Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | Apr. 30, 2016 | |
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 | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 70,699,901 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 195,938 | $ 166,178 |
Restricted cash | 14,563 | 14,557 |
Prepaid income taxes | 0 | 4,105 |
Prepaid expenses | 9,457 | 8,579 |
Other current assets | 1,638 | 1,359 |
Worksite employee related assets | 1,026,823 | 1,373,386 |
Total current assets | 1,248,419 | 1,568,164 |
Workers compensation receivable | 36,892 | 29,204 |
Restricted cash and investments | 103,502 | 101,806 |
Property and equipment, net | 41,879 | 37,844 |
Goodwill | 289,207 | 289,207 |
Other intangible assets, net | 42,092 | 46,772 |
Other assets | 19,565 | 19,452 |
Total assets | 1,781,556 | 2,092,449 |
Current liabilities: | ||
Accounts payable | 20,106 | 12,904 |
Accrued corporate wages | 24,106 | 28,963 |
Income taxes payable | 3,097 | 0 |
Current portion of notes payable and borrowings under capital leases | 35,358 | 32,970 |
Other current liabilities | 12,492 | 11,402 |
Worksite employee related liabilities | 1,022,458 | 1,369,497 |
Total current liabilities | 1,117,617 | 1,455,736 |
Notes payable and borrowings under capital leases, less current portion | 454,107 | 460,965 |
Workers compensation liabilities | 119,900 | 105,481 |
Deferred income taxes | 54,773 | 54,641 |
Other liabilities | 8,417 | 7,545 |
Total liabilities | $ 1,754,814 | $ 2,084,368 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $.000025 per share stated value; 20,000,000 shares authorized; no shares issued and outstanding at March 31, 2016 and December 31, 2015 | $ 0 | $ 0 |
Common stock, $.000025 per share stated value; 750,000,000 shares authorized; 70,718,423 and 70,371,425 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively | 501,786 | 494,397 |
Accumulated deficit | (474,674) | (485,595) |
Accumulated other comprehensive loss | (370) | (721) |
Total stockholders’ equity | 26,742 | 8,081 |
Total liabilities and stockholders’ equity | $ 1,781,556 | $ 2,092,449 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2016 | Dec. 31, 2015 |
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 | 70,718,423 | 70,371,425 |
Common stock, shares outstanding | 70,718,423 | 70,371,425 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Statement [Abstract] | ||
Professional service revenues | $ 112,403 | $ 97,016 |
Insurance service revenues | 620,536 | 528,562 |
Total revenues | 732,939 | 625,578 |
Costs and operating expenses: | ||
Insurance costs | 569,689 | 483,203 |
Cost of providing services (exclusive of depreciation and amortization of intangible assets) | 45,705 | 36,370 |
Sales and marketing | 48,708 | 37,624 |
General and administrative | 27,650 | 15,464 |
Systems development and programming costs | 6,389 | 7,225 |
Amortization of intangible assets | 4,980 | 11,217 |
Depreciation | 3,916 | 3,434 |
Total costs and operating expenses | 707,037 | 594,537 |
Operating income | 25,902 | 31,041 |
Other income (expense): | ||
Interest expense and bank fees | (5,042) | (5,204) |
Other, net | (42) | 450 |
Income before provision for income taxes | 20,818 | 26,287 |
Provision for income taxes | 9,241 | 10,476 |
Net income | $ 11,577 | $ 15,811 |
Net income per share: | ||
Basic (in dollars per share) | $ 0.16 | $ 0.23 |
Diluted (in dollars per share) | $ 0.16 | $ 0.22 |
Weighted average shares: | ||
Basic (in shares) | 70,521,000 | 70,198,000 |
Diluted (in shares) | 71,745,753 | 73,350,219 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 11,577 | $ 15,811 |
Other comprehensive income (loss), net of tax | ||
Unrealized gains on investments | 191 | 37 |
Foreign currency translation adjustments | 160 | (136) |
Total other comprehensive (loss), net of tax | 351 | (99) |
Comprehensive income | $ 11,928 | $ 15,712 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Operating activities | ||
Net income | $ 11,577 | $ 15,811 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 8,746 | 14,653 |
Stock-based compensation | 7,397 | 3,920 |
Excess tax (benefit) deficiency from equity incentive plan activity | 467 | (12,853) |
Changes in operating assets and liabilities: | ||
Restricted cash and investments | (3,202) | (4,520) |
Prepaid expenses and other current assets | (1,157) | (2,181) |
Workers compensation receivables | (7,688) | (22,100) |
Other assets | (312) | (13,259) |
Accounts payable | 6,111 | (1,352) |
Income taxes payable/receivable | 6,735 | 29,153 |
Other current liabilities | (2,505) | (211) |
Other liabilities | 15,205 | 8,319 |
Worksite employee related assets | 346,563 | 712,517 |
Worksite employee related liabilities | (347,039) | (714,570) |
Net cash provided by operating activities | 40,898 | 13,327 |
Investing activities | ||
Acquisitions of businesses | (300) | 0 |
Maturity of debt securities | 1,500 | 0 |
Purchase of property and equipment | (6,807) | (3,853) |
Net cash used in investing activities | (5,607) | (3,853) |
Financing activities | ||
Proceeds from issuance of common stock on exercised options | 504 | 3,199 |
Excess tax benefit (deficiency) from equity incentive plan activity | (467) | 12,853 |
Repayment of notes payable | (5,062) | (30,125) |
Repayments under capital leases | (10) | (180) |
Repurchase of common stock | 0 | (25,016) |
Awards effectively repurchased for required employee withholding taxes | (656) | (9) |
Net cash used in financing activities | (5,691) | (39,278) |
Effect of exchange rate changes on cash and cash equivalents | 160 | (136) |
Net increase (decrease) in cash and cash equivalents | 29,760 | (29,940) |
Cash and cash equivalents at beginning of period | 166,178 | 134,341 |
Cash and cash equivalents at end of period | 195,938 | 104,401 |
Supplemental disclosures of cash flow information | ||
Cash paid for interest | 4,083 | 3,872 |
Cash paid for income taxes, net | 2,572 | (4,357) |
Supplemental schedule of noncash investing and financing activities | ||
Payable for purchase of property and equipment | 1,435 | 1,034 |
Allowance for tenant improvements | $ 0 | $ 791 |
Description of Business and Sig
Description of Business and Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2016 | |
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 comprehensive human resources, or HR, solutions for small to midsize businesses, or SMBs, across a number of industries under a co-employment model. The Company’s HR solutions are designed to manage an increasingly complex set of HR regulations, costs, risks and responsibilities for its clients, allowing them to focus on operating and growing their core businesses. These HR solutions include offerings, such as multi-state payroll processing and tax administration, employee benefits programs (including health insurance and retirement plans), workers compensation insurance and claims management, federal, state and local labor, employment and benefit law compliance, risk mitigation, expense and time management, human capital consulting and other services. TriNet’s proprietary, cloud-based HR software systems are used by its clients and their employees, whom the Company refers to as worksite employees, or WSEs, to store and manage their core HR-related information and conduct a variety of HR-related transactions. In addition, TriNet’s teams of in-house HR professionals also provide additional services upon request to support various stages of TriNet clients' growth, including talent management, recruiting and training, performance management consulting or other consulting services. TriNet’s clients are distributed across a variety of industries, including technology, life sciences, not-for-profit, professional services, financial services, property management, retail, manufacturing, and hospitality. TriNet’s sales and marketing, client services and product development teams are increasingly focused on specific industry verticals. This verticalized approach helps gives us a better understanding of the HR needs facing SMBs in particular industries, which we believe helps us provide HR solutions and services tailored to the specific needs of clients in these verticals. 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 clients. Less than 1% of revenue 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, 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 consist 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 consist of client 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 balance sheet, consolidated statement of cash flows, Note 3 and Note 5 have been reclassified to conform to the current presentation. The results of the three months ended March 31, 2016 are not necessarily indicative of the results to be expected for the year ending December 31, 2016 . Seasonality and Insurance Variability The Company's business is affected by cyclicality in business activity and WSE behavior. 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 service providers tend to do so at the beginning of a calendar year. In addition, the Company experiences higher levels of client attrition in connection with renewals of the health insurance TriNet sponsors for its WSEs, in the event that such renewals result in higher costs to its clients. The Company has also historically experienced higher insurance claim volumes in the second and third quarters of the year than in the first and fourth quarters, as WSEs typically access their health care providers more often in the second and third quarters, 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 our health and workers compensation 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 which would 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 reserve estimates, health plan reserve estimates, 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 March 2016, the Financial Accounting Standards Board, or (FASB), issued Accounting Standards Update (ASU) 2016-09— Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting , as part of the Simplification Initiative. The areas for simplification in this update involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Some of the areas for simplification apply only to nonpublic entities. The amendment is effective for annual reporting periods, and interim periods within those years beginning after December 15, 2016. Early adoption is permitted. The Company is currently in the process of evaluating the impact of the adoption of this standard on its consolidated financial statements. In April 2015, the FASB issued ASU 2015-03— Interest—Imputation of Interest (Subtopic 835-30), and, in August 2015, the FASB issued ASU 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements. These ASUs require debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of that debt consistent with debt discounts. The presentation and subsequent measurement of debt issuance costs associated with lines of credit, may be presented as an asset and amortized ratably over the term of the line of credit arrangement, regardless of whether there are outstanding borrowings on the arrangement. The recognition and measurement guidance for debt issuance costs are not affected by these ASUs. The Company adopted these ASUs as of March 31, 2016. The adoption of the ASUs resulted in a reclassification of unamortized debt issuance costs of $5.2 million and $5.8 million from deferred loan costs and other assets to notes payable as of March 31, 2016 and December 31, 2015, respectively. Unamortized debt issuance costs related to the Company’s Revolving Credit Facility remain classified as an asset in the accompanying consolidated balance sheets. The adoption of this guidance did not have any impact on the Company’s consolidated statements of operations, comprehensive income or cash flows. 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. In March and April 2016, the FASB issued ASU 2016-08 Principal versus Agent Considerations (Reporting Revenue Gross versus Net) and 2016-10 Identifying Performance Obligations and Licensing , respectively, providing further clarification to be considered when implementing ASU 2014-19. 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 | 3 Months Ended |
Mar. 31, 2016 | |
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): March 31, December 31, Worksite employee-related assets: Restricted cash $ 103,503 $ 92,917 Restricted investments 2,969 3,819 Payroll funds collected 655,607 859,322 Unbilled revenue, net of advance collections of $165,766 and $11,875 at March 31, 2016 and December 31, 2015, respectively 237,760 213,837 Accounts receivable, net of allowance for doubtful accounts of $577 and $1,158 at March 31, 2016 and December 31, 2015, respectively 10,380 5,060 Prepaid health plan expenses 8,131 8,088 Refundable workers compensation premiums 2,234 2,428 Prepaid workers compensation expenses 2,006 744 Other payroll assets 4,233 187,171 Total worksite employee-related assets $ 1,026,823 $ 1,373,386 Worksite employee-related liabilities: Unbilled wages accrual $ 374,675 $ 202,396 Payroll taxes payable 366,902 883,608 Health benefits payable 126,957 128,028 Customer prepayments 56,722 57,758 Workers compensation payable 61,100 66,174 Other payroll deductions 36,102 31,533 Total worksite employee-related liabilities $ 1,022,458 $ 1,369,497 Other payroll assets and payroll taxes payable above include a receivable due from one client at December 31, 2015 for $181 million related to an end of year payroll tax liability for which funding was received in January 2016. Payroll taxes payable, workers compensation payable and health benefits payable also include the related amounts of approximately 2,500 Company employees. |
Workers Compensation
Workers Compensation | 3 Months Ended |
Mar. 31, 2016 | |
Insurance [Abstract] | |
Workers Compensation | WORKERS COMPENSATION The Company has agreements with various insurance carriers to provide workers compensation insurance coverage for worksite employees, including programs where either the Company or the carrier retains custody of claim deposits paid by the Company. Insurance carriers are responsible for administrating and paying claims. The Company is responsible for reimbursing each carrier up to a deductible limit per occurrence. In cases where the carrier retains custody of claim deposits, any excess deposits held by the carrier can be returned to the Company over time, based on terms defined within the respective agreements. The following summarizes the activities in the balance sheet for unpaid claims and claims adjustment expenses within workers compensation assets and liabilities (in thousands): Three months ended Year ended December 31, 2015 Liability for unpaid claims and claims adjustment at beginning of period $ 190,102 $ 148,034 Incurred related to: Current year 22,774 89,137 Prior years 5,263 26,391 Total incurred 28,037 115,528 Paid related to: Current year (711 ) (16,376 ) Prior years (17,276 ) (57,084 ) Total paid (17,987 ) (73,460 ) Liability for unpaid claims and claims adjustment at end of period $ 200,152 $ 190,102 Assets held by third parties to cover claim liabilities (67,807 ) (58,522 ) Workers compensation premiums and other liabilities 16,000 9,455 Other workers compensation assets (6,471 ) (1,012 ) Total net workers compensation liabilities $ 141,874 $ 140,023 Location on Consolidated Balance Sheet: Workers compensation liabilities Current portion included in worksite employee-related liability $ 61,100 $ 66,174 Long term portion 119,900 105,481 Total $ 181,000 $ 171,655 Workers compensation receivables Current portion included in worksite employee-related asset $ 2,234 $ 2,428 Long term portion 36,892 29,204 Total $ 39,126 $ 31,632 Incurred claims related to prior years represent changes in estimates for ultimate losses on workers compensation claims. 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 March 31, 2016 and December 31, 2015 , such restricted amounts of $57.0 million and $49.8 million , respectively, are included in restricted cash and restricted investments within WSE-related assets in the accompanying consolidated balance sheets. In addition, at March 31, 2016 and December 31, 2015 , $103.5 million and $101.8 million , respectively, are presented as restricted long-term cash and investments. Assets held by third parties to cover claim liabilities represents prefunded claim obligations paid to carriers in excess of estimated total claim liabilities, which will be applied to incurred claims. The funds remain restricted until the plan year to which they relate are settled. |
Marketable Securities and Fair
Marketable Securities and Fair Value Measurements | 3 Months Ended |
Mar. 31, 2016 | |
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 $62.7 million of available-for-sale marketable securities and $40.8 million of cash collateral at March 31, 2016 . The Company’s restricted investments within WSE-related assets include $2.3 million of certificates of deposit as of March 31, 2016 . The available-for-sale marketable securities as of March 31, 2016 and December 31, 2015 consist of the following (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value March 31, 2016: U.S. treasuries $ 62,706 $ 185 $ — $ 62,891 Mutual funds 500 8 — 508 Total investments $ 63,206 $ 193 $ — $ 63,399 December 31, 2015: U.S. treasuries $ 64,226 $ 9 $ (144 ) $ 64,091 Mutual funds 500 4 — 504 Total investments $ 64,726 $ 13 $ (144 ) $ 64,595 There were no realized gains or losses for the three months ended March 31, 2016 and 2015 . As of March 31, 2016 and December 31, 2015 , the contractual maturities of the U.S. treasuries were one to four years. As of March 31, 2016 , 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 81% of the total fair value of all securities available for sale as of March 31, 2016 and December 31, 2015 , respectively. 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 March 31, 2016: Certificates of deposit $ 2,319 $ 2,319 $ — $ — U.S. treasuries 62,891 62,891 — — Mutual funds 508 508 — — Total $ 65,718 $ 65,718 $ — $ — December 31, 2015: Certificates of deposit $ 2,319 $ 2,319 $ — $ — U.S. treasuries 64,091 64,091 — — Mutual funds 504 504 — — Total $ 66,914 $ 66,914 $ — $ — There were no transfers between Level I and Level II assets during the three months ended March 31, 2016 or the year ended December 31, 2015 . As of March 31, 2016 and December 31, 2015 , 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 and restricted cash, approximates fair value due to the relatively short maturity of such instruments. The fair value 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 March 31, 2016 and December 31, 2015 , the carrying value of the Company’s notes payable of $494.5 million and $499.6 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 | 3 Months Ended |
Mar. 31, 2016 | |
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): March 31, December 31, Notes payable under credit facility $ 494,501 $ 499,563 Deferred loan costs (5,178 ) (5,781 ) Capital leases 142 153 Less current portion (35,358 ) (32,970 ) $ 454,107 $ 460,965 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 $75.0 million revolving credit facility includes capacity for a $40.0 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 March 31, 2016 . 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 specified rate adjustments of 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 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 the 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 the 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 Company reclassified from long-term debt to current $12.7 million at December 31, 2015 in anticipation of this prepayment. The tranche A term loans will be repaid 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 repaid in equal quarterly installments in an aggregate annual amount equal to 1% of the principal amount thereof, with any remaining balance payable on the final maturity date of the tranche B term loans. In March 2015, the Company repaid $25.0 million of the tranche B 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 and a maximum total leverage ratio, currently at 4.25 to 1.00 . The Company was in compliance with these financial covenants under the credit facilities at March 31, 2016 . 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 | 3 Months Ended |
Mar. 31, 2016 | |
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. Non-employee directors are eligible to receive restricted stock units (RSUs) 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, 2016, an additional 3,166,714 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 generally 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. Options granted to non-employee directors in connection with an initial election or appointment generally vest at the rate of 33% of the total options one year after the grant date and 1/36 of the total options granted monthly thereafter. All other options granted to non-employee directors generally vest 100% one year from grant date. Before 2015, options granted to employees generally vest over four years with 25% of the total options vesting a year after the grant date and then the remaining options vest in monthly equal installments for three years thereafter. Starting in 2015, the options granted to newly hired employees generally vest at a rate of 25% of the total options a year after the grant date and then 1/16 of the total options granted on the 15th day of the second month of each calendar quarter thereafter. Options granted to existing employees generally vest at a rate of 1/16 of the total options granted on the 15th day of the second month of each calendar quarter following the grant date. The Company has granted RSUs to members of the Board of Directors, certain executives and employees. 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. RSUs granted to newly elected or appointed non-employee directors generally vest on the first anniversary of the Company’s most recent annual grants. RSUs granted to non-employee directors in connection with an annual grant generally vest 100% one year from the grant date. RSUs granted to newly hired employees generally vest at a rate of 25% of the total RSUs one 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. RSUs granted to existing employees generally 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 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 for the three months ended March 31, 2016 is summarized as follows: Equity Incentive Plan Activity Shares Available for Grant Balance at December 31, 2015 4,991,583 Authorized 3,166,714 Granted (1,856,207 ) Forfeited 241,205 Shares withheld for taxes and not issued 51,106 Balance at March 31, 2016 6,594,401 The following table summarizes stock option activity under the Company’s equity-based plans for the three months ended March 31, 2016 : Stock Options Activity Number Weighted Weighted Aggregate Balance at December 31, 2015 4,446,149 $ 8.96 7.56 $ 52,108 Exercised (190,608 ) 2.64 Forfeited (145,213 ) 24.35 Balance at March 31, 2016 4,110,328 $ 8.71 7.31 $ 30,286 Exercisable at March 31, 2016 2,331,709 $ 6.67 6.97 $ 20,620 Vested and expected to vest at March 31, 2016 3,993,724 $ 8.53 7.29 $ 29,845 There were no stock options granted during the three months ended March 31, 2016. The weighted-average grant date fair value of stock options granted during the three months ended March 31, 2015 was $13.55 per share. The total fair value of options vested for the three months ended March 31, 2016 and March 31, 2015 was $2.0 million and $4.4 million , respectively. The total intrinsic value of options exercised for the three months ended March 31, 2016 and March 31, 2015 was $2.2 million and $30.2 million , respectively. Cash received from options exercised during the three months ended March 31, 2016 and March 31, 2015 was $0.5 million and $3.2 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 March 31, 2016 , unrecognized compensation expense, net of forfeitures, associated with nonvested options outstanding was $10.6 million and is expected to be recognized over a weighted-average period of 1.94 years . The following table summarizes RSU activity under the Company’s equity-based plans for the three months ended March 31, 2016 : Restricted Stock Unit Activity Number of Units Weighted-Average Grant Date Fair Value Nonvested at December 31, 2015 956,687 $ 28.03 Granted 1,856,207 17.80 Vested (207,496 ) 26.50 Forfeited (72,118 ) 21.80 Nonvested at March 31, 2016 2,533,280 $ 20.84 The total grant date fair value of RSUs granted in the three months ended March 31, 2016 and March 31, 2015 was $33.0 million and $24.6 million , respectively. The total grant date fair value of RSUs vested in the three months ended March 31, 2016 and March 31, 2015 was $5.5 million and de minimis, respectively. As of March 31, 2016 , unrecognized compensation expense, net of forfeitures, associated with the nonvested RSUs outstanding was $46.2 million , and is expected to be recognized over a weighted-average period of 3.28 years . The following table summarizes PSU activity under the Company’s equity-based plans for the three months ended March 31, 2016 : Performance Based Restricted Stock Unit Activity Number of Units Weighted-Average Outstanding units at December 31, 2015 173,286 $ 33.51 Forfeited (23,874 ) $ 33.51 Outstanding units at March 31, 2016 149,412 $ 33.51 As of March 31, 2016 , there was $0.6 million of total unrecognized compensation expense, net of estimated forfeitures, associated with nonvested PSUs outstanding, which is expected to be recognized over a period of 1.75 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, 2016, an additional 703,714 shares were automatically reserved for issuance under the ESPP. The purchase price is 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. Employees may contribute a minimum of 1% and a maximum of 15% of their earnings. Stock Repurchases On June 29, 2015, the Board of Directors approved the repurchase of an additional $50.0 million of its outstanding common stock in the aggregate under the existing stock repurchase program. On February 29, 2016, the Board of Directors approved an additional $50.0 million incremental increase to its ongoing stock repurchase program. As of March 31, 2016 , a total of approximately $81.6 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 $7.4 million and $3.9 million was recognized for the three months ended March 31, 2016 and 2015 , respectively. Income tax benefit of $2.6 million and $1.2 million was recognized relating to stock-based compensation expense for the three months ended March 31, 2016 and 2015 , respectively. The tax benefit realized from stock options exercised was $2.0 million and $10.2 million for the three months ended March 31, 2016 and 2015 , 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 March 31, 2016 2015 Expected term (in years) N/A 6.08 Expected volatility N/A 39 % Risk-free interest rate N/A 1.74 % Expected dividend yield N/A 0 % ESPP Assumptions Three Months Ended March 31, 2016 2015 Expected term (in years) 0.50 0.50 Expected volatility 76 % 33 % Risk-free interest rate 0.33 % 0.07 % Expected dividend yield 0 % 0 % 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 March 31, 2016 2015 Cost of providing services $ 1,815 $ 758 Sales and marketing 1,985 917 General and administrative 2,974 2,021 Systems development and programming costs 623 224 $ 7,397 $ 3,920 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 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 March 31, 2016 2015 Net income $ 11,577 $ 15,811 Weighted average shares of common stock outstanding 70,521 70,198 Basic EPS $ 0.16 $ 0.23 Net income $ 11,577 $ 15,811 Weighted average shares of common stock 70,521 70,198 Dilutive effect of stock options and restricted stock units 1,225 3,152 Weighted average shares of common stock outstanding 71,746 73,350 Diluted EPS $ 0.16 $ 0.22 Common stock equivalents excluded from income per diluted share because of their anti-dilutive effect 3,396 522 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2016 | |
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 44.4% and 39.9% for the three months ended March 31, 2016 and 2015 , respectively. The increase is primarily due to an increase in state taxes resulting from state legislative changes enacted in the six months ended June 30, 2015 as well as a discrete benefit from disqualifying dispositions of previously non-deductible stock based compensation and a benefit from tax credits recorded in the three months ended March 31, 2015. 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, 2011. 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 | 3 Months Ended |
Mar. 31, 2016 | |
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 March 31, 2016 and 2015 was $3.8 million and $3.1 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 March 31, 2016 , 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 lawsuit arising under the Securities Exchange Act of 1934 in the United States District Court for the Northern District of California. 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. The name of the case is Welgus v. TriNet Group, Inc. et al., Case No. 3:15-cv-03625. No stockholder other than Mr. Welgus submitted a motion for appointment as lead plaintiff to represent the putative class, and, on December 3, 2015, the Court appointed Mr. Welgus as lead plaintiff. On February 1, 2016, Mr. Welgus filed an amended complaint. The defendants named in the case are the Company and certain of its officers and directors, as well as General Atlantic, LLC, a significant shareholder, and formerly majority shareholder, of the Company. Shortly before the scheduled date for the Company’s motion to dismiss the consolidated complaint, Mr. Welgus sought leave to further amend the consolidated complaint. The amended complaint was deemed filed by Mr. Welgus on April 1, 2016. The amended complaint expanded the class period to March 27, 2014 through February 29, 2016, and added as defendants the underwriters of the Company’s initial public offering and additional directors of the Company. The amended complaint generally alleges that the Company and other defendants caused damage to purchasers of the Company’s stock by misrepresenting and/or failing to disclose facts generally pertaining to alleged trends affecting health insurance and workers compensation claims. Under a stipulated revised briefing schedule approved by the Court, the Company intends to move to dismiss the amended complaint no later than June 20, 2016. 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 clients 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 clients 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 clients contain indemnification provisions related to the conduct of its clients, 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. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS The Company enters into sales and purchases agreements with various companies that have a relationship with the Company’s executive officers or members of the Company’s board of directors. The relationships are typically an equity investment by the executive officer or board member in the customer / vendor company or the Company’s executive officer or board member is a member of the customer / vendor company’s board of directors. The Company has received $1.8 million and $1.4 million in gross revenue from related parties for the three months ended March 31, 2016 and 2015 , respectively. Additionally, the company has entered into indemnity agreements with the directors and officers that provide, among other things, that TriNet will indemnify such officer or director, under the circumstances and to the extent provided for therein, for expenses, damages, judgments, fines and settlements he or she may be required to pay in actions or proceedings to which he or she is or may be made a party by reason of his or her position as a director, officer or other agent of TriNet, and otherwise to the fullest extent permitted under Delaware law and the Company’s Bylaws. |
Description of Business and S17
Description of Business and Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
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 clients. Less than 1% of revenue 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, 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 consist 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 consist of client 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 balance sheet, consolidated statement of cash flows, Note 3 and Note 5 have been reclassified to conform to the current presentation. The results of the three months ended March 31, 2016 are not necessarily indicative of the results to be expected for the year ending December 31, 2016 . |
Use of Estimates | Seasonality and Insurance Variability The Company's business is affected by cyclicality in business activity and WSE behavior. 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 service providers tend to do so at the beginning of a calendar year. In addition, the Company experiences higher levels of client attrition in connection with renewals of the health insurance TriNet sponsors for its WSEs, in the event that such renewals result in higher costs to its clients. The Company has also historically experienced higher insurance claim volumes in the second and third quarters of the year than in the first and fourth quarters, as WSEs typically access their health care providers more often in the second and third quarters, 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 our health and workers compensation 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 which would 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 reserve estimates, health plan reserve estimates, 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 March 2016, the Financial Accounting Standards Board, or (FASB), issued Accounting Standards Update (ASU) 2016-09— Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting , as part of the Simplification Initiative. The areas for simplification in this update involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Some of the areas for simplification apply only to nonpublic entities. The amendment is effective for annual reporting periods, and interim periods within those years beginning after December 15, 2016. Early adoption is permitted. The Company is currently in the process of evaluating the impact of the adoption of this standard on its consolidated financial statements. In April 2015, the FASB issued ASU 2015-03— Interest—Imputation of Interest (Subtopic 835-30), and, in August 2015, the FASB issued ASU 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements. These ASUs require debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of that debt consistent with debt discounts. The presentation and subsequent measurement of debt issuance costs associated with lines of credit, may be presented as an asset and amortized ratably over the term of the line of credit arrangement, regardless of whether there are outstanding borrowings on the arrangement. The recognition and measurement guidance for debt issuance costs are not affected by these ASUs. The Company adopted these ASUs as of March 31, 2016. The adoption of the ASUs resulted in a reclassification of unamortized debt issuance costs of $5.2 million and $5.8 million from deferred loan costs and other assets to notes payable as of March 31, 2016 and December 31, 2015, respectively. Unamortized debt issuance costs related to the Company’s Revolving Credit Facility remain classified as an asset in the accompanying consolidated balance sheets. The adoption of this guidance did not have any impact on the Company’s consolidated statements of operations, comprehensive income or cash flows. 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. In March and April 2016, the FASB issued ASU 2016-08 Principal versus Agent Considerations (Reporting Revenue Gross versus Net) and 2016-10 Identifying Performance Obligations and Licensing , respectively, providing further clarification to be considered when implementing ASU 2014-19. 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 Ass18
Worksite Employee-Related Assets and Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
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): March 31, December 31, Worksite employee-related assets: Restricted cash $ 103,503 $ 92,917 Restricted investments 2,969 3,819 Payroll funds collected 655,607 859,322 Unbilled revenue, net of advance collections of $165,766 and $11,875 at March 31, 2016 and December 31, 2015, respectively 237,760 213,837 Accounts receivable, net of allowance for doubtful accounts of $577 and $1,158 at March 31, 2016 and December 31, 2015, respectively 10,380 5,060 Prepaid health plan expenses 8,131 8,088 Refundable workers compensation premiums 2,234 2,428 Prepaid workers compensation expenses 2,006 744 Other payroll assets 4,233 187,171 Total worksite employee-related assets $ 1,026,823 $ 1,373,386 Worksite employee-related liabilities: Unbilled wages accrual $ 374,675 $ 202,396 Payroll taxes payable 366,902 883,608 Health benefits payable 126,957 128,028 Customer prepayments 56,722 57,758 Workers compensation payable 61,100 66,174 Other payroll deductions 36,102 31,533 Total worksite employee-related liabilities $ 1,022,458 $ 1,369,497 |
Workers Compensation (Tables)
Workers Compensation (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Insurance [Abstract] | |
Summary of Activities in Liability for Unpaid Claims and Claims Adjustment Expenses | The following summarizes the activities in the balance sheet for unpaid claims and claims adjustment expenses within workers compensation assets and liabilities (in thousands): Three months ended Year ended December 31, 2015 Liability for unpaid claims and claims adjustment at beginning of period $ 190,102 $ 148,034 Incurred related to: Current year 22,774 89,137 Prior years 5,263 26,391 Total incurred 28,037 115,528 Paid related to: Current year (711 ) (16,376 ) Prior years (17,276 ) (57,084 ) Total paid (17,987 ) (73,460 ) Liability for unpaid claims and claims adjustment at end of period $ 200,152 $ 190,102 Assets held by third parties to cover claim liabilities (67,807 ) (58,522 ) Workers compensation premiums and other liabilities 16,000 9,455 Other workers compensation assets (6,471 ) (1,012 ) Total net workers compensation liabilities $ 141,874 $ 140,023 Location on Consolidated Balance Sheet: Workers compensation liabilities Current portion included in worksite employee-related liability $ 61,100 $ 66,174 Long term portion 119,900 105,481 Total $ 181,000 $ 171,655 Workers compensation receivables Current portion included in worksite employee-related asset $ 2,234 $ 2,428 Long term portion 36,892 29,204 Total $ 39,126 $ 31,632 |
Marketable Securities and Fai20
Marketable Securities and Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Available-for-Sale Marketable Securities | The available-for-sale marketable securities as of March 31, 2016 and December 31, 2015 consist of the following (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value March 31, 2016: U.S. treasuries $ 62,706 $ 185 $ — $ 62,891 Mutual funds 500 8 — 508 Total investments $ 63,206 $ 193 $ — $ 63,399 December 31, 2015: U.S. treasuries $ 64,226 $ 9 $ (144 ) $ 64,091 Mutual funds 500 4 — 504 Total investments $ 64,726 $ 13 $ (144 ) $ 64,595 |
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 March 31, 2016: Certificates of deposit $ 2,319 $ 2,319 $ — $ — U.S. treasuries 62,891 62,891 — — Mutual funds 508 508 — — Total $ 65,718 $ 65,718 $ — $ — December 31, 2015: Certificates of deposit $ 2,319 $ 2,319 $ — $ — U.S. treasuries 64,091 64,091 — — Mutual funds 504 504 — — Total $ 66,914 $ 66,914 $ — $ — |
Notes Payable and Borrowings 21
Notes Payable and Borrowings under Capital Leases (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
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): March 31, December 31, Notes payable under credit facility $ 494,501 $ 499,563 Deferred loan costs (5,178 ) (5,781 ) Capital leases 142 153 Less current portion (35,358 ) (32,970 ) $ 454,107 $ 460,965 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Summary of Equity Incentive Plan Activity | Equity incentive plan activity for the three months ended March 31, 2016 is summarized as follows: Equity Incentive Plan Activity Shares Available for Grant Balance at December 31, 2015 4,991,583 Authorized 3,166,714 Granted (1,856,207 ) Forfeited 241,205 Shares withheld for taxes and not issued 51,106 Balance at March 31, 2016 6,594,401 |
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 three months ended March 31, 2016 : Stock Options Activity Number Weighted Weighted Aggregate Balance at December 31, 2015 4,446,149 $ 8.96 7.56 $ 52,108 Exercised (190,608 ) 2.64 Forfeited (145,213 ) 24.35 Balance at March 31, 2016 4,110,328 $ 8.71 7.31 $ 30,286 Exercisable at March 31, 2016 2,331,709 $ 6.67 6.97 $ 20,620 Vested and expected to vest at March 31, 2016 3,993,724 $ 8.53 7.29 $ 29,845 |
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 three months ended March 31, 2016 : Restricted Stock Unit Activity Number of Units Weighted-Average Grant Date Fair Value Nonvested at December 31, 2015 956,687 $ 28.03 Granted 1,856,207 17.80 Vested (207,496 ) 26.50 Forfeited (72,118 ) 21.80 Nonvested at March 31, 2016 2,533,280 $ 20.84 |
Summary of Performance Based Restricted Stock Unit Activity | The following table summarizes PSU activity under the Company’s equity-based plans for the three months ended March 31, 2016 : Performance Based Restricted Stock Unit Activity Number of Units Weighted-Average Outstanding units at December 31, 2015 173,286 $ 33.51 Forfeited (23,874 ) $ 33.51 Outstanding units at March 31, 2016 149,412 $ 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 March 31, 2016 2015 Expected term (in years) N/A 6.08 Expected volatility N/A 39 % Risk-free interest rate N/A 1.74 % Expected dividend yield N/A 0 % |
Summary of Significant Assumptions Used to Estimate Fair Value of Employee Stock Purchase Plans under Black-Scholes Model | ESPP Assumptions Three Months Ended March 31, 2016 2015 Expected term (in years) 0.50 0.50 Expected volatility 76 % 33 % Risk-free interest rate 0.33 % 0.07 % Expected dividend yield 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 March 31, 2016 2015 Cost of providing services $ 1,815 $ 758 Sales and marketing 1,985 917 General and administrative 2,974 2,021 Systems development and programming costs 623 224 $ 7,397 $ 3,920 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
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 March 31, 2016 2015 Net income $ 11,577 $ 15,811 Weighted average shares of common stock outstanding 70,521 70,198 Basic EPS $ 0.16 $ 0.23 Net income $ 11,577 $ 15,811 Weighted average shares of common stock 70,521 70,198 Dilutive effect of stock options and restricted stock units 1,225 3,152 Weighted average shares of common stock outstanding 71,746 73,350 Diluted EPS $ 0.16 $ 0.22 Common stock equivalents excluded from income per diluted share because of their anti-dilutive effect 3,396 522 |
Description of Business and S24
Description of Business and Significant Accounting Policies - Additional Information (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016USD ($)segment | Dec. 31, 2015USD ($) | |
Summary Of Significant Accounting Policy [Line Items] | ||
Number of reportable segments as result of acquisitions | segment | 1 | |
Deferred finance costs, net | $ (5,178) | $ (5,781) |
Maximum | Geographic concentration risk | Sales revenue, net | ||
Summary Of Significant Accounting Policy [Line Items] | ||
Concentration risk, less than 1% | 1.00% | |
Accounting Standards Update 2015-03 | Long-term Debt | ||
Summary Of Significant Accounting Policy [Line Items] | ||
Deferred finance costs, net | $ (5,200) | (5,800) |
Accounting Standards Update 2015-03 | Other Assets | ||
Summary Of Significant Accounting Policy [Line Items] | ||
Deferred finance costs, net | $ 5,200 | $ 5,800 |
Worksite Employee-Related Ass25
Worksite Employee-Related Assets and Liabilities - Schedule of Components of the Company's WSE-Related Assets and WSE-Related Liabilities (Details) $ in Thousands | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($)employee |
Worksite employee-related assets: | ||
Restricted cash | $ 14,563 | $ 14,557 |
Workers' Compensation Receivable, Current | 2,234 | 2,428 |
Total worksite employee-related assets | 1,026,823 | 1,373,386 |
Worksite employee-related liabilities: | ||
Health benefits payable | 24,106 | 28,963 |
Workers compensation payable | 61,100 | 66,174 |
Total worksite employee-related liabilities | 1,022,458 | $ 1,369,497 |
Number of employees | employee | 2,500 | |
WSE | ||
Worksite employee-related assets: | ||
Restricted cash | 103,503 | $ 92,917 |
Restricted investments | 2,969 | 3,819 |
Payroll funds collected | 655,607 | 859,322 |
Unbilled revenue, net of advance collections of $165,766 and $11,875 at March 31, 2016 and December 31, 2015, respectively | 237,760 | 213,837 |
Accounts receivable, net of allowance for doubtful accounts of $577 and $1,158 at March 31, 2016 and December 31, 2015, respectively | 10,380 | 5,060 |
Prepaid health plan expenses | 8,131 | 8,088 |
Refundable workers compensation premiums | 2,234 | 2,428 |
Prepaid workers compensation expenses | 2,006 | 744 |
Other payroll assets | 4,233 | 187,171 |
Total worksite employee-related assets | 1,026,823 | 1,373,386 |
Advance collection | 165,766 | 11,875 |
Allowance for doubtful accounts | 577 | 1,158 |
Worksite employee-related liabilities: | ||
Unbilled wages accrual | 374,675 | 202,396 |
Payroll taxes payable | 366,902 | 883,608 |
Health benefits payable | 126,957 | 128,028 |
Customer prepayments | 56,722 | 57,758 |
Workers compensation payable | 61,100 | 66,174 |
Other payroll deductions | 36,102 | 31,533 |
Total worksite employee-related liabilities | 1,022,458 | $ 1,369,497 |
Customer One | ||
Worksite employee-related assets: | ||
Payroll funds collected | $ 181,000 |
Workers Compensation - Summary
Workers Compensation - Summary of Activities in Liability for Unpaid Claims and Claims Adjustment Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Liability for Unpaid Claims and Claims Adjustment Expense | ||
Liability for unpaid claims and claims adjustment at beginning of period | $ 190,102 | $ 148,034 |
Incurred related to: | ||
Current year | 22,774 | 89,137 |
Prior years | 5,263 | 26,391 |
Total incurred | 28,037 | 115,528 |
Paid related to: | ||
Current year | (711) | (16,376) |
Prior years | (17,276) | (57,084) |
Total paid | (17,987) | (73,460) |
Liability for unpaid claims and claims adjustment at end of period | 200,152 | 190,102 |
Assets held by third parties to cover claim liabilities | (67,807) | (58,522) |
Workers compensation premiums and other liabilities | 16,000 | 9,455 |
Other workers compensation assets | (6,471) | (1,012) |
Total net workers compensation liabilities | 141,874 | 140,023 |
Current portion included in worksite employee-related liability | 61,100 | 66,174 |
Long term portion | 119,900 | 105,481 |
Workers' Compensation Liability | 181,000 | 171,655 |
Current portion included in worksite employee-related asset | 2,234 | 2,428 |
Long term portion | 36,892 | 29,204 |
Workers Compensation Receivable, Total | $ 39,126 | $ 31,632 |
Workers Compensation - Addition
Workers Compensation - Additional Information (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Long-term restricted cash and investments | $ 103,502 | $ 101,806 |
WSE | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Restricted cash and restricted investment | $ 57,000 | $ 49,800 |
Marketable Securities and Fai28
Marketable Securities and Fair Value Measurements - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Available-for-sale marketable securities | $ 62,700,000 | ||
Cash collateral | 40,800,000 | ||
Assets, fair value | 65,718,000 | $ 66,914,000 | |
Realized gains or losses | $ 0 | $ 0 | |
Percentage of total fair value of available for sale securities in unrealized loss position | 0.00% | 81.00% | |
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 | 0 | |
Carrying value of notes payable | 494,500,000 | 499,600,000 | |
Certificates of deposit | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Assets, fair value | 2,319,000 | 2,319,000 | |
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 | 62,891,000 | 64,091,000 | |
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 | 1 year | 1 year | |
U.S. treasuries | Maximum | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Contractual maturities | 4 years | 4 years |
Marketable Securities and Fai29
Marketable Securities and Fair Value Measurements - Summary of Available-for-Sale Marketable Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | $ 63,206 | $ 64,726 |
Gross Unrealized Gains | 193 | 13 |
Gross Unrealized Losses | 0 | (144) |
Estimated Fair Value | 63,399 | 64,595 |
U.S. treasuries | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 62,706 | 64,226 |
Gross Unrealized Gains | 185 | 9 |
Gross Unrealized Losses | 0 | (144) |
Estimated Fair Value | 62,891 | 64,091 |
Mutual funds | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 500 | 500 |
Gross Unrealized Gains | 8 | 4 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | $ 508 | $ 504 |
Marketable Securities and Fai30
Marketable Securities and Fair Value Measurements - Summary of Financial Assets Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Schedule Of Available For Sale Securities [Line Items] | ||
Total Fair Value | $ 65,718 | $ 66,914 |
Level I | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Total Fair Value | 65,718 | 66,914 |
Level II | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Total Fair Value | 0 | 0 |
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 | 2,319 |
Certificates of deposit | Level I | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Total Fair Value | 2,319 | 2,319 |
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 | 62,891 | 64,091 |
U.S. treasuries | Level I | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Total Fair Value | 62,891 | 64,091 |
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 | 508 | 504 |
Mutual funds | Level I | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Total Fair Value | 508 | 504 |
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 |
Notes Payable and Borrowings 31
Notes Payable and Borrowings under Capital Leases - Components of Company's Notes Payable and Borrowings under Capital Leases Balances (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Line of Credit Facility [Abstract] | ||
Notes payable under credit facility | $ 494,501 | $ 499,563 |
Deferred loan costs | (5,178) | (5,781) |
Capital leases | 142 | 153 |
Less current portion | (35,358) | (32,970) |
Notes payable and borrowings under capital leases, less current portion | $ 454,107 | $ 460,965 |
Notes Payable and Borrowings 32
Notes Payable and Borrowings under Capital Leases - Additional Information (Details) | 1 Months Ended | 3 Months Ended | ||
Mar. 31, 2015USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Jul. 31, 2014USD ($) | |
Minimum | ||||
Debt Instrument [Line Items] | ||||
Debt instrument covenant interest coverage ratio | 3.50 | |||
Maximum | ||||
Debt Instrument [Line Items] | ||||
Debt instrument covenant leverage ratio | 4.25 | |||
First lien credit facility | ||||
Debt Instrument [Line Items] | ||||
Unused portion of the revolving credit facility | $ 59,500,000 | |||
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 | |||
Interest rate, increase (decrease) | 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 | 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] | ||||
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% | |||
Repayments of lines of credit | $ 25,000,000 | |||
Lien of credit amount amortized | $ 400,000 | |||
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 | |||
First lien credit facility | Tranche B term loans | Maximum | ||||
Debt Instrument [Line Items] | ||||
Working capital less than $10 million | $ 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 | |||
First lien credit facility | Tranche B term loans | Maximum | Prepayment condition 2 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument covenant leverage ratio | 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 | $ 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 | $ 40,000,000 | |||
First lien credit facility | Swingline | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility | $ 10,000,000 | |||
First lien credit facility | Tranche B-1 Term Loan | ||||
Debt Instrument [Line Items] | ||||
Prepayment of debt | $ 12,700,000 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - USD ($) | Jan. 01, 2015 | Mar. 26, 2014 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | Feb. 29, 2016 | 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. | |||||||
Weighted-average grant-date fair value of stock options granted | $ 13.55 | |||||||
Total fair value of options vested | $ 2,000,000 | $ 4,400,000 | ||||||
Total intrinsic value of options exercised | 2,200,000 | 30,200,000 | ||||||
Cash received from options exercised | 500,000 | 3,200,000 | ||||||
Unrecognized compensation expense of options, net of forfeitures | $ 10,600,000 | |||||||
Unrecognized compensation expense, expected to be recognized over a weighted-average period | 1 year 10 months 38 days | |||||||
Stock repurchase program, authorized amount | $ 50,000,000 | |||||||
Additional stock repurchase program authorized amount | $ 50,000,000 | |||||||
Stock repurchase remained available for future repurchase, value | $ 81,600,000 | |||||||
Stock-based compensation expense | 7,397,000 | 3,920,000 | ||||||
Income tax benefit recognized relating to stock-based compensation expense | 2,600,000 | 1,200,000 | ||||||
Actual tax benefit realized from stock options exercised | $ 2,000,000 | $ 10,200,000 | ||||||
Stock Option | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Stock options vesting percentage | 25.00% | |||||||
Term of stock options | 4 years | |||||||
Volatility rate | 39.00% | |||||||
Stock Option | Vesting in one year for non-employee director | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Stock options vesting percentage | 33.00% | |||||||
Stock Option | 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 | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Unrecognized compensation expense of options, net of forfeitures | $ 46,200,000 | |||||||
Unrecognized compensation expense, expected to be recognized over a weighted-average period | 3 years 3 months 10 days | |||||||
Total grant date fair value of restricted stock units granted | $ 33,000,000 | $ 24,600,000 | ||||||
Total grant date fair value of restricted stock units | $ 5,500,000 | |||||||
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 | 1 year 8 months 30 days | |||||||
Unrecognized compensation expense of awards other than options, net of forfeitures | $ 600,000 | |||||||
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 | Stock Option | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Ownership, less than 10% | 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 | Stock Option | ||||||||
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% | |||||||
Nonemployee directors | Stock Option | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Stock options granted percentage of fair market value | 110.00% | |||||||
Nonemployee directors | Maximum | Stock Option | ||||||||
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 | |||||||
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 | 3,166,714 | |||||||
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 | |||||||
Common stock for future issuance percentage increased | 1.00% | |||||||
Authorized shares reserved for issuance | 703,714 | |||||||
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. | |||||||
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) | 3 Months Ended |
Mar. 31, 2016shares | |
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures [Abstract] | |
Forfeited | 145,213 |
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 | 4,991,583 |
Authorized | 3,166,714 |
Granted | (1,856,207) |
Forfeited | 241,205 |
Shares withheld for taxes and not issued | 51,106 |
Ending Balance | 6,594,401 |
Stockholders' Equity - Summar35
Stockholders' Equity - Summary of Stock Option Activity under the Company's Equity-Based Plans (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Number of Shares, Beginning Balance | 4,446,149 | |
Number of Shares, Exercised | (190,608) | |
Number of Shares, Forfeited | (145,213) | |
Number of Shares, Ending Balance | 4,110,328 | 4,446,149 |
Number of Shares, Exercisable, Ending Balance | 2,331,709 | |
Number of Shares, Vested and expected to vest, Ending Balance | 3,993,724 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||
Weighted-Average Exercise Price, Beginning Balance | $ 8.96 | |
Weighted-Average Exercise Price, Exercised | 2.64 | |
Weighted-Average Exercise Price, Forfeited | 24.35 | |
Weighted-Average Exercise Price, Ending Balance | 8.71 | $ 8.96 |
Weighted-Average Exercise Price, Exercisable, Ending Balance | 6.67 | |
Weighted-Average Exercise Price, Vested and expected to vest, Ending Balance | $ 8.53 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Weighted-Average Remaining Contractual Term (in years) | 7 years 3 months 22 days | 7 years 6 months 22 days |
Weighted-Average Remaining Contractual Term (in years), Exercisable | 6 years 11 months 19 days | |
Weighted-Average Remaining Contractual Term (in years), Vested and expected to vest | 7 years 3 months 15 days | |
Aggregate Intrinsic Value, Beginning Balance | $ 52,108 | |
Aggregate Intrinsic Value, Ending Balance | 30,286 | $ 52,108 |
Aggregate Intrinsic Value, Exercisable, Ending Balance | 20,620 | |
Aggregate Intrinsic Value, Vested and expected to vest, Ending Balance | $ 29,845 |
Stockholders' Equity - Summar36
Stockholders' Equity - Summary of Restricted Unit Activity under the Company's Equity-Based Plans (Details) | 3 Months Ended |
Mar. 31, 2016$ / 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 | shares | 956,687 |
Number of Units, Granted | shares | 1,856,207 |
Number of Units, Vested | shares | (207,496) |
Number of Units, Forfeited | shares | (72,118) |
Number of Units, Ending Balance | shares | 2,533,280 |
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 | $ 28.03 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 17.80 |
Weighted Average Grant Date Fair Value, Vested | $ / shares | 26.50 |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | 21.80 |
Weighted Average Grant Date Fair Value, Ending Balance | $ / shares | $ 20.84 |
Stockholders' Equity - Summar37
Stockholders' Equity - Summary of Performance Based Restricted Stock Unit Activity (Details) | 3 Months Ended |
Mar. 31, 2016$ / 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 | shares | 956,687 |
Number of Units, Granted | shares | 1,856,207 |
Number of Units, Ending Balance | shares | 2,533,280 |
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 | $ 28.03 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 17.80 |
Weighted Average Grant Date Fair Value, Ending Balance | $ / shares | $ 20.84 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | shares | (72,118) |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | $ 21.80 |
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 | shares | 173,286 |
Number of Units, Ending Balance | shares | 149,412 |
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 | $ 33.51 |
Weighted Average Grant Date Fair Value, Ending Balance | $ / shares | $ 33.51 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | shares | (23,874) |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | $ 33.51 |
Stockholders' Equity - Summar38
Stockholders' Equity - Summary of Fair Value of Stock-based Awards Estimated using Black-Scholes Option-Pricing Model (Details) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
ESPP | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected term (in years) | 6 months | 6 months |
Expected volatility | 76.00% | 33.00% |
Risk-free interest rate | 0.33% | 0.07% |
Expected dividend yield | 0.00% | 0.00% |
Stock Option | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected term (in years) | 6 years 29 days | |
Expected volatility | 39.00% | |
Risk-free interest rate | 1.74% | |
Expected dividend yield | 0.00% |
Stockholders' Equity - Summar39
Stockholders' Equity - Summary of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 7,397 | $ 3,920 |
Cost of providing services | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation expense | 1,815 | 758 |
Sales and marketing | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation expense | 1,985 | 917 |
General and administrative | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation expense | 2,974 | 2,021 |
Systems development and programming costs | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 623 | $ 224 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Earnings Per Share [Abstract] | ||
Net income | $ 11,577 | $ 15,811 |
Weighted average shares of common stock outstanding | 70,521,000 | 70,198,000 |
Basic (in dollars per share) | $ 0.16 | $ 0.23 |
Dilutive effect of stock options and restricted stock units | 1,225,000 | 3,152,000 |
Weighted average shares of common stock outstanding | 71,745,753 | 73,350,219 |
Diluted (in dollars per share) | $ 0.16 | $ 0.22 |
Common stock equivalents excluded from income per diluted share because of their anti-dilutive effect | 3,396,000 | 522,000 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Effective income tax rate | 44.40% | 39.90% | |
Employment tax credit | $ 10.5 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Rent expense | $ 3.8 | $ 3.1 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Related Party Transactions [Abstract] | ||
Revenue from related parties | $ 1.8 | $ 1.4 |