Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 16, 2017 | Jun. 30, 2016 | |
Document and Entity Information | |||
Entity Registrant Name | SYNCHRONOSS TECHNOLOGIES INC | ||
Entity Central Index Key | 1,131,554 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Common Stock, Shares Outstanding | 45,998,579 | ||
Entity Public Float | $ 1.3 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | |
Current assets: | |||
Cash and cash equivalents | $ 181,018 | $ 147,634 | |
Marketable securities | 12,506 | 66,357 | |
Accounts receivable, net of allowance for doubtful accounts of $1,756 and $3,029 at December 31, 2016 and December 31, 2015, respectively | 137,233 | 136,117 | |
Prepaid expenses and other assets | 33,696 | 48,127 | |
Assets of discontinued operations, current | 0 | 8,710 | |
Total current assets | 364,453 | 406,945 | |
Restricted cash | 30,000 | 0 | |
Marketable securities | 2,974 | 19,635 | |
Property and equipment, net | 155,599 | 168,280 | |
Goodwill | 269,905 | 182,000 | |
Intangible assets, net | 203,864 | 174,322 | |
Deferred tax assets | 1,503 | 3,560 | |
Other assets | 7,541 | 10,350 | |
Note receivable from related party | 83,000 | 0 | |
Equity method investment | 45,890 | 0 | |
Assets of discontinued operations, non-current | 0 | 45,136 | |
Total assets | 1,164,729 | 1,010,228 | |
Current liabilities: | |||
Accounts payable | 15,770 | 26,038 | |
Accrued expenses | 69,435 | 45,819 | |
Deferred revenues | 27,542 | 8,323 | |
Contingent consideration obligation | 11,860 | 0 | |
Short term debt | 29,000 | 0 | |
Total current liabilities | 153,607 | 80,180 | |
Lease financing obligation - long term | 12,121 | 13,343 | |
Contingent consideration obligation - long-term | 0 | 930 | |
Convertible debt | 226,291 | 224,878 | |
Deferred tax liability | [1] | 49,822 | 16,404 |
Deferred revenues | 12,134 | 559 | |
Other liabilities | 3,783 | 2,668 | |
Redeemable noncontrolling interest | 49,856 | 61,452 | |
Stockholders’ equity: | |||
Preferred stock, $0.0001 par value; 10,000 shares authorized, 0 shares issued and outstanding at December 31, 2016 and December 31, 2015 | 0 | 0 | |
Common stock, $0.0001 par value; 100,000 shares authorized, 49,317 and 48,084 shares issued; 45,323 and 44,405 outstanding at December 31, 2016 and December 31, 2015, respectively | 5 | 4 | |
Treasury stock, at cost (3,994 and 3,679 shares at December 31, 2016 and December 31, 2015, respectively) | (95,183) | (65,651) | |
Additional paid-in capital | [1] | 575,093 | 512,802 |
Accumulated other comprehensive loss | (43,253) | (38,684) | |
Retained earnings | [1] | 220,453 | 201,343 |
Total stockholders’ equity | 657,115 | 609,814 | |
Total liabilities and stockholders’ equity | $ 1,164,729 | $ 1,010,228 | |
[1] | See Note 2 for discussion of the adoption of ASU 2016-09. |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts (in dollars) | $ 1,756 | $ 3,029 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 49,317,000 | 48,084,000 |
Common stock, shares outstanding (in shares) | 45,323,000 | 44,405,000 |
Treasury stock (in shares) | 3,994,000 | 3,679,000 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Income Statement [Abstract] | ||||
Net revenues | $ 476,750 | $ 428,117 | $ 307,301 | |
Costs and expenses: | ||||
Cost of services | [1] | 194,198 | 155,287 | 102,386 |
Research and development | 106,681 | 91,430 | 73,620 | |
Selling, general and administrative | 131,106 | 88,411 | 77,081 | |
Net change in contingent consideration obligation | 10,930 | 760 | 1,799 | |
Restructuring charges | 6,333 | 4,946 | 0 | |
Depreciation and amortization | 99,311 | 72,152 | 55,956 | |
Total costs and expenses | 548,559 | 412,986 | 310,842 | |
(Loss) income from continuing operations | (71,809) | 15,131 | (3,541) | |
Interest income | 2,428 | 2,047 | 1,265 | |
Interest expense | (7,013) | (5,711) | (3,430) | |
Other income (expense), net | 1,863 | 372 | 441 | |
(Loss) income from continuing operations, before taxes | (74,531) | 11,839 | (5,265) | |
Provision for income taxes | [2] | 7,990 | (5,424) | 3,242 |
Net (loss) income from continuing operations | (66,541) | 6,415 | (2,023) | |
Net income from discontinued operations, net of taxes | 74,533 | 40,267 | 40,918 | |
Net income | 7,992 | 46,682 | 38,895 | |
Net (loss) income attributable to noncontrolling interests | (11,596) | 6,052 | 0 | |
Net income attributable to Synchronoss | $ 19,588 | $ 40,630 | $ 38,895 | |
Net income (loss) per common share attributable to Synchronoss: | ||||
Basic, Continuing operations (in dollars per share) | [3] | $ (1.26) | $ 0.01 | $ (0.05) |
Basic, Discontinued operations (in dollars per share) | [3] | 1.71 | 0.95 | 1.01 |
Basic (in dollars per share) | [3] | 0.45 | 0.96 | 0.96 |
Diluted, Continuing operations (in dollars per share) | [3] | (1.26) | 0.01 | (0.05) |
Diluted, Discontinued operations (in dollars per share) | [3] | 1.71 | 0.95 | 1.01 |
Diluted (in dollars per share) | [3] | $ 0.45 | $ 0.96 | $ 0.96 |
Weighted-average common shares outstanding: | ||||
Basic (in shares) | [3] | 43,571 | 42,284 | 40,418 |
Diluted (in shares) | [3] | 43,571 | 42,284 | 40,418 |
[1] | Cost of services excludes depreciation and amortization which is shown separately. | |||
[2] | See Note 2 for discussion of the adoption of ASU 2016-09. | |||
[3] | See notes to financial statement footnote 2. |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
Net income attributable to Synchronoss | $ 19,588 | $ 40,630 | $ 38,895 |
Other comprehensive income (loss), net of tax: | |||
Foreign currency translation adjustments | (4,042) | (17,281) | (12,739) |
Unrealized gain (loss) on securities | 198 | (54) | (176) |
Net loss on intra-entity foreign currency transactions | (725) | (1,335) | (6,376) |
Total other comprehensive loss | (4,569) | (18,670) | (19,291) |
Total comprehensive income attributable to Synchronoss | $ 15,019 | $ 21,960 | $ 19,604 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings |
Balance at Dec. 31, 2013 | $ 447,639 | $ 4 | $ (67,104) | $ 393,644 | $ (723) | $ 121,818 |
Balance (in shares) at Dec. 31, 2013 | 44,456 | (3,793) | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Stock based compensation | 9,992 | 9,992 | ||||
Issuance of restricted stock | 18,353 | 18,353 | ||||
Issuance of restricted stock (in shares) | 765 | |||||
Issuance of common stock on exercise of options | 30,003 | 30,003 | ||||
Issuance of common stock on exercise of options (in shares) | 1,223 | |||||
ESPP compensation | 642 | 642 | ||||
Sale of Treasury Stock in connection with an employee stock purchase plan | 1,677 | $ 768 | 909 | |||
Sale of Treasury Stock in connection with an employee stock purchase plan (in shares) | 60 | |||||
Net income attributable to Synchronoss | 38,895 | 38,895 | ||||
Total other comprehensive income (loss) | (19,291) | (19,291) | ||||
Tax benefit from stock option exercise | 1,197 | 1,197 | ||||
Balance at Dec. 31, 2014 | 529,107 | $ 4 | $ (66,336) | 454,740 | (20,014) | 160,713 |
Balance (in shares) at Dec. 31, 2014 | 46,444 | (3,733) | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Stock based compensation | 8,495 | 8,495 | ||||
Issuance of restricted stock | 22,592 | 22,592 | ||||
Issuance of restricted stock (in shares) | 761 | |||||
Issuance of common stock on exercise of options | 19,936 | 19,936 | ||||
Issuance of common stock on exercise of options (in shares) | 879 | |||||
ESPP compensation | 624 | 624 | ||||
Sale of Treasury Stock in connection with an employee stock purchase plan | 1,902 | $ 685 | 1,217 | |||
Sale of Treasury Stock in connection with an employee stock purchase plan (in shares) | 54 | |||||
Net income attributable to Synchronoss | 40,630 | 40,630 | ||||
Total other comprehensive income (loss) | (18,670) | (18,670) | ||||
Tax benefit from stock option exercise | 5,198 | 5,198 | ||||
Balance at Dec. 31, 2015 | $ 609,814 | $ 4 | $ (65,651) | 512,802 | (38,684) | 201,343 |
Balance (in shares) at Dec. 31, 2015 | 48,084 | 48,084 | (3,679) | |||
Increase (Decrease) in Stockholders' Equity | ||||||
Cumulative effect adjustment to RE's | $ 232 | 710 | (478) | |||
Adjusted balance | 610,046 | $ 4 | $ (65,651) | 513,512 | (38,684) | 200,865 |
Stock based compensation | 7,778 | 7,778 | ||||
Issuance of restricted stock | $ 25,384 | 25,384 | ||||
Issuance of restricted stock (in shares) | 41 | 605 | ||||
Issuance of common stock on exercise of options | $ 13,913 | $ 1 | 13,912 | |||
Issuance of common stock on exercise of options (in shares) | 608 | 608 | ||||
ESPP compensation | $ 817 | 817 | ||||
Issuance of common stock related to acquisition | 22,000 | $ 9,244 | 12,756 | |||
Issuance of common stock related to acquisition (in shares) | 840 | |||||
Issuance of common stock to subsidiary (in shares) | 20 | |||||
Issuance of common stock to a subsidiary | (40,025) | $ (40,025) | ||||
Repurchase of treasury stock (in shares) | (1,263) | |||||
Sale of Treasury Stock in connection with an employee stock purchase plan | 2,183 | $ 1,249 | 934 | |||
Sale of Treasury Stock in connection with an employee stock purchase plan (in shares) | 108 | |||||
Net income attributable to Synchronoss | 19,588 | 19,588 | ||||
Total other comprehensive income (loss) | (4,569) | (4,569) | ||||
Balance at Dec. 31, 2016 | $ 657,115 | $ 5 | $ (95,183) | $ 575,093 | $ (43,253) | $ 220,453 |
Balance (in shares) at Dec. 31, 2016 | 49,317 | 49,317 | (3,994) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Net Cash Provided by (Used in) Operating Activities [Abstract] | ||||
Net income | $ 7,992 | $ 46,682 | $ 38,895 | |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization | 99,311 | 72,152 | 55,956 | |
Amortization of debt issuance costs | 1,607 | 1,501 | 618 | |
(Gain) loss on disposals | (952) | 16 | 33 | |
Gain on discontinued operations | (95,311) | 0 | 0 | |
Amortization of bond premium | 1,416 | 1,705 | 384 | |
Deferred income taxes | 32,826 | 8,319 | 3,207 | |
Non-cash interest on leased facility | 1,111 | 924 | 946 | |
Stock-based compensation | 33,979 | 31,711 | 28,987 | |
Contingent consideration obligation | 10,930 | (772) | 3,532 | |
Changes in operating assets and liabilities: | ||||
Accounts receivable, net of allowance for doubtful accounts | (1,662) | (27,577) | (50,924) | |
Prepaid expenses and other current assets | [1] | 12,644 | (8,543) | (14,660) |
Other assets | 10,054 | (4,282) | (1,930) | |
Accounts payable | (11,139) | 6,185 | 4,169 | |
Accrued expenses | [1] | 22,024 | 16,333 | 16,402 |
Other liabilities | (6,558) | (402) | 5,825 | |
Deferred revenues | 24,317 | (4,130) | (4,119) | |
Net cash provided by operating activities | 142,589 | 139,822 | 87,321 | |
Net Cash Provided by (Used in) Investing Activities [Abstract] | ||||
Purchases of fixed assets | (58,542) | (59,960) | (73,885) | |
Purchases of intangible assets | 0 | (1,200) | 0 | |
Purchases of marketable securities available-for-sale | (13,445) | (139,569) | (50,275) | |
Maturities of marketable securities available-for-sale | 82,904 | 106,210 | 9,265 | |
Change in restricted cash | (30,000) | 0 | 0 | |
Proceeds from the sale of discontinued operations | 18,135 | 0 | 0 | |
Businesses acquired, net of cash | (98,428) | (131,592) | (38,085) | |
Net cash used in investing activities | (99,376) | (226,111) | (152,980) | |
Net Cash Provided by (Used in) Financing Activities [Abstract] | ||||
Proceeds from the exercise of stock options | 13,912 | 19,936 | 30,003 | |
Taxes paid on withholding shares | [1] | (8,885) | (17,043) | (15,139) |
Payments on contingent consideration obligation | 0 | (4,468) | 0 | |
Debt issuance costs | (1,346) | 0 | (7,065) | |
Proceeds from issuance of convertible notes | 0 | 0 | 230,000 | |
Borrowings on revolving line of credit | 144,000 | 0 | 40,000 | |
Repayment of revolving line of credit | (115,000) | 0 | (40,000) | |
Repurchases of common stock | (40,025) | 0 | 0 | |
Proceeds from the sale of treasury stock in connection with an employee stock purchase plan | 2,183 | 1,902 | 1,677 | |
Repayments of capital lease obligations | (3,815) | (2,021) | (1,515) | |
Net cash (used in) provided by financing activities | (8,976) | (1,694) | 237,961 | |
Effect of exchange rate changes on cash | (853) | (350) | 153 | |
Net increase (decrease) in cash and cash equivalents | 33,384 | (88,333) | 172,455 | |
Cash and cash equivalents at beginning of period | 147,634 | 235,967 | 63,512 | |
Cash and cash equivalents at end of period | 181,018 | 147,634 | 235,967 | |
Supplemental disclosures of cash flow information: | ||||
Cash paid for interest | 4,661 | 29,868 | 19,342 | |
Cash paid for interest | 6,981 | 5,791 | 2,290 | |
Supplemental disclosures of non-cash investing and financing activities: | ||||
Issuance of common stock in connection with Openwave acquisition | $ 22,000 | $ 0 | $ 0 | |
[1] | See Note 2 for discussion of the adoption of ASU 2016-09. |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2016 | |
Description of Business [Abstract] | |
Description of Business | Description of Business General Synchronoss is a global software and services company that provides essential technologies for the mobile transformation of business. The Company's portfolio, which is targeted at the Consumer and Enterprise markets, contains offerings such as personal cloud, secure-mobility, identity management and scalable messaging platforms, products and solutions. These essential technologies create a better way of delivering the transformative mobile experiences that service providers and enterprises need to help them stay ahead of the curve in competition, innovation, productivity, growth and operational efficiency. Synchronoss' products and platforms are designed to be carrier-grade, flexible and scalable, enabling multiple converged communication services to be managed across a range of distribution channels including e-commerce, m-commerce, telesales, customer stores, indirect and other retail outlets. This business model allows the Company to meet the rapidly changing converged services and connected devices offered by their customers. Synchronoss' products, platforms and solutions enable its enterprise and service provider customers to acquire, retain and service subscribers and employees quickly, reliably and cost-effectively with white label and custom-branded solutions. Synchronoss customers can simplify the processes associated with managing the customer experience for procuring, activating, connecting, backing-up, synchronizing and sharing/collaboration with connected devices and contents from these devices and associated services. The extensibility, scalability, reliability and relevance of the Company's platforms enable new revenue streams and retention opportunities for their customers through new subscriber acquisitions, sale of new devices, accessories and new value-added service offerings in the Cloud, including the services offered by Intralinks, which the Company acquired in January 2017. By using the Company's technologies, Synchronoss customers can optimize their cost of operations while enhancing their customer experience. The Company currently operates in and markets their solutions and services directly through their sales organizations in North America, Europe, the Middle East and Africa or EMEA, Latin America and the Asia-Pacific region. Synchronoss delivers essential technologies for mobile transformation to two primary types of customers: service provider and enterprise customers in regulated verticals and use cases. Service Providers, Retailers, OEMs, Re-sellers and Service Integrators These products and platforms provide end-to-end seamless integration between customer-facing channels/applications, communication services, or devices and “back-office” infrastructure-related systems and processes. Synchronoss' customers rely on their solutions and technology to automate the process of activation and content and settings management for their subscribers’ devices while delivering additional communication services. Synchronoss' portfolio includes: cloud-based sync, backup, storage and content engagement capabilities, broadband connectivity solutions, analytics, white label messaging, identity/access management that enable communications service providers or CSPs, cable operators/multi-services operators, or MSOs and original equipment manufacturers, or OEMs with embedded connectivity (e.g. smartphones, laptops, tablets and mobile internet devices or MIDs, such as automobiles, wearables for personal health and wellness, and connected homes), multi-channel retailers, as well as other customers to accelerate and monetize value-add services for secure and broadband networks and connected devices. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation and Consolidation The consolidated financial statements include the accounts of the Company, its wholly‑owned subsidiaries and variable interest entities (VIE) in which the Company is the primary beneficiary and entities in which the Company has a controlling interest. Investments in less than majority-owned companies in which the Company does not have a controlling interest, but does have significant influence, are accounted for as equity method investments. All material intercompany transactions and accounts are eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the current year's presentation. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the 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. Revenue Recognition and Deferred Revenue The Company provides services principally on a transactional or subscription basis or, at times, on a fixed fee basis and recognizes the revenues as the services are performed or delivered as described below: Transactional and Subscription Service Arrangements: Transaction and subscription revenues consist of revenues derived from the processing of transactions through the Company’s service platforms, providing enterprise portal management services on a subscription basis and maintenance agreements on software licenses. Transaction service arrangements include services such as processing equipment orders, new account set‑up and activation, number port requests, credit checks and inventory management. Subscription services include monthly active user fees, software as a service (“SaaS”) fees, hosting and storage and the related maintenance support for those services. Transaction revenues are principally based on a contractual price per transaction and are recognized based on the number of transactions processed during each reporting period. Revenues are recorded based on the total number of transactions processed at the applicable price established in the relevant contract. The total amount of revenues recognized is based primarily on the volume of transactions. Subscription revenues are recorded one of two ways: on a straight‑line basis over the life of the contract or on a fixed monthly fee based on a set contracted amount. Many of the Company’s contracts guarantee minimum volume transactions from the customer. In these instances, if the customer’s total transaction volume for the period is less than the contractual amount, the Company records revenues at the minimum guaranteed amount. At times, transaction revenues may also include billings to customers that reimburse the Company based on the number of individuals dedicated to processing transactions. Set‑up fees for transactional service arrangements are deferred and recognized on a straight‑line basis over the life of the contract since these amounts would not have been paid by the customer without the related transactional service arrangement. Revenues are presented net of discounts, which are volume level driven, or credits, which are performance driven, and are determined in the period in which the volume thresholds are met or the services are provided. Professional Service and Software License Arrangements: Professional services include process and workflow consulting services and development services. Professional services when sold with transactional or subscription service arrangements are accounted for separately when the professional services have value to the customer on a standalone basis and there is objective and reliable evidence of fair value of the professional services. When accounted for separately, professional service revenues are recognized as services are performed and all other elements of revenue recognition have been satisfied. In determining whether professional service revenues can be accounted for separately from transaction or subscription service revenues, the Company considers the following factors for each professional services agreement: availability of the professional services from other vendors, whether objective and reliable evidence of fair value exists of the undelivered elements, the nature of the professional services, the timing of when the professional services contract was signed in comparison to the transaction or subscription service start date and the contractual independence of the transactional or subscription service from the professional services. If a professional service arrangement were not to qualify for separate accounting, the Company would recognize the professional service revenues ratably over the remaining term of the transaction or subscription agreement. Revenue from software license arrangements is recognized when the license is delivered to its customers and all of the software revenue recognition criteria are met. When software arrangements include multiple elements, the arrangement consideration is allocated at the inception to all deliverables using the residual method providing the Company has vendor specific objective evidence (VSOE) on all undelivered elements. The Company determines VSOE for each element based on historical stand‑alone sales to third parties. When transaction or subscription service arrangements, include multiple elements, the arrangement consideration is allocated at the inception of an arrangement to all deliverables using the relative selling price method. The relative selling price method allocates any discount in the arrangement proportionally to each deliverable on the basis of each deliverable’s selling price. The selling price used for each deliverable will be based on VSOE if available, third‑party evidence (TPE) if vendor‑specific objective evidence is not available, or estimated selling price (ESP) if neither vendor‑specific objective evidence nor third‑party evidence is available. The objective of ESP is to determine the price at which the Company would transact a sale if the product or service were sold on a stand‑alone basis. The Company determines ESP by considering multiple factors including, but not limited to, geographies, market conditions, competitive landscape, internal costs, gross margin objectives, and pricing practices. ESP is generally used for offerings that are not typically sold on a stand‑alone basis or for new or highly customized offerings. While the Company follows specific and detailed rules and guidelines related to revenue recognition, it makes and uses management judgments and estimates in connection with the revenue recognized in any reporting period, particularly in the areas described above, as well as collectability. If management made different estimates or judgments, differences in the timing of the recognition of revenue could occur. Deferred Revenue: Deferred revenues primarily represent billings to customers for services in advance of the performance of services, with revenues recognized as the services are rendered, and also includes the fair value of deferred revenues recorded as a result of acquisitions. Service Level Standards Pursuant to certain contracts, the Company is subject to service level standards and to corresponding penalties for failure to meet those standards. All performance‑related penalties are reflected as a corresponding reduction of the Company’s revenues. These penalties, if applicable, are recorded in the month incurred and were insignificant for the years ended December 31, 2016 , 2015 and 2014 , respectively. Cost of Services Cost of services includes all direct materials, direct labor and those indirect costs related to revenues such as indirect labor, materials and supplies and facilities cost, exclusive of depreciation expense. Research and Development Research and development costs are expensed as incurred, unless they meet U.S. GAAP criteria for deferral and amortization. Software development costs incurred prior to the establishment of technological feasibility do not meet these criteria, and are expensed as incurred. The Company includes capitalized software development costs in intangible assets on the consolidated balance sheets. Amortization of software development costs is computed using the straight‑line method over the estimated useful lives of the assets, 3 and 5 years. Research and development expense consists primarily of costs related to personnel, including salaries and other personnel‑related expenses, consulting fees and the cost of facilities, computer and support services used in service technology development. The Company also expenses costs relating to developing modifications and minor enhancements of its existing technology and services. The unamortized software development costs and amortization expense were as follows: Year ended December 31, 2016 2015 2014 Unamortized software development costs $ 19,417 $ 6,071 $ 6,106 Software development amortization expense $ 2,235 $ 1,951 $ 837 Concentration of Credit Risk The Company’s financial instruments that are exposed to concentration of credit risk consist primarily of cash and cash equivalents, marketable securities and accounts receivable. The Company maintains its cash and cash equivalents at several major financial institutions. The Company has not experienced any realized losses in such accounts and believes it is not exposed to any significant credit risk related to cash, cash equivalents and securities. The Company’s cash equivalents and short‑term marketable securities consist primarily of money market funds, certificates of deposit, commercial paper, and municipal and corporate bonds. The Company believes that concentration of credit risk with respect to accounts receivable is limited because of the creditworthiness of the Company’s major customers. AT&T and Verizon Wireless in the aggregate accounted for 62% , 71% and 67% of net revenues for 2016 , 2015 and 2014 , respectively. AT&T and Verizon accounted for 64% and 57% of accounts receivable at December 31, 2016 and 2015 , respectively. The loss of either AT&T or Verizon as a customer would have a material negative impact on the Company. The Company believes that if either AT&T or Verizon terminated their relationships with Synchronoss, they would encounter substantial costs in replacing Synchronoss’ solutions. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with a maturity of three months or less at the date of acquisition to be cash equivalents. Restricted Cash The restricted cash balance is held in escrow to cover certain conditions that existed at the closing of the carrier activation business divestiture. The escrow funds will be released upon the assigned contracts meeting certain minimum revenue thresholds. Fair Value of Financial Instruments and Liabilities The Company includes disclosures of fair value information about financial instruments and liabilities, whether or not recognized on the balance sheet, for which it is practicable to estimate that value. Due to their short‑term nature, the carrying amounts reported in the financial statements approximate the fair value for cash and cash equivalents, marketable securities, accounts receivable and accounts payable. Marketable Securities Marketable securities consist of fixed income investments with a maturity of greater than three months and enhanced money market funds. These investments are classified as available‑for‑sale and are reported at fair value on the Company’s balance sheet. The Company classifies its securities with maturity dates of 12 months or more as long term. Unrealized holding gains and losses are reported within accumulated other comprehensive loss as a separate component of stockholders’ equity. If a decline in the fair value of a marketable security below the Company’s cost basis is determined to be other than temporary, such marketable security is written down to its estimated fair value as a new cost basis and the amount of the write‑down is included in earnings as an impairment charge. The Company has recorded temporary changes in fair value of the marketable securities but has not recorded other‑than‑temporary charges for the periods presented herein. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable consist of amounts due to the Company from normal business activities. The Company maintains an allowance for estimated losses resulting from the inability of its customers to make required payments. The Company estimates uncollectible amounts based upon historical bad debts, current customer receivable balances, the age of customer receivable balances, the customer’s financial condition and current economic trends. Property and Equipment Property and equipment and leasehold improvements are stated at cost, net of accumulated depreciation. Depreciation is computed using the straight‑line method over the estimated useful lives of the assets, which range from 3 to 5 years, or the lesser of the related initial term of the lease or useful life for leasehold improvements. Amortization of property and equipment recorded under a capital lease is included with depreciation expense. Expenditures for routine maintenance and repairs are charged against operations. Major replacements, improvements and additions are capitalized. Noncontrolling Interest Noncontrolling interests ("NCI") are evaluated by the Company and are shown as either a liability, temporary equity (shown between liabilities and equity) or as permanent equity depending on the nature of the redeemable features at amounts based on formulas specific to each entity. Generally, mandatorily redeemable NCI's are classified as liabilities and non-mandatorily redeemable NCI's are classified outside of stockholders' equity in the consolidated balance sheets as temporary equity under the caption, redeemable noncontrolling interests, and are measured at their redemption values at the end of each period. If the redemption value is greater than the carrying value, an adjustment is recorded in retained earnings to record the NCI at its redemption value. Redeemable NCI’s that are mandatorily redeemable are classified as a liability in the consolidated balance sheets under either other current liabilities or other long-term liabilities, depending on the remaining duration until settlement, and are measured at the amount of cash that would be paid if settlement occurred at the balance sheet date with any change from the prior period recognized as interest expense. If the noncontrolling interest is not currently redeemable yet probable of becoming redeemable, the Company is required to either (1) accrete changes in the redemption value over the period from the date of issuance to the earliest redemption date of the instrument using an appropriate methodology, usually the interest method, or (2) recognize changes in the redemption value immediately as they occur and adjust the carrying value of the security to equal the redemption value at the end of each reporting period. The Company has elected to recognize changes in the redemption value immediately as they occur and adjust the carrying value of the noncontrolling interest to the greater of the estimated redemption value, which approximates fair value, at the end of each reporting period or the initial carrying amount. Net income attributable to NCI’s reflects the portion of the net income (loss) of consolidated entities applicable to the NCI stockholders in the accompanying consolidated statements of income. The net income attributable to NCI is classified in the consolidated statements of income as part of consolidated net income and deducted from total consolidated net income to arrive at the net income attributable to the Company. Business Combinations The Company accounts for business combinations in accordance with the acquisition method. The acquisition method of accounting requires that assets acquired, liabilities assumed and any noncontrolling interest in the aquiree (if any) be recorded at their fair values on the date of a business acquisition. The Company’s consolidated financial statements and results of operations reflect an acquired business from the completion date of an acquisition. The judgments that the Company makes in determining the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact net income in periods following a business combination. The Company generally uses either the income, cost or market approach to aid in its conclusions of such fair values and asset lives. The income approach presumes that the value of an asset can be estimated by the net economic benefit to be received over the life of the asset, discounted to present value. The cost approach presumes that an investor would pay no more for an asset than its replacement or reproduction cost. The market approach estimates value based on what other participants in the market have paid for reasonably similar assets. Although each valuation approach is considered in valuing the assets acquired, the approach ultimately selected is based on the characteristics of the asset and the availability of information. The Company records contingent consideration resulting from a business combination at its fair value on the acquisition date. Each reporting period thereafter, the Company revalues these obligations and records increases or decreases in their fair value as an adjustment to net change in contingent consideration obligation within the consolidated statement of income. Changes in the fair value of the contingent consideration obligation can result from updates in the achievement of financial targets and changes to the weighted probability of achieving those future financial targets. Significant judgment is employed in determining the appropriateness of these assumptions as of the acquisition date and for each subsequent period. Accordingly, any change in the assumptions described above, could have a material impact on the amount of the net change in contingent consideration obligation that the Company records in any given period. Discontinued Operations The Company generally classifies a disposal transaction as discontinued operation in the consolidated financial statements when it qualifies as a component of the Company, meets the held for sale criteria, is disposed of by sale, or is disposed of other than by sale and it represents a strategic shift that has a major effect on the Company's operations and financial results. Investments in Affiliates and Other Entities In the normal course of business, Synchronoss enters into various types of investment arrangements, each having unique terms and conditions. These investments may include equity interests held by Synchronoss in business entities, including general or limited partnerships, contractual joint ventures, or other forms of equity participation. Synchronoss determines whether such investments involve a VIE based on the characteristics of the subject entity. If the entity is determined to be a VIE, then management determines if Synchronoss is the primary beneficiary of the entity and whether or not consolidation of the VIE is required. The primary beneficiary consolidating the VIE must normally have both (i) the power to direct the activities of a VIE that most significantly affect the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE, in either case that could potentially be significant to the VIE. When Synchronoss is deemed to be the primary beneficiary, the VIE is consolidated and the other party’s equity interest in the VIE is accounted for as a noncontrolling interest. The Company generally accounts for investments it makes in VIEs in which it has determined that it does not have a controlling financial interest but has significant influence over and holds at least a 20% ownership interest using the equity method. Any such investment not meeting the parameters to be accounted under the equity method would be accounted for using the cost method unless the investment had a readily determinable fair value, at which it would then be reported.The Company utilizes a 1 month reporting lag in recording equity income from equity method investments. If an entity fails to meet the characteristics of a VIE, the Company then evaluates such entity under the voting model. Under the voting model, the Company consolidates the entity if they determine that they, directly or indirectly, have greater than 50% of the voting shares, and determine that other equity holders do not have substantive participating rights. Goodwill Goodwill represents the excess of the purchase price over the fair value of assets acquired, including other definite‑lived intangible assets. Goodwill is not amortized, but reviewed annually for impairment or upon the occurrence of events or changes in circumstances that would more likely than not reduce the fair value of the reporting unit below its carrying amount. There were no impairment charges recognized during the years ended December 31, 2016 , 2015 and 2014 . Impairment of Long‑Lived Assets A review of long‑lived assets for impairment is performed when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. If an indication of impairment is present, the Company compares the estimated undiscounted future cash flows to be generated by the asset to the asset’s carrying amount. If the undiscounted future cash flows are less than the carrying amount of the asset, the Company records an impairment loss equal to the amount by which the asset’s carrying amount exceeds its fair value. The fair value is determined based on valuation techniques such as a comparison to fair values of similar assets or using a discounted cash flow analysis. There were no impairment charges recognized during the years ended December 31, 2016 , 2015 and 2014 . Long lived assets that do not have indefinite lives are amortized/depreciated over their useful lives and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. The Company reevaluates the useful life determinations each year to determine whether events and circumstances warrant a revision to the remaining useful lives. Income Taxes Since the Company conducts operations on a global basis, its effective tax rate has and will depend upon the geographic distribution of its pre‑tax earnings among locations with varying tax rates. The Company accounts for the effects of income taxes that result from its activities during the current and preceding years. Under this method, deferred income tax liabilities and assets are based on the difference between the financial statement carrying amounts and the tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse or be utilized. The realization of deferred tax assets is contingent upon the generation of future taxable income. A valuation allowance is recorded if it is “more likely than not” that a portion or all of a deferred tax asset will not be realized. In evaluating the Company’s ability to recover their deferred tax assets within the jurisdiction from which they arise, the Company considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax-planning strategies, and results of recent operations. In projecting future taxable income, the Company begins with historical results adjusted for the results of discontinued operations and incorporates assumptions about the amount of future state, federal, and foreign pretax operating income adjusted for items that do not have tax consequences. The assumptions about future taxable income require significant judgment and are consistent with the plans and estimates the Company is using to manage the underlying businesses. In evaluating the objective evidence that historical results provide, the Company considers three years of cumulative operating income (loss). The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not to be sustained upon examination based on the technical merits of the position. The amount of the accrual for which an exposure exists is measured by determining the amount that has a greater than 50 percent likelihood of being realized upon the settlement of the position. Components of the reserve are classified as a current or a long‑term liability in the consolidated balance sheets based on when the Company expects each of the items to be settled. The Company records interest and penalties accrued in relation to uncertain tax benefits as a component of interest expense. The Company expects that the amount of unrecognized tax benefits will change during 2017 , however, the Company does not expect the change to have a significant impact on its results of operations or financial position. While the Company believes it has identified all reasonably identifiable exposures and that the reserve that the Company has established for identifiable exposures is appropriate under the circumstances, it is possible that additional exposures exist and that exposures may be settled at amounts different than the amounts reserved. It is also possible that changes in facts and circumstances could cause the Company to either materially increase or reduce the carrying amount of its tax reserves. In general, tax returns for the year 2012 and thereafter are subject to future examination by tax authorities. The Company’s policy has been to leave its cumulative unremitted foreign earnings invested indefinitely outside the United States, and the Company intends to continue this policy. As such, taxes have not been provided on any of the remaining accumulated foreign unremitted earnings. Due to the timing and circumstances of repatriation of such earnings, if any, it is not practicable to determine the unrecognized deferred tax liability relating to such amounts. If the cumulative unremitted foreign earnings exceed the amount the Company intends to reinvest in foreign countries in the future, the Company would provide for taxes on such excess amount. Foreign Currency The functional currency is translated into U.S. dollars for balance sheet accounts using the month end rates in effect as of the balance sheet date and average exchange rate for revenue and expense accounts for each respective period. The translation adjustments are deferred as a separate component of stockholders’ equity within accumulated other comprehensive income. Gains or losses resulting from transactions denominated in foreign currencies are included in other income or expense, within the consolidated statements of income. Comprehensive Income Reporting on comprehensive income requires components of other comprehensive income, including unrealized gains or losses on available‑for‑sale securities, to be included as part of total comprehensive income. Comprehensive income is comprised of net income, translation adjustments and unrealized gains and losses on available‑for‑sale securities. The components of comprehensive income are included in the statements of comprehensive income. Basic and Diluted Net Income Attributable to Common Stockholders per Common Share Basic earnings per share is calculated by using the weighted-average number of common shares outstanding during the period, excluding amounts associated with restricted shares. The diluted earnings per share calculation is based on the weighted-average number of shares of common stock outstanding adjusted for the number of additional shares that would have been outstanding had all potentially dilutive common shares been issued. Potentially dilutive shares of common stock include stock options, convertible debt and unvested restricted stock. The dilutive effects of stock options and restricted stock awards are based on the treasury stock method. The dilutive effect of the assumed conversion of convertible debt is determined using the if-converted method. The after-tax effect of interest expense related to the convertible securities is added back to net income, and the convertible debt is assumed to have been converted into common shares at the beginning of the period. Stock‑Based Compensation The Company utilizes the Black‑Scholes pricing model to determine the fair value of stock options on the dates of grant. Restricted stock awards are measured based on the fair market values of the underlying stock on the dates of grant. The Company recognizes stock‑based compensation over the requisite service period with an offsetting credit to additional paid‑in capital. For the Company’s performance restricted stock awards the Company estimates the number of shares the recipient is to receive by applying a probability of achieving the performance goals. The actual number of shares the recipient receives is determined at the end of the performance period based on the results achieved versus goals based on the performance targets, such as revenues and EBITDA. Once the number of awards is determined, the compensation cost is fixed and continues to be recognized using straight line recognition over the requisite service period for each vesting tranche. Use of a valuation model requires management to make certain assumptions with respect to selected model inputs. Expected volatility was calculated based on historical information of the Company's stock. The average expected life was determined using historical stock option exercise activity. The risk‑free interest rate is based on U.S. Treasury zero‑coupon issues with a remaining term equal to the expected life assumed at the date of grant. The Company has never declared or paid cash dividends on the common or preferred equity and does not anticipate paying any cash dividends in the foreseeable future. Forfeitures are accounted for as they occur. Recently Issued Accounting Standards In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-04, Intangibles-Goodwill and Other, Simplifying the Test for Goodwill Impairment, which eliminates Step 2 from the goodwill impairment test. Under the revised test, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. This ASU is effective for any interim or annual impairment tests for fiscal years beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating the impact of adoption on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. ASU 2017-01 is effective for annual reporting periods beginning after December 15, 2017, and interim periods within those years, with early adoption permitted. The Company is currently evaluating the impact of adoption on its consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which amends the guidance in ASC 230, including providing additional guidance related to transfers between cash and restricted cash and how entities present, in their statement of cash flows, the cash receipts and cash payments that directly affect the restricted cash accounts. ASU 2016-18 is effective for annual reporting periods beginning after December 15, 2017, and interim periods within those years, with early adoption permitted. The Company is currently evaluating the impact of adoption on its consolidated financial statements. In October 2016, the FASB issued ASU 2016-17, Consolidati |
Acquisition and Divestiture
Acquisition and Divestiture | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Acquisition and Divestiture | Acquisition and Divestiture Acquisition Openwave Messaging, Inc. (“Openwave”) On March 1, 2016, the Company acquired all outstanding shares of Openwave for $124.5 million , net of working capital adjustments and liabilities assumed, comprised of $102.5 million paid in cash and $22.0 million paid in shares of the Company’s common stock, based upon the average market value of the common stock for the ten trading days prior to the acquisition date. Openwave’s product portfolio includes its core complete messaging platform optimized for today’s most complex messaging requirements worldwide with a particular geographic strength in Asia-Pacific. With this acquisition and combined with Synchronoss’ current global footprint, Synchronoss will have increased direct access to subscribers around the world for the Synchronoss Personal Cloud™ platform and bolster the Company’s go-to-market efforts internationally. The Company determined the fair value of the net assets acquired as follows: Purchase Price Cash $ 4,110 Prepaid expenses and other assets 3,145 Property, Plant & Equipment 2,882 Long term assets 1,986 Intangible assets: Wtd. Avg. Tradename 1,000 1 year Technology 32,100 7 years Customer relationships 29,000 10 years Goodwill 91,732 Total assets acquired 165,955 Accounts payable and accrued liabilities 17,722 Deferred revenues 8,204 Long term liabilities 15,491 Net assets acquired $ 124,538 The goodwill recorded in connection with this acquisition was based on operating synergies and other benefits expected to result from the combined operations and the assembled workforce acquired. The goodwill acquired is not deductible for tax purposes. Acquisition‑Related Costs Acquisition related costs recognized during the years ended December 31, 2016 , 2015 and 2014 including transaction costs such as employee retention, legal, accounting, valuation and other professional services, were $11.8 million , $1.8 million , and $2.5 million , respectively. Divestitures Mirapoint On December 29, 2016, we completed the divestiture of our Mirapoint activation business to an unrelated third party and recorded a gain of $1.4 million on the sale. Sequential Technology International, LLC On December 16, 2016, Synchronoss completed a divestiture of a portion of its carrier activation business (“BPO”) to a newly formed entity named Sequential Technology International, LLC (“STI”) for a total purchase price of $146 million . As part of the sales arrangement, Synchronoss will retain a 30% investment in STI. Sequential Technology International Holdings, LLC ("STIH") an unrelated third party that was formerly named Omniglobe International LLC, will own the remaining 70% of STI. STIH financed the purchase of these assets through cash of $18.1 million , a new term loan, and a related party subordinated seller's note receivable in the amount of $83 million issued by Synchronoss, which is secured by STIH’s interest in STI. The related party note receivable earns interest at a rate of 12% per annum and matures on June 16, 2021. The Company and STIH agreed to a put and call option in regards to the Company's equity interest in STI. The Company will have the right to exercise a put option at any time to sell it's interest in STI, at the fair market value determined at the date of exercise. Additionally, STIH will have the right to exercise a call option at any time to purchase the interest in STI at the fair market value determined at the date of exercise. The Company determined that the put and call options are embedded within the host contract and do not require bifurcation and separate accounting treatment. STI has been determined to be a VIE of which the Company is not the primary beneficiary (See Note 5). As part of the divestiture, Synchronoss entered into a three year transition services agreement (“TSA”) with STI to support various indirect activities such as customer software support, technical support services, maintenance and general & administrative support services and a term license for access to certain platforms, necessary to perform certain tasks, as part of the exception handling process. On December 22, 2016, the Company entered into a non-exclusive perpetual license agreement with STIH, in the amount of $9.2 million , which is included in net revenues in the statement of income, for the use of the Company's Analytics software. The Company calculated the fair value of the license using a cost approach, which calculates the time and effort required to recreate the technology today. Inputs used to value the license are considered Level 3 inputs. The following is a summary of the operating results of BPO which have been reflected within income from discontinued operations, net of tax: Year ended December 31, 2016 2015 2014 Net revenues $ 145,613 $ 150,714 $ 150,013 Costs and expenses: Cost of services 96,737 83,931 82,028 Selling, general and administrative 2,615 2,324 2,146 Total costs and expenses 99,352 86,255 84,174 Income from discontinued operations 46,261 64,459 65,839 Gain on sale of discontinued operations 95,311 — — Income from discontinued operations before taxes 141,572 64,459 65,839 Provision for income taxes (67,039 ) (24,192 ) (24,921 ) Discontinued operations, net of taxes $ 74,533 $ 40,267 $ 40,918 The financial results reflected above may not represent BPO's stand-alone operating results, as the results reported within income from discontinued operations, net of tax only include certain costs that are directly attributable to BPO and exclude certain overhead costs that were previously allocated to BPO for each period. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company classifies marketable securities as available‑for‑sale. The fair value hierarchy established in the guidance adopted by the Company prioritizes the inputs used in valuation techniques into three levels as follows: • Level 1—Observable inputs—quoted prices in active markets for identical assets and liabilities; • Level 2—Observable inputs other than the quoted prices in active markets for identical assets and liabilities—includes quoted prices for similar instruments, quoted prices for identical or similar instruments in inactive markets, and amounts derived from valuation models where all significant inputs are observable in active markets; and • Level 3—Unobservable inputs—includes amounts derived from valuation models where one or more significant inputs are unobservable and require the Company to develop relevant assumptions. The following is a summary of assets, liabilities and redeemable noncontrolling interests and their related classifications under the fair value hierarchy: December 31, 2016 Total (Level 1) (Level 2) (Level 3) Assets Cash and cash equivalents (A) $ 181,018 $ 181,018 $ — $ — Securities available-for-sale (B) 15,480 — 15,480 — Total assets $ 196,498 $ 181,018 $ 15,480 $ — Liabilities Contingent consideration obligation $ 11,860 $ — $ — $ 11,860 Total liabilities $ 11,860 $ — $ — $ 11,860 Temporary Equity Redeemable noncontrolling interest (C) $ 49,856 $ — $ — $ 49,856 Total temporary equity $ 49,856 $ — $ — $ 49,856 December 31, 2015 Total (Level 1) (Level 2) (Level 3) Assets Cash and cash equivalents (A) $ 147,634 $ 147,634 $ — $ — Securities available-for-sale (B) 85,992 — 85,992 — Total assets $ 233,626 $ 147,634 $ 85,992 $ — Liabilities Contingent consideration obligation $ 930 $ — $ — $ 930 Total liabilities $ 930 $ — $ — $ 930 Temporary Equity Redeemable noncontrolling interest $ 61,452 $ — $ — $ 61,452 Total temporary equity $ 61,452 $ — $ — $ 61,452 (A) Cash and cash equivalents includes money market funds. (B) Securities available-for-sale include municipal bonds, commercial papers, certificates of deposit, enhanced income money market fund and corporate bonds which are classified as marketable securities. (C) As of December 31, 2016 , the carrying amount of the redeemable noncontrolling interest was greater than the fair value and accordingly no adjustment to the carrying amount was recorded. The Company utilizes the market approach to measure fair value for its financial assets. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets. The Company's marketable securities investments classified as Level 2 primarily utilize broker quotes in a non-active market for valuation of these securities. No transfers of assets between Level 1, Level 2 and Level 3 of the fair value measurement hierarchy occurred during the year ended December 31, 2016 . Available-for-Sale Securities At December 31, 2016 and December 31, 2015 , the estimated fair value of investments classified as available for sale, are as follows: December 31, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Available-for-sale securities: Certificates of deposit $ 450 $ — $ — $ 450 Municipal bonds 15,063 1 (34 ) 15,030 Total available-for-sale securities $ 15,513 $ 1 $ (34 ) $ 15,480 December 31, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Available-for-sale securities: Certificates of deposit $ 2,329 $ — $ (5 ) $ 2,324 Corporate bonds 39,986 — (253 ) 39,733 Municipal bonds 38,564 11 (44 ) 38,531 Fixed Income Fund 5,593 — (189 ) 5,404 Total available-for-sale securities $ 86,472 $ 11 $ (491 ) $ 85,992 Unrealized gains and losses are reported as a component of accumulated other comprehensive loss in stockholders’ equity. There were no sales of marketable securities during the years ended December 31, 2016 and 2015 . The cost of securities sold is based on the specific identification method. The Company evaluates investments with unrealized losses to determine if the losses are other than temporary. The Company has determined that the gross unrealized losses at December 31, 2016 and 2015 are temporary. In making this determination, the Company considered the financial condition, credit ratings and near‑term prospects of the issuers, the underlying collateral of the investments, and the magnitude of the losses as compared to the cost and the length of time the investments have been in an unrealized loss position. Additionally, while the Company classifies the securities as available for sale, the Company does not currently intend to sell such investments and it is more likely than not to recover the carrying value prior to being required to sell such investments. The unrealized losses and fair values of available-for-sale securities that have been in an unrealized loss position for a period of less than and greater than 12 months as of December 31, 2016 , are as follows: December 31, 2016 Securities in unrealized loss position less than 12 months Securities in unrealized loss position greater than 12 months Total Unrealized Losses Fair Value Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Certificates of deposit $ — $ 250 $ — $ — $ — $ 250 Municipal bonds (32 ) 12,683 (2 ) 914 (34 ) 13,597 $ (32 ) $ 12,933 $ (2 ) $ 914 $ (34 ) $ 13,847 The unrealized losses and fair values of available-for-sale securities that have been in an unrealized loss position for a period of less than and greater than 12 months as of December 31, 2015 , are as follows: December 31, 2015 Securities in unrealized loss position less than 12 months Securities in unrealized loss position greater than 12 months Total Unrealized Losses Fair Value Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Certificates of deposit $ (5 ) $ 2,324 — $ — $ (5 ) $ 2,324 Corporate bonds (253 ) 39,808 — — (253 ) 39,808 Municipal bonds (43 ) 20,630 (1 ) 550 (44 ) 21,180 Fixed Income Fund — — (189 ) 5,404 (189 ) 5,404 $ (301 ) $ 62,762 $ (190 ) $ 5,954 $ (491 ) $ 68,716 Expected maturities of available-for-sale securities are as follows: December 31, 2016 Amortized Cost Fair Value Due within one year $ 12,525 $ 12,506 Due after 1 year through 5 years 2,988 2,974 Total available-for-sale securities $ 15,513 $ 15,480 Contingent Consideration The Company determined the fair value of the contingent consideration related to the acquisition of Razorsight using a real options approach which uses a risk-adjusted expected growth rate based on assessments of expected growth in revenue, adjusted by an appropriate factor. The fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement. The significant unobservable inputs used in the fair value measurement of the Company’s contingent consideration obligation are the probabilities of achieving certain financial targets and contractual milestones. Significant changes in any of those probabilities in isolation may result in a higher (lower) fair value measurement. No changes in valuation techniques occurred during the year ended December 31, 2016 . During the year ended December 31, 2016 , the Company recognized a $10.9 million increase of the contingent consideration obligation due to an increase in the probability of achieving the contractual milestones associated with the potential earn-out payment to the Razorsight shareholders. The changes in fair value of the Company’s Level 3 contingent consideration obligation during the year ended December 31, 2016 were as follows: Balance at December 31, 2015 $ 930 Fair value adjustment to contingent consideration obligation included in net income 10,930 Balance at December 31, 2016 $ 11,860 Redeemable Noncontrolling Interests The Company accounts for the redeemable noncontrolling interest at its acquisition date fair value as temporary equity, due to the redemption option existing outside the control of the Company. The noncontrolling shareholders have the option, which is embedded in the noncontrolling interest, to require the Company to purchase the remaining noncontrolling share at a formula price designed to approximate fair value based on operating results of the entity. The Company recognizes changes in the redemption value immediately as they occur and adjusts the carrying value of the noncontrolling interest to the greater of the estimated redemption value, which approximates fair value, at the end of each reporting period or the initial carrying amount. As of December 31, 2016 , the carrying amount of the redeemable noncontrolling interest was greater than the fair value and accordingly no adjustment to the carrying value was recorded. The fair value of the redeemable noncontrolling interest was estimated by applying an income approach using a discounted cash flow analysis. This fair value measurement is based on significant inputs that are not observable in the market and thus represents a Level 3 measurement. Significant changes in the underlying assumptions used to value the redeemable noncontrolling interest could significantly increase or decrease the fair value estimates recorded in the consolidated balance sheets. The changes in fair value of the Company’s Level 3 redeemable noncontrolling interests during the year ended December 31, 2016 were as follows: Balance at December 31, 2015 $ 61,452 Fair value adjustment — Net loss attributable to redeemable noncontrolling interests (11,596 ) Balance at December 31, 2016 $ 49,856 |
Investments
Investments | 12 Months Ended |
Dec. 31, 2016 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments | Investments STI, LLC The Company includes investments which are accounted for using the equity method, under the caption equity method investments on the Company's consolidated balance sheets. As of December 31, 2016 , the Company's investments in equity interests was comprised of $45.9 million related to a 30% equity interest in STI. The Company utilizes a 1 month reporting lag in recording equity income from STI. Zentry, LLC During the year ended December 31, 2015, the Company formed a venture with MCI Communications and Verizon Patent and Licensing Inc. (collectively, “Verizon”), referred to as Zentry, LLC (“Zentry”) in which the Company holds a 67% interest. The Company determined that Zentry was a voting interest entity, because the entity has sufficient equity at risk to enable it to finance its activities independently. As the Company holds a majority ownership in Zentry, the Company consolidates Zentry under the voting model. SNCR, LLC During the year ended December 31, 2015, the Company formed a venture with Goldman Sachs (“Goldman”), referred to as SNCR, LLC which was determined to be a VIE in which the Company holds a 67% interest. The Company concluded that the entity does not have enough equity to finance its activities without additional subordinated financial support, which was provided by the Company via a $20 million line of credit. The Company consolidates the entity under the VIE model. The Company is the primary beneficiary and has the power to direct activities that most significantly impact the ventures’ economic performance. In particular, the Company directs the day to day operations, sales, marketing, distribution and R&D efforts of SNCR, LLC. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consist of the following: December 31, 2016 2015 Computer hardware $ 242,739 $ 217,659 Computer software 48,040 39,510 Construction in-progress 14,961 4,299 Furniture and fixtures 5,981 4,040 Building 8,808 8,808 Leasehold improvements 15,576 11,922 336,105 286,238 Less: Accumulated depreciation (180,506 ) (117,958 ) $ 155,599 $ 168,280 Depreciation expense was approximately $52.3 million , $43.5 million , and $36.1 million for 2016 , 2015 , and 2014 , respectively. Amortization of property and equipment recorded under capital leases are included with depreciation expense. |
Goodwill and Intangibles
Goodwill and Intangibles | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangibles | Goodwill and Intangibles Goodwill The Company records goodwill which represents the excess of the purchase price over the fair value of assets acquired, including other definite-lived intangible assets. Goodwill is reviewed annually for impairment or upon the occurrence of events or changes in circumstances that would more likely than not reduce the fair value of the reporting unit below its carrying amount. The following table shows the adjustments to goodwill during 2016 and 2015 : Balance at December 31, 2014 $ 147,135 Acquisitions 84,636 Reclassifications, adjustments and other (30 ) Reclassified to assets of discontinued operations, non-current (39,271 ) Translation adjustments (10,470 ) Balance at December 31, 2015 $ 182,000 Acquisition 91,732 Adjustment to amount reclassified to assets of discontinued operations, non-current 2,466 Reclassifications, adjustments and other (3,033 ) Translation adjustments (3,260 ) Balance at December 31, 2016 $ 269,905 The reclassification, adjustments and other of $3.0 million and $30.0 thousand for the years 2016 and 2015 , respectively, are primarily related to a change in the Company’s deferred tax asset in connection with a pre-acquisition tax loss. Other Intangible Assets The Company’s intangible assets with definite lives consist primarily of trade names, technology, and customer lists and relationships. These intangible assets are being amortized on the straight‑line method over the estimated useful lives of the assets. Amortization expense related to intangible assets for the years ended December 31, 2016 , 2015 and 2014 was $47.0 million , $28.6 million and $19.8 million , respectively. The Company’s intangible assets consist of the following: December 31, 2016 Cost Accumulated Amortization Net Trade name $ 2,523 $ (2,259 ) $ 264 Technology 160,169 (60,794 ) 99,375 Customer lists and relationships 134,280 (50,503 ) 83,777 Capitalized software and patents 26,666 (6,218 ) 20,448 $ 323,638 $ (119,774 ) $ 203,864 December 31, 2015 Cost Accumulated Amortization Net Trade name $ 1,531 $ (1,372 ) $ 159 Technology 130,200 (35,336 ) 94,864 Customer lists and relationships 105,864 (33,969 ) 71,895 Capitalized software and patents 11,406 (4,002 ) 7,404 $ 249,001 $ (74,679 ) $ 174,322 Estimated future amortization expense of its intangible assets for the next five years is as follows: Year ending December 31, 2017 $ 49,563 2018 46,561 2019 39,631 2020 24,940 2021 12,965 Thereafter 30,225 |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses Accrued expenses consist of the following: December 31, 2016 2015 Accrued compensation and benefits $ 31,752 $ 24,776 Accrued accounting fees 2,258 1,622 Accrued consulting fees 15,140 6,075 Accrued other 16,220 12,663 Accrued income tax payable 4,065 683 $ 69,435 $ 45,819 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company leases office space, automobiles, office equipment and colocation services under non‑cancellable capital leases, operating leases or long-term agreements, which expire through December 2029. Aggregate annual future minimum payments under these non‑cancellable agreements are as follows: Year ending December 31: Colocation Operating Leases Capital Leases 2017 $ 14,327 $ 9,564 $ 2,464 2018 5,055 7,502 2,357 2019 4,914 6,790 2,285 2020 3,466 6,528 1,293 2021 and thereafter — 40,357 8,437 $ 27,762 $ 70,741 $ 16,836 Rent expense for the years ended December 31, 2016 , 2015 and 2014 was $8.6 million , $7.6 million and $6.5 million respectively. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Debt | Debt 2013 Credit Facility In September 2013, the Company entered into a Credit Agreement (the “Credit Facility”) with JP Morgan Chase Bank, N.A., as the administrative agent, Wells Fargo Bank, National Association, as the syndication agent and Capital One, National Association and KeyBank National Association, as co-documentation agents. The Credit Facility, which was used for general corporate purposes, was a $100 million unsecured revolving line of credit that was set to mature on September 27, 2018. The Company paid a commitment fee in the range of 25 to 35 basis points on the unused balance of the revolving credit facility under this credit agreement. Synchronoss had the right to request an increase in the aggregate principal amount of the Credit Facility to $150 million . Interest on the borrowings were based upon LIBOR plus a 2.25 basis point margin. All outstanding balances under the Credit Facility were repaid on July 7, 2016 and the 2013 Credit Facility was terminated and replaced with the Amended Credit Facility. Amended Credit Facility On July 7, 2016, the Company entered into an Amended Credit Agreement (the “Amended Credit Agreement”) with Wells Fargo Bank, National Association, as administrative agent (the “Administrative Agent”) and several lenders party thereto (the “Amended Credit Facility”). The Amended Credit Facility, was permitted to be used for general corporate purposes, was a $250 million unsecured revolving line of credit that was set to mature on July 7, 2021, subject to terms and conditions set forth therein. The Company paid a commitment fee in the range of 15 to 30 basis points on the unused balance of the revolving credit facility under the Amended Credit Agreement. Synchronoss had the right to request an increase in the aggregate principal amount of the Amended Credit Facility up to $350 million . Interest on the borrowings was based upon LIBOR plus a 1.99 basis point margin. As of December 31, 2016 , the Company had an outstanding balance of $29 million on the Amended Credit Facility. The Amended Credit Facility was subject to certain financial covenants. As of December 31, 2016 , the Company was in compliance with all required covenants. Interest expense and commitment fees under the Credit Facility and the Amended Credit Facility were as follows: Year ended December 31, 2016 2015 2014 Commitment fees $ 415 $ 332 $ 215 Interest expense 877 — 136 On January 19, 2017, the Company repaid all outstanding obligations under the Amended Credit Agreement with Wells Fargo Bank and the several lenders party thereto. The aggregate payoff amount was $29 million and included all accrued interest and associated prepayment penalties. For further details see the subsequent events footnote (Note 19). Convertible Senior Notes On August 12, 2014, the Company issued $230.0 million aggregate principal amount of its 0.75% Convertible Senior Notes due in 2019 (the “2019 Notes”). The 2019 Notes mature on August 15, 2019, and bear interest at a rate of 0.75% per annum payable semi-annually in arrears on February 15 and August 15 of each year. The Company accounted for the $230.0 million face value of the debt as a liability and capitalized approximately $7.1 million of financing fees, related to the issuance which are presented net of the face value of the 2019 Notes on the balance sheet. The 2019 Notes are senior, unsecured obligations of the Company, and are convertible into shares of its common stock based on a conversion rate of 18.8072 shares per $1,000 principal amount of 2019 Notes which is equivalent to an initial conversion price of approximately $53.17 per share. The Company will satisfy any conversion of the 2019 Notes with shares of the Company’s common stock. The 2019 Notes are convertible at the note holders’ option prior to their maturity and if specified corporate transactions occur. The issue price of the 2019 Notes was equal to their face amount. Holders of the 2019 Notes who convert their notes in connection with a qualifying fundamental change, as defined in the related indenture, may be entitled to a make-whole premium in the form of an increase in the conversion rate. Additionally, following the occurrence of a fundamental change, holders may require that the Company repurchase some or all of the 2019 Notes for cash at a repurchase price equal to 100% of the principal amount of the notes being repurchased, plus accrued and unpaid interest, if any. As of December 31, 2016 , none of these conditions existed with respect to the 2019 Notes and as a result, the 2019 Notes are classified as long term. The 2019 Notes are the Company’s direct senior unsecured obligations and rank equal in right of payment to all of the Company’s existing and future unsecured and unsubordinated indebtedness. At December 31, 2016 , the carrying amount of the liability was $226.3 million and the outstanding principal of the 2019 Notes was $230 million , with an effective interest rate of approximately 1.39% . The fair value of the 2019 Notes was $242.4 million at December 31, 2016 . The fair value of the liability of the 2019 Notes was determined using a discounted cash flow model based on current market interest rates available to the Company. These inputs are corroborated by observable market data for similar liabilities and therefore classified within Level 2 of the fair-value hierarchy. Interest expense for the Company’s 2019 Notes related to the contractual interest coupon was: Year ended December 31, 2016 2015 2014 Contractual interest expense $ 1,725 $ 1,725 $ 647 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 12 Months Ended |
Dec. 31, 2016 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Income The changes in accumulated other comprehensive income (loss) during the year ended December 31, 2016 , are as follows: Foreign Currency Unrealized (Loss) Income on Intra-Entity Foreign Currency Transactions Unrealized Holding Gains (Losses) on Available-for-Sale Securities Total Balance at December 31, 2015 $ (34,092 ) $ (4,292 ) $ (300 ) $ (38,684 ) Other comprehensive income (loss) (4,042 ) (789 ) 365 (4,466 ) Tax effect — 64 (167 ) (103 ) Total comprehensive income (loss) (4,042 ) (725 ) 198 (4,569 ) Balance at December 31, 2016 $ (38,134 ) $ (5,017 ) $ (102 ) $ (43,253 ) The changes in accumulated other comprehensive income (loss) during the year ended December 31, 2015 , are as follows: Foreign Currency Unrealized (Loss) Income on Intra-Entity Foreign Currency Transactions Unrealized Holding Gains (Losses) on Available-for-Sale Securities Total Balance at December 31, 2014 $ (16,811 ) $ (2,957 ) $ (246 ) $ (20,014 ) Other comprehensive income (loss) (17,281 ) (2,722 ) (79 ) (20,082 ) Tax effect — 1,387 25 1,412 Total comprehensive income (loss) (17,281 ) (1,335 ) (54 ) (18,670 ) Balance at December 31, 2015 $ (34,092 ) $ (4,292 ) $ (300 ) $ (38,684 ) |
Capital Structure
Capital Structure | 12 Months Ended |
Dec. 31, 2016 | |
Capital Structure | |
Capital Structure | Capital Structure As of December 31, 2016 , the Company’s authorized capital stock was 110 million shares of stock with a par value of $0.0001 , of which 100 million shares were designated as common stock and 10 million shares were designated as preferred stock. Common Stock Each holder of common stock is entitled to vote on all matters and is entitled to one vote for each share held. Dividends on common stock will be paid when, and if, declared by the Company’s Board of Directors. No dividends have ever been declared or paid by the Company. Preferred Stock There are no shares of preferred stock outstanding as of December 31, 2016 or 2015 . The Board of Directors is authorized to issue preferred shares and has the discretion to determine the rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences of preferred stock. Treasury Stock On February 4, 2016, the Company's Board of Directors authorized a stock repurchase program to purchase up to $100 million of the Company's outstanding Common Stock. Under the program, the Company may purchase shares of its Common Stock in the open market, through block trades or otherwise at prices deemed appropriate by the Company. The timing and amount of repurchase transactions under the program will depend on available working capital and other factors as determined by the Board of Directors and management. As of December 31, 2016 , a total of 1.3 million shares have been purchased under the program for an aggregate purchase price of $40 million . Registration Rights Holders of shares of common stock which were issued upon conversion of the Company’s Series A preferred stock are entitled to have their shares registered under the Securities Act of 1933, as amended (the “Securities Act”). Under the terms of an agreement between the Company and the holders of these securities which include registration rights, if the Company proposes to register any of its securities under the Securities Act, either for its own account or for the account of others, these stockholders are entitled to notice of such registration and are entitled to include their shares in such registration. |
Stock Plans
Stock Plans | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Plans | Stock Plans In March 2015, the Company adopted the 2015 Equity Incentive Plan (the “2015 Plan”). The 2015 Plan replaces the Company’s prior 2000 Equity Incentive Plan (the “2000 Plan”), the 2006 Equity Incentive Plan (the “2006 Plan”) and the 2010 New Hire Equity Incentive Plan (the “2010 Plan”), (collectively, the “Plans”). Beginning March 2015, all awards were granted under the 2015 Plan. In addition, any awards that were previously granted under any prior Plans that terminate without issuance of shares, shall be eligible for issuance under the 2015 Plan. Under the 2015 Plan, the Company may grant to its employees, outside directors and consultants awards in the form of non-qualified stock options, shares of restricted stock, stock units, or stock appreciation rights and performance shares. The Company’s Board of Directors administers the Plan and is responsible for determining the individuals to be granted options or shares, the number of options or shares each individual will receive, the price per share and the exercise period of each option. As of December 31, 2016 , there were 2.3 million shares available for grant or award under the Company’s 2015 Plan. Stock-Based Compensation The following table summarizes stock-based compensation expense: December 31, 2016 2015 2014 Stock options $ 7,778 $ 8,495 $ 9,992 Restricted stock awards 25,384 22,592 18,353 ESPP Plan 817 624 642 Total stock-based compensation before taxes 1 $ 33,979 $ 31,711 $ 28,987 Tax benefit $ 11,108 $ 10,130 $ 9,939 1 Includes $1.6 million , $1.8 million and $1.7 million related to discontinued operations for the years ended December 31, 2016 , 2015 and 2014 , respectively. The total stock-based compensation cost related to unvested equity awards as of December 31, 2016 was approximately $58.3 million . The expense is expected to be recognized over a weighted-average period of approximately 2.48 years. Stock Options Options that were granted under the Company’s 2000, 2006 and 2015 Plans generally vest 25% on the first year anniversary of the date of grant plus an additional 1/48th for each month of continuous service thereafter. Options that were granted under the Company’s 2010 Plan generally vest 50% on the second year anniversary and an additional 1/48th for each month of continuous service thereafter. Incentive options that were granted under the 2000 and 2006 Plans generally vest 25% on the 1st year anniversary on the date of grant and an additional 1/48th for each month of continuous service thereafter. The weighted‑average assumptions used in the Black‑Scholes option pricing model are as follows: December 31, 2016 2015 2014 Expected stock price volatility 45 % 47 % 57 % Risk-free interest rate 1.16 % 1.27 % 1.43 % Expected life of options (in years) 4.0 4.0 4.2 Expected dividend yield — % — % — % Weighted-average fair value (grant date) of the options $ 11.13 $ 15.88 $ 14.67 The following table summarizes information about stock options outstanding. Options Number of Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at December 31, 2015 2,348 $ 31.04 Options Granted 878 31.04 Options Exercised (608 ) 22.88 Options Cancelled (289 ) 36.56 Outstanding at December 31, 2016 2,329 $ 32.48 4.60 $ 15,719 Vested at December 31, 2016 2,203 $ 32.45 4.53 $ 14,865 Exercisable at December 31, 2016 1,056 $ 31.19 3.03 $ 8,397 The below table summarizes additional information related to stock options: December 31, 2016 2015 2014 Total intrinsic value for stock options exercised $ 8,953 $ 18,369 $ 18,950 Fair value of vested awards $ 21,687 $ 29,815 $ 19,409 Awards of Restricted Stock and Performance Stock Restricted stock awards (“restricted stock”) granted under the Company’s Plans generally vest 25% of the applicable shares on the first anniversary of the date of grant and thereafter an additional 1/16th for each three months of continuous service. Performance stock awards granted under the Company’s 2006 Plan generally vest with respect to one-third of the applicable shares on the date that the performance objectives under the performance stock awards are achieved and thereafter an additional one-third for each year of continuous service. Generally, performance stock awards granted under the Company’s 2015 Plan vest at the end of a three -year period based on service and achievement of certain performance objectives determined by the Company’s Board of Directors. A summary of the Company’s unvested restricted stock at December 31, 2016 , and changes during the year ended December 31, 2016 , is presented below: Non-Vested Restricted Stock Number of Awards Weighted- Average Grant Date Fair Value Non-vested at December 31, 2015 1,412 $ 36.80 Granted 939 34.06 Vested (677 ) 35.65 Forfeited (334 ) 37.55 Non-vested at December 31, 2016 1,340 $ 35.28 Restricted stock awards are granted subject to other service conditions or service and performance conditions (“performance-based awards”). Restricted stock and performance-based awards are measured at the closing stock price at the date of grant and are recognized straight line over the requisite service period. During 2016 , the Company issued approximately 41 thousand shares of restricted stock related to the 2015 performance share objectives. Employee Stock Purchase Plan On February 1, 2012, the Company established a ten year Employee Stock Purchase Plan (“ESPP” or “the Plan”) for certain eligible employees. The Plan is to be administered by the Company’s Board of Directors. The total number of shares available for purchase under the Plan is 500 thousand shares of the Company’s Common Stock. Employees participate over a six month period through payroll withholdings and may purchase, at the end of the six month period, the Company’s Common Stock at the lower of 85% of the fair market value on the first day of the offering period or the fair market value on the purchase date. No participant will be granted a right to purchase Common Stock under the Plan if such participant would own more than 5% of the total combined voting power of the Company. In addition, no participant may purchase more than a thousand shares of Common Stock within any purchase period or with a value greater than $25 thousand in any calendar year. Treasury Stock On February 4, 2016, the Company's Board of Directors authorized a stock repurchase program to purchase up to $100 million of the Company's outstanding Common Stock. Under the program, the Company may purchase shares of its Common Stock in the open market, through block trades or otherwise at prices deemed appropriate by the Company. The timing and amount of repurchase transactions under the program will depend on available working capital and other factors as determined by the Board of Directors and management. As of December 31, 2016 , a total of 1.3 million shares have been purchased under the program for an aggregate purchase price of $40 million . The Company classifies Common Stock repurchased as Treasury Stock on its balance sheet. |
401(k) Plan
401(k) Plan | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
401(k) Plan | 401(k) Plan The Company has a 401(k) plan (the “Plan”) covering all eligible employees. The Plan allows for a discretionary employer match. The Company incurred and expensed $2.7 million , $2.1 million , and $1.8 million for the years ended December 31, 2016 , 2015 and 2014 , respectively, in Plan match contributions. |
Restructuring Charges
Restructuring Charges | 12 Months Ended |
Dec. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Charges | Restructuring Charges In March 2016 and December 2016, the Company initiated the preliminary phase of a work-force reduction as part of a corporate restructuring, with reductions occurring across all levels and departments within the Company. These measures were intended to reduce costs and to align the Company’s resources with its key strategic priorities. As of December 31, 2016 , there were $1.2 million of accrued restructuring charges on the balance sheet. A summary of the Company’s restructuring accrual at December 31, 2016 and changes during the year ended December 31, 2016 , is presented below: Balance at December 31, 2015 Charges 1 Payments Balance at December 31, 2016 Employment termination costs $ — $ 6,639 $ (5,458 ) $ 1,181 Facilities consolidation 54 — (14 ) 40 Total $ 54 $ 6,639 $ (5,472 ) $ 1,221 1 Includes $0.3 million related to discontinued operations. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The components of income or (loss) from continuing operations before income taxes are as follows: Year ended December 31, 2016 2015 2014 Domestic $ (57,846 ) $ 32,385 $ (11,620 ) Foreign (16,685 ) (20,546 ) 6,355 Total $ (74,531 ) $ 11,839 $ (5,265 ) The components of income tax (expense) benefit from continuing operations are as follows: Year ended December 31, 2016 2015 2014 Current: Federal $ (48 ) $ 1,993 $ 12,873 State 1,580 299 447 Foreign (3,239 ) 682 (2,040 ) Deferred: Federal 10,716 (10,277 ) (10,437 ) State 301 (480 ) (1,301 ) Foreign (1,320 ) 2,359 3,700 Income tax expense $ 7,990 $ (5,424 ) $ 3,242 Reconciliations of the statutory tax rates and the effective tax rates from continuing operations for the years ended December 31, 2016 , 2015 and 2014 are as follows: Year ended December 31, 2016 2015 2014 Statutory rate 35 % 35 % 35 % State taxes, net of federal benefit 2 % 1 % (11 )% Effect of rates different than statutory (7 )% 44 % 47 % Minority interest (5 )% (18 )% — % Non-deductible stock based compensation — % — % (4 )% Other permanent adjustments — % 10 % (9 )% Fair market value adjustment on Earn-out (5 )% 2 % 3 % Research and development credit 3 % (19 )% 25 % Subpart F income — % — % (22 )% Change in valuation allowance (13 )% 12 % — % Ireland deferred tax liability - migration — % (13 )% — % Customer relationship adjustment - Australia — % (16 )% — % Other 1 % 8 % (2 )% Net 11 % 46 % 62 % Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows: December 31, 2016 2015 Deferred tax assets: Accrued liabilities $ 22 $ 14 Deferred revenue 8,715 316 Bad debts reserve 307 184 Deferred compensation 12,748 11,684 Federal net operating loss carry forwards 18,993 18,637 State net operating loss carry forwards 1,899 1,691 Foreign net operating loss carry forwards 14,433 9,992 Deferred rent 747 570 Capital loss carry forward 229 232 Transaction costs 2,438 — Other 2,057 1,761 Total deferred tax assets $ 62,588 $ 45,081 Deferred tax liabilities: Intangible assets $ (23,430 ) $ (24,373 ) Basis difference (15,323 ) — Installment sale (28,020 ) — Depreciation and amortization (30,034 ) (28,705 ) Total deferred tax liabilities (96,807 ) (53,078 ) Less: valuation allowance (14,100 ) (4,847 ) Net deferred income tax (liabilities) assets $ (48,319 ) $ (12,844 ) As of December 31, 2016 , the Company has federal and state income tax net operating loss (NOL) carryforwards of $54.3 million and $36.6 million , respectively, which will expire at various dates from 2017 through 2036. The Company also has foreign NOL carryforwards in various jurisdictions of $75.5 million that have various carryforward periods. Such NOL carryforwards expire as follows: 2017-2021 $ 10,937 2022-2026 15,647 2027-2036 67,526 Indefinite 72,272 $ 166,382 In evaluating the Company’s ability to recover its deferred tax assets within the jurisdiction from which they arise, the Company considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax-planning strategies, and results of recent operations. In projecting future taxable income, the Company begins with historical results and incorporates assumptions including the amount of future state, federal and foreign pretax operating income, the reversal of temporary differences, and the implementation of feasible and prudent tax-planning strategies. These assumptions require significant judgment about the forecasts of future taxable income and are consistent with the plans and estimates the Company is using to manage the underlying businesses. The foreign NOL carryforwards in the income tax returns filed included unrecognized tax benefits taken in prior years. The NOLs for which a deferred tax asset is recognized for financial statement purposes in accordance with ASC 740 are presented net of these unrecognized tax benefits. As of December 31, 2014, a valuation allowance of $2.5 million was recorded to place a full valuation allowance on all deferred tax assets within Spatial U.S. In 2016 , a valuation allowance of $41 thousand was released for the utilization of NOL for the current year income. However, the company still believes that there is no positive evidence with regards to the projections for the future income. As such, a valuation allowance of $2.2 million has been recorded to place a full valuation allowance on all the deferred tax assets within Spatial U.S. The Company continues to evaluate the ability to realize all of its net deferred tax assets at each reporting date and records a benefit for deferred tax assets to the extent it has deferred tax liabilities that provide a source of income to benefit the deferred tax asset. As a result of this analysis, the Company recorded a valuation allowance against the net deferred tax assets of certain foreign jurisdictions as the realization of these assets is not more likely than not, given uncertainty of future earnings in these jurisdictions. The Company is subject to taxation in the United States and various states and foreign jurisdictions. As of December 31, 2016 , the Company’s tax years for 2013 , 2014 and 2015 are subject to examination by the tax authorities. With few exceptions, as of December 31, 2016 , the Company is no longer subject to U.S. federal, state, local, or foreign examinations by tax authorities for years before 2012 . The Company is currently under income tax examinations in New York and New Jersey for the tax years 2012 through 2014 and currently under Federal tax examination for the tax years 2013 and 2014. The Company does not believe that the results of these audits will have a material effect on its financial position or results of operations. The Company has provided taxes for $3.3 million of royalty fees paid to its Ireland subsidiary as Subpart F income subject to US tax in 2014. The Company has not provided taxes for the remaining $34.9 million of undistributed earnings of its foreign subsidiaries which the Company plans to reinvest indefinitely outside of the United States. Should the Company decide to repatriate the foreign earnings, it would need to adjust its income tax provision in the period it determined that the earnings will no longer be indefinitely invested outside the United States. Due to the timing and circumstances of repatriation of such earnings, if any, it is not practicable to determine the unrecognized deferred tax liability relating to such amounts A reconciliation of the amounts of unrecognized tax benefits excluding interest are as follows: Unrecognized tax benefit at December 31, 2013 $ 708 Decreases for tax positions taken during prior year (218 ) Reduction due to lapse of applicable statute of limitations (11 ) Increases for tax positions of current period 651 Unrecognized tax benefit at December 31, 2014 1,130 Decreases for tax positions taken during prior year 38 Reduction due to lapse of applicable statute of limitations (58 ) Increases for tax positions of current period 344 Unrecognized tax benefit at December 31, 2015 1,454 Decreases for tax positions taken during prior year (30 ) Reduction due to lapse of applicable statute of limitations (44 ) Increases for tax positions of current period 362 Unrecognized tax benefit at December 31, 2016 $ 1,742 Included in the balance of unrecognized tax benefits as of the years ended December 31, 2016 , 2015 and 2014 , are $1.7 million , $1.5 million and $1.1 million , respectively, of tax benefits that, if recognized, would affect the effective tax rate. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in interest expense. The liability for unrecognized tax benefits excludes accrued interest for the years ended December 31, 2016 , 2015 and 2014 . The Company believes that it is reasonably possible that approximately $0.2 million of its currently unrecognized tax benefits related to research and development credits, which are individually insignificant, may be recognized by the end of 2016 as a result of a lapse of the statute of limitations. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net income attributable to common stockholders per common share from continued and discontinued operations. Year ended December 31, 2016 2015 2014 Numerator - Basic: Net (loss) income from continuing operations $ (66,541 ) $ 6,415 $ (2,023 ) Net (loss) income attributable to noncontrolling interests (11,596 ) 6,052 — Net (loss) income from continuing operations attributable to Synchronoss (54,945 ) 363 (2,023 ) Net income from discontinued operations, net of taxes 74,533 40,267 40,918 Net income attributable to Synchronoss $ 19,588 $ 40,630 $ 38,895 Numerator - Diluted: Net (loss) income from continuing operations attributable to Synchronoss $ (54,945 ) $ 363 $ (2,023 ) Income effect for interest on convertible debt, net of tax — 1,700 — Net (loss) income from continuing operations adjusted for the convertible debt (54,945 ) 2,063 (2,023 ) Net income from discontinued operations, net of taxes 74,533 40,267 40,918 Net income attributable to Synchronoss, adjusted for the convertible debt $ 19,588 $ 42,330 $ 38,895 Denominator: Weighted average common shares outstanding — basic 43,571 42,284 40,418 Dilutive effect of: Shares from assumed conversion of convertible debt — — — Options and unvested restricted shares — — — Weighted average common shares outstanding — diluted 43,571 42,284 40,418 Basic EPS Continuing operations $ (1.26 ) $ 0.01 $ (0.05 ) Discontinued operations 1.71 0.95 1.01 $ 0.45 $ 0.96 $ 0.96 Diluted EPS Continuing operations $ (1.26 ) $ 0.01 $ (0.05 ) Discontinued operations 1.71 0.95 1.01 $ 0.45 $ 0.96 $ 0.96 Anti-dilutive stock options excluded: 1,089 553 1,100 |
Legal Matters
Legal Matters | 12 Months Ended |
Dec. 31, 2016 | |
Legal Matters | |
Legal Matters | Legal Matters On October 7, 2014, the Company filed an amended complaint in the United States District Court for the District of New Jersey (Civ Act. No. 3:14-cv-06220) against F-Secure Corporation and F-Secure, Inc. (collectively, “F-Secure"), claiming that F-Secure has infringed, and continues to infringe, several of the Company’s patents. In February 2015, Synchronoss entered into a patent license and settlement agreement with F-Secure Corporation and F-Secure, Inc. whereby the Company granted each of these companies (but not their subsidiaries or affiliates) a limited license to Synchronoss’ patents. As a result of entering into the patent license and settlement agreement, the parties filed a joint stipulation to dismiss the above complaint. The Company’s 2011 acquisition agreement with Miyowa SA provided that former shareholders of Miyowa SA would be eligible for earn-out payments, to the extent specified business milestones were achieved following the acquisition. In December 2013, Eurowebfund and Bakamar, two former shareholders of Miyowa SA, filed a complaint against the Company in the Commercial Court of Paris, France claiming that they are entitled to certain earn-out payments under the acquisition agreement. The Company was served with a copy of this complaint in January 2014. On December 3, 2015, the Court dismissed all claims in the complaint against the Company. On December 19, 2015, the former shareholders of Miyowa filed an appeal with the Court of Appeal of Paris, France, appealing the Court’s decision. Although the Company cannot predict the outcome of the appeal, or estimate any potential loss if the outcome is adverse, due to the inherent uncertainties of litigation, the Company believes the positions of Eurowebfund and Bakamar are without merit, and the Company intends to vigorously defend all claims brought by them. The Company is not currently subject to any legal proceedings that could have a material adverse effect on its operations; however, it may from time to time become a party to various legal proceedings arising in the ordinary course of its business. The Company is currently the plaintiff in several patent infringement cases. The defendants in several of these cases have filed counterclaims. Although the Company cannot predict the outcome of the cases at this time due to the inherent uncertainties of litigation, the Company continues to pursue its claims and believes that the counterclaims are without merit, and the Company intends to defend all of such counterclaims. |
Subsequent Events Review
Subsequent Events Review | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events Review | Subsequent Events Review On January 19, 2017, Synchronoss completed the acquisition of Intralinks at a price of $13.00 per share, or $850.0 million , net of working capital adjustments. In connection with the acquisition, the Company entered into a credit agreement (the "2017 Credit Agreement"). Synchronoss paid a total of approximately $904.1 million , including repayment of existing indebtedness for both Synchronoss, including the Amended Credit Facility and Intralinks, fees and costs associated with the 2017 Term Facility (as defined below) and other transaction related expenses and funded the payments required to complete the acquisition with cash on hand and proceeds from the 2017 Credit Agreement. The Company's obligations under the 2017 Credit Agreement are guaranteed by certain of their subsidiaries, including Intralinks, and secured by substantially all of their assets and the guarantors. The Company believes that the acquisition will allow the Company to leverage the Synchronoss' product portfolio, go-to-market strategy and diversified customer footprint and deploy an enhanced enterprise and mobile solution to customers while opening up new enterprise distribution channels across the world. At this time, the required financial information needed to complete the initial purchase price allocation of all of the tangible and identifiable intangible assets and liabilities, as well as the required supplemental pro forma results of the combined entity, is incomplete. The term loan lenders under the 2017 Credit Agreement have advanced to senior secured term loans in an aggregate principal amount of $900 million with a maturity date of January 19, 2024 (the “ 2017 Term Facility”). The revolving lenders under the Credit Agreement have provided Synchronoss with a revolving credit facility of up to $200 million with a maturity date of January 19, 2022 (the “Revolving Facility”). The term loans under the Term Facility will amortize at 1% per annum in equal quarterly installments with the balance payable on the final maturity date. The proceeds of the Term Facility are being used to finance a portion of the cash consideration in the Offer and the Merger, to refinance certain existing indebtedness of Synchronoss, including the Amended Credit Facility and indebtedness of Intralinks (or its subsidiaries) and to pay related fees and expenses. The Revolving Facility includes borrowing capacity available for letters of credit and for borrowings on same-day notice under swingline loans, and borrowing thereunder may be used for working capital and other general corporate purposes. Loans under the 2017 Term Facility bear interest at a rate equal to, at Synchronoss' option, the adjusted LIBOR rate for an applicable interest period or an alternate base rate, in each case, plus an applicable margin of 2.75% or 1.75% , respectively. The revolving loans under the Revolving Facility initially bear interest at a rate equal to, at Synchronoss' option, the adjusted LIBOR rate or an alternate base rate, in each case, plus an applicable margin of 2.50% or 1.50% , respectively, subject to step-downs based on the Company's ratio of first lien secured debt to adjusted EBITDA. Subject to certain customary exceptions, loans under the Term Facility are subject to mandatory prepayments in amounts equal to: (1) 100% of the net cash proceeds from any non-ordinary course sale or other disposition of assets (including as a result of casualty or condemnation) by Synchronoss or its restricted subsidiaries subject to customary reinvestment provisions and certain other exceptions; (2) 100% of the net cash proceeds from incurrences of debt (other than permitted debt); and (3) a customary annual excess cash flow sweep at levels based on Parent’s then applicable ratio of first lien secured debt to adjusted EBITDA. The 2017 Credit Agreement contains a number of customary affirmative and negative covenants and events of default, which, among other things, restrict the ability of Synchronoss and its subsidiaries to incur debt, allow liens on assets, make investments, pay dividends or prepay certain other debt. The 2017 Credit Agreement also requires Synchronoss to comply with certain financial maintenance covenants, including a total gross leverage ratio and an interest charge coverage ratio. Certain of the lenders under the 2017 Credit Agreement, or their affiliates, have provided, and may in the future from time to time provide, certain commercial and investment banking, financial advisory and other services in the ordinary course of business for the registrant and its affiliates, for which they have in the past and may in the future receive customary fees and commissions. On February 1, 2017 the Company completed a divestiture of its SpeechCycle business, to an unrelated third party, for consideration of $13.5 million . As part of the divestiture, Synchronoss entered into a 1 year transition services agreement with the acquirer to support various indirect activities such as customer software support, technical support services, maintenance and general & administrative support services. |
SCHEDULE II - VALUATION AND QUA
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2016 | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule II - Valuation and Qualifying Accounts | VALUATION AND QUALIFYING ACCOUNTS December 31, 2016 , 2015 , and 2014 : Beginning Ending Balance Additions Reductions Balance (In thousands) Allowance for doubtful receivables 2016 $ 3,029 $ 7,433 $ (8,706 ) $ 1,756 2015 $ 88 $ 3,872 $ (931 ) $ 3,029 2014 $ 237 $ 418 $ (567 ) $ 88 Beginning Ending Balance Additions Reductions Balance (In thousands) Valuation allowance for deferred tax assets 2016 $ 4,847 $ 9,370 $ (117 ) $ 14,100 2015 $ 2,553 $ 2,521 $ (227 ) $ 4,847 2014 $ 2,803 $ 2,724 $ (2,974 ) $ 2,553 |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The consolidated financial statements include the accounts of the Company, its wholly‑owned subsidiaries and variable interest entities (VIE) in which the Company is the primary beneficiary and entities in which the Company has a controlling interest. Investments in less than majority-owned companies in which the Company does not have a controlling interest, but does have significant influence, are accounted for as equity method investments. All material intercompany transactions and accounts are eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the current year's presentation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the 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. |
Revenue Recognition and Deferred Revenue | Revenue Recognition and Deferred Revenue The Company provides services principally on a transactional or subscription basis or, at times, on a fixed fee basis and recognizes the revenues as the services are performed or delivered as described below: Transactional and Subscription Service Arrangements: Transaction and subscription revenues consist of revenues derived from the processing of transactions through the Company’s service platforms, providing enterprise portal management services on a subscription basis and maintenance agreements on software licenses. Transaction service arrangements include services such as processing equipment orders, new account set‑up and activation, number port requests, credit checks and inventory management. Subscription services include monthly active user fees, software as a service (“SaaS”) fees, hosting and storage and the related maintenance support for those services. Transaction revenues are principally based on a contractual price per transaction and are recognized based on the number of transactions processed during each reporting period. Revenues are recorded based on the total number of transactions processed at the applicable price established in the relevant contract. The total amount of revenues recognized is based primarily on the volume of transactions. Subscription revenues are recorded one of two ways: on a straight‑line basis over the life of the contract or on a fixed monthly fee based on a set contracted amount. Many of the Company’s contracts guarantee minimum volume transactions from the customer. In these instances, if the customer’s total transaction volume for the period is less than the contractual amount, the Company records revenues at the minimum guaranteed amount. At times, transaction revenues may also include billings to customers that reimburse the Company based on the number of individuals dedicated to processing transactions. Set‑up fees for transactional service arrangements are deferred and recognized on a straight‑line basis over the life of the contract since these amounts would not have been paid by the customer without the related transactional service arrangement. Revenues are presented net of discounts, which are volume level driven, or credits, which are performance driven, and are determined in the period in which the volume thresholds are met or the services are provided. Professional Service and Software License Arrangements: Professional services include process and workflow consulting services and development services. Professional services when sold with transactional or subscription service arrangements are accounted for separately when the professional services have value to the customer on a standalone basis and there is objective and reliable evidence of fair value of the professional services. When accounted for separately, professional service revenues are recognized as services are performed and all other elements of revenue recognition have been satisfied. In determining whether professional service revenues can be accounted for separately from transaction or subscription service revenues, the Company considers the following factors for each professional services agreement: availability of the professional services from other vendors, whether objective and reliable evidence of fair value exists of the undelivered elements, the nature of the professional services, the timing of when the professional services contract was signed in comparison to the transaction or subscription service start date and the contractual independence of the transactional or subscription service from the professional services. If a professional service arrangement were not to qualify for separate accounting, the Company would recognize the professional service revenues ratably over the remaining term of the transaction or subscription agreement. Revenue from software license arrangements is recognized when the license is delivered to its customers and all of the software revenue recognition criteria are met. When software arrangements include multiple elements, the arrangement consideration is allocated at the inception to all deliverables using the residual method providing the Company has vendor specific objective evidence (VSOE) on all undelivered elements. The Company determines VSOE for each element based on historical stand‑alone sales to third parties. When transaction or subscription service arrangements, include multiple elements, the arrangement consideration is allocated at the inception of an arrangement to all deliverables using the relative selling price method. The relative selling price method allocates any discount in the arrangement proportionally to each deliverable on the basis of each deliverable’s selling price. The selling price used for each deliverable will be based on VSOE if available, third‑party evidence (TPE) if vendor‑specific objective evidence is not available, or estimated selling price (ESP) if neither vendor‑specific objective evidence nor third‑party evidence is available. The objective of ESP is to determine the price at which the Company would transact a sale if the product or service were sold on a stand‑alone basis. The Company determines ESP by considering multiple factors including, but not limited to, geographies, market conditions, competitive landscape, internal costs, gross margin objectives, and pricing practices. ESP is generally used for offerings that are not typically sold on a stand‑alone basis or for new or highly customized offerings. While the Company follows specific and detailed rules and guidelines related to revenue recognition, it makes and uses management judgments and estimates in connection with the revenue recognized in any reporting period, particularly in the areas described above, as well as collectability. If management made different estimates or judgments, differences in the timing of the recognition of revenue could occur. Deferred Revenue: Deferred revenues primarily represent billings to customers for services in advance of the performance of services, with revenues recognized as the services are rendered, and also includes the fair value of deferred revenues recorded as a result of acquisitions. |
Service Level Standards | Service Level Standards Pursuant to certain contracts, the Company is subject to service level standards and to corresponding penalties for failure to meet those standards. All performance‑related penalties are reflected as a corresponding reduction of the Company’s revenues. These penalties, if applicable, are recorded in the month incurred and were insignificant for the years ended December 31, 2016 , 2015 and 2014 , respectively. |
Cost of Services | Cost of Services Cost of services includes all direct materials, direct labor and those indirect costs related to revenues such as indirect labor, materials and supplies and facilities cost, exclusive of depreciation expense. |
Research and Development | Research and Development Research and development costs are expensed as incurred, unless they meet U.S. GAAP criteria for deferral and amortization. Software development costs incurred prior to the establishment of technological feasibility do not meet these criteria, and are expensed as incurred. The Company includes capitalized software development costs in intangible assets on the consolidated balance sheets. Amortization of software development costs is computed using the straight‑line method over the estimated useful lives of the assets, 3 and 5 years. Research and development expense consists primarily of costs related to personnel, including salaries and other personnel‑related expenses, consulting fees and the cost of facilities, computer and support services used in service technology development. The Company also expenses costs relating to developing modifications and minor enhancements of its existing technology and services. |
Concentration of Credit Risk | Concentration of Credit Risk The Company’s financial instruments that are exposed to concentration of credit risk consist primarily of cash and cash equivalents, marketable securities and accounts receivable. The Company maintains its cash and cash equivalents at several major financial institutions. The Company has not experienced any realized losses in such accounts and believes it is not exposed to any significant credit risk related to cash, cash equivalents and securities. The Company’s cash equivalents and short‑term marketable securities consist primarily of money market funds, certificates of deposit, commercial paper, and municipal and corporate bonds. The Company believes that concentration of credit risk with respect to accounts receivable is limited because of the creditworthiness of the Company’s major customers. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments purchased with a maturity of three months or less at the date of acquisition to be cash equivalents. |
Restricted Cash | Restricted Cash The restricted cash balance is held in escrow to cover certain conditions that existed at the closing of the carrier activation business divestiture. The escrow funds will be released upon the assigned contracts meeting certain minimum revenue thresholds. |
Fair Value of Financial Instruments and Liabilities | Fair Value of Financial Instruments and Liabilities The Company includes disclosures of fair value information about financial instruments and liabilities, whether or not recognized on the balance sheet, for which it is practicable to estimate that value. Due to their short‑term nature, the carrying amounts reported in the financial statements approximate the fair value for cash and cash equivalents, marketable securities, accounts receivable and accounts payable. |
Marketable Securities | Marketable Securities Marketable securities consist of fixed income investments with a maturity of greater than three months and enhanced money market funds. These investments are classified as available‑for‑sale and are reported at fair value on the Company’s balance sheet. The Company classifies its securities with maturity dates of 12 months or more as long term. Unrealized holding gains and losses are reported within accumulated other comprehensive loss as a separate component of stockholders’ equity. If a decline in the fair value of a marketable security below the Company’s cost basis is determined to be other than temporary, such marketable security is written down to its estimated fair value as a new cost basis and the amount of the write‑down is included in earnings as an impairment charge. The Company has recorded temporary changes in fair value of the marketable securities but has not recorded other‑than‑temporary charges for the periods presented herein. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable consist of amounts due to the Company from normal business activities. The Company maintains an allowance for estimated losses resulting from the inability of its customers to make required payments. The Company estimates uncollectible amounts based upon historical bad debts, current customer receivable balances, the age of customer receivable balances, the customer’s financial condition and current economic trends. |
Property and Equipment | Property and Equipment Property and equipment and leasehold improvements are stated at cost, net of accumulated depreciation. Depreciation is computed using the straight‑line method over the estimated useful lives of the assets, which range from 3 to 5 years, or the lesser of the related initial term of the lease or useful life for leasehold improvements. Amortization of property and equipment recorded under a capital lease is included with depreciation expense. Expenditures for routine maintenance and repairs are charged against operations. Major replacements, improvements and additions are capitalized. |
Noncontrolling interest | Noncontrolling Interest Noncontrolling interests ("NCI") are evaluated by the Company and are shown as either a liability, temporary equity (shown between liabilities and equity) or as permanent equity depending on the nature of the redeemable features at amounts based on formulas specific to each entity. Generally, mandatorily redeemable NCI's are classified as liabilities and non-mandatorily redeemable NCI's are classified outside of stockholders' equity in the consolidated balance sheets as temporary equity under the caption, redeemable noncontrolling interests, and are measured at their redemption values at the end of each period. If the redemption value is greater than the carrying value, an adjustment is recorded in retained earnings to record the NCI at its redemption value. Redeemable NCI’s that are mandatorily redeemable are classified as a liability in the consolidated balance sheets under either other current liabilities or other long-term liabilities, depending on the remaining duration until settlement, and are measured at the amount of cash that would be paid if settlement occurred at the balance sheet date with any change from the prior period recognized as interest expense. If the noncontrolling interest is not currently redeemable yet probable of becoming redeemable, the Company is required to either (1) accrete changes in the redemption value over the period from the date of issuance to the earliest redemption date of the instrument using an appropriate methodology, usually the interest method, or (2) recognize changes in the redemption value immediately as they occur and adjust the carrying value of the security to equal the redemption value at the end of each reporting period. The Company has elected to recognize changes in the redemption value immediately as they occur and adjust the carrying value of the noncontrolling interest to the greater of the estimated redemption value, which approximates fair value, at the end of each reporting period or the initial carrying amount. Net income attributable to NCI’s reflects the portion of the net income (loss) of consolidated entities applicable to the NCI stockholders in the accompanying consolidated statements of income. The net income attributable to NCI is classified in the consolidated statements of income as part of consolidated net income and deducted from total consolidated net income to arrive at the net income attributable to the Company. |
Business Combinations | Business Combinations The Company accounts for business combinations in accordance with the acquisition method. The acquisition method of accounting requires that assets acquired, liabilities assumed and any noncontrolling interest in the aquiree (if any) be recorded at their fair values on the date of a business acquisition. The Company’s consolidated financial statements and results of operations reflect an acquired business from the completion date of an acquisition. The judgments that the Company makes in determining the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact net income in periods following a business combination. The Company generally uses either the income, cost or market approach to aid in its conclusions of such fair values and asset lives. The income approach presumes that the value of an asset can be estimated by the net economic benefit to be received over the life of the asset, discounted to present value. The cost approach presumes that an investor would pay no more for an asset than its replacement or reproduction cost. The market approach estimates value based on what other participants in the market have paid for reasonably similar assets. Although each valuation approach is considered in valuing the assets acquired, the approach ultimately selected is based on the characteristics of the asset and the availability of information. The Company records contingent consideration resulting from a business combination at its fair value on the acquisition date. Each reporting period thereafter, the Company revalues these obligations and records increases or decreases in their fair value as an adjustment to net change in contingent consideration obligation within the consolidated statement of income. Changes in the fair value of the contingent consideration obligation can result from updates in the achievement of financial targets and changes to the weighted probability of achieving those future financial targets. Significant judgment is employed in determining the appropriateness of these assumptions as of the acquisition date and for each subsequent period. Accordingly, any change in the assumptions described above, could have a material impact on the amount of the net change in contingent consideration obligation that the Company records in any given period. |
Discontinued Operations | Discontinued Operations The Company generally classifies a disposal transaction as discontinued operation in the consolidated financial statements when it qualifies as a component of the Company, meets the held for sale criteria, is disposed of by sale, or is disposed of other than by sale and it represents a strategic shift that has a major effect on the Company's operations and financial results. |
Investments in Affiliates and Other Entities | Investments in Affiliates and Other Entities In the normal course of business, Synchronoss enters into various types of investment arrangements, each having unique terms and conditions. These investments may include equity interests held by Synchronoss in business entities, including general or limited partnerships, contractual joint ventures, or other forms of equity participation. Synchronoss determines whether such investments involve a VIE based on the characteristics of the subject entity. If the entity is determined to be a VIE, then management determines if Synchronoss is the primary beneficiary of the entity and whether or not consolidation of the VIE is required. The primary beneficiary consolidating the VIE must normally have both (i) the power to direct the activities of a VIE that most significantly affect the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE, in either case that could potentially be significant to the VIE. When Synchronoss is deemed to be the primary beneficiary, the VIE is consolidated and the other party’s equity interest in the VIE is accounted for as a noncontrolling interest. The Company generally accounts for investments it makes in VIEs in which it has determined that it does not have a controlling financial interest but has significant influence over and holds at least a 20% ownership interest using the equity method. Any such investment not meeting the parameters to be accounted under the equity method would be accounted for using the cost method unless the investment had a readily determinable fair value, at which it would then be reported.The Company utilizes a 1 month reporting lag in recording equity income from equity method investments. If an entity fails to meet the characteristics of a VIE, the Company then evaluates such entity under the voting model. Under the voting model, the Company consolidates the entity if they determine that they, directly or indirectly, have greater than 50% of the voting shares, and determine that other equity holders do not have substantive participating rights. |
Goodwill | Goodwill Goodwill represents the excess of the purchase price over the fair value of assets acquired, including other definite‑lived intangible assets. Goodwill is not amortized, but reviewed annually for impairment or upon the occurrence of events or changes in circumstances that would more likely than not reduce the fair value of the reporting unit below its carrying amount. |
Impairment of Long-Lived Assets | Impairment of Long‑Lived Assets A review of long‑lived assets for impairment is performed when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. If an indication of impairment is present, the Company compares the estimated undiscounted future cash flows to be generated by the asset to the asset’s carrying amount. If the undiscounted future cash flows are less than the carrying amount of the asset, the Company records an impairment loss equal to the amount by which the asset’s carrying amount exceeds its fair value. The fair value is determined based on valuation techniques such as a comparison to fair values of similar assets or using a discounted cash flow analysis. There were no impairment charges recognized during the years ended December 31, 2016 , 2015 and 2014 . Long lived assets that do not have indefinite lives are amortized/depreciated over their useful lives and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. The Company reevaluates the useful life determinations each year to determine whether events and circumstances warrant a revision to the remaining useful lives. |
Income Taxes | Income Taxes Since the Company conducts operations on a global basis, its effective tax rate has and will depend upon the geographic distribution of its pre‑tax earnings among locations with varying tax rates. The Company accounts for the effects of income taxes that result from its activities during the current and preceding years. Under this method, deferred income tax liabilities and assets are based on the difference between the financial statement carrying amounts and the tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse or be utilized. The realization of deferred tax assets is contingent upon the generation of future taxable income. A valuation allowance is recorded if it is “more likely than not” that a portion or all of a deferred tax asset will not be realized. In evaluating the Company’s ability to recover their deferred tax assets within the jurisdiction from which they arise, the Company considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax-planning strategies, and results of recent operations. In projecting future taxable income, the Company begins with historical results adjusted for the results of discontinued operations and incorporates assumptions about the amount of future state, federal, and foreign pretax operating income adjusted for items that do not have tax consequences. The assumptions about future taxable income require significant judgment and are consistent with the plans and estimates the Company is using to manage the underlying businesses. In evaluating the objective evidence that historical results provide, the Company considers three years of cumulative operating income (loss). The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not to be sustained upon examination based on the technical merits of the position. The amount of the accrual for which an exposure exists is measured by determining the amount that has a greater than 50 percent likelihood of being realized upon the settlement of the position. Components of the reserve are classified as a current or a long‑term liability in the consolidated balance sheets based on when the Company expects each of the items to be settled. The Company records interest and penalties accrued in relation to uncertain tax benefits as a component of interest expense. The Company expects that the amount of unrecognized tax benefits will change during 2017 , however, the Company does not expect the change to have a significant impact on its results of operations or financial position. While the Company believes it has identified all reasonably identifiable exposures and that the reserve that the Company has established for identifiable exposures is appropriate under the circumstances, it is possible that additional exposures exist and that exposures may be settled at amounts different than the amounts reserved. It is also possible that changes in facts and circumstances could cause the Company to either materially increase or reduce the carrying amount of its tax reserves. In general, tax returns for the year 2012 and thereafter are subject to future examination by tax authorities. The Company’s policy has been to leave its cumulative unremitted foreign earnings invested indefinitely outside the United States, and the Company intends to continue this policy. As such, taxes have not been provided on any of the remaining accumulated foreign unremitted earnings. Due to the timing and circumstances of repatriation of such earnings, if any, it is not practicable to determine the unrecognized deferred tax liability relating to such amounts. If the cumulative unremitted foreign earnings exceed the amount the Company intends to reinvest in foreign countries in the future, the Company would provide for taxes on such excess amount. |
Foreign Currency | Foreign Currency The functional currency is translated into U.S. dollars for balance sheet accounts using the month end rates in effect as of the balance sheet date and average exchange rate for revenue and expense accounts for each respective period. The translation adjustments are deferred as a separate component of stockholders’ equity within accumulated other comprehensive income. Gains or losses resulting from transactions denominated in foreign currencies are included in other income or expense, within the consolidated statements of income. |
Comprehensive Income | Comprehensive Income Reporting on comprehensive income requires components of other comprehensive income, including unrealized gains or losses on available‑for‑sale securities, to be included as part of total comprehensive income. Comprehensive income is comprised of net income, translation adjustments and unrealized gains and losses on available‑for‑sale securities. The components of comprehensive income are included in the statements of comprehensive income. |
Basic and Diluted Net Income Attributable to Common Stockholders per Common Share | Basic and Diluted Net Income Attributable to Common Stockholders per Common Share Basic earnings per share is calculated by using the weighted-average number of common shares outstanding during the period, excluding amounts associated with restricted shares. The diluted earnings per share calculation is based on the weighted-average number of shares of common stock outstanding adjusted for the number of additional shares that would have been outstanding had all potentially dilutive common shares been issued. Potentially dilutive shares of common stock include stock options, convertible debt and unvested restricted stock. The dilutive effects of stock options and restricted stock awards are based on the treasury stock method. The dilutive effect of the assumed conversion of convertible debt is determined using the if-converted method. The after-tax effect of interest expense related to the convertible securities is added back to net income, and the convertible debt is assumed to have been converted into common shares at the beginning of the period. |
Stock-Based Compensation | Stock‑Based Compensation The Company utilizes the Black‑Scholes pricing model to determine the fair value of stock options on the dates of grant. Restricted stock awards are measured based on the fair market values of the underlying stock on the dates of grant. The Company recognizes stock‑based compensation over the requisite service period with an offsetting credit to additional paid‑in capital. For the Company’s performance restricted stock awards the Company estimates the number of shares the recipient is to receive by applying a probability of achieving the performance goals. The actual number of shares the recipient receives is determined at the end of the performance period based on the results achieved versus goals based on the performance targets, such as revenues and EBITDA. Once the number of awards is determined, the compensation cost is fixed and continues to be recognized using straight line recognition over the requisite service period for each vesting tranche. Use of a valuation model requires management to make certain assumptions with respect to selected model inputs. Expected volatility was calculated based on historical information of the Company's stock. The average expected life was determined using historical stock option exercise activity. The risk‑free interest rate is based on U.S. Treasury zero‑coupon issues with a remaining term equal to the expected life assumed at the date of grant. The Company has never declared or paid cash dividends on the common or preferred equity and does not anticipate paying any cash dividends in the foreseeable future. Forfeitures are accounted for as they occur. |
Recently Issued Accounting Standards/Impact of New Accounting Pronouncements Adopted | Recently Issued Accounting Standards In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-04, Intangibles-Goodwill and Other, Simplifying the Test for Goodwill Impairment, which eliminates Step 2 from the goodwill impairment test. Under the revised test, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. This ASU is effective for any interim or annual impairment tests for fiscal years beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating the impact of adoption on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. ASU 2017-01 is effective for annual reporting periods beginning after December 15, 2017, and interim periods within those years, with early adoption permitted. The Company is currently evaluating the impact of adoption on its consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which amends the guidance in ASC 230, including providing additional guidance related to transfers between cash and restricted cash and how entities present, in their statement of cash flows, the cash receipts and cash payments that directly affect the restricted cash accounts. ASU 2016-18 is effective for annual reporting periods beginning after December 15, 2017, and interim periods within those years, with early adoption permitted. The Company is currently evaluating the impact of adoption on its consolidated financial statements. In October 2016, the FASB issued ASU 2016-17, Consolidation (Topic 810): Interests Held through Related Parties That Are under Common Control, which amends the consolidation guidance in ASU 2015-02 regarding the treatment of indirect interests held through related parties that are under common control. ASU 2016-17 is effective for annual reporting periods beginning after December 15, 2016, and interim periods within those years, with early adoption permitted. The Company is currently evaluating the impact of adoption on its consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, Intra-Entity Transfers of Assets Other Than Inventory , which requires entities to recognize at the transaction date the income tax effects for intra-entity transfers of assets other than inventory. The standard is effective for interim and annual reporting periods beginning after December 15, 2017, with early adoption permitted. The Company is currently evaluating the impact of adoption on its consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (ASU 2016-15). This new guidance will make eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017. ASU 2016-15 will require adoption on a retrospective basis unless it is impracticable to apply, in which case the Company would be required to apply the amendments prospectively as of the earliest date practicable. The Company is currently evaluating the impact of adoption on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The amendments in this update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The ASU is effective for public companies in annual periods beginning after December 15, 2019, and interim periods within those years. Early adoption is permitted beginning after December 15, 2018 and interim periods within those years. The Company is currently evaluating the impact of adoption on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). Under ASU 2016-02, lessees will be required to recognize, for all leases of 12 months or more, a liability to make lease payments and a right-of-use asset representing the right to use the underlying asset for the lease term. Additionally, the guidance requires improved disclosures to help users of financial statements better understand the nature of an entity’s leasing activities. This ASU is effective for public reporting companies for interim and annual periods beginning after December 15, 2018, with early adoption permitted, and must be adopted using a modified retrospective approach. The Company is in the process of evaluating the effect of the new guidance on its consolidated financial statements and disclosures. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers,” which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or s e rvices to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. In March 2016, the FASB issued ASU 2016-08, “Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” which clarifies the guidance in determining revenue recognition as principal versus agent. In April 2016, the FASB issued ASU 2016-10, “Identifying Performance Obligations and Licensing,” which provides guidance in accounting for immaterial performance obligations and shipping and handling. In May 2016, the FASB issued ASU 2016-12, “Narrow-Scope Improvements and Practical Expedients” which provides clarification on assessing the collectability criterion, presentation of sales taxes, measurement date for non-cash consideration and completed contracts at transition. This ASU also provides a practical expedient for contract modifications. Finally, issued in December 2016, ASU 2016-20 makes minor corrections or minor improvements to the Codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. The new standards are effective for public reporting companies for interim and annual periods beginning after December 15, 2017. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the cumulative catch-up transition method). The Company has elected to use the modified retrospective transition method, with the cumulative effect of initially applying the guidance recognized at the date of initial application (the cumulative catch-up transition method). The Company is in the process of completing an initial assessment and expect changes to current accounting policy in the following areas: For certain software license arrangements, the Company currently uses a ratable, or over time, revenue recognition method for software licensing arrangements where vendor specific objective evidence (VSOE) of the maintenance portion of the arrangement does not exist. Under the new standard, the Company expects the timing of revenue recognition to be accelerated because it anticipates that the license revenue portion will be recognized at a point in time upon software license delivery, consistent with its current accounting policy for software arrangements where the Company can establish VSOE. Professional services in certain software and in other consulting services arrangements are recognized over time under a proportional performance method. Under the new standard, professional services must meet one of three defined criteria for professional services to be recognized over time. The three criteria are: ◦ The customer simultaneously receives and consumes the benefits as the Company performs, ◦ The customer controls the asset as the Company creates or enhances it, ◦ or the Company’s performance does not create an asset for which the entity has an alternative use, and there is a right to payment for performance to date. Where contract terms do not qualify for one of the over time criteria, the Company expects that the timing of revenue recognition for professional services in these contracts would be delayed and recognized at a point in time. Certain implementation costs and other fulfillment costs, such as direct labor for contract set-up activities, that were previously expensed as incurred will be capitalized and amortized over the contract term and anticipated renewal periods. Capitalizing and amortizing these costs would have these costs recognized over a longer time period. The Company's contracts may contain customer options for additional goods and services at stated prices, which may be material rights under the new standards. A material right exists if a contract option provides the customer with a good or service at a discounted price that a similar customer would not otherwise be offered. Under the new standards, material rights are treated as separate performance obligations and are allocated an estimated value. Where contract terms are determined to provide material rights, the Company expects that some portion of the contract price will be allocated to these material rights and recognized in later periods. At this time, the Company is not able to reasonably estimate the impact that adoption is expected to have. In the Company's implementation process, significant activities that are in process are the calculation of the transition adjustment, drafting and approval of new accounting policies, design and implementation of new processes and systems to accommodate the new policies and to compile the information for the enhanced disclosures under the new standards. In addition, internal controls around the new policies, processes and systems need to be designed and implemented. Impact of New Accounting Pronouncements In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (ASU 2014-15). ASU 2014-15 is intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. This ASU provides guidance to an organization’s management, with principles and definitions that are intended to reduce diversity in the timing and content of disclosures that are commonly provided by organizations today in the financial statement footnotes. The amendments are effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Early adoption is permitted. Adoption of this guidance, effective December 31, 2016, had no impact on the consolidated financial statements or disclosures. In March, 2016, the FASB released ASU 2016-09, “ Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting .” The ASU includes multiple provisions intended to simplify various aspects of the accounting for share-based payments. While aimed at reducing the cost and complexity of the accounting for share-based payments, the amendments may significantly impact net income, earnings per share, and the statement of cash flows. The ASU is effective for public companies in annual periods beginning after December 15, 2016, and interim periods within those years. The Company elected to early adopt this standard in the second quarter ended June 30, 2016. ASU 2016-09 eliminates the requirement to estimate and apply a forfeiture rate to reduce stock compensation expense during the vesting period and, instead, account for forfeitures as they occur. ASU 2016-09 requires that this change be adopted using the modified retrospective approach. As such, the Company recorded a cumulative-effect adjustment of $1.0 million to adjust retained earnings. Under ASU 2016-09, excess tax benefits related to employee share-based payments are not reclassified from operating activities to financing activities in the statement of cash flows. The Company applied the effect of ASU 2016-09 to the presentation of excess tax benefits in the statement of cash flows, retrospectively. This change increased the net cash provided by operating activities and decreased net cash provided by financing activities by $5.2 million and $15.1 million for the year s ended December 31, 2015 and 2014, respectively. Under ASU 2016-09, cash paid when withholding shares for tax withholding purposes are classified as a financing activity in the statement of cash flows. ASU 2016-09 requires that this change be adopted retrospectively. The presentation requirements for cash flows related to employee taxes paid for withheld shares increased the net cash provided by operating activities and decreased net cash provided by financing activities by $17.0 million and $1.2 million for the year s ended December 31, 2015 and 2014, respectively. ASU 2016-09 eliminates additional paid in capital ("APIC") pools and requires excess tax benefits and tax deficiencies to be recorded in the income statement when the awards vest or are settled. This increased the effective tax rate for the three months and year ended December 31, 2016 by less than 1% . The ASU requires that this change be adopted prospectively. The Company excluded the excess tax benefits from the assumed proceeds available to repurchase shares in the computation of diluted earnings per share for the three months ended December 31, 2016 . This increased the diluted weighted average common shares outstanding by 97,800 shares for the three months ended December 31, 2016 and decreased the diluted weighted average common shares outstanding by 66,363 for the year ended December 31, 2016 . ASU 2016-09 eliminates the requirement that excess tax benefits be realized (i.e., through a reduction in income taxes payable) before they can be recognized. Previously unrecognized deferred tax assets were recognized on a modified retrospective basis which resulted in a cumulative-effect adjustment to retained earnings of $0.5 million . Adoption of the new standard impacted previously reported quarterly results as follows: Three Months Ended March 31, 2016, As reported As adjusted Income statement: Provision for income taxes $ (3,965 ) $ (4,588 ) Cash flows statement: Net cash from operations $ 37,731 $ 40,489 Net cash used in financing (35,253 ) (32,495 ) Balance sheet: Deferred tax liability $ 23,096 $ 22,864 Additional paid-in capital 535,326 536,659 Retained earnings 194,012 192,911 The Company adopted ASU 2015-03, Interest- Imputation of Interest (subtopic 835-30); Simplifying the Presentation of Debt Issuance Costs , and ASU 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line of Credit Arrangements , during the first quarter of 2016, concurrently. The adoption of these ASUs required the Company to reclassify its deferred financing costs associated with its Convertible Senior Notes from other assets to long-term debt on a retrospective basis. The Company's consolidated balance sheets included deferred financing costs of $3.7 million and $5.1 million as of December 31, 2016 and December 31, 2015 , respectively, which were reclassified from other assets to long-term debt. The debt issuance costs associated with the Company's 2013 Credit Facility and Amended Credit Facility continue to be presented in other assets on the consolidated balance sheets. |
Segment and Geographic Information | Segment and Geographic Information The Company’s chief operating decision‑maker is the Principal Executive Officer, who reviews financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance and allocating resources. Accordingly, the Company has determined that it currently operates in one business segment: providing cloud solutions and software‑based activation for connected devices globally. The Company is not organized by market and is managed and operated as one business. A single management team reports to the chief operating decision maker who comprehensively manages the entire business. The Company does not operate any separate lines of business or separate business entities with respect to its services. Accordingly, the Company does not accumulate a complete set of discrete financial information with respect to separate service lines and does not have separately reportable segments. Although the Company operates in North America, Europe and Asia‑Pacific a majority of the Company’s revenue and long lived assets are in the U.S. Revenues by geography are based on the billing addresses of the Company’s customers. |
Fair Value Measurements | The Company classifies marketable securities as available‑for‑sale. The fair value hierarchy established in the guidance adopted by the Company prioritizes the inputs used in valuation techniques into three levels as follows: • Level 1—Observable inputs—quoted prices in active markets for identical assets and liabilities; • Level 2—Observable inputs other than the quoted prices in active markets for identical assets and liabilities—includes quoted prices for similar instruments, quoted prices for identical or similar instruments in inactive markets, and amounts derived from valuation models where all significant inputs are observable in active markets; and • Level 3—Unobservable inputs—includes amounts derived from valuation models where one or more significant inputs are unobservable and require the Company to develop relevant assumptions. |
Summary of Significant Accoun29
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of software development costs | The unamortized software development costs and amortization expense were as follows: Year ended December 31, 2016 2015 2014 Unamortized software development costs $ 19,417 $ 6,071 $ 6,106 Software development amortization expense $ 2,235 $ 1,951 $ 837 The Company’s intangible assets consist of the following: December 31, 2016 Cost Accumulated Amortization Net Trade name $ 2,523 $ (2,259 ) $ 264 Technology 160,169 (60,794 ) 99,375 Customer lists and relationships 134,280 (50,503 ) 83,777 Capitalized software and patents 26,666 (6,218 ) 20,448 $ 323,638 $ (119,774 ) $ 203,864 December 31, 2015 Cost Accumulated Amortization Net Trade name $ 1,531 $ (1,372 ) $ 159 Technology 130,200 (35,336 ) 94,864 Customer lists and relationships 105,864 (33,969 ) 71,895 Capitalized software and patents 11,406 (4,002 ) 7,404 $ 249,001 $ (74,679 ) $ 174,322 |
Impact of new accounting standard | Adoption of the new standard impacted previously reported quarterly results as follows: Three Months Ended March 31, 2016, As reported As adjusted Income statement: Provision for income taxes $ (3,965 ) $ (4,588 ) Cash flows statement: Net cash from operations $ 37,731 $ 40,489 Net cash used in financing (35,253 ) (32,495 ) Balance sheet: Deferred tax liability $ 23,096 $ 22,864 Additional paid-in capital 535,326 536,659 Retained earnings 194,012 192,911 |
Schedule of revenues and property and equipment, net by geographic area | Revenues by geography are based on the billing addresses of the Company’s customers. The following tables set forth revenues and property and equipment, net by geographic area: Year Ended December 31, 2016 2015 2014 Revenues Domestic $ 411,867 $ 375,254 $ 255,222 Foreign 64,883 52,863 52,079 Total $ 476,750 $ 428,117 $ 307,301 December 31, 2016 2015 Property and equipment, net: Domestic $ 146,772 $ 156,961 Foreign 8,827 11,319 Total $ 155,599 $ 168,280 |
Acquisition and Divestiture (Ta
Acquisition and Divestiture (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Summary of fair values of assets and liabilities assumed at acquisition date | The Company determined the fair value of the net assets acquired as follows: Purchase Price Cash $ 4,110 Prepaid expenses and other assets 3,145 Property, Plant & Equipment 2,882 Long term assets 1,986 Intangible assets: Wtd. Avg. Tradename 1,000 1 year Technology 32,100 7 years Customer relationships 29,000 10 years Goodwill 91,732 Total assets acquired 165,955 Accounts payable and accrued liabilities 17,722 Deferred revenues 8,204 Long term liabilities 15,491 Net assets acquired $ 124,538 |
Operating results of discontinued operations | The following is a summary of the operating results of BPO which have been reflected within income from discontinued operations, net of tax: Year ended December 31, 2016 2015 2014 Net revenues $ 145,613 $ 150,714 $ 150,013 Costs and expenses: Cost of services 96,737 83,931 82,028 Selling, general and administrative 2,615 2,324 2,146 Total costs and expenses 99,352 86,255 84,174 Income from discontinued operations 46,261 64,459 65,839 Gain on sale of discontinued operations 95,311 — — Income from discontinued operations before taxes 141,572 64,459 65,839 Provision for income taxes (67,039 ) (24,192 ) (24,921 ) Discontinued operations, net of taxes $ 74,533 $ 40,267 $ 40,918 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Measurements of Assets and Liabilities | |
Schedule of assets and liabilities held and their related classifications under the fair value hierarchy | The following is a summary of assets, liabilities and redeemable noncontrolling interests and their related classifications under the fair value hierarchy: December 31, 2016 Total (Level 1) (Level 2) (Level 3) Assets Cash and cash equivalents (A) $ 181,018 $ 181,018 $ — $ — Securities available-for-sale (B) 15,480 — 15,480 — Total assets $ 196,498 $ 181,018 $ 15,480 $ — Liabilities Contingent consideration obligation $ 11,860 $ — $ — $ 11,860 Total liabilities $ 11,860 $ — $ — $ 11,860 Temporary Equity Redeemable noncontrolling interest (C) $ 49,856 $ — $ — $ 49,856 Total temporary equity $ 49,856 $ — $ — $ 49,856 December 31, 2015 Total (Level 1) (Level 2) (Level 3) Assets Cash and cash equivalents (A) $ 147,634 $ 147,634 $ — $ — Securities available-for-sale (B) 85,992 — 85,992 — Total assets $ 233,626 $ 147,634 $ 85,992 $ — Liabilities Contingent consideration obligation $ 930 $ — $ — $ 930 Total liabilities $ 930 $ — $ — $ 930 Temporary Equity Redeemable noncontrolling interest $ 61,452 $ — $ — $ 61,452 Total temporary equity $ 61,452 $ — $ — $ 61,452 (A) Cash and cash equivalents includes money market funds. (B) Securities available-for-sale include municipal bonds, commercial papers, certificates of deposit, enhanced income money market fund and corporate bonds which are classified as marketable securities. (C) As of December 31, 2016 , the carrying amount of the redeemable noncontrolling interest was greater than the fair value and accordingly no adjustment to the carrying amount was recorded. |
Schedule of estimated fair value of investments classified as available for sale | At December 31, 2016 and December 31, 2015 , the estimated fair value of investments classified as available for sale, are as follows: December 31, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Available-for-sale securities: Certificates of deposit $ 450 $ — $ — $ 450 Municipal bonds 15,063 1 (34 ) 15,030 Total available-for-sale securities $ 15,513 $ 1 $ (34 ) $ 15,480 December 31, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Available-for-sale securities: Certificates of deposit $ 2,329 $ — $ (5 ) $ 2,324 Corporate bonds 39,986 — (253 ) 39,733 Municipal bonds 38,564 11 (44 ) 38,531 Fixed Income Fund 5,593 — (189 ) 5,404 Total available-for-sale securities $ 86,472 $ 11 $ (491 ) $ 85,992 |
Unrealized losses and fair value of available-for-sale securities | The unrealized losses and fair values of available-for-sale securities that have been in an unrealized loss position for a period of less than and greater than 12 months as of December 31, 2016 , are as follows: December 31, 2016 Securities in unrealized loss position less than 12 months Securities in unrealized loss position greater than 12 months Total Unrealized Losses Fair Value Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Certificates of deposit $ — $ 250 $ — $ — $ — $ 250 Municipal bonds (32 ) 12,683 (2 ) 914 (34 ) 13,597 $ (32 ) $ 12,933 $ (2 ) $ 914 $ (34 ) $ 13,847 The unrealized losses and fair values of available-for-sale securities that have been in an unrealized loss position for a period of less than and greater than 12 months as of December 31, 2015 , are as follows: December 31, 2015 Securities in unrealized loss position less than 12 months Securities in unrealized loss position greater than 12 months Total Unrealized Losses Fair Value Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Certificates of deposit $ (5 ) $ 2,324 — $ — $ (5 ) $ 2,324 Corporate bonds (253 ) 39,808 — — (253 ) 39,808 Municipal bonds (43 ) 20,630 (1 ) 550 (44 ) 21,180 Fixed Income Fund — — (189 ) 5,404 (189 ) 5,404 $ (301 ) $ 62,762 $ (190 ) $ 5,954 $ (491 ) $ 68,716 |
Expected maturities of available-for-sale securities | Expected maturities of available-for-sale securities are as follows: December 31, 2016 Amortized Cost Fair Value Due within one year $ 12,525 $ 12,506 Due after 1 year through 5 years 2,988 2,974 Total available-for-sale securities $ 15,513 $ 15,480 |
Redeemable Noncontrolling Interests | |
Fair Value Measurements of Assets and Liabilities | |
Schedule of changes in fair value of Level 3 | The changes in fair value of the Company’s Level 3 redeemable noncontrolling interests during the year ended December 31, 2016 were as follows: Balance at December 31, 2015 $ 61,452 Fair value adjustment — Net loss attributable to redeemable noncontrolling interests (11,596 ) Balance at December 31, 2016 $ 49,856 |
Contingent Consideration Obligation | |
Fair Value Measurements of Assets and Liabilities | |
Schedule of changes in fair value of Level 3 | The changes in fair value of the Company’s Level 3 contingent consideration obligation during the year ended December 31, 2016 were as follows: Balance at December 31, 2015 $ 930 Fair value adjustment to contingent consideration obligation included in net income 10,930 Balance at December 31, 2016 $ 11,860 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of components of property and equipment | Property and equipment consist of the following: December 31, 2016 2015 Computer hardware $ 242,739 $ 217,659 Computer software 48,040 39,510 Construction in-progress 14,961 4,299 Furniture and fixtures 5,981 4,040 Building 8,808 8,808 Leasehold improvements 15,576 11,922 336,105 286,238 Less: Accumulated depreciation (180,506 ) (117,958 ) $ 155,599 $ 168,280 |
Goodwill and intangibles (Table
Goodwill and intangibles (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in goodwill | The following table shows the adjustments to goodwill during 2016 and 2015 : Balance at December 31, 2014 $ 147,135 Acquisitions 84,636 Reclassifications, adjustments and other (30 ) Reclassified to assets of discontinued operations, non-current (39,271 ) Translation adjustments (10,470 ) Balance at December 31, 2015 $ 182,000 Acquisition 91,732 Adjustment to amount reclassified to assets of discontinued operations, non-current 2,466 Reclassifications, adjustments and other (3,033 ) Translation adjustments (3,260 ) Balance at December 31, 2016 $ 269,905 |
Schedule of composition of intangible assets | The unamortized software development costs and amortization expense were as follows: Year ended December 31, 2016 2015 2014 Unamortized software development costs $ 19,417 $ 6,071 $ 6,106 Software development amortization expense $ 2,235 $ 1,951 $ 837 The Company’s intangible assets consist of the following: December 31, 2016 Cost Accumulated Amortization Net Trade name $ 2,523 $ (2,259 ) $ 264 Technology 160,169 (60,794 ) 99,375 Customer lists and relationships 134,280 (50,503 ) 83,777 Capitalized software and patents 26,666 (6,218 ) 20,448 $ 323,638 $ (119,774 ) $ 203,864 December 31, 2015 Cost Accumulated Amortization Net Trade name $ 1,531 $ (1,372 ) $ 159 Technology 130,200 (35,336 ) 94,864 Customer lists and relationships 105,864 (33,969 ) 71,895 Capitalized software and patents 11,406 (4,002 ) 7,404 $ 249,001 $ (74,679 ) $ 174,322 |
Schedule of estimated annual amortization expense of intangible assets for the next five years | Estimated future amortization expense of its intangible assets for the next five years is as follows: Year ending December 31, 2017 $ 49,563 2018 46,561 2019 39,631 2020 24,940 2021 12,965 Thereafter 30,225 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Schedule of components of accrued expenses | Accrued expenses consist of the following: December 31, 2016 2015 Accrued compensation and benefits $ 31,752 $ 24,776 Accrued accounting fees 2,258 1,622 Accrued consulting fees 15,140 6,075 Accrued other 16,220 12,663 Accrued income tax payable 4,065 683 $ 69,435 $ 45,819 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of aggregate annual future minimum lease payments under non-cancellable leases | Aggregate annual future minimum payments under these non‑cancellable agreements are as follows: Year ending December 31: Colocation Operating Leases Capital Leases 2017 $ 14,327 $ 9,564 $ 2,464 2018 5,055 7,502 2,357 2019 4,914 6,790 2,285 2020 3,466 6,528 1,293 2021 and thereafter — 40,357 8,437 $ 27,762 $ 70,741 $ 16,836 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Line of Credit Facilities | Interest expense and commitment fees under the Credit Facility and the Amended Credit Facility were as follows: Year ended December 31, 2016 2015 2014 Commitment fees $ 415 $ 332 $ 215 Interest expense 877 — 136 |
Schedule of Long-term Debt Instruments | Interest expense for the Company’s 2019 Notes related to the contractual interest coupon was: Year ended December 31, 2016 2015 2014 Contractual interest expense $ 1,725 $ 1,725 $ 647 |
Accumulated Other Comprehensi37
Accumulated Other Comprehensive Income (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of changes in accumulated other comprehensive income | The changes in accumulated other comprehensive income (loss) during the year ended December 31, 2016 , are as follows: Foreign Currency Unrealized (Loss) Income on Intra-Entity Foreign Currency Transactions Unrealized Holding Gains (Losses) on Available-for-Sale Securities Total Balance at December 31, 2015 $ (34,092 ) $ (4,292 ) $ (300 ) $ (38,684 ) Other comprehensive income (loss) (4,042 ) (789 ) 365 (4,466 ) Tax effect — 64 (167 ) (103 ) Total comprehensive income (loss) (4,042 ) (725 ) 198 (4,569 ) Balance at December 31, 2016 $ (38,134 ) $ (5,017 ) $ (102 ) $ (43,253 ) The changes in accumulated other comprehensive income (loss) during the year ended December 31, 2015 , are as follows: Foreign Currency Unrealized (Loss) Income on Intra-Entity Foreign Currency Transactions Unrealized Holding Gains (Losses) on Available-for-Sale Securities Total Balance at December 31, 2014 $ (16,811 ) $ (2,957 ) $ (246 ) $ (20,014 ) Other comprehensive income (loss) (17,281 ) (2,722 ) (79 ) (20,082 ) Tax effect — 1,387 25 1,412 Total comprehensive income (loss) (17,281 ) (1,335 ) (54 ) (18,670 ) Balance at December 31, 2015 $ (34,092 ) $ (4,292 ) $ (300 ) $ (38,684 ) |
Stock Plans (Tables)
Stock Plans (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of stock-based compensation | The following table summarizes stock-based compensation expense: December 31, 2016 2015 2014 Stock options $ 7,778 $ 8,495 $ 9,992 Restricted stock awards 25,384 22,592 18,353 ESPP Plan 817 624 642 Total stock-based compensation before taxes 1 $ 33,979 $ 31,711 $ 28,987 Tax benefit $ 11,108 $ 10,130 $ 9,939 1 Includes $1.6 million , $1.8 million and $1.7 million related to discontinued operations for the years ended December 31, 2016 , 2015 and 2014 , respectively. |
Schedule of fair value assumptions | The weighted‑average assumptions used in the Black‑Scholes option pricing model are as follows: December 31, 2016 2015 2014 Expected stock price volatility 45 % 47 % 57 % Risk-free interest rate 1.16 % 1.27 % 1.43 % Expected life of options (in years) 4.0 4.0 4.2 Expected dividend yield — % — % — % Weighted-average fair value (grant date) of the options $ 11.13 $ 15.88 $ 14.67 |
Schedule of information about stock options outstanding | The following table summarizes information about stock options outstanding. Options Number of Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at December 31, 2015 2,348 $ 31.04 Options Granted 878 31.04 Options Exercised (608 ) 22.88 Options Cancelled (289 ) 36.56 Outstanding at December 31, 2016 2,329 $ 32.48 4.60 $ 15,719 Vested at December 31, 2016 2,203 $ 32.45 4.53 $ 14,865 Exercisable at December 31, 2016 1,056 $ 31.19 3.03 $ 8,397 |
Schedule of total intrinsic value for options exercised and fair value of vested options | The below table summarizes additional information related to stock options: December 31, 2016 2015 2014 Total intrinsic value for stock options exercised $ 8,953 $ 18,369 $ 18,950 Fair value of vested awards $ 21,687 $ 29,815 $ 19,409 |
Summary of unvested restricted stock activity | A summary of the Company’s unvested restricted stock at December 31, 2016 , and changes during the year ended December 31, 2016 , is presented below: Non-Vested Restricted Stock Number of Awards Weighted- Average Grant Date Fair Value Non-vested at December 31, 2015 1,412 $ 36.80 Granted 939 34.06 Vested (677 ) 35.65 Forfeited (334 ) 37.55 Non-vested at December 31, 2016 1,340 $ 35.28 |
Restructuring Charges (Tables)
Restructuring Charges (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Summary of the restructuring accrual and changes | A summary of the Company’s restructuring accrual at December 31, 2016 and changes during the year ended December 31, 2016 , is presented below: Balance at December 31, 2015 Charges 1 Payments Balance at December 31, 2016 Employment termination costs $ — $ 6,639 $ (5,458 ) $ 1,181 Facilities consolidation 54 — (14 ) 40 Total $ 54 $ 6,639 $ (5,472 ) $ 1,221 1 Includes $0.3 million related to discontinued operations. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of income before income taxes | The components of income or (loss) from continuing operations before income taxes are as follows: Year ended December 31, 2016 2015 2014 Domestic $ (57,846 ) $ 32,385 $ (11,620 ) Foreign (16,685 ) (20,546 ) 6,355 Total $ (74,531 ) $ 11,839 $ (5,265 ) |
Schedule of components of income tax (expense) benefit | The components of income tax (expense) benefit from continuing operations are as follows: Year ended December 31, 2016 2015 2014 Current: Federal $ (48 ) $ 1,993 $ 12,873 State 1,580 299 447 Foreign (3,239 ) 682 (2,040 ) Deferred: Federal 10,716 (10,277 ) (10,437 ) State 301 (480 ) (1,301 ) Foreign (1,320 ) 2,359 3,700 Income tax expense $ 7,990 $ (5,424 ) $ 3,242 |
Schedule of reconciliations of the statutory tax rates and the effective tax rates | Reconciliations of the statutory tax rates and the effective tax rates from continuing operations for the years ended December 31, 2016 , 2015 and 2014 are as follows: Year ended December 31, 2016 2015 2014 Statutory rate 35 % 35 % 35 % State taxes, net of federal benefit 2 % 1 % (11 )% Effect of rates different than statutory (7 )% 44 % 47 % Minority interest (5 )% (18 )% — % Non-deductible stock based compensation — % — % (4 )% Other permanent adjustments — % 10 % (9 )% Fair market value adjustment on Earn-out (5 )% 2 % 3 % Research and development credit 3 % (19 )% 25 % Subpart F income — % — % (22 )% Change in valuation allowance (13 )% 12 % — % Ireland deferred tax liability - migration — % (13 )% — % Customer relationship adjustment - Australia — % (16 )% — % Other 1 % 8 % (2 )% Net 11 % 46 % 62 % |
Schedule of significant components of the Company's deferred tax assets and liabilities | Significant components of the Company’s deferred tax assets and liabilities are as follows: December 31, 2016 2015 Deferred tax assets: Accrued liabilities $ 22 $ 14 Deferred revenue 8,715 316 Bad debts reserve 307 184 Deferred compensation 12,748 11,684 Federal net operating loss carry forwards 18,993 18,637 State net operating loss carry forwards 1,899 1,691 Foreign net operating loss carry forwards 14,433 9,992 Deferred rent 747 570 Capital loss carry forward 229 232 Transaction costs 2,438 — Other 2,057 1,761 Total deferred tax assets $ 62,588 $ 45,081 Deferred tax liabilities: Intangible assets $ (23,430 ) $ (24,373 ) Basis difference (15,323 ) — Installment sale (28,020 ) — Depreciation and amortization (30,034 ) (28,705 ) Total deferred tax liabilities (96,807 ) (53,078 ) Less: valuation allowance (14,100 ) (4,847 ) Net deferred income tax (liabilities) assets $ (48,319 ) $ (12,844 ) |
Schedule of net operating loss carryforwards | Such NOL carryforwards expire as follows: 2017-2021 $ 10,937 2022-2026 15,647 2027-2036 67,526 Indefinite 72,272 $ 166,382 |
Schedule of reconciliation of the amounts of unrecognized tax benefits excluding interest | A reconciliation of the amounts of unrecognized tax benefits excluding interest are as follows: Unrecognized tax benefit at December 31, 2013 $ 708 Decreases for tax positions taken during prior year (218 ) Reduction due to lapse of applicable statute of limitations (11 ) Increases for tax positions of current period 651 Unrecognized tax benefit at December 31, 2014 1,130 Decreases for tax positions taken during prior year 38 Reduction due to lapse of applicable statute of limitations (58 ) Increases for tax positions of current period 344 Unrecognized tax benefit at December 31, 2015 1,454 Decreases for tax positions taken during prior year (30 ) Reduction due to lapse of applicable statute of limitations (44 ) Increases for tax positions of current period 362 Unrecognized tax benefit at December 31, 2016 $ 1,742 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliation of the numerator and denominator used in computing basic and diluted net income attributable to common stockholders per common share | The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net income attributable to common stockholders per common share from continued and discontinued operations. Year ended December 31, 2016 2015 2014 Numerator - Basic: Net (loss) income from continuing operations $ (66,541 ) $ 6,415 $ (2,023 ) Net (loss) income attributable to noncontrolling interests (11,596 ) 6,052 — Net (loss) income from continuing operations attributable to Synchronoss (54,945 ) 363 (2,023 ) Net income from discontinued operations, net of taxes 74,533 40,267 40,918 Net income attributable to Synchronoss $ 19,588 $ 40,630 $ 38,895 Numerator - Diluted: Net (loss) income from continuing operations attributable to Synchronoss $ (54,945 ) $ 363 $ (2,023 ) Income effect for interest on convertible debt, net of tax — 1,700 — Net (loss) income from continuing operations adjusted for the convertible debt (54,945 ) 2,063 (2,023 ) Net income from discontinued operations, net of taxes 74,533 40,267 40,918 Net income attributable to Synchronoss, adjusted for the convertible debt $ 19,588 $ 42,330 $ 38,895 Denominator: Weighted average common shares outstanding — basic 43,571 42,284 40,418 Dilutive effect of: Shares from assumed conversion of convertible debt — — — Options and unvested restricted shares — — — Weighted average common shares outstanding — diluted 43,571 42,284 40,418 Basic EPS Continuing operations $ (1.26 ) $ 0.01 $ (0.05 ) Discontinued operations 1.71 0.95 1.01 $ 0.45 $ 0.96 $ 0.96 Diluted EPS Continuing operations $ (1.26 ) $ 0.01 $ (0.05 ) Discontinued operations 1.71 0.95 1.01 $ 0.45 $ 0.96 $ 0.96 Anti-dilutive stock options excluded: 1,089 553 1,100 |
Summary of Significant Accoun42
Summary of Significant Accounting Policies - Service Level Standards and Research and Development (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Finite-Lived Intangible Assets [Line Items] | |||
Performance related penalties | $ 0 | $ 0 | $ 0 |
Research and Development | |||
Unamortized software development costs | 19,417 | 6,071 | 6,106 |
Amortization expenses of capital software development costs | $ 2,235 | $ 1,951 | $ 837 |
Software Development | |||
Research and Development | |||
Estimated minimum useful life of software development costs | 3 years | ||
Estimated maximum useful life of software development costs | 5 years |
Summary of Significant Accoun43
Summary of Significant Accounting Policies - Concentration of Credit Risk (Details) - Top Customers | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Net Revenues | Customer Concentration | |||
Concentration of Credit Risk | |||
Percentage of concentration risk | 62.00% | 71.00% | 67.00% |
Accounts Receivable | Credit Concentration | |||
Concentration of Credit Risk | |||
Percentage of concentration risk | 64.00% | 57.00% |
Summary of Significant Accoun44
Summary of Significant Accounting Policies - Cash, Marketable Securities, and Property, Plant and Equipment (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Cash and Cash Equivalents | |
Maximum time period for which an investment is considered a cash equivalent | 3 months |
Minimum | |
Marketable Securities | |
Maturity period of fixed income investments | 3 months |
Maturity period of marketable securities to be classified as long-term | 12 months |
Minimum | Property, Equipment, and Leasehold Improvements | |
Property and Equipment | |
Estimated useful life of property and equipment and leasehold improvements | 3 years |
Maximum | Property, Equipment, and Leasehold Improvements | |
Property and Equipment | |
Estimated useful life of property and equipment and leasehold improvements | 5 years |
Summary of Significant Accoun45
Summary of Significant Accounting Policies - Investments in Affiliates and Other Entities (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Period of reporting lag in recording equity income | 1 month |
Summary of Significant Accoun46
Summary of Significant Accounting Policies - Goodwill, Intangible Assets and Income Taxes (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accounting Policies [Abstract] | |||
Document Fiscal Year Focus | 2,016 | ||
Impairment charges on goodwill | $ 0 | $ 0 | $ 0 |
Impairment of Long-Lived Assets | |||
Impairment charges on long lived assets | $ 0 | $ 0 | $ 0 |
Income Taxes | |||
Historical period used in future taxable income assumptions | 3 years |
Summary of Significant Accoun47
Summary of Significant Accounting Policies - Impact of New Accounting Pronouncements (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2016 | Mar. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Jun. 30, 2016 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Document Fiscal Year Focus | 2,016 | ||||||
Cumulative effect adjustment to RE's | $ 232 | ||||||
Increase (decrease) in net cash provided by financing activities | $ (8,976) | (1,694) | $ 237,961 | ||||
Increase (decrease) in net cash provided by operating activities | $ 142,589 | $ 139,822 | $ 87,321 | ||||
Effective tax rate | 11.00% | 46.00% | 62.00% | ||||
Increase (decrease) in weighted-average common shares outstanding, diluted (in shares) | [1] | 43,571,000 | 42,284,000 | 40,418,000 | |||
ASU 2015-03 | Other Assets | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Deferred financing costs | $ (3,700) | $ (3,700) | $ (5,100) | ||||
ASU 2015-03 | Long-term Debt | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Deferred financing costs | $ 3,700 | $ 3,700 | 5,100 | ||||
New Accounting Pronouncement, Early Adoption, Effect | ASU 2016-09 | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Increase (decrease) in net cash provided by financing activities | $ (32,495) | ||||||
Increase (decrease) in net cash provided by operating activities | $ 40,489 | ||||||
Effective tax rate | 1.00% | ||||||
New Accounting Pronouncement, Early Adoption, Effect | ASU 2016-09 | Stock Compensation Expense Forfeiture Rate | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Cumulative effect adjustment to RE's | $ (1,000) | ||||||
New Accounting Pronouncement, Early Adoption, Effect | ASU 2016-09 | Excess Tax Benefits | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Increase (decrease) in net cash provided by financing activities | (5,200) | $ (15,100) | |||||
Increase (decrease) in net cash provided by operating activities | 5,200 | 5,100 | |||||
Increase (decrease) in weighted-average common shares outstanding, diluted (in shares) | 97,800 | (66,363) | |||||
New Accounting Pronouncement, Early Adoption, Effect | ASU 2016-09 | Tax Withholding For Share Based Compensation | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Increase (decrease) in net cash provided by financing activities | (17,000) | (1,200) | |||||
Increase (decrease) in net cash provided by operating activities | $ 17,000 | $ 1,200 | |||||
New Accounting Pronouncement, Early Adoption, Effect | ASU 2016-09 | Deferred Tax Assets | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Cumulative effect adjustment to RE's | $ 500 | $ 500 | |||||
[1] | See notes to financial statement footnote 2. |
Summary of Significant Accoun48
Summary of Significant Accounting Policies - Early Adoption (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
New Accounting Pronouncement, Early Adoption [Line Items] | |||||
Provision for income taxes | [1] | $ 7,990 | $ (5,424) | $ 3,242 | |
Net cash from operations | 142,589 | 139,822 | 87,321 | ||
Net cash used in financing | (8,976) | (1,694) | $ 237,961 | ||
Deferred tax liability | [2] | 49,822 | 16,404 | ||
Additional paid-in capital | [2] | 575,093 | 512,802 | ||
Retained earnings | [2] | $ 220,453 | $ 201,343 | ||
As adjusted | ASU 2016-09 | |||||
New Accounting Pronouncement, Early Adoption [Line Items] | |||||
Provision for income taxes | $ (4,588) | ||||
Net cash from operations | 40,489 | ||||
Net cash used in financing | (32,495) | ||||
Deferred tax liability | 22,864 | ||||
Additional paid-in capital | 536,659 | ||||
Retained earnings | 192,911 | ||||
As reported | |||||
New Accounting Pronouncement, Early Adoption [Line Items] | |||||
Provision for income taxes | (3,965) | ||||
Net cash from operations | 37,731 | ||||
Net cash used in financing | (35,253) | ||||
Deferred tax liability | 23,096 | ||||
Additional paid-in capital | 535,326 | ||||
Retained earnings | $ 194,012 | ||||
[1] | See Note 2 for discussion of the adoption of ASU 2016-09. | ||||
[2] | See Note 2 for discussion of the adoption of ASU 2016-09. |
Summary of Significant Accoun49
Summary of Significant Accounting Policies - Segment and Geographic Information (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($)segmentbusiness | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Revenues and property and equipment, net by geographic area | |||
Document Fiscal Year Focus | 2,016 | ||
Segment and Geographic Information | |||
Number of business segments (segment) | segment | 1 | ||
Number of businesses the entity is managed and operated as (business) | business | 1 | ||
Revenues and property and equipment, net by geographic area | |||
Revenues | $ 476,750 | $ 428,117 | $ 307,301 |
Property and equipment, net | 155,599 | 168,280 | |
Geographic area | |||
Revenues and property and equipment, net by geographic area | |||
Revenues | 476,750 | 428,117 | 307,301 |
Property and equipment, net | 155,599 | 168,280 | |
Geographic area | Domestic | |||
Revenues and property and equipment, net by geographic area | |||
Revenues | 411,867 | 375,254 | 255,222 |
Property and equipment, net | 146,772 | 156,961 | |
Geographic area | Foreign | |||
Revenues and property and equipment, net by geographic area | |||
Revenues | 64,883 | 52,863 | $ 52,079 |
Property and equipment, net | $ 8,827 | $ 11,319 |
Acquisition and Divestiture - N
Acquisition and Divestiture - Narrative (Details) $ in Thousands | Dec. 29, 2016USD ($) | Dec. 22, 2016USD ($) | Dec. 16, 2016USD ($) | Mar. 01, 2016USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Business Acquisition [Line Items] | |||||||
Value of common stock paid for acquisition | $ 22,000 | $ 0 | $ 0 | ||||
Proceeds from the sale of discontinued operations | 18,135 | 0 | 0 | ||||
Mirapoint Activation Business | |||||||
Business Acquisition [Line Items] | |||||||
Gain on sale | $ 1,000 | ||||||
Discontinued Operations, Disposed of by Sale | BPO | |||||||
Business Acquisition [Line Items] | |||||||
Purchase price of divestiture | $ 146,000 | ||||||
Period of transition services agreement | 3 years | ||||||
Discontinued Operations, Disposed of by Sale | BPO | STI | |||||||
Business Acquisition [Line Items] | |||||||
Ownership interest in STI | 30.00% | ||||||
Discontinued Operations, Disposed of by Sale | BPO | STI | STIH | |||||||
Business Acquisition [Line Items] | |||||||
Purchase price of divestiture | $ 83,000 | ||||||
Ownership interest in STI by Sequential Technology Holdings, LLC | 0.7 | ||||||
Proceeds from the sale of discontinued operations | $ 18,135 | ||||||
Interest rate of related party note receivable | 12.00% | ||||||
Selling, General and Administrative Expenses | |||||||
Business Acquisition [Line Items] | |||||||
Acquisition related costs | $ 11,800 | $ 1,800 | $ 2,500 | ||||
Net Revenue | BPO | STIH | |||||||
Business Acquisition [Line Items] | |||||||
Non-exclusive perpetual license agreement | $ 9,200 | ||||||
Openwave Messaging | |||||||
Business Acquisition [Line Items] | |||||||
Consideration transferred | $ 124,500 | ||||||
Cash paid for acquisition | 102,500 | ||||||
Value of common stock paid for acquisition | $ 22,000 | ||||||
Number of trading days | 10 days |
Acquisition and Divestiture - F
Acquisition and Divestiture - Fair Value of Net Asset Acquired (Details) - USD ($) $ in Thousands | Mar. 01, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 269,905 | $ 182,000 | $ 147,135 | |
Openwave Messaging | ||||
Business Acquisition [Line Items] | ||||
Cash | $ 4,110 | |||
Prepaid expenses and other assets | 3,145 | |||
Property, Plant & Equipment | 2,882 | |||
Long term assets | 1,986 | |||
Goodwill | 91,732 | |||
Total assets acquired | 165,955 | |||
Accounts payable and accrued liabilities | 17,722 | |||
Deferred revenues | 8,204 | |||
Long term liabilities | 15,491 | |||
Net assets acquired | 124,538 | |||
Openwave Messaging | Tradename | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | $ 1,000 | |||
Weighted-average amortization period | 1 year | |||
Openwave Messaging | Technology | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | $ 32,100 | |||
Weighted-average amortization period | 7 years | |||
Openwave Messaging | Customer relationships | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | $ 29,000 | |||
Weighted-average amortization period | 10 years |
Acquisition and Divestiture - D
Acquisition and Divestiture - Discontinued Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Discontinued operations, net of taxes | $ 74,533 | $ 40,267 | $ 40,918 |
Discontinued Operations, Disposed of by Sale | BPO | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Net revenues | 145,613 | 150,714 | 150,013 |
Cost of services | 96,737 | 83,931 | 82,028 |
Selling, general and administrative | 2,615 | 2,324 | 2,146 |
Total costs and expenses | 99,352 | 86,255 | 84,174 |
Income from discontinued operations | 46,261 | 64,459 | 65,839 |
Gain on sale of discontinued operations | 95,311 | 0 | 0 |
Income from discontinued operations before taxes | 141,572 | 64,459 | 65,839 |
Provision for income taxes | (67,039) | (24,192) | (24,921) |
Discontinued operations, net of taxes | $ 74,533 | $ 40,267 | $ 40,918 |
Fair Value Measurements - Hiera
Fair Value Measurements - Hierarchy (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Assets | ||
Cash and cash equivalents | $ 181,018,000 | $ 147,634,000 |
Securities available-for-sale | 15,480,000 | 85,992,000 |
Total assets | 196,498,000 | 233,626,000 |
Liabilities | ||
Contingent consideration obligation | 11,860,000 | 930,000 |
Total liabilities | 11,860,000 | 930,000 |
Temporary Equity | ||
Redeemable noncontrolling interest | 49,856,000 | 61,452,000 |
Transfers between Levels | ||
Fair value of asset transfers between Levels 1, 2, and 3 | 0 | |
Redeemable Noncontrolling Interests | ||
Temporary Equity | ||
Fair value adjustment | 0 | |
Level 1 | ||
Assets | ||
Cash and cash equivalents | 181,018,000 | 147,634,000 |
Securities available-for-sale | 0 | 0 |
Total assets | 181,018,000 | 147,634,000 |
Liabilities | ||
Contingent consideration obligation | 0 | 0 |
Total liabilities | 0 | 0 |
Temporary Equity | ||
Redeemable noncontrolling interest | 0 | 0 |
Level 2 | ||
Assets | ||
Cash and cash equivalents | 0 | 0 |
Securities available-for-sale | 15,480,000 | 85,992,000 |
Total assets | 15,480,000 | 85,992,000 |
Liabilities | ||
Contingent consideration obligation | 0 | 0 |
Total liabilities | 0 | 0 |
Temporary Equity | ||
Redeemable noncontrolling interest | 0 | 0 |
Level 3 | ||
Assets | ||
Cash and cash equivalents | 0 | 0 |
Securities available-for-sale | 0 | 0 |
Total assets | 0 | 0 |
Liabilities | ||
Contingent consideration obligation | 11,860,000 | 930,000 |
Total liabilities | 11,860,000 | 930,000 |
Temporary Equity | ||
Redeemable noncontrolling interest | $ 49,856,000 | $ 61,452,000 |
Fair Value Measurements - AFS S
Fair Value Measurements - AFS Securities (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Amortized Cost to Fair Value | ||
Amortized Cost | $ 15,513,000 | $ 86,472,000 |
Gross Unrealized Gains | 1,000 | 11,000 |
Gross Unrealized Losses | (34,000) | (491,000) |
Fair Value | 15,480,000 | 85,992,000 |
Unrealized gain (loss) on securities | ||
Sales of marketable securities | 0 | 0 |
Municipal bonds | ||
Amortized Cost to Fair Value | ||
Amortized Cost | 15,063,000 | 38,564,000 |
Gross Unrealized Gains | 1,000 | 11,000 |
Gross Unrealized Losses | (34,000) | (44,000) |
Fair Value | 15,030,000 | 38,531,000 |
Corporate bonds | ||
Amortized Cost to Fair Value | ||
Amortized Cost | 39,986,000 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (253,000) | |
Fair Value | 39,733,000 | |
Fixed Income Fund | ||
Amortized Cost to Fair Value | ||
Amortized Cost | 5,593,000 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (189,000) | |
Fair Value | 5,404,000 | |
Certificates of deposit | ||
Amortized Cost to Fair Value | ||
Amortized Cost | 450,000 | 2,329,000 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | (5,000) |
Fair Value | $ 450,000 | $ 2,324,000 |
Fair Value Measurements - AFS55
Fair Value Measurements - AFS Securities in Unrealized Loss Position (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Securities in unrealized loss position: Unrealized Losses | ||
Securities in unrealized loss position less than 12 months | $ (32) | $ (301) |
Securities in unrealized loss position greater than 12 months | (2) | (190) |
Securities in unrealized loss position: Total Gross unrealized losses | (34) | (491) |
Securities in unrealized loss position: Fair Value | ||
Securities in unrealized loss position less than 12 months | 12,933 | 62,762 |
Securities in unrealized loss position greater than 12 months | 914 | 5,954 |
Securities in unrealized loss position: Total Fair Value | 13,847 | 68,716 |
Corporate bonds | ||
Securities in unrealized loss position: Unrealized Losses | ||
Securities in unrealized loss position less than 12 months | 0 | (253) |
Securities in unrealized loss position greater than 12 months | 0 | 0 |
Securities in unrealized loss position: Total Gross unrealized losses | 0 | (253) |
Securities in unrealized loss position: Fair Value | ||
Securities in unrealized loss position less than 12 months | 250 | 39,808 |
Securities in unrealized loss position greater than 12 months | 0 | 0 |
Securities in unrealized loss position: Total Fair Value | 250 | 39,808 |
Municipal bonds | ||
Securities in unrealized loss position: Unrealized Losses | ||
Securities in unrealized loss position less than 12 months | (32) | (43) |
Securities in unrealized loss position greater than 12 months | (2) | (1) |
Securities in unrealized loss position: Total Gross unrealized losses | (34) | (44) |
Securities in unrealized loss position: Fair Value | ||
Securities in unrealized loss position less than 12 months | 12,683 | 20,630 |
Securities in unrealized loss position greater than 12 months | 914 | 550 |
Securities in unrealized loss position: Total Fair Value | $ 13,597 | 21,180 |
Fixed Income Fund | ||
Securities in unrealized loss position: Unrealized Losses | ||
Securities in unrealized loss position less than 12 months | 0 | |
Securities in unrealized loss position greater than 12 months | (189) | |
Securities in unrealized loss position: Total Gross unrealized losses | (189) | |
Securities in unrealized loss position: Fair Value | ||
Securities in unrealized loss position less than 12 months | 0 | |
Securities in unrealized loss position greater than 12 months | 5,404 | |
Securities in unrealized loss position: Total Fair Value | 5,404 | |
Certificates of deposit | ||
Securities in unrealized loss position: Unrealized Losses | ||
Securities in unrealized loss position less than 12 months | (5) | |
Securities in unrealized loss position greater than 12 months | 0 | |
Securities in unrealized loss position: Total Gross unrealized losses | (5) | |
Securities in unrealized loss position: Fair Value | ||
Securities in unrealized loss position less than 12 months | 2,324 | |
Securities in unrealized loss position greater than 12 months | 0 | |
Securities in unrealized loss position: Total Fair Value | $ 2,324 |
Fair Value Measurements - AFS56
Fair Value Measurements - AFS Securities Expected Maturities (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Available-for-sale Securities, Debt Maturities, Amortized Cost Basis, Fiscal Year Maturity [Abstract] | |
Due within one year | $ 12,525 |
Due after 1 year through 5 years | 2,988 |
Total available-for-sale marketable securities, Amortized Cost | 15,513 |
Available-for-sale Securities, Debt Maturities, Single Maturity Date [Abstract] | |
Due within one year | 12,506 |
Due after 1 year through 5 years | 2,974 |
Total available-for-sale marketable securities, Fair Value | $ 15,480 |
Fair Value Measurements - Level
Fair Value Measurements - Level 3 Contingent Consideration (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Changes in fair value of the Company's Level 3 contingent consideration obligation | |||
Fair value adjustment to contingent consideration obligation included in net income | $ 10,930 | $ 760 | $ 1,799 |
Level 3 | Contingent Consideration Obligation | |||
Changes in fair value of the Company's Level 3 contingent consideration obligation | |||
Balance as at the beginning of the period | 930 | ||
Fair value adjustment to contingent consideration obligation included in net income | 10,930 | ||
Balance as at the end of the period | $ 11,860 | $ 930 |
Fair Value Measurements - Lev58
Fair Value Measurements - Level 3 Redeemable Noncontrolling Interests (Details) - Redeemable Noncontrolling Interests | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Changes in fair value of the Company’s Level 3 redeemable noncontrolling interests | |
Balance at beginning of period | $ 61,452,000 |
Fair value adjustment | 0 |
Net loss attributable to redeemable noncontrolling interests | (11,596,000) |
Balance at end of period | $ 49,856,000 |
Investments (Details)
Investments (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Schedule of Equity Method Investments [Line Items] | ||
Equity method investment | $ 45,890,000 | $ 0 |
Equity method investment, ownership interest | 30.00% | |
Period of reporting lag in recording equity income | 1 month | |
Variable Interest Entity, Primary Beneficiary | ||
Schedule of Equity Method Investments [Line Items] | ||
Line of credit provided to SNCR, LLC | $ 20,000,000 | |
Variable Interest Entity, Primary Beneficiary | Zentry, LLC | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership percentage | 67.00% | |
Variable Interest Entity, Primary Beneficiary | SNCR, LLC | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership percentage in VIE | 67.00% |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property and Equipment | |||
Property and Equipment, gross | $ 336,105 | $ 286,238 | |
Less: Accumulated depreciation | (180,506) | (117,958) | |
Property and equipment, net | 155,599 | 168,280 | |
Depreciation expense | 52,300 | 43,500 | $ 36,100 |
Computer hardware | |||
Property and Equipment | |||
Property and Equipment, gross | 242,739 | 217,659 | |
Computer software | |||
Property and Equipment | |||
Property and Equipment, gross | 48,040 | 39,510 | |
Construction in-progress | |||
Property and Equipment | |||
Property and Equipment, gross | 14,961 | 4,299 | |
Furniture and fixtures | |||
Property and Equipment | |||
Property and Equipment, gross | 5,981 | 4,040 | |
Building | |||
Property and Equipment | |||
Property and Equipment, gross | 8,808 | 8,808 | |
Leasehold improvements | |||
Property and Equipment | |||
Property and Equipment, gross | $ 15,576 | $ 11,922 |
Goodwill and Intangibles - Good
Goodwill and Intangibles - Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill | ||
Balance at the beginning of the period | $ 182,000 | $ 147,135 |
Acquisitions | 91,732 | 84,636 |
Reclassifications, adjustments and other | (3,033) | (30) |
Reclassified to assets of discontinued operations, non-current | 2,466 | (39,271) |
Translation adjustments | (3,260) | (10,470) |
Balance at the end of the period | $ 269,905 | $ 182,000 |
Goodwill and Intangibles - Inta
Goodwill and Intangibles - Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Intangible assets | |||
Amortization expense | $ 47,000 | $ 28,600 | $ 19,800 |
Intangible assets: | |||
Cost | 323,638 | 249,001 | |
Accumulated Amortization | (119,774) | (74,679) | |
Net | 203,864 | 174,322 | |
Tradename | |||
Intangible assets: | |||
Cost | 2,523 | 1,531 | |
Accumulated Amortization | (2,259) | (1,372) | |
Net | 264 | 159 | |
Technology | |||
Intangible assets: | |||
Cost | 160,169 | 130,200 | |
Accumulated Amortization | (60,794) | (35,336) | |
Net | 99,375 | 94,864 | |
Customer lists and relationships | |||
Intangible assets: | |||
Cost | 134,280 | 105,864 | |
Accumulated Amortization | (50,503) | (33,969) | |
Net | 83,777 | 71,895 | |
Capitalized software and patents | |||
Intangible assets: | |||
Cost | 26,666 | 11,406 | |
Accumulated Amortization | (6,218) | (4,002) | |
Net | $ 20,448 | $ 7,404 |
Goodwill and Intangibles - In63
Goodwill and Intangibles - Intangible Assets - Future Amortization (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Estimated future amortization expense | |
2,017 | $ 49,563 |
2,018 | 46,561 |
2,019 | 39,631 |
2,020 | 24,940 |
2,021 | 12,965 |
Thereafter | $ 30,225 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Payables and Accruals [Abstract] | ||
Accrued compensation and benefits | $ 31,752 | $ 24,776 |
Accrued accounting fees | 2,258 | 1,622 |
Accrued consulting fees | 15,140 | 6,075 |
Accrued other | 16,220 | 12,663 |
Accrued income tax payable | 4,065 | 683 |
Total | $ 69,435 | $ 45,819 |
Commitments and Contingencies65
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Aggregate annual future minimum lease payments under non-cancellable leases | |||
Rent expense | $ 8,600 | $ 7,600 | $ 6,500 |
Colocation | |||
Aggregate annual future minimum lease payments under non-cancellable leases | |||
2,017 | 14,327 | ||
2,018 | 5,055 | ||
2,019 | 4,914 | ||
2,020 | 3,466 | ||
2021 and thereafter | 0 | ||
Total | 27,762 | ||
Operating Leases | |||
Aggregate annual future minimum lease payments under non-cancellable leases | |||
2,017 | 9,564 | ||
2,018 | 7,502 | ||
2,019 | 6,790 | ||
2,020 | 6,528 | ||
2021 and thereafter | 40,357 | ||
Total | 70,741 | ||
Capital Leases | |||
Aggregate annual future minimum lease payments under non-cancellable leases | |||
2,017 | 2,464 | ||
2,018 | 2,357 | ||
2,019 | 2,285 | ||
2,020 | 1,293 | ||
2021 and thereafter | 8,437 | ||
Total | $ 16,836 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | Jan. 19, 2017 | Jul. 07, 2016 | Aug. 12, 2014 | Sep. 30, 2013 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Credit Facility | |||||||
Short term debt | $ 29,000,000 | $ 0 | |||||
Aggregate payoff | 115,000,000 | $ 0 | $ 40,000,000 | ||||
2019 Notes | |||||||
Credit Facility | |||||||
Face amount of debt issued | $ 230,000,000 | ||||||
Interest rate, as a percent | 0.75% | ||||||
Carrying amount of debt | $ 230,000,000 | $ 226,300,000 | |||||
Capitalized finance fees | $ 7,100,000 | ||||||
Conversion rate | 0.0188072 | ||||||
Conversion price | $ 53.17 | ||||||
Repurchase price, expressed as a percentage of principal of debt repurchased | 100.00% | ||||||
Effective interest rate (as a percent) | 1.39% | ||||||
Fair value of debt | $ 242,400,000 | ||||||
Credit Facility | |||||||
Credit Facility | |||||||
Borrowing capacity | $ 100,000,000 | ||||||
Amount of borrowing capacity to which the company has a right to request an increase | $ 150,000,000 | ||||||
Credit Facility | London Interbank Offered Rate (LIBOR) | |||||||
Credit Facility | |||||||
Interest rate spread | 0.025% | ||||||
Credit Facility | Minimum | |||||||
Credit Facility | |||||||
Commitment fee on unused balance (as a percent) | 0.15% | 0.25% | |||||
Credit Facility | Maximum | |||||||
Credit Facility | |||||||
Commitment fee on unused balance (as a percent) | 0.30% | 0.35% | |||||
Amended And Restated Credit Agreement | |||||||
Credit Facility | |||||||
Borrowing capacity | $ 250,000,000 | ||||||
Amount of borrowing capacity to which the company has a right to request an increase | $ 350,000,000 | ||||||
Short term debt | $ 29,000,000 | ||||||
Amended And Restated Credit Agreement | Subsequent Event | |||||||
Credit Facility | |||||||
Aggregate payoff | $ 29,000,000 | ||||||
Amended And Restated Credit Agreement | London Interbank Offered Rate (LIBOR) | |||||||
Credit Facility | |||||||
Interest rate spread | 0.019% |
Debt - Credit Facility (Details
Debt - Credit Facility (Details) - Credit Facility - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Debt Instrument [Line Items] | |||
Commitment fees | $ 415 | $ 332 | $ 215 |
Interest expense | $ 877 | $ 0 | $ 136 |
Debt - 2019 Notes (Details)
Debt - 2019 Notes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
2019 Notes | |||
Debt Instrument [Line Items] | |||
Contractual interest expense | $ 1,725 | $ 1,725 | $ 647 |
Accumulated Other Comprehensi69
Accumulated Other Comprehensive Income - Changes in AOCI (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Changes in accumulated other comprehensive income (loss) | |||
Balance | $ 609,814 | $ 529,107 | $ 447,639 |
Total other comprehensive loss | (4,569) | (18,670) | (19,291) |
Balance | 657,115 | 609,814 | 529,107 |
Accumulated Other Comprehensive Income (Loss) | |||
Changes in accumulated other comprehensive income (loss) | |||
Balance | (38,684) | (20,014) | (723) |
Other comprehensive income (loss) | (4,466) | (20,082) | |
Tax effect | (103) | 1,412 | |
Total other comprehensive loss | (4,569) | (18,670) | (19,291) |
Balance | (43,253) | (38,684) | (20,014) |
Foreign Currency | |||
Changes in accumulated other comprehensive income (loss) | |||
Balance | (34,092) | (16,811) | |
Other comprehensive income (loss) | (4,042) | (17,281) | |
Tax effect | 0 | 0 | |
Total other comprehensive loss | (4,042) | (17,281) | |
Balance | (38,134) | (34,092) | (16,811) |
Unrealized (Loss) Income on Intra-Entity Foreign Currency Transactions | |||
Changes in accumulated other comprehensive income (loss) | |||
Balance | (4,292) | (2,957) | |
Other comprehensive income (loss) | (789) | (2,722) | |
Tax effect | 64 | 1,387 | |
Total other comprehensive loss | (725) | (1,335) | |
Balance | (5,017) | (4,292) | (2,957) |
Unrealized Holding Gains (Losses) on Available-for-Sale Securities | |||
Changes in accumulated other comprehensive income (loss) | |||
Balance | (300) | (246) | |
Other comprehensive income (loss) | 365 | (79) | |
Tax effect | (167) | 25 | |
Total other comprehensive loss | 198 | (54) | |
Balance | $ (102) | $ (300) | $ (246) |
Capital Structure - Capitalizat
Capital Structure - Capitalization Information (Details) | 12 Months Ended | ||
Dec. 31, 2016USD ($)vote$ / sharesshares | Feb. 04, 2016USD ($) | Dec. 31, 2015shares | |
Equity, Class of Treasury Stock [Line Items] | |||
Authorized capital stock (in shares) | 110,000,000 | ||
Par value per share of capital stock (in dollars per share) | $ / shares | $ 0.0001 | ||
Designated common stock (in shares) | 100,000,000 | 100,000,000 | |
Designated preferred stock (in shares) | 10,000,000 | 10,000,000 | |
Preferred stock, shares outstanding (in shares) | 0 | 0 | |
Share Repurchase Program 2016 | |||
Equity, Class of Treasury Stock [Line Items] | |||
Amount authorized to be purchased under stock repurchase program | $ | $ 100,000,000 | ||
Number of shares repurchased under program (in shares) | 1,300,000 | ||
Value of shares repurchased under program | $ | $ 40,000,000 | ||
Common Stock | |||
Equity, Class of Treasury Stock [Line Items] | |||
Number of votes per share (vote) | vote | 1 | ||
Dividends | $ | $ 0 |
Stock Plans - Plan Information
Stock Plans - Plan Information (Details) shares in Millions | Dec. 31, 2016shares |
2015 Plan | |
Stockholder's Equity | |
Number of shares available for grant (in shares) | 2.3 |
Stock Plans - Stock-based compe
Stock Plans - Stock-based compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based compensation expense | |||
Total stock-based compensation expense before taxes | $ 33,979 | $ 31,711 | $ 28,987 |
Tax benefit | 11,108 | 10,130 | 9,939 |
Stock-based compensation cost related to non-vested equity awards not yet recognized as an expense | $ 58,300 | ||
Weighted-average period over which stock-based compensation cost related to non-vested equity awards is expected to be recognized | 2 years 5 months 23 days | ||
Discontinued Operations, Disposed of by Sale | |||
Share-based compensation expense | |||
Total stock-based compensation expense before taxes | $ 1,600 | 1,800 | 1,700 |
ESPP Plan | |||
Share-based compensation expense | |||
Total stock-based compensation expense before taxes | 817 | 624 | 642 |
Stock options | |||
Share-based compensation expense | |||
Total stock-based compensation expense before taxes | 7,778 | 8,495 | 9,992 |
Restricted stock awards | |||
Share-based compensation expense | |||
Total stock-based compensation expense before taxes | $ 25,384 | $ 22,592 | $ 18,353 |
Stock Plans - Option Vesting (D
Stock Plans - Option Vesting (Details) - Stock options | 12 Months Ended |
Dec. 31, 2016 | |
2000 Plan | First Anniversary | |
Stockholder's Equity | |
Percentage of awards vesting | 25.00% |
2000 Plan | Monthly vesting after first anniversary | |
Stockholder's Equity | |
Percentage of awards vesting | 2.10% |
2006 Plan | First Anniversary | |
Stockholder's Equity | |
Percentage of awards vesting | 25.00% |
2006 Plan | Monthly vesting after first anniversary | |
Stockholder's Equity | |
Percentage of awards vesting | 2.10% |
2015 Plan | First Anniversary | |
Stockholder's Equity | |
Percentage of awards vesting | 25.00% |
2015 Plan | Monthly vesting after first anniversary | |
Stockholder's Equity | |
Percentage of awards vesting | 2.10% |
2010 Plan | Second Anniversary | |
Stockholder's Equity | |
Percentage of awards vesting | 50.00% |
2010 Plan | Monthly vesting after second anniversary | |
Stockholder's Equity | |
Percentage of awards vesting | 2.10% |
2000 and 2006 Stock incentive plans | First Anniversary | |
Stockholder's Equity | |
Percentage of awards vesting | 25.00% |
2000 and 2006 Stock incentive plans | Monthly vesting after first anniversary | |
Stockholder's Equity | |
Percentage of awards vesting | 2.10% |
Stock Plans - Black-Scholes Ass
Stock Plans - Black-Scholes Assumptions (Details) - Stock options - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Weighted-average assumptions | |||
Expected stock price volatility | 45.00% | 47.00% | 57.00% |
Risk-free interest rate | 1.16% | 1.27% | 1.43% |
Expected life of options (in years) | 4 years | 4 years | 4 years 2 months 12 days |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Weighted-average fair value (grant date) of the options | $ 11.13 | $ 15.88 | $ 14.67 |
Stock Plans - Stock Options (De
Stock Plans - Stock Options (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Number of Options | |||
Options outstanding at the beginning of the period (in shares) | 2,348 | ||
Options Granted (in shares) | 878 | ||
Options Exercised (in shares) | (608) | ||
Options Cancelled (in shares) | (289) | ||
Options outstanding at the end of the period (in shares) | 2,329 | 2,348 | |
Vested or expected to vest (in shares) | 2,203 | ||
Exercisable (in shares) | 1,056 | ||
Weighted-Average Exercise Price | |||
Balance at the beginning of the period (in dollars per share) | $ 31.04 | ||
Options Granted (in dollars per share) | 31.04 | ||
Options Exercised (in dollars per share) | 22.88 | ||
Options Cancelled (in dollars per share) | 36.56 | ||
Balance at the end of the period (in dollars per share) | 32.48 | $ 31.04 | |
Vested or expected to vest (in dollars per share) | 32.45 | ||
Exercisable (in dollars per share) | $ 31.19 | ||
Weighted-Average Remaining Contractual Term | |||
Outstanding | 4 years 7 months 6 days | ||
Vested or expected to vest | 4 years 6 months 10 days | ||
Exercisable | 3 years 10 days | ||
Aggregate Intrinsic Value | |||
Outstanding | $ 15,719 | ||
Vested or expected to vest | 14,865 | ||
Exercisable | 8,397 | ||
Additional disclosures related to stock options | |||
Total intrinsic value for stock options exercised | 8,953 | $ 18,369 | $ 18,950 |
Fair value of vested awards | $ 21,687 | $ 29,815 | $ 19,409 |
Stock Plans - Restricted Stock
Stock Plans - Restricted Stock (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Additional disclosures | |
Issuance of restricted stock (in shares) | 41 |
Restricted stock awards | |
Number of Awards | |
Non-vested at the beginning of the period (in shares) | 1,412 |
Granted (in shares) | 939 |
Vested (in shares) | (677) |
Forfeited (in shares) | (334) |
Non-vested at the end of the period (in shares) | 1,340 |
Weighted-Average Grant Date Fair Value | |
Non-vested at the beginning of the period (in dollars per share) | $ / shares | $ 36.80 |
Granted (in dollars per share) | $ / shares | 34.06 |
Vested (in dollars per share) | $ / shares | 35.65 |
Forfeited (in dollars per share) | $ / shares | 37.55 |
Non-vested at the end of the period (in dollars per share) | $ / shares | $ 35.28 |
2015 Plan | Performance Stock Awards | |
Stockholder's Equity | |
Vesting period | 3 years |
First Anniversary | Restricted stock awards | |
Stockholder's Equity | |
Percentage of awards vesting | 25.00% |
Quarterly Vesting after first anniversary | Restricted stock awards | |
Stockholder's Equity | |
Percentage of awards vesting | 6.25% |
Performance Goal Achievement | 2006 Plan | Performance Stock Awards | |
Stockholder's Equity | |
Percentage of awards vesting | 33.30% |
Annual Vesting of Performance Awards After Initial Achievement | 2006 Plan | Performance Stock Awards | |
Stockholder's Equity | |
Percentage of awards vesting | 33.30% |
Stock Plans - ESPP and Treasury
Stock Plans - ESPP and Treasury Stock (Details) - USD ($) | Feb. 01, 2012 | Dec. 31, 2016 | Feb. 04, 2016 |
Share Repurchase Program 2016 | |||
Employee Stock Purchase Plan | |||
Amount authorized to be purchased under stock repurchase program | $ 100,000,000 | ||
Number of shares repurchased under program (in shares) | 1,300,000 | ||
Value of shares repurchased under program | $ 40,000,000 | ||
ESPP Plan | |||
Employee Stock Purchase Plan | |||
Term of Employee Stock Purchase Plan | 10 years | ||
Total number of shares available for purchase (in shares) | 500,000 | ||
ESPP participation period | 6 months | ||
Percentage of fair market value of common stock | 85.00% | ||
Maximum percentage of total combined voting power a participant is allowed to be granted a right to purchase common stock | 5.00% | ||
Maximum number of shares authorized for purchase within any purchase period (in shares) | 1,000 | ||
Maximum value of shares authorized for purchase within any purchase period | $ 25,000 |
401(k) Plan (Details)
401(k) Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Compensation and Retirement Disclosure [Abstract] | |||
Employer contribution incurred and expensed under 401(k) Plan | $ 2.7 | $ 2.1 | $ 1.8 |
Restructuring Charges (Details)
Restructuring Charges (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Restructuring accrual and changes | |||
Charges | $ 6,333 | $ 4,946 | $ 0 |
Accrued liabilities | |||
Restructuring accrual and changes | |||
Balance at the beginning of the period | 54 | ||
Charges | 6,639 | ||
Payments | (5,472) | ||
Balance at the end of the period | 1,221 | 54 | |
Accrued liabilities | Employment termination costs | |||
Restructuring accrual and changes | |||
Balance at the beginning of the period | 0 | ||
Charges | 6,639 | ||
Payments | (5,458) | ||
Balance at the end of the period | 1,181 | 0 | |
Accrued liabilities | Facilities consolidation | |||
Restructuring accrual and changes | |||
Balance at the beginning of the period | 54 | ||
Charges | 0 | ||
Payments | (14) | ||
Balance at the end of the period | 40 | $ 54 | |
Discontinued Operations, Disposed of by Sale | Accrued liabilities | |||
Restructuring accrual and changes | |||
Charges | $ 300 |
Income Taxes - Components of In
Income Taxes - Components of Income before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income before income taxes | |||
Domestic | $ (57,846) | $ 32,385 | $ (11,620) |
Foreign | (16,685) | (20,546) | 6,355 |
(Loss) income from continuing operations, before taxes | $ (74,531) | $ 11,839 | $ (5,265) |
Income Taxes - Components of 81
Income Taxes - Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Current: | ||||
Federal | $ (48) | $ 1,993 | $ 12,873 | |
State | 1,580 | 299 | 447 | |
Foreign | (3,239) | 682 | (2,040) | |
Deferred: | ||||
Federal | 10,716 | (10,277) | (10,437) | |
State | 301 | (480) | (1,301) | |
Foreign | (1,320) | 2,359 | 3,700 | |
Income tax expense | [1] | $ 7,990 | $ (5,424) | $ 3,242 |
[1] | See Note 2 for discussion of the adoption of ASU 2016-09. |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Statutory Rate (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reconciliation of the statutory tax rates and the effective tax rates | |||
Statutory rate | 35.00% | 35.00% | 35.00% |
State taxes, net of federal benefit | 2.00% | 1.00% | (11.00%) |
Effect of rates different than statutory | (7.00%) | 44.00% | 47.00% |
Minority interest | (5.00%) | (18.00%) | (0.00%) |
Non-deductible stock based compensation | 0.00% | 0.00% | (4.00%) |
Other permanent adjustments | 0.00% | 10.00% | (9.00%) |
Fair market value adjustment on Earn-out | (5.00%) | 2.00% | 3.00% |
Research and development credit | 3.00% | (19.00%) | 25.00% |
Subpart F income | (0.00%) | (0.00%) | (22.00%) |
Change in valuation allowance | (13.00%) | 12.00% | 0.00% |
Ireland deferred tax liability - migration | 0.00% | (13.00%) | 0.00% |
Customer relationship adjustment - Australia | 0.00% | (16.00%) | 0.00% |
Other | 1.00% | 8.00% | (2.00%) |
Net | 11.00% | 46.00% | 62.00% |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets (Liabilities) Components (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||
Accrued liabilities | $ 22 | $ 14 |
Deferred revenue | 8,715 | 316 |
Bad debts reserve | 307 | 184 |
Deferred compensation | 12,748 | 11,684 |
Federal net operating loss carry forwards | 18,993 | 18,637 |
State net operating loss carry forwards | 1,899 | 1,691 |
Foreign net operating loss carry forwards | 14,433 | 9,992 |
Deferred rent | 747 | 570 |
Capital loss carry forward | 229 | 232 |
Transaction costs | 2,438 | 0 |
Other | 2,057 | 1,761 |
Total deferred tax assets | 62,588 | 45,081 |
Deferred tax liabilities: | ||
Intangible assets | (23,430) | (24,373) |
Basis difference | (15,323) | 0 |
Installment sale | (28,020) | 0 |
Depreciation and amortization | (30,034) | (28,705) |
Total deferred tax liabilities | (96,807) | (53,078) |
Less: valuation allowance | (14,100) | (4,847) |
Net deferred income tax (liabilities) assets | $ (48,319) | $ (12,844) |
Income Taxes - Carryforwards (D
Income Taxes - Carryforwards (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Details of net operating loss carryforwards | |
Net operating loss | $ 166,382 |
2017 - 2021 | |
Details of net operating loss carryforwards | |
Net operating loss | 10,937 |
2022 - 2026 | |
Details of net operating loss carryforwards | |
Net operating loss | 15,647 |
2027 - 2036 | |
Details of net operating loss carryforwards | |
Net operating loss | 67,526 |
Indefinite | |
Details of net operating loss carryforwards | |
Net operating loss | 72,272 |
Federal | |
Details of net operating loss carryforwards | |
Net operating loss | 54,300 |
State | |
Details of net operating loss carryforwards | |
Net operating loss | 36,600 |
Foreign | Indefinite | |
Details of net operating loss carryforwards | |
Net operating loss | $ 75,500 |
Income Taxes - Valuation allowa
Income Taxes - Valuation allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Valuation allowance | |||
Valuation allowance | $ 14,100 | $ 4,847 | |
Spatial Systems Nominees PTY LTD (Spatial) | |||
Valuation allowance | |||
Valuation allowance | 2,200 | ||
Operating loss carryforwards utilized | $ 41 | ||
Spatial Systems Nominees PTY LTD (Spatial) | Deferred Revenue | |||
Valuation allowance | |||
Valuation allowance | $ 2,500 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Undistributed foreign earnings | |||
Royalty fees paid | $ 3,300 | ||
Undistributed earnings attributable to foreign subsidiaries considered to be indefinitely invested | 34,900 | ||
Reconciliation of beginning and ending amount of unrecognized tax benefits excluding interest | |||
Unrecognized tax benefit at the beginning of the period | $ 708 | ||
Decreases for tax positions taken during prior year | (30) | (218) | |
Reduction due to lapse of applicable statute of limitations | (44) | $ (58) | (11) |
Decreases for tax positions taken during prior year | 38 | ||
Increases for tax positions of current period | 362 | 344 | 651 |
Unrecognized tax benefits that, if recognized, would impact the effective tax rate | 1,700 | $ 1,500 | $ 1,100 |
Portion of current unrecognized tax benefit expected to be recognized | $ 200 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Net Income (Loss) Available to Common Stockholders, Diluted [Abstract] | ||||
Net income (loss) from continuing operations | $ (66,541) | $ 6,415 | $ (2,023) | |
Net (loss) income attributable to noncontrolling interests | (11,596) | 6,052 | 0 | |
Net income (loss) from continuing operations attributable to Synchronoss | (54,945) | 363 | (2,023) | |
Net income from discontinued operations, net of taxes | 74,533 | 40,267 | 40,918 | |
Net income attributable to Synchronoss | 19,588 | 40,630 | 38,895 | |
Income effect for interest on convertible debt, net of tax | 0 | 1,700 | 0 | |
Numerator for diluted EPS- Income to common stockholders after assumed conversions | (54,945) | 2,063 | (2,023) | |
Net Income (Loss) Available to Common Stockholders, Diluted | $ 19,588 | $ 42,330 | $ 38,895 | |
Weighted-average common shares outstanding: | ||||
Weighted average common shares outstanding - basic (in shares) | [1] | 43,571 | 42,284 | 40,418 |
Incremental Weighted Average Shares Attributable to Dilutive Effect [Abstract] | ||||
Shares from assumed conversion of convertible debt (in shares) | 0 | 0 | 0 | |
Options and unvested restricted shares (in shares) | 0 | 0 | 0 | |
Weighted average common shares outstanding - diluted (in shares) | [1] | 43,571 | 42,284 | 40,418 |
Earnings Per Share, Basic [Abstract] | ||||
Basic, Continuing operations (in dollars per share) | [1] | $ (1.26) | $ 0.01 | $ (0.05) |
Basic, Discontinued operations (in dollars per share) | [1] | 1.71 | 0.95 | 1.01 |
Basic (in dollars per share) | [1] | 0.45 | 0.96 | 0.96 |
Earnings Per Share, Diluted [Abstract] | ||||
Diluted, Continuing operations (in dollars per share) | [1] | (1.26) | 0.01 | (0.05) |
Diluted, Discontinued operations (in dollars per share) | [1] | 1.71 | 0.95 | 1.01 |
Diluted (in dollars per share) | [1] | $ 0.45 | $ 0.96 | $ 0.96 |
Anti-dilutive stock options excluded (in shares) | 1,089 | 553 | 1,100 | |
[1] | See notes to financial statement footnote 2. |
Legal Matters (Details)
Legal Matters (Details) | 1 Months Ended |
Dec. 31, 2013shareholder | |
Obligations Under Acquisition Agreement | Miyowa | |
Legal Matters | |
Number of former shareholders (shareholder) | 2 |
Subsequent Events Review (Detai
Subsequent Events Review (Details) - Subsequent Event - USD ($) | Feb. 01, 2017 | Jan. 19, 2017 |
Divestiture of SpeechCycle | ||
Subsequent Event [Line Items] | ||
Divestiture consideration | $ 13,500,000 | |
Period of transition services agreement | 1 year | |
Goldman Sachs Bank USA | Term Facility | ||
Subsequent Event [Line Items] | ||
Borrowing capacity | $ 900,000,000 | |
Amortization percent per annum | 1.00% | |
Mandatory prepayments, percent of net cash proceeds from non-ordinary sale or disposition of assets | 100.00% | |
Mandatory prepayments, percent of net cash proceeds from incurrences of debt | 100.00% | |
Goldman Sachs Bank USA | Revolving Facility | ||
Subsequent Event [Line Items] | ||
Borrowing capacity | $ 200,000,000 | |
London Interbank Offered Rate (LIBOR) | Goldman Sachs Bank USA | Term Facility | ||
Subsequent Event [Line Items] | ||
Interest rate spread | 2.75% | |
London Interbank Offered Rate (LIBOR) | Goldman Sachs Bank USA | Revolving Facility | ||
Subsequent Event [Line Items] | ||
Interest rate spread | 2.50% | |
Base Rate | Goldman Sachs Bank USA | Term Facility | ||
Subsequent Event [Line Items] | ||
Interest rate spread | 1.75% | |
Base Rate | Goldman Sachs Bank USA | Revolving Facility | ||
Subsequent Event [Line Items] | ||
Interest rate spread | 1.50% | |
Acquisition of Intralinks Common Stock | ||
Subsequent Event [Line Items] | ||
Payments to acquire outstanding shares of Intralinks common stock | $ 904,100,000 | |
Acquisition of Intralinks Common Stock | Common Stock | ||
Subsequent Event [Line Items] | ||
Common stock sale price (in dollars per share) | $ 13 | |
Value of common stock paid for acquisition | $ 850,000,000 |
SCHEDULE II - VALUATION AND Q90
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Allowance for doubtful receivables | |||
Allowance for doubtful receivables | |||
Beginning Balance | $ 3,029 | $ 88 | $ 237 |
Additions | 7,433 | 3,872 | 418 |
Reductions | (8,706) | (931) | (567) |
Ending Balance | 1,756 | 3,029 | 88 |
Valuation allowance for deferred tax assets | |||
Allowance for doubtful receivables | |||
Beginning Balance | 4,847 | 2,553 | 2,803 |
Additions | 9,370 | 2,521 | 2,724 |
Reductions | (117) | (227) | (2,974) |
Ending Balance | $ 14,100 | $ 4,847 | $ 2,553 |