0 million of the costs, which are being amortized over the term of the credit facility. The remaining $3.1 million of costs were recorded to interest expense and bank fees. Additionally, the Company recorded a $9.0 million loss on extinguishment of debt to write-off deferred issuance costs associated with the original first lien credit facility, which was also recorded to interest expense and bank fees. The remaining $6.1 million of loan fees associated with the previous facility that was deemed to be modified continues to be amortized over the revised remaining term of the Amended and Restated Credit Agreement. In March 2015, the Company repaid $25.0 million of the first lien tranche B-1 term loan. As a result, a portion of the loan fees associated with the first lien credit facility was fully amortized in March 2015 for a charge of $0.4 million . The Amended and Restated Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants applicable to the Company and its subsidiaries, including, among other things, restrictions on indebtedness, liens, investments, mergers, dispositions, prepayment of other indebtedness, and dividends and other distributions. The Amended and Restated Credit Agreement also contains financial covenants that require the Company to maintain a minimum consolidated interest coverage ratio of at least 3.50 to 1.00, beginning with the fiscal quarter ending September 30, 2014, and a maximum total leverage ratio, currently at 4.50 to 1.00. The Company was in compliance with the restrictive covenants under the credit facilities at September 30, 2015 . The credit facility is secured by substantially all of the Company’s assets and the assets of the borrower and of the subsidiary guarantors, other than specifically excluded assets. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Stockholders' Equity | STOCKHOLDERS’ EQUITY Equity-Based Incentive Plans In 2000, the Company established the 2000 Equity Incentive Plan (the 2000 Plan), which provided for granting incentive stock options, nonstatutory stock options, bonus awards and restricted stock awards to eligible employees, directors, and consultants of the Company. In December 2009, the Board of Directors approved the 2009 Equity Incentive Plan (the 2009 Plan) as the successor to and continuation of the 2000 Plan. As of the 2009 Plan effective date, remaining shares available for issuance under the 2000 Plan were cancelled and became available for issuance under the 2009 Plan. No additional stock awards will be granted under the 2000 Plan. The 2009 Plan provides for the grant of the following awards to eligible employees, directors, and consultants: incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance stock awards, performance cash awards, and other stock awards. Incentive stock options may only be granted to employees. Nonemployee directors are eligible to receive nonstatutory stock options automatically at designated intervals over their period of continuous service on the Board. The 2009 Plan, as amended, provides that the number of shares reserved for issuance under the 2009 Plan will increase on January 1 of each year for a period of up to five years by 4.5% of the total number of shares of capital stock outstanding on December 31 of the preceding calendar year, which will begin on January 1, 2015 and continue through January 1, 2019. On January 1, 2015, an additional 3,141,509 shares were automatically reserved for issuance under the amended 2009 Plan. The exercise price per share of all incentive stock options granted under the 2000 Plan and the 2009 Plan must be at least equal to the fair market value of the shares at the date of grant as determined by the Board of Directors. Options issued to recipients other than nonemployee directors generally vest over four years with a one year cliff and monthly thereafter, and have a maximum contractual term of 10 years. Incentive stock options granted at 110% of the fair market value to stockholders who have greater than 10% ownership have a maximum term of five years. The Company has granted restricted stock units (RSUs) to members of the Board of Directors and certain executives. These RSUs represent rights to receive shares of the Company’s common stock on satisfaction of applicable vesting conditions. The fair value of RSUs is equal to the fair value of the Company’s common stock on the date of grant. The RSUs granted to the members of the Board of Directors vest a year from the grant date. The RSUs granted to newly hired employees vest at a rate of 25% of the total RSUs a year after the grant date and then 1/16 of the total RSUs granted on the 15th day of the second month of each calendar quarter thereafter. All other RSUs granted to employees vest at a rate of 1/16 of the total RSUs granted on the 15th day of the second month of each calendar quarter following the grant date. In March 2015, the Company granted performance-based restricted stock units (PSUs) to its executives intended to represent 33.3% of each executive’s annual long-term incentive compensation award value in fiscal 2015. These PSUs vest over three years based on the Company’s attainment of annual financial performance goals as well as the executive’s continued employment through each vesting date. The number of shares that ultimately vest each year will range from 0 to 200% of the annual target amount, based on the Company’s performance. Cumulative financial performance metrics and goals are established for these awards at the grant date and the tranche of each award related to that period’s performance goal is treated as a separate grant for accounting purposes. The financial performance metric established for the performance awards is cumulative annual growth rate in the Company’s net service revenues. These values are being recognized over the tranches’ 12 -month, 24 -month and 36 -month service periods. The Company began recording stock-based compensation expense for these tranches in March 2015, when the financial performance goals were established. Equity incentive plan activity under the 2000 Plan and the 2009 Plan for the nine months ended September 30, 2015 is summarized as follows: Equity Incentive Plan Activity Shares Available for Grant Balance at December 31, 2014 2,708,524 Authorized 3,141,509 Granted (1,400,109 ) Forfeited 597,960 Expired 1,250 Shares withheld for taxes and not issued 24,852 Balance at September 30, 2015 5,073,986 The following table summarizes stock option activity under the Company’s equity-based plans for the nine months ended September 30, 2015 : Stock Options Activity Number Weighted Weighted Aggregate Balance at December 31, 2014 6,892,810 $ 6.13 8.22 $ 173,338 Granted 312,200 31.66 Exercised (1,918,378 ) 3.42 Forfeited (575,532 ) 7.83 Expired (1,250 ) 10.98 Balance at September 30, 2015 4,709,850 $ 8.72 7.79 $ 45,341 Exercisable at September 30, 2015 1,843,386 $ 5.78 7.34 $ 21,443 Vested and expected to vest at September 30, 2015 4,468,943 $ 8.45 7.76 $ 43,827 The weighted-average grant date fair value of stock options granted in each of the three months ended September 30, 2015 and September 30, 2014 was $8.09 and $15.83 per share, respectively. The weighted-average grant date fair value of stock options granted in each of the nine months ended September 30, 2015 and September 30, 2014 was $12.85 and $6.99 per share, respectively. The total fair value of options vested for the three months ended September 30, 2015 and September 30, 2014 was $1.8 million and $1.7 million , respectively. The total fair value of options vested for the nine months ended September 30, 2015 and September 30, 2014 was $7.5 million and $6.2 million , respectively. The total intrinsic value of options exercised for the three months ended September 30, 2015 and September 30, 2014 was $7.3 million and $6.8 million , respectively. The total intrinsic value of options exercised for the nine months ended September 30, 2015 and September 30, 2014 was $50.3 million and $16.8 million , respectively. Cash received from options exercised during the nine months ended September 30, 2015 and September 30, 2014 was $6.6 million and $1.1 million , respectively. The exercise price of all options granted was equal to the fair value of the common stock on the date of grant. As of September 30, 2015 , unrecognized compensation expense, net of forfeitures, associated with nonvested options outstanding was $17.1 million and is expected to be recognized over a weighted-average period of 1.68 years . The following table summarizes RSU activity under the Company’s equity-based plans for the nine months ended September 30, 2015 : Restricted Stock Unit Activity Number of Units Weighted-Average Grant Date Fair Value Nonvested at December 31, 2014 7,750 $ 13.21 Granted 914,623 $ 30.49 Vested (71,053 ) $ 32.84 Forfeited (22,428 ) $ 33.51 Nonvested at September 30, 2015 828,892 $ 30.05 The total grant date fair value of RSUs granted in the three months ended September 30, 2015 was $3.0 million . The total grant date fair value of RSUs granted in the nine months ended September 30, 2015 was $27.9 million . The total grant date fair value of RSUs vested in the three months ended September 30, 2015 was $1.2 million . The total grant date fair value of RSUs vested in the nine months ended September 30, 2015 was $2.3 million . As of September 30, 2015 , unrecognized compensation expense, net of forfeitures, associated with the nonvested RSUs outstanding was $22.4 million , and is expected to be recognized over a weighted-average period of 3.31 years . The following table summarizes PSU activity under the Company’s equity-based plans for the nine months ended September 30, 2015 : Performance Based Restricted Stock Unit Activity Number of Units Weighted-Average Outstanding units at December 31, 2014 — $ — Granted 173,286 $ 33.51 Units converted — $ — Forfeited — $ — Outstanding units at September 30, 2015 173,286 $ 33.51 The maximum total grant date fair value of PSUs granted in the nine months ended September 30, 2015 was $5.8 million , assuming maximum 200% performance target is met. As of September 30, 2015 , unrecognized compensation expense assuming a 100% performance target is met during 2016 and 2017, net of forfeitures, was $1.3 million , and is expected to be recognized over a weighted-average period of 2.25 years . Employee Stock Purchase Plan The Company adopted the 2014 Employee Stock Purchase Plan (ESPP) in February 2014, which became effective on March 26, 2014. The ESPP was approved with a reserve of 1.1 million shares of common stock for future issuance under various terms provided for in the ESPP, which will automatically increase on January 1 of each year from 2015 through 2024 by the lesser of 1% of the total number of shares outstanding on December 31 of the preceding calendar year or 1,800,000 shares. On January 1, 2015, an additional 698,113 shares were automatically reserved for issuance under the ESPP. The Company commenced its first purchase period under the ESPP on March 26, 2014 with a purchase price equal to the lesser of 85% of the fair market value of the common stock on the offering date and 85% of the fair market value of the common stock on the applicable purchase date. Offering periods are six months in duration and will end on or about May 15 and November 15 of each year, with the exception of the initial offering period, which commenced on March 26, 2014 and ended on November 14, 2014. Employees may contribute a minimum of 1% and a maximum of 15% of their earnings. During the nine months ended September 30, 2015 , employees purchased 107,858 shares under the ESPP at a price of $25.25 per share for cash proceeds of $2.7 million . Stock Repurchases During the nine months ended September 30, 2015 , the Company repurchased 1,895,625 shares of outstanding common stock for $48.4 million . On June 29, 2015, the Board approved the repurchase of an additional $50.0 million of its outstanding common stock in the aggregate under the existing stock repurchase program. As of September 30, 2015 , a total of approximately $31.6 million remained available for further repurchases of the Company’s common stock under the Company’s stock repurchase program. Stock-Based Compensation Stock-based compensation expense of $13.0 million and $8.3 million was recognized for the nine months ended September 30, 2015 and 2014 , respectively. Income tax benefit of $4.2 million and $2.0 million was recognized relating to stock-based compensation expense for the nine months ended September 30, 2015 and 2014 , respectively. The tax benefit realized from stock options exercised was $16.4 million and $6.4 million for the nine months ended September 30, 2015 and 2014 , respectively. The fair value of stock-based awards is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions: Stock Option Assumptions Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Expected term (in years) 6.11 6.08 6.08-6.11 6.04-6.08 Expected volatility 46 % 41 % 39-46% 41-58% Risk-free interest rate 1.62 % 1.85 % 1.62-1.96% 1.74-1.96% Expected dividend yield 0 % 0 % 0 % 0 % ESPP Assumptions Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Expected term (in years) 0.50 0.64 0.50 0.64 Expected volatility 43 % 58 % 34-43% 58 % Risk-free interest rate 0.08 % 0.06 % 0.07-0.08% 0.06 % Expected dividend yield 0 % 0 % 0 % 0 % The volatility for the offering periods beginning on May 18, 2015, November 16, 2014 and March 26, 2014 were 43% , 33% and 58% , respectively. Stock-based compensation expense for stock-based awards made to the Company’s employees pursuant to the equity plans was as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Cost of providing services $ 1,079 $ 843 $ 3,051 $ 2,098 Sales and marketing 1,029 771 3,255 2,062 General and administrative 1,633 1,280 5,497 3,333 Systems development and programming costs 447 287 1,188 758 $ 4,188 $ 3,181 $ 12,991 $ 8,251 |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE Prior to its IPO, the Company’s basic and diluted earnings per share (EPS) were computed using the two-class method, an earnings allocation method that determines earnings per share for common stock and participating securities. Shares of convertible preferred stock are considered participating securities and are entitled to dividend, on a pro rata basis, upon redemption, as if these had been converted to common stock. The undistributed earnings are allocated between common stock and participating securities as if all earnings had been distributed during the period. Basic EPS is calculated by taking net income, less earnings available to participating securities, divided by the basic weighted average common stock outstanding. Diluted EPS is calculated using the more dilutive of the if-converted method and the two-class method. Because the preferred stock participates in dividends on a pro rata basis as if the shares had been converted, the diluted earnings per share are the same under both methods. The two-class method has been presented below. The following table sets forth the computation of the Company’s basic and diluted net income per share attributable to common stock (in thousands, except per share data): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Numerator (basic) Net income $ 3,097 $ 725 $ 17,600 $ 8,486 Less net income allocated to participating securities — — — (1,658 ) Net income attributable to common stock $ 3,097 $ 725 $ 17,600 $ 6,828 Denominator (basic) Weighted average shares of common stock outstanding 70,238 69,135 70,247 51,655 Basic EPS $ 0.04 $ 0.01 $ 0.25 $ 0.13 Numerator (diluted) Net income $ 3,097 $ 725 $ 17,600 $ 8,486 Less net income allocated to participating securities — — — (1,576 ) Net income attributable to common stock $ 3,097 $ 725 $ 17,600 $ 6,910 Denominator (diluted) Weighted average shares of common stock 70,238 69,135 70,247 51,655 Dilutive effect of stock options and restricted stock units 1,850 3,819 2,510 3,349 Weighted average shares of common stock outstanding 72,088 72,954 72,757 55,004 Diluted EPS $ 0.04 $ 0.01 $ 0.24 $ 0.13 Common stock equivalents excluded from diluted weighted average shares of common stock outstanding because of their anti-dilutive effect 1,321 129 957 595 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The Company is subject to income taxation in the United States and Canada. However, business is conducted primarily in the United States. The effective income tax rate differs from the statutory rate primarily due to state taxes, non-deductible stock-based compensation, and tax credits. The Company makes estimates and judgments about its future taxable income that are based on assumptions that are consistent with the Company’s plans and estimates. Should the actual amounts differ from these estimates, the amount of the valuation allowance could be materially affected. Income taxes are computed using the asset and liability method, under which deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Changes in valuation allowances are reflected as a component of provision for income taxes. The Company’s effective income tax rate was 57.9% and 75.5% for the three months ended September 30, 2015 and 2014 , respectively, and 49.6% and 51.9% for the nine months ended September 30, 2015 and 2014 , respectively. The decrease is primarily due to a 2014 discrete charge for the revaluation of deferred taxes based on an income tax accounting method change approved by the Internal Revenue Service (IRS) in the third quarter of 2014. The remainder of the decrease is primarily due to disqualifying dispositions on previously non-deductible stock-based compensation. The Company is subject to taxation under the laws of the U.S. and various state and local jurisdictions, as well as Canada. The Company is not subject to any material income tax examinations by U.S. federal or state tax authorities for tax years beginning prior to January 1, 2010. The Company paid Notices of Proposed Assessments outstanding as of December 31, 2014 related to the disallowance of employment tax credits totaling $10.5 million in connection with the IRS examination of Gevity HR, Inc. and its subsidiaries, which was acquired by TriNet in June 2009. The Company plans to exhaust all administrative efforts to resolve this matter, however, it is likely that the matter will ultimately be resolved through litigation. With regard to these employment tax credits, the Company believes it is more likely than not that the Company will prevail. Therefore, no reserve has been recognized related to this matter. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Lease Commitments The Company leases office facilities, including its headquarters and other facilities, and equipment under non-cancelable operating leases. The Company also leases certain software and furniture, fixtures, and equipment under capital leases. The lease agreements generally provide for rental payments on a graduated basis and for options to renew, which could increase future minimum lease payments if exercised. The Company recognizes rent expense on a straight-line basis over the lease period and accrues for rent expense incurred but not paid. Rent expense for the three months ended September 30, 2015 and 2014 was $3.2 and $3.1 million , respectively. Rent expense for the nine months ended September 30, 2015 and 2014 was $9.5 million and $8.7 million , respectively. Operating Covenants To meet various states’ licensing requirements and maintain accreditation by the Employer Services Assurance Corporation, the Company is subject to various minimum working capital and net worth requirements. As of September 30, 2015 , the Company believes it has fully complied in all material respects with all applicable state regulations regarding minimum net worth, working capital and all other financial and legal requirements. Further, the Company has maintained positive working capital throughout the period covered by the financial statements. Contingencies On or about August 7, 2015, Howard Welgus, a purported stockholder of the Company, filed a putative securities class action arising under the Securities and Exchange Act of 1934 in the United States District Court for the Northern District of California. The name of the case is Welgus v. TriNet Group, Inc. et al., Case No. 3:15-cv-03625. The defendants named in the case are the Company and certain of its officers. The complaint generally alleges that the Company caused damage to stockholders of the Company by misrepresenting and/or failing to disclose facts generally pertaining to alleged trends impacting health insurance and worker compensations claims. The case has not been certified as a class action, although it purports to be filed on behalf of purchasers of the Company's common stock between May 5, 2014 and August 3, 2015, inclusive. No stockholder other than Mr. Welgus submitted a motion for appointment as lead plaintiff to represent the putative class in the case prior to the October 6, 2015 deadline for such motions. A Court hearing has been set for December 10, 2015 on Mr. Welgus's motion for appointment as lead plaintiff. The Company believes that it has meritorious defenses against this action and intends to continue to defend itself vigorously against the allegations of Mr. Welgus. The Company is and, from time to time, has been and may in the future become involved in various litigation matters, legal proceedings and claims arising in the ordinary course of its business, including disputes with its clients or various class action, collective action, representative action and other proceedings arising from the nature of its co-employment relationship with its customers and WSEs in which the Company is named as a defendant. In addition, due to the nature of the Company’s co-employment relationship with its customers and WSEs, the Company could be subject to liability for federal and state law violations, even if the Company does not participate in such violations. While the Company’s agreements with its customers contain indemnification provisions related to the conduct of its customers, the Company may not be able to avail itself of such provisions in every instance. While the outcome of the matters described above cannot be predicted with certainty, management currently does not believe that any such claims or proceedings or the above mentioned securities class action will have a materially adverse effect on the Company’s consolidated financial position, results of operations or cash flows. However, the unfavorable resolution of any particular matter or the Company’s reassessment of its exposure for any of the above matters based on additional information obtained in the future could have a material impact on the Company’s consolidated financial position, results of operations or cash flows. In addition, regardless of the outcome, the above matters, individually and in the aggregate, could have an adverse impact on the Company because of diversion of management resources and other factors. |
Description of Business and S18
Description of Business and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Segment Information | Segment Information The Company operates in one reportable segment in accordance with Accounting Standard Codification (ASC) 280 – Segment Reporting, issued by the Financial Accounting Standards Board (FASB). All of the Company’s service revenues are generated from external customers. Less than 1% of revenues is generated outside of the United States of America (U.S.). Substantially all of the Company’s long-lived assets are located in the U.S. |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements and footnotes thereto of the Company and its wholly owned subsidiaries have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) and applicable rules and regulations of the Securities and Exchange Commission (SEC) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 , filed with the SEC on March 30, 2015. There have been no changes to the Company’s significant accounting policies described in such Annual Report that have had a material impact on its consolidated financial statements and related notes. All intercompany accounts and transactions have been eliminated in consolidation. The accompanying unaudited consolidated balance sheets present the current assets and current liabilities directly related to the processing of human resources transactions as WSE-related assets and WSE-related liabilities, respectively. WSE-related assets are comprised of cash and investments restricted for current workers compensation claim payments, payroll funds collected, accounts receivable, unbilled service revenues, and refundable or prepaid amounts related to the Company-sponsored workers compensation and health plan programs. WSE-related liabilities are comprised of customer prepayments, wages and payroll taxes accrued and payable, and liabilities related to the Company-sponsored workers compensation and health plan programs resulting from workers compensation case reserves, premium amounts due to providers for enrolled employees, and workers compensation and health reserves that are expected to be disbursed within the next 12 months. The unaudited interim financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, necessary for fair presentation. Certain prior period amounts in the consolidated statement of cash flows and in Note 3 have been reclassified to conform to the current presentation. The results of the nine months ended September 30, 2015 are not necessarily indicative of the results to be expected for the year ending December 31, 2015 . |
Use of Estimates | Seasonality and Insurance Variability Historically, the Company has experienced its highest monthly addition of WSEs, as well as its highest monthly levels of client attrition, in the month of January, primarily because clients that change their payroll and benefits service providers tend to do so at the beginning of a calendar year. In addition, the Company experiences higher levels of client attrition during the fourth quarter and, to a lesser extent, during the first quarter of the calendar year, in connection with renewals of the health insurance it provides for its WSEs, in the event that such renewals result in increased premiums that it passes on to its clients. The Company has also historically experienced higher insurance claim volumes in the second and third quarters of a fiscal year than in the first and fourth quarters of a fiscal year, as WSEs typically access their health care providers more often in the second and third quarters of a fiscal year, which has negatively impacted the Company’s insurance costs in these quarters. The Company has also experienced variability on a quarterly basis in the amount of insurance costs due to the number and severity of insurance claims being unpredictable. These historical trends may change, and other seasonal trends and variability may develop that make it more difficult for the Company to manage its business. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. These estimates include, but are not limited to, allowances for accounts receivable, workers compensation-related assets and liabilities, health plan assets and liabilities, recoverability of goodwill and other intangible assets, income taxes, stock-based compensation and other contingent liabilities. Such estimates are based on historical experience and on various other assumptions that Company management believes to be reasonable under the circumstances. Actual results could differ from those estimates. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In September 2015, the FASB issued Accounting Standards Update (ASU) 2015-16— Business Combinations , as part of its initiative to reduce complexity in accounting standards (the Simplification Initiative). The amendment eliminates the requirement to retrospectively apply adjustments made to provisional amounts recognized in a business combination. The amendment is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. The Company expects to adopt this guidance in the current fiscal year. The Company does not expect this guidance to have a material effect on its consolidated financial statements. In April 2015, the FASB issued ASU 2015-05— Intangibles—Goodwill and Other—Internal-Use Software , as part of the Simplification Initiative. The amendment provides guidance to clarify the customer’s accounting for fees paid in a cloud computing arrangement. The amendment is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. The Company expects to adopt this guidance in 2016. The Company does not expect this guidance to have a material effect on its consolidated financial statements. In April 2015, the FASB issued ASU 2015-03— Interest—Imputation of Interest, as part of its Simplification Initiative. The amendment requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The amendment is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted for financial statements that have not been previously issued. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements. In August 2014, the FASB issued ASU 2014-15— Presentation of Financial Statements—Going Concern ( Subtopic 205-40), which addresses management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. Management’s evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued. The standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2016. Early adoption is permitted. The Company does not expect to adopt this guidance early and does not believe that the adoption of this guidance will have a material effect on its consolidated financial statements. In June 2014, the FASB issued ASU 2014-12— Compensation — Stock Compensation , which requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. ASU 2014-12 is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2015. Early adoption is permitted. The amendments may be applied prospectively to all awards granted or modified after the effective date or retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented . The Company does not expect this guidance to have a material effect on its consolidated financial statements. The Company expects to adopt this guidance in 2016. In May 2014, the FASB issued ASU 2014-09— Revenue from Contracts with Customers , which will replace most existing revenue recognition guidance under GAAP. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard provides a five-step analysis of transactions to determine when and how revenue is recognized. In July 2015, the FASB deferred the effective date to annual reporting periods, and interim periods within those years, beginning after December 15, 2017. Early adoption at the original effective date of December 15, 2016 is permitted. The amendments may be applied retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company has not yet selected a method of adoption and is currently evaluating the effect that the amendments will have on the consolidated financial statements. |
Worksite Employee-Related Ass19
Worksite Employee-Related Assets and Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Other Industries [Abstract] | |
Schedule of Components of the Company's WSE-Related Assets and WSE-Related Liabilities | The following schedule presents the components of the Company’s WSE-related assets and WSE-related liabilities (in thousands): September 30, December 31, Worksite employee-related assets: Restricted cash $ 80,943 $ 64,890 Restricted investments 2,319 4,555 Payroll funds collected 479,368 1,336,994 Unbilled revenue, net of advance collections of $114,259 and $113,190 at September 30, 2015 and December 31, 2014, respectively 281,100 203,599 Accounts receivable, net of allowance for doubtful accounts of $817 and $388 at September 30, 2015 and December 31, 2014, respectively 7,122 5,193 Prepaid health plan expenses 5,545 4,932 Refundable workers compensation premiums 2,751 7,975 Prepaid workers compensation expenses 4,177 1,256 Other payroll assets 3,801 5,742 Total worksite employee-related assets $ 867,126 $ 1,635,136 Worksite employee-related liabilities: Unbilled wages accrual $ 365,771 $ 292,906 Payroll taxes payable 240,583 1,119,427 Health benefits payable 120,792 104,220 Customer prepayments 67,377 53,770 Workers compensation payable 38,246 36,778 Other payroll deductions 29,234 23,454 Total worksite employee-related liabilities $ 862,003 $ 1,630,555 |
Workers Compensation (Tables)
Workers Compensation (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Insurance [Abstract] | |
Summary of Activities in Liability for Unpaid Claims and Claims Adjustment Expenses | The following summarizes the activities in the liability for unpaid claims and claims adjustment expenses (in thousands): For the nine months ended September 30, 2015 For the year ended December 31, 2014 Liability for unpaid claims and claims adjustment at beginning of period $ 92,406 $ 58,610 Incurred related to: Current year 64,094 61,669 Prior years 3,824 (4,725 ) Total incurred 67,918 56,944 Paid related to: Current year (11,113 ) (11,003 ) Prior years (22,509 ) (12,145 ) Total paid (33,622 ) (23,148 ) Reclassification from workers compensation receivable 5,087 — Liability for unpaid claims and claims adjustment at end of period 131,789 92,406 Other premiums and collateral liabilities 27,485 19,820 Total workers compensation liabilities at end of period $ 159,274 $ 112,226 Current portion included in worksite employee- related liability 38,246 36,778 Long term portion $ 121,028 $ 75,448 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and equipment, net, consist of the following (in thousands): September 30, December 31, Software $ 62,342 $ 53,349 Office equipment, including data processing equipment 19,779 18,550 Leasehold improvements 9,761 7,092 Furniture, fixtures, and equipment 6,946 6,450 Projects in progress 6,119 6,786 104,947 92,227 Accumulated depreciation (68,595 ) (59,929 ) Property and equipment, net $ 36,352 $ 32,298 |
Marketable Securities and Fai22
Marketable Securities and Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Available-for-Sale Marketable Securities | The available-for-sale marketable securities as of September 30, 2015 and December 31, 2014 consist of the following (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value September 30, 2015: U.S. treasuries $ 63,596 $ 89 $ — $ 63,685 Mutual funds 500 6 — 506 Total investments $ 64,096 $ 95 $ — $ 64,191 December 31, 2014: U.S. treasuries $ 50,075 $ 22 $ (15 ) $ 50,082 Mutual funds 500 6 — 506 Total investments $ 50,575 $ 28 $ (15 ) $ 50,588 |
Summary of Financial Assets Measured at Fair Value on Recurring Basis | The following table summarizes the Company’s financial assets measured at fair value on a recurring basis (in thousands): Total Fair Value Level I Level II Level III September 30, 2015: Certificates of deposit $ 2,319 $ 2,319 $ — $ — U.S. treasuries 63,685 63,685 — — Mutual funds 506 506 — — Total $ 66,510 $ 66,510 $ — $ — December 31, 2014: Certificates of deposit $ 2,318 $ 2,318 $ — $ — U.S. treasuries 50,082 50,082 — — Mutual funds 506 506 — — Interest rate cap 1 — 1 — Total $ 52,907 $ 52,906 $ 1 $ — |
Notes Payable and Borrowings 23
Notes Payable and Borrowings under Capital Leases (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Line of Credit Facility [Abstract] | |
Components of Company's Notes Payable and Borrowings under Capital Leases Balances | The following schedule summarizes the components of the Company’s notes payable and borrowings under capital leases balances (in thousands): September 30, December 31, Notes payable under credit facility $ 504,626 $ 544,875 Capital leases 132 275 Less current portion (20,274 ) (20,738 ) $ 484,484 $ 524,412 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Summary of Equity Incentive Plan Activity | Equity incentive plan activity under the 2000 Plan and the 2009 Plan for the nine months ended September 30, 2015 is summarized as follows: Equity Incentive Plan Activity Shares Available for Grant Balance at December 31, 2014 2,708,524 Authorized 3,141,509 Granted (1,400,109 ) Forfeited 597,960 Expired 1,250 Shares withheld for taxes and not issued 24,852 Balance at September 30, 2015 5,073,986 |
Summary of Stock Option Activity under the Company's Equity-Based Plans | The following table summarizes stock option activity under the Company’s equity-based plans for the nine months ended September 30, 2015 : Stock Options Activity Number Weighted Weighted Aggregate Balance at December 31, 2014 6,892,810 $ 6.13 8.22 $ 173,338 Granted 312,200 31.66 Exercised (1,918,378 ) 3.42 Forfeited (575,532 ) 7.83 Expired (1,250 ) 10.98 Balance at September 30, 2015 4,709,850 $ 8.72 7.79 $ 45,341 Exercisable at September 30, 2015 1,843,386 $ 5.78 7.34 $ 21,443 Vested and expected to vest at September 30, 2015 4,468,943 $ 8.45 7.76 $ 43,827 |
Summary of Restricted Stock Unit Activity under the Company's Equity-Based Plans | The following table summarizes RSU activity under the Company’s equity-based plans for the nine months ended September 30, 2015 : Restricted Stock Unit Activity Number of Units Weighted-Average Grant Date Fair Value Nonvested at December 31, 2014 7,750 $ 13.21 Granted 914,623 $ 30.49 Vested (71,053 ) $ 32.84 Forfeited (22,428 ) $ 33.51 Nonvested at September 30, 2015 828,892 $ 30.05 |
Summary of Performance Based Restricted Stock Unit Activity | The following table summarizes PSU activity under the Company’s equity-based plans for the nine months ended September 30, 2015 : Performance Based Restricted Stock Unit Activity Number of Units Weighted-Average Outstanding units at December 31, 2014 — $ — Granted 173,286 $ 33.51 Units converted — $ — Forfeited — $ — Outstanding units at September 30, 2015 173,286 $ 33.51 |
Summary of Significant Assumptions Used to Estimate Fair Value of Stock Options under Black-Scholes Model | The fair value of stock-based awards is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions: Stock Option Assumptions Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Expected term (in years) 6.11 6.08 6.08-6.11 6.04-6.08 Expected volatility 46 % 41 % 39-46% 41-58% Risk-free interest rate 1.62 % 1.85 % 1.62-1.96% 1.74-1.96% Expected dividend yield 0 % 0 % 0 % 0 % |
Summary of Significant Assumptions Used to Estimate Fair Value of Employee Stock Purchase Plans under Black-Scholes Model | ESPP Assumptions Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Expected term (in years) 0.50 0.64 0.50 0.64 Expected volatility 43 % 58 % 34-43% 58 % Risk-free interest rate 0.08 % 0.06 % 0.07-0.08% 0.06 % Expected dividend yield 0 % 0 % 0 % 0 % |
Summary of Stock-based Compensation Expense | Stock-based compensation expense for stock-based awards made to the Company’s employees pursuant to the equity plans was as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Cost of providing services $ 1,079 $ 843 $ 3,051 $ 2,098 Sales and marketing 1,029 771 3,255 2,062 General and administrative 1,633 1,280 5,497 3,333 Systems development and programming costs 447 287 1,188 758 $ 4,188 $ 3,181 $ 12,991 $ 8,251 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | The following table sets forth the computation of the Company’s basic and diluted net income per share attributable to common stock (in thousands, except per share data): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Numerator (basic) Net income $ 3,097 $ 725 $ 17,600 $ 8,486 Less net income allocated to participating securities — — — (1,658 ) Net income attributable to common stock $ 3,097 $ 725 $ 17,600 $ 6,828 Denominator (basic) Weighted average shares of common stock outstanding 70,238 69,135 70,247 51,655 Basic EPS $ 0.04 $ 0.01 $ 0.25 $ 0.13 Numerator (diluted) Net income $ 3,097 $ 725 $ 17,600 $ 8,486 Less net income allocated to participating securities — — — (1,576 ) Net income attributable to common stock $ 3,097 $ 725 $ 17,600 $ 6,910 Denominator (diluted) Weighted average shares of common stock 70,238 69,135 70,247 51,655 Dilutive effect of stock options and restricted stock units 1,850 3,819 2,510 3,349 Weighted average shares of common stock outstanding 72,088 72,954 72,757 55,004 Diluted EPS $ 0.04 $ 0.01 $ 0.24 $ 0.13 Common stock equivalents excluded from diluted weighted average shares of common stock outstanding because of their anti-dilutive effect 1,321 129 957 595 |
Description of Business and S26
Description of Business and Significant Accounting Policies - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2015segment | |
Summary Of Significant Accounting Policy [Line Items] | |
Number of reportable segments as result of acquisitions | 1 |
Maximum | Geographic concentration risk | Sales revenue, net | |
Summary Of Significant Accounting Policy [Line Items] | |
Concentration risk, less than 1% | 1.00% |
Worksite Employee-Related Ass27
Worksite Employee-Related Assets and Liabilities - Schedule of Components of the Company's WSE-Related Assets and WSE-Related Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Worksite employee-related assets: | ||
Restricted cash | $ 14,554 | $ 14,543 |
Total worksite employee-related assets | 867,126 | 1,635,136 |
Worksite employee-related liabilities: | ||
Health benefits payable | 34,559 | 29,179 |
Total worksite employee-related liabilities | 862,003 | 1,630,555 |
WSE | ||
Worksite employee-related assets: | ||
Restricted cash | 80,943 | 64,890 |
Restricted investments | 2,319 | 4,555 |
Payroll funds collected | 479,368 | 1,336,994 |
Unbilled revenue, net of advance collections of $114,259 and $113,190 at September 30, 2015 and December 31, 2014, respectively | 281,100 | 203,599 |
Accounts receivable, net of allowance for doubtful accounts of $817 and $388 at September 30, 2015 and December 31, 2014, respectively | 7,122 | 5,193 |
Prepaid health plan expenses | 5,545 | 4,932 |
Prepaid workers compensation expenses | 4,177 | 1,256 |
Other payroll assets | 3,801 | 5,742 |
Total worksite employee-related assets | 867,126 | 1,635,136 |
Advance collection | 114,259 | 113,190 |
Allowance for doubtful accounts | 817 | 388 |
Worksite employee-related liabilities: | ||
Unbilled wages accrual | 365,771 | 292,906 |
Payroll taxes payable | 240,583 | 1,119,427 |
Health benefits payable | 120,792 | 104,220 |
Customer prepayments | 67,377 | 53,770 |
Workers compensation payable | 38,246 | 36,778 |
Other payroll deductions | 29,234 | 23,454 |
Total worksite employee-related liabilities | 862,003 | 1,630,555 |
WSE | Workers compensation | ||
Worksite employee-related assets: | ||
Refundable workers compensation premiums | $ 2,751 | $ 7,975 |
Workers Compensation - Summary
Workers Compensation - Summary of Activities in Liability for Unpaid Claims and Claims Adjustment Expenses (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||
Liability for unpaid claims and claims adjustment at beginning of period | $ 92,406 | $ 58,610 |
Incurred related to: | ||
Current year | 64,094 | 61,669 |
Prior years | 3,824 | (4,725) |
Total incurred | 67,918 | 56,944 |
Paid related to: | ||
Current year | (11,113) | (11,003) |
Prior years | (22,509) | (12,145) |
Total paid | (33,622) | (23,148) |
Reclassification from workers compensation receivable | 5,087 | 0 |
Liability for unpaid claims and claims adjustment at end of period | 131,789 | 92,406 |
Other premiums and collateral liabilities | 27,485 | 19,820 |
Total workers compensation liabilities at end of period | 159,274 | 112,226 |
Long term portion | 121,028 | 75,448 |
WSE | ||
Paid related to: | ||
Current portion included in worksite employee- related liability | $ 38,246 | $ 36,778 |
Workers Compensation - Addition
Workers Compensation - Additional Information (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Long-term restricted cash and investments | $ 104,348 | $ 69,447 |
WSE | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Restricted cash and restricted investment | $ 37,800 | $ 36,500 |
Business Combinations - Additio
Business Combinations - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | |
Business Combinations [Abstract] | |||
Cash payments to acquire business | $ 4,750 | $ 4,750 | $ 0 |
Intangible assets acquired | 3,100 | ||
Goodwill acquired | $ 1,700 | ||
Useful life of intangible assets (in years) | 5 years |
Property and Equipment, Net - P
Property and Equipment, Net - Property and Equipment, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 104,947 | $ 92,227 |
Accumulated depreciation | (68,595) | (59,929) |
Property and equipment, net | 36,352 | 32,298 |
Software | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 62,342 | 53,349 |
Office equipment, including data processing equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 19,779 | 18,550 |
Leasehold improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 9,761 | 7,092 |
Furniture, fixtures, and equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 6,946 | 6,450 |
Projects in progress | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 6,119 | $ 6,786 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Property Plant And Equipment [Line Items] | |||||
Assets under capital leases | $ 200 | $ 200 | $ 1,400 | ||
Accumulated depreciation - assets under capital leases | 900 | ||||
Depreciation | 4,132 | $ 3,265 | 10,761 | $ 9,725 | |
Accumulated depreciation | 68,595 | 68,595 | 59,929 | ||
Internally developed software | |||||
Property Plant And Equipment [Line Items] | |||||
Depreciation | 3,700 | 4,000 | |||
Accumulated depreciation | $ 32,800 | 32,800 | $ 29,400 | ||
Impairment loss on internally developed software | $ 400 | $ 100 |
Marketable Securities and Fai33
Marketable Securities and Fair Value Measurements - Additional Information (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Available-for-sale marketable securities | $ 64,200,000 | ||
Cash collateral | 40,100,000 | ||
Assets, fair value | 66,510,000 | $ 52,907,000 | |
Realized gains or losses | $ 0 | $ 0 | |
Percentage of total fair value of available for sale securities in unrealized loss position | 0.00% | 59.00% | |
Transfers between Level I and Level II assets | $ 0 | $ 0 | |
Level II | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Assets, fair value | 0 | 1,000 | |
Carrying value of notes payable | 504,600,000 | 544,900,000 | |
Certificates of deposit | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Assets, fair value | 2,319,000 | 2,318,000 | |
Certificates of deposit | Level II | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Assets, fair value | 0 | 0 | |
U.S. treasuries | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Assets, fair value | 63,685,000 | 50,082,000 | |
U.S. treasuries | Level II | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Assets, fair value | $ 0 | $ 0 | |
U.S. treasuries | Minimum | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Contractual maturities | 2 years | 2 years | |
U.S. treasuries | Maximum | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Contractual maturities | 3 years | 3 years |
Marketable Securities and Fai34
Marketable Securities and Fair Value Measurements - Summary of Available-for-Sale Marketable Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | $ 64,096 | $ 50,575 |
Gross Unrealized Gains | 95 | 28 |
Gross Unrealized Losses | 0 | (15) |
Estimated Fair Value | 64,191 | 50,588 |
U.S. treasuries | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 63,596 | 50,075 |
Gross Unrealized Gains | 89 | 22 |
Gross Unrealized Losses | 0 | (15) |
Estimated Fair Value | 63,685 | 50,082 |
Mutual funds | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 500 | 500 |
Gross Unrealized Gains | 6 | 6 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | $ 506 | $ 506 |
Marketable Securities and Fai35
Marketable Securities and Fair Value Measurements - Summary of Financial Assets Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Schedule Of Available For Sale Securities [Line Items] | ||
Total Fair Value | $ 66,510 | $ 52,907 |
Level I | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Total Fair Value | 66,510 | 52,906 |
Level II | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Total Fair Value | 0 | 1 |
Level III | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Total Fair Value | 0 | 0 |
Certificates of deposit | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Total Fair Value | 2,319 | 2,318 |
Certificates of deposit | Level I | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Total Fair Value | 2,319 | 2,318 |
Certificates of deposit | Level II | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Total Fair Value | 0 | 0 |
Certificates of deposit | Level III | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Total Fair Value | 0 | 0 |
U.S. treasuries | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Total Fair Value | 63,685 | 50,082 |
U.S. treasuries | Level I | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Total Fair Value | 63,685 | 50,082 |
U.S. treasuries | Level II | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Total Fair Value | 0 | 0 |
U.S. treasuries | Level III | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Total Fair Value | 0 | 0 |
Mutual funds | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Total Fair Value | 506 | 506 |
Mutual funds | Level I | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Total Fair Value | 506 | 506 |
Mutual funds | Level II | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Total Fair Value | 0 | 0 |
Mutual funds | Level III | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Total Fair Value | $ 0 | 0 |
Interest rate cap | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Total Fair Value | 1 | |
Interest rate cap | Level I | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Total Fair Value | 0 | |
Interest rate cap | Level II | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Total Fair Value | 1 | |
Interest rate cap | Level III | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Total Fair Value | $ 0 |
Notes Payable and Borrowings 36
Notes Payable and Borrowings under Capital Leases - Components of Company's Notes Payable and Borrowings under Capital Leases Balances (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Line of Credit Facility [Abstract] | ||
Notes payable under credit facility | $ 504,626 | $ 544,875 |
Capital leases | 132 | 275 |
Less current portion | (20,274) | (20,738) |
Notes payable and borrowings under capital leases, less current portion | $ 484,484 | $ 524,412 |
Notes Payable and Borrowings 37
Notes Payable and Borrowings under Capital Leases - Additional Information (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Mar. 31, 2015USD ($) | May. 31, 2014USD ($) | Mar. 31, 2014USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Jul. 31, 2014USD ($) | |
Debt Instrument [Line Items] | ||||||||
Interest and debt expense | $ 4,685,000 | $ 18,462,000 | $ 14,653,000 | $ 49,174,000 | ||||
Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument covenant interest coverage ratio | 3.50 | 3.50 | ||||||
Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument covenant leverage ratio | 4.50 | 4.50 | ||||||
Second lien credit facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Repayments of lines of credit | $ 190,000,000 | |||||||
Penalty paid | 3,800,000 | |||||||
First lien credit facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Repayments of lines of credit | $ 25,000,000 | 25,000,000 | ||||||
Lien of credit amount amortized | $ 500,000 | $ 5,000,000 | $ 6,100,000 | |||||
Unused portion of the revolving credit facility | $ 59,500,000 | 59,500,000 | ||||||
Debt issuance costs | 11,100,000 | |||||||
Deferred financing costs | $ 8,000,000 | 8,000,000 | ||||||
Interest and debt expense | 3,100,000 | |||||||
Gains (losses) on extinguishment of debt | $ (9,000,000) | |||||||
First lien credit facility | Tranche A term loans | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit facility | $ 375,000,000 | |||||||
Credit facility, maturity date | Jul. 9, 2019 | |||||||
Increase (decrease) in interest rate | 0.25% | |||||||
First lien credit facility | Tranche A term loans | Installment period 1 | ||||||||
Debt Instrument [Line Items] | ||||||||
Frequency of payment | Quarterly | |||||||
Beginning date of payment | Dec. 31, 2014 | |||||||
Ending date of payment | Dec. 31, 2016 | |||||||
Percentage of principal amount to be paid | 5.00% | |||||||
First lien credit facility | Tranche A term loans | Installment period 2 | ||||||||
Debt Instrument [Line Items] | ||||||||
Frequency of payment | Quarterly | |||||||
Beginning date of payment | Dec. 31, 2016 | |||||||
Ending date of payment | Dec. 31, 2018 | |||||||
Percentage of principal amount to be paid | 7.50% | |||||||
First lien credit facility | Tranche A term loans | Installment period 3 | ||||||||
Debt Instrument [Line Items] | ||||||||
Frequency of payment | Quarterly | |||||||
Beginning date of payment | Dec. 31, 2018 | |||||||
Ending date of payment | Jun. 30, 2019 | |||||||
Percentage of principal amount to be paid | 10.00% | |||||||
First lien credit facility | Tranche A term loans | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Increase (decrease) in interest rate | (0.25%) | |||||||
First lien credit facility | Tranche A term loans | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Increase (decrease) in interest rate | (0.50%) | |||||||
First lien credit facility | Tranche A term loans | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Margin for term loans | 2.75% | |||||||
First lien credit facility | Tranche A term loans | Prime lending rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Margin for term loans | 1.75% | |||||||
First lien credit facility | Tranche B term loans | ||||||||
Debt Instrument [Line Items] | ||||||||
Repayments of lines of credit | $ 25,000,000 | |||||||
Lien of credit amount amortized | $ 400,000 | |||||||
Line of credit facility | 200,000,000 | |||||||
Credit facility, maturity date | Jul. 9, 2017 | |||||||
Commitment fee percentage | 0.50% | |||||||
Percentage of prepayment in excess cash flow | 50.00% | |||||||
Frequency of payment | Quarterly | |||||||
Percentage of principal amount to be paid | 1.00% | |||||||
First lien credit facility | Tranche B term loans | Prepayment condition 1 | ||||||||
Debt Instrument [Line Items] | ||||||||
Percentage of prepayment in excess cash flow | 25.00% | |||||||
First lien credit facility | Tranche B term loans | Prepayment condition 2 | ||||||||
Debt Instrument [Line Items] | ||||||||
Percentage of prepayment in excess cash flow | 0.00% | |||||||
First lien credit facility | Tranche B term loans | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Commitment fee percentage | 0.375% | |||||||
First lien credit facility | Tranche B term loans | Minimum | Prepayment condition 1 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument covenant leverage ratio | 3 | 3 | ||||||
First lien credit facility | Tranche B term loans | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Working capital less than $10 million | $ 10,000,000 | $ 10,000,000 | ||||||
First lien credit facility | Tranche B term loans | Maximum | Prepayment condition 1 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument covenant leverage ratio | 3.75 | 3.75 | ||||||
First lien credit facility | Tranche B term loans | Maximum | Prepayment condition 2 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument covenant leverage ratio | 3 | 3 | ||||||
First lien credit facility | Tranche B term loans | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Margin for term loans | 2.75% | |||||||
First lien credit facility | Tranche B term loans | Prime lending rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Margin for term loans | 1.75% | |||||||
First lien credit facility | Revolving credit facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit facility | $ 75,000,000 | |||||||
Credit facility, maturity date | Jul. 9, 2019 | |||||||
First lien credit facility | Letter of credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit facility | $ 30,000,000 | $ 30,000,000 | ||||||
First lien credit facility | Swingline | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit facility | $ 10,000,000 | $ 10,000,000 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - USD ($) | May. 18, 2015 | Jan. 01, 2015 | Nov. 16, 2014 | Mar. 26, 2014 | Mar. 26, 2014 | Mar. 31, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Jun. 29, 2015 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Plan description | Options issued to recipients other than nonemployee directors generally vest over four years with a one year cliff and monthly thereafter, and have a maximum contractual term of 10 years. | ||||||||||
Term of stock options | 4 years | ||||||||||
Stock options granted percentage of fair market value | 110.00% | ||||||||||
Weighted-average grant-date fair value of stock options granted | $ 8.09 | $ 15.83 | $ 12.85 | $ 6.99 | |||||||
Total fair value of options vested | $ 1,800,000 | $ 1,700,000 | $ 7,500,000 | $ 6,200,000 | |||||||
Total intrinsic value of options exercised | 7,300,000 | 6,800,000 | 50,300,000 | 16,800,000 | |||||||
Cash received from options exercised | 6,600,000 | 1,100,000 | |||||||||
Unrecognized compensation expense of options, net of forfeitures | 17,100,000 | $ 17,100,000 | |||||||||
Unrecognized compensation expense, expected to be recognized over a weighted-average period | 1 year 8 months 5 days | ||||||||||
Employee stock purchase plans, purchased shares | 107,858 | ||||||||||
Number of shares repurchased | 1,895,625 | ||||||||||
Value of shares repurchased | $ 48,400,000 | ||||||||||
Stock repurchase program, authorized amount | $ 50,000,000 | ||||||||||
Stock repurchase remained available for future repurchase, value | 31,600,000 | 31,600,000 | |||||||||
Stock-based compensation expense | 4,188,000 | $ 3,181,000 | 12,991,000 | 8,251,000 | |||||||
Income tax benefit recognized relating to stock-based compensation expense | 4,200,000 | 2,000,000 | |||||||||
Actual tax benefit realized from stock options exercised | $ 16,400,000 | $ 6,400,000 | |||||||||
Volatility rate | 43.00% | 33.00% | 58.00% | ||||||||
Restricted Stock Unit | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Unrecognized compensation expense, expected to be recognized over a weighted-average period | 3 years 3 months 22 days | ||||||||||
Total grant date fair value of restricted stock units granted | 3,000,000 | $ 27,900,000 | |||||||||
Total grant date fair value of restricted stock units | 1,200,000 | 2,300,000 | |||||||||
Unrecognized compensation expense of awards other than options, net of forfeitures | 22,400,000 | $ 22,400,000 | |||||||||
Restricted Stock Unit | Awards vesting a year from grant date for newly hired employees | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Stock options vesting percentage | 25.00% | ||||||||||
Restricted Stock Unit | Awards vesting during each quarter after first year for newly hired employees | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Stock options vesting percentage | 6.25% | ||||||||||
Restricted Stock Unit | Remaining awards vesting during each quarter | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Stock options vesting percentage | 6.25% | ||||||||||
Performance-based restricted stock units | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Unrecognized compensation expense, expected to be recognized over a weighted-average period | 2 years 3 months | ||||||||||
Unrecognized compensation expense of awards other than options, net of forfeitures | $ 1,300,000 | $ 1,300,000 | |||||||||
Performance target assumption, unrecognized compensation expense | 100.00% | 100.00% | |||||||||
Performance-based restricted stock units | Share-based compensation award, tranche one | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Service period | 12 months | ||||||||||
Performance-based restricted stock units | Share-based compensation award, tranche two | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Service period | 24 months | ||||||||||
Performance-based restricted stock units | Share-based compensation award, tranche three | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Service period | 36 months | ||||||||||
Minimum | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Ownership, less than 10% | 10.00% | 10.00% | |||||||||
Minimum | Performance-based restricted stock units | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Stock options vesting percentage range | 0.00% | ||||||||||
Maximum | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Contractual term | 5 years | ||||||||||
Maximum | Performance-based restricted stock units | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Stock options vesting percentage range | 200.00% | ||||||||||
Total grant date fair value of restricted stock units granted | $ 5,800,000 | ||||||||||
Performance target assumption, grant date fair value | 200.00% | ||||||||||
Member of board of directors | Restricted Stock Unit | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Term of stock options | 1 year | ||||||||||
Nonemployee directors | Maximum | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Contractual term | 10 years | ||||||||||
Executives | Performance-based restricted stock units | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Term of stock options | 3 years | ||||||||||
Percentage of long term incentive compensation award grants | 33.30% | ||||||||||
2000 Plan | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Share-based compensation arrangement by share-based payment award, additional number of shares available for grant | 0 | 0 | |||||||||
2009 Plan | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Shares reserved for future issuance expressed as a percentage of outstanding shares | 4.50% | ||||||||||
Number of shares reserved for issuance | 3,141,509 | ||||||||||
2009 Plan | Nonemployee directors | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Plan description | The 2009 Plan, as amended, provides that the number of shares reserved for issuance under the 2009 Plan will increase on January 1 of each year for a period of up to five years by 4.5% of the total number of shares of capital stock outstanding on December 31 of the preceding calendar year, which will begin on January 1, 2015 and continue through January 1, 2019. | ||||||||||
Employee Stock Purchase Plan | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Number of shares reserved for issuance | 1,100,000 | 1,100,000 | |||||||||
Common stock for future issuance percentage increased | 1.00% | 1.00% | |||||||||
Authorized shares reserved for issuance | 698,113 | ||||||||||
Stock options granted percentage of fair market value on offering date | 85.00% | ||||||||||
Stock options granted percentage of fair market value on purchase date | 85.00% | ||||||||||
Employee stock purchase plan offering periods | Offering periods are six months in duration and will end on or about May 15 and November 15 of each year, with the exception of the initial offering period, which commenced on March 26, 2014 and ended on November 14, 2014. | ||||||||||
Employee stock purchase plans, price per share | $ 25.25 | $ 25.25 | |||||||||
Employee stock purchase plans, purchased share values | $ 2,700,000 | ||||||||||
Employee Stock Purchase Plan | Minimum | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Employees contribution on earnings | 1.00% | ||||||||||
Employee Stock Purchase Plan | Maximum | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Common stock for future issuance number increase | 1,800,000 | ||||||||||
Employees contribution on earnings | 15.00% |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Equity Incentive Plan Activity (Details) | 9 Months Ended |
Sep. 30, 2015shares | |
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract] | |
Granted | (312,200) |
Forfeited | 575,532 |
Expired | 1,250 |
Equity incentive plan activity under 2000 Plan and 2009 Plan | |
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract] | |
Beginning Balance | 2,708,524 |
Authorized | 3,141,509 |
Granted | (1,400,109) |
Forfeited | 597,960 |
Expired | 1,250 |
Shares withheld for taxes and not issued | 24,852 |
Ending Balance | 5,073,986 |
Stockholders' Equity - Summar40
Stockholders' Equity - Summary of Stock Option Activity under the Company's Equity-Based Plans (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Number of Shares, Beginning Balance | 6,892,810 | |
Number of Shares, Granted | 312,200 | |
Number of Shares, Exercised | (1,918,378) | |
Number of Shares, Forfeited | (575,532) | |
Number of Shares, Expired | (1,250) | |
Number of Shares, Ending Balance | 4,709,850 | 6,892,810 |
Number of Shares, Exercisable, Ending Balance | 1,843,386 | |
Number of Shares, Vested and expected to vest, Ending Balance | 4,468,943 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||
Weighted-Average Exercise Price, Beginning Balance | $ 6.13 | |
Weighted-Average Exercise Price, Granted | 31.66 | |
Weighted-Average Exercise Price, Exercised | 3.42 | |
Weighted-Average Exercise Price, Forfeited | 7.83 | |
Weighted-Average Exercise Price, Expired | 10.98 | |
Weighted-Average Exercise Price, Ending Balance | 8.72 | $ 6.13 |
Weighted-Average Exercise Price, Exercisable, Ending Balance | 5.78 | |
Weighted-Average Exercise Price, Vested and expected to vest, Ending Balance | $ 8.45 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Weighted-Average Remaining Contractual Term (in years) | 7 years 9 months 15 days | 8 years 2 months 19 days |
Weighted-Average Remaining Contractual Term (in years), Exercisable | 7 years 4 months 2 days | |
Weighted-Average Remaining Contractual Term (in years), Vested and expected to vest | 7 years 9 months 4 days | |
Aggregate Intrinsic Value, Beginning Balance | $ 173,338 | |
Aggregate Intrinsic Value, Ending Balance | 45,341 | $ 173,338 |
Aggregate Intrinsic Value, Exercisable, Ending Balance | 21,443 | |
Aggregate Intrinsic Value, Vested and expected to vest, Ending Balance | $ 43,827 |
Stockholders' Equity - Summar41
Stockholders' Equity - Summary of Restricted Unit Activity under the Company's Equity-Based Plans (Details) | 9 Months Ended |
Sep. 30, 2015$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Number of Units, Beginning Balance | 7,750 |
Number of Units, Granted | 914,623 |
Number of Units, Vested | (71,053) |
Number of Units, Forfeited | (22,428) |
Number of Units, Ending Balance | 828,892 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |
Weighted Average Grant Date Fair Value, Beginning Balance | $ / shares | $ 13.21 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 30.49 |
Weighted Average Grant Date Fair Value, Vested | $ / shares | 32.84 |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | 33.51 |
Weighted Average Grant Date Fair Value, Ending Balance | $ / shares | $ 30.05 |
Stockholders' Equity - Summar42
Stockholders' Equity - Summary of Performance Based Restricted Stock Unit Activity (Details) | 9 Months Ended |
Sep. 30, 2015$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Number of Units, Beginning Balance | 7,750 |
Number of Units, Granted | 914,623 |
Number of Units, Ending Balance | 828,892 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |
Weighted Average Grant Date Fair Value, Beginning Balance | $ / shares | $ 13.21 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 30.49 |
Weighted Average Grant Date Fair Value, Ending Balance | $ / shares | $ 30.05 |
Performance-based restricted stock units | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Number of Units, Beginning Balance | 0 |
Number of Units, Granted | 173,286 |
Number of Units, Ending Balance | 173,286 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |
Weighted Average Grant Date Fair Value, Beginning Balance | $ / shares | $ 0 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 33.51 |
Weighted Average Grant Date Fair Value, Ending Balance | $ / shares | $ 33.51 |
Stockholders' Equity - Summar43
Stockholders' Equity - Summary of Fair Value of Stock-based Awards Estimated using Black-Scholes Option-Pricing Model (Details) | May. 18, 2015 | Nov. 16, 2014 | Mar. 26, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Expected volatility | 43.00% | 33.00% | 58.00% | ||||
ESPP | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Expected term (in years) | 6 months | 7 months 21 days | 6 months | 7 months 21 days | |||
Expected volatility | 43.00% | 58.00% | 58.00% | ||||
Expected volatility, minimum | 34.00% | ||||||
Expected volatility, maximum | 43.00% | ||||||
Risk-free interest rate | 0.08% | 0.06% | 0.06% | ||||
Risk-free interest rate, minimum | 0.07% | ||||||
Risk-free interest rate, maximum | 0.08% | ||||||
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% | |||
Stock Option | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Expected term (in years) | 6 years 1 month 10 days | 6 years 29 days | |||||
Expected volatility | 46.00% | 41.00% | |||||
Expected volatility, minimum | 39.00% | 41.00% | |||||
Expected volatility, maximum | 46.00% | 58.00% | |||||
Risk-free interest rate | 1.62% | 1.85% | |||||
Risk-free interest rate, minimum | 1.62% | 1.74% | |||||
Risk-free interest rate, maximum | 1.96% | 1.96% | |||||
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% | |||
Minimum | Stock Option | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Expected term (in years) | 6 years 29 days | 6 years 15 days | |||||
Maximum | Stock Option | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Expected term (in years) | 6 years 1 month 10 days | 6 years 29 days |
Stockholders' Equity - Summar44
Stockholders' Equity - Summary of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 4,188 | $ 3,181 | $ 12,991 | $ 8,251 |
Cost of providing services | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock-based compensation expense | 1,079 | 843 | 3,051 | 2,098 |
Sales and marketing | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock-based compensation expense | 1,029 | 771 | 3,255 | 2,062 |
General and administrative | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock-based compensation expense | 1,633 | 1,280 | 5,497 | 3,333 |
Systems development and programming costs | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 447 | $ 287 | $ 1,188 | $ 758 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Numerator (basic) | ||||
Net income | $ 3,097 | $ 725 | $ 17,600 | $ 8,486 |
Less net income allocated to participating securities | 0 | 0 | 0 | (1,658) |
Net income attributable to common stock | $ 3,097 | $ 725 | $ 17,600 | $ 6,828 |
Denominator (basic) | ||||
Weighted average shares of common stock outstanding | 70,237,737 | 69,134,908 | 70,247,035 | 51,654,608 |
Basic EPS | $ 0.04 | $ 0.01 | $ 0.25 | $ 0.13 |
Numerator (diluted) | ||||
Net income | $ 3,097 | $ 725 | $ 17,600 | $ 8,486 |
Less net income allocated to participating securities | 0 | 0 | 0 | (1,576) |
Net income attributable to common stock | $ 3,097 | $ 725 | $ 17,600 | $ 6,910 |
Denominator (diluted) | ||||
Weighted average shares of common stock outstanding | 70,237,737 | 69,134,908 | 70,247,035 | 51,654,608 |
Dilutive effect of stock options and restricted stock units | 1,850,000 | 3,819,000 | 2,510,000 | 3,349,000 |
Weighted average shares of common stock outstanding | 72,087,917 | 72,954,352 | 72,757,277 | 55,003,651 |
Diluted EPS | $ 0.04 | $ 0.01 | $ 0.24 | $ 0.13 |
Common stock equivalents excluded from diluted weighted average shares of common stock outstanding because of their anti-dilutive effect | 1,321,000 | 129,000 | 957,000 | 595,000 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||||
Effective income tax rate | 57.90% | 75.50% | 49.60% | 51.90% | |
Employment tax credit | $ 10.5 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Rent expenses incurred | $ 3.2 | $ 3.1 | $ 9.5 | $ 8.7 |