Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 25, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | PERFICIENT INC | |
Entity Central Index Key | 1,085,869 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 33,181,786 | |
Trading Symbol | PRFT |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 44,947 | $ 6,307 |
Accounts receivable, net | 109,764 | 112,194 |
Prepaid expenses | 4,303 | 4,470 |
Other current assets | 2,212 | 6,237 |
Total current assets | 161,226 | 129,208 |
Property and equipment, net | 6,565 | 7,145 |
Goodwill | 321,995 | 305,238 |
Intangible assets, net | 49,821 | 51,066 |
Other non-current assets | 9,662 | 6,403 |
Total assets | 549,269 | 499,060 |
Current liabilities: | ||
Accounts payable | 10,801 | 23,196 |
Other current liabilities | 44,172 | 38,077 |
Total current liabilities | 54,973 | 61,273 |
Long-term debt, net | 119,038 | 55,000 |
Other non-current liabilities | 20,254 | 16,436 |
Total liabilities | 194,265 | 132,709 |
STOCKHOLDERS' EQUITY ATTRIBUTABLE TO PARENT | ||
Common stock (par value $.001 per share; 100,000,000 authorized; 47,999,384 shares issued and 31,920,534 shares outstanding as of September 30, 2018; 47,370,945 shares issued and 33,249,665 shares outstanding as of December 31, 2017) | 48 | 47 |
Additional paid-in capital | 431,510 | 403,906 |
Accumulated other comprehensive loss | (2,837) | (1,822) |
Treasury stock, at cost (16,078,850 shares as of September 30, 2018; 14,121,280 shares as of December 31, 2017) | (218,891) | (163,871) |
Retained earnings | 145,174 | 128,091 |
Total stockholders’ equity | 355,004 | 366,351 |
Total liabilities and stockholders’ equity | $ 549,269 | $ 499,060 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Common Stock, par value | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 100,000,000 | 100,000,000 |
Common Stock, shares issued | 47,999,384 | 47,370,945 |
Common stock, shares outstanding (in shares) | 31,920,534 | 33,249,665 |
Treasury Stock, shares | 16,078,850 | 14,121,280 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues | ||||
Revenues | $ 123,933 | $ 123,738 | $ 366,672 | $ 351,783 |
Cost of revenues (exclusive of depreciation and amortization, shown separately below) | ||||
Cost of Goods and Services Sold | 79,183 | 81,139 | 238,004 | 233,718 |
Selling, general and administrative | 29,322 | 27,072 | 85,945 | 78,884 |
Depreciation | 995 | 1,123 | 3,057 | 3,587 |
Amortization | 4,009 | 3,936 | 12,029 | 11,098 |
Acquisition costs | 497 | (100) | 1,337 | 1,283 |
Adjustment to fair value of contingent consideration | 666 | (389) | 1,757 | (828) |
Income from operations | 9,261 | 10,957 | 24,543 | 24,041 |
Other Income (Expense) | ||||
Net interest expense | 831 | 440 | 1,718 | 1,444 |
Net other (income) expense | (6) | (15) | 43 | (84) |
Income before income taxes | 8,436 | 10,532 | 22,782 | 22,681 |
Provision for income taxes | 2,131 | 3,505 | 5,699 | 10,535 |
Net income | $ 6,305 | $ 7,027 | $ 17,083 | $ 12,146 |
Basic net income per share (in dollars per share) | $ 0.19 | $ 0.22 | $ 0.52 | $ 0.37 |
Diluted net income per share (in dollars per share) | $ 0.19 | $ 0.21 | $ 0.50 | $ 0.36 |
Shares used in computing basic net income per share (in shares) | 32,648 | 32,673 | 32,724 | 32,997 |
Shares used in computing diluted net income per share (in shares) | 33,645 | 33,991 | 33,846 | 34,085 |
Services | ||||
Revenues | ||||
Revenues | $ 122,879 | $ 117,415 | $ 363,986 | $ 329,192 |
Cost of revenues (exclusive of depreciation and amortization, shown separately below) | ||||
Cost of Goods and Services Sold | 79,183 | 75,971 | 238,004 | 214,858 |
Software and hardware | ||||
Revenues | ||||
Revenues | 1,054 | 6,323 | 2,686 | 22,591 |
Cost of revenues (exclusive of depreciation and amortization, shown separately below) | ||||
Cost of Goods and Services Sold | $ 0 | $ 5,168 | $ 0 | $ 18,860 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 6,305 | $ 7,027 | $ 17,083 | $ 12,146 |
Other comprehensive (loss) income: | ||||
Foreign currency translation adjustment | (363) | 137 | (1,015) | 720 |
Comprehensive income | $ 5,942 | $ 7,164 | $ 16,068 | $ 12,866 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statement of Stockholders' Equity - 9 months ended Sep. 30, 2018 - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Treasury Stock | Retained Earnings |
Balance at Dec. 31, 2017 | $ 366,351 | $ 47 | $ 403,906 | $ (1,822) | $ (163,871) | $ 128,091 |
Balance (in shares) at Dec. 31, 2017 | 33,249,665 | 33,250,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Proceeds from the sales of stock through the Employee Stock Purchase Plan (in shares) | 6,000 | |||||
Proceeds from the sales of stock through the Employee Stock Purchase Plan | $ 124 | 124 | ||||
Stock compensation related to restricted stock vesting and retirement savings plan contributions (in shares) | 421,000 | |||||
Stock compensation related to restricted stock vesting and retirement savings plan contributions | 11,560 | $ 1 | 11,559 | |||
Purchases of treasury stock and buyback of shares for taxes (in shares) | (1,943,000) | |||||
Purchases of treasury stock and buyback of shares for taxes | (54,717) | (54,717) | ||||
Issuance of stock in conjunction with acquisition including stock attributed to future compensation (in shares) | 201,000 | |||||
Issuance of stock in conjunction with acquisition including stock attributed to future compensation | 4,201 | 4,201 | 0 | |||
Surrender of stock in conjunction with net working capital settlement (in shares) | (14,000) | |||||
Surrender of stock in conjunction with net working capital settlement | (303) | (303) | ||||
Equity component of convertible notes, net of tax | 15,547 | 15,547 | ||||
Debt issuance costs of convertible notes allocated to equity, net of tax | (511) | (511) | ||||
Purchase of hedges on convertible notes, net of tax | (15,376) | (15,376) | ||||
Proceeds from issuance of warrants on convertible notes | 12,060 | 12,060 | ||||
Net income | 17,083 | 17,083 | ||||
Foreign currency translation adjustment | (1,015) | (1,015) | ||||
Balance at Sep. 30, 2018 | $ 355,004 | $ 48 | $ 431,510 | $ (2,837) | $ (218,891) | $ 145,174 |
Balance (in shares) at Sep. 30, 2018 | 31,920,534 | 31,921,000 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
OPERATING ACTIVITIES | ||
Net income | $ 17,083 | $ 12,146 |
Adjustments to reconcile net income to net cash provided by operations: | ||
Depreciation | 3,057 | 3,587 |
Amortization | 12,029 | 11,098 |
Deferred income taxes | 655 | 918 |
Non-cash stock compensation and retirement savings plan contributions | 11,560 | 10,595 |
Adjustment to fair value of contingent consideration for purchase of business | 1,757 | (828) |
Amortization of debt issuance costs and discounts | 300 | 122 |
Write-off of unamortized credit facility fees | 0 | 246 |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable | 11,453 | 1,415 |
Other assets | 1,157 | 2,634 |
Accounts payable | (12,394) | (6,423) |
Other liabilities | (3,865) | (5,386) |
Net cash provided by operating activities | 42,792 | 30,124 |
INVESTING ACTIVITIES | ||
Purchase of property and equipment | (3,182) | (2,521) |
Capitalization of internally developed software costs | (477) | (762) |
Purchase of businesses | (21,213) | (37,886) |
Net cash used in investing activities | (24,872) | (41,169) |
FINANCING ACTIVITIES | ||
Proceeds from issuance of convertible notes | 143,750 | 0 |
Payment for convertible notes issuance costs | (4,323) | 0 |
Purchase of convertible notes hedges | (20,686) | 0 |
Proceeds from issuance of convertible notes warrants | 12,060 | 0 |
Proceeds from line of credit | 161,000 | 223,500 |
Payments on line of credit | (216,000) | (190,500) |
Payment for credit facility financing fees | 0 | (355) |
Payment of contingent consideration for purchase of business | 0 | (3,258) |
Proceeds from the sale of stock through the Employee Stock Purchase Plan | 124 | 135 |
Purchases of treasury stock | (51,809) | (23,953) |
Remittance of taxes withheld as part of a net share settlement of restricted stock vesting | (2,908) | (2,542) |
Net cash provided by financing activities | 21,208 | 3,027 |
Effect of exchange rate on cash and cash equivalents | (488) | 353 |
Change in cash and cash equivalents | 38,640 | (7,665) |
Cash and cash equivalents at beginning of period | 6,307 | 10,113 |
Cash and cash equivalents at end of period | 44,947 | 2,448 |
Supplemental disclosures: | ||
Cash paid for income taxes | 2,439 | 3,725 |
Cash paid for interest | 1,277 | 922 |
Non-cash investing activity: | ||
Stock issued for purchase of businesses | 3,789 | 9,429 |
Stock surrendered by sellers in conjunction with net working capital settlement | $ 303 | $ 572 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying interim unaudited condensed consolidated financial statements of Perficient, Inc. and its subsidiaries (collectively, the “Company”) have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and are presented in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) applicable to interim financial information. Accordingly, certain note disclosures have been condensed or omitted. In the opinion of management, the interim unaudited condensed consolidated financial statements reflect all adjustments (consisting of only normal recurring adjustments) necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the periods presented. These financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto filed with the SEC in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 . Operating results for the three and nine months ended September 30, 2018 may not be indicative of the results for the full year ending December 31, 2018 . Certain prior period financial statement amounts have been reclassified to conform to current period presentation. This reclassification relates to reimbursable expenses, which have been combined with services revenues and cost of services within revenues and cost of revenues in the Unaudited Condensed Consolidated Statements of Operations. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates, and such differences could be material to the financial statements. Except for the accounting policies related to revenue recognition that were updated as a result of the adoption of Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers issued by the Financial Accounting Standards Board (the “FASB”), there have been no changes to significant accounting policies described in the Annual Report on Form 10-K for the year ended December 31, 2017 , filed with the SEC on March 1, 2018 , that have had a material impact on the Company’s condensed consolidated financial statements and related notes. See Note 4, Revenue , for updated policies related to revenue recognition. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Accounting Standards Codification ( “ ASC ” ) Topic 606) , which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU No. 2014-09 replaced most existing revenue recognition guidance in U.S. GAAP. In 2015, the FASB deferred the effective date of ASU No. 2014-09 by one year. In 2016, the FASB issued ASU No. 2016-08, Principal versus Agent Considerations , ASU No. 2016-10, Identifying Performance Obligations and Licensing , ASU No. 2016-12, Narrow-Scope Improvements and Practical Expedients and ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers , all of which further amended ASU No. 2014-09. The Company adopted the standard on January 1, 2018 using the modified retrospective method which requires a cumulative-effect adjustment to the opening balance of retained earnings within stockholders’ equity. The Company has determined that the most significant impact upon adoption was to third-party software and hardware revenue, which was primarily recorded on a gross basis as the principal in the transaction through December 31, 2017 and presented on a net basis as the agent as of January 1, 2018. The adoption of the standard also resulted in minor changes to the timing of revenue recognition. As the agent, revenue from multi-year sales of third-party software and support is recognized upfront as the performance obligation is fulfilled, rather than annually as invoiced to the customer. Additionally, variable consideration related to service contracts, such as volume discounts and holdbacks, are recognized earlier under the new standard in certain instances. The impact from these timing changes was immaterial as of January 1, 2018, and therefore, did not result in a cumulative-effect adjustment to the opening balance of retained earnings. The adoption of the standard also resulted in increases to accounts receivable, net and deferred revenue within other current liabilities for those contracts under which the Company’s right to consideration is unconditional. Refer to Impacts of ASC Topic 606 Adoption on Current Period Results below for the impact of adopting ASC Topic 606 on the Unaudited Condensed Consolidated Balance Sheet as of September 30, 2018 and the Unaudited Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2018 . There was no material impact on the Unaudited Condensed Consolidated Statement of Cash Flows for the nine months ended September 30, 2018 . The adoption of ASU No. 2014-09 and its amendments also resulted in additional disclosures around the nature and timing of performance obligations, contract costs, and deferred revenue, as well as significant judgments and practical expedients used by the Company. See Note 4, Revenue , for these disclosures. Impacts of ASC Topic 606 Adoption on Current Period Results The impacts of ASC Topic 606 adoption on the Unaudited Condensed Consolidated Balance Sheet as of September 30, 2018 are as follows (in thousands): As Reported ASC Topic 606 Impact Without ASC Topic 606 Adoption Accounts receivable, net $ 109,764 $ (1,512 ) $ 108,252 Total assets 549,269 (1,512 ) 547,757 Other current liabilities 44,172 (1,512 ) 42,660 Total liabilities 194,265 (1,512 ) 192,753 The impacts of ASC Topic 606 adoption on the Unaudited Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2018 are as follows (in thousands): Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 As Reported (Net Presentation) ASC Topic 606 Impact Without ASC Topic 606 Adoption (Gross Presentation) As Reported (Net Presentation) ASC Topic 606 Impact Without ASC Topic 606 Adoption (Gross Presentation) Revenues Services $ 122,879 $ — $ 122,879 $ 363,986 $ — $ 363,986 Software and hardware 1,054 3,665 4,719 2,686 16,050 18,736 Total revenues 123,933 3,665 127,598 366,672 16,050 382,722 Cost of revenues Cost of services 79,183 — 79,183 238,004 — 238,004 Software and hardware costs — 3,665 3,665 — 16,050 16,050 Total cost of revenues 79,183 3,665 82,848 238,004 16,050 254,054 Income from operations 9,261 — 9,261 24,543 — 24,543 Net income 6,305 — 6,305 17,083 — 17,083 In February 2016, the FASB issued ASU No. 2016-02, Leases , which supersedes ASC Topic 840, Leases, and creates a new topic, ASC Topic 842, Leases . In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases , and ASU 2018-11, Leases – Targeted Improvement , which further amended ASU No. 2016-02. These updates require lessees to recognize a lease liability and a lease asset for all leases, including operating leases, with a term greater than 12 months on its balance sheet. The updates also expand the required quantitative and qualitative disclosures surrounding leases. These updates are effective for the Company on January 1, 2019. The amendments to ASU 2016-02 allow companies to elect to apply the provisions of the new standard at the effective date without adjusting the comparative periods presented, which the Company currently expects to elect. The Company continues to evaluate the effect that ASU No. 2016-02 and its amendments will have on its consolidated financial statements and disclosures. The Company expects the primary impact upon adoption will be the recognition, on a discounted basis, of its minimum commitments under noncancellable operating leases on its consolidated balance sheets resulting in the recording of right of use assets and lease obligations. The Company is also evaluating provisions within its contracts to identify any embedded leases which would have a potential impact upon adoption. Current minimum commitments under noncancellable operating leases are disclosed in Note 14, Commitments and Contingencies . |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue The Company’s revenues consist of services and software and hardware sales. Revenues are recognized when control of these services or goods are transferred to clients, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services or goods. For a description of the Company’s revenue recognition policy prior to January 1, 2018 under ASC Subtopic 985-605, Software – Revenue Recognition, ASC Subtopic 605-25, Revenue Recognition – Multiple-Element Arrangements , and ASC Section 605-10-S99 (Staff Accounting Bulletin Topic 13, Revenue Recognition ), refer to Note 2, Summary of Significant Accounting Policies, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. The following discussion relates to the Company’s revenue recognition policy, effective January 1, 2018, under ASC Topic 606. Services Revenues Services revenues are primarily comprised of professional services that include developing, implementing, automating and extending business processes, technology infrastructure, and software applications. The Company’s professional services span multiple industries, platforms and solutions; however, the Company has remained relatively diversified and does not believe that it has significant revenue concentration within any single industry, platform or solution. Professional services revenues are recognized over time as services are rendered. Most projects are performed on a time and materials basis, while a portion of revenues is derived from projects performed on a fixed fee or fixed fee percent complete basis. For time and material contracts, revenues are generally recognized and invoiced by multiplying the number of hours expended in the performance of the contract by the billing rates established in the contract. For fixed fee contracts, revenues are generally recognized and invoiced by multiplying the fixed rate per time period established in the contract by the number of time periods elapsed. For fixed fee percent complete contracts, revenues are generally recognized using an input method based on the ratio of hours expended to total estimated hours, and the client is invoiced according to the agreed-upon schedule detailing the amount and timing of payments in the contract. Clients are typically billed monthly for services provided during that month, but can be billed on a more or less frequent basis as determined by the contract. If the time is worked and approved at the end of a fiscal period and the invoice has not yet been sent to the client, the amount is recorded as revenue once the Company verifies all other revenue recognition criteria have been met, and the amount is classified as a receivable as the right to consideration is unconditional at that point. Amounts invoiced and collected in excess of revenues recognized are contract liabilities, which are classified as deferred revenues in the Unaudited Condensed Consolidated Balance Sheet. The term between invoicing and payment due date is not significant. Contracts for professional services provide for a general right, to the client or the Company, to cancel or terminate the contract within a given period of time (generally 10 to 30 days’ notice is required). The client is responsible for any time and expenses incurred up to the date of cancellation or termination of the contract. Certain contracts may include volume discounts or holdbacks, which are accounted for as variable consideration under ASC Topic 606, but are not typically significant. The Company estimates variable consideration based on historical experience and forecasted sales and includes the variable consideration in the transaction price. Other services revenues are comprised of hosting fees, partner referral fees, maintenance agreements, training and internally developed software-as-a-service (“SaaS”) sales. Revenues from hosting fees, maintenance agreements, training and internally developed SaaS sales are generally recognized over time using a time-based measure of progress as services are rendered. Partner referral fees are recorded at a point in time upon meeting specified requirements set by each partner to earn the respective fee. On many professional service projects, the Company is also reimbursed for out-of-pocket expenses including travel and other project-related expenses. These reimbursements are included as a component of the transaction price of the respective professional services contract and are invoiced as the expenses are incurred. The Company structures its professional services arrangements to recover the cost of reimbursable expenses without a markup. Software and Hardware Revenues Software and hardware revenues are comprised of third-party software and hardware resales, in which the Company is considered the agent, and sales of internally developed software, in which the Company is considered the principal. Third-party software and hardware revenues are recognized and invoiced when the Company fulfills its obligation to arrange the sale, which occurs when the purchase order with the vendor is executed and the customer has access to the software or the hardware has been shipped to the customer. Internally developed software revenues are recognized and invoiced when control is transferred to the customer, which occurs when the software has been made available to the customer and the license term has commenced. Revenues from third-party software and hardware sales are recorded on a net basis, while revenues from internally developed software sales are recorded on a gross basis. There are no significant cancellation or termination-type provisions for the Company’s software and hardware sales, and the term between invoicing and payment due date is not significant. Arrangements with Multiple Performance Obligations Arrangements with clients may contain multiple promises such as delivery of software, hardware, professional services or post-contract support services. These promises are accounted for as separate performance obligations if they are distinct. For arrangements with clients that contain multiple performance obligations, the transaction price is allocated to the separate performance obligations based on estimated relative standalone selling price, which is estimated by the expected cost plus a margin approach, taking into consideration market conditions and competitive factors. Contract Costs In accordance with the terms of the Company’s sales commission plan, commissions are not earned until the related revenue is recognized. Therefore, sales commissions are expensed as they are incurred. Certain sales incentives are accrued based on achievement of specified bookings goals. For these incentives, the Company applies the practical expedient that allows the Company to expense the incentives as incurred, since the amortization period would have been one year or less. Deferred Revenue The Company’s deferred revenue balance as of December 31, 2017 was $3.3 million , which increased to $6.1 million as of January 1, 2018 due to the adoption of ASC Topic 606. The deferred revenue balance as of September 30, 2018 was $4.7 million . During the nine months ended September 30, 2018 , $ 4.5 million was recognized in revenue that was included in the deferred revenue balance at the beginning of the period. Deferred revenue balances assumed in the Company's 2018 acquisitions were immaterial. Transaction Price Allocated to Remaining Performance Obligations Due to the ability of the client or the Company to cancel or terminate the contract within a given period of time (generally 10 to 30 days’ notice is required), the majority of the Company’s contracts have a term of less than one year. Perficient does not disclose the value of unsatisfied performance obligations for contracts with an original maturity date of one year or less or time and materials contracts for which the Company has the right to invoice for services performed. Revenue related to unsatisfied performance obligations for remaining contracts as of September 30, 2018 was immaterial. Disaggregation of Revenue The following table presents revenue disaggregated by revenue source and pattern of revenue recognition (in thousands): Three Months Ended Nine Months Ended Over Time Point In Time Total Revenues Over Time Point In Time Total Revenues Time and materials contracts $ 85,127 $ — $ 85,127 $ 252,158 $ — $ 252,158 Fixed fee percent complete contracts 9,731 — 9,731 26,741 — 26,741 Fixed fee contracts 20,402 — 20,402 62,001 — 62,001 Reimbursable expenses 3,223 — 3,223 9,468 — 9,468 Total professional services fees 118,483 — 118,483 350,368 — 350,368 Other services revenue* 3,610 786 4,396 11,229 2,389 13,618 Total services 122,093 786 122,879 361,597 2,389 363,986 Software and hardware — 1,054 1,054 — 2,686 2,686 Total revenues $ 122,093 $ 1,840 $ 123,933 $ 361,597 $ 5,075 $ 366,672 * Other services revenue primarily consists of hosting fees, maintenance, training, internally developed SaaS and partner referral fees. The following table presents revenue disaggregated by geographic area, as determined by the billing address of customers (in thousands): Three Months Ended Nine Months Ended United States $ 121,440 $ 358,179 Canada 800 2,910 Other countries 1,693 5,583 Total revenues $ 123,933 $ 366,672 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation is accounted for in accordance with ASC Topic 718, Compensation – Stock Compensation . Under this guidance, the Company recognizes share-based compensation ratably using the straight-line attribution method over the requisite service period, which is generally three years. In addition, the Company has elected to estimate the amount of expected forfeitures when calculating share-based compensation, instead of accounting for forfeitures as they occur. The fair value of restricted stock awards is based on the value of the Company’s common stock on the date of the grant. Stock Award Plans The Company’s Second Amended and Restated 2012 Long Term Incentive Plan (as amended, the “Incentive Plan”) allows for the granting of various types of stock awards, not to exceed a total of 7.0 million shares, to eligible individuals. The Compensation Committee of the Board of Directors administers the Incentive Plan and determines the terms of all stock awards made under the Incentive Plan. As of September 30, 2018 , there were 2.6 million shares of common stock available for issuance under the Incentive Plan. Stock-based compensation cost recognized for the three and nine months ended September 30, 2018 was approximately $ 4.1 million and $ 12.1 million, respectively, which included $ 0.7 million and $ 2.1 million, respectively, of expense for retirement savings plan contributions. The associated current and future income tax benefits recognized were $ 0.8 million and $ 2.4 million for the three and nine months ended September 30, 2018 , respectively. Stock-based compensation cost recognized for the three and nine months ended September 30, 2017 was approximately $ 3.6 million and $ 11.0 million, respectively, which included $ 0.6 million and $ 1.9 million, respectively, of expense for retirement savings plan contributions. The associated current and future income tax benefits recognized were $ 1.1 million and $ 3.4 million for the three and nine months ended September 30, 2017 , respectively. As of September 30, 2018 , there was $ 17.1 million of total unrecognized compensation cost related to non-vested share-based awards with a weighted-average remaining life of two years. Restricted stock activity for the nine months ended September 30, 2018 was as follows (shares in thousands): Shares Weighted-Average Restricted stock awards outstanding at December 31, 2017 1,436 $ 18.12 Awards granted 366 22.08 Awards vested (334 ) 19.26 Awards forfeited (87 ) 17.45 Restricted stock awards outstanding at September 30, 2018 1,381 $ 18.91 |
Net Income per Share
Net Income per Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Net Income per Share | Net Income per Share The following table presents the calculation of basic and diluted net income per share (in thousands, except per share information): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Net income $ 6,305 $ 7,027 $ 17,083 $ 12,146 Basic: Weighted-average shares of common stock outstanding 32,648 32,673 32,724 32,997 Shares used in computing basic net income per share 32,648 32,673 32,724 32,997 Effect of dilutive securities: Restricted stock subject to vesting 733 459 665 450 Shares issuable for acquisition consideration (1) 264 859 457 638 Shares used in computing diluted net income per share 33,645 33,991 33,846 34,085 Basic net income per share $ 0.19 $ 0.22 $ 0.52 $ 0.37 Diluted net income per share $ 0.19 $ 0.21 $ 0.50 $ 0.36 (1) For the three and nine months ended September 30, 2018 , this represents the shares held in escrow pursuant to: (i) the Asset Purchase Agreement with BioPharm Systems, Inc. (“BioPharm”); (ii) the Asset Purchase Agreement with Zeon Solutions Incorporated and certain related entities (collectively, “Zeon”); (iii) the Asset Purchase Agreement with RAS & Associates, LLC (“RAS”); (iv) the Asset Purchase Agreement with Clarity Consulting, Inc. and Truth Labs, LLC (together, “Clarity”); (v) the Asset Purchase Agreement with Southport Services Group, LLC (“Southport”); and (vi) the Asset Purchase Agreement with Stone Temple Consulting Corporation (“Stone Temple”), as part of the consideration. For the three and nine months ended September 30, 2017 , this represents the shares held in escrow pursuant to: (i) the Asset Purchase Agreement with BioPharm; (ii) the Asset Purchase Agreement with Zeon; (iii) the Asset Purchase Agreement with The Pup Group, Inc. d/b/a Enlighten (“Enlighten”); (iv) the Asset Purchase Agreement with RAS; and (v) the Asset Purchase Agreement with Clarity, as part of the consideration. The number of anti-dilutive securities not included in the calculation of diluted net income per share were as follows (in thousands): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Restricted stock subject to vesting — — 40 117 Convertible senior notes 3,823 — 3,823 — Warrants related to the issuance of convertible senior notes 3,823 — 3,823 — Total anti-dilutive securities 7,646 — 7,686 117 See Note 10, Long-term Debt for further information on the convertible senior notes and warrants related to the issuance of convertible notes. Prior to 2018, the Company's Board of Directors authorized the repurchase of up to $135.0 million of Company common stock. On February 20, 2018, the Board of Directors authorized the expansion of the stock repurchase program by authorizing the repurchase of up to an additional $25.0 million of Company common stock and extended the expiration date of the program from December 31, 2018 to December 31, 2019. On August 15, 2018, the Board of Directors authorized an additional $75.0 million , for a total repurchase program of $235.0 million . The program could be suspended or discontinued at any time, based on market, economic, or business conditions. The timing and amount of repurchase transactions will be determined by management based on its evaluation of market conditions, share price, and other factors. Since the program’s inception on August 11, 2008, the Company has repurchased approximately $186.8 million ( 14.2 million shares) of outstanding common stock through September 30, 2018 . |
Balance Sheet Components
Balance Sheet Components | 9 Months Ended |
Sep. 30, 2018 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Components | Balance Sheet Components September 30, 2018 (unaudited) December 31, 2017 (in thousands) Accounts receivable: Accounts receivable $ 66,541 $ 82,603 Unbilled revenues 44,038 30,863 Allowance for doubtful accounts (815 ) (1,272 ) Total $ 109,764 $ 112,194 Property and equipment: Computer hardware (useful life of 3 years) $ 13,832 $ 13,110 Software (useful life of 1 to 7 years) 5,042 5,159 Furniture and fixtures (useful life of 5 years) 4,472 3,772 Leasehold improvements (useful life of 5 years) 3,172 2,836 Less: Accumulated depreciation (19,953 ) (17,732 ) Total $ 6,565 $ 7,145 Other current liabilities: Estimated fair value of contingent consideration liability (1) $ 15,356 $ 8,148 Accrued variable compensation 12,810 16,842 Deferred revenue 4,733 3,278 Other current liabilities 4,452 3,879 Payroll related costs 3,378 2,971 Accrued medical claims expense 2,072 2,133 Professional fees 1,106 357 Accrued subcontractor fees 265 469 Total $ 44,172 $ 38,077 Other non-current liabilities: Deferred income taxes $ 7,638 $ 7,360 Other non-current liabilities 7,742 4,667 Deferred compensation liability 4,874 4,409 Total $ 20,254 $ 16,436 (1) As of September 30, 2018 , represents the fair value estimate of revenue and earnings-based contingent consideration that may be realized by Stone Temple, Southport and Clarity twelve months after the acquisition. As of December 31, 2017 , represents the fair value estimate of additional revenue and earnings-based contingent consideration that may be realized by Clarity twelve months after the acquisition. |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Business Combination | Business Combinations 2017 Acquisitions Acquisition of RAS On January 3, 2017 , the Company acquired substantially all of the assets of RAS through a wholly-owned subsidiary of the Company, pursuant to the terms of an Asset Purchase Agreement. The Company’s total allocable purchase price consideration was $10.4 million . The purchase price was comprised of $7.1 million in cash paid and $2.1 million in Company common stock issued at closing reduced by $0.6 million as a result of a net working capital adjustment settled in Company common stock surrendered by RAS in 2017. The purchase price also included $1.8 million representing the initial fair value estimate of additional revenue and earnings-based contingent consideration, which was not realized by RAS. The amount of goodwill deductible for tax purposes was $3.7 million . Acquisition of Clarity On June 22, 2017 , the Company acquired substantially all of the assets of Clarity, pursuant to the terms of an Asset Purchase Agreement. The Company’s total allocable purchase price consideration was $41.7 million . The purchase price was comprised of $30.7 million in cash paid and $7.3 million in Company common stock issued at closing reduced by $0.4 million as a result of the net working capital adjustment settled in Company common stock surrendered by Clarity in February 2018. The purchase price also included $4.1 million representing the initial fair value estimate of additional revenue and earnings-based contingent consideration with a maximum cash payout of $9.2 million . Clarity achieved the maximum cash payout pursuant to the Asset Purchase Agreement and, as a result, the Company has accrued $9.2 million of contingent consideration as of September 30, 2018 . The amount of goodwill expected to be deductible for tax purposes, excluding contingent consideration, is $22.1 million . 2018 Acquisitions Acquisition of Southport On April 2, 2018 , the Company acquired substantially all of the assets of Southport, pursuant to the terms of an Asset Purchase Agreement. The acquisition of Southport expands the Company’s expertise in business intelligence and data warehousing services. The Company has initially estimated the total allocable purchase price consideration to be $18.6 million . The purchase price was comprised of $11.3 million in cash paid and $2.7 million in Company common stock issued at closing increased by $0.3 million for an estimated net working capital adjustment due to the seller. The purchase price also included $4.3 million representing the initial fair value estimate of additional revenue and earnings-based contingent consideration, which may be realized by the seller twelve months after the closing date of the acquisition with a maximum cash payout of $6.6 million . As of September 30, 2018 , the Company’s best estimate of the fair value of the contingent consideration was $5.0 million . As a result, the Company recorded a pre-tax adjustment in “Adjustment to fair value of contingent consideration” on the Consolidated Statements of Operations of $0.7 million during the three and nine months ended September 30, 2018 . The Company incurred approximately $0.8 million in transaction costs, which were expensed when incurred. As part of the consideration transferred for the acquisition of Southport, the Company issued common stock to owners of Southport, who are continuing with the Company, with restrictions limiting the ability to sell the common stock which lapse over a certain period or over an accelerated period upon meeting specified employment milestones. As such, an estimated $0.3 million of the common stock value was attributed to future compensation and recorded as an asset within “Other current assets” and “Other non-current assets” in the Unaudited Condensed Consolidated Balance Sheet as of the acquisition date, to be amortized over the requisite service period. The Company has estimated the allocation of the total purchase price consideration between tangible assets, identified intangible assets, liabilities, and goodwill as follows (in millions): Acquired tangible assets $ 4.2 Identified intangible assets 5.7 Liabilities assumed (1.8 ) Goodwill 10.5 Total purchase price $ 18.6 The amount of goodwill expected to be deductible for tax purposes, excluding contingent consideration, is $7.1 million . The above purchase price accounting estimates are pending finalization of the net working capital settlement that is subject to final adjustment as the Company evaluates information during the measurement period. Acquisition of Stone Temple On July 16, 2018 , the Company acquired substantially all of the assets of Stone Temple, pursuant to the terms of an Asset Purchase Agreement. The acquisition of Stone Temple expands the Company’s capabilities in search engine marketing and digital content services. The Company has initially estimated the total allocable purchase price consideration to be $12.4 million . The purchase price was comprised of $9.9 million in cash paid and $1.2 million in Company common stock issued at closing increased by $0.1 million for an estimated net working capital adjustment due to the seller. The purchase price also included $1.2 million representing the initial fair value estimate of additional revenue and earnings-based contingent consideration, which may be realized by the seller twelve months after the closing date of the acquisition with a maximum cash payout of $2.6 million . The Company incurred approximately $0.5 million in transaction costs, which were expensed when incurred. The Company has estimated the allocation of the total purchase price consideration between tangible assets, identified intangible assets, liabilities, and goodwill as follows (in millions): Acquired tangible assets $ 2.5 Identified intangible assets 4.6 Liabilities assumed (1.5 ) Goodwill 6.8 Total purchase price $ 12.4 The amount of goodwill expected to be deductible for tax purposes, excluding contingent consideration, is $5.4 million . The above purchase price accounting estimates are pending finalization of the intangible assets and contingent consideration valuation and a net working capital settlement that is subject to final adjustment as the Company evaluates information during the measurement period. The following table presents details of the intangible assets acquired during the nine months ended September 30, 2018 (dollars in millions): Weighted Average Useful Life Estimated Useful Life Aggregate Acquisitions Customer relationships 5 years 5 - 6 years $ 8.2 Customer backlog 1 year 1 - 1.5 years 1.4 Non-compete agreements 5 years 5 years 0.2 Trade name 1 year 1 year 0.1 Developed software 3 years 3 years 0.4 Total acquired intangible assets $ 10.3 The operating results of the 2017 and 2018 acquisitions have been included in the Company's interim unaudited condensed consolidated financial statements since the respective acquisition date. The aggregate amounts of revenue and net income of the Southport and Stone Temple acquisitions in the Unaudited Condensed Consolidated Statements of Operations from the respective acquisition dates to September 30, 2018 are as follows (in thousands): Acquisition Date to Revenues $ 10,774 Net income $ 777 Pro-forma Results of Operations The following presents the unaudited pro-forma combined results of operations of the Company with the 2017 and 2018 acquisitions for the nine months ended September 30, 2018 and 2017 , after giving effect to certain pro-forma adjustments and assuming the 2018 acquisitions were acquired as of the beginning of 2017 and assuming the 2017 acquisitions were acquired as of the beginning of 2016 . These unaudited pro-forma results are presented in compliance with the adoption of ASU No. 2010-29, Business Combinations (Topic 805): Disclosure of Supplementary Pro Forma Information for Business Combinations , and are not necessarily indicative of the actual consolidated results of operations had the acquisitions actually occurred on January 1, 2017 or January 1, 2016 or of future results of operations of the consolidated entities (in thousands except per share data): Nine Months Ended September 30, 2018 2017 Revenues $ 376,695 $ 385,639 Net income $ 20,846 $ 12,845 Basic net income per share $ 0.63 $ 0.38 Diluted net income per share $ 0.61 $ 0.37 Shares used in computing basic net income per share 33,054 33,505 Shares used in computing diluted net income per share 33,931 34,582 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill represents the excess purchase price over the fair value of net assets acquired, or net liabilities assumed, in a business combination. In accordance with ASC Topic 350, Intangibles – Goodwill and Other , the Company performs an annual impairment review in the fourth quarter and more frequently if events or changes in circumstances indicate that goodwill might be impaired. There was no indication that goodwill became impaired as of September 30, 2018 . Other intangible assets include customer relationships, non-compete arrangements, trade names, customer backlog, and internally developed software, which are being amortized over the assets’ estimated useful lives using the straight-line method. Estimated useful lives range from less than one year to ten years. Amortization of customer relationships, non-compete arrangements, trade names, customer backlog, and internally developed software is considered an operating expense and is included in “Amortization” in the accompanying Unaudited Condensed Consolidated Statements of Operations. The Company periodically reviews the estimated useful lives of its identifiable intangible assets, taking into consideration any events or circumstances that might result in a lack of recoverability or revised useful life. Goodwill The changes in the carrying amount of goodwill for the nine months ended September 30, 2018 are as follows (in thousands): Balance at December 31, 2017 $ 305,238 Preliminary purchase price allocations for acquisitions 17,267 Effect of foreign currency translation adjustments (510 ) Balance at September 30, 2018 $ 321,995 Intangible Assets with Definite Lives The following table presents a summary of the Company’s intangible assets that are subject to amortization (in thousands): September 30, 2018 December 31, 2017 Gross Carrying Amounts Accumulated Amortization Net Carrying Amounts Gross Carrying Amounts Accumulated Amortization Net Carrying Amounts Customer relationships $ 80,176 $ (37,781 ) $ 42,395 $ 75,407 $ (32,307 ) $ 43,100 Non-compete agreements 1,626 (789 ) 837 1,556 (707 ) 849 Customer backlog 1,400 (443 ) 957 1,650 (866 ) 784 Trade name 110 (43 ) 67 100 (53 ) 47 Internally developed software 11,900 (6,335 ) 5,565 11,325 (5,039 ) 6,286 Total $ 95,212 $ (45,391 ) $ 49,821 $ 90,038 $ (38,972 ) $ 51,066 The estimated useful lives of identifiable intangible assets are as follows: Customer relationships 5 - 10 years Non-compete agreements 2 - 5 years Customer backlog 1 - 1.5 years Trade name 1 year Internally developed software 2 - 7 years Estimated annual amortization expense for the next five years ended December 31 and thereafter is as follows and excludes the impact of the acquisition referenced in Note 15, Subsequent Events (in thousands): 2018 remaining $ 4,054 2019 $ 14,767 2020 $ 11,021 2021 $ 8,813 2022 $ 7,404 Thereafter $ 3,762 |
Long-term Debt
Long-term Debt | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-term Debt Revolving Credit Facility On June 9, 2017 , the Company entered into a Credit Agreement, as amended (the “Credit Agreement”), with Wells Fargo Bank, National Association, as administrative agent and the other lenders parties thereto. The Credit Agreement provides for revolving credit borrowings up to a maximum principal amount of $125.0 million , subject to a commitment increase of $75.0 million . All outstanding amounts owed under the Credit Agreement become due and payable no later than the final maturity date of June 9, 2022 . The Credit Agreement also allows for the issuance of letters of credit in the aggregate amount of up to $10.0 million at any one time; outstanding letters of credit reduce the credit available for revolving credit borrowings. As of September 30, 2018 , the Company had one outstanding letter of credit for $0.2 million . Substantially all of the Company’s assets are pledged to secure the credit facility. Borrowings under the Credit Agreement bear interest at the Company’s option of the prime rate ( 5.25% on September 30, 2018 ) plus a margin ranging from 0.00% to 0.50% or one month LIBOR ( 2.26% on September 30, 2018 ) plus a margin ranging from 1.00% to 1.75% . The Company incurs an annual commitment fee of 0.15% to 0.20% on the unused portion of the line of credit. The additional margin amount and annual commitment fee are dependent on the level of outstanding borrowings. As of September 30, 2018 , the Company had $124.8 million of unused borrowing capacity. The Company is required to comply with various financial covenants under the Credit Agreement. Specifically, the Company is required to maintain a ratio of earnings before interest, taxes, depreciation, and amortization (“EBITDA”) plus stock compensation to interest expense for the previous four consecutive fiscal quarters of not less than 3.00 to 1.00 and a ratio of indebtedness to EBITDA plus stock compensation (“Leverage Ratio”) of not more than 3.00 to 1.00. Additionally, the Credit Agreement currently restricts the payment of dividends that would result in a pro-forma Leverage Ratio of more than 2.00 to 1.00. At September 30, 2018 , the Company was in compliance with all covenants under the Credit Agreement. Convertible Senior Notes due 2023 On September 11, 2018 , the Company issued $143.8 million aggregate principal amount of 2.375% Convertible Senior Notes Due 2023 (the “Notes”) in a private placement to qualified institutional purchasers pursuant to an exemption from registration provided by Section 4(a)(2) and Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). The net proceeds from the offerings, after deducting the initial purchasers’ discount and issuance costs of $4.4 million , were $139.4 million . The Company used (i) $49.0 million of the net proceeds to pay down the Company’s revolving credit facility, (ii) $38.8 million of the net proceeds to repurchase 1.3 million shares of the Company’s common stock concurrently with the pricing of the Notes offering in privately negotiated transactions and (iii) $8.6 million of the net proceeds to fund the cost of entering into the Notes Hedges (as defined below), after such cost was partially offset by the proceeds that the Company received from entering into the Notes Warrants (as defined below). The remaining proceeds will be used for working capital or other general corporate purposes. The Notes bear interest at a rate of 2.375% per year. Interest will be payable in cash on March 15 and September 15 of each year, beginning March 15, 2019 . The Notes mature on September 15, 2023 , unless earlier converted, redeemed or repurchased in accordance with their terms prior to such date. The initial conversion rate is 26.5957 shares of the Company’s common stock per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately $37.60 per share of common stock. After consideration of the Notes Hedges and Notes Warrants (each defined below), the conversion rate is effectively hedged to a price of $46.62 per share of common stock. The conversion rate, and thus the conversion price, may be adjusted under certain circumstances as described in the indenture governing the Notes (the “Indenture”). The Company may settle conversions by paying or delivering, as applicable, cash, shares of its common stock or a combination of cash and shares of its common stock, at the Company’s election, based on the applicable conversion rate(s). If a “make-whole fundamental change” (as defined in the Indenture) occurs, then the Company will in certain circumstances increase the conversion rate for a specified period of time. The Company’s intent is to settle the principal amount of the Notes in cash upon conversion. A Note may be converted at the holder’s option prior to the close of business on the business day immediately preceding September 15, 2023 , but only under the following circumstances: • during any calendar quarter commencing after the calendar quarter ending on December 31, 2018, if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price for each of at least 20 trading days during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; • during the five consecutive business days immediately after any 10 consecutive trading day period (such 10 consecutive trading day period, the “measurement period”) in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of the Company’s common stock on such trading day and the conversion rate on such trading day; • upon the occurrence of certain corporate events or distributions on the Company’s common stock described in the Indenture; and • at any time from, and including, March 15, 2023 until the close of business on the second scheduled trading day immediately before the maturity date. The Company may not redeem the Notes at its option before maturity. If a “fundamental change” (as defined in the Indenture) occurs, then, except as described in the Indenture, noteholders may require the Company to repurchase their notes at a cash repurchase price equal to the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any. As of September 30, 2018 , none of the conditions permitting holders to convert their Notes had been satisfied and no shares of the Company’s common stock had been issued in connection with any conversions of the Notes. Based on the closing price of our common stock of $26.65 per share on September 28, 2018 , the conversion value of the Notes was less than the principal amount of the Notes outstanding on a per Note basis. In accordance with accounting for debt with conversions and other options, the Company bifurcated the principal amount of the Notes into liability and equity components. The initial liability component of the Notes was valued at $122.9 million based on the contractual cash flows discounted at an appropriate comparable market non-convertible debt borrowing rate at the date of issuance of 5.7% . The equity component representing the residual amount of the proceeds was recorded as an increase in additional paid-in capital within stockholders’ equity of $20.9 million , partially offset by the associated deferred tax effect of $5.4 million . The amount recorded within additional paid-in capital is not to be remeasured as long as it continues to meet the conditions for equity classification. The debt discount of $20.9 million is being amortized to interest expense using the effective interest method with an effective interest rate of 5.7% over the period from the issuance date through the contractual maturity date of September 15, 2023 . The Company will utilize the treasury stock method to calculate the effects of the Notes on diluted earnings per share. Issuance costs totaling $4.7 million were allocated pro rata based on the relative fair values of the liability and equity components. Issuance costs of $4.0 million attributable to the liability component were recorded as a direct deduction from the carrying value of the Notes and are being amortized to interest expense using the effective interest method over the term of the Notes. Issuance costs of $0.7 million attributable to the equity component were recorded as a charge to additional paid-in capital within stockholders’ equity, partially offset by the associated deferred tax effect of $0.2 million . The unamortized issuance costs will be amortized over a weighted-average remaining period of approximately five years . The liability and equity components of the Notes consisted of the following (in thousands): As of September 30, 2018 Liability component: Principal $ 143,750 Less: Unamortized debt discount (20,716 ) Unamortized debt issuance costs (3,996 ) Net carrying amount $ 119,038 Equity component: Debt discount for conversion option, net of taxes $ 15,547 Less: Issuance costs, net of taxes (511 ) Net carrying amount $ 15,036 Interest expense for the three and nine months ended September 30, 2018 related to the Notes consisted of the following (in thousands): Three and Nine Months Ended September 30, 2018 Coupon interest $ 190 Amortization of debt discount 200 Amortization of debt issuance costs 45 Total interest expense recognized $ 435 2023 Convertible Notes Hedges In connection with the issuance of the Notes, the Company entered into privately negotiated convertible note hedge transactions (the “Notes Hedges”) with certain of the initial purchasers or their respective affiliates and/or other financial institutions (the “Option Counterparties”). The Notes Hedges provide the Company with the option to acquire, on a net settlement basis, approximately 3.8 million shares of common stock at a strike price of $37.60 , which is equal to the number of shares of common stock that notionally underlie the Notes and corresponds to the conversion price of the Notes. If the Company elects cash settlement and exercises the Notes Hedges, the aggregate amount of cash received from the Option Counterparties will cover the aggregate amount of cash that the Company would be required to pay to the holders of the Notes, less the principal amount thereof. The Notes Hedges do not meet the criteria for separate accounting as a derivative as they are indexed to the Company’s stock and are accounted for as freestanding financial instruments. The Notes Hedges were recorded as a reduction in additional paid-in capital within stockholders’ equity of $20.7 million , partially offset by the deferred tax effect of $5.3 million . 2023 Convertible Notes Warrants In connection with the issuance of the Notes, the Company also sold net-share-settled warrants (the “Notes Warrants”) in privately negotiated transactions with the Option Counterparties. The strike price of the Notes Warrants was approximately $46.62 per share, and is subject to certain adjustments under the terms of the Notes Warrants. As a result of the Notes Warrants and related transactions, the Company is required to recognize incremental dilution of earnings per share to the extent the average share price is over $46.62 for any fiscal quarter. The Notes Warrants expire over a period of 100 trading days commencing on December 15, 2023 and may be settled in net shares of common stock or net cash at the Company’s election. The Notes Warrants were recorded as an increase in additional paid-in capital within stockholders’ equity of $12.1 million . |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. The Internal Revenue Service (the “IRS”) has completed examinations of the Company’s U.S. income tax returns or the statute of limitations has passed on returns for the years through 2010. The Company’s 2011 through 2015 U.S. income tax returns are currently under examination by the IRS. The IRS has sought to disallow research credits in total of $2.5 million on the Company’s 2011, 2012 and 2013 U.S. income tax returns. The Company has exhausted all administrative appeals and formal mediation and has filed suit to resolve this dispute. The Company is awaiting a new court date to be set by the U.S. Tax Court for the 2011 through 2013 returns. The Company believes the research credits taken are appropriate and intends to vigorously defend its position. An amount of adjustment, if any, and the timing of such adjustment are not reasonably possible to estimate at this time. The total amount of research credits taken or expected to be taken in the Company’s income tax returns for 2011 through September 30, 2018 is approximately $10.0 million . Under the provisions of the ASC Subtopic 740-10-25, Income Taxes - Recognition , the Company had an unrecognized tax benefit of $3.4 million (inclusive of $0.3 million of interest) as of September 30, 2018 . The Company’s effective tax rate was 25.3% and 25.0% for the three and nine months ended September 30, 2018 compared to 33.3% and 46.4% for the three and nine months ended September 30, 2017 . The decrease in the effective tax rate is primarily due to the passage of the Tax Cuts and Jobs Act of 2017 (the “2017 Tax Act”), as well as the one-time tax impact of the determination in the second quarter of 2017 that the foreign earnings of the Company's Chinese subsidiary were no longer permanently reinvested. As of September 30, 2018 , the Company’s net non-current deferred tax liability was $7.6 million . Deferred tax liabilities primarily relate to goodwill, other intangibles, fixed assets, prepaid expenses and issuance of the Notes. Net non-current deferred tax liabilities are recorded in “Other non-current liabilities” on the Condensed Consolidated Balance Sheet as of September 30, 2018 (unaudited) and December 31, 2017. In general, it is the Company’s practice and intention to reinvest the earnings of the Company’s foreign subsidiaries in those operations. However, during the second quarter of 2017, the Company determined that as a result of changes in the business and macroeconomic environment, the foreign earnings of the Company’s Chinese subsidiary were no longer permanently reinvested and may repatriate available earnings from time to time. A provision for the expected current and deferred taxes on the repatriation of earnings was recorded in the amount of $2.5 million during the second quarter of 2017. Approximately $1.6 million of this provision was reversed during the fourth quarter of 2017 due to the adoption of the 2017 Tax Act. Management intends to continue to permanently reinvest all other remaining current and prior earnings in its other foreign subsidiaries. Excluding China, foreign unremitted earnings of entities not included in the United States tax return have been included in the consolidated financial statements without giving effect to the United States taxes that may be payable on distribution to the United States because it is not anticipated such earnings will be remitted to the United States. Under current applicable tax laws, if the Company elects to remit some or all of the funds it has designated as indefinitely reinvested outside the United States, the amount remitted would be subject to non-U.S. withholding taxes. As of September 30, 2018 , the aggregate unremitted earnings of the Company’s foreign subsidiaries for which a deferred income tax liability has not been recorded was approximately $8.7 million , and the unrecognized deferred tax liability on unremitted earnings was approximately $0.5 million . U.S. Tax Reform On December 22, 2017, the U.S. government enacted the 2017 Tax Act. The 2017 Tax Act significantly revised the ongoing U.S. corporate income tax by, among other things, lowering U.S. corporate income tax rates and implementing a territorial tax system. The SEC has issued rules that would allow for a measurement period of up to one year after the enactment date of the 2017 Tax Act to finalize the recording of the related tax impacts. Based on a continued analysis of the estimates and further guidance on the application of the law, it is anticipated that additional revisions may occur throughout the allowable measurement period. During the third quarter of 2018, the Company finalized and filed its 2017 income tax return. There were no material changes to the original estimate. The Company currently anticipates finalizing and recording any further adjustments within a year of the enactment date. |
Derivatives
Derivatives | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | Derivatives In the normal course of business, the Company uses derivative financial instruments to manage foreign currency exchange rate risk. Currency exposure is monitored and managed by the Company as part of its risk management program which seeks to reduce the potentially adverse effects that market volatility could have on operating results. The Company's derivative financial instruments consist of non-deliverable foreign currency forward contracts. Derivative financial instruments are neither held nor issued by the Company for trading purposes. Derivatives Not Designated as Hedging Instruments Both the gain or loss on the derivatives not designated as hedging instruments and the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in current earnings. Realized gains or losses and changes in the estimated fair value of foreign currency forward contracts that have not been designated as hedges were a net loss of $0.1 million for each of the three and nine months ended September 30, 2018 . An immaterial net gain was recognized during the three months ended September 30, 2017 and a net gain of $0.1 million was recognized during the nine months ended September 30, 2017 . Gains and losses on these contracts are recorded in net other expense (income) and net interest expense in the Unaudited Condensed Consolidated Statements of Operations and are offset by losses and gains on the related hedged items. The fair value of the Company’s derivative instruments outstanding as of September 30, 2018 was immaterial. The notional amounts of the Company’s derivative instruments outstanding were as follows (in thousands): September 30, 2018 December 31, 2017 Derivatives not designated as hedges Foreign exchange contracts $ 2,984 $ 3,979 Total derivatives not designated as hedges $ 2,984 $ 3,979 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity’s pricing based upon its own market assumptions. The fair value hierarchy consists of the following three levels: • Level 1 – Inputs are quoted prices in active markets for identical assets or liabilities. • Level 2 – Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and market-corroborated inputs which are derived principally from or corroborated by observable market data. • Level 3 – Inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable. All highly liquid investments with maturities at date of purchase of three months or less are considered to be cash equivalents. Based on their short-term nature, the carrying value of cash equivalents approximate their fair value. As of September 30, 2018 , $37.0 million of the Company’s cash and cash equivalents balance related to money-market fund investments. These short-term money-market funds are considered Level 1 investments. The fair value of the Notes is measured using quoted price inputs. The Notes are not actively traded, and thus the price inputs represent a Level 2 measurement. As the quoted price inputs are highly variable from day to day, the fair value estimates could significantly increase or decrease. The Company’s Notes are carried at their principal amount less unamortized debt discount and issuance costs, and are not carried at fair value at each period end. The original debt discount was calculated at a market interest rate for nonconvertible debt at the time of issuance, which represented a Level 3 fair value measurement. The approximate fair value of the Notes as of September 30, 2018 was $136.0 million , which is estimated on the basis of inputs that are observable in the market and is considered a Level 2 fair value measurement. The fair value of the Company’s foreign exchange forward contracts is measured using the present value of expected cash flows. This considers the difference between the current market forward price and contracted forward price for each foreign exchange contract and applies the difference in the rates to each outstanding contract. Valuations for all derivative instruments represent Level 2 measurements. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies From time to time the Company is involved in legal proceedings, claims and litigation related to employee claims, contractual disputes and taxes in the ordinary course of business. Although the Company cannot predict the outcome of such matters, currently the Company has no reason to believe the disposition of any current matter could reasonably be expected to have a material adverse impact on the Company’s financial position, results of operations or the ability to carry on any of its business activities. The Company leases office space under various operating lease agreements. The Company has the option to extend the term of certain lease agreements. Future minimum commitments under these lease agreements as of September 30, 2018 were as follows (in thousands): Operating Leases 2018 remaining $ 1,766 2019 7,059 2020 6,608 2021 5,122 2022 3,288 2023 3,609 Total minimum lease payments $ 27,452 Rent expense for the three and nine months ended September 30, 2018 was $2.1 million and $6.2 million , respectively. Rent expense for the three and nine months ended September 30, 2017 was $2.1 million and $6.0 million , respectively. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Acquisition of Elixiter, Inc. On October 29, 2018 , the Company acquired Elixiter Inc., a Montana corporation (“Elixiter”), pursuant to the terms of an Agreement and Plan of Merger (the “Merger Agreement”). The Merger Agreement provided for approximately $6.3 million of cash to be paid at closing, subject to a net working capital adjustment, approximately 64,846 shares of Company common stock to be issued at closing and a maximum potential payout for additional revenue and earnings-based contingent consideration of $1.8 million , which may be realized by the equity holders twelve months after the closing date of the acquisition. The acquisition of Elixiter expands the Company’s capabilities in digital marketing. Goodwill and intangible assets are expected to be recorded on the Consolidated Balance Sheet from the acquisition of Elixiter. As of November 1, 2018 , the initial accounting for the business combination has not been completed, including the measurement of certain intangible assets and goodwill. Acquisition costs related to Elixiter for the three and nine months ended September 30, 2018 were immaterial. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Use of Estimates | The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates, and such differences could be material to the financial statements. Except for the accounting policies related to revenue recognition that were updated as a result of the adoption of Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers issued by the Financial Accounting Standards Board (the “FASB”), there have been no changes to significant accounting policies described in the Annual Report on Form 10-K for the year ended December 31, 2017 , filed with the SEC on March 1, 2018 , that have had a material impact on the Company’s condensed consolidated financial statements and related notes. See Note 4, Revenue , for updated policies related to revenue recognition. |
Recent Accounting Pronouncements | In February 2016, the FASB issued ASU No. 2016-02, Leases , which supersedes ASC Topic 840, Leases, and creates a new topic, ASC Topic 842, Leases . In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases , and ASU 2018-11, Leases – Targeted Improvement , which further amended ASU No. 2016-02. These updates require lessees to recognize a lease liability and a lease asset for all leases, including operating leases, with a term greater than 12 months on its balance sheet. The updates also expand the required quantitative and qualitative disclosures surrounding leases. These updates are effective for the Company on January 1, 2019. The amendments to ASU 2016-02 allow companies to elect to apply the provisions of the new standard at the effective date without adjusting the comparative periods presented, which the Company currently expects to elect. The Company continues to evaluate the effect that ASU No. 2016-02 and its amendments will have on its consolidated financial statements and disclosures. The Company expects the primary impact upon adoption will be the recognition, on a discounted basis, of its minimum commitments under noncancellable operating leases on its consolidated balance sheets resulting in the recording of right of use assets and lease obligations. The Company is also evaluating provisions within its contracts to identify any embedded leases which would have a potential impact upon adoption. Current minimum commitments under noncancellable operating leases are disclosed in Note 14, Commitments and Contingencies . In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Accounting Standards Codification ( “ ASC ” ) Topic 606) , which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU No. 2014-09 replaced most existing revenue recognition guidance in U.S. GAAP. In 2015, the FASB deferred the effective date of ASU No. 2014-09 by one year. In 2016, the FASB issued ASU No. 2016-08, Principal versus Agent Considerations , ASU No. 2016-10, Identifying Performance Obligations and Licensing , ASU No. 2016-12, Narrow-Scope Improvements and Practical Expedients and ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers , all of which further amended ASU No. 2014-09. The Company adopted the standard on January 1, 2018 using the modified retrospective method which requires a cumulative-effect adjustment to the opening balance of retained earnings within stockholders’ equity. The Company has determined that the most significant impact upon adoption was to third-party software and hardware revenue, which was primarily recorded on a gross basis as the principal in the transaction through December 31, 2017 and presented on a net basis as the agent as of January 1, 2018. The adoption of the standard also resulted in minor changes to the timing of revenue recognition. As the agent, revenue from multi-year sales of third-party software and support is recognized upfront as the performance obligation is fulfilled, rather than annually as invoiced to the customer. Additionally, variable consideration related to service contracts, such as volume discounts and holdbacks, are recognized earlier under the new standard in certain instances. The impact from these timing changes was immaterial as of January 1, 2018, and therefore, did not result in a cumulative-effect adjustment to the opening balance of retained earnings. The adoption of the standard also resulted in increases to accounts receivable, net and deferred revenue within other current liabilities for those contracts under which the Company’s right to consideration is unconditional. Refer to Impacts of ASC Topic 606 Adoption on Current Period Results below for the impact of adopting ASC Topic 606 on the Unaudited Condensed Consolidated Balance Sheet as of September 30, 2018 and the Unaudited Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2018 . There was no material impact on the Unaudited Condensed Consolidated Statement of Cash Flows for the nine months ended September 30, 2018 . The adoption of ASU No. 2014-09 and its amendments also resulted in additional disclosures around the nature and timing of performance obligations, contract costs, and deferred revenue, as well as significant judgments and practical expedients used by the Company. See Note 4, Revenue , for these disclosures. |
Revenue from Contract with Customer | The following discussion relates to the Company’s revenue recognition policy, effective January 1, 2018, under ASC Topic 606. Services Revenues Services revenues are primarily comprised of professional services that include developing, implementing, automating and extending business processes, technology infrastructure, and software applications. The Company’s professional services span multiple industries, platforms and solutions; however, the Company has remained relatively diversified and does not believe that it has significant revenue concentration within any single industry, platform or solution. Professional services revenues are recognized over time as services are rendered. Most projects are performed on a time and materials basis, while a portion of revenues is derived from projects performed on a fixed fee or fixed fee percent complete basis. For time and material contracts, revenues are generally recognized and invoiced by multiplying the number of hours expended in the performance of the contract by the billing rates established in the contract. For fixed fee contracts, revenues are generally recognized and invoiced by multiplying the fixed rate per time period established in the contract by the number of time periods elapsed. For fixed fee percent complete contracts, revenues are generally recognized using an input method based on the ratio of hours expended to total estimated hours, and the client is invoiced according to the agreed-upon schedule detailing the amount and timing of payments in the contract. Clients are typically billed monthly for services provided during that month, but can be billed on a more or less frequent basis as determined by the contract. If the time is worked and approved at the end of a fiscal period and the invoice has not yet been sent to the client, the amount is recorded as revenue once the Company verifies all other revenue recognition criteria have been met, and the amount is classified as a receivable as the right to consideration is unconditional at that point. Amounts invoiced and collected in excess of revenues recognized are contract liabilities, which are classified as deferred revenues in the Unaudited Condensed Consolidated Balance Sheet. The term between invoicing and payment due date is not significant. Contracts for professional services provide for a general right, to the client or the Company, to cancel or terminate the contract within a given period of time (generally 10 to 30 days’ notice is required). The client is responsible for any time and expenses incurred up to the date of cancellation or termination of the contract. Certain contracts may include volume discounts or holdbacks, which are accounted for as variable consideration under ASC Topic 606, but are not typically significant. The Company estimates variable consideration based on historical experience and forecasted sales and includes the variable consideration in the transaction price. Other services revenues are comprised of hosting fees, partner referral fees, maintenance agreements, training and internally developed software-as-a-service (“SaaS”) sales. Revenues from hosting fees, maintenance agreements, training and internally developed SaaS sales are generally recognized over time using a time-based measure of progress as services are rendered. Partner referral fees are recorded at a point in time upon meeting specified requirements set by each partner to earn the respective fee. On many professional service projects, the Company is also reimbursed for out-of-pocket expenses including travel and other project-related expenses. These reimbursements are included as a component of the transaction price of the respective professional services contract and are invoiced as the expenses are incurred. The Company structures its professional services arrangements to recover the cost of reimbursable expenses without a markup. Software and Hardware Revenues Software and hardware revenues are comprised of third-party software and hardware resales, in which the Company is considered the agent, and sales of internally developed software, in which the Company is considered the principal. Third-party software and hardware revenues are recognized and invoiced when the Company fulfills its obligation to arrange the sale, which occurs when the purchase order with the vendor is executed and the customer has access to the software or the hardware has been shipped to the customer. Internally developed software revenues are recognized and invoiced when control is transferred to the customer, which occurs when the software has been made available to the customer and the license term has commenced. Revenues from third-party software and hardware sales are recorded on a net basis, while revenues from internally developed software sales are recorded on a gross basis. There are no significant cancellation or termination-type provisions for the Company’s software and hardware sales, and the term between invoicing and payment due date is not significant. Arrangements with Multiple Performance Obligations Arrangements with clients may contain multiple promises such as delivery of software, hardware, professional services or post-contract support services. These promises are accounted for as separate performance obligations if they are distinct. For arrangements with clients that contain multiple performance obligations, the transaction price is allocated to the separate performance obligations based on estimated relative standalone selling price, which is estimated by the expected cost plus a margin approach, taking into consideration market conditions and competitive factors. Contract Costs In accordance with the terms of the Company’s sales commission plan, commissions are not earned until the related revenue is recognized. Therefore, sales commissions are expensed as they are incurred. Certain sales incentives are accrued based on achievement of specified bookings goals. For these incentives, the Company applies the practical expedient that allows the Company to expense the incentives as incurred, since the amortization period would have been one year or less. |
Stock-Based Compensation | Stock-based compensation is accounted for in accordance with ASC Topic 718, Compensation – Stock Compensation . Under this guidance, the Company recognizes share-based compensation ratably using the straight-line attribution method over the requisite service period, which is generally three years. In addition, the Company has elected to estimate the amount of expected forfeitures when calculating share-based compensation, instead of accounting for forfeitures as they occur. The fair value of restricted stock awards is based on the value of the Company’s common stock on the date of the grant. |
Goodwill and Intangible Assets | Goodwill represents the excess purchase price over the fair value of net assets acquired, or net liabilities assumed, in a business combination. In accordance with ASC Topic 350, Intangibles – Goodwill and Other , the Company performs an annual impairment review in the fourth quarter and more frequently if events or changes in circumstances indicate that goodwill might be impaired. There was no indication that goodwill became impaired as of September 30, 2018 . Other intangible assets include customer relationships, non-compete arrangements, trade names, customer backlog, and internally developed software, which are being amortized over the assets’ estimated useful lives using the straight-line method. Estimated useful lives range from less than one year to ten years. Amortization of customer relationships, non-compete arrangements, trade names, customer backlog, and internally developed software is considered an operating expense and is included in “Amortization” in the accompanying Unaudited Condensed Consolidated Statements of Operations. The Company periodically reviews the estimated useful lives of its identifiable intangible assets, taking into consideration any events or circumstances that might result in a lack of recoverability or revised useful life. |
Debt | In accordance with accounting for debt with conversions and other options, the Company bifurcated the principal amount of the Notes into liability and equity components. The initial liability component of the Notes was valued at $122.9 million based on the contractual cash flows discounted at an appropriate comparable market non-convertible debt borrowing rate at the date of issuance of 5.7% . The equity component representing the residual amount of the proceeds was recorded as an increase in additional paid-in capital within stockholders’ equity of $20.9 million , partially offset by the associated deferred tax effect of $5.4 million . The amount recorded within additional paid-in capital is not to be remeasured as long as it continues to meet the conditions for equity classification. The debt discount of $20.9 million is being amortized to interest expense using the effective interest method with an effective interest rate of 5.7% over the period from the issuance date through the contractual maturity date of September 15, 2023 . The Company will utilize the treasury stock method to calculate the effects of the Notes on diluted earnings per share. 2023 Convertible Notes Hedges In connection with the issuance of the Notes, the Company entered into privately negotiated convertible note hedge transactions (the “Notes Hedges”) with certain of the initial purchasers or their respective affiliates and/or other financial institutions (the “Option Counterparties”). The Notes Hedges provide the Company with the option to acquire, on a net settlement basis, approximately 3.8 million shares of common stock at a strike price of $37.60 , which is equal to the number of shares of common stock that notionally underlie the Notes and corresponds to the conversion price of the Notes. If the Company elects cash settlement and exercises the Notes Hedges, the aggregate amount of cash received from the Option Counterparties will cover the aggregate amount of cash that the Company would be required to pay to the holders of the Notes, less the principal amount thereof. The Notes Hedges do not meet the criteria for separate accounting as a derivative as they are indexed to the Company’s stock and are accounted for as freestanding financial instruments. The Notes Hedges were recorded as a reduction in additional paid-in capital within stockholders’ equity of $20.7 million , partially offset by the deferred tax effect of $5.3 million . 2023 Convertible Notes Warrants In connection with the issuance of the Notes, the Company also sold net-share-settled warrants (the “Notes Warrants”) in privately negotiated transactions with the Option Counterparties. The strike price of the Notes Warrants was approximately $46.62 per share, and is subject to certain adjustments under the terms of the Notes Warrants. As a result of the Notes Warrants and related transactions, the Company is required to recognize incremental dilution of earnings per share to the extent the average share price is over $46.62 for any fiscal quarter. The Notes Warrants expire over a period of 100 trading days commencing on December 15, 2023 and may be settled in net shares of common stock or net cash at the Company’s election. The Notes Warrants were recorded as an increase in additional paid-in capital within stockholders’ equity of $12.1 million . |
Derivatives | Both the gain or loss on the derivatives not designated as hedging instruments and the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in current earnings. Realized gains or losses and changes in the estimated fair value of foreign currency forward contracts that have not been designated as hedges were a net loss of $0.1 million for each of the three and nine months ended September 30, 2018 . An immaterial net gain was recognized during the three months ended September 30, 2017 and a net gain of $0.1 million was recognized during the nine months ended September 30, 2017 . Gains and losses on these contracts are recorded in net other expense (income) and net interest expense in the Unaudited Condensed Consolidated Statements of Operations and are offset by losses and gains on the related hedged items. The fair value of the Company’s derivative instruments outstanding as of September 30, 2018 was immaterial. |
Fair Value Measurement | The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity’s pricing based upon its own market assumptions. The fair value hierarchy consists of the following three levels: • Level 1 – Inputs are quoted prices in active markets for identical assets or liabilities. • Level 2 – Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and market-corroborated inputs which are derived principally from or corroborated by observable market data. • Level 3 – Inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable. All highly liquid investments with maturities at date of purchase of three months or less are considered to be cash equivalents. Based on their short-term nature, the carrying value of cash equivalents approximate their fair value. As of September 30, 2018 , $37.0 million of the Company’s cash and cash equivalents balance related to money-market fund investments. These short-term money-market funds are considered Level 1 investments. The fair value of the Notes is measured using quoted price inputs. The Notes are not actively traded, and thus the price inputs represent a Level 2 measurement. As the quoted price inputs are highly variable from day to day, the fair value estimates could significantly increase or decrease. The Company’s Notes are carried at their principal amount less unamortized debt discount and issuance costs, and are not carried at fair value at each period end. The original debt discount was calculated at a market interest rate for nonconvertible debt at the time of issuance, which represented a Level 3 fair value measurement. The approximate fair value of the Notes as of September 30, 2018 was $136.0 million , which is estimated on the basis of inputs that are observable in the market and is considered a Level 2 fair value measurement. The fair value of the Company’s foreign exchange forward contracts is measured using the present value of expected cash flows. This considers the difference between the current market forward price and contracted forward price for each foreign exchange contract and applies the difference in the rates to each outstanding contract. Valuations for all derivative instruments represent Level 2 measurements. |
Commitments and Contingencies, Policy | From time to time the Company is involved in legal proceedings, claims and litigation related to employee claims, contractual disputes and taxes in the ordinary course of business. Although the Company cannot predict the outcome of such matters, currently the Company has no reason to believe the disposition of any current matter could reasonably be expected to have a material adverse impact on the Company’s financial position, results of operations or the ability to carry on any of its business activities. |
Lessee, Leases | The Company leases office space under various operating lease agreements. The Company has the option to extend the term of certain lease agreements. |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Impacts of ASC Topic 606 Adoption on Current Period Results | The impacts of ASC Topic 606 adoption on the Unaudited Condensed Consolidated Balance Sheet as of September 30, 2018 are as follows (in thousands): As Reported ASC Topic 606 Impact Without ASC Topic 606 Adoption Accounts receivable, net $ 109,764 $ (1,512 ) $ 108,252 Total assets 549,269 (1,512 ) 547,757 Other current liabilities 44,172 (1,512 ) 42,660 Total liabilities 194,265 (1,512 ) 192,753 The impacts of ASC Topic 606 adoption on the Unaudited Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2018 are as follows (in thousands): Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 As Reported (Net Presentation) ASC Topic 606 Impact Without ASC Topic 606 Adoption (Gross Presentation) As Reported (Net Presentation) ASC Topic 606 Impact Without ASC Topic 606 Adoption (Gross Presentation) Revenues Services $ 122,879 $ — $ 122,879 $ 363,986 $ — $ 363,986 Software and hardware 1,054 3,665 4,719 2,686 16,050 18,736 Total revenues 123,933 3,665 127,598 366,672 16,050 382,722 Cost of revenues Cost of services 79,183 — 79,183 238,004 — 238,004 Software and hardware costs — 3,665 3,665 — 16,050 16,050 Total cost of revenues 79,183 3,665 82,848 238,004 16,050 254,054 Income from operations 9,261 — 9,261 24,543 — 24,543 Net income 6,305 — 6,305 17,083 — 17,083 |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table presents revenue disaggregated by revenue source and pattern of revenue recognition (in thousands): Three Months Ended Nine Months Ended Over Time Point In Time Total Revenues Over Time Point In Time Total Revenues Time and materials contracts $ 85,127 $ — $ 85,127 $ 252,158 $ — $ 252,158 Fixed fee percent complete contracts 9,731 — 9,731 26,741 — 26,741 Fixed fee contracts 20,402 — 20,402 62,001 — 62,001 Reimbursable expenses 3,223 — 3,223 9,468 — 9,468 Total professional services fees 118,483 — 118,483 350,368 — 350,368 Other services revenue* 3,610 786 4,396 11,229 2,389 13,618 Total services 122,093 786 122,879 361,597 2,389 363,986 Software and hardware — 1,054 1,054 — 2,686 2,686 Total revenues $ 122,093 $ 1,840 $ 123,933 $ 361,597 $ 5,075 $ 366,672 * Other services revenue primarily consists of hosting fees, maintenance, training, internally developed SaaS and partner referral fees. The following table presents revenue disaggregated by geographic area, as determined by the billing address of customers (in thousands): Three Months Ended Nine Months Ended United States $ 121,440 $ 358,179 Canada 800 2,910 Other countries 1,693 5,583 Total revenues $ 123,933 $ 366,672 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Restricted Stock Activity | Restricted stock activity for the nine months ended September 30, 2018 was as follows (shares in thousands): Shares Weighted-Average Restricted stock awards outstanding at December 31, 2017 1,436 $ 18.12 Awards granted 366 22.08 Awards vested (334 ) 19.26 Awards forfeited (87 ) 17.45 Restricted stock awards outstanding at September 30, 2018 1,381 $ 18.91 |
Net Income per Share (Tables)
Net Income per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Net Income per Share | The following table presents the calculation of basic and diluted net income per share (in thousands, except per share information): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Net income $ 6,305 $ 7,027 $ 17,083 $ 12,146 Basic: Weighted-average shares of common stock outstanding 32,648 32,673 32,724 32,997 Shares used in computing basic net income per share 32,648 32,673 32,724 32,997 Effect of dilutive securities: Restricted stock subject to vesting 733 459 665 450 Shares issuable for acquisition consideration (1) 264 859 457 638 Shares used in computing diluted net income per share 33,645 33,991 33,846 34,085 Basic net income per share $ 0.19 $ 0.22 $ 0.52 $ 0.37 Diluted net income per share $ 0.19 $ 0.21 $ 0.50 $ 0.36 (1) For the three and nine months ended September 30, 2018 , this represents the shares held in escrow pursuant to: (i) the Asset Purchase Agreement with BioPharm Systems, Inc. (“BioPharm”); (ii) the Asset Purchase Agreement with Zeon Solutions Incorporated and certain related entities (collectively, “Zeon”); (iii) the Asset Purchase Agreement with RAS & Associates, LLC (“RAS”); (iv) the Asset Purchase Agreement with Clarity Consulting, Inc. and Truth Labs, LLC (together, “Clarity”); (v) the Asset Purchase Agreement with Southport Services Group, LLC (“Southport”); and (vi) the Asset Purchase Agreement with Stone Temple Consulting Corporation (“Stone Temple”), as part of the consideration. For the three and nine months ended September 30, 2017 , this represents the shares held in escrow pursuant to: (i) the Asset Purchase Agreement with BioPharm; (ii) the Asset Purchase Agreement with Zeon; (iii) the Asset Purchase Agreement with The Pup Group, Inc. d/b/a Enlighten (“Enlighten”); (iv) the Asset Purchase Agreement with RAS; and (v) the Asset Purchase Agreement with Clarity, as part of the consideration. |
Antidilutive Securities Excluded from Computation of Earnings Per Share | The number of anti-dilutive securities not included in the calculation of diluted net income per share were as follows (in thousands): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Restricted stock subject to vesting — — 40 117 Convertible senior notes 3,823 — 3,823 — Warrants related to the issuance of convertible senior notes 3,823 — 3,823 — Total anti-dilutive securities 7,646 — 7,686 117 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Balance Sheet Related Disclosures [Abstract] | |
Accounts Receivable | September 30, 2018 (unaudited) December 31, 2017 (in thousands) Accounts receivable: Accounts receivable $ 66,541 $ 82,603 Unbilled revenues 44,038 30,863 Allowance for doubtful accounts (815 ) (1,272 ) Total $ 109,764 $ 112,194 |
Property and Equipment | Property and equipment: Computer hardware (useful life of 3 years) $ 13,832 $ 13,110 Software (useful life of 1 to 7 years) 5,042 5,159 Furniture and fixtures (useful life of 5 years) 4,472 3,772 Leasehold improvements (useful life of 5 years) 3,172 2,836 Less: Accumulated depreciation (19,953 ) (17,732 ) Total $ 6,565 $ 7,145 |
Other Current Liabilities | Other current liabilities: Estimated fair value of contingent consideration liability (1) $ 15,356 $ 8,148 Accrued variable compensation 12,810 16,842 Deferred revenue 4,733 3,278 Other current liabilities 4,452 3,879 Payroll related costs 3,378 2,971 Accrued medical claims expense 2,072 2,133 Professional fees 1,106 357 Accrued subcontractor fees 265 469 Total $ 44,172 $ 38,077 |
Other Non-Current Liabilities | Other non-current liabilities: Deferred income taxes $ 7,638 $ 7,360 Other non-current liabilities 7,742 4,667 Deferred compensation liability 4,874 4,409 Total $ 20,254 $ 16,436 (1) As of September 30, 2018 , represents the fair value estimate of revenue and earnings-based contingent consideration that may be realized by Stone Temple, Southport and Clarity twelve months after the acquisition. As of December 31, 2017 , represents the fair value estimate of additional revenue and earnings-based contingent consideration that may be realized by Clarity twelve months after the acquisition. |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Allocation of Total Purchase Price Consideration | The Company has estimated the allocation of the total purchase price consideration between tangible assets, identified intangible assets, liabilities, and goodwill as follows (in millions): Acquired tangible assets $ 4.2 Identified intangible assets 5.7 Liabilities assumed (1.8 ) Goodwill 10.5 Total purchase price $ 18.6 The Company has estimated the allocation of the total purchase price consideration between tangible assets, identified intangible assets, liabilities, and goodwill as follows (in millions): Acquired tangible assets $ 2.5 Identified intangible assets 4.6 Liabilities assumed (1.5 ) Goodwill 6.8 Total purchase price $ 12.4 |
Schedule of Finite-Lived Intangible Assets Acquired | The following table presents details of the intangible assets acquired during the nine months ended September 30, 2018 (dollars in millions): Weighted Average Useful Life Estimated Useful Life Aggregate Acquisitions Customer relationships 5 years 5 - 6 years $ 8.2 Customer backlog 1 year 1 - 1.5 years 1.4 Non-compete agreements 5 years 5 years 0.2 Trade name 1 year 1 year 0.1 Developed software 3 years 3 years 0.4 Total acquired intangible assets $ 10.3 |
Pro-Forma Results of Operations | The aggregate amounts of revenue and net income of the Southport and Stone Temple acquisitions in the Unaudited Condensed Consolidated Statements of Operations from the respective acquisition dates to September 30, 2018 are as follows (in thousands): Acquisition Date to Revenues $ 10,774 Net income $ 777 These unaudited pro-forma results are presented in compliance with the adoption of ASU No. 2010-29, Business Combinations (Topic 805): Disclosure of Supplementary Pro Forma Information for Business Combinations , and are not necessarily indicative of the actual consolidated results of operations had the acquisitions actually occurred on January 1, 2017 or January 1, 2016 or of future results of operations of the consolidated entities (in thousands except per share data): Nine Months Ended September 30, 2018 2017 Revenues $ 376,695 $ 385,639 Net income $ 20,846 $ 12,845 Basic net income per share $ 0.63 $ 0.38 Diluted net income per share $ 0.61 $ 0.37 Shares used in computing basic net income per share 33,054 33,505 Shares used in computing diluted net income per share 33,931 34,582 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | The changes in the carrying amount of goodwill for the nine months ended September 30, 2018 are as follows (in thousands): Balance at December 31, 2017 $ 305,238 Preliminary purchase price allocations for acquisitions 17,267 Effect of foreign currency translation adjustments (510 ) Balance at September 30, 2018 $ 321,995 |
Intangible Assets | The following table presents a summary of the Company’s intangible assets that are subject to amortization (in thousands): September 30, 2018 December 31, 2017 Gross Carrying Amounts Accumulated Amortization Net Carrying Amounts Gross Carrying Amounts Accumulated Amortization Net Carrying Amounts Customer relationships $ 80,176 $ (37,781 ) $ 42,395 $ 75,407 $ (32,307 ) $ 43,100 Non-compete agreements 1,626 (789 ) 837 1,556 (707 ) 849 Customer backlog 1,400 (443 ) 957 1,650 (866 ) 784 Trade name 110 (43 ) 67 100 (53 ) 47 Internally developed software 11,900 (6,335 ) 5,565 11,325 (5,039 ) 6,286 Total $ 95,212 $ (45,391 ) $ 49,821 $ 90,038 $ (38,972 ) $ 51,066 |
Estimated Useful Lives of Intangible Assets | The estimated useful lives of identifiable intangible assets are as follows: Customer relationships 5 - 10 years Non-compete agreements 2 - 5 years Customer backlog 1 - 1.5 years Trade name 1 year Internally developed software 2 - 7 years |
Estimated Annual Amortization Expense | Estimated annual amortization expense for the next five years ended December 31 and thereafter is as follows and excludes the impact of the acquisition referenced in Note 15, Subsequent Events (in thousands): 2018 remaining $ 4,054 2019 $ 14,767 2020 $ 11,021 2021 $ 8,813 2022 $ 7,404 Thereafter $ 3,762 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Interest expense for the three and nine months ended September 30, 2018 related to the Notes consisted of the following (in thousands): Three and Nine Months Ended September 30, 2018 Coupon interest $ 190 Amortization of debt discount 200 Amortization of debt issuance costs 45 Total interest expense recognized $ 435 The liability and equity components of the Notes consisted of the following (in thousands): As of September 30, 2018 Liability component: Principal $ 143,750 Less: Unamortized debt discount (20,716 ) Unamortized debt issuance costs (3,996 ) Net carrying amount $ 119,038 Equity component: Debt discount for conversion option, net of taxes $ 15,547 Less: Issuance costs, net of taxes (511 ) Net carrying amount $ 15,036 |
Derivatives (Tables)
Derivatives (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Notional Amounts of Outstanding Derivative Positions | The notional amounts of the Company’s derivative instruments outstanding were as follows (in thousands): September 30, 2018 December 31, 2017 Derivatives not designated as hedges Foreign exchange contracts $ 2,984 $ 3,979 Total derivatives not designated as hedges $ 2,984 $ 3,979 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future Minimum Commitments Under Operating Lease Agreements | Future minimum commitments under these lease agreements as of September 30, 2018 were as follows (in thousands): Operating Leases 2018 remaining $ 1,766 2019 7,059 2020 6,608 2021 5,122 2022 3,288 2023 3,609 Total minimum lease payments $ 27,452 |
Recent Accounting Pronounceme_3
Recent Accounting Pronouncements - Impact on Unaudited Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Assets [Abstract] | ||
Accounts receivable, net | $ 109,764 | $ 112,194 |
Total assets | 549,269 | 499,060 |
Liabilities [Abstract] | ||
Other current liabilities | 44,172 | 38,077 |
Total liabilities | 194,265 | $ 132,709 |
ASC Topic 606 Impact | ASU 2014-09 | ||
Assets [Abstract] | ||
Accounts receivable, net | (1,512) | |
Total assets | (1,512) | |
Liabilities [Abstract] | ||
Other current liabilities | (1,512) | |
Total liabilities | (1,512) | |
Without ASC Topic 606 Adoption | ASU 2014-09 | ||
Assets [Abstract] | ||
Accounts receivable, net | 108,252 | |
Total assets | 547,757 | |
Liabilities [Abstract] | ||
Other current liabilities | 42,660 | |
Total liabilities | $ 192,753 |
Recent Accounting Pronounceme_4
Recent Accounting Pronouncements - Impact on Unaudited Condensed Consolidated Statement of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues | ||||
Revenues | $ 123,933 | $ 123,738 | $ 366,672 | $ 351,783 |
Cost of revenues | ||||
Cost of Goods and Services Sold | 79,183 | 81,139 | 238,004 | 233,718 |
Income from operations | 9,261 | 10,957 | 24,543 | 24,041 |
Net income | 6,305 | 7,027 | 17,083 | 12,146 |
Services | ||||
Revenues | ||||
Revenues | 122,879 | 117,415 | 363,986 | 329,192 |
Cost of revenues | ||||
Cost of Goods and Services Sold | 79,183 | 75,971 | 238,004 | 214,858 |
Software and hardware | ||||
Revenues | ||||
Revenues | 1,054 | 6,323 | 2,686 | 22,591 |
Cost of revenues | ||||
Cost of Goods and Services Sold | 0 | $ 5,168 | 0 | $ 18,860 |
Impact of ASC Topic 606 Adoption | ASU 2014-09 | ||||
Revenues | ||||
Revenues | 3,665 | 16,050 | ||
Cost of revenues | ||||
Cost of Goods and Services Sold | 3,665 | 16,050 | ||
Income from operations | 0 | 0 | ||
Net income | 0 | 0 | ||
Impact of ASC Topic 606 Adoption | ASU 2014-09 | Services | ||||
Revenues | ||||
Revenues | 0 | 0 | ||
Cost of revenues | ||||
Cost of Goods and Services Sold | 0 | 0 | ||
Impact of ASC Topic 606 Adoption | ASU 2014-09 | Software and hardware | ||||
Revenues | ||||
Revenues | 3,665 | 16,050 | ||
Cost of revenues | ||||
Cost of Goods and Services Sold | 3,665 | 16,050 | ||
Without ASC Topic 606 Adoption | ASU 2014-09 | ||||
Revenues | ||||
Revenues | 127,598 | 382,722 | ||
Cost of revenues | ||||
Cost of Goods and Services Sold | 82,848 | 254,054 | ||
Income from operations | 9,261 | 24,543 | ||
Net income | 6,305 | 17,083 | ||
Without ASC Topic 606 Adoption | ASU 2014-09 | Services | ||||
Revenues | ||||
Revenues | 122,879 | 363,986 | ||
Cost of revenues | ||||
Cost of Goods and Services Sold | 79,183 | 238,004 | ||
Without ASC Topic 606 Adoption | ASU 2014-09 | Software and hardware | ||||
Revenues | ||||
Revenues | 4,719 | 18,736 | ||
Cost of revenues | ||||
Cost of Goods and Services Sold | $ 3,665 | $ 16,050 |
Revenue - Services Revenue (Det
Revenue - Services Revenue (Details) - Services | 9 Months Ended |
Sep. 30, 2018 | |
Minimum | |
Disaggregation of Revenue [Line Items] | |
Notice period to cancel or terminate contract | 10 days |
Maximum | |
Disaggregation of Revenue [Line Items] | |
Notice period to cancel or terminate contract | 30 days |
Revenue - Deferred Revenue (Det
Revenue - Deferred Revenue (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Change in Contract with Customer, Asset and Liability [Abstract] | ||
Deferred revenue balance | $ 4.7 | $ 3.3 |
ASU 2014-09 | ||
Change in Contract with Customer, Asset and Liability [Abstract] | ||
Deferred revenue balance | $ 6.1 | |
Impact of ASC Topic 606 Adoption | ASU 2014-09 | ||
Change in Contract with Customer, Asset and Liability [Abstract] | ||
Recognition of deferred revenue | $ 4.5 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue by Revenue Source and Pattern of Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 123,933 | $ 123,738 | $ 366,672 | $ 351,783 |
Transferred over Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 122,093 | 361,597 | ||
Transferred at Point in Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 1,840 | 5,075 | ||
Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 122,879 | 117,415 | 363,986 | 329,192 |
Services | Transferred over Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 122,093 | 361,597 | ||
Services | Transferred at Point in Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 786 | 2,389 | ||
Professional Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 118,483 | 350,368 | ||
Professional Services | Transferred over Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 118,483 | 350,368 | ||
Professional Services | Transferred at Point in Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | ||
Professional Services | Time and materials contracts | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 85,127 | 252,158 | ||
Professional Services | Time and materials contracts | Transferred over Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 85,127 | 252,158 | ||
Professional Services | Time and materials contracts | Transferred at Point in Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | ||
Professional Services | Fixed fee percent complete contracts | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 9,731 | 26,741 | ||
Professional Services | Fixed fee percent complete contracts | Transferred over Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 9,731 | 26,741 | ||
Professional Services | Fixed fee percent complete contracts | Transferred at Point in Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | ||
Professional Services | Fixed fee contracts | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 20,402 | 62,001 | ||
Professional Services | Fixed fee contracts | Transferred over Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 20,402 | 62,001 | ||
Professional Services | Fixed fee contracts | Transferred at Point in Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | ||
Professional Services | Reimbursable expenses | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 3,223 | 9,468 | ||
Professional Services | Reimbursable expenses | Transferred over Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 3,223 | 9,468 | ||
Professional Services | Reimbursable expenses | Transferred at Point in Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | ||
Other Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 4,396 | 13,618 | ||
Other Services | Transferred over Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 3,610 | 11,229 | ||
Other Services | Transferred at Point in Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 786 | 2,389 | ||
Software and hardware | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 1,054 | $ 6,323 | 2,686 | $ 22,591 |
Software and hardware | Transferred over Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | ||
Software and hardware | Transferred at Point in Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 1,054 | $ 2,686 |
Revenue - Disaggregation of R_2
Revenue - Disaggregation of Revenue by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 123,933 | $ 123,738 | $ 366,672 | $ 351,783 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 121,440 | 358,179 | ||
Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 800 | 2,910 | ||
Other countries | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 1,693 | $ 5,583 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Award Plans (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Stock-Based Compensation [Abstract] | ||||
Requisite service period | 3 years | |||
Stock-based compensation expense | $ 4.1 | $ 3.6 | $ 12.1 | $ 11 |
Stock-based compensation expense for retirement savings plan contributions | 0.7 | 0.6 | 2.1 | 1.9 |
Associated current and future income tax benefits recognized | 0.8 | $ 1.1 | 2.4 | $ 3.4 |
Total unrecognized compensation cost related to non-vested share-based awards | $ 17.1 | $ 17.1 | ||
Unrecognized compensation cost, weighted-average period for recognition | 2 years | |||
2012 Long Term Incentive Plan | ||||
Stock-Based Compensation [Abstract] | ||||
Maximum number of shares authorized under plan (in shares) | 7 | 7 | ||
Number of shares available for issuance under the Incentive Plan | 2.6 | 2.6 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Activity (Details) - 2012 Long Term Incentive Plan - Restricted stock subject to vesting shares in Thousands | 9 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Restricted stock awards outstanding at beginning of period (in shares) | shares | 1,436 |
Awards granted (in shares) | shares | 366 |
Awards vested (in shares) | shares | (334) |
Awards forfeited (in shares) | shares | (87) |
Restricted stock awards outstanding at end of period (in shares) | shares | 1,381 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Awards outstanding at beginning of period (in dollars per share) | $ / shares | $ 18.12 |
Awards granted (in dollars per share) | $ / shares | 22.08 |
Awards vested (in dollars per share) | $ / shares | 19.26 |
Awards forfeited (in dollars per share) | $ / shares | 17.45 |
Awards outstanding at end of period (in dollars per share) | $ / shares | $ 18.91 |
Net Income per Share - Basic an
Net Income per Share - Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Earnings Per Share [Abstract] | ||||
Net income | $ 6,305 | $ 7,027 | $ 17,083 | $ 12,146 |
Weighted Average Number of Shares Outstanding, Basic [Abstract] | ||||
Weighted-average shares of common stock outstanding | 32,648 | 32,673 | 32,724 | 32,997 |
Shares used in computing basic net income per share | 32,648 | 32,673 | 32,724 | 32,997 |
Incremental Weighted Average Shares Attributable to Dilutive Effect [Abstract] | ||||
Restricted stock subject to vesting | 733 | 459 | 665 | 450 |
Shares issuable for acquisition consideration (in shares) | 264 | 859 | 457 | 638 |
Shares used in computing diluted net income per share | 33,645 | 33,991 | 33,846 | 34,085 |
Basic net income per share (in dollars per share) | $ 0.19 | $ 0.22 | $ 0.52 | $ 0.37 |
Diluted net income per share (in dollars per share) | $ 0.19 | $ 0.21 | $ 0.50 | $ 0.36 |
Net Income per Share - Anti-dil
Net Income per Share - Anti-dilutive Securities (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities | 7,646 | 0 | 7,686 | 117 |
Restricted stock subject to vesting | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities | 0 | 0 | 40 | 117 |
Convertible senior notes | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities | 3,823 | 0 | 3,823 | 0 |
Warrants related to the issuance of convertible senior notes | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities | 3,823 | 0 | 3,823 | 0 |
Net Income per Share - Addition
Net Income per Share - Additional Information (Details) - USD ($) shares in Millions, $ in Millions | Aug. 15, 2018 | Feb. 20, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Earnings Per Share [Abstract] | ||||
Increase in authorized amount to be repurchased | $ 75 | $ 25 | ||
Stock Repurchase Program, Authorized Amount | $ 235 | $ 135 | ||
Cumulative amount repurchased | $ 186.8 | |||
Cumulative number of shares repurchased | 14.2 |
Balance Sheet Components - Acco
Balance Sheet Components - Accounts Receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Balance Sheet Related Disclosures [Abstract] | ||
Accounts receivable | $ 66,541 | $ 82,603 |
Unbilled revenues | 44,038 | 30,863 |
Allowance for doubtful accounts | (815) | (1,272) |
Total | $ 109,764 | $ 112,194 |
Balance Sheet Components - Prop
Balance Sheet Components - Property and Equipment) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Property and Equipment [Abstract] | ||
Less: Accumulated depreciation | $ (19,953) | $ (17,732) |
Property and equipment, net | 6,565 | 7,145 |
Computer Hardware | ||
Property and Equipment [Abstract] | ||
Property, Plant and Equipment, Gross | $ 13,832 | 13,110 |
Useful life | 3 years | |
Software and Software Development Costs | ||
Property and Equipment [Abstract] | ||
Property, Plant and Equipment, Gross | $ 5,042 | 5,159 |
Furniture And Fixtures | ||
Property and Equipment [Abstract] | ||
Property, Plant and Equipment, Gross | $ 4,472 | 3,772 |
Useful life | 5 years | |
Leasehold Improvements | ||
Property and Equipment [Abstract] | ||
Property, Plant and Equipment, Gross | $ 3,172 | $ 2,836 |
Useful life | 5 years | |
Minimum | Software and Software Development Costs | ||
Property and Equipment [Abstract] | ||
Useful life | 1 year | |
Maximum | Software and Software Development Costs | ||
Property and Equipment [Abstract] | ||
Useful life | 7 years |
Balance Sheet Components - Othe
Balance Sheet Components - Other Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Balance Sheet Related Disclosures [Abstract] | ||
Estimated fair value of contingent consideration liability | $ 15,356 | $ 8,148 |
Accrued variable compensation | 12,810 | 16,842 |
Deferred revenue | 4,733 | 3,278 |
Other current liabilities | 4,452 | 3,879 |
Payroll related costs | 3,378 | 2,971 |
Accrued medical claims expense | 2,072 | 2,133 |
Professional fees | 1,106 | 357 |
Accrued subcontractor fees | 265 | 469 |
Total | $ 44,172 | $ 38,077 |
Balance Sheet Components - Ot_2
Balance Sheet Components - Other Non-Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Balance Sheet Related Disclosures [Abstract] | ||
Deferred income taxes | $ 7,638 | $ 7,360 |
Other non-current liabilities | 7,742 | 4,667 |
Deferred compensation liability | 4,874 | 4,409 |
Total | $ 20,254 | $ 16,436 |
Business Combinations - RAS (De
Business Combinations - RAS (Details) - RAS - USD ($) $ in Millions | Jan. 03, 2017 | Sep. 30, 2018 |
Business Combinations [Abstract] | ||
Date of acquisition | Jan. 3, 2017 | |
Total purchase price | $ 10.4 | |
Cash paid for acquisition | 7.1 | |
Common stock issued | 2.1 | |
Net working capital settlement | (0.6) | |
Initial fair value estimate of additional earnings-based contingent consideration | $ 1.8 | |
Tax deductible amount of Goodwill | $ 3.7 |
Business Combinations - Clarity
Business Combinations - Clarity (Details) - Clarity Consultants - USD ($) $ in Millions | Jun. 22, 2017 | Sep. 30, 2018 |
Business Combinations [Abstract] | ||
Date of acquisition | Jun. 22, 2017 | |
Total purchase price | $ 41.7 | |
Cash paid for acquisition | 30.7 | |
Common stock issued | 7.3 | |
Net working capital settlement | (0.4) | |
Initial fair value estimate of additional earnings-based contingent consideration | $ 4.1 | |
Contingent consideration, maximum cash payout | $ 9.2 | |
Tax deductible amount of Goodwill | $ 22.1 |
Business Combinations - Southpo
Business Combinations - Southport (Details) - USD ($) $ in Thousands | Apr. 02, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 |
Business Combinations [Abstract] | ||||||
Period to realize additional earnings-based contingent consideration | 12 months | |||||
Adjustment to fair value of contingent consideration | $ 666 | $ (389) | $ 1,757 | $ (828) | ||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||||
Goodwill | 321,995 | 321,995 | $ 305,238 | |||
Southport Services Group, LLC | ||||||
Business Combinations [Abstract] | ||||||
Date of acquisition | Apr. 2, 2018 | |||||
Cash paid for acquisition | $ 11,300 | |||||
Common stock issued | 2,700 | |||||
Net working capital settlement | 300 | |||||
Initial fair value estimate of additional earnings-based contingent consideration | 4,300 | |||||
Contingent consideration, maximum cash payout | 6,600 | 6,600 | ||||
Current Contingent Consideration Liability | 5,000 | 5,000 | ||||
Adjustment to fair value of contingent consideration | 700 | 700 | ||||
Transaction costs | 800 | 800 | ||||
Common stock value attributed to future compensation | 300 | 300 | ||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||||
Acquired tangible assets | 4,200 | |||||
Identified intangible assets | 5,700 | |||||
Liabilities assumed | (1,800) | |||||
Goodwill | 10,500 | |||||
Total purchase price | $ 18,600 | |||||
Tax deductible amount of Goodwill | $ 7,100 | $ 7,100 |
Business Combinations - Stone T
Business Combinations - Stone Temple (Details) - USD ($) $ in Thousands | Jul. 16, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | |||
Period to realize additional earnings-based contingent consideration | 12 months | ||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||
Goodwill | $ 321,995 | $ 305,238 | |
Stone Temple Consulting Corporation | |||
Business Acquisition [Line Items] | |||
Date of acquisition | Jul. 16, 2018 | ||
Cash paid for acquisition | $ 9,900 | ||
Common stock issued | 1,200 | ||
Net working capital settlement | 100 | ||
Initial fair value estimate of additional earnings-based contingent consideration | 1,200 | ||
Contingent consideration, maximum cash payout | 2,600 | ||
Transaction costs | 500 | ||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||
Acquired tangible assets | 2,500 | ||
Identified intangible assets | 4,600 | ||
Liabilities assumed | (1,500) | ||
Goodwill | 6,800 | ||
Total purchase price | $ 12,400 | ||
Tax deductible amount of Goodwill | $ 5,400 |
Business Combinations - Intangi
Business Combinations - Intangible Assets Acquired (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Finite-Lived Intangible Assets, Gross [Abstract] | |
Aggregate Acquisitions | $ 10.3 |
Customer relationships | |
Finite-Lived Intangible Assets, Gross [Abstract] | |
Weighted Average Useful Life | 5 years |
Aggregate Acquisitions | $ 8.2 |
Customer backlog | |
Finite-Lived Intangible Assets, Gross [Abstract] | |
Weighted Average Useful Life | 1 year |
Aggregate Acquisitions | $ 1.4 |
Non-compete agreements | |
Finite-Lived Intangible Assets, Gross [Abstract] | |
Weighted Average Useful Life | 5 years |
Estimated Useful Life | 5 years |
Aggregate Acquisitions | $ 0.2 |
Trade name | |
Finite-Lived Intangible Assets, Gross [Abstract] | |
Weighted Average Useful Life | 1 year |
Estimated Useful Life | 1 year |
Aggregate Acquisitions | $ 0.1 |
Internally developed software | |
Finite-Lived Intangible Assets, Gross [Abstract] | |
Weighted Average Useful Life | 3 years |
Estimated Useful Life | 3 years |
Aggregate Acquisitions | $ 0.4 |
Minimum | Customer relationships | |
Finite-Lived Intangible Assets, Gross [Abstract] | |
Estimated Useful Life | 5 years |
Minimum | Customer backlog | |
Finite-Lived Intangible Assets, Gross [Abstract] | |
Estimated Useful Life | 1 year |
Maximum | Customer relationships | |
Finite-Lived Intangible Assets, Gross [Abstract] | |
Estimated Useful Life | 6 years |
Maximum | Customer backlog | |
Finite-Lived Intangible Assets, Gross [Abstract] | |
Estimated Useful Life | 1 year 6 months |
Business Combinations - Acquisi
Business Combinations - Acquisition Results (Details) - Southport and Stone Temple $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Business Acquisition [Line Items] | |
Revenues | $ 10,774 |
Net income | $ 777 |
Business Combinations - Pro For
Business Combinations - Pro Forma Results of Operations (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Business Acquisition, Pro Forma Information [Abstract] | ||
Revenues | $ 376,695 | $ 385,639 |
Net income | $ 20,846 | $ 12,845 |
Basic net income per share | $ 0.63 | $ 0.38 |
Diluted net income per share | $ 0.61 | $ 0.37 |
Shares used in computing basic net income per share | 33,054 | 33,505 |
Shares used in computing diluted net income per share | 33,931 | 34,582 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Balance at beginning of period | $ 305,238 |
Preliminary purchase price allocations for acquisitions | 17,267 |
Effect of foreign currency translation adjustments | (510) |
Balance at end of period | $ 321,995 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amounts | $ 95,212 | $ 90,038 |
Accumulated Amortization | (45,391) | (38,972) |
Net Carrying Amounts | 49,821 | 51,066 |
Customer relationships | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amounts | 80,176 | 75,407 |
Accumulated Amortization | (37,781) | (32,307) |
Net Carrying Amounts | 42,395 | 43,100 |
Non-compete agreements | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amounts | 1,626 | 1,556 |
Accumulated Amortization | (789) | (707) |
Net Carrying Amounts | 837 | 849 |
Customer backlog | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amounts | 1,400 | 1,650 |
Accumulated Amortization | (443) | (866) |
Net Carrying Amounts | 957 | 784 |
Trade name | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amounts | 110 | 100 |
Accumulated Amortization | (43) | (53) |
Net Carrying Amounts | 67 | 47 |
Internally developed software | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amounts | 11,900 | 11,325 |
Accumulated Amortization | (6,335) | (5,039) |
Net Carrying Amounts | $ 5,565 | $ 6,286 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Estimated Useful Lives (Details) | 9 Months Ended |
Sep. 30, 2018 | |
Customer relationships | Minimum | |
Intangible Assets [Abstract] | |
Estimated useful lives | 5 years |
Customer relationships | Maximum | |
Intangible Assets [Abstract] | |
Estimated useful lives | 10 years |
Non-compete agreements | Minimum | |
Intangible Assets [Abstract] | |
Estimated useful lives | 2 years |
Non-compete agreements | Maximum | |
Intangible Assets [Abstract] | |
Estimated useful lives | 5 years |
Customer backlog | Minimum | |
Intangible Assets [Abstract] | |
Estimated useful lives | 1 year |
Customer backlog | Maximum | |
Intangible Assets [Abstract] | |
Estimated useful lives | 1 year 6 months |
Trade name | |
Intangible Assets [Abstract] | |
Estimated useful lives | 1 year |
Internally developed software | Minimum | |
Intangible Assets [Abstract] | |
Estimated useful lives | 2 years |
Internally developed software | Maximum | |
Intangible Assets [Abstract] | |
Estimated useful lives | 7 years |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Estimated Amortization Expense (Details) $ in Thousands | Sep. 30, 2018USD ($) |
Estimated Amortization Expense [Abstract] | |
2018 remaining | $ 4,054 |
2,019 | 14,767 |
2,020 | 11,021 |
2,021 | 8,813 |
2,022 | 7,404 |
Thereafter | $ 3,762 |
Long-term Debt - Revolving Cred
Long-term Debt - Revolving Credit Facility (Details) | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Line of Credit [Abstract] | |
Leverage Ratio | 3 |
Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | Minimum | |
Line of Credit [Abstract] | |
Margin interest rate percentage | 1.00% |
Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | Maximum | |
Line of Credit [Abstract] | |
Margin interest rate percentage | 1.75% |
Revolving Credit Facility | Credit Agreement | |
Line of Credit [Abstract] | |
Maximum borrowing capacity | $ 125,000,000 |
Additional commitment increase | $ 75,000,000 |
Maturity date | Jun. 9, 2022 |
Allowable amount of letters of credit for issuance | $ 10,000,000 |
Letters of Credit Outstanding, Amount | 200,000 |
Available borrowing capacity | $ 124,800,000 |
EBITDA Ratio | 3 |
Leverage Ratio needed for payment of dividends | 2 |
Revolving Credit Facility | Credit Agreement | Minimum | |
Line of Credit [Abstract] | |
Annual commitment fee percentage on unused capacity | 0.15% |
Revolving Credit Facility | Credit Agreement | Maximum | |
Line of Credit [Abstract] | |
Annual commitment fee percentage on unused capacity | 0.20% |
Revolving Credit Facility | Credit Agreement | Prime Rate | |
Line of Credit [Abstract] | |
Interest rate at end of period | 5.25% |
Revolving Credit Facility | Credit Agreement | Prime Rate | Minimum | |
Line of Credit [Abstract] | |
Margin interest rate percentage | 0.00% |
Revolving Credit Facility | Credit Agreement | Prime Rate | Maximum | |
Line of Credit [Abstract] | |
Margin interest rate percentage | 0.50% |
Revolving Credit Facility | Credit Agreement | London Interbank Offered Rate (LIBOR) | |
Line of Credit [Abstract] | |
Interest rate at end of period | 2.26% |
Term of variable rate | 1 month |
Long-term Debt - Convertible Se
Long-term Debt - Convertible Senior Notes (Additional Notes) (Details) $ / shares in Units, $ in Thousands, shares in Millions | Sep. 11, 2018USD ($)$ / sharesshares | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 28, 2018$ / shares |
Debt Instrument [Line Items] | ||||
Proceeds from issuance of convertible notes | $ 143,750 | $ 0 | ||
Maturity date | Sep. 15, 2023 | |||
Closing price of common stock (in dollars per share) | $ / shares | $ 26.65 | |||
Convertible Senior Notes Due 2023 | ||||
Debt Instrument [Line Items] | ||||
Net proceeds to repurchase common stock | $ 38,800 | |||
Purchases of treasury stock and buyback of shares for taxes (in shares) | shares | (1.3) | |||
Cost of hedging transactions | $ 8,600 | |||
Convertible Debt | Convertible Senior Notes Due 2023 | ||||
Debt Instrument [Line Items] | ||||
Interest rate stated, percentage | 2.375% | |||
Aggregated principal amount | $ 143,800 | |||
Initial purchasers' discount and issuance costs | (4,400) | |||
Proceeds from debt, net of issuance costs | $ 139,400 | |||
Shares conversion rate | 26.5957 | |||
Initial conversion price (in dollars per share) | $ / shares | $ 37.60 | |||
Initial liability component of note | $ 122,900 | |||
Debt borrowing rate, percentage | 5.70% | |||
Debt discount for conversion option | $ 20,900 | |||
Deferred Tax Liability, Convertible Debt | 5,400 | |||
Unamortized debt issuance costs | (3,996) | |||
Debt Issuance Costs, Gross | 4,700 | |||
Deferred finance cost, attributable liability component | 4,000 | |||
Deferred finance costs, equity component | 700 | |||
Deferred tax asset, convertible debt equity component | $ 200 | |||
Remaining discount weighted-average remaining period (years) | 5 years | |||
Revolving Credit Facility | Convertible Senior Notes Due 2023 | ||||
Debt Instrument [Line Items] | ||||
Net proceeds to pay down revolving credit facility | $ 49,000 |
Long-term Debt - Liability and
Long-term Debt - Liability and Equity Component of Note (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | ||
Net carrying amount | $ 119,038 | $ 55,000 |
Debt discount for conversion option, net of taxes | 15,547 | |
Less: Issuance costs, net of taxes | (511) | |
Net carrying amount | 15,036 | |
Convertible Debt | Convertible Senior Notes Due 2023 | ||
Debt Instrument [Line Items] | ||
Principal | 143,750 | |
Less: Unamortized debt discount | (20,716) | |
Unamortized debt issuance costs | (3,996) | |
Net carrying amount | $ 119,038 |
Long-term Debt - Interest Expen
Long-term Debt - Interest Expense on Note (Details) - Senior notes - Convertible Senior Notes Due 2023 - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018 | Sep. 30, 2018 | |
Debt Instrument [Line Items] | ||
Coupon interest | $ 190 | $ 190 |
Amortization of debt discount | 200 | 200 |
Amortization of debt issuance costs | 45 | 45 |
Total interest expense recognized | $ 435 | $ 435 |
Long-term Debt - Convertible No
Long-term Debt - Convertible Note Hedges and Warrants (Details) $ / shares in Units, $ in Thousands, shares in Millions | 9 Months Ended |
Sep. 30, 2018USD ($)$ / sharesshares | |
Debt Instrument [Line Items] | |
Expiration Period for Notes Warrants in Trading Days | 100 days |
Proceeds from issuance of warrants on convertible notes | $ 12,060 |
Convertible Note Hedges | Convertible Senior Notes Due 2023 | |
Debt Instrument [Line Items] | |
Conversion option to acquire shares (in shares) | shares | 3.8 |
Strike price (in dollars per share) | $ / shares | $ 37.60 |
Cost of purchase of hedges on convertible notes | $ 20,700 |
Deferred tax amount | 5,300 |
Convertible Debt | Convertible Senior Notes Due 2023 | |
Debt Instrument [Line Items] | |
Debt discount for conversion option | $ 20,900 |
Warrants related to the issuance of convertible senior notes | Convertible Senior Notes Due 2023 | |
Debt Instrument [Line Items] | |
Warrant exercise price (in dollars per share) | $ / shares | $ 46.62 |
Warrants related to the issuance of convertible senior notes | Convertible Debt | |
Debt Instrument [Line Items] | |
Proceeds from issuance of warrants on convertible notes | $ 12,100 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Taxes [Abstract] | |||||
Unrecognized tax benefits | $ 3,400 | $ 3,400 | |||
Unrecognized Tax Benefits, Interest on Income Taxes Accrued | $ 300 | $ 300 | |||
Effective tax rate | 25.30% | 33.30% | 25.00% | 46.40% | |
Deferred income taxes | $ 7,638 | $ 7,360 | $ 7,638 | ||
Taxes on foreign earnings repatriated | $ 2,500 | ||||
Reversal of taxes on foreign earnings repatriated due to 2017 Tax Act | $ (1,600) | ||||
Unremitted earnings of foreign subsidiaries | 8,700 | 8,700 | |||
Unrecognized deferred tax liability on unremitted earnings of foreign subsidiaries | 500 | 500 | |||
Internal Revenue Service (IRS) | Tax Years 2011, 2012 and 2013 | |||||
Income Taxes [Abstract] | |||||
Disallowed research tax credits being litigated | $ 2,500 | 2,500 | |||
Internal Revenue Service (IRS) | Tax Years 2011 to Date | |||||
Income Taxes [Abstract] | |||||
Income Tax Credits and Adjustments | $ 10,000 |
Derivatives - Gains (Losses) on
Derivatives - Gains (Losses) on Derivatives, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Foreign Exchange Forward | Net Other Income (Expense) and Net Interest Expense | Not Designated as Hedging Instrument | ||||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | ||||
Recognized gain (loss) on derivative | $ (0.1) | $ 0 | $ (0.1) | $ 0.1 |
Derivatives - Notional Amounts
Derivatives - Notional Amounts (Details) - Not Designated as Hedging Instrument - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Notional Disclosures [Abstract] | ||
Derivative, Notional Amount | $ 2,984 | $ 3,979 |
Foreign Exchange Forward | ||
Notional Disclosures [Abstract] | ||
Derivative, Notional Amount | $ 2,984 | $ 3,979 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) $ in Millions | Sep. 30, 2018USD ($) |
Level 2 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Note, debt instrument | $ 136 |
Money Market Funds | Level 1 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Cash and cash equivalents | $ 37 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||||
2018 remaining | $ 1,766 | $ 1,766 | ||
2,019 | 7,059 | 7,059 | ||
2,020 | 6,608 | 6,608 | ||
2,021 | 5,122 | 5,122 | ||
2,022 | 3,288 | 3,288 | ||
2,023 | 3,609 | 3,609 | ||
Total minimum lease payments | 27,452 | 27,452 | ||
Rent expense | $ 2,100 | $ 2,100 | $ 6,200 | $ 6,000 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - Elixiter $ in Millions | Oct. 29, 2018USD ($)shares |
Business Combinations [Abstract] | |
Date of acquisition | Oct. 29, 2018 |
Cash paid for acquisition | $ 6.3 |
Common stock issued | shares | 64,846 |
Contingent consideration, maximum cash payout | $ 1.8 |