Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 31, 2017 | Jun. 30, 2016 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | BSQR | ||
Entity Registrant Name | BSQUARE CORP /WA | ||
Entity Central Index Key | 1,054,721 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Common Stock, Shares Outstanding | 12,540,945 | ||
Entity Public Float | $ 54,461,983 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 14,312 | $ 16,443 |
Short-term investments | 18,888 | 13,280 |
Accounts receivable, net of allowance for doubtful accounts of $50 at December 31, 2016 and $62 at December 31, 2015 | 21,579 | 19,009 |
Prepaid expenses and other current assets | 878 | 580 |
Total current assets | 55,657 | 49,312 |
Equipment, furniture and leasehold improvements, net | 1,089 | 1,167 |
Restricted cash equivalents | 250 | |
Deferred tax assets | 7 | 145 |
Intangible assets, net | 464 | 594 |
Goodwill | 3,738 | 3,738 |
Other non-current assets | 53 | 52 |
Total assets | 61,008 | 55,258 |
Current liabilities: | ||
Third-party software fees payable | 14,831 | 11,789 |
Accounts payable | 283 | 188 |
Accrued compensation | 2,008 | 2,390 |
Other accrued expenses | 714 | 1,277 |
Deferred rent, current portion | 321 | 298 |
Deferred revenue | 2,064 | 1,135 |
Total current liabilities | 20,221 | 17,077 |
Deferred tax liability | 23 | 97 |
Deferred rent | 854 | 1,177 |
Deferred revenue | 1,798 | |
Commitments and contingencies (Note 8) | ||
Shareholders' equity: | ||
Preferred stock, no par value: 10,000,000 shares authorized; no shares issued and outstanding | ||
Common stock, no par value: 37,500,000 shares authorized; 12,532,348 shares issued and outstanding at December 31, 2016 and 12,092,598 shares issued and outstanding at December 31, 2015 | 135,660 | 133,331 |
Accumulated other comprehensive loss | (941) | (869) |
Accumulated deficit | (96,607) | (95,555) |
Total shareholders' equity | 38,112 | 36,907 |
Total liabilities and shareholders' equity | $ 61,008 | $ 55,258 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Statement Of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 50 | $ 62 |
Preferred stock, par value | ||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | ||
Common stock, shares authorized | 37,500,000 | 37,500,000 |
Common stock, shares issued | 12,532,348 | 12,092,598 |
Common stock, shares outstanding | 12,532,348 | 12,092,598 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue: | ||
Software | $ 82,170 | $ 86,208 |
Professional engineering service | 15,271 | 20,393 |
Total revenue | 97,441 | 106,601 |
Cost of revenue: | ||
Software | 68,182 | 70,937 |
Professional engineering service | 13,439 | 15,194 |
Total cost of revenue | 81,621 | 86,131 |
Gross profit | 15,820 | 20,470 |
Operating expenses: | ||
Selling, general and administrative | 14,119 | 12,400 |
Research and development | 2,859 | 1,639 |
Total operating expenses | 16,978 | 14,039 |
Income (loss) from operations | (1,158) | 6,431 |
Other income (expense), net | 247 | 132 |
Income (loss) before income taxes | (911) | 6,563 |
Income tax expense | (141) | (470) |
Net income (loss) | $ (1,052) | $ 6,093 |
Basic income (loss) per share | $ (0.09) | $ 0.51 |
Diluted income (loss) per share | $ (0.09) | $ 0.49 |
Shares used in calculation of income (loss) per share: | ||
Basic | 12,260 | 11,938 |
Diluted | 12,260 | 12,419 |
Comprehensive income (loss): | ||
Net income (loss) | $ (1,052) | $ 6,093 |
Other comprehensive income (loss): | ||
Foreign currency translation, net of tax | (79) | 19 |
Change in net unrealized gains (losses) on investments, net of tax | 7 | (4) |
Total other comprehensive income (loss) | (72) | 15 |
Comprehensive income (loss): | $ (1,124) | $ 6,108 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Total | Common Stock [Member] | Accumulated Other Comprehensive Loss [Member] | Accumulated Deficit [Member] |
Balance at Dec. 31, 2014 | $ 28,577 | $ 131,071 | $ (846) | $ (101,648) |
Balance, Shares at Dec. 31, 2014 | 11,767,577 | |||
Net income (loss) | 1,823 | |||
Balance at Mar. 31, 2015 | 30,662 | |||
Balance at Dec. 31, 2014 | 28,577 | $ 131,071 | (846) | (101,648) |
Balance, Shares at Dec. 31, 2014 | 11,767,577 | |||
Exercise of stock options | $ 744 | $ 744 | ||
Exercise of stock options, Shares | 250,196 | 250,196 | ||
Share-based compensation, including issuance of restricted stock | $ 1,516 | $ 1,516 | ||
Share-based compensation, including issuance of restricted stock, Shares | 74,825 | |||
Net income (loss) | 6,093 | 6,093 | ||
Foreign currency translation adjustment, net of tax | (19) | (19) | ||
Change in unrealized gains on investments, net of tax | (4) | (4) | ||
Balance at Dec. 31, 2015 | $ 36,907 | $ 133,331 | (869) | (95,555) |
Balance, Shares at Dec. 31, 2015 | 12,092,598 | 12,092,598 | ||
Balance at Mar. 31, 2015 | $ 30,662 | |||
Net income (loss) | 1,885 | |||
Balance at Jun. 30, 2015 | 33,189 | |||
Net income (loss) | 1,245 | |||
Balance at Sep. 30, 2015 | 35,077 | |||
Net income (loss) | 1,140 | |||
Balance at Dec. 31, 2015 | $ 36,907 | $ 133,331 | (869) | (95,555) |
Balance, Shares at Dec. 31, 2015 | 12,092,598 | 12,092,598 | ||
Net income (loss) | $ 500 | |||
Balance at Mar. 31, 2016 | 37,873 | |||
Balance at Dec. 31, 2015 | $ 36,907 | $ 133,331 | (869) | (95,555) |
Balance, Shares at Dec. 31, 2015 | 12,092,598 | 12,092,598 | ||
Exercise of stock options | $ 1,082 | $ 1,082 | ||
Exercise of stock options, Shares | 371,845 | 371,845 | ||
Share-based compensation, including issuance of restricted stock | $ 1,247 | $ 1,247 | ||
Share-based compensation, including issuance of restricted stock, Shares | 67,905 | |||
Net income (loss) | (1,052) | (1,052) | ||
Foreign currency translation adjustment, net of tax | (79) | (79) | ||
Change in unrealized gains on investments, net of tax | 7 | 7 | ||
Balance at Dec. 31, 2016 | $ 38,112 | $ 135,660 | (941) | (96,607) |
Balance, Shares at Dec. 31, 2016 | 12,532,348 | 12,532,348 | ||
Balance at Mar. 31, 2016 | $ 37,873 | |||
Net income (loss) | (185) | |||
Balance at Jun. 30, 2016 | 38,166 | |||
Net income (loss) | (106) | |||
Balance at Sep. 30, 2016 | 38,790 | |||
Net income (loss) | (1,261) | |||
Balance at Dec. 31, 2016 | $ 38,112 | $ 135,660 | $ (941) | $ (96,607) |
Balance, Shares at Dec. 31, 2016 | 12,532,348 | 12,532,348 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows provided by operating activities: | ||
Net income (loss) | $ (1,052) | $ 6,093 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 598 | 575 |
Stock-based compensation | 1,247 | 1,516 |
Deferred income taxes | 209 | |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (2,570) | (5,383) |
Prepaid expenses and other assets | (235) | 139 |
Third-party software fees payable | 3,042 | (458) |
Accounts payable and accrued expenses | (850) | 45 |
Deferred revenue | 2,727 | 423 |
Deferred rent | (300) | (276) |
Net cash provided by operating activities | 2,607 | 2,883 |
Cash flows used in investing activities: | ||
Purchases of equipment and furniture | (390) | (272) |
Proceeds from maturities of short-term investments | 24,950 | 25,081 |
Purchases of short-term investments | (30,566) | (25,089) |
Reduction of restricted cash equivalents | 250 | |
Net cash used for investing activities | (5,756) | (280) |
Cash flows from financing activities: | ||
Proceeds from exercise of stock options | 1,110 | 716 |
Effect of exchange rate changes on cash | (92) | (3) |
Net increase (decrease) in cash and cash equivalents | (2,131) | 3,316 |
Cash and cash equivalents, beginning of year | 16,443 | 13,127 |
Cash and cash equivalents, end of year | 14,312 | 16,443 |
Supplemental cash flow information: | ||
Cash paid for income taxes | $ 194 | $ 310 |
Description of Business and Acc
Description of Business and Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Description of Business and Accounting Policies | 1. Description of Business and Accounting Policies Description of Business BSQUARE Corporation (“BSQUARE”) was incorporated in Washington State in July 1994. Since our inception, our business has largely been focused on providing software solutions (historically including reselling software from Microsoft Corporation (“Microsoft”)) and related engineering services to businesses that develop, market and sell dedicated purpose standalone intelligent systems. Examples of dedicated purpose standalone intelligent systems include smart, connected computing devices such as smart phones, set-top boxes, point-of-sale terminals, kiosks, tablets and handheld data collection devices, as well as smart vending machines, ATM machines, digital signs and in-vehicle telematics and entertainment devices. We focus on systems that utilize various Microsoft Windows Embedded operating systems as well as devices running other popular operating systems such as Android, Linux, and QNX, and that are usually connected to a network or data cloud via a wired or wireless connection. Our customers include world-class original equipment manufacturers (“OEMs”), original design manufacturers (“ODMs”), corporate enterprises (“Enterprises”), silicon vendors (“SVs”) and peripheral vendors. A significant portion of our business historically has also been focused on reselling software from Microsoft, from which a majority of our revenue currently continues to be derived. Beginning in 2014, we initiated development efforts focused on new proprietary software products addressing the Internet of Things (“IoT”) market, which is the interconnection of uniquely identifiable embedded computing devices within the existing internet infrastructure. These software development efforts have driven a new business initiative for BSQUARE, which refer to as DataV TM Basis of Consolidation The consolidated financial statements include the accounts of BSQUARE and our wholly owned subsidiaries. All intercompany balances and transactions have been eliminated. Use of Estimates Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. Examples include provisions for bad debts and income taxes, estimates of progress on professional engineering service arrangements, bonus accruals, fair value of intangible assets and property and equipment, fair values of stock-based awards and the fair values of acquired assets and liabilities, among other estimates. Actual results may differ from these estimates. Income (Loss) Per Share Basic income or loss per share is computed using the weighted average number of common shares outstanding during the period, and excludes any dilutive effects of common stock equivalent shares, such as options, restricted stock awards, restricted stock units and warrants. Restricted stock awards (“RSAs”) are considered outstanding and included in the computation of basic income or loss per share when underlying restrictions expire and the awards are no longer forfeitable. Restricted stock units (“RSUs”) are considered outstanding and included in the computation of basic income or loss per share only when vested. Diluted income per share is computed using the weighted average number of common shares outstanding and common stock equivalent shares outstanding during the period using the treasury stock method. Common stock equivalent shares are excluded from the computation if their effect is anti-dilutive. Unvested but outstanding RSUs and RSAs (which are forfeitable) are included in the diluted income per share calculation. In a period where we are in a net loss position, the diluted loss per share is computed using the basic share count. The following table presents a reconciliation of the number of shares used in the calculation of basic and diluted income (loss) per share (in thousands): Year Ended December 31, 2016 2015 Weighted average shares outstanding for basic income (loss) per share 12,260 11,938 Dilutive effect of common stock equivalent shares — 481 Weighted average shares outstanding for diluted income (loss) per share 12,260 12,419 Common stock equivalent shares of 691,243 and 213,820 were excluded from the computations of basic and diluted income per share for the years ended December 31, 2016 and 2015, respectively, because their effect was anti-dilutive. Cash, Cash Equivalents and Investments We invest our excess cash primarily in highly liquid debt instruments of U.S. government agencies and municipalities, debt instruments issued by foreign governments, corporate commercial paper, money market funds, and corporate debt securities. We classify all highly liquid investments with stated maturities of three months or less from date of purchase as cash equivalents and all highly liquid investments with stated maturities of greater than three months as short-term investments. Short-term investments consist entirely of marketable securities, which are all classified as available-for-sale securities and are recorded at their estimated fair value. We determine the appropriate classification of our investments at the time of purchase and reevaluate such designation at each balance sheet date. We may or may not hold securities with stated maturities greater than 12 months until maturity. As we view these securities as available to support current operations, we classify securities with maturities less than 12 months as short-term investments. We carry these securities at fair value, and report the unrealized gains and losses, net of taxes, as a component of shareholders’ equity, except for unrealized losses determined to be other than temporary, which are recorded in other expense. Restricted Cash Our restricted cash equivalents balance at December 31, 2015 represented funds held at a financial institution as security for an outstanding letter of credit related to our corporate headquarters lease obligation. The full balance of restricted cash equivalents was released in September 2016 when we entered into a new letter of credit agreement secured by our credit agreement with JPMorgan Chase Bank, N.A. Financial Instruments and Concentrations of Risk Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash, cash equivalents, short-term investments, and accounts receivable. Allowance for Doubtful Accounts We record accounts receivable at the invoiced amount net of an estimated allowance for doubtful accounts to reserve for potentially uncollectible receivables. We review customers that have past due invoices to identify specific customers with known disputes or collectability issues. In determining the amount of the allowance, we make judgments about the creditworthiness of significant customers based on ongoing credit evaluations. Equipment, Furniture and Leasehold Improvements We account for equipment, furniture and leasehold improvements at cost less accumulated depreciation and amortization. We compute depreciation of equipment and furniture using the straight-line method over the estimated useful lives of the assets, generally three years. Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or estimated useful lives, ranging from two to ten years. We expense maintenance and repairs costs as incurred. When assets are retired or otherwise disposed of, gains or losses are included in the consolidated statements of income. When facts and circumstances indicate that the value of long-lived assets may be impaired, we perform an evaluation of recoverability comparing the carrying value of the asset to projected undiscounted future cash flows. Upon indication that the carrying value of such assets may not be recoverable, we recognize an impairment loss as a charge against current operations based on the difference between the carrying value of the asset and its fair value. Intangible Assets Intangible assets were recorded as a result of business acquisitions and are stated at estimated fair value at the time of acquisition less accumulated amortization. We amortize our acquired intangible assets using the straight-line method using lives ranging from one to ten years. We review intangible assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. We measure recoverability of these assets by comparing the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If intangible assets are considered impaired, the impairment to be recognized equals the amount by which the carrying value of the asset exceeds its fair market value. Goodwill We evaluate goodwill for impairment in the fourth quarter annually, or more frequently when an event occurs or circumstances change that indicate that the carrying value may not be recoverable. We test goodwill for impairment by performing a qualitative assessment to determine whether the fair value of the reporting unit is more likely than not less than the carrying amount. If we determine that the fair value of the reporting unit is more likely greater than its carrying amount, we do not conduct further impairment testing. If we determine that the fair value of the reporting unit is not more likely greater than the carrying amount, we perform a quantitative two-step impairment test. The first step compares the fair value of the reporting unit with its carrying amount, including goodwill. If the carrying amount exceeds fair value, we then perform the second step of the impairment test to measure the amount of any impairment loss. Third-Party Software Fees Payable We record all fees payable and accrued liabilities related to the sale of third-party software, such as Microsoft Windows Embedded and Windows Mobile operating systems, as third-party software fees payable. Research and Development Costs incurred internally in researching and developing a computer software product are charged to expense until technological feasibility has been established for the product. Once technological feasibility is established, all software costs would be capitalized until the product is available for general release to customers. Judgment is required in determining when technological feasibility of a product is established. Generally, this would be reached after all high-risk development issues have been resolved through coding and testing, and would occur shortly before the product is released. Amortization of costs incurred after this point would be included in cost of revenue over the estimated life of the products. As of December 31, 2016 and 2015, we had not recorded any such capitalized costs. Advertising Costs All costs of advertising, including cooperative marketing arrangements, are expensed as incurred. Advertising expense was $45,000 in 2016 and $23,000 in 2015. Stock-Based Compensation The estimated fair value of stock based awards is recognized as compensation expense over the vesting period of the award, net of estimated forfeitures. We estimate forfeitures of stock based awards based on historical experience and expected future activity. The fair value of restricted stock awards and restricted stock units is determined based on the number of shares granted and the quoted price of our common stock on the date of grant. The fair value of stock option awards are estimated at the grant date based on the fair value of each vesting tranche as calculated by the Black-Scholes-Merton (“BSM”) option-pricing model. The BSM model requires various highly judgmental assumptions including expected volatility and option life. If any of the assumptions used in the BSM model change significantly, stock-based compensation expense may differ materially in the future from that recorded in the current period. Comprehensive Income (Loss) Comprehensive income (loss) refers to net income (loss) and other revenue, expenses, gains and losses that, under generally accepted accounting principles, are recorded as an element of shareholders’ equity but are excluded from the calculation of net income (loss). Income Taxes We are subject to income taxes in the U.S. and certain foreign jurisdictions. Significant judgment is required in determining our provision for income taxes. We compute income taxes using the asset and liability method, under which deferred income taxes are provided for on the temporary differences between the financial reporting basis and the tax basis of our assets and liabilities. Our deferred tax amounts are measured using currently enacted tax rates that are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. We apply the guidance of Accounting Standards Codification (ASC) 740, Income Taxes, which requires us to use judgment as to the appropriate weighting of all available evidence when assessing the need for the establishment or the release of valuation allowances. As part of this analysis, we examine all available evidence on a jurisdiction-by-jurisdiction basis and weigh the positive and negative information when determining the need for full or partial valuation allowances. The evidence considered for each jurisdiction includes, among other items, (i) the historical levels of income or loss over a range of time periods that extends beyond the two years presented, (ii) the historical sources of income and losses, (iii) the expectations and risk associated with underlying estimates of future taxable income, (iv) the expectations and risk associated with new product offerings and uncertainties with the timing of future taxable income, and (v) prudent and feasible tax planning strategies. Based on the analysis conducted as of December 31, 2016, we determined that we would not release, in full or in part, the valuation allowance against our U.S. gross deferred tax assets. We recognize tax benefits from an uncertain position only if it is “more likely than not” that the position is sustainable, based on its technical merits. The tax benefit of a qualifying position is the largest amount of tax benefit that is greater than fifty percent likely of being realized upon ultimate settlement with a taxing authority having full knowledge of all relevant information. Interest and penalties related to uncertain tax positions are classified in the consolidated financial statements as income tax expense. Foreign Currency The functional currency of foreign subsidiaries is their local currency. Accordingly, assets and liabilities are translated into U.S. dollars at exchange rates in effect at the balance sheet date. Resulting translation adjustments are included in Other Comprehensive Income (Loss) and Accumulated Other Comprehensive Loss, a separate component of shareholders’ equity. The net gains and losses resulting from foreign currency transactions are recorded in the period incurred and were not significant for any of the periods presented. Revenue Recognition We recognize revenue from software and engineering service sales when the following four revenue recognition criteria are met: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; the selling price is fixed or determinable; and collectability is reasonably assured. Contracts and customer purchase orders are generally used to determine the existence of an arrangement. Shipping documents and time records are generally used to verify delivery. We assess whether the selling price is fixed or determinable based on the contract and/or customer purchase order and payment terms associated with the transaction and whether the sales price is subject to refund or adjustment. We assess collectability based primarily on the creditworthiness of the customer as determined by credit checks and analysis, as well as the customer’s payment history. Periodically, we will begin work on engineering service engagements prior to having a signed contract and, in some cases, the contract is signed in a quarter after which service delivery costs are incurred. We do not defer costs associated with such engagements before we have received a signed contract. In certain rare circumstances, we will grant extended terms to highly credit-worthy customers. The terms we offer are fixed and determinable; they are for sales of perpetual software licenses, they do not exceed twelve months in duration, they do not include multiple element arrangements requiring post-contract support, they do not permit returns or exchanges past thirty days and they do not require any additional services be provided by us. We recognize software revenue upon delivery provided that no significant obligations remain on our part, substantive acceptance conditions, if any, have been met and other revenue recognition criteria have been met. We recognize service revenue from time and materials contracts, and training service agreements, as we perform the services. Fixed-price service agreements, and certain time and materials service agreements with capped fee structures, are accounted for using the percentage-of-completion method assuming we can make reasonable estimates of completion. We use the percentage-of-completion method of accounting because we believe it is the most accurate method to recognize revenue based on the nature and scope of these engineering service contracts and provides the best match of revenue recognized with costs incurred. We measure the percentage of completion based primarily on input measures such as hours incurred to date compared to total estimated hours to complete, with consideration given to output measures, such as contract milestones, when applicable. We use significant judgment when estimating total hours and progress to completion on these arrangements, which we use to determine the amount of revenue we recognize as well as whether a loss is recognized, if one is expected to be incurred for the remainder of the project. We incorporate revisions to hour and cost estimates during the period in which the causal facts become known. In certain situations, when it is impractical for us to reliably estimate either specific amounts or ranges of contract revenues and costs, and where we anticipate that we will not incur a loss, a zero profit model is used for revenue recognition. Equal amounts of revenue and cost are recognized during the contract period, and profit is recognized when the project is completed and accepted. If the contract includes post-contract customer support and/or maintenance (“PCS”), profit is recognized over the PCS term. We also enter into arrangements in which a customer purchases a combination of software licenses, engineering services and PCS. As a result, judgment is often required to determine the appropriate accounting, including how to allocate the price among the deliverable elements if there are multiple elements. PCS may include rights to upgrades, when and if available, telephone support, updates and enhancements. We allocate revenue to each element based on the relative fair value of each of the elements in a multiple element arrangement, when vendor specific objective evidence (“VSOE”) of fair value exists for all elements. When the same element is sold separately, VSOE is established; when VSOE does not exist, judgments are required to assess the fair values of various elements of an agreement, which can impact the recognition of revenue in each period. While changes in the allocation of the sales price between contract elements may affect the timing of revenue recognition, the total revenue recognized on the contract would not change. When elements such as software and engineering services are contained in a single arrangement, or in related arrangements with the same customer, we allocate revenue to each element based on its relative fair value if such element meets the criteria for treatment as a separate unit of accounting. In the absence of fair value for a delivered element, we allocate revenue first to the fair value of the undelivered elements and then to the residual delivered elements. In the absence of fair value for an undelivered element, we account for the arrangement as a single unit of accounting, which delays revenue recognition until all elements are fulfilled. There are two items involving revenue recognition that require us to make more difficult and subjective judgments: the determination of VSOE of fair value in multiple element arrangements and the estimation of percentage of completion on fixed-price service contracts. While we have entered into very few multiple-element arrangements for proprietary software historically, our initial DataV contracts each included multiple elements, including software licenses, installation, training services and PCS, and we anticipate this will continue to be the case for many future DataV contracts. We have been unable to establish VSOE for DataV contracts to date. When engineering services and royalties are contained in a single arrangement, we recognize revenue from professional engineering services as earned in accordance with the criteria above even though the effective rate per hour may be lower than typical because the customer is contractually obligated to pay royalties on their device shipments. We recognize royalty revenue, classified as software revenue, when we receive the royalty report from the customer, or when such royalties are contractually guaranteed and the other revenue recognition criteria are met, when collectability is reasonably assured. Revenue is recognized net of any applicable sales taxes collected from customers and remitted to governmental authorities. Shipping and handling costs are generally billed to customers and are included in cost of revenue in the consolidated statements of operations. Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers,” amending revenue recognition guidance and requiring more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The guidance, as amended, is effective for annual and interim reporting periods beginning after December 15, 2017, with early adoption permitted for public companies effective for annual and interim reporting periods beginning after December 15, 2016. We are currently evaluating the impact this ASU will have on our consolidated financial statements and related disclosures, and are currently planning to implement this ASU effective January 1, 2017. We believe the adoption will not have a material impact on our traditional third-party software or professional engineering services business, but that it will have a significant impact on the revenue recognition timing for our new DataV software products and services. While we are continuing to assess all potential impacts of the new standard, we currently believe the most significant impact relates to our accounting for DataV arrangements that include term-based software licenses bundled with professional engineering services, and maintenance and support. Under current GAAP, the revenue attributable to these software licenses is recognized ratably over the term of the arrangement because VSOE does not exist for the undelivered maintenance and support element as it is not sold separately. The requirement to have VSOE for undelivered elements to enable the separation of revenue for the delivered software licenses is eliminated under the new standard. Accordingly, under the new standard there will be more performance obligations under the new standard as compared with the deliverables and units of account previously identified for DataV in which revenue was recognized over time. As a result, this may yield earlier recognition of DataV revenue than under current accounting rules and may result in greater quarterly revenue recognition variability. While we currently expect revenue recognition related to our traditional third-party software and professional engineering services business to remain unchanged, we are still in the process of evaluating the impact of the new standard on these arrangements. Due to the complexity of certain of our contracts, the actual revenue recognition treatment required under the new standard for these arrangements may be dependent on contract-specific terms and therefore may vary in some instances. In November 2015, the FASB issued ASU No. 2015-17, “Balance Sheet Classification of Deferred Taxes,” to simplify the presentation of deferred income taxes. The amendments in this ASU require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The amendments in this ASU apply to all entities that present a classified statement of financial position. The current requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by the amendments in this ASU. We adopted the new guidance retrospectively beginning with the year ended December 31, 2014. In February 2016, the FASB issued ASU No. 2016-2, “Leases,” to make leasing activities more transparent and comparable, requiring most leases be recognized by lessees on their balance sheets as right-of-use assets, along with corresponding lease liabilities. ASU 2016-2 is effective for public business entities for annual periods beginning after December 31, 2018 and interim periods within that year, with early adoption permitted. We are currently evaluating the impact this ASU may have on our consolidated financial statements and related disclosures. In March 2016, the FASB amended the existing accounting standards for stock-based compensation, ASU 2016-09, “Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” The amendments impact several aspects of accounting for share-based payment transactions, including income tax consequences, forfeitures, classification of awards as either equity or liabilities, and classification on the statement of cash flows. We are required to adopt the amendments in the first quarter of 2017, with early adoption permitted. If early adoption is elected, all amendments must be adopted in the same period. The manner of application varies by the various provisions of the guidance, with certain provisions applied on a retrospective or modified retrospective approach, while others are applied prospectively. We are currently evaluating the impact this ASU may have on our consolidated financial statements and related disclosures. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments,” adding or clarifying guidance on the classification of certain cash receipts and payments in the statement of cash flows. The standard addresses eight specific cash flow issues with the objective of reducing diversity in practice. ASU 2016-15 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted. We are currently evaluating the impact this ASU may have on our consolidated financial statements and related disclosures. |
Cash and Investments
Cash and Investments | 12 Months Ended |
Dec. 31, 2016 | |
Cash And Cash Equivalents [Abstract] | |
Cash and Investments | 2. Cash and Investments Cash, cash equivalents, short-term investments, and restricted cash consist of the following (in thousands): December 31, 2016 2015 Cash $ 11,016 $ 7,270 Cash equivalents—money market funds 2,796 1,500 Corporate commercial paper 500 5,404 Corporate debt securities — 2,269 Total cash and cash equivalents 14,312 16,443 Short-term investments: Corporate commercial paper 11,465 6,245 Treasury bonds — 1,007 Corporate debt securities 7,423 6,028 Total short-term investments 18,888 13,280 Restricted cash equivalents — 250 Total cash, cash equivalents, short-term investments and restricted cash equivalents $ 33,200 $ 29,973 Gross unrealized gains and losses on our cash equivalents and short-term investments were not material as of December 31, 2016 and December 31, 2015. Our restricted cash equivalents balance at December 31, 2015 related to a letter of credit securing the lease of our corporate headquarters. The restricted cash equivalents balance was released in September 2016 when we entered into a new letter of credit agreement secured by our credit agreement with JPMorgan Chase Bank, N.A. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 3. Fair Value Measurements We measure our cash equivalents, marketable securities and restricted cash at fair value. 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. A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Directly or indirectly observable market-based inputs or unobservable inputs used in models or other valuation methodologies. Level 3: Unobservable inputs that are not corroborated by market data. The inputs require significant management judgment or estimation. We classify our cash equivalents, marketable securities and restricted cash within Level 1 or Level 2. This is because we value these items using quoted market prices or alternative pricing sources and models utilizing market observable inputs that are actively quoted and can be validated through external sources, including third-party pricing services, brokers and market transactions. We review the pricing techniques and methodologies of the independent pricing service for Level 2 investments and believe that the policies adequately consider market activity, either based on specific transactions for the security valued or based on modeling of securities with similar credit quality, duration, yield and structure that were recently traded. Assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands): December 31, 2016 Quoted Prices in Active Markets for Identical Assets (Level 1) Direct or Indirect Observable Inputs (Level 2) Total Assets Cash equivalents: Money market funds $ 2,796 $ — $ 2,796 Corporate commercial paper — 500 500 Corporate debt — — $ — Total cash equivalents 2,796 500 3,296 Short-term investments: Corporate commercial paper — 11,465 11,465 Treasury bonds — — — Corporate debt — 7,423 7,423 Total short-term investments — 18,888 18,888 Total assets measured at fair value $ 2,796 $ 19,388 $ 22,184 December 31, 2015 Quoted Prices in Active Markets for Identical Assets (Level 1) Direct or Indirect Observable Inputs (Level 2) Total Assets Cash equivalents: Money market funds $ 5,404 $ — $ 5,404 Corporate commercial paper — 1,500 1,500 Corporate debt — 2,269 $ 2,269 Total cash equivalents 5,404 3,769 9,173 Short-term investments: Corporate commercial paper — 6,245 6,245 Treasury bonds — 1,007 1,007 Corporate debt — 6,028 6,028 Total short-term investments — 13,280 13,280 Restricted cash equivalents—money market fund 250 — 250 Total assets measured at fair value $ 5,654 $ 17,049 $ 22,703 |
Equipment, Furniture and Leaseh
Equipment, Furniture and Leasehold Improvements | 12 Months Ended |
Dec. 31, 2016 | |
Property Plant And Equipment [Abstract] | |
Equipment, Furniture and Leasehold Improvements | 4. Equipment, Furniture and Leasehold Improvements Equipment, furniture, and leasehold improvements consist of the following (in thousands): December 31, 2016 2015 Computer equipment and software $ 2,929 $ 2,667 Office furniture and equipment 357 305 Leasehold improvements 1,192 1,197 Total 4,478 4,169 Less: accumulated depreciation and amortization (3,389 ) (3,002 ) Equipment, furniture and leasehold improvements, net $ 1,089 $ 1,167 Depreciation and amortization expense of equipment, furniture and leasehold improvements was $468,000 in 2016 and $440,000 in 2015. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 5. Goodwill and Intangible Assets Goodwill was originally recorded in connection with the September 2011 acquisition of MPC Data, Ltd. (renamed BSQUARE EMEA, Ltd. in 2015), a United Kingdom based provider of software engineering services. The excess of the acquisition consideration over the fair value of net assets acquired was recorded as goodwill and is included within the professional engineering services reporting unit. There were no changes in the carrying amount of goodwill for the years ended December 31, 2016 and 2015. Intangible assets relate to customer relationships that we acquired from TestQuest, Inc. in November 2008 and from the acquisition of BSQUARE EMEA, Ltd. in September 2011. Information regarding our intangible assets is as follows (in thousands): December 31, 2016 Gross Net Carrying Accumulated Carrying Amount Amortization Value Customer relationships $ 1,275 $ (811 ) $ 464 December 31, 2015 Gross Net Carrying Accumulated Carrying Amount Amortization Value Customer relationships $ 1,275 $ (681 ) $ 594 Amortization expense was $130,000 and $135,000 for 2016 and 2015, respectively. As of December 31, 2016, expected amortization expense for acquisition-related intangible assets for each of the next five years and thereafter is as follows (in thousands): 2017 $ 98 2018 98 2019 98 2020 98 2021 72 Total $ 464 |
Other Income (Expense), Net
Other Income (Expense), Net | 12 Months Ended |
Dec. 31, 2016 | |
Other Income And Expenses [Abstract] | |
Other Income (Expense), Net | 6. Other Income (Expense), Net The components of other income (expense), net are as follows (in thousands): Year Ended December 31, 2016 2015 Interest income $ 137 $ 53 Other income 110 79 Total $ 247 $ 132 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 7. Income Taxes Income (loss) before income taxes consists of the following (in thousands): Year Ended December 31, 2016 2015 U.S. $ (580 ) $ 6,280 Foreign (331 ) 283 Total $ (911 ) $ 6,563 Income tax expense consists of the following (in thousands): Year Ended December 31, 2016 2015 Current taxes: Federal $ (24 ) $ 104 State and local 38 39 Foreign 41 97 Current taxes 55 240 Deferred taxes: Federal $ — $ — State and local — — Foreign 86 230 Deferred taxes 86 230 Total $ 141 $ 470 The components of net deferred tax assets consist of the following (in thousands): December 31, 2016 2015 Net deferred income tax assets (liability): Depreciation and amortization $ 365 $ 322 Accrued expenses and reserves 411 720 Net operating loss carryforwards 20,448 20,135 Research and development credit carryforwards 2,740 2,673 Stock-based compensation 840 750 Other 91 — Gross deferred tax assets 24,895 24,600 Less: valuation allowance (24,911 ) (24,552 ) Net deferred tax assets (liability) $ (16 ) $ 48 Our net deferred tax assets are recorded as follows (in thousands): December 31, 2016 2015 Net deferred tax assets (liability): Deferred tax assets—non-current $ 7 $ 145 Deferred tax liability (23 ) (97 ) Net deferred tax assets (liability) $ (16 ) $ 48 As of December 31, 2016, our deferred tax assets were primarily the result of U.S. net operating loss and research and development credit carryforwards. We have applied a full valuation allowance against the U.S. deferred tax assets and a partial valuation allowance against deferred tax assets in Japan. Valuation allowances of $24.9 million and $24.6 million have been recorded against our gross deferred tax asset balances as of December 31, 2016 and December 31, 2015, respectively. We apply the guidance of ASC 740, which requires us to use judgment as to the appropriate weighting of all available evidence when assessing the need for the establishment or the release of valuation allowances. As part of this analysis, we examine all available evidence on a jurisdiction-by-jurisdiction basis and weigh the positive and negative information when determining the need for full or partial valuation allowances. The evidence considered for each jurisdiction includes, among other items, (i) the historical levels of income or loss over a range of time periods that extends beyond the two years presented, (ii) the historical sources of income and losses, (iii) the expectations and risk associated with underlying estimates of future taxable income, (iv) the expectations and risk associated with new product offerings and uncertainties with the timing of future taxable income, and (v) prudent and feasible tax planning strategies. Based on the analysis conducted as of December 31, 2016, we determined that we would not release, in full or in part, the valuation allowance against our U.S. gross deferred tax assets. The provision for income taxes differs from the amount of expected income tax expense determined by applying the applicable U.S. statutory federal income tax rate to pre-tax income (loss), as a result of the following (in thousands, except percentages): Year Ended December 31, 2016 2015 U.S. Federal tax expense at statutory rates $ (310 ) 34.0 % $ 2,231 34.0 % Increase (decrease) resulting from: Tax credits (170 ) 18.6 % 130 2.0 % State income tax 25 (2.7 )% 14 0.2 % International operations 183 (20.1 )% 20 0.3 % Incentive stock options (23 ) 2.6 % (66 ) (1.0 )% Valuation allowance 311 (34.2 )% (2,121 ) (32.4 )% Expiration of state net operating loss carryforwards 77 (8.5 )% 236 3.6 % Other, net 48 (5.4 )% 26 0.4 % Tax expense and effective tax rate $ 141 (15.7 )% $ 470 7.1 % At December 31, 2016, we had approximately $55.7 million of federal and $1.8 million of state net operating loss carryforwards, which have begun to expire, including $0.2 million of state losses which will expire in 2017. Of the federal net operating loss carryforwards, an aggregate of $36.3 million will expire in 2022 and 2023. We also have $2.8 million of tax credit carryforwards, which begin to expire in 2018. Use of these carryforwards may subject us to an annual limitation due to Section 382 of the U.S. Internal Revenue Code that restricts the ability of a corporation that undergoes an ownership change to use its carryforwards. Under the applicable tax rules, an ownership change occurs if holders of more than five percent of an issuer’s outstanding common stock, collectively, increase their ownership percentage by more than 50 percentage points over a rolling three-year period. We have performed analyses of possible ownership changes in the past, which included consideration of third-party studies, and do not believe that an ownership change of more than 50 percentage points has occurred. We have evaluated all the material income tax positions taken on our income tax filings to various tax authorities, and we determined that we did not have unrealized tax benefits related to uncertain tax positions recorded at December 31, 2016 or 2015. Because of net operating loss and tax credit carryforwards, substantially all of our tax years remain open and subject to examination. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 8. Commitments and Contingencies Contingencies A third-party software vendor invoiced us a total of $934,000 for certain licensed software that was lost in transit by a common carrier during the second quarter of 2014. We accrued a liability of $100,000 in the second quarter of 2014 as an estimate of our potential liability for legal and insurance deductible expenses. During the first quarter of 2015, the vendor credited our account for the full $934,000 as the licenses had been deactivated and there was no indication of counterfeit use. Accordingly, we reversed approximately $85,000 of the accrual after payment of legal expenses in the first quarter of 2015. Contractual Commitments Our commitments include obligations outstanding under operating leases, which expire through 2020. We have lease commitments for office space in Bellevue, Washington; Taipei, Taiwan; Trowbridge, UK; and Tokyo, Japan. We also lease office space on a month-to-month basis in Akron, Ohio, and on an annual basis in San Diego, California and Boston, Massachusetts. In August 2013, we amended the lease agreement for our Bellevue, Washington headquarters and extended the term of the original lease that was scheduled to expire in August 2014 to May 2020. Rent expense was $1.0 million in 2016 and $1.1 million in 2015. As of December 31, 2015, we had $250,000 pledged as collateral for a bank letter of credit under the terms of our headquarters facility lease. The pledged cash supporting the outstanding letter of credit was recorded as restricted cash equivalents. In September 2016, this letter of credit agreement was replaced by a letter of credit secured by our credit agreement and the corresponding restricted cash equivalents were returned to us. Operating lease commitments at December 31, 2016 were as follows (in thousands): 2017 $ 1,175 2018 1,088 2019 1,038 2020 437 Total $ 3,738 Volume Pricing Agreements In conjunction with our activities under the OEM Distribution Agreements (“ODAs”) with Microsoft Corporation (“Microsoft”), we previously entered into OEM Volume Royalty Program (“OVRP”) commitments with Microsoft. Under these OVRPs, we were provided with volume pricing on a customer-by-customer basis assuming certain minimum unit volumes were met. The OVRP terms were 12 months. In the event we did not meet the committed minimum unit volumes, we were obligated to pay the difference between the committed per-unit volume rate and the actual per-unit rate we achieved based upon actual units purchased. The OVRP arrangements did not equate to a minimum purchase commitment but rather, the arrangements were a volume pricing arrangement based upon actual volume purchased. In substantially all instances, we had reciprocal agreements with our customers such that we received per-unit price adjustments, similar to the amounts we would have subsequently owed to Microsoft if such OVRP volumes were not met. However, in the event a customer was unwilling or unable to pay us, we would have been negatively impacted. Based upon the credit-worthiness of our customers, our historical OVRP experience with our customers and OVRP arrangements in general, we did not believe we would incur any material liability in the current or future periods relating to existing agreements. Microsoft has implemented significant pricing changes for its embedded products, including ending its design registration pricing discounts, terminating its OVRP and changing the aggregate volume price structure and product royalties for existing embedded Windows products effective January 1, 2016. In December 2015, Microsoft granted extensions for certain of the OVRPs through 2016. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Shareholders' Equity | 9. Shareholders’ Equity Equity Compensation Plans We have a stock plan (the “Stock Plan”) and an inducement stock plan for newly hired employees (the “Inducement Plan”) (collectively the “Plans”). Under the Plans, stock options may be granted with a fixed exercise price that is equivalent to fair market value on the date of grant. These options have a term of up to 10 years and vest over predetermined periods, generally one to four years. Incentive stock options granted under the Stock Plan may only be granted to our employees. The Plans also allow for awards of non-qualified stock options, stock appreciation rights, RSAs and unrestricted stock awards, and RSUs. Stock-Based Compensation The estimated fair value of stock-based awards is recognized as compensation expense over the vesting period of the award, net of estimated forfeitures. We estimate forfeitures of stock based awards based on historical experience and expected future activity. The fair value of restricted stock awards and restricted stock units is determined based on the number of shares granted and the quoted price of the Company’s common stock on the date of grant. The fair value of stock option awards are estimated at the grant date based on the fair value of each vesting tranche as calculated by the Black-Scholes-Merton (“BSM”) option-pricing model. The BSM model requires various highly judgmental assumptions including expected volatility and option life. If any of the assumptions used in the BSM model change significantly, stock-based compensation expense may differ materially in the future from that recorded in the current period. The fair values of our equity awards, primarily stock option grants, were estimated with the following weighted average assumptions: Year Ended December 31, 2016 2015 Dividend yield 0 % 0 % Expected life 3.4 years 3.3 years Expected volatility 55 % 52 % Risk-free interest rate 1.1 % 1.2 % The impact on our results of operations of recording stock-based compensation expense was as follows (in thousands, except per share amounts): Year Ended December 31, 2016 2015 Cost of revenue— professional engineering service $ 220 $ 508 Selling, general and administrative 868 925 Research and development 159 83 Total stock-based compensation expense $ 1,247 $ 1,516 Per basic and diluted share $ 0.10 $ 0.12 Stock Option Activity The following table summarizes stock option activity under the Plans for 2016 and 2015: Weighted Average Weighted Remaining Average Contractual Aggregate Number of Exercise Life Intrinsic Stock Options Shares Price (in years) Value Balance at January 1, 2015 1,553,360 $ 3.50 7.04 Granted 564,450 6.37 Exercised (250,196 ) 3.18 Forfeited (81,666 ) 4.01 Expired (7,251 ) 2.82 Balance at December 31, 2015 1,778,697 $ 4.43 7.83 Granted 903,248 5.24 Exercised (371,845 ) 3.17 Forfeited (396,161 ) 5.32 Expired (67,171 ) 5.91 Balance at December 31, 2016 1,846,768 $ 4.84 8.19 $ 2,138,361 Vested and expected to vest at December 31, 2016 1,676,601 $ 4.79 8.05 $ 2,036,356 Exercisable at December 31, 2016 771,265 $ 4.15 6.63 $ 1,425,867 At December 31, 2016, total unrecognized compensation cost related to stock options granted under the Plans was $1,688,358, net of estimated forfeitures. This cost will be amortized on the straight-line method over a weighted-average period of approximately 1.69 years. The aggregate intrinsic value represents the difference between the exercise price of the underlying options and the quoted price of our common stock for the number of options that were in-the-money at year-end. We issue new shares of common stock upon exercise of stock options. The following table summarizes certain information about stock options: Year Ended December 31, 2016 2015 Weighted average grant-date fair value for options granted during the year $ 2.63 $ 3.13 Vested options in-the-money at December 31 605,017 703,765 Aggregate intrinsic value of options exercised during the year $ 773,327 $ 860,743 Restricted Stock Unit Activity The following table summarizes restricted stock unit activity under the Stock Plan for 2016 and 2015: Weighted Average Number of Award Shares Price Unvested at January 1, 2015 80,179 $ 3.40 Granted 117,049 6.34 Vested (83,789 ) 4.32 Forfeited (8,976 ) 3.15 Unvested at December 31, 2015 104,463 $ 5.97 Granted 107,370 5.41 Vested (76,258 ) 5.81 Forfeited (15,969 ) 5.77 Unvested at December 31, 2016 119,606 $ 5.60 Expected to vest after December 31, 2016 102,834 $ 5.62 At December 31, 2016, total unrecognized compensation cost related to restricted stock units granted under the Stock Plan was $368,505, net of estimated forfeitures. This cost will be amortized on the straight-line method over a period of approximately 1.50 years. Common Stock Reserved for Future Issuance The following table summarizes our shares of common stock reserved for future issuance under the Plans: December 31, 2016 2015 Stock options outstanding 1,846,768 1,778,697 Restricted stock units outstanding 119,606 104,463 Stock options available for future grant 689,160 1,020,477 Common stock reserved for future issuance 2,655,534 2,903,637 |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2016 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Benefit Plan | 10. Employee Benefit Plan Profit Sharing and Deferred Compensation Plan We have a Profit Sharing and Deferred Compensation Plan, The BSQUARE Corporation 401(k) Plan and Trust, (the “Profit Sharing Plan”) under Section 401(k) of the Internal Revenue Code of 1986, as amended. Substantially all full-time employees are eligible to participate in the Profit Sharing Plan. We typically elect to match the participants’ contributions to the Profit Sharing Plan up to a certain amount subject to vesting. Participants will receive their share of the value of their investments, and any applicable vested match, upon retirement or termination. We made matching contributions of $321,000 in 2016 and $269,000 in 2015. Of the annual matching contributions, none of the 2016 and $26,000 of the 2015 contributions were composed of transfers from the Profit Sharing Plan’s forfeiture account. |
Significant Risk Concentrations
Significant Risk Concentrations | 12 Months Ended |
Dec. 31, 2016 | |
Risks And Uncertainties [Abstract] | |
Significant Risk Concentrations | 11. Significant Risk Concentrations Significant Customer Honeywell International Inc. accounted for 14% of total revenue in 2016 and 16% in 2015. No other customers accounted for 10% or more of total revenue in either 2016 or 2015. Honeywell International, Inc. and affiliated entities had total accounts receivable balances of $7.1 million, or 33% of total accounts receivable, and $6.1 million, or 32% of total accounts receivable, as of December 31, 2016 and 2015, respectively. No other customer accounted for 10% or more of total accounts receivable at December 31, 2016 or 2015. Significant Supplier We have two ODAs with Microsoft that enable us to sell Microsoft Windows Embedded operating systems to our customers in the United States, Canada, Argentina, Brazil, Chile, Columbia, Mexico, Peru, Puerto Rico, the Caribbean (excluding Cuba), the E.U., the European Free Trade Association and Africa, which expire on June 30, 2017 and are typically renewed annually or bi-annually. We also have four ODAs with Microsoft that allow us to sell Microsoft Windows Mobile operating systems in the Americas (excluding Cuba), Japan, Taiwan, Europe, the Middle East, and Africa, which also expire on June 30, 2017 and are typically renewed annually or bi-annually. Software sales under these agreements constitute a significant portion of our software revenue and total revenue. These agreements are typically renewed annually or semi-annually; however, there is no automatic renewal provision in any of these agreements. Further, these agreements can be terminated unilaterally by Microsoft at any time. Microsoft currently offers a rebate program to sell Microsoft Windows Embedded operating systems pursuant to which we earn money for achieving certain predefined objectives. In accordance with Microsoft rebate program rules, we allocate 30% of rebate values to reduce cost of sales, with the remaining 70% to offset qualified marketing expenses in the period the expenditures are incurred. Under this rebate program, we recognized $345,000 and $326,000 of rebate credits in 2016 and 2015, respectively, which were accounted for as reductions in cost of sales. We received $1.1 million and $0.8 million in rebates during 2016 and 2015, respectively, which were accounted for as reductions in marketing expenses. There was a balance of approximately $469,000 in outstanding rebate credits for which we qualified as of December 31, 2016, which will be accounted for as reductions in marketing expense in the period in which qualified program expenditures are made. Microsoft implemented significant pricing changes for its embedded products, including ending its design registration pricing discounts, terminating its OVRP and changing the aggregate volume price structure and product royalties for existing embedded Windows products effective January 1, 2016. In December 2015, Microsoft granted extensions for certain of the OVRPs through 2016. |
Credit Agreement
Credit Agreement | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Credit Agreement | 12. Credit Agreement Line of Credit In September 2015, we entered into a two-year unsecured line of credit agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A. (the “Bank”) in the principal amount of up to $12 million. In September 2016, the Credit Agreement was modified to extend the final due date an additional year to September 22, 2018. At our election, advances under the Credit Agreement shall bear interest at either (1) a rate per annum equal to 1.5% below the bank’s applicable prime rate or (2) 1.5% above the Bank’s applicable LIBOR rate, in each case as defined in the Credit Agreement. The Credit Agreement contains customary affirmative and negative covenants, including compliance with financial ratios and metrics, as well as limitations on our ability to pay distributions or dividends while there is an ongoing event of default or to the extent such distribution causes an event of default. We are required to maintain certain minimum interest coverage ratios, liquidity levels and asset coverage ratios as defined in the Credit Agreement. We were in compliance with all such covenants as of December 31, 2016. There were no amounts outstanding under the Credit Agreement as of December 31, 2016 or 2015. In September 2016, we entered into a letter of credit agreement for $250,000 secured by the Credit Agreement in connection with the lease of our corporate headquarters. Accordingly, the principal amount available under the Credit Agreement has been reduced from $12 million to $11.75 million. |
Restructuring
Restructuring | 12 Months Ended |
Dec. 31, 2016 | |
Restructuring And Related Activities [Abstract] | |
Restructuring | 13. Restructuring During the third quarter of 2016, our board of directors approved a restructuring plan that included a workforce reduction in our professional engineering services group. The workforce reduction impacted 33 personnel, comprised of both employees and consultants, representing approximately 17% of our pre-reduction headcount, and was intended to reduce expenses and to better align our organizational structure with our increasing strategic focus on our DataV software and services. The staff reductions from this restructuring were completed in October 2016. The total amounts incurred in 2016 in connection with the restructuring by expense type was as follows (in thousands): Incurred Year Ended Total Estimated Expense December 31, 2016 Severance $ 954 $ 954 Other 31 31 Total $ 985 $ 985 A reconciliation of the beginning and ending liability balances by expense type follows (in thousands): Severance Other Expense Expenses Beginning Balance—January 1, 2016 $ — $ — Costs charged to expense 954 31 Costs paid or otherwise settled 954 29 Ending Balance—December 31, 2016 $ - $ 2 The restructuring costs have been included in the results of operations as follows (in thousands): Year Ended December 31, 2016 Cost of revenue $ 968 Selling, general and administrative 17 Research and development — Total $ 985 |
Information about Operating Seg
Information about Operating Segments and Geographic Areas | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Information about Operating Segments and Geographic Areas | 14. Information about Operating Segments and Geographic Areas Our chief operating decision-makers (i.e., our Chief Executive Officer and certain direct reports) review financial information presented on a consolidated basis, accompanied by disaggregated information for purposes of allocating resources and evaluating financial performance. There are no segment managers who are held accountable by our chief operating decision-makers, or anyone else, for operations, operating results, or planning for levels or components below the consolidated unit level. We operate within a single industry segment of computer software and services. We have two major product lines, software and professional engineering services, each of which we consider to be an operating and reportable segment. Software includes third-party software and proprietary software sales, and professional engineering services includes consulting, programming and software implementation revenue. We do not allocate costs other than direct cost of goods sold to the segments or produce segment income statements. We do not produce asset information by reportable segment and it is not presented here. The following table sets forth profit and loss information about our segments (in thousands): Year Ended December 31, 2016 2015 Software Revenue $ 82,170 $ 86,208 Cost of revenue 68,182 70,937 Gross profit 13,988 15,271 Professional Engineering Services Revenue 15,271 20,393 Cost of revenue 13,439 15,194 Gross profit 1,832 5,199 Total gross profit 15,820 20,470 Operating expenses 16,978 14,039 Other income, net 247 132 Income tax expense (141 ) (470 ) Net income (loss) $ (1,052 ) $ 6,093 Revenue by geography is based on the sales region of the customer. The following table sets forth revenue and long-lived assets by geographic area (in thousands): Year Ended December 31, 2016 2015 Total revenue: North America $ 92,299 $ 97,858 Asia 2,024 3,405 Europe 3,118 5,338 Total revenue $ 97,441 $ 106,601 December 31, 2016 2015 Long-lived assets: North America $ 1,025 $ 1,353 Asia 90 247 Europe 4,236 4,345 Total long-lived assets $ 5,351 $ 5,945 |
Quarterly Financial Information
Quarterly Financial Information | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information | 15. Quarterly Financial Information (Unaudited) Following is a summary of unaudited quarterly financial information for 2016 and 2015: Condensed Consolidated Statements of Operations 2016 Q4 Q3 Q2 Q1 (in thousands, except per share data) Revenue $ 26,797 $ 22,467 $ 22,738 $ 25,439 Gross profit 3,954 3,677 3,893 4,296 Income (loss) from operations (1,307 ) (415 ) (85 ) 649 Net income (loss) $ (1,261 ) $ (106 ) $ (185 ) $ 500 Basic income (loss) per share $ (0.10 ) $ (0.01 ) $ (0.02 ) $ 0.04 Diluted income (loss) per share $ (0.10 ) $ (0.01 ) $ (0.02 ) $ 0.04 Shares used in calculation of income (loss) per share: Basic 12,473 12,310 12,152 12,102 Diluted 12,473 12,310 12,152 12,531 Condensed Consolidated Statements of Operations 2015 Q4 Q3 Q2 Q1 (in thousands, except per share data) Revenue $ 25,028 $ 26,435 $ 28,873 $ 26,265 Gross profit 4,916 4,873 5,232 5,449 Income from operations 1,297 1,387 1,871 1,876 Net income $ 1,140 $ 1,245 $ 1,885 $ 1,823 Basic income per share $ 0.09 $ 0.10 $ 0.16 $ 0.15 Diluted income per share $ 0.09 $ 0.10 $ 0.15 $ 0.15 Shares used in calculation of income per share: Basic 12,047 11,959 11,856 11,778 Diluted 12,649 12,466 12,295 12,057 Condensed Consolidated Balance Sheets 2016 December 31 September 30 June 30 March 31 (in thousands) Cash, cash equivalents and short-term investments $ 33,200 $ 31,577 $ 26,898 $ 27,626 Accounts receivable, net 21,579 19,808 19,377 21,323 Total current assets 55,657 51,844 47,059 49,683 Total assets 61,008 57,355 52,680 55,389 Third-party software fees payable 14,831 11,068 8,403 12,045 Accounts payable 283 284 328 470 Accrued compensation 2,008 1,924 2,093 1,553 Other accrued expenses 714 741 1,715 1,208 Total current liabilities 20,221 15,502 13,407 16,322 Common stock 135,660 135,043 134,264 133,774 Accumulated deficit (96,607 ) (95,346 ) (95,240 ) (846 ) Total shareholders' equity 38,112 38,790 38,166 37,873 Total liabilities and shareholders' equity 61,008 57,355 52,680 55,389 Condensed Consolidated Balance Sheets 2015 December 31 September 30 June 30 March 31 (in thousands) Cash, cash equivalents and short-term investments $ 29,723 $ 29,311 $ 29,430 $ 26,594 Accounts receivable, net 19,009 15,560 15,418 13,490 Total current assets 49,312 45,395 45,557 40,799 Total assets 55,258 51,593 51,813 47,161 Third-party software fees payable 11,789 10,184 12,361 10,793 Accounts payable 188 285 191 211 Accrued compensation 2,390 2,333 2,173 1,738 Other accrued expenses 1,277 1,320 1,501 1,374 Total current liabilities 17,077 15,120 17,147 14,951 Common stock 133,331 132,601 131,962 131,410 Accumulated deficit (95,555 ) (96,695 ) (97,940 ) (99,825 ) Total shareholders' equity 36,907 35,077 33,189 30,662 Total liabilities and shareholders' equity 55,258 51,593 51,813 47,161 |
Description of Business and A22
Description of Business and Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business BSQUARE Corporation (“BSQUARE”) was incorporated in Washington State in July 1994. Since our inception, our business has largely been focused on providing software solutions (historically including reselling software from Microsoft Corporation (“Microsoft”)) and related engineering services to businesses that develop, market and sell dedicated purpose standalone intelligent systems. Examples of dedicated purpose standalone intelligent systems include smart, connected computing devices such as smart phones, set-top boxes, point-of-sale terminals, kiosks, tablets and handheld data collection devices, as well as smart vending machines, ATM machines, digital signs and in-vehicle telematics and entertainment devices. We focus on systems that utilize various Microsoft Windows Embedded operating systems as well as devices running other popular operating systems such as Android, Linux, and QNX, and that are usually connected to a network or data cloud via a wired or wireless connection. Our customers include world-class original equipment manufacturers (“OEMs”), original design manufacturers (“ODMs”), corporate enterprises (“Enterprises”), silicon vendors (“SVs”) and peripheral vendors. A significant portion of our business historically has also been focused on reselling software from Microsoft, from which a majority of our revenue currently continues to be derived. Beginning in 2014, we initiated development efforts focused on new proprietary software products addressing the Internet of Things (“IoT”) market, which is the interconnection of uniquely identifiable embedded computing devices within the existing internet infrastructure. These software development efforts have driven a new business initiative for BSQUARE, which refer to as DataV TM |
Basis of Consolidation | Basis of Consolidation The consolidated financial statements include the accounts of BSQUARE and our wholly owned subsidiaries. All intercompany balances and transactions have been eliminated. |
Use of Estimates | Use of Estimates Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. Examples include provisions for bad debts and income taxes, estimates of progress on professional engineering service arrangements, bonus accruals, fair value of intangible assets and property and equipment, fair values of stock-based awards and the fair values of acquired assets and liabilities, among other estimates. Actual results may differ from these estimates. |
Income (Loss) Per Share | Income (Loss) Per Share Basic income or loss per share is computed using the weighted average number of common shares outstanding during the period, and excludes any dilutive effects of common stock equivalent shares, such as options, restricted stock awards, restricted stock units and warrants. Restricted stock awards (“RSAs”) are considered outstanding and included in the computation of basic income or loss per share when underlying restrictions expire and the awards are no longer forfeitable. Restricted stock units (“RSUs”) are considered outstanding and included in the computation of basic income or loss per share only when vested. Diluted income per share is computed using the weighted average number of common shares outstanding and common stock equivalent shares outstanding during the period using the treasury stock method. Common stock equivalent shares are excluded from the computation if their effect is anti-dilutive. Unvested but outstanding RSUs and RSAs (which are forfeitable) are included in the diluted income per share calculation. In a period where we are in a net loss position, the diluted loss per share is computed using the basic share count. The following table presents a reconciliation of the number of shares used in the calculation of basic and diluted income (loss) per share (in thousands): Year Ended December 31, 2016 2015 Weighted average shares outstanding for basic income (loss) per share 12,260 11,938 Dilutive effect of common stock equivalent shares — 481 Weighted average shares outstanding for diluted income (loss) per share 12,260 12,419 Common stock equivalent shares of 691,243 and 213,820 were excluded from the computations of basic and diluted income per share for the years ended December 31, 2016 and 2015, respectively, because their effect was anti-dilutive. |
Cash, Cash Equivalents and Investments | Cash, Cash Equivalents and Investments We invest our excess cash primarily in highly liquid debt instruments of U.S. government agencies and municipalities, debt instruments issued by foreign governments, corporate commercial paper, money market funds, and corporate debt securities. We classify all highly liquid investments with stated maturities of three months or less from date of purchase as cash equivalents and all highly liquid investments with stated maturities of greater than three months as short-term investments. Short-term investments consist entirely of marketable securities, which are all classified as available-for-sale securities and are recorded at their estimated fair value. We determine the appropriate classification of our investments at the time of purchase and reevaluate such designation at each balance sheet date. We may or may not hold securities with stated maturities greater than 12 months until maturity. As we view these securities as available to support current operations, we classify securities with maturities less than 12 months as short-term investments. We carry these securities at fair value, and report the unrealized gains and losses, net of taxes, as a component of shareholders’ equity, except for unrealized losses determined to be other than temporary, which are recorded in other expense. |
Restricted Cash | Restricted Cash Our restricted cash equivalents balance at December 31, 2015 represented funds held at a financial institution as security for an outstanding letter of credit related to our corporate headquarters lease obligation. The full balance of restricted cash equivalents was released in September 2016 when we entered into a new letter of credit agreement secured by our credit agreement with JPMorgan Chase Bank, N.A. |
Financial Instruments and Concentrations of Risk | Financial Instruments and Concentrations of Risk Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash, cash equivalents, short-term investments, and accounts receivable. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts We record accounts receivable at the invoiced amount net of an estimated allowance for doubtful accounts to reserve for potentially uncollectible receivables. We review customers that have past due invoices to identify specific customers with known disputes or collectability issues. In determining the amount of the allowance, we make judgments about the creditworthiness of significant customers based on ongoing credit evaluations. |
Equipment, Furniture and Leasehold Improvements | Equipment, Furniture and Leasehold Improvements We account for equipment, furniture and leasehold improvements at cost less accumulated depreciation and amortization. We compute depreciation of equipment and furniture using the straight-line method over the estimated useful lives of the assets, generally three years. Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or estimated useful lives, ranging from two to ten years. We expense maintenance and repairs costs as incurred. When assets are retired or otherwise disposed of, gains or losses are included in the consolidated statements of income. When facts and circumstances indicate that the value of long-lived assets may be impaired, we perform an evaluation of recoverability comparing the carrying value of the asset to projected undiscounted future cash flows. Upon indication that the carrying value of such assets may not be recoverable, we recognize an impairment loss as a charge against current operations based on the difference between the carrying value of the asset and its fair value. |
Intangible Assets | Intangible Assets Intangible assets were recorded as a result of business acquisitions and are stated at estimated fair value at the time of acquisition less accumulated amortization. We amortize our acquired intangible assets using the straight-line method using lives ranging from one to ten years. We review intangible assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. We measure recoverability of these assets by comparing the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If intangible assets are considered impaired, the impairment to be recognized equals the amount by which the carrying value of the asset exceeds its fair market value. |
Goodwill | Goodwill We evaluate goodwill for impairment in the fourth quarter annually, or more frequently when an event occurs or circumstances change that indicate that the carrying value may not be recoverable. We test goodwill for impairment by performing a qualitative assessment to determine whether the fair value of the reporting unit is more likely than not less than the carrying amount. If we determine that the fair value of the reporting unit is more likely greater than its carrying amount, we do not conduct further impairment testing. If we determine that the fair value of the reporting unit is not more likely greater than the carrying amount, we perform a quantitative two-step impairment test. The first step compares the fair value of the reporting unit with its carrying amount, including goodwill. If the carrying amount exceeds fair value, we then perform the second step of the impairment test to measure the amount of any impairment loss. |
Third-Party Software Fees Payable | Third-Party Software Fees Payable We record all fees payable and accrued liabilities related to the sale of third-party software, such as Microsoft Windows Embedded and Windows Mobile operating systems, as third-party software fees payable. |
Research and Development | Research and Development Costs incurred internally in researching and developing a computer software product are charged to expense until technological feasibility has been established for the product. Once technological feasibility is established, all software costs would be capitalized until the product is available for general release to customers. Judgment is required in determining when technological feasibility of a product is established. Generally, this would be reached after all high-risk development issues have been resolved through coding and testing, and would occur shortly before the product is released. Amortization of costs incurred after this point would be included in cost of revenue over the estimated life of the products. As of December 31, 2016 and 2015, we had not recorded any such capitalized costs. |
Advertising Costs | Advertising Costs All costs of advertising, including cooperative marketing arrangements, are expensed as incurred. Advertising expense was $45,000 in 2016 and $23,000 in 2015. |
Stock-Based Compensation | Stock-Based Compensation The estimated fair value of stock based awards is recognized as compensation expense over the vesting period of the award, net of estimated forfeitures. We estimate forfeitures of stock based awards based on historical experience and expected future activity. The fair value of restricted stock awards and restricted stock units is determined based on the number of shares granted and the quoted price of our common stock on the date of grant. The fair value of stock option awards are estimated at the grant date based on the fair value of each vesting tranche as calculated by the Black-Scholes-Merton (“BSM”) option-pricing model. The BSM model requires various highly judgmental assumptions including expected volatility and option life. If any of the assumptions used in the BSM model change significantly, stock-based compensation expense may differ materially in the future from that recorded in the current period. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) refers to net income (loss) and other revenue, expenses, gains and losses that, under generally accepted accounting principles, are recorded as an element of shareholders’ equity but are excluded from the calculation of net income (loss). |
Income Taxes | Income Taxes We are subject to income taxes in the U.S. and certain foreign jurisdictions. Significant judgment is required in determining our provision for income taxes. We compute income taxes using the asset and liability method, under which deferred income taxes are provided for on the temporary differences between the financial reporting basis and the tax basis of our assets and liabilities. Our deferred tax amounts are measured using currently enacted tax rates that are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. We apply the guidance of Accounting Standards Codification (ASC) 740, Income Taxes, which requires us to use judgment as to the appropriate weighting of all available evidence when assessing the need for the establishment or the release of valuation allowances. As part of this analysis, we examine all available evidence on a jurisdiction-by-jurisdiction basis and weigh the positive and negative information when determining the need for full or partial valuation allowances. The evidence considered for each jurisdiction includes, among other items, (i) the historical levels of income or loss over a range of time periods that extends beyond the two years presented, (ii) the historical sources of income and losses, (iii) the expectations and risk associated with underlying estimates of future taxable income, (iv) the expectations and risk associated with new product offerings and uncertainties with the timing of future taxable income, and (v) prudent and feasible tax planning strategies. Based on the analysis conducted as of December 31, 2016, we determined that we would not release, in full or in part, the valuation allowance against our U.S. gross deferred tax assets. We recognize tax benefits from an uncertain position only if it is “more likely than not” that the position is sustainable, based on its technical merits. The tax benefit of a qualifying position is the largest amount of tax benefit that is greater than fifty percent likely of being realized upon ultimate settlement with a taxing authority having full knowledge of all relevant information. Interest and penalties related to uncertain tax positions are classified in the consolidated financial statements as income tax expense. |
Foreign Currency | Foreign Currency The functional currency of foreign subsidiaries is their local currency. Accordingly, assets and liabilities are translated into U.S. dollars at exchange rates in effect at the balance sheet date. Resulting translation adjustments are included in Other Comprehensive Income (Loss) and Accumulated Other Comprehensive Loss, a separate component of shareholders’ equity. The net gains and losses resulting from foreign currency transactions are recorded in the period incurred and were not significant for any of the periods presented. |
Revenue Recognition | Revenue Recognition We recognize revenue from software and engineering service sales when the following four revenue recognition criteria are met: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; the selling price is fixed or determinable; and collectability is reasonably assured. Contracts and customer purchase orders are generally used to determine the existence of an arrangement. Shipping documents and time records are generally used to verify delivery. We assess whether the selling price is fixed or determinable based on the contract and/or customer purchase order and payment terms associated with the transaction and whether the sales price is subject to refund or adjustment. We assess collectability based primarily on the creditworthiness of the customer as determined by credit checks and analysis, as well as the customer’s payment history. Periodically, we will begin work on engineering service engagements prior to having a signed contract and, in some cases, the contract is signed in a quarter after which service delivery costs are incurred. We do not defer costs associated with such engagements before we have received a signed contract. In certain rare circumstances, we will grant extended terms to highly credit-worthy customers. The terms we offer are fixed and determinable; they are for sales of perpetual software licenses, they do not exceed twelve months in duration, they do not include multiple element arrangements requiring post-contract support, they do not permit returns or exchanges past thirty days and they do not require any additional services be provided by us. We recognize software revenue upon delivery provided that no significant obligations remain on our part, substantive acceptance conditions, if any, have been met and other revenue recognition criteria have been met. We recognize service revenue from time and materials contracts, and training service agreements, as we perform the services. Fixed-price service agreements, and certain time and materials service agreements with capped fee structures, are accounted for using the percentage-of-completion method assuming we can make reasonable estimates of completion. We use the percentage-of-completion method of accounting because we believe it is the most accurate method to recognize revenue based on the nature and scope of these engineering service contracts and provides the best match of revenue recognized with costs incurred. We measure the percentage of completion based primarily on input measures such as hours incurred to date compared to total estimated hours to complete, with consideration given to output measures, such as contract milestones, when applicable. We use significant judgment when estimating total hours and progress to completion on these arrangements, which we use to determine the amount of revenue we recognize as well as whether a loss is recognized, if one is expected to be incurred for the remainder of the project. We incorporate revisions to hour and cost estimates during the period in which the causal facts become known. In certain situations, when it is impractical for us to reliably estimate either specific amounts or ranges of contract revenues and costs, and where we anticipate that we will not incur a loss, a zero profit model is used for revenue recognition. Equal amounts of revenue and cost are recognized during the contract period, and profit is recognized when the project is completed and accepted. If the contract includes post-contract customer support and/or maintenance (“PCS”), profit is recognized over the PCS term. We also enter into arrangements in which a customer purchases a combination of software licenses, engineering services and PCS. As a result, judgment is often required to determine the appropriate accounting, including how to allocate the price among the deliverable elements if there are multiple elements. PCS may include rights to upgrades, when and if available, telephone support, updates and enhancements. We allocate revenue to each element based on the relative fair value of each of the elements in a multiple element arrangement, when vendor specific objective evidence (“VSOE”) of fair value exists for all elements. When the same element is sold separately, VSOE is established; when VSOE does not exist, judgments are required to assess the fair values of various elements of an agreement, which can impact the recognition of revenue in each period. While changes in the allocation of the sales price between contract elements may affect the timing of revenue recognition, the total revenue recognized on the contract would not change. When elements such as software and engineering services are contained in a single arrangement, or in related arrangements with the same customer, we allocate revenue to each element based on its relative fair value if such element meets the criteria for treatment as a separate unit of accounting. In the absence of fair value for a delivered element, we allocate revenue first to the fair value of the undelivered elements and then to the residual delivered elements. In the absence of fair value for an undelivered element, we account for the arrangement as a single unit of accounting, which delays revenue recognition until all elements are fulfilled. There are two items involving revenue recognition that require us to make more difficult and subjective judgments: the determination of VSOE of fair value in multiple element arrangements and the estimation of percentage of completion on fixed-price service contracts. While we have entered into very few multiple-element arrangements for proprietary software historically, our initial DataV contracts each included multiple elements, including software licenses, installation, training services and PCS, and we anticipate this will continue to be the case for many future DataV contracts. We have been unable to establish VSOE for DataV contracts to date. When engineering services and royalties are contained in a single arrangement, we recognize revenue from professional engineering services as earned in accordance with the criteria above even though the effective rate per hour may be lower than typical because the customer is contractually obligated to pay royalties on their device shipments. We recognize royalty revenue, classified as software revenue, when we receive the royalty report from the customer, or when such royalties are contractually guaranteed and the other revenue recognition criteria are met, when collectability is reasonably assured. Revenue is recognized net of any applicable sales taxes collected from customers and remitted to governmental authorities. Shipping and handling costs are generally billed to customers and are included in cost of revenue in the consolidated statements of operations. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers,” amending revenue recognition guidance and requiring more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The guidance, as amended, is effective for annual and interim reporting periods beginning after December 15, 2017, with early adoption permitted for public companies effective for annual and interim reporting periods beginning after December 15, 2016. We are currently evaluating the impact this ASU will have on our consolidated financial statements and related disclosures, and are currently planning to implement this ASU effective January 1, 2017. We believe the adoption will not have a material impact on our traditional third-party software or professional engineering services business, but that it will have a significant impact on the revenue recognition timing for our new DataV software products and services. While we are continuing to assess all potential impacts of the new standard, we currently believe the most significant impact relates to our accounting for DataV arrangements that include term-based software licenses bundled with professional engineering services, and maintenance and support. Under current GAAP, the revenue attributable to these software licenses is recognized ratably over the term of the arrangement because VSOE does not exist for the undelivered maintenance and support element as it is not sold separately. The requirement to have VSOE for undelivered elements to enable the separation of revenue for the delivered software licenses is eliminated under the new standard. Accordingly, under the new standard there will be more performance obligations under the new standard as compared with the deliverables and units of account previously identified for DataV in which revenue was recognized over time. As a result, this may yield earlier recognition of DataV revenue than under current accounting rules and may result in greater quarterly revenue recognition variability. While we currently expect revenue recognition related to our traditional third-party software and professional engineering services business to remain unchanged, we are still in the process of evaluating the impact of the new standard on these arrangements. Due to the complexity of certain of our contracts, the actual revenue recognition treatment required under the new standard for these arrangements may be dependent on contract-specific terms and therefore may vary in some instances. In November 2015, the FASB issued ASU No. 2015-17, “Balance Sheet Classification of Deferred Taxes,” to simplify the presentation of deferred income taxes. The amendments in this ASU require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The amendments in this ASU apply to all entities that present a classified statement of financial position. The current requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by the amendments in this ASU. We adopted the new guidance retrospectively beginning with the year ended December 31, 2014. In February 2016, the FASB issued ASU No. 2016-2, “Leases,” to make leasing activities more transparent and comparable, requiring most leases be recognized by lessees on their balance sheets as right-of-use assets, along with corresponding lease liabilities. ASU 2016-2 is effective for public business entities for annual periods beginning after December 31, 2018 and interim periods within that year, with early adoption permitted. We are currently evaluating the impact this ASU may have on our consolidated financial statements and related disclosures. In March 2016, the FASB amended the existing accounting standards for stock-based compensation, ASU 2016-09, “Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” The amendments impact several aspects of accounting for share-based payment transactions, including income tax consequences, forfeitures, classification of awards as either equity or liabilities, and classification on the statement of cash flows. We are required to adopt the amendments in the first quarter of 2017, with early adoption permitted. If early adoption is elected, all amendments must be adopted in the same period. The manner of application varies by the various provisions of the guidance, with certain provisions applied on a retrospective or modified retrospective approach, while others are applied prospectively. We are currently evaluating the impact this ASU may have on our consolidated financial statements and related disclosures. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments,” adding or clarifying guidance on the classification of certain cash receipts and payments in the statement of cash flows. The standard addresses eight specific cash flow issues with the objective of reducing diversity in practice. ASU 2016-15 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted. We are currently evaluating the impact this ASU may have on our consolidated financial statements and related disclosures. |
Description of Business and A23
Description of Business and Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Reconciliation of Number of Shares Used in Calculation of Basic and Diluted Income (Loss) Per Share | The following table presents a reconciliation of the number of shares used in the calculation of basic and diluted income (loss) per share (in thousands): Year Ended December 31, 2016 2015 Weighted average shares outstanding for basic income (loss) per share 12,260 11,938 Dilutive effect of common stock equivalent shares — 481 Weighted average shares outstanding for diluted income (loss) per share 12,260 12,419 |
Cash and Investments (Tables)
Cash and Investments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Cash And Cash Equivalents [Abstract] | |
Cash, Cash Equivalents, Short-Term Investments, and Restricted Cash | Cash, cash equivalents, short-term investments, and restricted cash consist of the following (in thousands): December 31, 2016 2015 Cash $ 11,016 $ 7,270 Cash equivalents—money market funds 2,796 1,500 Corporate commercial paper 500 5,404 Corporate debt securities — 2,269 Total cash and cash equivalents 14,312 16,443 Short-term investments: Corporate commercial paper 11,465 6,245 Treasury bonds — 1,007 Corporate debt securities 7,423 6,028 Total short-term investments 18,888 13,280 Restricted cash equivalents — 250 Total cash, cash equivalents, short-term investments and restricted cash equivalents $ 33,200 $ 29,973 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Measured at Fair Value on Recurring Basis | Assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands): December 31, 2016 Quoted Prices in Active Markets for Identical Assets (Level 1) Direct or Indirect Observable Inputs (Level 2) Total Assets Cash equivalents: Money market funds $ 2,796 $ — $ 2,796 Corporate commercial paper — 500 500 Corporate debt — — $ — Total cash equivalents 2,796 500 3,296 Short-term investments: Corporate commercial paper — 11,465 11,465 Treasury bonds — — — Corporate debt — 7,423 7,423 Total short-term investments — 18,888 18,888 Total assets measured at fair value $ 2,796 $ 19,388 $ 22,184 December 31, 2015 Quoted Prices in Active Markets for Identical Assets (Level 1) Direct or Indirect Observable Inputs (Level 2) Total Assets Cash equivalents: Money market funds $ 5,404 $ — $ 5,404 Corporate commercial paper — 1,500 1,500 Corporate debt — 2,269 $ 2,269 Total cash equivalents 5,404 3,769 9,173 Short-term investments: Corporate commercial paper — 6,245 6,245 Treasury bonds — 1,007 1,007 Corporate debt — 6,028 6,028 Total short-term investments — 13,280 13,280 Restricted cash equivalents—money market fund 250 — 250 Total assets measured at fair value $ 5,654 $ 17,049 $ 22,703 |
Equipment, Furniture and Leas26
Equipment, Furniture and Leasehold Improvements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property Plant And Equipment [Abstract] | |
Equipment, Furniture and Leasehold Improvements | Equipment, furniture, and leasehold improvements consist of the following (in thousands): December 31, 2016 2015 Computer equipment and software $ 2,929 $ 2,667 Office furniture and equipment 357 305 Leasehold improvements 1,192 1,197 Total 4,478 4,169 Less: accumulated depreciation and amortization (3,389 ) (3,002 ) Equipment, furniture and leasehold improvements, net $ 1,089 $ 1,167 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Information Regarding Intangible Assets | Information regarding our intangible assets is as follows (in thousands): December 31, 2016 Gross Net Carrying Accumulated Carrying Amount Amortization Value Customer relationships $ 1,275 $ (811 ) $ 464 December 31, 2015 Gross Net Carrying Accumulated Carrying Amount Amortization Value Customer relationships $ 1,275 $ (681 ) $ 594 |
Expected Amortization Expense for Acquisition-Related Intangible Assets | As of December 31, 2016, expected amortization expense for acquisition-related intangible assets for each of the next five years and thereafter is as follows (in thousands): 2017 $ 98 2018 98 2019 98 2020 98 2021 72 Total $ 464 |
Other Income (Expense), Net (Ta
Other Income (Expense), Net (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Other Income And Expenses [Abstract] | |
Components of Other Income (Expense), Net | The components of other income (expense), net are as follows (in thousands): Year Ended December 31, 2016 2015 Interest income $ 137 $ 53 Other income 110 79 Total $ 247 $ 132 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income (Loss) Before Income Taxes | Income (loss) before income taxes consists of the following (in thousands): Year Ended December 31, 2016 2015 U.S. $ (580 ) $ 6,280 Foreign (331 ) 283 Total $ (911 ) $ 6,563 |
Income Tax Expense | Income tax expense consists of the following (in thousands): Year Ended December 31, 2016 2015 Current taxes: Federal $ (24 ) $ 104 State and local 38 39 Foreign 41 97 Current taxes 55 240 Deferred taxes: Federal $ — $ — State and local — — Foreign 86 230 Deferred taxes 86 230 Total $ 141 $ 470 |
Components of Net Deferred Tax Assets | The components of net deferred tax assets consist of the following (in thousands): December 31, 2016 2015 Net deferred income tax assets (liability): Depreciation and amortization $ 365 $ 322 Accrued expenses and reserves 411 720 Net operating loss carryforwards 20,448 20,135 Research and development credit carryforwards 2,740 2,673 Stock-based compensation 840 750 Other 91 — Gross deferred tax assets 24,895 24,600 Less: valuation allowance (24,911 ) (24,552 ) Net deferred tax assets (liability) $ (16 ) $ 48 |
Net Deferred Tax Assets | Our net deferred tax assets are recorded as follows (in thousands): December 31, 2016 2015 Net deferred tax assets (liability): Deferred tax assets—non-current $ 7 $ 145 Deferred tax liability (23 ) (97 ) Net deferred tax assets (liability) $ (16 ) $ 48 |
Schedule of Provision for Income Taxes | The provision for income taxes differs from the amount of expected income tax expense determined by applying the applicable U.S. statutory federal income tax rate to pre-tax income (loss), as a result of the following (in thousands, except percentages): Year Ended December 31, 2016 2015 U.S. Federal tax expense at statutory rates $ (310 ) 34.0 % $ 2,231 34.0 % Increase (decrease) resulting from: Tax credits (170 ) 18.6 % 130 2.0 % State income tax 25 (2.7 )% 14 0.2 % International operations 183 (20.1 )% 20 0.3 % Incentive stock options (23 ) 2.6 % (66 ) (1.0 )% Valuation allowance 311 (34.2 )% (2,121 ) (32.4 )% Expiration of state net operating loss carryforwards 77 (8.5 )% 236 3.6 % Other, net 48 (5.4 )% 26 0.4 % Tax expense and effective tax rate $ 141 (15.7 )% $ 470 7.1 % |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Operating Lease Commitments | Operating lease commitments at December 31, 2016 were as follows (in thousands): 2017 $ 1,175 2018 1,088 2019 1,038 2020 437 Total $ 3,738 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Fair Values of Equity Awards, Primarily Stock Option Grants Estimated with Weighted Average Assumptions | The fair values of our equity awards, primarily stock option grants, were estimated with the following weighted average assumptions: Year Ended December 31, 2016 2015 Dividend yield 0 % 0 % Expected life 3.4 years 3.3 years Expected volatility 55 % 52 % Risk-free interest rate 1.1 % 1.2 % |
Stock-Based Compensation Expense | The impact on our results of operations of recording stock-based compensation expense was as follows (in thousands, except per share amounts): Year Ended December 31, 2016 2015 Cost of revenue— professional engineering service $ 220 $ 508 Selling, general and administrative 868 925 Research and development 159 83 Total stock-based compensation expense $ 1,247 $ 1,516 Per basic and diluted share $ 0.10 $ 0.12 |
Summary of Stock Option Activity | The following table summarizes stock option activity under the Plans for 2016 and 2015: Weighted Average Weighted Remaining Average Contractual Aggregate Number of Exercise Life Intrinsic Stock Options Shares Price (in years) Value Balance at January 1, 2015 1,553,360 $ 3.50 7.04 Granted 564,450 6.37 Exercised (250,196 ) 3.18 Forfeited (81,666 ) 4.01 Expired (7,251 ) 2.82 Balance at December 31, 2015 1,778,697 $ 4.43 7.83 Granted 903,248 5.24 Exercised (371,845 ) 3.17 Forfeited (396,161 ) 5.32 Expired (67,171 ) 5.91 Balance at December 31, 2016 1,846,768 $ 4.84 8.19 $ 2,138,361 Vested and expected to vest at December 31, 2016 1,676,601 $ 4.79 8.05 $ 2,036,356 Exercisable at December 31, 2016 771,265 $ 4.15 6.63 $ 1,425,867 |
Summary of Certain Information about Stock Options | The following table summarizes certain information about stock options: Year Ended December 31, 2016 2015 Weighted average grant-date fair value for options granted during the year $ 2.63 $ 3.13 Vested options in-the-money at December 31 605,017 703,765 Aggregate intrinsic value of options exercised during the year $ 773,327 $ 860,743 |
Summary of Restricted Stock Unit Activity | The following table summarizes restricted stock unit activity under the Stock Plan for 2016 and 2015: Weighted Average Number of Award Shares Price Unvested at January 1, 2015 80,179 $ 3.40 Granted 117,049 6.34 Vested (83,789 ) 4.32 Forfeited (8,976 ) 3.15 Unvested at December 31, 2015 104,463 $ 5.97 Granted 107,370 5.41 Vested (76,258 ) 5.81 Forfeited (15,969 ) 5.77 Unvested at December 31, 2016 119,606 $ 5.60 Expected to vest after December 31, 2016 102,834 $ 5.62 |
Summary of Shares of Common Stock Reserved for Future Issuance under Plans | The following table summarizes our shares of common stock reserved for future issuance under the Plans: December 31, 2016 2015 Stock options outstanding 1,846,768 1,778,697 Restricted stock units outstanding 119,606 104,463 Stock options available for future grant 689,160 1,020,477 Common stock reserved for future issuance 2,655,534 2,903,637 |
Restructuring (Tables)
Restructuring (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Restructuring And Related Activities [Abstract] | |
Schedule of Amount Incurred for Restructuring Expense | The total amounts incurred in 2016 in connection with the restructuring by expense type was as follows (in thousands): Incurred Year Ended Total Estimated Expense December 31, 2016 Severance $ 954 $ 954 Other 31 31 Total $ 985 $ 985 |
Schedule of Reconciliation of Beginning and Ending Liability Balances by Expense | A reconciliation of the beginning and ending liability balances by expense type follows (in thousands): Severance Other Expense Expenses Beginning Balance—January 1, 2016 $ — $ — Costs charged to expense 954 31 Costs paid or otherwise settled 954 29 Ending Balance—December 31, 2016 $ - $ 2 |
Schedule of Restructuring Costs Included in Operations | The restructuring costs have been included in the results of operations as follows (in thousands): Year Ended December 31, 2016 Cost of revenue $ 968 Selling, general and administrative 17 Research and development — Total $ 985 |
Information about Operating S33
Information about Operating Segments and Geographic Areas (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Profit and Loss Information of Segments | The following table sets forth profit and loss information about our segments (in thousands): Year Ended December 31, 2016 2015 Software Revenue $ 82,170 $ 86,208 Cost of revenue 68,182 70,937 Gross profit 13,988 15,271 Professional Engineering Services Revenue 15,271 20,393 Cost of revenue 13,439 15,194 Gross profit 1,832 5,199 Total gross profit 15,820 20,470 Operating expenses 16,978 14,039 Other income, net 247 132 Income tax expense (141 ) (470 ) Net income (loss) $ (1,052 ) $ 6,093 |
Revenue and Long-Lived Assets by Geographic Area | Revenue by geography is based on the sales region of the customer. The following table sets forth revenue and long-lived assets by geographic area (in thousands): Year Ended December 31, 2016 2015 Total revenue: North America $ 92,299 $ 97,858 Asia 2,024 3,405 Europe 3,118 5,338 Total revenue $ 97,441 $ 106,601 December 31, 2016 2015 Long-lived assets: North America $ 1,025 $ 1,353 Asia 90 247 Europe 4,236 4,345 Total long-lived assets $ 5,351 $ 5,945 |
Quarterly Financial Informati34
Quarterly Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of Condensed Consolidated Statements of Operations | Following is a summary of unaudited quarterly financial information for 2016 and 2015: Condensed Consolidated Statements of Operations 2016 Q4 Q3 Q2 Q1 (in thousands, except per share data) Revenue $ 26,797 $ 22,467 $ 22,738 $ 25,439 Gross profit 3,954 3,677 3,893 4,296 Income (loss) from operations (1,307 ) (415 ) (85 ) 649 Net income (loss) $ (1,261 ) $ (106 ) $ (185 ) $ 500 Basic income (loss) per share $ (0.10 ) $ (0.01 ) $ (0.02 ) $ 0.04 Diluted income (loss) per share $ (0.10 ) $ (0.01 ) $ (0.02 ) $ 0.04 Shares used in calculation of income (loss) per share: Basic 12,473 12,310 12,152 12,102 Diluted 12,473 12,310 12,152 12,531 Condensed Consolidated Statements of Operations 2015 Q4 Q3 Q2 Q1 (in thousands, except per share data) Revenue $ 25,028 $ 26,435 $ 28,873 $ 26,265 Gross profit 4,916 4,873 5,232 5,449 Income from operations 1,297 1,387 1,871 1,876 Net income $ 1,140 $ 1,245 $ 1,885 $ 1,823 Basic income per share $ 0.09 $ 0.10 $ 0.16 $ 0.15 Diluted income per share $ 0.09 $ 0.10 $ 0.15 $ 0.15 Shares used in calculation of income per share: Basic 12,047 11,959 11,856 11,778 Diluted 12,649 12,466 12,295 12,057 |
Summary of Condensed Consolidated Balance Sheets | Condensed Consolidated Balance Sheets 2016 December 31 September 30 June 30 March 31 (in thousands) Cash, cash equivalents and short-term investments $ 33,200 $ 31,577 $ 26,898 $ 27,626 Accounts receivable, net 21,579 19,808 19,377 21,323 Total current assets 55,657 51,844 47,059 49,683 Total assets 61,008 57,355 52,680 55,389 Third-party software fees payable 14,831 11,068 8,403 12,045 Accounts payable 283 284 328 470 Accrued compensation 2,008 1,924 2,093 1,553 Other accrued expenses 714 741 1,715 1,208 Total current liabilities 20,221 15,502 13,407 16,322 Common stock 135,660 135,043 134,264 133,774 Accumulated deficit (96,607 ) (95,346 ) (95,240 ) (846 ) Total shareholders' equity 38,112 38,790 38,166 37,873 Total liabilities and shareholders' equity 61,008 57,355 52,680 55,389 Condensed Consolidated Balance Sheets 2015 December 31 September 30 June 30 March 31 (in thousands) Cash, cash equivalents and short-term investments $ 29,723 $ 29,311 $ 29,430 $ 26,594 Accounts receivable, net 19,009 15,560 15,418 13,490 Total current assets 49,312 45,395 45,557 40,799 Total assets 55,258 51,593 51,813 47,161 Third-party software fees payable 11,789 10,184 12,361 10,793 Accounts payable 188 285 191 211 Accrued compensation 2,390 2,333 2,173 1,738 Other accrued expenses 1,277 1,320 1,501 1,374 Total current liabilities 17,077 15,120 17,147 14,951 Common stock 133,331 132,601 131,962 131,410 Accumulated deficit (95,555 ) (96,695 ) (97,940 ) (99,825 ) Total shareholders' equity 36,907 35,077 33,189 30,662 Total liabilities and shareholders' equity 55,258 51,593 51,813 47,161 |
Description of Business and A35
Description of Business and Accounting Policies - Additional Information (Detail) | 12 Months Ended | |
Dec. 31, 2016USD ($)Customershares | Dec. 31, 2015USD ($)shares | |
Summary Of Business And Accounting Policies [Line Items] | ||
Entity incorporation date | 1994-07 | |
Common stock equivalent shares excluded from computations of basic and diluted income per share | shares | 691,243 | 213,820 |
Capitalized software development costs | $ 0 | $ 0 |
Advertising expense | $ 45,000 | $ 23,000 |
Office furniture and equipment [Member] | ||
Summary Of Business And Accounting Policies [Line Items] | ||
Leasehold improvements estimated useful life | 3 years | |
Minimum [Member] | ||
Summary Of Business And Accounting Policies [Line Items] | ||
Intangible assets useful life range | 1 year | |
Minimum [Member] | Leasehold improvements [Member] | ||
Summary Of Business And Accounting Policies [Line Items] | ||
Leasehold improvements estimated useful life | 2 years | |
Maximum [Member] | ||
Summary Of Business And Accounting Policies [Line Items] | ||
Intangible assets useful life range | 10 years | |
Maximum [Member] | Leasehold improvements [Member] | ||
Summary Of Business And Accounting Policies [Line Items] | ||
Leasehold improvements estimated useful life | 10 years | |
IoT Market [Member] | ||
Summary Of Business And Accounting Policies [Line Items] | ||
Number of customer account as major customer | Customer | 3 |
Description of Business and A36
Description of Business and Accounting Policies - Reconciliation of Number of Shares Used in Calculation of Basic and Diluted Income (Loss) Per Share (Detail) - shares shares in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings Per Share [Abstract] | ||||||||||
Weighted average shares outstanding for basic income (loss) per share | 12,473 | 12,310 | 12,152 | 12,102 | 12,047 | 11,959 | 11,856 | 11,778 | 12,260 | 11,938 |
Dilutive effect of common stock equivalent shares | 481 | |||||||||
Weighted average shares outstanding for diluted income (loss) per share | 12,473 | 12,310 | 12,152 | 12,531 | 12,649 | 12,466 | 12,295 | 12,057 | 12,260 | 12,419 |
Cash and Investments - Cash, Ca
Cash and Investments - Cash, Cash Equivalents, Short-Term Investments, and Restricted Cash (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Investment Holdings [Line Items] | |||
Cash | $ 11,016 | $ 7,270 | |
Cash equivalents: | |||
Total cash and cash equivalents | 14,312 | 16,443 | $ 13,127 |
Short-term investments: | |||
Total short-term investments | 18,888 | 13,280 | |
Restricted cash equivalents | 250 | ||
Total cash, cash equivalents, short-term investments and restricted cash equivalents | 33,200 | 29,973 | |
Corporate commercial paper [Member] | |||
Cash equivalents: | |||
Cash equivalents | 500 | 5,404 | |
Short-term investments: | |||
Total short-term investments | 11,465 | 6,245 | |
Corporate debt securities [Member] | |||
Cash equivalents: | |||
Cash equivalents | 2,269 | ||
Short-term investments: | |||
Total short-term investments | 7,423 | 6,028 | |
Treasury bonds [Member] | |||
Short-term investments: | |||
Total short-term investments | 1,007 | ||
Money market funds [Member] | |||
Cash equivalents: | |||
Cash equivalents | $ 2,796 | $ 1,500 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Short-term investments: | ||
Total short-term investments | $ 18,888 | $ 13,280 |
Restricted cash equivalents—money market fund | 250 | |
Recurring basis [Member] | ||
Cash equivalents: | ||
Total cash equivalents | 3,296 | 9,173 |
Short-term investments: | ||
Total short-term investments | 18,888 | 13,280 |
Restricted cash equivalents—money market fund | 250 | |
Total assets measured at fair value | 22,184 | 22,703 |
Corporate commercial paper [Member] | ||
Short-term investments: | ||
Total short-term investments | 11,465 | 6,245 |
Corporate commercial paper [Member] | Recurring basis [Member] | ||
Cash equivalents: | ||
Total cash equivalents | 500 | 1,500 |
Short-term investments: | ||
Total short-term investments | 11,465 | 6,245 |
Corporate debt [Member] | ||
Short-term investments: | ||
Total short-term investments | 7,423 | 6,028 |
Corporate debt [Member] | Recurring basis [Member] | ||
Cash equivalents: | ||
Total cash equivalents | 2,269 | |
Short-term investments: | ||
Total short-term investments | 7,423 | 6,028 |
Treasury bonds [Member] | ||
Short-term investments: | ||
Total short-term investments | 1,007 | |
Treasury bonds [Member] | Recurring basis [Member] | ||
Short-term investments: | ||
Total short-term investments | 1,007 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Recurring basis [Member] | ||
Cash equivalents: | ||
Total cash equivalents | 2,796 | 5,404 |
Short-term investments: | ||
Restricted cash equivalents—money market fund | 250 | |
Total assets measured at fair value | 2,796 | 5,654 |
Direct or Indirect Observable Inputs (Level 2) [Member] | Recurring basis [Member] | ||
Cash equivalents: | ||
Total cash equivalents | 500 | 3,769 |
Short-term investments: | ||
Total short-term investments | 18,888 | 13,280 |
Total assets measured at fair value | 19,388 | 17,049 |
Direct or Indirect Observable Inputs (Level 2) [Member] | Corporate commercial paper [Member] | Recurring basis [Member] | ||
Cash equivalents: | ||
Total cash equivalents | 500 | 1,500 |
Short-term investments: | ||
Total short-term investments | 11,465 | 6,245 |
Direct or Indirect Observable Inputs (Level 2) [Member] | Corporate debt [Member] | Recurring basis [Member] | ||
Cash equivalents: | ||
Total cash equivalents | 2,269 | |
Short-term investments: | ||
Total short-term investments | 7,423 | 6,028 |
Direct or Indirect Observable Inputs (Level 2) [Member] | Treasury bonds [Member] | Recurring basis [Member] | ||
Short-term investments: | ||
Total short-term investments | 1,007 | |
Money market funds [Member] | Recurring basis [Member] | ||
Cash equivalents: | ||
Total cash equivalents | 2,796 | 5,404 |
Money market funds [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Recurring basis [Member] | ||
Cash equivalents: | ||
Total cash equivalents | $ 2,796 | $ 5,404 |
Equipment, Furniture and Leas39
Equipment, Furniture and Leasehold Improvements - Equipment, Furniture and Leasehold Improvements (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Line Items] | ||
Total | $ 4,478 | $ 4,169 |
Less: accumulated depreciation and amortization | (3,389) | (3,002) |
Equipment, furniture and leasehold improvements, net | 1,089 | 1,167 |
Computer equipment and software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 2,929 | 2,667 |
Office furniture and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 357 | 305 |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 1,192 | $ 1,197 |
Equipment, Furniture and Leas40
Equipment, Furniture and Leasehold Improvements - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Property Plant And Equipment [Abstract] | ||
Depreciation and amortization expense of equipment, furniture and leasehold improvements | $ 468,000 | $ 440,000 |
Goodwill and Intangible Asset41
Goodwill and Intangible Assets - Additional Information (Detail) | 12 Months Ended | |
Dec. 31, 2016USD ($)Segment | Dec. 31, 2015USD ($) | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Change in carrying amount of goodwill | $ | $ 0 | $ 0 |
Number of operating segments | Segment | 2 | |
Number of reportable segments | Segment | 2 | |
Amortization expense | $ | $ 130,000 | $ 135,000 |
Goodwill and Intangible Asset42
Goodwill and Intangible Assets - Information Regarding Intangible Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Net Carrying Value | $ 464 | $ 594 |
Customer relationships [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,275 | 1,275 |
Accumulated Amortization | (811) | (681) |
Net Carrying Value | $ 464 | $ 594 |
Goodwill and Intangible Asset43
Goodwill and Intangible Assets - Expected Amortization Expense for Acquisition-Related Intangible Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
2,017 | $ 98 | |
2,018 | 98 | |
2,019 | 98 | |
2,020 | 98 | |
2,021 | 72 | |
Net Carrying Value | $ 464 | $ 594 |
Other Income (Expense), Net - C
Other Income (Expense), Net - Components of Other Income (Expense), Net (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Other Income And Expenses [Abstract] | ||
Interest income | $ 137 | $ 53 |
Other income | 110 | 79 |
Total | $ 247 | $ 132 |
Income Taxes - Income (Loss) Be
Income Taxes - Income (Loss) Before Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
U.S. | $ (580) | $ 6,280 |
Foreign | (331) | 283 |
Income (loss) before income taxes | $ (911) | $ 6,563 |
Income Taxes - Income Tax Expen
Income Taxes - Income Tax Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Current taxes: | ||
Federal current taxes | $ (24) | $ 104 |
State and local current taxes | 38 | 39 |
Foreign current taxes | 41 | 97 |
Total current taxes | 55 | 240 |
Deferred taxes: | ||
Foreign deferred taxes | 86 | 230 |
Total deferred taxes | 86 | 230 |
Total Income tax expense | $ 141 | $ 470 |
Income Taxes - Components of Ne
Income Taxes - Components of Net Deferred Tax Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Net deferred income tax assets (liability): | ||
Depreciation and amortization | $ 365 | $ 322 |
Accrued expenses and reserves | 411 | 720 |
Net operating loss carryforwards | 20,448 | 20,135 |
Research and development credit carryforwards | 2,740 | 2,673 |
Stock-based compensation | 840 | 750 |
Other | 91 | |
Gross deferred tax assets | 24,895 | 24,600 |
Less: valuation allowance | (24,911) | (24,552) |
Net deferred tax liability | $ (16) | |
Net deferred tax assets | $ 48 |
Income Taxes - Net Deferred Tax
Income Taxes - Net Deferred Tax Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Net deferred tax assets (liability): | ||
Deferred tax assets—non-current | $ 7 | $ 145 |
Deferred tax liability | (23) | (97) |
Net deferred tax liability | $ (16) | |
Net deferred tax assets | $ 48 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Operating Loss Carryforwards [Line Items] | ||
Deferred tax asset valuation allowance | $ 24,911,000 | $ 24,552,000 |
Tax credit carryforwards | $ 2,800,000 | |
Tax credit carryforwards expiration period | 2,018 | |
Period of increase in ownership | 3 years | |
Unrealized tax benefits | $ 0 | $ 0 |
Domestic Tax Authority [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforward | 55,700,000 | |
Domestic Tax Authority [Member] | Expire in 2022 and 2023 [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforward | $ 36,300,000 | |
Domestic Tax Authority [Member] | Minimum [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards expiration period | 2,022 | |
Domestic Tax Authority [Member] | Maximum [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards expiration period | 2,023 | |
State and Local Jurisdiction [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforward | $ 1,800,000 | |
Expired state net operating losses | $ 200,000 | |
Operating loss carryforwards expiration period | 2,017 |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
U.S. Federal tax expense at statutory rates | $ (310) | $ 2,231 |
Increase (decrease) resulting from: | ||
Tax credits | (170) | 130 |
State income tax | 25 | 14 |
International operations | 183 | 20 |
Incentive stock options | (23) | (66) |
Valuation allowance | 311 | (2,121) |
Expiration of state net operating loss carryforwards | 77 | 236 |
Other, net | 48 | 26 |
Total Income tax expense | $ 141 | $ 470 |
U.S. Federal tax expense at statutory rates | 34.00% | 34.00% |
Increase (decrease) resulting from: | ||
Tax credits | 18.60% | 2.00% |
State income tax | (2.70%) | 0.20% |
International operations | (20.10%) | 0.30% |
Incentive stock options | 2.60% | (1.00%) |
Valuation allowance | (34.20%) | (32.40%) |
Expiration of state net operating loss carryforwards | (8.50%) | 3.60% |
Other, net | (5.40%) | 0.40% |
Tax expense and effective tax rate | (15.70%) | 7.10% |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Aug. 31, 2013 | Mar. 31, 2015 | Jun. 30, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | |
Other Commitments [Line Items] | |||||
Third party software vendor licensed lost | $ 934,000 | ||||
Accrued contingent liability | $ 100,000 | ||||
Loss contingency receivable | $ 934,000 | ||||
Payment of legal expenses | $ 85,000 | ||||
Operating leases, expiration year | 2,020 | ||||
Rent expense | $ 1,000,000 | $ 1,100,000 | |||
Restricted cash equivalents | $ 250,000 | ||||
Volume pricing agreements period of OVRP | 12 months | ||||
Bellevue [Member] | Washington [Member] | |||||
Other Commitments [Line Items] | |||||
Expiration date of operating lease | 2014-08 | ||||
Extended expiration date of operating lease | 2020-05 |
Commitments and Contingencies52
Commitments and Contingencies - Operating Lease Commitments (Detail) $ in Thousands | Dec. 31, 2016USD ($) |
Leases [Abstract] | |
2,017 | $ 1,175 |
2,018 | 1,088 |
2,019 | 1,038 |
2,020 | 437 |
Total | $ 3,738 |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost related to stock options granted, net of estimated forfeitures | $ 1,688,358 |
Amortization cost, weighted-average period | 1 year 8 months 9 days |
Employee Stock Option [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Term of stock options granted | 10 years |
Employee Stock Option [Member] | Minimum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting of options granted | 1 year |
Employee Stock Option [Member] | Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting of options granted | 4 years |
Restricted Stock Units (RSUs) [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Amortization cost, weighted-average period | 1 year 8 months 16 days |
Unrecognized compensation cost related to restricted stock units granted, net of estimated forfeitures | $ 368,505 |
Shareholders' Equity - Fair Val
Shareholders' Equity - Fair Values of Equity Awards, Primarily Stock Option Grants Estimated with Weighted Average Assumptions (Detail) - Employee Stock Option [Member] | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Dividend yield | 0.00% | 0.00% |
Expected life | 3 years 4 months 24 days | 3 years 3 months 18 days |
Expected volatility | 55.00% | 52.00% |
Risk-free interest rate | 1.10% | 1.20% |
Shareholders' Equity - Stock-Ba
Shareholders' Equity - Stock-Based Compensation Expense (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | $ 1,247 | $ 1,516 |
Per basic and diluted share | $ 0.10 | $ 0.12 |
Cost of revenue- professional engineering service [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | $ 220 | $ 508 |
Selling, general and administrative [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | 868 | 925 |
Research and development [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | $ 159 | $ 83 |
Shareholders' Equity - Summary
Shareholders' Equity - Summary of Stock Option Activity (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share Based Compensation Arrangement By Share Based Payment Award Options Outstanding Roll Forward | |||
Number of Shares, Beginning Balance | 1,778,697 | 1,553,360 | |
Granted, Number of Shares | 903,248 | 564,450 | |
Exercised, Number of Shares | (371,845) | (250,196) | |
Forfeited, Number of Shares | (396,161) | (81,666) | |
Expired, Number of Shares | (67,171) | (7,251) | |
Number of Shares, Ending Balance | 1,846,768 | 1,778,697 | 1,553,360 |
Vested and expected to vest, Number of Shares, Ending Balance | 1,676,601 | ||
Exercisable, Number of Shares, Ending Balance | 771,265 | ||
Weighted Average Exercise Price, Beginning Balance | $ 4.43 | $ 3.50 | |
Granted, Weighted Average Exercise Price | 5.24 | 6.37 | |
Exercised, Weighted Average Exercise Price | 3.17 | 3.18 | |
Forfeited, Weighted Average Exercise Price | 5.32 | 4.01 | |
Expired, Weighted Average Exercise Price | 5.91 | 2.82 | |
Weighted Average Exercise Price, Ending Balance | 4.84 | $ 4.43 | $ 3.50 |
Vested and expected to vest, Weighted Average Exercise Price, Ending Balance | 4.79 | ||
Exercisable, Weighted Average Exercise Price, Ending Balance | $ 4.15 | ||
Weighted Average Remaining Contractual Life (in years) | 8 years 2 months 9 days | 7 years 9 months 29 days | 7 years 15 days |
Vested and expected to vest, Weighted Average Remaining Contractual Life (in years) | 8 years 18 days | ||
Exercisable, Weighted Average Remaining Contractual Life (in years) | 6 years 7 months 17 days | ||
Aggregate Intrinsic Value | $ 2,138,361 | ||
Vested and expected to vest, Aggregate Intrinsic Value | 2,036,356 | ||
Exercisable, Aggregate Intrinsic Value | $ 1,425,867 |
Shareholders' Equity - Summar57
Shareholders' Equity - Summary of Certain Information about Stock Options (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Weighted average grant-date fair value for options granted during the year | $ 2.63 | $ 3.13 |
Vested options in-the-money at December 31 | 605,017 | 703,765 |
Aggregate intrinsic value of options exercised during the year | $ 773,327 | $ 860,743 |
Shareholders' Equity - Summar58
Shareholders' Equity - Summary of Restricted Stock Unit Activity (Detail) - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unvested, Number of Shares, Beginning Balance | 104,463 | |
Unvested, Number of Shares, Ending Balance | 119,606 | 104,463 |
Restricted Stock Units (RSUs) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unvested, Number of Shares, Beginning Balance | 104,463 | 80,179 |
Granted, Number of Shares | 107,370 | 117,049 |
Vested, Number of Shares | (76,258) | (83,789) |
Forfeited, Number of Shares | (15,969) | (8,976) |
Unvested, Number of Shares, Ending Balance | 119,606 | 104,463 |
Expected to vest, Number of Shares, Ending Balance | 102,834 | |
Unvested, Weighted Average Award Price, Beginning Balance | $ 5.97 | $ 3.40 |
Granted, Weighted Average Award Price | 5.41 | 6.34 |
Vested, Weighted Average Award Price | 5.81 | 4.32 |
Forfeited, Weighted Average Award Price | 5.77 | 3.15 |
Unvested, Weighted Average Award Price, Ending Balance | 5.60 | $ 5.97 |
Expected to vest, Weighted Average Grant Date Fair Value, Ending Balance | $ 5.62 |
Shareholders' Equity - Summar59
Shareholders' Equity - Summary of Shares of Common Stock Reserved for Future Issuance under Plans (Detail) - shares | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Common Stock Number Of Shares Par Value And Other Disclosures [Abstract] | |||
Stock options outstanding | 1,846,768 | 1,778,697 | 1,553,360 |
Restricted stock units outstanding | 119,606 | 104,463 | |
Stock options available for future grant | 689,160 | 1,020,477 | |
Common stock reserved for future issuance | 2,655,534 | 2,903,637 |
Employee Benefit Plan - Additio
Employee Benefit Plan - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
General Discussion Of Pension And Other Postretirement Benefits [Abstract] | ||
Profit Sharing and Deferred Compensation Plan | $ 321,000 | $ 269,000 |
Transfers from the profit sharing plan’s forfeiture account | $ 0 | $ 26,000 |
Significant Risk Concentratio61
Significant Risk Concentrations - Additional Information (Detail) | 12 Months Ended | |||||||
Dec. 31, 2016USD ($)CustomerAgreement | Dec. 31, 2015USD ($)Customer | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | |
Concentration Risk [Line Items] | ||||||||
Accounts receivable | $ 21,579,000 | $ 19,009,000 | $ 19,808,000 | $ 19,377,000 | $ 21,323,000 | $ 15,560,000 | $ 15,418,000 | $ 13,490,000 |
Expiration date one of OEM Distribution agreements for embedded operating systems | Jun. 30, 2017 | |||||||
Number of OEM Distribution agreements for embedded operating systems | Agreement | 2 | |||||||
Expiration date of OEM Distribution agreements for mobile operating systems, non-EMEA | Jun. 30, 2017 | |||||||
Number of OEM Distribution agreements for mobile operating systems | Agreement | 4 | |||||||
OEM Distribution agreements for mobile operating systems renewal description | Renewed annually or bi-annually | |||||||
OEM Distribution agreements for embedded operating systems renewal description | Renewed annually or bi-annually | |||||||
Rebate credits outstanding | $ 469,000 | |||||||
Cost of revenue- professional engineering service [Member] | ||||||||
Concentration Risk [Line Items] | ||||||||
Allocation of rebate values, percentage | 30.00% | |||||||
Earnings under the rebate program | $ 345,000 | 326,000 | ||||||
Reduction in marketing expense [Member] | ||||||||
Concentration Risk [Line Items] | ||||||||
Allocation of rebate values, percentage | 70.00% | |||||||
Earnings under the rebate program | $ 1,100,000 | 800,000 | ||||||
Honeywell International Inc and affiliated entities [Member] | Credit Concentration Risk [Member] | ||||||||
Concentration Risk [Line Items] | ||||||||
Accounts receivable | $ 7,100,000 | $ 6,100,000 | ||||||
Revenue [Member] | Honeywell International Inc [Member] | Customer Concentration Risk [Member] | ||||||||
Concentration Risk [Line Items] | ||||||||
Concentration risk, percentage | 14.00% | 16.00% | ||||||
Revenue [Member] | Customer accounted for 10% or more [Member] | Customer Concentration Risk [Member] | ||||||||
Concentration Risk [Line Items] | ||||||||
Number of customer account as major customer | Customer | 0 | 0 | ||||||
Accounts receivable [Member] | Customer accounted for 10% or more [Member] | Credit Concentration Risk [Member] | ||||||||
Concentration Risk [Line Items] | ||||||||
Number of customer account as major customer | Customer | 0 | 0 | ||||||
Accounts receivable [Member] | Honeywell International Inc and affiliated entities [Member] | Credit Concentration Risk [Member] | ||||||||
Concentration Risk [Line Items] | ||||||||
Concentration risk, percentage | 33.00% | 32.00% |
Credit Agreement - Additional I
Credit Agreement - Additional Information (Detail) - Credit Agreement [Member] - USD ($) | 1 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Line Of Credit Facility [Line Items] | ||||
Letter of credit, agreement amount | $ 250,000 | |||
Unsecured Line of Credit Agreement [Member] | ||||
Line Of Credit Facility [Line Items] | ||||
Line of credit, interest rate description | The Credit Agreement shall bear interest at either (1) a rate per annum equal to 1.5% below the bank’s applicable prime rate or (2) 1.5% above the Bank’s applicable LIBOR rate, in each case as defined in the Credit Agreement. | |||
Line of credit, final due date | Sep. 22, 2018 | |||
Line of credit, amount outstanding | $ 0 | $ 0 | ||
Unsecured Line of Credit Agreement [Member] | Prime Rate [Member] | Minimum [Member] | ||||
Line Of Credit Facility [Line Items] | ||||
Line of credit, interest rate, basis spread on variable rate | 1.50% | |||
Unsecured Line of Credit Agreement [Member] | LIBOR Rate [Member] | Maximum [Member] | ||||
Line Of Credit Facility [Line Items] | ||||
Line of credit, interest rate, basis spread on variable rate | 1.50% | |||
Unsecured Line of Credit Agreement [Member] | JPMorgan Chase Bank, N.A. [Member] | ||||
Line Of Credit Facility [Line Items] | ||||
Line of credit, term | 2 years | |||
Line of credit, maximum borrowing capacity | $ 11,750,000 | $ 12,000,000 |
Restructuring - Additional Info
Restructuring - Additional Information (Detail) | 3 Months Ended |
Sep. 30, 2016Employee | |
Restructuring And Related Activities [Abstract] | |
Number of employees impacted by workforce reduction | 33 |
Percentage of pre-reduction headcount impacted by workforce reduction | 17.00% |
Restructuring - Schedule of Amo
Restructuring - Schedule of Amount Incurred for Restructuring Expense (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Restructuring costs and Reserve [Line Items] | |
Total Estimated Expense | $ 985 |
Incurred | 985 |
Severance Expense [Member] | |
Restructuring costs and Reserve [Line Items] | |
Total Estimated Expense | 954 |
Incurred | 954 |
Other Expense [Member] | |
Restructuring costs and Reserve [Line Items] | |
Total Estimated Expense | 31 |
Incurred | $ 31 |
Restructuring - Reconciliation
Restructuring - Reconciliation of Beginning and Ending Liability Balances by Expense Type (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Restructuring costs and Reserve [Line Items] | |
Costs charged to expense | $ 985 |
Severance Expense [Member] | |
Restructuring costs and Reserve [Line Items] | |
Costs charged to expense | 954 |
Costs paid or otherwise settled | 954 |
Other Expenses [Member] | |
Restructuring costs and Reserve [Line Items] | |
Costs charged to expense | 31 |
Costs paid or otherwise settled | 29 |
Ending Balance | $ 2 |
Restructuring - Schedule of Res
Restructuring - Schedule of Restructuring Costs (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Restructuring costs and Reserve [Line Items] | |
Total restructuring costs | $ 985 |
Cost of revenue [Member] | |
Restructuring costs and Reserve [Line Items] | |
Total restructuring costs | 968 |
Selling, general and administrative [Member] | |
Restructuring costs and Reserve [Line Items] | |
Total restructuring costs | $ 17 |
Information about Operating S67
Information about Operating Segments and Geographic Areas - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2016Segment | |
Segment Reporting [Abstract] | |
Number of reportable segment | 2 |
Number of operating segment | 2 |
Information about Operating S68
Information about Operating Segments and Geographic Areas - Profit and Loss Information of Segments (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | ||||||||||
Revenue | $ 26,797 | $ 22,467 | $ 22,738 | $ 25,439 | $ 25,028 | $ 26,435 | $ 28,873 | $ 26,265 | $ 97,441 | $ 106,601 |
Cost of revenue | 81,621 | 86,131 | ||||||||
Gross profit | 3,954 | 3,677 | 3,893 | 4,296 | 4,916 | 4,873 | 5,232 | 5,449 | 15,820 | 20,470 |
Operating expenses | 16,978 | 14,039 | ||||||||
Other income (expense), net | 247 | 132 | ||||||||
Income tax expense | (141) | (470) | ||||||||
Net income (loss) | $ (1,261) | $ (106) | $ (185) | $ 500 | $ 1,140 | $ 1,245 | $ 1,885 | $ 1,823 | (1,052) | 6,093 |
Software [Member] | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Revenue | 82,170 | 86,208 | ||||||||
Cost of revenue | 68,182 | 70,937 | ||||||||
Gross profit | 13,988 | 15,271 | ||||||||
Professional Engineering Services [Member] | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Revenue | 15,271 | 20,393 | ||||||||
Cost of revenue | 13,439 | 15,194 | ||||||||
Gross profit | $ 1,832 | $ 5,199 |
Information about Operating S69
Information about Operating Segments and Geographic Areas - Revenue and Long-Lived Assets by Geographic Area (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Total revenue: | ||||||||||
Total revenue | $ 26,797 | $ 22,467 | $ 22,738 | $ 25,439 | $ 25,028 | $ 26,435 | $ 28,873 | $ 26,265 | $ 97,441 | $ 106,601 |
Long-lived assets: | ||||||||||
Total long-lived assets | 5,351 | 5,945 | 5,351 | 5,945 | ||||||
North America [Member] | ||||||||||
Total revenue: | ||||||||||
Total revenue | 92,299 | 97,858 | ||||||||
Long-lived assets: | ||||||||||
Total long-lived assets | 1,025 | 1,353 | 1,025 | 1,353 | ||||||
Asia [Member] | ||||||||||
Total revenue: | ||||||||||
Total revenue | 2,024 | 3,405 | ||||||||
Long-lived assets: | ||||||||||
Total long-lived assets | 90 | 247 | 90 | 247 | ||||||
Europe [Member] | ||||||||||
Total revenue: | ||||||||||
Total revenue | 3,118 | 5,338 | ||||||||
Long-lived assets: | ||||||||||
Total long-lived assets | $ 4,236 | $ 4,345 | $ 4,236 | $ 4,345 |
Quarterly Financial Informati70
Quarterly Financial Information - Summary of Condensed Consolidated Statements of Operations (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | ||||||||||
Revenue | $ 26,797 | $ 22,467 | $ 22,738 | $ 25,439 | $ 25,028 | $ 26,435 | $ 28,873 | $ 26,265 | $ 97,441 | $ 106,601 |
Gross profit | 3,954 | 3,677 | 3,893 | 4,296 | 4,916 | 4,873 | 5,232 | 5,449 | 15,820 | 20,470 |
Income (loss) from operations | (1,307) | (415) | (85) | 649 | 1,297 | 1,387 | 1,871 | 1,876 | (1,158) | 6,431 |
Net income (loss) | $ (1,261) | $ (106) | $ (185) | $ 500 | $ 1,140 | $ 1,245 | $ 1,885 | $ 1,823 | $ (1,052) | $ 6,093 |
Basic income (loss) per share | $ (0.10) | $ (0.01) | $ (0.02) | $ 0.04 | $ 0.09 | $ 0.10 | $ 0.16 | $ 0.15 | $ (0.09) | $ 0.51 |
Diluted income (loss) per share | $ (0.10) | $ (0.01) | $ (0.02) | $ 0.04 | $ 0.09 | $ 0.10 | $ 0.15 | $ 0.15 | $ (0.09) | $ 0.49 |
Shares used in calculation of income (loss) per share: | ||||||||||
Basic | 12,473 | 12,310 | 12,152 | 12,102 | 12,047 | 11,959 | 11,856 | 11,778 | 12,260 | 11,938 |
Diluted | 12,473 | 12,310 | 12,152 | 12,531 | 12,649 | 12,466 | 12,295 | 12,057 | 12,260 | 12,419 |
Quarterly Financial Informati71
Quarterly Financial Information - Summary of Condensed Consolidated Balance Sheets (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 |
Statement Of Financial Position [Abstract] | |||||||||
Cash, cash equivalents and short-term investments | $ 33,200 | $ 31,577 | $ 26,898 | $ 27,626 | $ 29,723 | $ 29,311 | $ 29,430 | $ 26,594 | |
Accounts receivable | 21,579 | 19,808 | 19,377 | 21,323 | 19,009 | 15,560 | 15,418 | 13,490 | |
Total current assets | 55,657 | 51,844 | 47,059 | 49,683 | 49,312 | 45,395 | 45,557 | 40,799 | |
Total assets | 61,008 | 57,355 | 52,680 | 55,389 | 55,258 | 51,593 | 51,813 | 47,161 | |
Third-party software fees payable | 14,831 | 11,068 | 8,403 | 12,045 | 11,789 | 10,184 | 12,361 | 10,793 | |
Accounts payable | 283 | 284 | 328 | 470 | 188 | 285 | 191 | 211 | |
Accrued compensation | 2,008 | 1,924 | 2,093 | 1,553 | 2,390 | 2,333 | 2,173 | 1,738 | |
Other accrued expenses | 714 | 741 | 1,715 | 1,208 | 1,277 | 1,320 | 1,501 | 1,374 | |
Total current liabilities | 20,221 | 15,502 | 13,407 | 16,322 | 17,077 | 15,120 | 17,147 | 14,951 | |
Common stock | 135,660 | 135,043 | 134,264 | 133,774 | 133,331 | 132,601 | 131,962 | 131,410 | |
Accumulated deficit | (96,607) | (95,346) | (95,240) | (846) | (95,555) | (96,695) | (97,940) | (99,825) | |
Total shareholders' equity | 38,112 | 38,790 | 38,166 | 37,873 | 36,907 | 35,077 | 33,189 | 30,662 | $ 28,577 |
Total liabilities and shareholders' equity | $ 61,008 | $ 57,355 | $ 52,680 | $ 55,389 | $ 55,258 | $ 51,593 | $ 51,813 | $ 47,161 |