Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 10, 2017 | Jun. 30, 2016 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | SPSC | ||
Entity Registrant Name | SPS COMMERCE INC | ||
Entity Central Index Key | 1,092,699 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 17,180,650 | ||
Entity Public Float | $ 1 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 115,877 | $ 121,538 |
Short-term marketable securities | 23,076 | 7,517 |
Accounts receivable, net | 20,746 | 17,615 |
Deferred costs | 19,224 | 15,086 |
Other current assets | 7,010 | 5,030 |
Total current assets | 185,933 | 166,786 |
PROPERTY AND EQUIPMENT, net | 15,314 | 13,620 |
GOODWILL | 49,777 | 33,848 |
INTANGIBLE ASSETS, net | 19,788 | 15,081 |
MARKETABLE SECURITIES, non-current | 7,494 | 14,950 |
OTHER ASSETS | ||
Deferred costs, non-current | 6,086 | 5,260 |
Deferred income taxes, non-current | 12,446 | 11,149 |
Other non-current assets | 1,527 | 1,037 |
Total assets | 298,365 | 261,731 |
CURRENT LIABILITIES | ||
Accounts payable | 2,302 | 2,163 |
Accrued compensation | 13,740 | 11,150 |
Accrued expenses | 3,508 | 1,987 |
Deferred revenue | 11,055 | 7,740 |
Deferred rent | 1,556 | 1,194 |
Total current liabilities | 32,161 | 24,234 |
OTHER LIABILITIES | ||
Deferred revenue, non-current | 10,847 | 11,005 |
Deferred rent, non-current | 4,179 | 4,307 |
Deferred income tax liability | 1,911 | |
Total liabilities | 49,098 | 39,546 |
COMMITMENTS and CONTINGENCIES | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock, $0.001 par value; 5,000,000 shares authorized; 0 shares issued and outstanding | ||
Common stock, $0.001 par value; 55,000,000 shares authorized; 17,081,145 and 16,723,994 shares issued and outstanding, respectively | 17 | 17 |
Additional paid-in capital | 286,315 | 265,265 |
Accumulated deficit | (33,739) | (39,449) |
Accumulated other comprehensive loss | (3,326) | (3,648) |
Total stockholders' equity | 249,267 | 222,185 |
Total liabilities and stockholders' equity | $ 298,365 | $ 261,731 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 55,000,000 | 55,000,000 |
Common stock, shares issued | 17,081,145 | 16,723,994 |
Common stock, shares outstanding | 17,081,145 | 16,723,994 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | |||
Revenues | $ 193,295 | $ 158,518 | $ 127,947 |
Cost of revenues | 64,346 | 50,043 | 39,991 |
Gross profit | 128,949 | 108,475 | 87,956 |
Operating expenses | |||
Sales and marketing | 65,886 | 55,374 | 46,990 |
Research and development | 21,981 | 17,954 | 13,494 |
General and administrative | 28,827 | 24,817 | 20,233 |
Amortization of intangible assets | 4,738 | 3,307 | 2,856 |
Total operating expenses | 121,432 | 101,452 | 83,573 |
Income from operations | 7,517 | 7,023 | 4,383 |
Other income (expense) | |||
Interest income, net | 601 | 197 | 187 |
Other income (expense), net | 732 | (145) | (458) |
Total other income (expense), net | 1,333 | 52 | (271) |
Income before income taxes | 8,850 | 7,075 | 4,112 |
Income tax expense | (3,140) | (2,436) | (1,408) |
Net income | $ 5,710 | $ 4,639 | $ 2,704 |
Net income per share | |||
Basic | $ 0.34 | $ 0.28 | $ 0.17 |
Diluted | $ 0.33 | $ 0.27 | $ 0.16 |
Weighted average common shares used to compute net income per share | |||
Basic | 16,947 | 16,565 | 16,236 |
Diluted | 17,241 | 17,032 | 16,814 |
Other comprehensive income (loss) | |||
Foreign currency translation adjustments | $ 336 | $ (2,119) | $ (1,470) |
Unrealized loss on investments (net of tax of $5, $31, and $0) | (9) | (59) | |
Comprehensive income | $ 6,037 | $ 2,461 | $ 1,234 |
Consolidated Statements of Com5
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | |||
Tax on net unrealized gains on investment securities available for sale | $ 5 | $ 31 | $ 0 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Loss [Member] |
Beginning balance at Dec. 31, 2013 | $ 192,773 | $ 16 | $ 239,549 | $ (46,792) | |
Beginning balance, shares at Dec. 31, 2013 | 16,092,121 | ||||
Stock-based compensation | 5,396 | 5,396 | |||
Exercise of stock options and issuance of restricted stock | 1,886 | 1,886 | |||
Exercise of stock options and issuance of restricted stock, shares | 186,678 | ||||
Excess tax benefit of stock options exercised | 261 | 261 | |||
Employee stock purchase plan | 1,338 | 1,338 | |||
Employee stock purchase plan, shares | 26,353 | ||||
Stock issued for acquisition | 2,203 | 2,203 | |||
Stock issued for acquisition, Shares | 43,595 | ||||
Net income | 2,704 | 2,704 | |||
Foreign currency translation adjustments | (1,470) | $ (1,470) | |||
Ending balance at Dec. 31, 2014 | 205,091 | $ 16 | 250,633 | (44,088) | (1,470) |
Ending balance, shares at Dec. 31, 2014 | 16,348,747 | ||||
Stock-based compensation | 6,379 | 6,379 | |||
Exercise of stock options and issuance of restricted stock | 4,440 | $ 1 | 4,439 | ||
Exercise of stock options and issuance of restricted stock, shares | 346,885 | ||||
Excess tax benefit of stock options exercised | 2,336 | 2,336 | |||
Employee stock purchase plan | 1,478 | 1,478 | |||
Employee stock purchase plan, shares | 28,362 | ||||
Net income | 4,639 | 4,639 | |||
Foreign currency translation adjustments | (2,119) | (2,119) | |||
Unrealized loss on investments | (59) | (59) | |||
Ending balance at Dec. 31, 2015 | 222,185 | $ 17 | 265,265 | (39,449) | (3,648) |
Ending balance, shares at Dec. 31, 2015 | 16,723,994 | ||||
Stock-based compensation | 8,023 | 8,023 | |||
Exercise of stock options and issuance of restricted stock | 4,303 | 4,303 | |||
Exercise of stock options and issuance of restricted stock, shares | 279,841 | ||||
Excess tax benefit of stock options exercised | 4,070 | 4,070 | |||
Employee stock purchase plan | 1,732 | 1,732 | |||
Employee stock purchase plan, shares | 33,357 | ||||
Stock issued for acquisition | 2,922 | 2,922 | |||
Stock issued for acquisition, Shares | 43,953 | ||||
Net income | 5,710 | 5,710 | |||
Reclassification of losses on investments into earnings | 18 | 18 | |||
Foreign currency translation adjustments | 336 | 336 | |||
Unrealized loss on investments | (32) | (32) | |||
Ending balance at Dec. 31, 2016 | $ 249,267 | $ 17 | $ 286,315 | $ (33,739) | $ (3,326) |
Ending balance, shares at Dec. 31, 2016 | 17,081,145 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities | |||
Net income | $ 5,710 | $ 4,639 | $ 2,704 |
Reconciliation of net income to net cash provided by operating activities | |||
Deferred income taxes | (1,698) | (38) | 1,031 |
Share-based earn-out liability | (1,103) | ||
Depreciation and amortization of property and equipment | 6,598 | 6,265 | 5,714 |
Amortization of intangible assets | 4,738 | 3,307 | 2,856 |
Provision for doubtful accounts | 1,375 | 1,271 | 717 |
Stock-based compensation | 8,023 | 6,379 | 5,396 |
Changes in assets and liabilities, net of effects of acquisitions | |||
Accounts receivable | (3,735) | (3,517) | (3,890) |
Deferred costs | (4,964) | (3,023) | (4,590) |
Other current assets and non-current assets | (1,911) | (2,037) | (719) |
Accounts payable | (382) | (1,569) | 1,271 |
Accrued compensation | 2,180 | 1,295 | 1,568 |
Accrued expenses | 990 | (461) | 1,365 |
Deferred revenue | 2,710 | 587 | 2,440 |
Deferred rent | 234 | 1,331 | 925 |
Net cash provided by operating activities | 18,765 | 14,429 | 16,788 |
Cash flows from investing activities | |||
Purchases of property and equipment | (8,008) | (8,757) | (7,582) |
Purchases of marketable securities | (23,135) | (22,527) | |
Maturities of marketable securities | 15,018 | ||
Business acquistions, net of cash acquired | (18,032) | (12,595) | |
Net cash used in investing activities | (34,157) | (31,284) | (20,177) |
Cash flows from financing activities | |||
Net proceeds from exercise of options to purchase common stock | 4,303 | 4,440 | 1,886 |
Excess tax benefit from exercise of options to purchase common stock | 4,070 | 2,336 | 261 |
Net proceeds from employee stock purchase plan | 1,732 | 1,478 | 1,338 |
Net cash provided by financing activities | 10,105 | 8,254 | 3,485 |
Effect of foreign currency exchange rate changes | (374) | (656) | (595) |
Net increase (decrease) in cash and cash equivalents | (5,661) | (9,257) | (499) |
Cash and cash equivalents at beginning of period | 121,538 | 130,795 | 131,294 |
Cash and cash equivalents at end of period | 115,877 | 121,538 | 130,795 |
Supplemental disclosure of cash flow information | |||
Cash paid for income taxes, net | 722 | $ 114 | 113 |
Non-cash financing activities: | |||
Common stock issued for business acquisitions | $ 2,922 | $ 2,203 |
General
General | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General | NOTE A – General Business Description We are a leading provider of cloud-based supply chain management solutions, providing network-proven fulfillment, sourcing and item assortment management solutions, along with comprehensive retail performance analytics, to thousands of customers worldwide. We provide our solutions through the SPS Commerce platform, a cloud-based product suite that improves the way suppliers, retailers, distributors and logistics firms orchestrate the sourcing, set up of new vendors and items, and fulfillment of the products that customers buy from retailers and suppliers. We derive the majority of our revenues from thousands of monthly recurring subscriptions from businesses that utilize our solutions. Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of SPS Commerce, Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated in the consolidated financial statements. Foreign Currency Translation Assets and liabilities denominated in currencies other than the U.S. dollar are translated into U.S. dollars at the exchange rates in effect at the balance sheet date, with the resulting translation adjustments recorded as a separate component of accumulated other comprehensive loss. Income and expense accounts are translated at the average exchange rates during the year. Foreign currency transaction gains and losses, if any, are included in net income. Use of Estimates Preparing financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Business Combinations We recognize separately from goodwill the fair value of the assets acquired and the liabilities assumed at the acquisition date. Goodwill as of the acquisition date is measured as the excess of consideration transferred and the net of the acquisition date amounts of the assets acquired and the liabilities assumed. Assets acquired include tangible and intangible assets. We use estimates and assumptions that we believe are reasonable as a part of determining the value and useful lives of purchased intangible assets and the purchase price allocation process. While we believe these estimates and assumptions are reasonable, they are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the fair value of the assets acquired and the liabilities assumed. Any such adjustments would be recorded as an offset to goodwill. Upon the conclusion of the measurement period or final determination of the fair values, whichever comes first, any subsequent adjustments would be recorded in our consolidated statements of comprehensive income. Segment Information We operate in and report on one segment, which is supply chain management solutions . Risk and Uncertainties We rely on hardware and software licensed from third parties to offer our on-demand Concentration of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist principally of temporary cash and cash equivalents in financial institutions in excess of federally insured limits and trade accounts receivable. Temporary cash investments are held with financial institutions that we believe are subject to minimal risk. Cash and Cash Equivalents Cash and cash equivalents consist of cash and highly liquid investments with original maturities of less than 90 days. Cash and cash equivalents are stated at fair value. Marketable Securities Management determines the appropriate classification of marketable securities at the time of purchase and reevaluates such determination at each balance sheet date. Securities are classified as available for sale and are carried at fair value, with the change in unrealized gains and losses, net of tax, reported as a separate component on the consolidated statements of comprehensive income. Fair value is determined based on quoted market rates when observable or utilizing data points that are observable, such as quoted prices, interest rates and yield curves. When a determination has been made that an other-than-temporary decline in fair value has occurred, the amount of the decline that is related to a credit loss is realized and is included in other income (expense), net in the consolidated statements of comprehensive income. Fair Value of Financial Instruments The carrying amounts of our financial instruments, which include cash, cash equivalents, accounts receivable, accounts payable and other accrued expenses, approximates fair value due to their short maturities. Marketable securities are recorded at fair value as further described in Note C. Accounts Receivable Accounts receivable are initially recorded upon the sale of solutions to customers. Credit is granted in the normal course of business without collateral. Accounts receivable are stated net of allowances for doubtful accounts, which represent estimated losses resulting from the inability of certain customers to make the required payments. When determining the allowances for doubtful accounts, we take several factors into consideration including the overall composition of the accounts receivable aging, our prior history of accounts receivable write-offs, the type of customers and our experience with specific customers. We write off accounts receivable when they are determined to be uncollectible. Changes in the allowances for doubtful accounts are recorded as bad debt expense and are included in general and administrative expense in our consolidated statements of comprehensive income. Property and Equipment Property and equipment, including assets acquired under capital lease obligations, are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives when placed in service, which are: Computer equipment and software: 2 to 3 years Office equipment and furniture: 5 to 7 years Leasehold improvements: the shorter of the useful life of the asset or the remaining term of the lease Significant additions or improvements extending asset lives beyond one year are capitalized, while repairs and maintenance are charged to expense as incurred. We also capitalize and amortize eligible costs to acquire or develop internal-use Research and Development Research and development costs primarily include maintenance and data conversion activities related to our cloud-based supply chain management solutions and are expensed as incurred. Goodwill Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations. We test goodwill for impairment annually at November 30, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test is conducted by comparing the fair value of the net assets with the carrying value of the reporting unit. Fair value is determined using the direct market observation of market price and outstanding equity of the reporting unit at the testing date. If the carrying value of the goodwill exceeds the fair value of the reporting unit, goodwill may be impaired. If this occurs, the fair value is then allocated to its assets and liabilities in a manner similar to a purchase price allocation in order to determine the implied fair value of goodwill. This implied fair value is then compared to the carrying amount of goodwill and, if it is less, we would recognize an impairment loss. During 2016, we changed our annual impairment testing date from December 31 to November 30. This voluntary change in accounting principle, applied prospectively, is preferable as it allows more timely completion of our annual impairment test and does not delay, accelerate, or avoid an impairment charge. Intangible Assets Assets acquired in business combinations may include identifiable intangible assets such as subscriber relationships and non-competition The purchased intangible assets are being amortized on a straight-line basis over their estimated useful lives, which are three to nine years for subscriber relationships, two to five years for non-competition Impairment of Long-Lived Assets We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The carrying amount of a long-lived asset is not recoverable if the carrying amount of an asset group exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the assets at the date it is tested for recoverability, whether in use or under development. An impairment loss is measured as the amount by which the carrying amount of a long-lived asset exceeds its fair value. Revenue Recognition We generate revenues by providing a number of solutions to our customers. These solutions include Trading Partner Fulfillment, Trading Partner Enablement and Trading Partner Analytics. Our cloud-based solutions allow customers to meet their supply chain management requirements. Sales taxes are presented on a net basis within revenue. Revenues are recognized when all of the following criteria are met: (1) persuasive evidence of an arrangement exists, (2) delivery has occurred, (3) the fee is fixed or determinable, and (4) collectability is probable. If collection is not considered probable, revenues are recognized when the fees are collected. Fees related to our Trading Partner Fulfillment and Trading Partner Analytics solutions consist of two revenue sources: set-up Set-up Set-up set-up set-up Set-up set-up Stock-Based Compensation We recognize the cost of all share-based payments to employees, including grants of employee stock options, in the financial statements based on the grant date fair value of those awards. This cost is recognized over the period for which an employee is required to provide service in exchange for the award. Benefits associated with tax deductions in excess of recognized compensation expense are reported as a cash flow from financing activities. We estimate the fair value of options granted using the Black-Scholes option pricing model. The estimation of stock awards that will ultimately vest requires judgment, and to the extent actual results differ from our estimates, such amounts will be recorded as an adjustment in the period estimates are revised. In valuing share-based awards, judgment is required in determining the expected volatility of common stock and the expected term individuals will hold their share-based awards prior to exercising. The expected volatility of the options is based on the historical volatility of our common stock. The expected term of the options is based on the simplified method which does not consider historical employee exercise behavior. Advertising Costs Advertising costs are charged to expense as incurred. Advertising costs were approximately $61,000, $47,000, and $23,000 for the years ended December 31, 2016, 2015 and 2014, respectively. Advertising costs are included in sales and marketing expenses in our consolidated statements of comprehensive income. Income Taxes We account for income taxes using the liability method, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance when it is not “more likely than not” that the deferred tax asset will be utilized. We assess our ability to realize our deferred tax assets at the end of each reporting period. Realization of our deferred tax assets is contingent upon future taxable earnings. Accordingly, this assessment requires significant estimates and judgment. If the estimates of future taxable income vary from actual results, our assessment regarding the realization of these deferred tax assets could change. Future changes in the estimated amount of deferred taxes expected to be realized will be reflected in our consolidated financial statements in the period the estimate is changed, with a corresponding adjustment to our operating results. We recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would “more likely than not” sustain the position following an audit. For tax positions meeting the “more likely than not” threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. Net Income Per Share Basic net income per share has been computed using the weighted average number of shares of common stock outstanding during each period. Diluted net income per share also includes the impact of our outstanding potential common shares, including options, restricted stock units and restricted stock awards. Potential common shares that are anti-dilutive are excluded from the calculation of diluted net income per share. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, set-up In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes non-current non-current non-current In February 2016, the FASB issued ASU 2016-02, Leases non-current non-current In March 2016, the FASB issued ASU 2016-09, 2016-09 |
Business Acquisitions
Business Acquisitions | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Business Acquisitions | NOTE B – Business Acquisitions Toolbox Solutions, Inc. On January 5, 2016, we completed our acquisition of all of the outstanding common shares of Toolbox Solutions, Inc. (“Toolbox Solutions”), a privately held company providing point-of-sale Purchase Price Allocation We accounted for the acquisition as a business combination. We allocated the purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. We engaged a third-party valuation firm to assist us in the determination of the value of the purchased intangible assets. The excess of the purchase price over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill. Goodwill is attributed to a trained workforce and other buyer-specific value resulting from expected synergies, including long-term cost savings, which are not included in the fair values of identifiable assets. The purchase price consisted of the following (in thousands): Cash $ 18,032 SPS Commerce, Inc. common stock 2,922 Fair value of share-based earn-out 1,043 $ 21,997 The final purchase price was subject to a net working capital adjustment to be determined by us and the sellers, pursuant to the terms of the purchase agreement. The number of shares of our common stock issued for the acquisition was a net of 43,953 shares, which consisted of 48,668 shares issued at closing, as calculated according to the terms of the purchase agreement, less 4,715 shares that were returned to us from escrow in the fourth quarter of 2016. The following table summarizes the estimated fair values of the assets acquired, net of cash acquired of $359,000, and liabilities assumed at the acquisition date (in thousands): Current assets $ 1,253 Property and equipment 56 Goodwill 15,389 Intangible assets 9,070 Current liabilities (1,249 ) Deferred revenue (301 ) Deferred income tax liability (2,221 ) $ 21,997 Purchased Intangible Assets The following table summarizes the estimated fair value of the purchased intangible assets and their estimated useful lives: Purchased Intangible Assets Estimated Estimated Subscriber relationships $ 7,400 8 Developed technology 1,200 4 Trade names 70 1 Non-competition 400 5 Total $ 9,070 The purchased intangible assets are being amortized on a straight-line basis over their estimated useful lives. Amortization expense for the period from January 5, 2016 through December 31, 2016 was $1.4 million. Acquisition-Related Costs and Post-Acquisition Operating Results Acquisition-related costs were $147,000 and are included in our consolidated statement of comprehensive income for the year ended December 31, 2016. The operating results of Toolbox Solutions have been included in our consolidated financial statements from January 5, 2016, the closing date of the acquisition. For the period from January 5, 2016 through December 31, 2016, approximately $7.9 million of our revenues were derived from Toolbox Solutions’ products and services. The amount of operating income or loss from Toolbox Solutions was not separately identifiable due to our integration. Unaudited Pro Forma Financial Information The unaudited pro forma financial information in the table below presents the combined operating results of SPS Commerce and Toolbox Solutions as if the acquisition had occurred on January 1, 2015. The unaudited pro forma information includes the historical operating results of each company and pro forma adjustments for the approximately $1.4 million of annual amortization expense related to purchased intangible assets and the additional impact on the provision or benefit for income taxes, resulting from the combined income and intangible amortization expense, using our statutory blended income tax rate of 26.5%. Year Ended December 31, (in thousands, except per share data) 2016 2015 Pro forma total revenue $ 193,525 $ 166,873 Pro forma net income 5,976 2,400 Pro forma net income per share Basic 0.35 0.14 Diluted 0.35 0.14 The unaudited pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that would have actually been reported had the acquisition occurred on January 1, 2015, nor is it necessarily indicative of our results of operations for any future periods. Leadtec On October 12, 2014, we entered into and completed an asset purchase agreement with Leadtec Systems Australia Pty Ltd (“Leadtec”), and its affiliates, Advanced Barcode Solutions Pty Ltd, Scott Needham and Leading Technology Group Pty Ltd. Leadtec is in the business of cloud-based integration solutions. Pursuant to the asset purchase agreement, we purchased and acquired from Leadtec substantially all of the assets used in Leadtec’s business and assumed certain liabilities of Leadtec, all of which were recorded in Australian dollars. We paid $12.6 million in cash and issued 43,595 shares of our common stock for this acquisition, which expanded our base of recurring revenue customers and added suppliers to our network. Purchase Price Allocation We accounted for the acquisition as a business combination. We allocated the purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. The excess of the purchase price over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill. Goodwill is attributed to buyer-specific value resulting from expected synergies, including long-term cost savings, as well as a trained workforce which are not included in the fair values of assets. Goodwill will not be amortized; however the value is deductible for tax purposes. The purchase price consisted of the following (in thousands): Cash $ 12,595 SPS Commerce, Inc. common stock 2,203 $ 14,798 The number of shares of our common stock issued for the acquisition was 43,595 shares as calculated according to the terms of the purchase agreement. The fair value of the shares issued was approximately $2.2 million and was determined using the closing price of our common stock on October 10, 2014. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands): Current and other assets $ 659 Property and equipment 143 Goodwill 9,954 Intangible assets 4,891 Current liabilities (849 ) $ 14,798 Purchased Intangible Assets The following table summarizes the estimated fair value of the purchased intangible assets and their estimated useful lives: Purchased Intangible Assets Estimated Estimated Subscriber relationships $ 3,778 9 Non-competition 148 5 Technology and other 965 2.5 Total $ 4,891 The purchased intangible assets are being amortized on a straight-line basis over their estimated useful lives. Amortization expense related to these intangible assets was $733,000 for the year ended December 31, 2015 and $168,000 for the period from October 12, 2014 through December 31, 2014. Acquisition-Related Costs and Post-Acquisition Operating Results Acquisition-related costs were $690,000, including $338,000 for a one-time Unaudited Pro Forma Financial Information The unaudited pro forma financial information in the table below presents the combined operating results of SPS Commerce and Leadtec as if the acquisition had occurred on January 1, 2013. The unaudited pro forma information includes the historical operating results of each company and pro forma adjustments for annual amortization expense related to purchased intangible assets and the expected tax impact considering our current tax elections and representations. Year Ended (in thousands, except per share data) 2014 Pro forma total revenue $ 132,818 Pro forma net income 2,973 Pro forma net income per share Basic 0.18 Diluted 0.18 The unaudited pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that would have actually been reported had the acquisition occurred on January 1, 2013, nor is it necessarily indicative of our results of operations for any future periods. |
Financial Instruments
Financial Instruments | 12 Months Ended |
Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Financial Instruments | NOTE C – Financial Instruments We invest primarily in money market funds, highly liquid debt instruments of the U.S. government, and U.S. corporate debt securities. All highly liquid investments with original maturities of 90 days or less are classified as cash equivalents. All investments with original maturities greater than 90 days and remaining maturities less than one year from the balance sheet date are classified as short-term marketable securities. Investments with remaining maturities of more than one year from the balance sheet date are classified as marketable securities, non-current. non-current, available-for-sale. Our fixed income investments are carried at fair value and unrealized gains and losses on these investments, net of taxes, are included in accumulated other comprehensive loss in the consolidated balance sheets. Realized gains or losses are included in other income (expense) in the consolidated statements of comprehensive income. When a determination has been made that an other-than-temporary decline in fair value has occurred, the amount of the decline that is related to a credit loss is realized and is included in other income (expense), net in the consolidated statements of comprehensive income. Cash equivalents and marketable securities, consisted of the following (in thousands): December 31, 2016 2015 Amortized Unrealized Fair Value Amortized Unrealized Fair Value Cash equivalents: Money market funds $ 75,375 $ — $ 75,375 $ 79,717 $ — $ 79,717 Marketable securities: Corporate bonds 15,681 (96 ) 15,585 10,042 (34 ) 10,008 Commercial paper 4,977 10 4,987 2,499 1 2,500 U.S. treasury securities 7,489 10 7,499 7,489 (27 ) 7,462 U.S. agency obligations 2,497 3 2,500 2,497 1 2,498 $ 106,019 $ (73 ) $ 105,946 $ 102,244 $ (59 ) $ 102,185 Due within one year $ 98,452 $ 87,235 Due within two years 7,494 14,950 Total $ 105,946 $ 102,185 We do not believe any of the unrealized losses represent an other-than-temporary impairment based on our assessment of available evidence as of December 31, 2016. We expect to receive the full principal and interest on all of these cash equivalents and marketable securities. Fair Value Measurements We measure certain financial assets at fair value on a recurring basis based on a fair value hierarchy that requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of inputs that may be used to measure fair value are: • Level 1 — quoted prices in active markets for identical assets or liabilities • Level 2 — observable inputs other than Level 1 prices, such as (a) quoted prices for similar assets or liabilities, (b) quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or (c) model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 — unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities. Level 1 Measurements Our cash equivalents held in money market funds are measured at fair value using level 1 inputs. Level 2 Measurements Our available-for-sale available-for-sale The following table presents information about our financial assets that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value (in thousands): Level 1 Level 2 Level 3 Total Assets at December 31, 2016: Cash and cash equivalents: Money market funds $ 75,375 $ — $ — $ 75,375 Marketable securities: Corporate bonds — 15,585 — 15,585 Commerical paper — 4,987 — 4,987 U.S. treasury securities — 7,499 — 7,499 U.S. agency obligations — 2,500 — 2,500 $ 75,375 $ 30,571 $ — $ 105,946 Assets at December 31, 2015: Cash and cash equivalents: Money market funds $ 79,717 $ — $ — $ 79,717 Marketable securities: Corporate bonds — 10,008 — 10,008 Commerical paper — 2,500 — 2,500 U.S. treasury securities — 7,462 — 7,462 U.S. agency obligations — 2,498 — 2,498 $ 79,717 $ 22,468 $ — $ 102,185 |
Allowance for Doubtful Accounts
Allowance for Doubtful Accounts | 12 Months Ended |
Dec. 31, 2016 | |
Text Block [Abstract] | |
Allowance for Doubtful Accounts | NOTE D – Allowance for Doubtful Accounts The allowance for doubtful accounts activity, included in accounts receivable, net, was as follows (in thousands): 2016 2015 2014 Balances, January 1 $ 446 $ 279 $ 237 Provision for doubtful accounts 1,375 1,271 717 Write-offs, net of recoveries (1,306 ) (1,104 ) (675 ) Balances, December 31 $ 515 $ 446 $ 279 |
Property and Equipment, net
Property and Equipment, net | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | NOTE E – Property and Equipment, net Property and equipment, net included the following (in thousands): December 31, 2016 2015 Computer equipment and software $ 29,270 $ 27,725 Office equipment and furniture 7,087 5,793 Leasehold improvements 7,844 5,530 44,201 39,048 Less: accumulated depreciation and amortization (28,887 ) (25,428 ) $ 15,314 $ 13,620 At December 31, 2016 and 2015, property and equipment, net included approximately $2.1 million and $709,000, respectively, of assets held at subsidiary and office locations outside of the United States of America. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, net | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, net | NOTE F – Goodwill and Intangible Assets, net The changes in the net carrying amount of goodwill for the years ended December 31, 2016 and 2015 are as follows (in thousands): 2016 2015 Balances, January 1 $ 33,848 $ 34,854 Additions from business acquisitions 15,389 — Foreign currency translation 540 (1,006 ) Balances, December 31 $ 49,777 $ 33,848 Intangible assets, net included the following (in thousands): December 31, 2016 Carrying Accumulated Foreign Net Subscriber relationships $ 33,736 $ (15,708 ) $ 295 $ 18,323 Non-competition 2,234 (1,818 ) 17 433 Technology and other 2,089 (1,120 ) 63 1,032 $ 38,059 $ (18,646 ) $ 375 $ 19,788 December 31, 2015 Carrying Accumulated Foreign Net Subscriber relationships $ 26,701 $ (11,856 ) $ (364 ) $ 14,481 Non-competition 1,843 (1,653 ) (9 ) 181 Technology and other 905 (400 ) (86 ) 419 $ 29,449 $ (13,909 ) $ (459 ) $ 15,081 Amortization expense was $4.7 million, $3.3 million, and $2.9 million for the years ended December 31, 2016, 2015, and 2014, respectively. At December 31, 2016, future amortization expense for intangible assets was as follows (in thousands): 2017 $ 4,380 2018 3,793 2019 3,502 2020 3,174 2021 2,381 Thereafter 2,558 $ 19,788 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE G – Commitments and Contingencies Operating Leases We are obligated under non-cancellable On June 30, 2016, we executed a new lease agreement at our Toronto office location which commenced on January 1, 2017 and expires on December 31, 2021. The lease includes a right of first offer to lease certain additional space and one option to extend the term of the lease for five years at a market rate determined in accordance with the lease. There was also a rent holiday of two months which has been incorporated into our deferred rent calculation. On September 1, 2015, we executed a new lease agreement at our New Jersey office location which commenced on February 1, 2016 and expires on June 30, 2023. The lease includes a right of first offer to lease certain additional space and one option to extend the term of the lease for five years at a market rate determined in accordance with the lease. There was also a rent holiday of five months which has been incorporated into our deferred rent calculation. On February 14, 2012, we executed a new lease agreement for our current headquarters location which commenced on November 1, 2012 and expires on April 30, 2020. The lease includes additional square footage upon commencement, a right of first offer to lease certain additional space, which we exercised, and two options to extend the term of the lease for three years at a market rate determined in accordance with the lease. There was also a rent holiday from November 2012 to October 2013 which has been incorporated into our deferred rent calculation. At December 31, 2016, our future minimum payments under operating leases were as follows (in thousands): 2017 $ 3,318 2018 3,123 2019 3,220 2020 1,825 2021 1,047 Thereafter 1,174 $ 13,707 Other Contingencies We may be involved in various claims and legal actions in the normal course of business. Our management believes that the outcome of any such claims and legal actions will not have a material effect on our financial position, results of operations or cash flows. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE H – Stockholders’ Equity Common Stock Issued In connection with the acquisition of Toolbox Solutions (see Note B), we issued a net of 43,953 shares which consisted of 48,668 shares issued at closing, as calculated according to the terms of the purchase agreement, less 4,715 shares that were returned to us from escrow in the fourth quarter of 2016. The fair value of the shares we issued, approximately $2.9 million, was determined using the closing price of our common stock on January 5, 2016. On October 12, 2014, in connection with the acquisition of Leadtec (see Note B), we issued 43,595 shares of our common stock. The fair value of the shares we issued, approximately $2.2 million, was determined using the closing price of our common stock on October 10, 2014. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | NOTE I – Stock-Based Compensation Our equity compensation plans provide for the grant of incentive and nonqualified stock options, as well as other stock-based awards including restricted stock and restricted stock units, to employees, non-employee We recorded stock-based compensation expense of $8.0 million, $6.4 million and $5.4 million for the years ended December 31, 2016, 2015 and 2014, respectively. This expense was allocated as follows (in thousands): Year Ended December 31, 2016 2015 2014 Cost of revenues $ 1,309 $ 989 $ 614 Operating expenses Sales and marketing 2,412 1,978 1,933 Research and development 618 640 444 General and administrative 3,684 2,772 2,405 Total stock-based compensation expense $ 8,023 $ 6,379 $ 5,396 As of December 31, 2016, there was approximately $13.7 million of unrecognized stock-based compensation expense under our equity compensation plans, which is expected to be recognized on a straight line basis over a weighted average period of 2.56 years. Stock Options Stock options generally vest over four years and have a contractual term of seven to ten years from the date of grant. Our stock option activity was as follows: Options (#) Weighted Average ($/share) Outstanding at January 1, 2014 1,097,223 $ 19.62 Granted 153,770 62.86 Exercised (153,196 ) 12.27 Forfeited (12,334 ) 41.38 Outstanding at December 31, 2014 1,085,463 26.53 Granted 181,487 67.50 Exercised (305,106 ) 14.55 Forfeited (18,741 ) 45.82 Outstanding at December 31, 2015 943,103 37.91 Granted 340,609 48.58 Exercised (221,630 ) 19.42 Forfeited (46,070 ) 55.58 Outstanding at December 31, 2016 1,016,012 44.72 Of the total outstanding options at December 31, 2016, 582,650 were exercisable with a weighted average exercise price of $38.43 per share. The total outstanding options had a weighted average remaining contractual life of 4.6 years. The fair value of options that vested during the years ended December 31, 2016, 2015 and 2014 was $3.4 million, $3.1 million and $2.9 million, respectively. The intrinsic value of options exercised during the years ended December 31, 2016, 2015 and 2014 was $8.6 million, $16.8 million and $7.4 million, respectively. The intrinsic value of outstanding options at December 31, 2016, 2015 and 2014 was $25.6 million, $30.5 million and $33.8 million, respectively. The weighted-average fair values per share of options granted during 2016, 2015 and 2014 were $16.13, $23.09 and $24.36, respectively. The fair values of the options granted were estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions: Year Ended December 31, 2016 2015 2014 Volatility 38 % 39 % 42 % Dividend yield — — — Life (in years) 4.54 4.52 4.17 Risk-free interest rate 1.19 % 1.36 % 1.44 % The expected volatility of the options is based on the historical volatility of our common stock. We have not issued dividends on our common stock and do not expect to do so in the foreseeable future. The expected term of the options is based on the simplified method which does not consider historical employee exercise behavior. The risk-free interest rate is based on the U.S. Treasury rates at the date of grant with maturity dates approximately equal to the expected life at the grant date. Restricted Stock Units and Awards Restricted stock units vest over four years and, upon vesting, the holder is entitled to receive shares of our common stock. With restricted stock awards, shares of our common stock are issued when the award is granted and the restrictions lapse over one year. Our restricted stock units activity was as follows: Restricted Stock Weighted Average Outstanding at January 1, 2014 102,644 $ 33.77 Granted 42,001 64.89 Vested and common stock issued (28,367 ) 32.92 Forfeited (1,145 ) 35.42 Outstanding at December 31, 2014 115,133 45.25 Granted 68,159 67.50 Vested and common stock issued (37,669 ) 40.91 Forfeited (5,058 ) 54.28 Outstanding at December 31, 2015 140,565 56.88 Granted 115,896 48.32 Vested and common stock issued (52,133 ) 48.19 Forfeited (15,286 ) 55.48 Outstanding at December 31, 2016 189,042 54.14 The number of restricted stock units outstanding at December 31, 2016 included 34,190 units that have vested, but the shares of common stock have not yet been issued pursuant to the terms of the agreement. Our restricted stock awards activity was as follows: Restricted Stock Awards Weighted Average Outstanding at January 1, 2014 1,422 $ 48.66 Restricted common stock issued 5,352 51.74 Restrictions lapsed (5,199 ) 51.04 Forfeited (237 ) 48.66 Outstanding at December 31, 2014 1,338 51.74 Restricted common stock issued 4,110 67.37 Restrictions lapsed (4,416 ) 62.63 Forfeited — — Outstanding at December 31, 2015 1,032 67.39 Restricted common stock issued 6,078 52.27 Restrictions lapsed (5,586 ) 55.06 Forfeited — — Outstanding at December 31, 2016 1,524 52.28 Employee Stock Purchase Plan Effective July 1, 2012, we adopted an employee stock purchase plan which allows participating employees to purchase shares of our common stock at a discount through payroll deductions. The plan is available to all employees subject to certain eligibility requirements. Participating employees may purchase common stock, on a voluntary after tax basis, at a price that is the lower of 85% of the fair market value of one share of common stock at the beginning or end of each stock purchase period. The plan consists of two six-month For the offering periods in 2016, we withheld approximately $1.7 million from employees participating in the plan and we purchased 33,357 shares on their behalf. For the offering periods in 2015, we withheld approximately $1.5 million from employees participating in the plan and we purchased 28,362 shares on their behalf. For the offering periods in 2014, we withheld approximately $1.3 million from employees participating in the plan and we purchased 26,353 shares on their behalf. For the years ended December 31, 2016, 2015 and 2014, we recorded approximately $552,000, $408,000 and $473,000 of stock-based compensation expense associated with the employee stock purchase plan. The fair value was estimated based on the market price of our common stock at the beginning of each offering period and using the Black-Scholes option pricing model with the following weighted-average assumptions: Year Ended December 31, 2016 2015 2014 Volatility 37 % 30 % 45 % Dividend yield — — — Life (in years) 0.50 0.50 0.50 Risk-free interest rate 0.42 % 0.12 % 0.08 % |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE J – Income Taxes The provision for income taxes was as follows (in thousands): Year Ended December 31, 2016 2015 2014 Current Federal $ 3,684 $ 2,066 $ 43 State 555 289 254 Foreign 599 119 80 Deferred Federal (988 ) 103 1,183 State (133 ) (141 ) (152 ) Foreign (577 ) — — $ 3,140 $ 2,436 $ 1,408 A reconciliation of the expected federal income tax at the statutory rate to the provision for income taxes was as follows (in thousands): Year Ended December 31, 2016 2015 2014 Expected federal income tax at statutory rate $ 3,011 $ 2,404 $ 1,398 State income taxes, net of federal tax effect 320 246 124 Tax impact of foreign activity (115 ) 39 37 Permanent book/tax differences 372 67 173 Change in valuation allowance (35 ) (27 ) (88 ) Change in state deferred rate (67 ) (118 ) (9 ) Research and development credit (261 ) (200 ) (178 ) Other (85 ) 25 (49 ) Total provision for income taxes $ 3,140 $ 2,436 $ 1,408 The significant components of our deferred tax assets (liabilities) were as follows (in thousands): December 31, 2016 2015 Deferred tax assets Net operating loss and credit carryforwards $ 4,614 $ 4,687 Deferred operations 799 1,443 Stock-based compensation expense 4,085 3,284 Depreciation and amortization — 1,179 Accounts receivable allowances 363 252 Accrued expenses 2,704 1,137 Other 297 234 Gross deferred tax asset 12,862 12,216 Less: valuation allowance (649 ) (928 ) Total net deferred tax asset 12,213 11,288 Deferred tax liability Foreign operations (350 ) (139 ) Depreciation and amortization (1,328 ) — Total deferred tax liability (1,678 ) (139 ) Net deferred tax assets $ 10,535 $ 11,149 As of December 31, 2016, we had net operating loss carryforwards of $70.7 million for U.S. federal tax purposes. We also had $19.2 million of various state net operating loss carryforwards. The loss carryforwards for federal tax purposes will expire between 2019 and 2036 if not utilized. The loss carryforwards for state tax purposes will expire between 2017 and 2036 if not utilized. Section 382 of the U.S. Internal Revenue Code generally imposes an annual limitation on the amount of net operating loss carryforwards that might be used to offset taxable income when a corporation has undergone significant changes in stock ownership. We have performed a Section 382 analysis for the time period from our inception through December 8, 2010. During this time period it was determined that we had six separate ownership changes under Section 382. We have not updated the Section 382 analysis subsequent to December 8, 2010; however, we believe there have not been any events subsequent to that date that would materially impact the analysis. We believe that approximately $17.6 million of federal losses will expire unused due to Section 382 limitations. The maximum annual limitation of federal net operating losses under Section 382 is approximately $990,000. This limitation could be further restricted if any ownership changes occur in future years. Our federal and state net operating losses at December 31, 2016 included $46.2 million and $10.7 million, respectively, of income tax deductions in excess of previously recorded tax benefits. Although these additional tax deductions are included in the net operating losses referenced above, the related tax benefit will not be recognized until the deductions reduce our income taxes payable. The tax benefit of these excess deductions will be reflected as a credit to additional paid in capital when recognized. Accordingly, our deferred tax assets are reported net of the excess tax deductions for stock compensation and Section 382 limitations. As of December 31, 2016 we had federal research and development credit carryforwards, net of Section 383 limitations, of $980,000, which, if not utilized, will begin to expire in 2030. We had state research and development credit carryforwards of $461,000, which, if not utilized, will begin to expire in 2025. As of December 31, 2016, we had a valuation allowance against our deferred tax assets of $649,000. The valuation allowance is established for state net operating loss and credit carryforwards that we do not expect to utilize based on our current expectations of future state taxable income. We are subject to income taxes in the U.S. federal and various state and international jurisdictions. We are generally subject to U.S. federal and state tax examinations for all prior tax years due to our net operating loss carryforwards and the utilization of the carryforwards in years still open under statute. As of December 31, 2016, we do not have any unrecognized tax benefits. It is our practice to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. We do not expect any material changes in our unrecognized tax positions over the next 12 months. |
Net Income Per Share
Net Income Per Share | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | NOTE K – Net Income Per Share The following table presents the components of the computation of basic and diluted net income per share for the periods indicated (in thousands, except per share amounts): Year Ended December 31, 2016 2015 2014 Numerator Net income $ 5,710 $ 4,639 $ 2,704 Denominator Weighted average common shares outstanding, basic 16,947 16,565 16,236 Options to purchase common stock 267 437 535 Restricted stock units 27 27 42 Employee stock purchase plan — 3 1 Weighted average common shares outstanding, diluted 17,241 17,032 16,814 Net income per share Basic $ 0.34 $ 0.28 $ 0.17 Diluted $ 0.33 $ 0.27 $ 0.16 For the years ended December 31, 2016, 2015, and 2014, the effect of approximately 5,000, 4,000 and 126,000 outstanding potential common shares, respectively, were excluded from the calculation of diluted net income per share because they were anti-dilutive. |
Retirement Savings Plan
Retirement Savings Plan | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Retirement Savings Plan | NOTE L – Retirement Savings Plan We sponsor a 401(k) retirement savings plan for our U.S. employees. Employees can contribute up to 100% of their compensation, subject to the limits established by law. We match 25% of the employee’s contribution up to the first 6% of pre-tax |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE M – Related Party Transactions SPS Commerce Foundation (the “Foundation”) is a Minnesota non-profit |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | NOTE N – Selected Quarterly Financial Data (Unaudited) The following table presents our selected unaudited quarterly statements of comprehensive income data (in thousands, except per share amounts): For the Three Months Ended 2016 Mar 31 Jun 30 Sep 30 Dec 31 Revenues $ 45,599 $ 47,351 $ 49,284 $ 51,061 Gross profit 30,718 31,379 33,113 33,739 Income from operations 1,314 880 2,670 2,653 Net income 1,044 352 2,509 $ 1,805 Diluted earnings per share $ 0.06 $ 0.02 $ 0.14 $ 0.10 For the Three Months Ended 2015 Mar 31 Jun 30 Sep 30 Dec 31 Revenues $ 36,970 $ 38,846 $ 40,354 $ 42,348 Gross profit 25,398 26,511 27,654 28,912 Income from operations 922 1,027 2,260 2,814 Net income 586 651 1,270 2,132 Diluted earnings per share $ 0.03 $ 0.04 $ 0.07 $ 0.12 |
General (Policies)
General (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Description | Business Description We are a leading provider of cloud-based supply chain management solutions, providing network-proven fulfillment, sourcing and item assortment management solutions, along with comprehensive retail performance analytics, to thousands of customers worldwide. We provide our solutions through the SPS Commerce platform, a cloud-based product suite that improves the way suppliers, retailers, distributors and logistics firms orchestrate the sourcing, set up of new vendors and items, and fulfillment of the products that customers buy from retailers and suppliers. We derive the majority of our revenues from thousands of monthly recurring subscriptions from businesses that utilize our solutions. |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of SPS Commerce, Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated in the consolidated financial statements. |
Foreign Currency Translation | Foreign Currency Translation Assets and liabilities denominated in currencies other than the U.S. dollar are translated into U.S. dollars at the exchange rates in effect at the balance sheet date, with the resulting translation adjustments recorded as a separate component of accumulated other comprehensive loss. Income and expense accounts are translated at the average exchange rates during the year. Foreign currency transaction gains and losses, if any, are included in net income. |
Use of Estimates | Use of Estimates Preparing financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. |
Business Combinations | Business Combinations We recognize separately from goodwill the fair value of the assets acquired and the liabilities assumed at the acquisition date. Goodwill as of the acquisition date is measured as the excess of consideration transferred and the net of the acquisition date amounts of the assets acquired and the liabilities assumed. Assets acquired include tangible and intangible assets. We use estimates and assumptions that we believe are reasonable as a part of determining the value and useful lives of purchased intangible assets and the purchase price allocation process. While we believe these estimates and assumptions are reasonable, they are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the fair value of the assets acquired and the liabilities assumed. Any such adjustments would be recorded as an offset to goodwill. Upon the conclusion of the measurement period or final determination of the fair values, whichever comes first, any subsequent adjustments would be recorded in our consolidated statements of comprehensive income. |
Segment Information | Segment Information We operate in and report on one segment, which is supply chain management solutions . |
Risk and Uncertainties | Risk and Uncertainties We rely on hardware and software licensed from third parties to offer our on-demand |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist principally of temporary cash and cash equivalents in financial institutions in excess of federally insured limits and trade accounts receivable. Temporary cash investments are held with financial institutions that we believe are subject to minimal risk. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash and highly liquid investments with original maturities of less than 90 days. Cash and cash equivalents are stated at fair value. |
Marketable Securities | Marketable Securities Management determines the appropriate classification of marketable securities at the time of purchase and reevaluates such determination at each balance sheet date. Securities are classified as available for sale and are carried at fair value, with the change in unrealized gains and losses, net of tax, reported as a separate component on the consolidated statements of comprehensive income. Fair value is determined based on quoted market rates when observable or utilizing data points that are observable, such as quoted prices, interest rates and yield curves. When a determination has been made that an other-than-temporary decline in fair value has occurred, the amount of the decline that is related to a credit loss is realized and is included in other income (expense), net in the consolidated statements of comprehensive income. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of our financial instruments, which include cash, cash equivalents, accounts receivable, accounts payable and other accrued expenses, approximates fair value due to their short maturities. Marketable securities are recorded at fair value as further described in Note C. |
Accounts Receivable | Accounts Receivable Accounts receivable are initially recorded upon the sale of solutions to customers. Credit is granted in the normal course of business without collateral. Accounts receivable are stated net of allowances for doubtful accounts, which represent estimated losses resulting from the inability of certain customers to make the required payments. When determining the allowances for doubtful accounts, we take several factors into consideration including the overall composition of the accounts receivable aging, our prior history of accounts receivable write-offs, the type of customers and our experience with specific customers. We write off accounts receivable when they are determined to be uncollectible. Changes in the allowances for doubtful accounts are recorded as bad debt expense and are included in general and administrative expense in our consolidated statements of comprehensive income. |
Property and Equipment | Property and Equipment Property and equipment, including assets acquired under capital lease obligations, are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives when placed in service, which are: Computer equipment and software: 2 to 3 years Office equipment and furniture: 5 to 7 years Leasehold improvements: the shorter of the useful life of the asset or the remaining term of the lease Significant additions or improvements extending asset lives beyond one year are capitalized, while repairs and maintenance are charged to expense as incurred. We also capitalize and amortize eligible costs to acquire or develop internal-use |
Research and Development | Research and Development Research and development costs primarily include maintenance and data conversion activities related to our cloud-based supply chain management solutions and are expensed as incurred. |
Goodwill | Goodwill Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations. We test goodwill for impairment annually at November 30, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test is conducted by comparing the fair value of the net assets with the carrying value of the reporting unit. Fair value is determined using the direct market observation of market price and outstanding equity of the reporting unit at the testing date. If the carrying value of the goodwill exceeds the fair value of the reporting unit, goodwill may be impaired. If this occurs, the fair value is then allocated to its assets and liabilities in a manner similar to a purchase price allocation in order to determine the implied fair value of goodwill. This implied fair value is then compared to the carrying amount of goodwill and, if it is less, we would recognize an impairment loss. During 2016, we changed our annual impairment testing date from December 31 to November 30. This voluntary change in accounting principle, applied prospectively, is preferable as it allows more timely completion of our annual impairment test and does not delay, accelerate, or avoid an impairment charge. |
Intangible Assets | Intangible Assets Assets acquired in business combinations may include identifiable intangible assets such as subscriber relationships and non-competition The purchased intangible assets are being amortized on a straight-line basis over their estimated useful lives, which are three to nine years for subscriber relationships, two to five years for non-competition |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The carrying amount of a long-lived asset is not recoverable if the carrying amount of an asset group exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the assets at the date it is tested for recoverability, whether in use or under development. An impairment loss is measured as the amount by which the carrying amount of a long-lived asset exceeds its fair value. |
Revenue Recognition | Revenue Recognition We generate revenues by providing a number of solutions to our customers. These solutions include Trading Partner Fulfillment, Trading Partner Enablement and Trading Partner Analytics. Our cloud-based solutions allow customers to meet their supply chain management requirements. Sales taxes are presented on a net basis within revenue. Revenues are recognized when all of the following criteria are met: (1) persuasive evidence of an arrangement exists, (2) delivery has occurred, (3) the fee is fixed or determinable, and (4) collectability is probable. If collection is not considered probable, revenues are recognized when the fees are collected. Fees related to our Trading Partner Fulfillment and Trading Partner Analytics solutions consist of two revenue sources: set-up Set-up Set-up set-up set-up Set-up set-up |
Stock-Based Compensation | Stock-Based Compensation We recognize the cost of all share-based payments to employees, including grants of employee stock options, in the financial statements based on the grant date fair value of those awards. This cost is recognized over the period for which an employee is required to provide service in exchange for the award. Benefits associated with tax deductions in excess of recognized compensation expense are reported as a cash flow from financing activities. We estimate the fair value of options granted using the Black-Scholes option pricing model. The estimation of stock awards that will ultimately vest requires judgment, and to the extent actual results differ from our estimates, such amounts will be recorded as an adjustment in the period estimates are revised. In valuing share-based awards, judgment is required in determining the expected volatility of common stock and the expected term individuals will hold their share-based awards prior to exercising. The expected volatility of the options is based on the historical volatility of our common stock. The expected term of the options is based on the simplified method which does not consider historical employee exercise behavior. |
Advertising Costs | Advertising Costs Advertising costs are charged to expense as incurred. Advertising costs were approximately $61,000, $47,000, and $23,000 for the years ended December 31, 2016, 2015 and 2014, respectively. Advertising costs are included in sales and marketing expenses in our consolidated statements of comprehensive income. |
Income Taxes | Income Taxes We account for income taxes using the liability method, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance when it is not “more likely than not” that the deferred tax asset will be utilized. We assess our ability to realize our deferred tax assets at the end of each reporting period. Realization of our deferred tax assets is contingent upon future taxable earnings. Accordingly, this assessment requires significant estimates and judgment. If the estimates of future taxable income vary from actual results, our assessment regarding the realization of these deferred tax assets could change. Future changes in the estimated amount of deferred taxes expected to be realized will be reflected in our consolidated financial statements in the period the estimate is changed, with a corresponding adjustment to our operating results. We recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would “more likely than not” sustain the position following an audit. For tax positions meeting the “more likely than not” threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. |
Net Income Per Share | Net Income Per Share Basic net income per share has been computed using the weighted average number of shares of common stock outstanding during each period. Diluted net income per share also includes the impact of our outstanding potential common shares, including options, restricted stock units and restricted stock awards. Potential common shares that are anti-dilutive are excluded from the calculation of diluted net income per share. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, set-up In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes non-current non-current non-current In February 2016, the FASB issued ASU 2016-02, Leases non-current non-current In March 2016, the FASB issued ASU 2016-09, 2016-09 |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Toolbox Solutions, Inc. [Member] | |
Business Purchase Price | The purchase price consisted of the following (in thousands): Cash $ 18,032 SPS Commerce, Inc. common stock 2,922 Fair value of share-based earn-out 1,043 $ 21,997 |
Estimated Fair Values of Assets Acquired, Net of Cash Acquired and Liabilities Assumed at Acquisition Date | The following table summarizes the estimated fair values of the assets acquired, net of cash acquired of $359,000, and liabilities assumed at the acquisition date (in thousands): Current assets $ 1,253 Property and equipment 56 Goodwill 15,389 Intangible assets 9,070 Current liabilities (1,249 ) Deferred revenue (301 ) Deferred income tax liability (2,221 ) $ 21,997 |
Estimated Fair Value of Purchased Intangible Assets and Estimated Useful Lives | The following table summarizes the estimated fair value of the purchased intangible assets and their estimated useful lives: Purchased Intangible Assets Estimated Estimated Subscriber relationships $ 7,400 8 Developed technology 1,200 4 Trade names 70 1 Non-competition 400 5 Total $ 9,070 |
Pro Forma Financial Information | Year Ended December 31, (in thousands, except per share data) 2016 2015 Pro forma total revenue $ 193,525 $ 166,873 Pro forma net income 5,976 2,400 Pro forma net income per share Basic 0.35 0.14 Diluted 0.35 0.14 |
Leadtec [Member] | |
Business Purchase Price | The purchase price consisted of the following (in thousands): Cash $ 12,595 SPS Commerce, Inc. common stock 2,203 $ 14,798 |
Estimated Fair Values of Assets Acquired, Net of Cash Acquired and Liabilities Assumed at Acquisition Date | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands): Current and other assets $ 659 Property and equipment 143 Goodwill 9,954 Intangible assets 4,891 Current liabilities (849 ) $ 14,798 |
Estimated Fair Value of Purchased Intangible Assets and Estimated Useful Lives | The following table summarizes the estimated fair value of the purchased intangible assets and their estimated useful lives: Purchased Intangible Assets Estimated Estimated Subscriber relationships $ 3,778 9 Non-competition 148 5 Technology and other 965 2.5 Total $ 4,891 |
Pro Forma Financial Information | Year Ended (in thousands, except per share data) 2014 Pro forma total revenue $ 132,818 Pro forma net income 2,973 Pro forma net income per share Basic 0.18 Diluted 0.18 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Investment in Cash Equivalents and Marketable Securities | Cash equivalents and marketable securities, consisted of the following (in thousands): December 31, 2016 2015 Amortized Unrealized Fair Value Amortized Unrealized Fair Value Cash equivalents: Money market funds $ 75,375 $ — $ 75,375 $ 79,717 $ — $ 79,717 Marketable securities: Corporate bonds 15,681 (96 ) 15,585 10,042 (34 ) 10,008 Commercial paper 4,977 10 4,987 2,499 1 2,500 U.S. treasury securities 7,489 10 7,499 7,489 (27 ) 7,462 U.S. agency obligations 2,497 3 2,500 2,497 1 2,498 $ 106,019 $ (73 ) $ 105,946 $ 102,244 $ (59 ) $ 102,185 Due within one year $ 98,452 $ 87,235 Due within two years 7,494 14,950 Total $ 105,946 $ 102,185 |
Summary of Financial Assets Measured at Fair Value on a Recurring Basis | The following table presents information about our financial assets that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value (in thousands): Level 1 Level 2 Level 3 Total Assets at December 31, 2016: Cash and cash equivalents: Money market funds $ 75,375 $ — $ — $ 75,375 Marketable securities: Corporate bonds — 15,585 — 15,585 Commerical paper — 4,987 — 4,987 U.S. treasury securities — 7,499 — 7,499 U.S. agency obligations — 2,500 — 2,500 $ 75,375 $ 30,571 $ — $ 105,946 Assets at December 31, 2015: Cash and cash equivalents: Money market funds $ 79,717 $ — $ — $ 79,717 Marketable securities: Corporate bonds — 10,008 — 10,008 Commerical paper — 2,500 — 2,500 U.S. treasury securities — 7,462 — 7,462 U.S. agency obligations — 2,498 — 2,498 $ 79,717 $ 22,468 $ — $ 102,185 |
Allowance for Doubtful Accoun25
Allowance for Doubtful Accounts (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Text Block [Abstract] | |
Schedule of Allowance for Doubtful Activity Included in Accounts Receivable Net | The allowance for doubtful accounts activity, included in accounts receivable, net, was as follows (in thousands): 2016 2015 2014 Balances, January 1 $ 446 $ 279 $ 237 Provision for doubtful accounts 1,375 1,271 717 Write-offs, net of recoveries (1,306 ) (1,104 ) (675 ) Balances, December 31 $ 515 $ 446 $ 279 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment, net included the following (in thousands): December 31, 2016 2015 Computer equipment and software $ 29,270 $ 27,725 Office equipment and furniture 7,087 5,793 Leasehold improvements 7,844 5,530 44,201 39,048 Less: accumulated depreciation and amortization (28,887 ) (25,428 ) $ 15,314 $ 13,620 |
Goodwill and Intangible Asset27
Goodwill and Intangible Assets, net (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Net Carrying Amount of Goodwill | The changes in the net carrying amount of goodwill for the years ended December 31, 2016 and 2015 are as follows (in thousands): 2016 2015 Balances, January 1 $ 33,848 $ 34,854 Additions from business acquisitions 15,389 — Foreign currency translation 540 (1,006 ) Balances, December 31 $ 49,777 $ 33,848 |
Intangible Assets | Intangible assets, net included the following (in thousands): December 31, 2016 Carrying Accumulated Foreign Net Subscriber relationships $ 33,736 $ (15,708 ) $ 295 $ 18,323 Non-competition 2,234 (1,818 ) 17 433 Technology and other 2,089 (1,120 ) 63 1,032 $ 38,059 $ (18,646 ) $ 375 $ 19,788 December 31, 2015 Carrying Accumulated Foreign Net Subscriber relationships $ 26,701 $ (11,856 ) $ (364 ) $ 14,481 Non-competition 1,843 (1,653 ) (9 ) 181 Technology and other 905 (400 ) (86 ) 419 $ 29,449 $ (13,909 ) $ (459 ) $ 15,081 |
Future Amortization Expense for Intangible Assets | At December 31, 2016, future amortization expense for intangible assets was as follows (in thousands): 2017 $ 4,380 2018 3,793 2019 3,502 2020 3,174 2021 2,381 Thereafter 2,558 $ 19,788 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future Minimum Payments Under Operating Leases | At December 31, 2016, our future minimum payments under operating leases were as follows (in thousands): 2017 $ 3,318 2018 3,123 2019 3,220 2020 1,825 2021 1,047 Thereafter 1,174 $ 13,707 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Stock-Based Compensation Expense | This expense was allocated as follows (in thousands): Year Ended December 31, 2016 2015 2014 Cost of revenues $ 1,309 $ 989 $ 614 Operating expenses Sales and marketing 2,412 1,978 1,933 Research and development 618 640 444 General and administrative 3,684 2,772 2,405 Total stock-based compensation expense $ 8,023 $ 6,379 $ 5,396 |
Stock Option Activity | Our stock option activity was as follows: Options (#) Weighted Average ($/share) Outstanding at January 1, 2014 1,097,223 $ 19.62 Granted 153,770 62.86 Exercised (153,196 ) 12.27 Forfeited (12,334 ) 41.38 Outstanding at December 31, 2014 1,085,463 26.53 Granted 181,487 67.50 Exercised (305,106 ) 14.55 Forfeited (18,741 ) 45.82 Outstanding at December 31, 2015 943,103 37.91 Granted 340,609 48.58 Exercised (221,630 ) 19.42 Forfeited (46,070 ) 55.58 Outstanding at December 31, 2016 1,016,012 44.72 |
Weighted Average Fair Value Per Share of Options Granted, Assumptions | The weighted-average fair values per share of options granted during 2016, 2015 and 2014 were $16.13, $23.09 and $24.36, respectively. The fair values of the options granted were estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions: Year Ended December 31, 2016 2015 2014 Volatility 38 % 39 % 42 % Dividend yield — — — Life (in years) 4.54 4.52 4.17 Risk-free interest rate 1.19 % 1.36 % 1.44 % |
Fair Value Estimation of Common Stock Using Black-Scholes Option Pricing Model, Weighted-Average Assumptions | The fair value was estimated based on the market price of our common stock at the beginning of each offering period and using the Black-Scholes option pricing model with the following weighted-average assumptions: Year Ended December 31, 2016 2015 2014 Volatility 37 % 30 % 45 % Dividend yield — — — Life (in years) 0.50 0.50 0.50 Risk-free interest rate 0.42 % 0.12 % 0.08 % |
Restricted Stock Units [Member] | |
Restricted Stock Units and Restricted Stock Awards | Our restricted stock units activity was as follows: Restricted Stock Weighted Average Outstanding at January 1, 2014 102,644 $ 33.77 Granted 42,001 64.89 Vested and common stock issued (28,367 ) 32.92 Forfeited (1,145 ) 35.42 Outstanding at December 31, 2014 115,133 45.25 Granted 68,159 67.50 Vested and common stock issued (37,669 ) 40.91 Forfeited (5,058 ) 54.28 Outstanding at December 31, 2015 140,565 56.88 Granted 115,896 48.32 Vested and common stock issued (52,133 ) 48.19 Forfeited (15,286 ) 55.48 Outstanding at December 31, 2016 189,042 54.14 |
Restricted Stock Award [Member] | |
Restricted Stock Units and Restricted Stock Awards | Our restricted stock awards activity was as follows: Restricted Stock Awards Weighted Average Outstanding at January 1, 2014 1,422 $ 48.66 Restricted common stock issued 5,352 51.74 Restrictions lapsed (5,199 ) 51.04 Forfeited (237 ) 48.66 Outstanding at December 31, 2014 1,338 51.74 Restricted common stock issued 4,110 67.37 Restrictions lapsed (4,416 ) 62.63 Forfeited — — Outstanding at December 31, 2015 1,032 67.39 Restricted common stock issued 6,078 52.27 Restrictions lapsed (5,586 ) 55.06 Forfeited — — Outstanding at December 31, 2016 1,524 52.28 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Provision for Income Taxes | The provision for income taxes was as follows (in thousands): Year Ended December 31, 2016 2015 2014 Current Federal $ 3,684 $ 2,066 $ 43 State 555 289 254 Foreign 599 119 80 Deferred Federal (988 ) 103 1,183 State (133 ) (141 ) (152 ) Foreign (577 ) — — $ 3,140 $ 2,436 $ 1,408 |
Reconciliation of the Provision for Income Taxes to the Statutory Federal Rate | A reconciliation of the expected federal income tax at the statutory rate to the provision for income taxes was as follows (in thousands): Year Ended December 31, 2016 2015 2014 Expected federal income tax at statutory rate $ 3,011 $ 2,404 $ 1,398 State income taxes, net of federal tax effect 320 246 124 Tax impact of foreign activity (115 ) 39 37 Permanent book/tax differences 372 67 173 Change in valuation allowance (35 ) (27 ) (88 ) Change in state deferred rate (67 ) (118 ) (9 ) Research and development credit (261 ) (200 ) (178 ) Other (85 ) 25 (49 ) Total provision for income taxes $ 3,140 $ 2,436 $ 1,408 |
Significant Components of Deferred Tax Assets (Liabilities) | The significant components of our deferred tax assets (liabilities) were as follows (in thousands): December 31, 2016 2015 Deferred tax assets Net operating loss and credit carryforwards $ 4,614 $ 4,687 Deferred operations 799 1,443 Stock-based compensation expense 4,085 3,284 Depreciation and amortization — 1,179 Accounts receivable allowances 363 252 Accrued expenses 2,704 1,137 Other 297 234 Gross deferred tax asset 12,862 12,216 Less: valuation allowance (649 ) (928 ) Total net deferred tax asset 12,213 11,288 Deferred tax liability Foreign operations (350 ) (139 ) Depreciation and amortization (1,328 ) — Total deferred tax liability (1,678 ) (139 ) Net deferred tax assets $ 10,535 $ 11,149 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Components of Computation of Basic and Diluted Net Income Per Share | The following table presents the components of the computation of basic and diluted net income per share for the periods indicated (in thousands, except per share amounts): Year Ended December 31, 2016 2015 2014 Numerator Net income $ 5,710 $ 4,639 $ 2,704 Denominator Weighted average common shares outstanding, basic 16,947 16,565 16,236 Options to purchase common stock 267 437 535 Restricted stock units 27 27 42 Employee stock purchase plan — 3 1 Weighted average common shares outstanding, diluted 17,241 17,032 16,814 Net income per share Basic $ 0.34 $ 0.28 $ 0.17 Diluted $ 0.33 $ 0.27 $ 0.16 |
Selected Quarterly Financial 32
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of Unaudited Quarterly Statements of Comprehensive Income Data | The following table presents our selected unaudited quarterly statements of comprehensive income data (in thousands, except per share amounts): For the Three Months Ended 2016 Mar 31 Jun 30 Sep 30 Dec 31 Revenues $ 45,599 $ 47,351 $ 49,284 $ 51,061 Gross profit 30,718 31,379 33,113 33,739 Income from operations 1,314 880 2,670 2,653 Net income 1,044 352 2,509 $ 1,805 Diluted earnings per share $ 0.06 $ 0.02 $ 0.14 $ 0.10 For the Three Months Ended 2015 Mar 31 Jun 30 Sep 30 Dec 31 Revenues $ 36,970 $ 38,846 $ 40,354 $ 42,348 Gross profit 25,398 26,511 27,654 28,912 Income from operations 922 1,027 2,260 2,814 Net income 586 651 1,270 2,132 Diluted earnings per share $ 0.03 $ 0.04 $ 0.07 $ 0.12 |
General - Additional Informatio
General - Additional Information (Detail) | 12 Months Ended | ||
Dec. 31, 2016USD ($)Segment | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Schedule Of Accounting Policies [Line Items] | |||
Number of reportable segments | Segment | 1 | ||
Expected life of customer relationship period | 2 years | ||
Advertising costs | $ 61,000 | $ 47,000 | $ 23,000 |
Unrecognized federal and state net operating losses | 4,614,000 | $ 4,687,000 | |
Domestic Tax Authority [Member] | |||
Schedule Of Accounting Policies [Line Items] | |||
Unrecognized federal and state net operating losses | 46,200,000 | ||
State and Local Jurisdiction [Member] | |||
Schedule Of Accounting Policies [Line Items] | |||
Unrecognized federal and state net operating losses | $ 10,700,000 | ||
Computer Equipment and Software [Member] | Maximum [Member] | |||
Schedule Of Accounting Policies [Line Items] | |||
Estimated useful lives of property and equipment | 3 years | ||
Computer Equipment and Software [Member] | Minimum [Member] | |||
Schedule Of Accounting Policies [Line Items] | |||
Estimated useful lives of property and equipment | 2 years | ||
Office Equipment and Furniture [Member] | Maximum [Member] | |||
Schedule Of Accounting Policies [Line Items] | |||
Estimated useful lives of property and equipment | 7 years | ||
Office Equipment and Furniture [Member] | Minimum [Member] | |||
Schedule Of Accounting Policies [Line Items] | |||
Estimated useful lives of property and equipment | 5 years | ||
Subscriber Relationships [Member] | Maximum [Member] | |||
Schedule Of Accounting Policies [Line Items] | |||
Estimated useful lives of intangible assets | 9 years | ||
Subscriber Relationships [Member] | Minimum [Member] | |||
Schedule Of Accounting Policies [Line Items] | |||
Estimated useful lives of intangible assets | 3 years | ||
Non-competition Agreements [Member] | Maximum [Member] | |||
Schedule Of Accounting Policies [Line Items] | |||
Estimated useful lives of intangible assets | 5 years | ||
Non-competition Agreements [Member] | Minimum [Member] | |||
Schedule Of Accounting Policies [Line Items] | |||
Estimated useful lives of intangible assets | 2 years | ||
Technology and Other [Member] | Maximum [Member] | |||
Schedule Of Accounting Policies [Line Items] | |||
Estimated useful lives of intangible assets | 4 years | ||
Technology and Other [Member] | Minimum [Member] | |||
Schedule Of Accounting Policies [Line Items] | |||
Estimated useful lives of intangible assets | 1 year |
Business Acquisitions - Additio
Business Acquisitions - Additional Information (Detail) - USD ($) | Jan. 05, 2016 | Oct. 12, 2014 | Dec. 31, 2016 | Dec. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Oct. 10, 2014 |
Business Acquisition [Line Items] | ||||||||
Stock issued for acquisition | $ 2,922,000 | $ 2,203,000 | ||||||
Amortization expense for purchased intangible assets | 4,738,000 | $ 3,307,000 | 2,856,000 | |||||
Contingent Consideration Liability [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Other income | 1,100,000 | |||||||
Toolbox Solutions, Inc. [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Payments to acquire business | $ 18,000,000 | |||||||
Stock issued for acquisition | $ 2,900,000 | $ 2,922,000 | ||||||
Stock issued for acquisition, Shares | 43,953 | 43,953 | ||||||
Number of shares of common stock issuable | 16,222 | |||||||
Cash Acquired from Acquisition | $ 359,000 | |||||||
Number of gross shares issued | 48,668 | 48,668 | 48,668 | |||||
Number of shares retuned from escrow | 4,715 | 4,715 | ||||||
Amortization expense for purchased intangible assets | $ 1,400,000 | |||||||
Acquisition-related cost included in consolidated statements | 147,000 | |||||||
Revenues from acquisition | 7,900,000 | |||||||
Proforma adjustments in amortization | $ 1,400,000 | |||||||
Statutory blended income tax rate | 26.50% | |||||||
Fair value of the shares issued | $ 2,900,000 | |||||||
Leadtec [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Payments to acquire business | $ 12,600,000 | |||||||
Stock issued for acquisition | $ 2,203,000 | |||||||
Stock issued for acquisition, Shares | 43,595 | 43,595 | ||||||
Amortization expense for purchased intangible assets | $ 168,000 | $ 733,000 | ||||||
Acquisition-related cost included in consolidated statements | 690,000 | |||||||
Revenues from acquisition | 1,200,000 | |||||||
Fair value of the shares issued | $ 2,200,000 | |||||||
Acquisition related one-time Australian stamp duty tax | $ 338,000 | |||||||
Operating loss from acquisition | $ (280,000) |
Business Acquisitions - Busines
Business Acquisitions - Business Purchase Price (Detail) - USD ($) $ in Thousands | Jan. 05, 2016 | Dec. 31, 2016 | Dec. 31, 2014 |
Business Acquisition [Line Items] | |||
Cash | $ 18,032 | $ 12,595 | |
SPS Commerce, Inc. common stock | 2,922 | $ 2,203 | |
Toolbox Solutions, Inc. [Member] | |||
Business Acquisition [Line Items] | |||
Cash | 18,032 | ||
SPS Commerce, Inc. common stock | $ 2,900 | 2,922 | |
Fair value of share-based earn-out liability | 1,043 | ||
Total purchase price | 21,997 | ||
Leadtec [Member] | |||
Business Acquisition [Line Items] | |||
Cash | 12,595 | ||
SPS Commerce, Inc. common stock | 2,203 | ||
Total purchase price | $ 14,798 |
Business Acquisitions - Estimat
Business Acquisitions - Estimated Fair Values of the Assets Acquired, Net of Cash acquired and Liabilities Assumed at the Acquisition Date (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Schedule Of Business Acquisitions Purchase Price Allocation [Line Items] | |||
GOODWILL | $ 49,777 | $ 33,848 | $ 34,854 |
Toolbox Solutions, Inc. [Member] | |||
Schedule Of Business Acquisitions Purchase Price Allocation [Line Items] | |||
Current assets | 1,253 | ||
Property and equipment | 56 | ||
GOODWILL | 15,389 | ||
Intangible assets | 9,070 | ||
Current liabilities | (1,249) | ||
Deferred revenue | (301) | ||
Deferred income tax liability | (2,221) | ||
Total purchase price | 21,997 | ||
Leadtec [Member] | |||
Schedule Of Business Acquisitions Purchase Price Allocation [Line Items] | |||
Current and other assets | 659 | ||
Property and equipment | 143 | ||
GOODWILL | 9,954 | ||
Intangible assets | 4,891 | ||
Current liabilities | (849) | ||
Total purchase price | $ 14,798 |
Business Acquisitions - Estim37
Business Acquisitions - Estimated Fair Value of Purchased Intangible Assets and Estimated Useful Lives (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Toolbox Solutions, Inc. [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated Fair Value | $ 9,070 |
Toolbox Solutions, Inc. [Member] | Subscriber Relationships [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated Fair Value | $ 7,400 |
Estimated Life (in years) | 8 years |
Toolbox Solutions, Inc. [Member] | Developed Technology [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated Fair Value | $ 1,200 |
Estimated Life (in years) | 4 years |
Toolbox Solutions, Inc. [Member] | Trade Names [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated Fair Value | $ 70 |
Estimated Life (in years) | 1 year |
Toolbox Solutions, Inc. [Member] | Non-competition Agreements [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated Fair Value | $ 400 |
Estimated Life (in years) | 5 years |
Leadtec [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated Fair Value | $ 4,891 |
Leadtec [Member] | Subscriber Relationships [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated Fair Value | $ 3,778 |
Estimated Life (in years) | 9 years |
Leadtec [Member] | Non-competition Agreements [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated Fair Value | $ 148 |
Estimated Life (in years) | 5 years |
Leadtec [Member] | Technology and Other [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated Fair Value | $ 965 |
Estimated Life (in years) | 2 years 6 months |
Business Acquisitions - Pro For
Business Acquisitions - Pro Forma Financial Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Toolbox Solutions, Inc. [Member] | |||
Business Acquisition [Line Items] | |||
Pro forma total revenue | $ 193,525 | $ 166,873 | |
Pro forma net income | $ 5,976 | $ 2,400 | |
Pro forma net income per share, Basic | $ 0.35 | $ 0.14 | |
Pro forma net income per share, Diluted | $ 0.35 | $ 0.14 | |
Leadtec [Member] | |||
Business Acquisition [Line Items] | |||
Pro forma total revenue | $ 132,818 | ||
Pro forma net income | $ 2,973 | ||
Pro forma net income per share, Basic | $ 0.18 | ||
Pro forma net income per share, Diluted | $ 0.18 |
Financial Instruments - Summary
Financial Instruments - Summary of Investment in Cash Equivalents and Marketable Securities (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Cash Equivalents and Marketable Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 106,019 | $ 102,244 |
Due within one year | 98,452 | 87,235 |
Unrealized Gains (Losses) | (73) | (59) |
Due within two years | 7,494 | 14,950 |
Fair Value | 105,946 | 102,185 |
Money Market Funds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 75,375 | 79,717 |
Fair Value | 75,375 | 79,717 |
Corporate Bonds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 15,681 | 10,042 |
Unrealized Gains (Losses) | (96) | (34) |
Fair Value | 15,585 | 10,008 |
Commercial Paper [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 4,977 | 2,499 |
Unrealized Gains (Losses) | 10 | 1 |
Fair Value | 4,987 | 2,500 |
U.S. Treasury Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 7,489 | 7,489 |
Unrealized Gains (Losses) | 10 | (27) |
Fair Value | 7,499 | 7,462 |
U.S. Agency Obligations [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 2,497 | 2,497 |
Unrealized Gains (Losses) | 3 | 1 |
Fair Value | $ 2,500 | $ 2,498 |
Financial Instruments - Additio
Financial Instruments - Additional Information (Detail) | Dec. 31, 2016USD ($) |
Money Market Funds [Member] | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Unrealized Losses | $ 0 |
Financial Instruments - Summa41
Financial Instruments - Summary of Financial Assets Measured at Fair Value on a Recurring Basis (Detail) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets fair value | $ 105,946 | $ 102,185 |
Money Market Funds [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets fair value | 75,375 | 79,717 |
Corporate Bonds [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets fair value | 15,585 | 10,008 |
Commercial Paper [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets fair value | 4,987 | 2,500 |
U.S. Treasury Securities [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets fair value | 7,499 | 7,462 |
U.S. Agency Obligations [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets fair value | 2,500 | 2,498 |
Level 1 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets fair value | 75,375 | 79,717 |
Level 1 [Member] | Money Market Funds [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets fair value | 75,375 | 79,717 |
Level 2 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets fair value | 30,571 | 22,468 |
Level 2 [Member] | Corporate Bonds [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets fair value | 15,585 | 10,008 |
Level 2 [Member] | Commercial Paper [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets fair value | 4,987 | 2,500 |
Level 2 [Member] | U.S. Treasury Securities [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets fair value | 7,499 | 7,462 |
Level 2 [Member] | U.S. Agency Obligations [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets fair value | $ 2,500 | $ 2,498 |
Allowance for Doubtful Accoun42
Allowance for Doubtful Accounts - Schedule of Allowance for Doubtful Activity Included in Accounts Receivable Net (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Receivables [Abstract] | |||
Beginning Balance | $ 446 | $ 279 | $ 237 |
Provision for doubtful accounts | 1,375 | 1,271 | 717 |
Write-offs, net of recoveries | (1,306) | (1,104) | (675) |
Ending Balance | $ 515 | $ 446 | $ 279 |
Property and Equipment, net - S
Property and Equipment, net - Schedule of Property and Equipment, Net (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 44,201 | $ 39,048 |
Less: accumulated depreciation and amortization | (28,887) | (25,428) |
Net, Total | 15,314 | 13,620 |
Computer Equipment and Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 29,270 | 27,725 |
Office Equipment and Furniture [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 7,087 | 5,793 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 7,844 | $ 5,530 |
Property and Equipment, net - A
Property and Equipment, net - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Property Plant and Equipment Useful Life and Values [Abstract] | ||
Property and equipment held at subsidiary and office locations outside of the United States of America, net | $ 2,100,000 | $ 709,000 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets Net - Schedule of Changes in Net Carrying Amount of Goodwill (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Balances, January 1 | $ 33,848 | $ 34,854 |
Additions from business acquisitions | 15,389 | |
Foreign currency translation | 540 | (1,006) |
Balances, December 31 | $ 49,777 | $ 33,848 |
Goodwill and Intangible Asset46
Goodwill and Intangible Assets, net - Intangible Assets (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | ||
Carrying Amount | $ 38,059 | $ 29,449 |
Accumulated Amortization | (18,646) | (13,909) |
Foreign Currency Translation | 375 | (459) |
Net | 19,788 | 15,081 |
Subscriber Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Carrying Amount | 33,736 | 26,701 |
Accumulated Amortization | (15,708) | (11,856) |
Foreign Currency Translation | 295 | (364) |
Net | 18,323 | 14,481 |
Non-competition Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Carrying Amount | 2,234 | 1,843 |
Accumulated Amortization | (1,818) | (1,653) |
Foreign Currency Translation | 17 | (9) |
Net | 433 | 181 |
Technology and Other [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Carrying Amount | 2,089 | 905 |
Accumulated Amortization | (1,120) | (400) |
Foreign Currency Translation | 63 | (86) |
Net | $ 1,032 | $ 419 |
Goodwill and Intangible Asset47
Goodwill and Intangible Assets, net - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 4,738 | $ 3,307 | $ 2,856 |
Goodwill and Intangible Asset48
Goodwill and Intangible Assets, net - Future Amortization Expense for Intangible Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2,017 | $ 4,380 | |
2,018 | 3,793 | |
2,019 | 3,502 | |
2,020 | 3,174 | |
2,021 | 2,381 | |
Thereafter | 2,558 | |
Net | $ 19,788 | $ 15,081 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Millions | Jun. 30, 2016OptionPlan | Sep. 01, 2015OptionPlan | Feb. 14, 2012OptionPlan | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Commitments and Contingencies Disclosure [Abstract] | ||||||
Rent expense charged to operations | $ | $ 5 | $ 4.6 | $ 3.7 | |||
Lease agreement expires, date | Dec. 31, 2021 | Jun. 30, 2023 | Apr. 30, 2020 | |||
Number of options to extend term of the lease | OptionPlan | 1 | 1 | 2 | |||
Options to extend the term of the lease, number of years | 5 years | 5 years | 3 years |
Commitments and Contingencies50
Commitments and Contingencies - Future Minimum Payments Under Operating Leases (Detail) $ in Thousands | Dec. 31, 2016USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,017 | $ 3,318 |
2,018 | 3,123 |
2,019 | 3,220 |
2,020 | 1,825 |
2,021 | 1,047 |
Thereafter | 1,174 |
Operating leases, total | $ 13,707 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) $ in Millions | Jan. 05, 2016 | Oct. 12, 2014 | Dec. 31, 2016 | Dec. 31, 2016 | Oct. 10, 2014 |
Leadtec [Member] | |||||
Schedule Of Stockholders Equity [Line Items] | |||||
Fair value of the shares issued | $ 2.2 | ||||
Stock issued for acquisition, Shares | 43,595 | 43,595 | |||
Toolbox Solutions, Inc. [Member] | |||||
Schedule Of Stockholders Equity [Line Items] | |||||
Number of gross shares issued | 48,668 | 48,668 | 48,668 | ||
Fair value of the shares issued | $ 2.9 | ||||
Stock issued for acquisition, Shares | 43,953 | 43,953 | |||
Number of shares retuned from escrow | 4,715 | 4,715 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) | 1 Months Ended | 12 Months Ended | ||
Feb. 29, 2016shares | Dec. 31, 2016USD ($)OfferingPeriods$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares available for grant | shares | 3,900,000 | |||
Stock-based compensation expense | $ 8,023,000 | $ 6,379,000 | $ 5,396,000 | |
Unrecognized stock-based compensation expense | $ 13,700,000 | |||
Unrecognized stock-based compensation, expected to be recognized, weighted average period | 2 years 6 months 22 days | |||
Stock options vest, period | 4 years | |||
Stock options contractual term, from the date of grant | Seven to ten years | |||
Stock options exercisable | shares | 582,650 | |||
Weighted average exercise price | $ / shares | $ 38.43 | |||
Weighted average remaining contractual life | 4 years 7 months 6 days | |||
Fair value of options vested | $ 3,400,000 | 3,100,000 | 2,900,000 | |
Intrinsic value of options exercised | 8,600,000 | 16,800,000 | 7,400,000 | |
Intrinsic value of options outstanding | $ 25,600,000 | $ 30,500,000 | $ 33,800,000 | |
Weighted average fair value per share of options granted | $ / shares | $ 16.13 | $ 23.09 | $ 24.36 | |
Number of RSU's vested and not issued during the period | shares | 34,190 | |||
Percentage of common stock on fair market value | 85.00% | |||
Number of offerings per year | OfferingPeriods | 2 | |||
Employee Stock Purchase Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 552,000 | $ 408,000 | $ 473,000 | |
Common stock reserved for future issuance | shares | 1,100,000 | |||
Restricted Stock Units [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options vest, period | 4 years | |||
Restricted Stock Award [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock awards units vest over, period | 1 year | |||
Equity Incentive Plan [Member] | 2010 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Additional shares were authorized under 2010 Equity Incentive Plan | shares | 1,003,439 | |||
Stock Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Employee stock purchase plan, employees contribution | $ 1,700,000 | $ 1,500,000 | $ 1,300,000 | |
Employee stock purchase plan, shares purchased | shares | 33,357 | 28,362 | 26,353 | |
Maximum [Member] | Stock Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options contractual term range | 10 years | |||
Minimum [Member] | Stock Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options contractual term range | 7 years |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | $ 8,023 | $ 6,379 | $ 5,396 |
Cost of Revenues [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | 1,309 | 989 | 614 |
Sales and Marketing [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | 2,412 | 1,978 | 1,933 |
Research and Development [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | 618 | 640 | 444 |
General and Administrative [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation expense | $ 3,684 | $ 2,772 | $ 2,405 |
Stock-Based Compensation - St54
Stock-Based Compensation - Stock Option Activity (Detail) - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Options Outstanding, Beginning balance | 943,103 | 1,085,463 | 1,097,223 |
Options, Granted | 340,609 | 181,487 | 153,770 |
Options, Exercised | (221,630) | (305,106) | (153,196) |
Options, Forfeited | (46,070) | (18,741) | (12,334) |
Options Outstanding, Ending balance | 1,016,012 | 943,103 | 1,085,463 |
Weighted Average Exercise Price, Outstanding, Beginning Balance | $ 37.91 | $ 26.53 | $ 19.62 |
Weighted Average Exercise Price, Granted | 48.58 | 67.50 | 62.86 |
Weighted Average Exercise Price, Exercised | 19.42 | 14.55 | 12.27 |
Weighted Average Exercise Price, Forfeited | 55.58 | 45.82 | 41.38 |
Weighted Average Exercise Price, Outstanding, Ending Balance | $ 44.72 | $ 37.91 | $ 26.53 |
Stock-Based Compensation - Weig
Stock-Based Compensation - Weighted Average Fair Value Per Share of Options Granted, Assumptions (Detail) - Stock Options [Member] | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Volatility | 38.00% | 39.00% | 42.00% |
Dividend yield | 0.00% | 0.00% | 0.00% |
Life (in years) | 4 years 6 months 15 days | 4 years 6 months 7 days | 4 years 2 months 1 day |
Risk-free interest rate | 1.19% | 1.36% | 1.44% |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Units (Detail) - Restricted Stock Units [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock awards, Outstanding, Beginning Balance | 140,565 | 115,133 | 102,644 |
Granted, stock units | 115,896 | 68,159 | 42,001 |
Vested, stock units | (52,133) | (37,669) | (28,367) |
Forfeited, stock units | (15,286) | (5,058) | (1,145) |
Stock awards, Outstanding, Ending Balance | 189,042 | 140,565 | 115,133 |
Weighted average grant date fair value, Outstanding, Beginning Balance | $ 56.88 | $ 45.25 | $ 33.77 |
Granted, Weighted Average Grant Date Fair Value | 48.32 | 67.50 | 64.89 |
Vested, Weighted Average Grant Date Fair Value | 48.19 | 40.91 | 32.92 |
Forfeited, Weighted Average Grant Date Fair Value | 55.48 | 54.28 | 35.42 |
Weighted average grant date fair value, Outstanding, Ending Balance | $ 54.14 | $ 56.88 | $ 45.25 |
Stock-Based Compensation - Re57
Stock-Based Compensation - Restricted Stock Awards (Detail) - Restricted Stock Award [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock awards, Outstanding, Beginning Balance | 1,032 | 1,338 | 1,422 |
Restricted common stock issued, stock awards | 6,078 | 4,110 | 5,352 |
Restrictions lapsed, stock awards | (5,586) | (4,416) | (5,199) |
Forfeited, stock awards | (237) | ||
Stock awards, Outstanding, Ending Balance | 1,524 | 1,032 | 1,338 |
Weighted average grant date fair value, Outstanding, Beginning Balance | $ 67.39 | $ 51.74 | $ 48.66 |
Restricted common stock issued, Weighted Average Grant Date Fair Value | 52.27 | 67.37 | 51.74 |
Restrictions lapsed, Weighted Average Grant Date Fair Value | 55.06 | 62.63 | 51.04 |
Forfeited, Weighted Average Grant Date Fair Value | 48.66 | ||
Weighted average grant date fair value, Outstanding, Ending Balance | $ 52.28 | $ 67.39 | $ 51.74 |
Stock-Based Compensation - Fair
Stock-Based Compensation - Fair Value Estimation of Common Stock Using Black-Scholes Option Pricing Model, Weighted-Average Assumptions (Detail) - Employee Stock Purchase Plan [Member] | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Volatility | 37.00% | 30.00% | 45.00% |
Dividend yield | 0.00% | 0.00% | 0.00% |
Life (in years) | 6 months | 6 months | 6 months |
Risk-free interest rate | 0.42% | 0.12% | 0.08% |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current | |||
Federal | $ 3,684 | $ 2,066 | $ 43 |
State | 555 | 289 | 254 |
Foreign | 599 | 119 | 80 |
Deferred | |||
Federal | (988) | 103 | 1,183 |
State | (133) | (141) | (152) |
Foreign | (577) | ||
Total provision (benefit) for income taxes | $ 3,140 | $ 2,436 | $ 1,408 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Provision for Income Taxes to Statutory Federal Rate (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Expected federal income tax at statutory rate | $ 3,011 | $ 2,404 | $ 1,398 |
State income taxes, net of federal tax effect | 320 | 246 | 124 |
Tax impact of foreign activity | (115) | 39 | 37 |
Permanent book/tax differences | 372 | 67 | 173 |
Change in valuation allowance | (35) | (27) | (88) |
Change in state deferred rate | (67) | (118) | (9) |
Research and development credit | (261) | (200) | (178) |
Other | (85) | 25 | (49) |
Total provision (benefit) for income taxes | $ 3,140 | $ 2,436 | $ 1,408 |
Income Taxes - Significant Comp
Income Taxes - Significant Components of Deferred Tax Assets (Liabilities) (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets | ||
Net operating loss and credit carryforwards | $ 4,614 | $ 4,687 |
Deferred operations | 799 | 1,443 |
Stock-based compensation expense | 4,085 | 3,284 |
Depreciation and amortization | 1,179 | |
Accounts receivable allowances | 363 | 252 |
Accrued expenses | 2,704 | 1,137 |
Other | 297 | 234 |
Gross deferred tax asset | 12,862 | 12,216 |
Less: valuation allowance | (649) | (928) |
Total net deferred tax asset | 12,213 | 11,288 |
Deferred tax liability | ||
Foreign operations | (350) | (139) |
Depreciation and amortization | (1,328) | |
Total deferred tax liability | (1,678) | (139) |
Net deferred tax assets | $ 10,535 | $ 11,149 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Expense Benefit [Line Items] | ||
Net operating losses | $ 4,614,000 | $ 4,687,000 |
Valuation allowance against our deferred tax assets | 649,000 | |
Unrecognized tax benefits | 0 | |
Significant change in unrecognized tax benefits is reasonably possible, amount of unrecorded benefit | 0 | |
Domestic Tax Authority [Member] | ||
Income Tax Expense Benefit [Line Items] | ||
Net operating loss carry forwards for U. S. federal tax | 70,700,000 | |
Unused federal losses that will expire | 17,600,000 | |
Maximum annual limitation of federal net operating losses | 990,000 | |
Net operating losses | 46,200,000 | |
Domestic Tax Authority [Member] | Research and Development [Member] | ||
Income Tax Expense Benefit [Line Items] | ||
Research and development credit carryforwards | $ 980,000 | |
Research and development credit expire date | 2,030 | |
Domestic Tax Authority [Member] | Maximum [Member] | ||
Income Tax Expense Benefit [Line Items] | ||
Expiration of net operating loss carryforwards | Loss carryforwards for federal tax purposes will expire between 2019 and 2036 if not utilized | |
State and Local Jurisdiction [Member] | ||
Income Tax Expense Benefit [Line Items] | ||
Net operating loss carry forwards for U. S. federal tax | $ 19,200,000 | |
Net operating losses | 10,700,000 | |
State and Local Jurisdiction [Member] | Research and Development [Member] | ||
Income Tax Expense Benefit [Line Items] | ||
Research and development credit carryforwards | $ 461,000 | |
Research and development credit expire date | 2,025 | |
State and Local Jurisdiction [Member] | Maximum [Member] | ||
Income Tax Expense Benefit [Line Items] | ||
Expiration of net operating loss carryforwards | Loss carryforwards for state tax purposes will expire between 2017 and 2036 if not utilized |
Net Income Per Share - Componen
Net Income Per Share - Components of Computation of Basic and Diluted Net Income Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Numerator | |||||||||||
Net income | $ 1,805 | $ 2,509 | $ 352 | $ 1,044 | $ 2,132 | $ 1,270 | $ 651 | $ 586 | $ 5,710 | $ 4,639 | $ 2,704 |
Denominator | |||||||||||
Weighted average common shares outstanding, basic | 16,947 | 16,565 | 16,236 | ||||||||
Options to purchase common stock | 267 | 437 | 535 | ||||||||
Restricted stock units | 27 | 27 | 42 | ||||||||
Employee stock purchase plan | 3 | 1 | |||||||||
Weighted average common shares outstanding, diluted | 17,241 | 17,032 | 16,814 | ||||||||
Net income per share | |||||||||||
Basic | $ 0.34 | $ 0.28 | $ 0.17 | ||||||||
Diluted | $ 0.10 | $ 0.14 | $ 0.02 | $ 0.06 | $ 0.12 | $ 0.07 | $ 0.04 | $ 0.03 | $ 0.33 | $ 0.27 | $ 0.16 |
Net Income Per Share - Addition
Net Income Per Share - Additional Information (Detail) - shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Earnings Per Share [Abstract] | |||
Outstanding potential common shares excluded from computation of net income per share | 5,000 | 4,000 | 126,000 |
Retirement Savings Plan - Addit
Retirement Savings Plan - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Defined Contribution Pension and Other Postretirement Plans Disclosure [Abstract] | |||
Maximum allowable contribution by employee percentage | 100.00% | ||
Defined benefit plan employer matching contribution percent | 25.00% | ||
Maximum annual contribution per employee, percent | 6.00% | ||
Employer matching contribution amount | $ 1,400,000 | $ 1,100,000 | $ 733,000 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | ||
Officers compensation from the foundation | $ 0 | |
Contributions To Related Party [Member] | ||
Related Party Transaction [Line Items] | ||
Contributions to the foundation | 250,000 | $ 500,000 |
Legal Obligation To Future Commitments [Member] | ||
Related Party Transaction [Line Items] | ||
Contributions to the foundation | $ 0 |
Selected Quarterly Financial 67
Selected Quarterly Financial Data (Unaudited) - Summary of Unaudited Quarterly Statements of Comprehensive Income Data (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 51,061 | $ 49,284 | $ 47,351 | $ 45,599 | $ 42,348 | $ 40,354 | $ 38,846 | $ 36,970 | $ 193,295 | $ 158,518 | $ 127,947 |
Gross profit | 33,739 | 33,113 | 31,379 | 30,718 | 28,912 | 27,654 | 26,511 | 25,398 | 128,949 | 108,475 | 87,956 |
Income from operations | 2,653 | 2,670 | 880 | 1,314 | 2,814 | 2,260 | 1,027 | 922 | 7,517 | 7,023 | 4,383 |
Net income | $ 1,805 | $ 2,509 | $ 352 | $ 1,044 | $ 2,132 | $ 1,270 | $ 651 | $ 586 | $ 5,710 | $ 4,639 | $ 2,704 |
Diluted earnings per share | $ 0.10 | $ 0.14 | $ 0.02 | $ 0.06 | $ 0.12 | $ 0.07 | $ 0.04 | $ 0.03 | $ 0.33 | $ 0.27 | $ 0.16 |