Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 06, 2017 | Jun. 30, 2016 | |
Document And Entity Information [Abstract] | |||
Document type | 10-K | ||
Amendment flag | false | ||
Document period end date | Dec. 31, 2016 | ||
Document fiscal year focus | 2,016 | ||
Document fiscal period focus | Q4 | ||
Trading symbol | blkb | ||
Entity registrant name | BLACKBAUD INC | ||
Entity central index key | 1,280,058 | ||
Current fiscal year end date | --12-31 | ||
Entity filer category | Large Accelerated Filer | ||
Entity common stock, shares outstanding | 47,532,014 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 3,142,932,861 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 16,902 | $ 15,362 |
Restricted cash due to customers | 353,771 | 255,038 |
Accounts receivable, net of allowance of $3,291 and $4,943 at December 31, 2016 and December 31, 2015, respectively | 88,932 | 80,046 |
Prepaid expenses and other current assets | 48,314 | 48,666 |
Total current assets | 507,919 | 399,112 |
Property and equipment, net | 50,269 | 52,651 |
Software development costs, net | 37,582 | 19,551 |
Goodwill | 438,240 | 436,449 |
Intangible assets, net | 253,676 | 294,672 |
Other assets | 22,524 | 20,901 |
Total assets | 1,310,210 | 1,223,336 |
Current liabilities: | ||
Trade accounts payable | 23,274 | 19,208 |
Accrued expenses and other current liabilities | 54,196 | 57,461 |
Due to customers | 353,771 | 255,038 |
Debt, current portion | 4,375 | 4,375 |
Deferred revenue, current portion | 244,500 | 230,216 |
Total current liabilities | 680,116 | 566,298 |
Debt, net of current portion | 338,018 | 403,712 |
Deferred tax liability | 29,558 | 27,996 |
Deferred revenue, net of current portion | 6,440 | 7,119 |
Other liabilities | 8,533 | 7,623 |
Total liabilities | 1,062,665 | 1,012,748 |
Commitments and contingencies (see Note 11) | ||
Stockholders' equity: | ||
Preferred stock; 20,000,000 shares authorized, none outstanding | 0 | 0 |
Common stock, $0.001 par value; 180,000,000 shares authorized, 57,672,401 and 56,873,817 shares issued at December 31, 2016 and December 31, 2015, respectively | 58 | 57 |
Additional paid-in capital | 310,452 | 276,340 |
Treasury stock, at cost; 10,166,801 and 9,903,071 shares at December 31, 2016 and December 31, 2015, respectively | (215,237) | (199,861) |
Accumulated other comprehensive loss | (457) | (825) |
Retained earnings | 152,729 | 134,877 |
Total stockholders' equity | 247,545 | 210,588 |
Total liabilities and stockholders' equity | $ 1,310,210 | $ 1,223,336 |
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 | $ 3,291 | $ 4,943 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 180,000,000 | 180,000,000 |
Common stock, shares issued | 57,672,401 | 56,873,817 |
Treasury stock, shares | 10,166,801 | 9,903,071 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenue | |||
Subscriptions | $ 428,987 | $ 331,759 | $ 263,435 |
Maintenance | 146,946 | 153,801 | 147,418 |
Services | 139,690 | 132,978 | 128,371 |
License fees and other | 15,192 | 19,402 | 25,197 |
Total revenue | 730,815 | 637,940 | 564,421 |
Cost of revenue | |||
Cost of subscriptions | 213,883 | 167,341 | 133,221 |
Cost of maintenance | 22,094 | 27,066 | 25,448 |
Cost of services | 96,488 | 102,815 | 106,506 |
Cost of license fees and other | 6,755 | 7,409 | 8,263 |
Total cost of revenue | 339,220 | 304,631 | 273,438 |
Gross profit | 391,595 | 333,309 | 290,983 |
Operating expenses | |||
Sales, marketing and customer success | 155,754 | 123,646 | 107,360 |
Research and development | 89,870 | 84,636 | 77,179 |
General and administrative | 81,331 | 76,084 | 58,277 |
Amortization | 2,840 | 2,231 | 1,803 |
Total operating expenses | 329,795 | 286,597 | 244,619 |
Income from operations | 61,800 | 46,712 | 46,364 |
Interest expense | (10,583) | (8,073) | (6,011) |
Other expense, net | (291) | (1,687) | (1,119) |
Income before provision for income taxes | 50,926 | 36,952 | 39,234 |
Income tax provision | 9,411 | 11,303 | 10,944 |
Net income | $ 41,515 | $ 25,649 | $ 28,290 |
Earnings per share | |||
Basic earnings per share | $ 0.90 | $ 0.56 | $ 0.63 |
Diluted earnings per share | $ 0.88 | $ 0.55 | $ 0.62 |
Common shares and equivalents outstanding | |||
Basic weighted average shares | 46,132,389 | 45,623,854 | 45,215,138 |
Diluted weighted average shares | 47,316,538 | 46,498,704 | 45,799,874 |
Dividends per share (in dollars per share) | $ 0.48 | $ 0.48 | $ 0.48 |
Other comprehensive income | |||
Foreign currency translation adjustment | $ 324 | $ 62 | $ 261 |
Unrealized gain on derivative instruments, net of tax | 44 | 145 | 92 |
Total other comprehensive income | 368 | 207 | 353 |
Comprehensive income | $ 41,883 | $ 25,856 | $ 28,643 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Cash flows from operating activities | ||||
Net income | $ 41,515 | $ 25,649 | $ 28,290 | |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization | 70,491 | 55,997 | 45,417 | |
Provision for doubtful accounts and sales returns | 3,730 | 6,825 | 5,248 | |
Stock-based compensation expense | 32,638 | 25,246 | 17,345 | |
Deferred taxes | 3,033 | 3,165 | 3,050 | |
Loss on sale of business | 0 | 1,976 | 0 | |
Impairment of capitalized software development costs | 0 | 239 | 1,626 | |
Loss on debt extinguishment and termination of derivative instruments | 0 | 0 | 996 | [1] |
Amortization of deferred financing costs and discount | 958 | 899 | 734 | |
Other non-cash adjustments | (864) | (197) | 1,163 | |
Changes in operating assets and liabilities, net of acquisition and disposal of businesses: | ||||
Accounts receivable | (13,196) | (7,593) | (5,750) | |
Prepaid expenses and other assets | (2,478) | (10,979) | (8,464) | |
Trade accounts payable | 3,689 | 6,133 | (948) | |
Accrued expenses and other liabilities | (751) | 9,255 | 11,166 | |
Restricted cash due to customers | (96,000) | (34,279) | (33,510) | |
Due to customers | 96,000 | 34,279 | 33,510 | |
Deferred revenue | 14,863 | 12,612 | 17,011 | |
Net cash provided by operating activities | 153,628 | 129,227 | 116,884 | |
Cash flows from investing activities | ||||
Purchase of property and equipment | (17,694) | (18,633) | (13,911) | |
Capitalized software development costs | (26,359) | (15,481) | (8,535) | |
Purchase of net assets of acquired companies, net of cash | (3,377) | (188,072) | (188,918) | |
Net cash used in sale of business | 0 | (521) | 0 | |
Net cash used in investing activities | (47,430) | (222,707) | (211,364) | |
Cash flows from financing activities | ||||
Proceeds from issuance of debt | 227,200 | 312,300 | 365,100 | |
Payments on debt | (293,575) | (184,475) | (235,589) | |
Debt issuance costs | 0 | (429) | (3,003) | |
Employee taxes paid for withheld shares upon equity award settlement | (15,376) | (9,421) | (7,152) | |
Proceeds from exercise of stock options | 16 | 32 | 188 | |
Dividend payments to stockholders | (22,811) | (22,508) | (22,107) | |
Net cash (used in) provided by financing activities | (104,546) | 95,499 | 97,437 | |
Effect of exchange rate on cash and cash equivalents | (112) | (1,392) | (111) | |
Net increase in cash and cash equivalents | 1,540 | 627 | 2,846 | |
Cash and cash equivalents, beginning of year | 15,362 | 14,735 | 11,889 | |
Cash and cash equivalents, end of year | 16,902 | 15,362 | 14,735 | |
Supplemental disclosure of cash flow information | ||||
Interest paid | (9,608) | (7,208) | (4,894) | |
Income taxes paid, net of refunds | (1,340) | (4,795) | (9,581) | |
Purchase of equipment and other assets included in accounts payable | $ (3,155) | $ (3,204) | $ (3,300) | |
[1] | See Notes 9 and 10 to these consolidated financial statements for details of the loss on debt extinguishment and termination of derivative instruments. |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common stock [Member] | Additional paid-in capital [Member] | Treasury stock [Member] | Accumulated other comprehensive loss [Member] | Retained earnings [Member] |
Balance (in shares) at Dec. 31, 2013 | 55,699,817 | |||||
Balance at Dec. 31, 2013 | $ 161,544 | $ 56 | $ 220,763 | $ (183,288) | $ (1,385) | $ 125,398 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 28,290 | 28,290 | ||||
Payment of dividends | (22,107) | (22,107) | ||||
Exercise of stock options and stock appreciation rights and vesting of restricted stock units (in shares) | 186,473 | |||||
Exercise of stock options and stock appreciation rights and vesting of restricted stock units | 188 | 188 | ||||
Employee taxes paid for withheld shares upon equity award settlement | (7,152) | (7,152) | ||||
Excess tax benefits from exercise and vesting of stock-based compensation | 7,455 | 7,455 | ||||
Stock-based compensation | 17,345 | 17,268 | 77 | |||
Restricted stock grants (in shares) | 248,567 | |||||
Restricted stock grants | 0 | $ 0 | ||||
Restricted stock cancellations (in shares) | (86,722) | |||||
Other comprehensive income | 353 | 353 | ||||
Balance (in shares) at Dec. 31, 2014 | 56,048,135 | |||||
Balance at Dec. 31, 2014 | 185,916 | $ 56 | 245,674 | (190,440) | (1,032) | 131,658 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 25,649 | 25,649 | ||||
Payment of dividends | (22,508) | (22,508) | ||||
Exercise of stock options and stock appreciation rights and vesting of restricted stock units (in shares) | 202,078 | |||||
Exercise of stock options and stock appreciation rights and vesting of restricted stock units | 32 | 32 | ||||
Employee taxes paid for withheld shares upon equity award settlement | (9,421) | (9,421) | ||||
Excess tax benefits from exercise and vesting of stock-based compensation | 5,466 | 5,466 | ||||
Stock-based compensation | 25,246 | 25,168 | 78 | |||
Restricted stock grants (in shares) | 736,252 | |||||
Restricted stock grants | 1 | $ 1 | ||||
Restricted stock cancellations (in shares) | (112,648) | |||||
Other comprehensive income | 207 | 207 | ||||
Balance (in shares) at Dec. 31, 2015 | 56,873,817 | |||||
Balance at Dec. 31, 2015 | 210,588 | $ 57 | 276,340 | (199,861) | (825) | 134,877 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Cumulative effect of a change in accounting principle | 606 | 1,540 | (934) | |||
Net income | 41,515 | 41,515 | ||||
Payment of dividends | (22,811) | (22,811) | ||||
Exercise of stock options and stock appreciation rights and vesting of restricted stock units (in shares) | 341,418 | |||||
Exercise of stock options and stock appreciation rights and vesting of restricted stock units | 16 | 16 | ||||
Employee taxes paid for withheld shares upon equity award settlement | (15,376) | (15,376) | ||||
Stock-based compensation | 32,638 | 32,556 | 82 | |||
Restricted stock grants (in shares) | 574,309 | |||||
Restricted stock grants | 1 | $ 1 | ||||
Restricted stock cancellations (in shares) | (117,143) | |||||
Other comprehensive income | 368 | 368 | ||||
Balance (in shares) at Dec. 31, 2016 | 57,672,401 | |||||
Balance at Dec. 31, 2016 | $ 247,545 | $ 58 | $ 310,452 | $ (215,237) | $ (457) | $ 152,729 |
Consolidated Statements of Sto7
Consolidated Statements of Stockholders' Equity (Parenthetical) - shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Stockholders' Equity [Abstract] | |||
Employee taxes paid for withheld shares upon equity award settlement (in shares) | 263,730 | 163,017 | 166,952 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | 1. Organization We are the world’s leading cloud software company powering social good. Serving the entire social good community—nonprofits, foundations, corporations, education institutions, and individual change agents—we connect and empower organizations to increase their impact through software, services, expertise, and data intelligence. Our portfolio is tailored to the unique needs of vertical markets, with solutions for fundraising and relationship management, digital marketing, advocacy, accounting, payments, analytics, school management, grant management, corporate social responsibility and volunteerism. Serving the industry for more than three decades, we are headquartered in Charleston, South Carolina and have operations in the United States, Australia, Canada, Ireland and the United Kingdom. As of December 31, 2016 , we had approximately 35,000 customers. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of presentation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). Basis of consolidation The consolidated financial statements include the accounts of Blackbaud, Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. On an ongoing basis, we reconsider and evaluate our estimates and assumptions, including those that impact revenue recognition, long-lived and intangible assets including goodwill, income taxes, business combinations, stock-based compensation, capitalization of software development costs, our allowances for sales returns and doubtful accounts, deferred sales commissions and professional services costs, valuation of derivative instruments and loss contingencies. Changes in the facts or circumstances underlying these estimates could result in material changes and actual results could materially differ from these estimates. Revenue recognition Our revenue is primarily generated from the following sources: (i) charging for the use of our software solutions in cloud-based and hosted environments; (ii) providing software maintenance and support services; (iii) providing professional services including implementation, training, consulting, analytic, hosting and other services; (iv) providing transaction and payment processing services; and (v) selling perpetual licenses of our software solutions. We commence revenue recognition when all of the following conditions are met: • Persuasive evidence of an arrangement exists; • The solutions or services have been or are being provided to the customer; • The fee is fixed or determinable; and • Collection of the resulting receivable is probable. Determining whether and when these criteria have been met can require significant judgment and estimates. We deem acceptance of a contract to be evidence of an arrangement. Delivery of our services occurs when the services have been performed. Delivery of our solutions occurs when the solution is shipped or made available to the customers. Our typical arrangements do not include customer acceptance provisions; however, if acceptance provisions are provided, delivery is deemed to occur upon acceptance. We consider the fee to be fixed or determinable unless the fee is subject to refund or adjustment or is not payable within our standard payment terms. Payment terms greater than 90 days are considered to be beyond our customary payment terms. Collection is deemed probable if we expect that the customer will be able to pay amounts under the arrangement as they become due. If we determine that collection is not probable, we defer revenue recognition until collection. Revenue is recognized net of actual and estimated sales returns and allowances. We follow guidance provided in ASC 605-45, Principal Agent Considerations , which states that determining whether a company should recognize revenue based on the gross amount billed to a customer or the net amount retained is a matter of judgment that depends on the facts and circumstances of the arrangement and that certain factors should be considered in the evaluation. Subscriptions We provide software solutions to customers which are available for use in cloud-based subscription arrangements without licensing perpetual rights to the software (“cloud-based solutions”). Revenue from cloud-based solutions is recognized ratably beginning on the activation date over the term of the agreement, which generally ranges from one to three years. Any revenue related to upfront activation or set-up fees is deferred and recognized ratably over the estimated period that the customer benefits from the related cloud-based solution. Direct and incremental costs related to upfront activation or set-up activities for cloud-based solutions are capitalized until the cloud-based solution is deployed and in use, and then expensed ratably over the estimated period that the customer benefits from the related cloud-based solution. We provide hosting services to customers who have purchased perpetual rights to certain of our software solutions (“hosting services”). Revenue from hosting services, online training programs as well as subscription-based analytic services such as data enrichment and data management services, is recognized ratably beginning on the activation date over the term of the agreement, which generally ranges from one to three years. Any related set-up fees are recognized ratably over the estimated period that the customer benefits from the related hosting service. The estimated period of benefit is evaluated on an annual basis using historical customer retention information by solution or service. For arrangements that have multiple elements and do not include software licenses, we allocate arrangement consideration at the inception of the arrangement to those elements that qualify as separate units of accounting. The arrangement consideration is allocated to the separate units of accounting based on relative selling price method in accordance with the selling price hierarchy, which includes: (i) vendor specific objective evidence (“VSOE”) of fair value if available; (ii) third-party evidence (“TPE”) if VSOE is not available; and (iii) best estimate of selling price (“BESP”) if neither VSOE nor TPE is available. In general, we use VSOE to allocate the selling price to subscription and service deliverables. We offer certain payment processing services with the assistance of third-party vendors. In general, when we are the principal in a transaction based on the predominant weighting of factors identified in ASC 605-45, we record the revenue and related costs on a gross basis. Otherwise, we net the cost of revenue associated with the service against the gross amount billed to the customer and record the net amount as revenue. Revenue from transaction processing services is recognized when the service is provided and the amounts are determinable. Revenue directly associated with processing donations for customers are included in subscriptions revenue. Maintenance We recognize revenue from maintenance services ratably over the term of the arrangement, generally one year at contract inception with annual renewals thereafter. Maintenance contracts are at rates that vary according to the level of the maintenance program associated with the software solution and are generally renewable annually. Maintenance contracts may also include the right to unspecified solution upgrades on an if-and-when available basis. Certain incremental support services are sold in prepaid units of time and recognized as revenue upon their usage. Services We generally bill consulting, installation and implementation services based on hourly rates plus reimbursable travel-related expenses. Revenue is recognized for these services over the period the services are delivered. We recognize analytic services revenue from donor prospect research engagements, the sale of lists of potential donors, benchmarking studies and data modeling service engagements upon delivery. In arrangements where we provide customers the right to updated information during the contract period, revenue is recognized ratably over the contract period. We sell fixed-rate programs, which permit customers to attend unlimited training over a specified contract period, typically one year, subject to certain restrictions, and revenue in those cases is recognized ratably over the contract period. Additionally, we sell training at a fixed rate for each specific class at a per attendee price or at a packaged price for several attendees, and recognize the related revenue upon the customer attending and completing training. License fees We sell perpetual software licenses with maintenance, varying levels of professional services and, in certain instances, with hosting services. We allocate revenue to each of the elements in these arrangements using the residual method under which we first allocate revenue to the undelivered elements, typically the non-software license components, based on VSOE of fair value of the various elements. We determine VSOE of fair value of the various elements using different methods. VSOE of fair value for maintenance services associated with software licenses is based upon renewal rates stated in the arrangements with customers, which demonstrate a consistent relationship of maintenance pricing as a percentage of the contractual license fee. VSOE of fair value of professional services and other solutions and services is based on the average selling price of these same solutions and services to other customers when sold on a stand-alone basis. Any remaining revenue is allocated to the delivered elements, which is normally the software license in the arrangement. In general, revenue is recognized for software licenses upon delivery to our customers. When a software license is sold with software customization services, generally the services are to provide the customer assistance in creating special reports and other enhancements that will improve operational efficiency and/or help to support business process improvements. These services are generally not essential to the functionality of the software and the related revenues are recognized either as the services are delivered or upon completion. However, when software customization services are considered essential to the functionality of the software, we recognize revenue for both the software license and the services using the percentage-of-completion method. Deferred revenue To the extent that our customers are billed for the above described solutions and services in advance of delivery, we record such amounts in deferred revenue. Generally, our subscription and maintenance customers are billed one year in advance. Fair value measurements We measure certain financial assets and liabilities at fair value on a recurring basis, including derivative instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. An active market is defined as a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. We use a three-tier fair value hierarchy to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows: • Level 1 - Quoted prices for identical assets or liabilities in active markets; • Level 2 - Quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and • Level 3 - Valuations derived from valuation techniques in which one or more significant inputs are unobservable. Our financial assets and liabilities are classified in their entirety within the hierarchy based on the lowest level of input that is significant to fair value measurement. Changes to a financial asset's or liability's level within the fair value hierarchy are determined as of the end of a reporting period. All methods of assessing fair value result in a general approximation of value, and such value may never actually be realized. Derivative instruments We use derivative instruments to manage interest rate risk. We view derivative instruments as risk management tools and do not use them for trading or speculative purposes. Our policy requires that derivatives used for hedging purposes be designated and effective as a hedge of the identified risk exposure at the inception of the contract. Accordingly, changes in fair value of the derivative contract must be highly correlated with changes in the fair value of the underlying hedged item at inception of the hedge and over the life of the hedge contract. We record all derivative instruments on our consolidated balance sheets at fair value. If the derivative is designated as a cash flow hedge, the effective portions of the changes in fair value of the derivative are recorded in other comprehensive income and reclassified to earnings in a manner that matches the timing of the earnings impact of the hedged transactions. Ineffective portions of the changes in the fair value of cash flow hedges are recognized currently in earnings. See Note 10 of these consolidated financial statements for further discussion of our derivative instruments. Sales taxes We present sales taxes and other taxes collected from customers and remitted to governmental authorities on a net basis and, as such, exclude them from revenues. Shipping and handling We expense shipping and handling costs as incurred and include them in cost of license fees and other revenue. The reimbursement of these costs by our customers is included in license fees and other revenue. Cash and cash equivalents We consider all highly liquid investments purchased with an original maturity of three months or less and cash items in transit to be cash equivalents. Restricted cash due to customers; Due to customers Restricted cash due to customers consists of monies collected by us and payable to our customers, net of the associated transaction fees earned. Monies associated with amounts due to customers are segregated in a separate bank account and used exclusively for the payment of amounts due to customers. This usage restriction is either legally or internally imposed and reflects our intention with regard to such deposits. Concentration of credit risk Financial instruments that potentially subject us to concentrations of credit risk consist of cash and cash equivalents, restricted cash due to customers and accounts receivable. Our cash and cash equivalents and restricted cash due to customers are placed with high credit-quality financial institutions. Our accounts receivable is derived from sales to customers who primarily operate in the nonprofit sector. With respect to accounts receivable, we perform ongoing evaluations of our customers and maintain an allowance for doubtful accounts based on historical experience and our expectations of future losses. As of and for the years ended December 31, 2016 , 2015 and 2014 , there were no significant concentrations with respect to our consolidated revenues or accounts receivable. Property and equipment We record property and equipment assets at cost and depreciate them over their estimated useful lives using the straight-line method. Leasehold improvements are depreciated over the lesser of the term of the lease or the estimated useful life of the asset. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is credited or charged to earnings. Repair and maintenance costs are expensed as incurred. Construction-in-progress represents purchases of computer software and hardware associated with new internal system implementation projects which had not been placed in service at the respective balance sheet dates. We transferred these assets to the applicable property category on the date they are placed in service. There was no capitalized interest applicable to construction-in-progress for the years ended December 31, 2016 , 2015 and 2014 . Business combinations We are required to allocate the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed at the acquisition date based upon their estimated fair values. Goodwill as of the acquisition date represents the excess of the purchase consideration of an acquired business over the fair value of the underlying net tangible and intangible assets acquired and liabilities assumed. This allocation and valuation require management to make significant estimates and assumptions, especially with respect to long-lived and intangible assets. Critical estimates in valuing intangible assets include, but are not limited to, estimates about: future expected cash flows from customer contracts, proprietary technology and non-compete agreements; the acquired company's brand awareness and market position, assumptions about the period of time the brand will continue to be valuable; as well as expected costs to develop any in-process research and development into commercially viable solutions and estimated cash flows from the projects when completed, and discount rates. Our estimates of fair value are based upon assumptions we believe to be reasonable, but which are inherently uncertain and unpredictable, and unanticipated events and changes in circumstances may occur. Goodwill Goodwill represents the purchase price in excess of the net amount assigned to assets acquired and liabilities assumed by us in a business combination. Goodwill is allocated to reporting units and tested annually for impairment. Our reporting units are our three reportable segments as described in Note 16 of these consolidated financial statements. We will also test goodwill for impairment between annual impairment tests if indicators of potential impairment exist. The quantitative impairment test is a two-step process that first compares the fair values of the reporting units with their respective carrying amounts. If the carrying amount of a reporting unit exceeds its fair value, a potential impairment is indicated, and we then perform the second step to determine the amount of any impairment loss by comparing the implied fair value of the affected reporting unit's goodwill with the carrying amount of its goodwill. If the carrying amount of the affected reporting unit's goodwill exceeds the implied fair value of its goodwill, an impairment loss is recognized in an amount equal to that excess. In each of 2016 and 2015 , we performed the quantitative impairment test which indicated that the estimated fair values of the reporting units significantly exceeded their respective carrying values; therefore, the second step of the impairment test was not required to be performed. In 2014 , we performed the optional qualitative assessment of the goodwill assigned to each of our reporting units. When a qualitative assessment is performed, we first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Significant judgment is required in the assessment of qualitative factors including but not limited to an evaluation of macroeconomic conditions as they relate to our business, industry and market trends, as well as the overall future financial performance of our reporting units and future opportunities in the markets in which they operate. To the extent the qualitative factors indicate that there is more than 50% likelihood that the fair value is less than the carrying amount, we compare the fair value of the reporting unit with its carrying amount. If the carrying amount exceeds its fair value, impairment is indicated and we will recognize an impairment loss in an amount equal to the difference. As a result of our 2014 qualitative assessment of goodwill assigned to each of our reporting units, we concluded it was not more likely than not that the fair value of each reporting unit was less than its carrying value, respectively. There was no impairment of goodwill during 2016 , 2015 or 2014 . Intangible assets We amortize finite-lived intangible assets over their estimated useful lives as follows. Basis of amortization Amortization period (in years) Customer relationships Straight-line and accelerated (1) 8-17 Marketing assets Straight-line 3-9 Acquired software and technology Straight-line and accelerated (2) 5-10 Non-compete agreements Straight-line 3-5 Database Straight-line 8 (1) Certain of the customer relationships are amortized on an accelerated basis. (2) Certain of the acquired software and technology assets are amortized on an accelerated basis. Indefinite-lived intangible assets consist of trade names. We evaluate the estimated useful lives and the potential for impairment of finite and indefinite-lived intangible assets on an annual basis, or more frequently if events or circumstances indicate revised estimates of useful lives may be appropriate or that the carrying amount may not be recoverable. If the carrying amount is no longer recoverable based upon the undiscounted cash flows of the asset, the amount of impairment is the difference between the carrying amount and the fair value of the asset. Substantially all of our intangible assets were acquired in business combinations. There was no impairment of acquired intangible assets during 2016 , 2015 or 2014 . Deferred financing costs Deferred financing costs included in other assets represent the direct third-party costs of entering into the revolving (line-of-credit) portion of our credit facility in February 2014 and portions of the unamortized deferred financing costs from prior facilities. These costs are amortized ratably over the term of the credit facility as interest expense. Stock-based compensation We measure stock-based compensation cost at the grant date based on the fair value of the award and recognize it as expense over the requisite service period, which is the vesting period. We determine the fair value of stock options and stock appreciation rights using a Black-Scholes option pricing model, which requires us to use significant judgment to make estimates regarding the life of the award, volatility of our stock price, the risk-free interest rate and the dividend yield of our stock over the life of the award. We determine the fair value of awards that contain market conditions using a Monte Carlo simulation model. Changes to these estimates would result in different fair values of awards. As discussed below, we now recognize the effect of awards for which the requisite service period is not rendered when the award is forfeited (that is, recognize the effect of forfeitures in compensation cost when they occur). Previously recognized compensation cost for an award is reversed in the period that the award is forfeited. Income tax benefits resulting from the vesting and exercise of stock-based compensation awards are recognized in the period the unit or award is vested or option or right is exercised to the extent expense has been recognized. Income taxes We make estimates and judgments in accounting for income taxes. The calculation of the income tax provision requires estimates due to transactions, credits and calculations where the ultimate tax determination is uncertain. Uncertainties arise as a consequence of the actual source of taxable income between domestic and foreign locations, the outcome of tax audits and the ultimate utilization of tax credits. To the extent actual results differ from estimated amounts recorded, such differences will impact the income tax provision in the period in which the determination is made. We make estimates in determining tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expense for tax and financial statement purposes. We record valuation allowances to reduce our deferred tax assets to the amount expected to be realized. In assessing the adequacy of a recorded valuation allowance significant judgment is required. We consider all positive and negative evidence and a variety of factors including the scheduled reversal of deferred tax liabilities, historical and projected future taxable income, and prudent and feasible tax planning strategies. If we determine there is less than a 50% likelihood that we will be able to use a deferred tax asset in the future in excess of its net carrying value, then an adjustment to the deferred tax asset valuation allowance is made to increase income tax expense, thereby reducing net income in the period such determination was made. We measure and recognize uncertain tax positions. To recognize such positions, we must first determine if it is more likely than not that the position will be sustained upon audit. We must then measure the benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement. Significant judgment is required in the identification and measurement of uncertain tax positions. Foreign currency Net assets recorded in a foreign currency are translated at the exchange rate on the balance sheet date. Revenue and expense items are translated using an average of monthly exchange rates. The resulting translation adjustments are recorded in accumulated other comprehensive income. Gains and losses resulting from foreign currency transactions denominated in currency other than the functional currency are recorded at the approximate rate of exchange at the transaction date in other expense, net. For the years ended December 31, 2016 and 2014 , we recorded insignificant net foreign currency losses. For the year ended December 31, 2015 , we recorded an insignificant net foreign currency gain. Research and development Research and development costs are expensed as incurred. These costs include human resource costs, stock-based compensation expense, third-party contractor expenses, software development tools and certain other expenses related to researching and developing new solutions, and allocated depreciation, facilities and IT support costs. Software development costs We incur certain costs associated with the development of internal-use software, which are primarily related to activities performed to develop our cloud-based solutions. Internal and external costs incurred in the preliminary project stage of internal-use software development are expensed as incurred. Once the software being developed has reached the application development stage, qualifying internal costs including payroll and payroll-related costs of employees who are directly associated with and devote time to the software project as well as external direct costs of materials and services are capitalized. Capitalization ceases at the point at which the developed software is substantially complete and ready for its intended use, which is typically upon completion of all substantial testing. Qualifying costs capitalized during the application development stage include those related to specific upgrades and enhancements when it is probable that those costs incurred will result in additional functionality. Overhead costs, including general and administrative costs, as well as maintenance, training and all other costs associated with post-implementation stage activities are expensed as incurred. In addition, internal costs that cannot be reasonably separated between maintenance and relatively minor upgrades and enhancements are expensed as incurred. Historically, we have also incurred and capitalized costs in connection with the development of certain of our software solutions licensed to customers on a perpetual basis, which are accounted for as costs of software to be sold, leased or otherwise marketed; however, costs capitalized related to those solutions were insignificant as of December 31, 2016 and 2015 . Qualifying capitalized software development costs are amortized on a straight line basis over the software asset's estimated useful life, which is generally three to seven years. We evaluate the useful lives of these assets on an annual basis and test for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. There were no impairment charges during the year ended December 31, 2016 . During the year ended December 31, 2015, we recorded insignificant impairment charges against previously capitalized software development costs. During the year ended December 31, 2014, we recorded impairment charges of $1.6 million against certain previously capitalized software development costs. The charges reduced the carrying value of the certain previously capitalized software development costs to zero and are reflected in research and development expense. The impairment charges resulted from obtaining software solutions through the acquisitions of Smart Tuition in 2015 and WhippleHill in 2014, respectively, and our determination that it was no longer probable that certain internal-use software that was previously being developed would be placed into service. Sales returns and allowance for doubtful accounts We maintain a reserve for returns and credits which is estimated based on several factors including historical experience, known credits yet to be issued, the aging of customer accounts and the nature of service level commitments. A considerable amount of judgment is required in assessing these factors. Provisions for sales returns and credits are charged against the related revenue items. Accounts receivable are recorded at original invoice amounts less an allowance for doubtful accounts, an amount we estimate to be sufficient to provide adequate protection against losses resulting from extending credit to our customers. In judging the adequacy of the allowance for doubtful accounts, we consider multiple factors including historical bad debt experience, the general economic environment and the aging of our receivables. A considerable amount of judgment is required in assessing these factors and if any receivables were to deteriorate, an additional provision for doubtful accounts could be required. Accounts are written off after all means of collection are exhausted and recovery is considered remote. Provisions for doubtful accounts are recorded in general and administrative expense. Below is a summary of the changes in our allowance for sales returns. Years ended December 31, (in thousands) Balance at beginning of year Provision/adjustment Write-off Balance at end of year 2016 $ 4,431 $ 3,060 $ (4,787 ) $ 2,704 2015 4,185 5,834 (5,588 ) 4,431 2014 5,158 4,407 (5,380 ) 4,185 Below is a summary of the changes in our allowance for doubtful accounts. Years ended December 31, (in thousands) Balance at beginning of year Provision/adjustment Write-off Balance at end of year 2016 $ 512 $ 499 $ (424 ) $ 587 2015 354 699 (541 ) 512 2014 455 777 (878 ) 354 Sales commissions We pay sales commissions at the time contracts with customers are signed or shortly thereafter, depending on the size and duration of the sales contract. To the extent that these commissions relate to revenue not yet recognized, the amounts are recorded as deferred sales commission costs. Subsequently, the commissions are recognized as sales, marketing and customer success expense as the revenue is recognized. Below is a summary of the changes in our deferred sales commission costs included in prepaid expenses and other current assets. Years ended December 31, (in thousands) Balance at beginning of year Additions Expense Balance at end of year 2016 $ 30,141 $ 37,553 $ (30,235 ) $ 37,459 2015 22,630 55,934 (48,423 ) 30,141 2014 20,088 24,615 (22,073 ) 22,630 Advertising costs We expense advertising costs as incurred, which was $2.3 million , $2.3 million and $1.6 million for the years ended December 31, 2016 , 2015 and 2014 , respectively. Restructuring costs Restructuring costs include charges for the costs of exit or disposal activities. The liability for costs associated with exit or disposal activities is measured initially at fair value and only recognized when the liability is incurred. Impairment of long-lived assets We review long-lived assets for impairment when events change or circumstances indicate the carrying amount may not be recoverable. Events or changes in circumstances that indicate the carrying amount may not be recoverable include, but are not limited to, a significant decrease in the market value of the business or asset acquired, a significant adverse change in the extent or manner in which the business or asset acquired is used or significant adverse change in the business climate. If such events or changes in circumstances are present, the undiscounted cash flow method is used to determine whether the asset is impaired. No impairment of long-lived assets occurred in 2016 . |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Business Combinations | 3. Business Combinations 2016 Acquisition Attentive.ly On July 11, 2016 , we acquired all of the outstanding equity, including all voting equity interests of Good+Geek, Inc., a Delaware corporation doing business as "Attentive.ly." Attentive.ly provides social media capabilities allowing organizations to conduct social listening, identify key influencers and drive engagement through its cloud solution. The acquisition accelerates our ability to deliver these capabilities to our customers. We acquired Attentive.ly for $3.9 million in cash, net of closing adjustments. Of that purchase price, $1.3 million was allocated to the acquired finite-lived intangible technology asset, which will be amortized over its estimated useful life of five years. The estimated amount of goodwill arising from the acquisition that was assigned to the General Markets Business Unit ("GMBU") reporting segment and the Enterprise Customer Business Unit ("ECBU") reporting segment was $1.4 million and $0.8 million , respectively. None of the goodwill is deductible for tax purposes. The carrying amounts of all other assets acquired and liabilities assumed are insignificant and approximate their estimated fair values. The assets and liabilities recorded for the acquisition of Attentive.ly were based on preliminary valuations and the estimates and assumptions are subject to change as we obtain additional information during the measurement period, which may be up to one year from the acquisition date. The assets and liabilities pending finalization include the valuation of acquired intangible assets and as well as the evaluation of amounts recorded for deferred income taxes. During the year ended December 31, 2016, we incurred insignificant acquisition-related expenses associated with the acquisition of Attentive.ly, which were recorded in general and administrative expense. We included the operating results of Attentive.ly, which are insignificant, in our consolidated financial statements from the date of acquisition. We do not expect this business combination to have a material effect on our consolidated financial position, results of operations or cash flows. We determined that the Attentive.ly acquisition was not a material business combination; therefore, pro forma disclosures have not been presented. 2015 Acquisition Smart Tuition On October 2, 2015 , we completed our acquisition of all of the outstanding equity, including all voting equity interests, of Smart, LLC (“Smart Tuition”). Smart Tuition is a leading provider of payment software and services for private schools and parents. The acquisition of Smart Tuition further expanded our offerings in the K-12 technology sector. We acquired Smart Tuition for $187.3 million in cash, net of closing adjustments including an adjustment of approximately $0.5 million during the three months ended March 31, 2016. We received the proceeds from these closing adjustments during the three months ended June 30, 2016. On October 2, 2015 , we drew down a $186.0 million revolving credit loan under our 2014 Credit Facility (as defined in Note 9 below) to finance the acquisition of Smart Tuition. As a result of the acquisition, Smart Tuition has become a wholly-owned subsidiary of ours. We included the operating results of Smart Tuition in our consolidated financial statements within our GMBU reporting segment from the date of acquisition. For the year ended December 31, 2016 , Smart Tuition's total revenue included in our consolidated financial statements was $39.8 million . Because we have integrated the operations of Smart Tuition into ours, it is impracticable to determine the operating income attributable solely to the acquired business. The following table summarizes the allocation of the purchase price based on the estimated fair value of the assets acquired and the liabilities assumed: (dollars in thousands) Purchase Price Allocation Net working capital, excluding deferred revenue $ 202 Property and equipment 2,457 Deferred revenue (6,500 ) Deferred tax asset 2,637 Intangible assets 97,800 Goodwill 90,376 Total purchase price (1) $ 186,972 (1) The purchase price differs from the net cash outlay of $187.3 million due to certain insignificant acquisition-related expenses included therein. The estimated fair value of accounts receivable acquired approximates the contractual value of $2.8 million . The estimated goodwill recognized is attributable primarily to the opportunities for expected synergies from combining operations and the assembled workforce of Smart Tuition, all of which was assigned to our GMBU reporting segment. Approximately $86.3 million of the goodwill arising in the acquisition is deductible for income tax purposes. We finalized the purchase price allocation for Smart Tuition, including the valuation of assets acquired and liabilities assumed, during the third quarter of 2016. All measurement period adjustments recorded were insignificant. The Smart Tuition acquisition resulted in the identification of the following identifiable intangible assets: Intangible assets acquired Weighted average amortization period (in thousands) (in years) Customer relationships $ 72,300 17 Marketing assets 1,200 3 Acquired technology 22,100 7 Non-compete agreements 2,200 5 Total intangible assets $ 97,800 14 The estimated fair values of the finite-lived intangible assets were based on variations of the income approach, which estimates fair value based on the present value of cash flows that the assets are expected to generate which included the relief-from-royalty method, incremental cash flow method including the with and without method and excess earnings method, depending on the intangible asset being valued. The method of amortization of identifiable finite-lived intangible assets is based on the expected pattern in which the estimated economic benefits of the respective assets are consumed or otherwise used up. Customer relationships and acquired technology are being amortized on an accelerated basis while marketing assets and non-compete agreements are being amortized on a straight-line basis. The following unaudited pro forma condensed combined consolidated results of operations assume that the acquisition of Smart Tuition occurred on January 1, 2014. This unaudited pro forma financial information does not reflect any adjustments for anticipated synergies resulting from the acquisition and should not be relied upon as being indicative of the historical results that would have been attained had the transaction been consummated as of January 1, 2014, or of the results that may occur in the future. The unaudited pro forma information reflects adjustments for amortization of intangibles related to the fair value adjustments of the assets acquired, write-down of acquired deferred revenue to fair value, additional interest expense related to the financing of the transaction and the related tax effects of the adjustments. Years ended December 31, (dollars in thousands, except per share amounts) 2015 2014 Revenue $ 666,131 $ 587,459 Net income $ 26,334 $ 17,952 Basic earnings per share $ 0.58 $ 0.40 Diluted earnings per share $ 0.57 $ 0.39 2014 Acquisitions MicroEdge On October 1, 2014 , we completed our acquisition of all of the outstanding equity, including all voting equity interests of MicroEdge Holdings, LLC (“MicroEdge”). MicroEdge is a provider of software solutions that enable the worldwide giving community to organize, simplify and measure their acts of charitable giving. The acquisition of MicroEdge expanded our offerings in the philanthropic giving sector with its comprehensive solutions for grant-making, corporate social responsibility and foundation management. We acquired MicroEdge for an aggregate purchase price of $159.8 million in cash. As a result of the acquisition, MicroEdge has become a wholly-owned subsidiary of ours. The operating results of MicroEdge have been included in our consolidated financial statements from the date of acquisition within the ECBU. Because we have integrated the operations of MicroEdge into ours, it is impracticable to determine the revenue and operating income attributable solely to the acquired business. We financed the acquisition of MicroEdge through cash on hand and borrowings of $140.0 million under our existing credit facility. The following unaudited pro forma condensed combined consolidated results of operations assume that the acquisition of MicroEdge occurred on January 1, 2013. This unaudited pro forma financial information does not reflect any adjustments for anticipated synergies resulting from the acquisition and should not be relied upon as being indicative of the historical results that would have been attained had the transaction been consummated as of January 1, 2013, or of the results that may occur in the future. The unaudited pro forma information reflects adjustments for amortization of intangibles related to the fair value adjustments of the assets acquired, write-down of acquired deferred revenue to fair value, additional interest expense related to the financing of the transaction and the related tax effects of the adjustments. Year ended December 31, (in thousands, except per share amounts) 2014 Revenue $ 592,930 Net income $ 26,944 Basic earnings per share $ 0.60 Diluted earnings per share $ 0.59 WhippleHill On June 16, 2014 , we acquired all of the outstanding stock of WhippleHill Communications, Inc. (“WhippleHill”), a privately held company based in New Hampshire, for $35.0 million in cash. WhippleHill is a provider of cloud-based solutions designed exclusively to serve K-12 private schools. The acquisition of WhippleHill expanded our offerings in the K-12 technology sector. The operating results of WhippleHill have been included in our consolidated financial statements from the date of acquisition. Because we have integrated the operations of WhippleHill into ours, it is impracticable to determine the revenue and operating income attributable solely to the acquired business. We determined that the WhippleHill acquisition was a non-material business combination. As such, pro forma disclosures are not required and are not presented. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 4. Earnings Per Share The following table sets forth the computation of basic and diluted earnings per share: Years ended December 31, (dollars in thousands, except per share amounts) 2016 2015 2014 Numerator: Net income $ 41,515 $ 25,649 $ 28,290 Denominator: Weighted average common shares 46,132,389 45,623,854 45,215,138 Add effect of dilutive securities: Stock-based awards 1,184,149 874,850 584,736 Weighted average common shares assuming dilution 47,316,538 46,498,704 45,799,874 Earnings per share: Basic $ 0.90 $ 0.56 $ 0.63 Diluted $ 0.88 $ 0.55 $ 0.62 Anti-dilutive shares excluded from calculations of diluted earnings per share 7,339 18,554 23,159 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 5. Fair Value Measurements Recurring fair value measurements Financial assets and liabilities measured at fair value on a recurring basis consisted of the following, as of: Fair value measurement using (dollars in thousands) Level 1 Level 2 Level 3 Total Fair value as of December 31, 2016 Financial assets: Derivative instruments (1) $ — $ 206 $ — $ 206 Total financial assets $ — $ 206 $ — $ 206 Fair value as of December 31, 2016 Financial liabilities: Derivative instruments (1) $ — $ 163 $ — $ 163 Total financial liabilities $ — $ 163 $ — $ 163 Fair value as of December 31, 2015 Financial assets: Derivative instruments (1) $ — $ 406 $ — $ 406 Total financial assets $ — $ 406 $ — $ 406 Fair value as of December 31, 2015 Financial liabilities: Derivative instruments (1) $ — $ 438 $ — $ 438 Total financial liabilities $ — $ 438 $ — $ 438 (1) The fair value of our interest rate swaps was based on model-driven valuations using LIBOR rates, which are observable at commonly quoted intervals. Accordingly, our interest rate swaps are classified within Level 2 of the fair value hierarchy. We believe the carrying amounts of our cash and cash equivalents, donor restricted cash, accounts receivable, trade accounts payable, accrued expenses and other current liabilities and donations payable approximate their fair values at December 31, 2016 and December 31, 2015 , due to the immediate or short-term maturity of these instruments. We believe the carrying amount of our debt approximates its fair value at December 31, 2016 and December 31, 2015 , as the debt bears interest rates that approximate market value. As LIBOR rates are observable at commonly quoted intervals, our debt is classified within Level 2 of the fair value hierarchy. We did not transfer any assets or liabilities among the levels within the fair value hierarchy during the years ended December 31, 2016 , 2015 and 2014 . Additionally, we did not hold any Level 3 assets or liabilities during the years ended December 31, 2016 , 2015 and 2014 . Non-recurring fair value measurements Assets and liabilities that are measured at fair value on a non-recurring basis include intangible assets and goodwill which are recognized at fair value during the period in which an acquisition is completed, from updated estimates and assumptions during the measurement period, or when they are considered to be impaired. These non-recurring fair value measurements, primarily for intangible assets acquired, were based on Level 3 unobservable inputs. In the event of an impairment, we determine the fair value of the goodwill and intangible assets using a discounted cash flow approach, which contains significant unobservable inputs and therefore is considered a Level 3 fair value measurement. The unobservable inputs in the analysis generally include future cash flow projections and a discount rate. There were no non-recurring fair value adjustments to intangible assets and goodwill during 2016 , 2015 and 2014 except for certain business combination accounting adjustments to the initial fair value estimates of the assets acquired and liabilities assumed at the acquisition date (as disclosed in Note 3 to these consolidated financial statements) from updated estimates and assumptions during the measurement period. The measurement period may be up to one year from the acquisition date. We record any measurement period adjustments to the fair value of assets acquired and liabilities assumed, with the corresponding offset to goodwill. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment Disclosure | 6. Property and Equipment and Software Development Costs Property and equipment Property and equipment consisted of the following, as of: Estimated useful life (years) December 31, (dollars in thousands) 2016 2015 Equipment 3 - 5 $ 2,403 $ 3,868 Computer hardware 3 - 5 81,260 77,668 Computer software 3 - 5 31,604 26,457 Construction in progress - 2,972 2,337 Furniture and fixtures 5 - 7 7,989 7,146 Leasehold improvements Lesser of lea se term or 10 years 19,942 17,171 Total property and equipment 146,170 134,647 Less: accumulated depreciation (95,901 ) (81,996 ) Property and equipment, net $ 50,269 $ 52,651 Depreciation expense was $19.8 million , $18.5 million , and $17.3 million for the years ended December 31, 2016 , 2015 and 2014 , respectively. Property and equipment, net of depreciation, under capital leases at December 31, 2016 and 2015 was insignificant. Software development costs Software development costs consisted of the following, as of: Estimated useful life (years) December 31, (dollars in thousands) 2016 2015 Software development costs 3 - 7 $ 55,126 $ 28,767 Less: accumulated amortization (17,544 ) (9,216 ) Software development costs, net $ 37,582 $ 19,551 Amortization expense related to software development costs was $8.3 million , $5.4 million , and $2.0 million for the years ended December 31, 2016 , 2015 and 2014 , respectively, and is included in both cost of subscriptions, primarily, and to a lesser extent, cost of license fees. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | 7. Goodwill and Other Intangible Assets The change in goodwill for each reportable segment (as defined in Note 16 ) during 2016 consisted of the following: (dollars in thousands) ECBU GMBU IBU Total Balance at December 31, 2015 $ 240,494 $ 190,976 $ 4,979 $ 436,449 Additions related to current year business combination 840 1,444 58 2,342 Adjustments related to prior year business combination — (182 ) — (182 ) Effect of foreign currency translation — — (369 ) (369 ) Balance at December 31, 2016 $ 241,334 $ 192,238 $ 4,668 $ 438,240 We have recorded intangible assets acquired in various business combinations based on their fair values at the date of acquisition. The table below sets forth the balances of each class of intangible asset and related amortization as of: December 31, (dollars in thousands) 2016 2015 Finite-lived gross carrying amount Customer relationships $ 248,287 $ 247,462 Marketing assets 16,187 16,187 Acquired software and technology 147,269 148,615 Non-compete agreements 3,493 3,402 Database 4,275 4,378 Total finite-lived gross carrying amount 419,511 420,044 Accumulated amortization Customer relationships (77,983 ) (57,748 ) Marketing assets (9,826 ) (7,753 ) Acquired software and technology (74,975 ) (57,548 ) Non-compete agreements (1,553 ) (864 ) Database (4,093 ) (4,061 ) Total accumulated amortization (168,430 ) (127,974 ) Indefinite-lived gross carrying amount Marketing assets 2,595 2,602 Intangible assets, net $ 253,676 $ 294,672 Changes to the gross carrying amounts of intangible asset classes during 2016 were related to our business acquisitions as described in Note 3 of these financial statements and the effect of foreign currency translation. Amortization expense Amortization expense related to finite-lived intangible assets acquired in business combinations is allocated to cost of revenue on the consolidated statements of comprehensive income based on the revenue stream to which the asset contributes, except for marketing assets and non-compete agreements, for which the associated amortization expense is included in operating expenses. The following table summarizes amortization expense of our finite-lived intangible assets: Years ended December 31, (dollars in thousands) 2016 2015 2014 Included in cost of revenue: Cost of subscriptions $ 31,270 $ 23,075 $ 20,239 Cost of maintenance 5,327 4,162 772 Cost of services 2,621 2,382 2,910 Cost of license fees and other 340 368 424 Total included in cost of revenue 39,558 29,987 24,345 Included in operating expenses 2,840 2,231 1,803 Total amortization of intangibles from business combinations $ 42,398 $ 32,218 $ 26,148 The following table outlines the estimated future amortization expense for each of the next five years for our finite-lived intangible assets as of December 31, 2016 : Years ending December 31, (dollars in thousands) Amortization expense 2017 $ 41,711 2018 40,001 2019 36,541 2020 27,975 2021 21,062 Total $ 167,290 |
Consolidated Financial Statemen
Consolidated Financial Statement Details | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Additional Financial Information Disclosure | 8. Consolidated Financial Statement Details Prepaid expenses and other assets (dollars in thousands) December 31, December 31, Deferred sales commissions $ 37,459 $ 30,141 Prepaid software maintenance 18,130 15,308 Taxes, prepaid and receivable 4,111 9,121 Deferred professional services costs 1,722 3,603 Deferred tax asset 2,379 2,869 Prepaid royalties 1,373 1,767 Other assets 5,664 6,758 Total prepaid expenses and other assets 70,838 69,567 Less: Long-term portion 22,524 20,901 Prepaid expenses and other current assets $ 48,314 $ 48,666 Accrued expenses and other liabilities (dollars in thousands) December 31, December 31, Accrued bonuses $ 19,217 $ 24,591 Accrued commissions and salaries 9,352 8,391 Taxes payable 3,452 3,923 Deferred rent liabilities 4,110 4,070 Lease incentive obligations 5,604 4,734 Unrecognized tax benefit 3,295 3,147 Customer credit balances 5,148 3,515 Accrued vacation costs 2,214 2,446 Accrued health care costs 1,495 2,356 Other liabilities 8,842 7,911 Total accrued expenses and other liabilities 62,729 65,084 Less: Long-term portion 8,533 7,623 Accrued expenses and other current liabilities $ 54,196 $ 57,461 Deferred revenue (dollars in thousands) December 31, December 31, Subscriptions $ 144,606 $ 122,524 Maintenance 76,803 85,901 Services 29,039 28,517 License fees and other 492 393 Total deferred revenue 250,940 237,335 Less: Long-term portion 6,440 7,119 Deferred revenue, current portion $ 244,500 $ 230,216 Other expense, net Years ended December 31, (dollars in thousands) 2016 2015 2014 Interest income $ 581 $ 155 $ 59 Loss on sale of business — (1,976 ) — Loss on debt extinguishment and termination of derivative instruments (1) — — (996 ) Other (expense) income, net (872 ) 134 (182 ) Other expense, net $ (291 ) $ (1,687 ) $ (1,119 ) (1) See Notes 9 and 10 to these consolidated financial statements for details of the loss on debt extinguishment and termination of derivative instruments. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Debt | 9. Debt The following table summarizes our debt balances and the related weighted average effective interest rates, which includes the effect of interest rate swap agreements. Debt balance at Weighted average effective interest rate at (dollars in thousands) December 31, December 31, December 31, December 31, Credit facility: Revolving credit loans $ 180,900 $ 242,900 2.36 % 2.15 % Term loans 162,969 167,344 2.62 % 2.51 % Total debt 343,869 410,244 2.48 % 2.30 % Less: Unamortized debt discount 1,476 2,157 Less: Debt, current portion 4,375 4,375 2.50 % 2.11 % Debt, net of current portion $ 338,018 $ 403,712 2.48 % 2.30 % We were previously party to a $325.0 million five -year credit facility entered into during February 2012 . The credit facility included: a dollar and a designated currency revolving credit facility with sublimits for letters of credit and swingline loans (the “ 2012 Revolving Facility ”) and a delayed draw term loan (the “ 2012 Term Loan ”) together, (the “ 2012 Credit Facility ”). 2014 refinancing In February 2014 , we entered into a five -year $325.0 million credit facility (the “ 2014 Credit Facility ”) and drew $175.0 million on a term loan upon closing, which was used to repay all amounts outstanding under the 2012 Credit Facility . The 2014 Credit Facility includes the following facilities: (i) a dollar and a designated currency revolving credit facility with sublimits for letters of credit and swingline loans (the “ 2014 Revolving Facility ”) and (ii) a term loan facility (the “ 2014 Term Loan ”). Certain lenders of the 2012 Term Loan participated in the 2014 Term Loan and the change in the present value of our future cash flows to these lenders under the 2012 Term Loan and under the 2014 Term Loan was less than 10% . Accordingly, we accounted for the refinancing event for these lenders as a debt modification. Certain lenders of the 2012 Term Loan did not participate in the 2014 Term Loan . Accordingly, we accounted for the refinancing event for these lenders as a debt extinguishment. Certain lenders of the 2012 Revolving Facility participated in the 2014 Revolving Facility and provided increased borrowing capacities. Accordingly, we accounted for the refinancing event for these lenders as a debt modification. Certain lenders of the 2012 Revolving Facility did not participate in the 2014 Revolving Facility . Accordingly, we accounted for the refinancing event for these lenders as a debt extinguishment. We recorded a $0.4 million loss on debt extinguishment related to the write-off of deferred financing costs for the portions of the 2012 Credit Facility considered to be extinguished. This loss was recognized in the consolidated statements of comprehensive income within loss on debt extinguishment and termination of derivative instruments. In connection with our entry into the 2014 Credit Facility , we paid $2.5 million in financing costs, of which $1.1 million were capitalized and, together with a portion of the unamortized deferred financing costs from the 2012 Credit Facility and prior facilities, are being amortized into interest expense ratably over the term of the new facility. As of December 31, 2016 and December 31, 2015 , deferred financing costs totaling $0.6 million and $0.9 million , respectively, were included in other assets on our consolidated balance sheets. Summary of the 2014 Credit Facility The 2014 Credit Facility is secured by the stock and limited liability company interests of certain of our subsidiaries and is guaranteed by our material domestic subsidiaries. Amounts borrowed under the dollar tranche revolving credit loans and term loan under the 2014 Credit Facility bear interest at a rate per annum equal to, at our option, (a) a base rate equal to the highest of (i) the prime rate, (ii) federal funds rate plus 0.50% and (iii) one month LIBOR plus 1.00% (the “Base Rate”), in addition to a margin of 0.00% to 0.50% , or (b) LIBOR rate plus a margin of 1.00% to 1.50% . We also pay a quarterly commitment fee on the unused portion of the 2014 Revolving Facility from 0.15% to 0.225% per annum, depending on our net leverage ratio. At December 31, 2016 , the commitment fee was 0.225% . The term loan under the 2014 Credit Facility requires periodic principal payments. The balance of the term loan and any amounts drawn on the revolving credit loans are due upon maturity of the 2014 Credit Facility in February 2019 . We evaluate the classification of our debt as current or non-current based on the required annual maturities of the 2014 Credit Facility . The 2014 Credit Facility includes financial covenants related to the net leverage ratio and interest coverage ratio, as well as restrictions on our ability to declare and pay dividends and our ability to repurchase shares of our common stock. At December 31, 2016, we were in compliance with our debt covenants under the 2014 Credit Facility. Financing for MicroEdge acquisition The 2014 Credit Facility includes an option to request increases in the revolving commitments and/or request additional term loans in an aggregate principal amount of up to $200.0 million . On October 1, 2014 , we exercised this option, and certain lenders agreed, to increase the revolving credit commitments by $100.0 million (the " October 2014 Additional Revolving Credit Commitments") such that for the period commencing October 1, 2014 , the aggregate revolving credit commitments available were $250.0 million . The October 2014 Additional Revolving Credit Commitments have the same terms as the existing revolving credit commitments. On October 1, 2014 , we drew down $140.0 million in revolving credit commitments under the 2014 Credit Facility to finance the acquisition of MicroEdge. Financing for Smart Tuition acquisition On July 17, 2015 , we again exercised this option and certain lenders agreed to increase the revolving credit commitments by an additional $100.0 million (the " July 2015 Additional Revolving Credit Commitments") such that for the period commencing July 17, 2015 , the aggregate revolving credit commitments available were $350.0 million . The July 2015 Additional Revolving Credit Commitments have the same terms as the existing revolving credit commitments. On October 2, 2015 , we drew down a $186.0 million revolving credit loan under the 2014 Credit Facility to finance the acquisition of Smart Tuition. As of December 31, 2016 , the required annual maturities related to the 2014 Credit Facility were as follows: Years ending December 31, (dollars in thousands) Annual maturities 2017 $ 4,375 2018 4,375 2019 335,119 2020 — 2021 — Thereafter — Total required maturities $ 343,869 |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives Instruments | 10. Derivative Instruments We use derivative instruments to manage our variable interest rate risk. In February 2014 , in connection with the refinancing of our debt, we terminated the two interest rate swap agreements associated with the 2012 Credit Facility. As part of the settlement of our swap liabilities, we recorded a loss of $0.6 million , which was recognized in the consolidated statements of comprehensive income within loss on debt extinguishment and termination of derivative instruments. In March 2014 , we entered into a new interest rate swap agreement (the "March 2014 Swap Agreement"), which effectively converts portions of our variable rate debt under the 2014 Credit Facility to a fixed rate for the term of the March 2014 Swap Agreement. The initial notional value of the March 2014 Swap Agreement was $125.0 million with an effective date beginning in March 2014 . In March 2017 , the notional value of the March 2014 Swap Agreement will decrease to $75.0 million for the remaining term through February 2018 . We designated the March 2014 Swap Agreement as a cash flow hedge at the inception of the contract. In October 2015 , we entered into an additional interest rate swap agreement (the " October 2015 Swap Agreement"), which effectively converts portions of our variable rate debt under the 2014 Credit Facility to a fixed rate for the term of the October 2015 Swap Agreement. The notional value of the October 2015 Swap Agreement was $75.0 million with an effective date beginning in October 2015 and maturing in February 2018. We designated the October 2015 Swap Agreement as a cash flow hedge at the inception of the contract. The fair values of our derivative instruments were as follows as of: (dollars in thousands) Balance sheet location December 31, December 31, Derivative instruments designated as hedging instruments: Interest rate swap, long-term portion Other assets $ 206 $ 406 Total derivative instruments designated as hedging instruments $ 206 $ 406 December 31, December 31, Derivative instruments designated as hedging instruments: Interest rate swaps, current portion Accrued expenses and $ — $ 2 Interest rate swaps, long-term portion Other liabilities 163 436 Total derivative instruments designated as hedging instruments $ 163 $ 438 The effects of derivative instruments in cash flow hedging relationships were as follows: Gain (loss) recognized in accumulated other comprehensive loss as of Location of gain (loss) reclassified from accumulated other comprehensive loss into income Gain (loss) reclassified from accumulated other comprehensive loss into income (dollars in thousands) December 31, Year ended Interest rate swaps $ 42 Interest expense $ (1,106 ) December 31, Year ended Interest rate swaps $ (31 ) Interest expense $ (1,569 ) December 31, Year ended Interest rate swaps $ (268 ) Interest expense $ (1,215 ) Interest rate swaps — Loss on debt extinguishment (587 ) Total $ (268 ) $ (1,802 ) Our policy requires that derivatives used for hedging purposes be designated and effective as a hedge of the identified risk exposure at the inception of the contract. Accumulated other comprehensive income (loss) includes unrealized gains or losses from the change in fair value measurement of our derivative instruments each reporting period and the related income tax expense or benefit. Changes in the fair value measurements of the derivative instruments and the related income tax expense or benefit are reflected as adjustments to accumulated other comprehensive income (loss) until the actual hedged expense is incurred or until the hedge is terminated at which point the unrealized gain (loss) is reclassified from accumulated other comprehensive income (loss) to current earnings. The estimated net amount of losses that are recorded in accumulated other comprehensive loss as of December 31, 2016 that is expected to be reclassified into earnings within the next twelve months is insignificant . There were no ineffective portions of our interest rate swap derivatives during the years ended December 31, 2016 , 2015 and 2014 . See Note 14 to these consolidated financial statements for a summary of the changes in accumulated other comprehensive income (loss) by component. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 11. Commitments and Contingencies Historical Leases We lease our headquarters facility under a 15 -year lease agreement which was entered into in October 2008 , and has two five -year renewal options. The current annual base rent of the lease is $5.1 million , payable in equal monthly installments. The base rent escalates annually at a rate equal to the change in the consumer price index, as defined in the agreement, but not to exceed 5.5% in any year. We have a lease for office space in Austin, Texas which terminates on September 30, 2023, and has two five -year renewal options. The current annual base rent of the lease is $2.8 million . The base rent escalates annually between 2% and 4% based on the terms of the agreement. The rent expense is recorded on a straight-line basis over the length of the lease term. At December 31, 2016 , we had a standby letter of credit of $2.0 million for a security deposit for this lease. We have provisions in our leases that entitle us to aggregate remaining leasehold improvement allowances of $5.1 million as of December 31, 2016 . These amounts are being recorded as a reduction to rent expense ratably over the terms of the leases. The leasehold improvement allowances have been included in the table of operating lease commitments below as a reduction in our lease commitments ratably over the then remaining terms of the leases. The timing of the reimbursements for the actual leasehold improvements may vary from the amounts reflected in the table below. We have also received quarterly South Carolina state incentive payments as a result of locating our headquarters facility in Berkeley County, South Carolina. These amounts are recorded as a reduction of rent expense upon receipt and were $2.9 million , $2.3 million and $2.2 million for the years ended December 31, 2016 , 2015 and 2014 , respectively. These quarterly state incentive payments related to our current headquarters facility ended in 2016. Total rent expense was $11.7 million , $10.3 million and $9.4 million for the years ended December 31, 2016 , 2015 and 2014 , respectively. Lease for New Headquarters Facility In May 2016, we entered into a lease agreement for a new headquarters facility to be built in Charleston, South Carolina (the "New Headquarters Facility"). The landlord is responsible for the design, development and construction of the New Headquarters Facility. Construction of the New Headquarters Facility will proceed in two phases. Phase One will include a building with approximately 172,000 rentable square feet, which is expected to be completed in the first quarter of 2018. The lease agreement also grants us a Phase Two option to request that the landlord construct and lease to us a second office building and related improvements. Total rent payments and leasehold improvement allowances for Phase One are estimated to be approximately $102.1 million and $12.9 million , respectively, over the life of the lease agreement, plus additional amounts for Phase Two, if applicable. The lease agreement is for a period of twenty years beginning on the date of substantial completion of construction by the landlord, which is estimated to be in the first quarter of 2018, and ending in the first quarter of 2038. The lease agreement provides for four renewal periods of five years each at a base rent equal to the then prevailing market rate for comparable buildings. We expect to receive quarterly South Carolina state incentive payments as a result of locating our new headquarters facility in Berkeley County, South Carolina, which will be recorded as a reduction of rent expense upon receipt. As of December 31, 2016 , the future minimum lease commitments related to lease agreements, net of related lease incentives, were as follows: Years ending December 31, (dollars in thousands) Operating leases (1) 2017 $ 16,085 2018 17,103 2019 16,004 2020 15,461 2021 14,724 Thereafter 95,385 Total minimum lease payments $ 174,762 (1) Our future minimum lease commitments related to operating leases do not include payments related to Phase Two of our New Headquarters Facility, as that option had not been exercised as of December 31, 2016 . Other commitments As discussed in Note 9 to these consolidated financial statements, the term loans under the 2014 Credit Facility require periodic principal payments. The balance of the term loans and any amounts drawn on the revolving credit loans are due upon maturity of the 2014 Credit Facility in February 2019 . We utilize third-party technology in conjunction with our solutions, services and operations with contractual arrangements varying in length from one to five years. In certain cases, these arrangements require a minimum annual purchase commitment. As of December 31, 2016 , the remaining aggregate minimum purchase commitment under these arrangements was approximately $38.2 million through 2021 . Solution and service indemnifications In the ordinary course of business, we provide certain indemnifications of varying scope to customers against claims of intellectual property infringement made by third parties arising from the use of our solutions or services. If we determine that it is probable that a loss has been incurred related to solution or service indemnifications, any such loss that could be reasonably estimated would be recognized. We have not identified any losses and, accordingly, we have not recorded a liability related to these indemnifications. Guarantees and indemnification obligations We enter into agreements in the ordinary course of business with, among others, customers, creditors, vendors and service providers. Pursuant to certain of these agreements we have agreed to indemnify the other party for certain matters, such as property damage, personal injury, acts or omissions of ours, or our employees, agents or representatives, or third-party claims alleging that the activities of its contractual partner pursuant to the contract infringe a patent, trademark or copyright of such third party. Legal contingencies We are subject to legal proceedings and claims that arise in the ordinary course of business. We record an accrual for a contingency when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. As of December 31, 2016 , in our opinion, there was not at least a reasonable possibility that these actions arising in the ordinary course of business will have a material adverse effect upon our consolidated financial position, results of operations or cash flows and, therefore, no material loss contingencies were recorded. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 12. Income Taxes We file income tax returns in the U.S. for federal and various state jurisdictions as well as in foreign jurisdictions including Canada, the United Kingdom, Australia and Ireland. We are generally subject to U.S. federal income tax examination for calendar tax years 2013 through 2016 as well as state and foreign income tax examinations for various years depending on statutes of limitations of those jurisdictions. The following summarizes the components of income tax expense: Years ended December 31, (dollars in thousands) 2016 2015 2014 Current taxes: U.S. Federal $ 4,655 $ 5,890 $ 5,757 U.S. State and local 1,670 2,215 2,158 International 53 33 (21 ) Total current taxes 6,378 8,138 7,894 Deferred taxes: U.S. Federal 2,544 2,702 4,725 U.S. State and local 304 585 (1,329 ) International 185 (122 ) (346 ) Total deferred taxes 3,033 3,165 3,050 Total income tax provision $ 9,411 $ 11,303 $ 10,944 The following summarizes the components of income before provision for income taxes: Years ended December 31, (dollars in thousands) 2016 2015 2014 U.S. $ 49,320 $ 37,523 $ 39,638 International 1,606 (571 ) (404 ) Income before provision for income taxes $ 50,926 $ 36,952 $ 39,234 A reconciliation between the effect of applying the federal statutory rate and the effective income tax rate used to calculate our income tax provision is as follows: Years ended December 31, 2016 2015 2014 Federal statutory rate 35.0 % 35.0 % 35.0 % Effect of: State income taxes, net of federal benefit 4.1 5.7 3.2 Change in state income tax rate applied to deferred tax balances 0.2 2.1 (1.1 ) Fixed assets — (0.1 ) (0.3 ) Unrecognized tax benefit 0.2 (1.1 ) (2.9 ) State credits, net of federal benefit (0.1 ) 6.0 (1.0 ) Change in valuation reserve (primarily state credit reserves) (1.6 ) (8.6 ) 1.3 Federal credits generated (6.2 ) (6.1 ) (4.7 ) Foreign tax rate (0.4 ) (0.7 ) (0.1 ) Acquisition costs 0.1 0.1 0.6 Section 162(m) limitation 1.7 0.1 0.4 Loss from sale of foreign subsidiary — 1.9 — Domestic production activities deduction (1.2 ) (1.8 ) (1.2 ) Stock-based compensation (13.6 ) — — Other 0.3 (1.9 ) (1.3 ) Income tax provision effective rate 18.5 % 30.6 % 27.9 % As discussed in Note 2 to these consolidated financial statements, we early adopted ASU 2016-09 relating to stock-based compensation in 2016. Under ASU 2016-09, tax benefits in excess of compensation costs (windfalls) generated upon the exercise or settlement of stock awards are no longer recognized as additional paid-in capital but are instead recognized as a reduction to income tax expense. This change in accounting for income taxes is effective on a prospective basis as of the beginning of the 2016 fiscal year. Upon adoption of ASU 2016-09 in 2016, we recorded a benefit to tax expense of $7.7 million . We recorded excess tax benefits from the exercise and vesting of stock-based compensation of $5.5 million and $7.5 million in additional paid-in capital during the years ended December 31, 2015 and 2014, respectively. A portion of our South Carolina credit carryforward expired in 2015 and 2016 and this is reflected in the rate increase for state credits, net of federal benefit. This increase was offset by the release of the related state credit valuation reserve and additional state research credits generated in 2015 and 2016, which are reflected in the rate decrease for change in valuation reserve. The significant components of our deferred tax assets and liabilities were as follows: December 31, (dollars in thousands) 2016 2015 Deferred tax assets relating to: Federal and state and foreign net operating loss carryforwards $ 12,906 $ 13,913 Federal, state and foreign tax credits 9,924 10,464 Intangible assets 652 449 Stock-based compensation 11,480 7,848 Accrued bonuses 7,426 9,335 Deferred revenue 5,371 6,049 Allowance for doubtful accounts 1,294 780 Other 6,781 6,593 Total deferred tax assets 55,834 55,431 Deferred tax liabilities relating to: Intangible assets (44,885 ) (49,559 ) Fixed assets (9,200 ) (10,323 ) Other (21,934 ) (12,765 ) Total deferred tax liabilities (76,019 ) (72,647 ) Valuation allowance (6,994 ) (7,911 ) Net deferred tax liability $ (27,179 ) $ (25,127 ) As of December 31, 2016 , our federal, foreign and state net operating loss carryforwards for income tax purposes were approximately $28.8 million , $6.4 million and $36.5 million , respectively. The federal and state net operating loss carryforwards are subject to various Internal Revenue Code limitations and applicable state tax laws. If not utilized, the federal net operating loss carryforwards will begin to expire in 2028 and the state net operating loss carryforwards will expire over various periods beginning in 2017. Our foreign net operating loss carryforwards have an unlimited carryforward period. Our federal and foreign tax credit carryforwards for income tax purposes were insignificant. Our state tax credit carryforwards for income tax purposes were approximately $9.9 million , net of federal benefit. If not utilized, the state tax credit carryforwards will begin to expire in 2017. A portion of the foreign and state net operating loss carryforwards and state credit carryforwards have a valuation reserve due to management's uncertainty regarding the future ability to use such carryforwards. The following table illustrates the change in our deferred tax asset valuation allowance: Years ended December 31, Balance at beginning of year Acquisition related change Charges to expense Balance at end of year (dollars in thousands) 2016 $ 7,911 $ — $ (917 ) $ 6,994 2015 11,161 — (3,250 ) 7,911 2014 11,042 — 119 11,161 The following table sets forth the change to our unrecognized tax benefit for the years ended December 31, 2016 , 2015 and 2014 : Years ended December 31, (dollars in thousands) 2016 2015 2014 Balance at December 31, 2015 $ 3,024 $ 3,564 $ 3,698 Increases from prior period positions 23 129 195 Decreases in prior year positions (17 ) (651 ) (102 ) Increases from current period positions 358 257 1,046 Settlements (payments) — (274 ) — Lapse of statute of limitations (243 ) (1 ) (1,273 ) Balance at December 31, 2016 $ 3,145 $ 3,024 $ 3,564 The total amount of unrecognized tax benefit that, if recognized, would favorably affect the effective tax rate was $2.4 million at December 31, 2016 . Certain prior period amounts relating to our 2014 acquisitions are covered under indemnification agreements and, therefore, we have recorded a corresponding indemnification asset. We recognize accrued interest and penalties, if any, related to unrecognized tax benefits as a component of income tax expense. The total amount of accrued interest and penalties included in the consolidated balance sheet as of December 31, 2016 and December 31, 2015 was insignificant . The total amount of interest and penalties included in the consolidated statements of comprehensive income as an increase or decrease in income tax expense for 2016 , 2015 and 2014 was insignificant . We have taken federal and state tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits might decrease within the next twelve months. This possible decrease could result from the expiration of statutes of limitations. The reasonably possible decrease at December 31, 2016 was insignificant . For our undistributed earnings of foreign subsidiaries, which we do not consider to be significant, we concluded that these earnings would be permanently reinvested in the local jurisdictions and not repatriated to the United States. Accordingly, we have not provided for U.S. federal income taxes and foreign withholding taxes on those undistributed earnings of our foreign subsidiaries. It is not practicable to estimate the amount that might be payable if some or all of such earnings were to be remitted. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | 13. Stock-based Compensation Employee stock-based compensation plans Under the 2016 Equity and Incentive Compensation Plan (the "2016 Equity Plan"), we may grant incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock, restricted stock units, other stock awards and cash incentive awards to employees, directors and consultants. We maintain other stock-based compensation plans including the 2008 Equity Incentive Plan (the “2008 Equity Plan”) and the 2004 Stock Plan, under which no additional grants may be made, and the 2009 Equity Compensation Plan for Employees from Acquired Companies, under which we may grant shares of common stock to employees pursuant to employment contracts or other arrangements entered into in connection with past and future acquisitions. In connection with the acquisition of Kintera in July 2008, we maintain the Kintera, Inc. Amended and Restated 2003 Equity Incentive Plan, as amended (the “Kintera 2003 Plan”), which we assumed upon the acquisition of Kintera. In connection with the acquisition of Convio in May 2012, we maintain the Convio, Inc. 1999 Stock Option/Stock Issuance Plan, as amended (the “Convio 1999 Plan”) and Convio, Inc. 2009 Stock Incentive Plan, as amended (the “Convio 2009 Plan”), which we assumed upon the acquisition of Convio. Our Compensation Committee of the Board of Directors administers all of these plans and the stock-based awards are granted under terms determined by them. The total number of authorized stock-based awards available under our plans was 7,014,287 as of December 31, 2016 . We issue common stock from our pool of authorized stock upon exercise of stock options and stock appreciation rights, vesting of restricted stock units or upon granting of restricted stock. Historically, we have issued four types of awards under these plans: restricted stock awards, restricted stock units, stock appreciation rights and stock options. The following table sets forth the number of awards outstanding for each award type as of: Outstanding at December 31, Award type 2016 2015 Restricted stock awards 1,178,592 1,096,839 Restricted stock units 465,395 396,198 Stock appreciation rights 469,075 757,203 Stock options 3,502 4,745 The majority of the stock-based awards granted under these plans have a 10 -year contractual term. Stock appreciation rights (“SARs”) have contractual lives of 7 years. Awards granted to our executive officers and certain members of management are subject to accelerated vesting upon a change in control as defined in the employees’ retention agreement. Expense recognition We recognize compensation expense associated with stock options and awards with performance or market based vesting conditions on an accelerated basis over the requisite service period of the individual grantees, which generally equals the vesting period. We recognize compensation expense associated with restricted stock awards and SARs on a straight-line basis over the requisite service period of the individual grantees, which generally equals the vesting period. Compensation expense is recognized net of estimated forfeitures such that expense is recognized only for those stock-based awards that are expected to vest. A forfeiture rate is estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from initial estimates. Stock-based compensation expense is allocated to cost of revenue and operating expenses on the consolidated statements of comprehensive income based on where the associated employee’s compensation is recorded. The following table summarizes stock-based compensation expense: Years ended December 31, (in thousands) 2016 2015 2014 Included in cost of revenue: Cost of subscriptions $ 1,168 $ 1,130 $ 687 Cost of maintenance 508 420 689 Cost of services 1,621 1,944 2,229 Total included in cost of revenue 3,297 3,494 3,605 Included in operating expenses: Sales, marketing and customer success 3,844 2,979 2,147 Research and development 6,467 4,865 3,264 General and administrative 19,030 13,908 8,329 Total included in operating expenses 29,341 21,752 13,740 Total stock-based compensation expense $ 32,638 $ 25,246 $ 17,345 The total amount of compensation cost related to unvested awards not recognized was $52.5 million at December 31, 2016 . It is expected that this amount will be recognized over a weighted average period of 1.8 years . Restricted stock awards We have granted shares of common stock subject to certain restrictions under the 2016 Equity Plan, the 2008 Equity Plan and the 2004 Stock Plan. Restricted stock awards granted to employees vest in equal annual installments generally over four years from the grant date subject to the recipient’s continued employment with us. Restricted stock awards granted to non-employee directors vest after one year from the date of grant or, if earlier, immediately prior to the next annual election of directors, provided the non-employee director is serving as a director at that time. The fair market value of the stock at the time of the grant is amortized on a straight-line basis to expense over the period of vesting. Recipients of restricted stock awards have the right to vote such shares and receive dividends. The following table summarizes our unvested restricted stock awards as of December 31, 2016 , and changes during the year then ended: Restricted stock awards Restricted stock awards Weighted average grant-date fair value Weighted average remaining contractual term (in years) Aggregate intrinsic value (1) (in thousands) Unvested at January 1, 2016 1,096,839 $ 43.28 Granted 574,309 53.59 Vested (375,413 ) 38.70 Forfeited (117,143 ) 46.05 Unvested at December 31, 2016 1,178,592 49.49 8.2 $ 75,430 (1) The intrinsic value is calculated as the market value as of the end of the fiscal period. The total fair value of restricted stock awards that vested during the years ended December 31, 2016 , 2015 and 2014 was $14.5 million , $10.6 million and $10.5 million , respectively. The weighted average grant-date fair value of restricted stock awards granted during the years ended December 31, 2015 and 2014 was $48.82 and $37.89 , respectively. Restricted stock units We have also granted restricted stock units subject to certain restrictions under the 2016 Equity Plan and the 2008 Equity Plan. In addition, we assumed restricted stock units in connection with the Convio acquisition. Restricted stock units granted to employees vest in equal annual installments generally over three years from the grant date subject to the recipient’s continued employment with us. We have also granted restricted stock units for which vesting is subject to meeting certain performance and/or market conditions. Restricted stock units granted with a market condition had a fair market value assigned at the grant date based on the use of a Monte Carlo simulation model. The fair market value of the stock at the time of the grant is amortized to expense on a straight-line basis over the period of vesting except for awards with market or performance conditions, which are amortized on an accelerated basis over the period of vesting. The following table summarizes our unvested restricted stock units as of December 31, 2016 , and changes during the year then ended: Restricted stock units Restricted stock units Weighted average grant-date fair value Weighted average remaining contractual term (in years) Aggregate intrinsic value (1) (in thousands) Unvested at January 1, 2016 396,198 $ 40.51 Granted 276,499 51.98 Forfeited (33,274 ) 47.20 Expired (3,500 ) 23.13 Vested (170,528 ) 39.04 Unvested at December 31, 2016 465,395 47.51 7.5 $ 29,785 (1) The intrinsic value is calculated as the market value as of the end of the fiscal period. The total fair value of restricted stock units that vested during the years ended December 31, 2016 , 2015 and 2014 was $6.7 million , $3.9 million , and $1.4 million , respectively. The weighted average grant date fair value of restricted stock units granted for the years ended December 31, 2015 and 2014 was $45.15 and $33.38 , respectively. Stock appreciation rights We have granted SARs under the 2008 Equity Plan and the 2004 Stock Plan to certain members of management. The SARs will be settled in stock at the time of exercise and vest in equal annual installments generally over four years from the date of grant subject to the recipient’s continued employment with us. The number of shares issued upon the exercise of the SARs is calculated as the difference between the share price of our stock on the date of exercise and the date of grant multiplied by the number of SARs divided by the share price on the exercise date. The following table summarizes our outstanding SARs as of December 31, 2016 , and changes during the year then ended: Stock appreciation rights Stock appreciation rights Weighted average exercise price Weighted average remaining contractual term (in years) Aggregate intrinsic value (1) (in thousands) Outstanding at January 1, 2016 757,203 $ 24.27 Exercised (284,424 ) 25.29 Forfeited (3,704 ) 27.92 Outstanding at December 31, 2016 469,075 23.63 2.6 $ 18,938 Unvested and expected to vest at December 31, 2016 8,610 29.17 3.3 300 Vested and exercisable at December 31, 2016 460,465 23.52 2.6 18,638 (1) The intrinsic value is calculated as the difference between the market value as of the end of the fiscal period and the exercise price of the shares. There have been no new SARs granted since 2013. The total intrinsic value of SARs exercised during the years ended December 31, 2016 , 2015 and 2014 was $10.7 million , $5.2 million , and $5.0 million , respectively. The total fair value of SARs that vested during the years ended December 31, 2016 , 2015 and 2014 was $1.0 million , $1.9 million , and $2.5 million , respectively. SARs granted with a market condition had a fair market value assigned at the grant date based on the use of a Monte Carlo simulation model. All other SARs granted had a fair market value assigned at the grant date based on the use of the Black-Scholes option pricing model. Stock options The following table summarizes our outstanding stock options as of December 31, 2016 , and changes during the year then ended: Stock options Stock options Weighted average exercise price Weighted average remaining contractual term (in years) Aggregate intrinsic value (1) (in thousands) Outstanding at January 1, 2016 4,745 $ 11.60 Exercised (1,243 ) 12.61 Outstanding at December 31, 2016 3,502 11.25 1.8 $ 185 Vested and exercisable at December 31, 2016 3,502 11.25 1.8 185 (1) The intrinsic value is calculated as the difference between the market value as of the end of the fiscal period and the exercise price of the shares. There have been no new stock option awards granted since 2005. The total intrinsic value of stock options exercised during the years ended December 31, 2016 , 2015 and 2014 was insignificant. The total fair value of stock options that vested during the years ended December 31, 2016 , 2015 and 2014 was insignificant. All outstanding stock options granted had a fair market value assigned at the grant date based on the use of the Black-Scholes option pricing model. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Stockholders' Equity | 14. Stockholders' Equity Preferred stock Our Board of Directors may fix the relative rights and preferences of each series of preferred stock in a resolution of the Board of Directors. Dividends Our Board of Directors has adopted a dividend policy, which provides for the distribution to stockholders a portion of cash generated by us that is in excess of operational needs and capital expenditures. The 2014 Credit Facility limits the amount of dividends payable and certain state laws restrict the amount of dividends distributed. The following table provides information with respect to quarterly dividends paid on common stock during the year ended December 31, 2016 . Declaration Date Dividend per Share Record Date Payable Date February 9, 2016 $ 0.12 February 26 March 15 April 27, 2016 0.12 May 27 June 15 August 1, 2016 0.12 August 26 September 15 November 1, 2016 0.12 November 23 December 15 On February 8, 2017 , our Board of Directors declared a first quarter dividend of $0.12 per share payable on March 15, 2017 to stockholders of record on February 28, 2017 . Stock repurchase program In August 2010 , our Board of Directors approved a stock repurchase program that authorized us to purchase up to $50.0 million of our outstanding shares of common stock. The program does not have an expiration date. The shares can be purchased from time to time on the open market or in privately negotiated transactions depending upon market conditions and other factors. Under the 2014 Credit Facility, we also have restrictions on our ability to repurchase shares of our common stock. We account for purchases of treasury stock under the cost method. The remaining amount available to purchase stock under the stock repurchase program was $50.0 million as of December 31, 2016 . Changes in accumulated other comprehensive loss by component The changes in accumulated other comprehensive loss by component, consisted of the following: Years ended December 31, (in thousands) 2016 2015 2014 Accumulated other comprehensive loss, beginning of period $ (825 ) $ (1,032 ) $ (1,385 ) By component: Gains and losses on cash flow hedges: Accumulated other comprehensive loss balance, beginning of period $ (19 ) $ (164 ) $ (256 ) Other comprehensive income (loss) before reclassifications, net of tax effects of $406, $514 and $644 (626 ) (818 ) (999 ) Amounts reclassified from accumulated other comprehensive loss to interest expense 1,106 1,569 1,215 Amounts reclassified from accumulated other comprehensive loss to loss on debt extinguishment and termination of derivative instruments — — 587 Tax benefit included in provision for income taxes (436 ) (606 ) (711 ) Total amounts reclassified from accumulated other comprehensive loss 670 963 1,091 Net current-period other comprehensive income 44 145 92 Accumulated other comprehensive income (loss) balance, end of period $ 25 $ (19 ) $ (164 ) Foreign currency translation adjustment: Accumulated other comprehensive loss balance, beginning of period $ (806 ) $ (868 ) $ (1,129 ) Translation adjustments 324 62 261 Accumulated other comprehensive loss balance, end of period (482 ) (806 ) (868 ) Accumulated other comprehensive loss, end of period $ (457 ) $ (825 ) $ (1,032 ) |
Defined Contribution Plan
Defined Contribution Plan | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Defined Contribution Plan | 15. Defined Contribution Plan We have a defined contribution plan 401(k) (the 401K Plan) covering substantially all employees. Employees can contribute between 1% and 30% of their salaries in 2016 , 2015 and 2014 , and we match 50% of qualified employees’ contributions up to 6% of their salary. The 401K Plan also provides for additional employer contributions to be made at our discretion. Total matching contributions to the 401K Plan for the years ended December 31, 2016 , 2015 and 2014 were $7.6 million , $5.3 million and $5.6 million , respectively. There were no discretionary contributions by us to the 401K Plan in 2016 , 2015 and 2014 . |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Segment Information | 16. Segment Information As of December 31, 2016 , our reportable segments were the GMBU, the ECBU, and the IBU. Following is a description of each reportable segment: • The GMBU is focused on marketing, sales, delivery and support to all emerging and mid-sized prospects and customers in North America; • The ECBU is focused on marketing, sales, delivery and support to all large and/or strategic prospects and customers in North America; and • The IBU is focused on marketing, sales, delivery and support to all prospects and customers outside of North America. Our chief operating decision maker is our chief executive officer ("CEO"). The CEO reviews financial information presented on an operating segment basis for the purposes of making certain operating decisions and assessing financial performance. The CEO uses internal financial reports that provide segment revenues and operating income, excluding stock-based compensation expense, amortization expense, depreciation expense, research and development expense and certain corporate sales, marketing, general and administrative expenses. Currently, the CEO believes that the exclusion of these costs allows for a better understanding of the operating performance of the operating units and management of other operating expenses and cash needs. The CEO does not review any segment balance sheet information. Summarized reportable segment financial results, were as follows: Years ended December 31, (dollars in thousands) 2016 2015 2014 Revenue by segment: GMBU $ 383,319 $ 313,935 $ 270,637 ECBU 302,968 279,897 245,119 IBU 42,539 41,997 47,068 Other (1) 1,989 2,111 1,597 Total revenue $ 730,815 $ 637,940 $ 564,421 Segment operating income (2) : GMBU $ 185,539 $ 156,876 $ 139,310 ECBU 154,415 137,162 121,285 IBU 4,014 5,404 4,291 Other (1) (106 ) (120 ) 1,585 343,862 299,322 266,471 Less: Corporate unallocated costs (3) (207,026 ) (195,146 ) (176,614 ) Stock-based compensation costs (32,638 ) (25,246 ) (17,345 ) Amortization expense (42,398 ) (32,218 ) (26,148 ) Interest expense (10,583 ) (8,073 ) (6,011 ) Other expense, net (291 ) (1,687 ) (1,119 ) Income before provision for income taxes $ 50,926 $ 36,952 $ 39,234 (1) Other includes revenue and the related costs from the sale of solutions and services not directly attributable to a reportable segment. (2) Segment operating income includes direct, controllable costs related to the sale of solutions and services by the reportable segment. (3) Corporate unallocated costs include research and development, depreciation expense, and certain corporate sales, marketing, general and administrative expenses. Revenue by solution and service group for each of our reportable segments was as follows: Years ended December 31, (dollars in thousands) 2016 2015 2014 GMBU revenue: Subscriptions $ 238,177 $ 167,010 $ 125,223 Maintenance 77,068 83,974 86,840 Services 62,884 56,294 48,814 License fees and other 5,190 6,657 9,760 Total GMBU revenue $ 383,319 $ 313,935 $ 270,637 ECBU revenue: Subscriptions $ 171,279 $ 147,719 $ 121,484 Maintenance 57,290 56,196 45,069 Services 67,875 66,741 67,756 License fees and other 6,524 9,241 10,810 Total ECBU revenue $ 302,968 $ 279,897 $ 245,119 IBU revenue: Subscriptions $ 19,363 $ 16,885 $ 16,703 Maintenance 12,588 13,631 15,509 Services 8,931 9,943 11,801 License fees and other 1,657 1,538 3,055 Total IBU revenue $ 42,539 $ 41,997 $ 47,068 Other revenue: Subscriptions $ 168 $ 145 $ 25 Maintenance — — — Services — — — License fees and other 1,821 1,966 1,572 Total Other revenue $ 1,989 $ 2,111 $ 1,597 Total consolidated revenue $ 730,815 $ 637,940 $ 564,421 We generate a portion of our revenue from foreign operations. The following table presents revenue by geographic region based on country of invoice origin and identifiable, long-lived assets by geographic region based on the location of the assets. (dollars in thousands) United States Total Foreign Total Revenue from external customers: 2016 $ 660,339 $ 70,476 $ 730,815 2015 570,519 67,421 637,940 2014 491,731 72,690 564,421 Property and equipment: December 31, 2016 $ 47,663 $ 2,606 $ 50,269 December 31, 2015 49,682 2,969 52,651 It is impracticable for us to identify our total assets by segment. |
Quarterly Results
Quarterly Results | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Results | 17. Quarterly Results (Unaudited) (dollars in thousands, except per share data) December 31, September 30, June 30, March 31, Total revenue $ 198,305 $ 183,063 $ 180,191 $ 169,256 Gross profit 105,903 99,746 96,579 89,367 Income from operations 24,024 13,540 13,624 10,612 Income before provision for income taxes 21,372 10,884 10,838 7,832 Net income 17,284 8,934 9,060 6,237 Earnings per share Basic $ 0.37 $ 0.19 $ 0.20 $ 0.14 Diluted 0.36 0.19 0.19 0.13 (dollars in thousands, except per share data) December 31, September 30, June 30, March 31, Total revenue $ 175,877 $ 158,811 $ 156,259 $ 146,993 Gross profit 90,661 84,638 82,829 75,181 Income from operations 10,271 13,968 14,461 8,012 Income before provision for income taxes 7,255 12,344 11,314 6,039 Net income 6,411 7,911 7,042 4,285 Earnings per share Basic $ 0.14 $ 0.17 $ 0.15 $ 0.09 Diluted 0.14 0.17 0.15 0.09 Note: The individual amounts for each quarter may not sum to full year totals due to rounding. The results of operations of acquired companies are included in the consolidated results of operations from the date of their respective acquisition as described in Note 3 of these consolidated financial statements. In addition, we completed the sale of a business in 2015 as discussed in Note 18 of these consolidated financial statements. Our early adoption of ASU 2016-09 impacted the 2016 fiscal year amounts previously reported for both the three months ended March 31, 2016 and June 30, 2016. See Note 2 to these consolidated financial statements for a detailed discussion of ASU 2016-09 and its effects upon adoption. |
Disposition of Business
Disposition of Business | 12 Months Ended |
Dec. 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposition of Business | 18. Disposition of Business On May 18, 2015, we completed the sale of RLC Customer Technology B.V. ("RLC"), a formerly wholly-owned entity based in the Netherlands, to a private software company by selling all of the issued and outstanding stock of RLC in exchange for $0.4 million in gross cash proceeds. We incurred an insignificant amount of legal costs associated with the disposition of this business. As part of the disposition, we derecognized $1.4 million of goodwill related to RLC. As a result of this disposition, we also recognized an insignificant foreign currency translation loss in our consolidated statement of comprehensive income. Overall, this transaction, including costs associated with the disposition and the recognition of an insignificant foreign currency translation gain, resulted in a $2.0 million loss, which was recorded in loss on sale of business in our consolidated statements of comprehensive income for the year ended December 31, 2015. The disposition of RLC did not qualify for reporting as a discontinued operation since the transaction did not represent a strategic shift in our operations. The following table presents the carrying amounts of RLC's assets and liabilities immediately preceding the disposition on May 18, 2015, which are excluded from our consolidated balance sheets as of December 31, 2016 and 2015. (in thousands) Cash and cash equivalents $ 952 Accounts receivable, net of allowance 132 Prepaid expenses and other assets 38 Property and equipment, net 31 Deferred tax asset 6 Goodwill 1,374 Intangible assets, net 289 Total assets held-for-sale $ 2,822 Trade accounts payable $ 82 Accrued expenses and other liabilities 181 Deferred revenue 490 Deferred tax liability 90 Total liabilities held-for-sale $ 843 |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Policy) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). |
Basis of consolidation | Basis of consolidation The consolidated financial statements include the accounts of Blackbaud, Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Use of estimates | Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. On an ongoing basis, we reconsider and evaluate our estimates and assumptions, including those that impact revenue recognition, long-lived and intangible assets including goodwill, income taxes, business combinations, stock-based compensation, capitalization of software development costs, our allowances for sales returns and doubtful accounts, deferred sales commissions and professional services costs, valuation of derivative instruments and loss contingencies. Changes in the facts or circumstances underlying these estimates could result in material changes and actual results could materially differ from these estimates. |
Revenue recognition | Revenue recognition Our revenue is primarily generated from the following sources: (i) charging for the use of our software solutions in cloud-based and hosted environments; (ii) providing software maintenance and support services; (iii) providing professional services including implementation, training, consulting, analytic, hosting and other services; (iv) providing transaction and payment processing services; and (v) selling perpetual licenses of our software solutions. We commence revenue recognition when all of the following conditions are met: • Persuasive evidence of an arrangement exists; • The solutions or services have been or are being provided to the customer; • The fee is fixed or determinable; and • Collection of the resulting receivable is probable. Determining whether and when these criteria have been met can require significant judgment and estimates. We deem acceptance of a contract to be evidence of an arrangement. Delivery of our services occurs when the services have been performed. Delivery of our solutions occurs when the solution is shipped or made available to the customers. Our typical arrangements do not include customer acceptance provisions; however, if acceptance provisions are provided, delivery is deemed to occur upon acceptance. We consider the fee to be fixed or determinable unless the fee is subject to refund or adjustment or is not payable within our standard payment terms. Payment terms greater than 90 days are considered to be beyond our customary payment terms. Collection is deemed probable if we expect that the customer will be able to pay amounts under the arrangement as they become due. If we determine that collection is not probable, we defer revenue recognition until collection. Revenue is recognized net of actual and estimated sales returns and allowances. We follow guidance provided in ASC 605-45, Principal Agent Considerations , which states that determining whether a company should recognize revenue based on the gross amount billed to a customer or the net amount retained is a matter of judgment that depends on the facts and circumstances of the arrangement and that certain factors should be considered in the evaluation. Subscriptions We provide software solutions to customers which are available for use in cloud-based subscription arrangements without licensing perpetual rights to the software (“cloud-based solutions”). Revenue from cloud-based solutions is recognized ratably beginning on the activation date over the term of the agreement, which generally ranges from one to three years. Any revenue related to upfront activation or set-up fees is deferred and recognized ratably over the estimated period that the customer benefits from the related cloud-based solution. Direct and incremental costs related to upfront activation or set-up activities for cloud-based solutions are capitalized until the cloud-based solution is deployed and in use, and then expensed ratably over the estimated period that the customer benefits from the related cloud-based solution. We provide hosting services to customers who have purchased perpetual rights to certain of our software solutions (“hosting services”). Revenue from hosting services, online training programs as well as subscription-based analytic services such as data enrichment and data management services, is recognized ratably beginning on the activation date over the term of the agreement, which generally ranges from one to three years. Any related set-up fees are recognized ratably over the estimated period that the customer benefits from the related hosting service. The estimated period of benefit is evaluated on an annual basis using historical customer retention information by solution or service. For arrangements that have multiple elements and do not include software licenses, we allocate arrangement consideration at the inception of the arrangement to those elements that qualify as separate units of accounting. The arrangement consideration is allocated to the separate units of accounting based on relative selling price method in accordance with the selling price hierarchy, which includes: (i) vendor specific objective evidence (“VSOE”) of fair value if available; (ii) third-party evidence (“TPE”) if VSOE is not available; and (iii) best estimate of selling price (“BESP”) if neither VSOE nor TPE is available. In general, we use VSOE to allocate the selling price to subscription and service deliverables. We offer certain payment processing services with the assistance of third-party vendors. In general, when we are the principal in a transaction based on the predominant weighting of factors identified in ASC 605-45, we record the revenue and related costs on a gross basis. Otherwise, we net the cost of revenue associated with the service against the gross amount billed to the customer and record the net amount as revenue. Revenue from transaction processing services is recognized when the service is provided and the amounts are determinable. Revenue directly associated with processing donations for customers are included in subscriptions revenue. Maintenance We recognize revenue from maintenance services ratably over the term of the arrangement, generally one year at contract inception with annual renewals thereafter. Maintenance contracts are at rates that vary according to the level of the maintenance program associated with the software solution and are generally renewable annually. Maintenance contracts may also include the right to unspecified solution upgrades on an if-and-when available basis. Certain incremental support services are sold in prepaid units of time and recognized as revenue upon their usage. Services We generally bill consulting, installation and implementation services based on hourly rates plus reimbursable travel-related expenses. Revenue is recognized for these services over the period the services are delivered. We recognize analytic services revenue from donor prospect research engagements, the sale of lists of potential donors, benchmarking studies and data modeling service engagements upon delivery. In arrangements where we provide customers the right to updated information during the contract period, revenue is recognized ratably over the contract period. We sell fixed-rate programs, which permit customers to attend unlimited training over a specified contract period, typically one year, subject to certain restrictions, and revenue in those cases is recognized ratably over the contract period. Additionally, we sell training at a fixed rate for each specific class at a per attendee price or at a packaged price for several attendees, and recognize the related revenue upon the customer attending and completing training. License fees We sell perpetual software licenses with maintenance, varying levels of professional services and, in certain instances, with hosting services. We allocate revenue to each of the elements in these arrangements using the residual method under which we first allocate revenue to the undelivered elements, typically the non-software license components, based on VSOE of fair value of the various elements. We determine VSOE of fair value of the various elements using different methods. VSOE of fair value for maintenance services associated with software licenses is based upon renewal rates stated in the arrangements with customers, which demonstrate a consistent relationship of maintenance pricing as a percentage of the contractual license fee. VSOE of fair value of professional services and other solutions and services is based on the average selling price of these same solutions and services to other customers when sold on a stand-alone basis. Any remaining revenue is allocated to the delivered elements, which is normally the software license in the arrangement. In general, revenue is recognized for software licenses upon delivery to our customers. When a software license is sold with software customization services, generally the services are to provide the customer assistance in creating special reports and other enhancements that will improve operational efficiency and/or help to support business process improvements. These services are generally not essential to the functionality of the software and the related revenues are recognized either as the services are delivered or upon completion. However, when software customization services are considered essential to the functionality of the software, we recognize revenue for both the software license and the services using the percentage-of-completion method. Deferred revenue To the extent that our customers are billed for the above described solutions and services in advance of delivery, we record such amounts in deferred revenue. Generally, our subscription and maintenance customers are billed one year in advance. |
Fair value measurements | Fair value measurements We measure certain financial assets and liabilities at fair value on a recurring basis, including derivative instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. An active market is defined as a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. We use a three-tier fair value hierarchy to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows: • Level 1 - Quoted prices for identical assets or liabilities in active markets; • Level 2 - Quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and • Level 3 - Valuations derived from valuation techniques in which one or more significant inputs are unobservable. Our financial assets and liabilities are classified in their entirety within the hierarchy based on the lowest level of input that is significant to fair value measurement. Changes to a financial asset's or liability's level within the fair value hierarchy are determined as of the end of a reporting period. All methods of assessing fair value result in a general approximation of value, and such value may never actually be realized. |
Derivative instruments | Derivative instruments We use derivative instruments to manage interest rate risk. We view derivative instruments as risk management tools and do not use them for trading or speculative purposes. Our policy requires that derivatives used for hedging purposes be designated and effective as a hedge of the identified risk exposure at the inception of the contract. Accordingly, changes in fair value of the derivative contract must be highly correlated with changes in the fair value of the underlying hedged item at inception of the hedge and over the life of the hedge contract. We record all derivative instruments on our consolidated balance sheets at fair value. If the derivative is designated as a cash flow hedge, the effective portions of the changes in fair value of the derivative are recorded in other comprehensive income and reclassified to earnings in a manner that matches the timing of the earnings impact of the hedged transactions. Ineffective portions of the changes in the fair value of cash flow hedges are recognized currently in earnings. |
Sales taxes | Sales taxes We present sales taxes and other taxes collected from customers and remitted to governmental authorities on a net basis and, as such, exclude them from revenues. |
Shipping and handling | Shipping and handling We expense shipping and handling costs as incurred and include them in cost of license fees and other revenue. The reimbursement of these costs by our customers is included in license fees and other revenue. |
Cash and cash equivalents | Cash and cash equivalents We consider all highly liquid investments purchased with an original maturity of three months or less and cash items in transit to be cash equivalents. |
Restricted cash due to customers; due to customers | Restricted cash due to customers; Due to customers Restricted cash due to customers consists of monies collected by us and payable to our customers, net of the associated transaction fees earned. Monies associated with amounts due to customers are segregated in a separate bank account and used exclusively for the payment of amounts due to customers. This usage restriction is either legally or internally imposed and reflects our intention with regard to such deposits. |
Concentration of credit risk | Concentration of credit risk Financial instruments that potentially subject us to concentrations of credit risk consist of cash and cash equivalents, restricted cash due to customers and accounts receivable. Our cash and cash equivalents and restricted cash due to customers are placed with high credit-quality financial institutions. Our accounts receivable is derived from sales to customers who primarily operate in the nonprofit sector. With respect to accounts receivable, we perform ongoing evaluations of our customers and maintain an allowance for doubtful accounts based on historical experience and our expectations of future losses. |
Property and equipment | Property and equipment We record property and equipment assets at cost and depreciate them over their estimated useful lives using the straight-line method. Leasehold improvements are depreciated over the lesser of the term of the lease or the estimated useful life of the asset. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is credited or charged to earnings. Repair and maintenance costs are expensed as incurred. Construction-in-progress represents purchases of computer software and hardware associated with new internal system implementation projects which had not been placed in service at the respective balance sheet dates. We transferred these assets to the applicable property category on the date they are placed in service. |
Business combinations | Business combinations We are required to allocate the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed at the acquisition date based upon their estimated fair values. Goodwill as of the acquisition date represents the excess of the purchase consideration of an acquired business over the fair value of the underlying net tangible and intangible assets acquired and liabilities assumed. This allocation and valuation require management to make significant estimates and assumptions, especially with respect to long-lived and intangible assets. Critical estimates in valuing intangible assets include, but are not limited to, estimates about: future expected cash flows from customer contracts, proprietary technology and non-compete agreements; the acquired company's brand awareness and market position, assumptions about the period of time the brand will continue to be valuable; as well as expected costs to develop any in-process research and development into commercially viable solutions and estimated cash flows from the projects when completed, and discount rates. Our estimates of fair value are based upon assumptions we believe to be reasonable, but which are inherently uncertain and unpredictable, and unanticipated events and changes in circumstances may occur. |
Goodwill | Goodwill Goodwill represents the purchase price in excess of the net amount assigned to assets acquired and liabilities assumed by us in a business combination. Goodwill is allocated to reporting units and tested annually for impairment. Our reporting units are our three reportable segments as described in Note 16 of these consolidated financial statements. We will also test goodwill for impairment between annual impairment tests if indicators of potential impairment exist. The quantitative impairment test is a two-step process that first compares the fair values of the reporting units with their respective carrying amounts. If the carrying amount of a reporting unit exceeds its fair value, a potential impairment is indicated, and we then perform the second step to determine the amount of any impairment loss by comparing the implied fair value of the affected reporting unit's goodwill with the carrying amount of its goodwill. If the carrying amount of the affected reporting unit's goodwill exceeds the implied fair value of its goodwill, an impairment loss is recognized in an amount equal to that excess. In each of 2016 and 2015 , we performed the quantitative impairment test which indicated that the estimated fair values of the reporting units significantly exceeded their respective carrying values; therefore, the second step of the impairment test was not required to be performed. In 2014 , we performed the optional qualitative assessment of the goodwill assigned to each of our reporting units. When a qualitative assessment is performed, we first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Significant judgment is required in the assessment of qualitative factors including but not limited to an evaluation of macroeconomic conditions as they relate to our business, industry and market trends, as well as the overall future financial performance of our reporting units and future opportunities in the markets in which they operate. To the extent the qualitative factors indicate that there is more than 50% likelihood that the fair value is less than the carrying amount, we compare the fair value of the reporting unit with its carrying amount. If the carrying amount exceeds its fair value, impairment is indicated and we will recognize an impairment loss in an amount equal to the difference. As a result of our 2014 qualitative assessment of goodwill assigned to each of our reporting units, we concluded it was not more likely than not that the fair value of each reporting unit was less than its carrying value, respectively. |
Intangible assets | We amortize finite-lived intangible assets over their estimated useful lives as follows. Basis of amortization Amortization period (in years) Customer relationships Straight-line and accelerated (1) 8-17 Marketing assets Straight-line 3-9 Acquired software and technology Straight-line and accelerated (2) 5-10 Non-compete agreements Straight-line 3-5 Database Straight-line 8 (1) Certain of the customer relationships are amortized on an accelerated basis. (2) Certain of the acquired software and technology assets are amortized on an accelerated basis. Indefinite-lived intangible assets consist of trade names. We evaluate the estimated useful lives and the potential for impairment of finite and indefinite-lived intangible assets on an annual basis, or more frequently if events or circumstances indicate revised estimates of useful lives may be appropriate or that the carrying amount may not be recoverable. If the carrying amount is no longer recoverable based upon the undiscounted cash flows of the asset, the amount of impairment is the difference between the carrying amount and the fair value of the asset. |
Deferred financing costs | Deferred financing costs Deferred financing costs included in other assets represent the direct third-party costs of entering into the revolving (line-of-credit) portion of our credit facility in February 2014 and portions of the unamortized deferred financing costs from prior facilities. These costs are amortized ratably over the term of the credit facility as interest expense. |
Stock-based compensation | Stock-based compensation We measure stock-based compensation cost at the grant date based on the fair value of the award and recognize it as expense over the requisite service period, which is the vesting period. We determine the fair value of stock options and stock appreciation rights using a Black-Scholes option pricing model, which requires us to use significant judgment to make estimates regarding the life of the award, volatility of our stock price, the risk-free interest rate and the dividend yield of our stock over the life of the award. We determine the fair value of awards that contain market conditions using a Monte Carlo simulation model. Changes to these estimates would result in different fair values of awards. As discussed below, we now recognize the effect of awards for which the requisite service period is not rendered when the award is forfeited (that is, recognize the effect of forfeitures in compensation cost when they occur). Previously recognized compensation cost for an award is reversed in the period that the award is forfeited. Income tax benefits resulting from the vesting and exercise of stock-based compensation awards are recognized in the period the unit or award is vested or option or right is exercised to the extent expense has been recognized. |
Income taxes | Income taxes We make estimates and judgments in accounting for income taxes. The calculation of the income tax provision requires estimates due to transactions, credits and calculations where the ultimate tax determination is uncertain. Uncertainties arise as a consequence of the actual source of taxable income between domestic and foreign locations, the outcome of tax audits and the ultimate utilization of tax credits. To the extent actual results differ from estimated amounts recorded, such differences will impact the income tax provision in the period in which the determination is made. We make estimates in determining tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expense for tax and financial statement purposes. We record valuation allowances to reduce our deferred tax assets to the amount expected to be realized. In assessing the adequacy of a recorded valuation allowance significant judgment is required. We consider all positive and negative evidence and a variety of factors including the scheduled reversal of deferred tax liabilities, historical and projected future taxable income, and prudent and feasible tax planning strategies. If we determine there is less than a 50% likelihood that we will be able to use a deferred tax asset in the future in excess of its net carrying value, then an adjustment to the deferred tax asset valuation allowance is made to increase income tax expense, thereby reducing net income in the period such determination was made. We measure and recognize uncertain tax positions. To recognize such positions, we must first determine if it is more likely than not that the position will be sustained upon audit. We must then measure the benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement. Significant judgment is required in the identification and measurement of uncertain tax positions. |
Foreign currency | Foreign currency Net assets recorded in a foreign currency are translated at the exchange rate on the balance sheet date. Revenue and expense items are translated using an average of monthly exchange rates. The resulting translation adjustments are recorded in accumulated other comprehensive income. Gains and losses resulting from foreign currency transactions denominated in currency other than the functional currency are recorded at the approximate rate of exchange at the transaction date in other expense, net. |
Research and development | Research and development Research and development costs are expensed as incurred. These costs include human resource costs, stock-based compensation expense, third-party contractor expenses, software development tools and certain other expenses related to researching and developing new solutions, and allocated depreciation, facilities and IT support costs. |
Software development costs, software for internal use | Software development costs We incur certain costs associated with the development of internal-use software, which are primarily related to activities performed to develop our cloud-based solutions. Internal and external costs incurred in the preliminary project stage of internal-use software development are expensed as incurred. Once the software being developed has reached the application development stage, qualifying internal costs including payroll and payroll-related costs of employees who are directly associated with and devote time to the software project as well as external direct costs of materials and services are capitalized. Capitalization ceases at the point at which the developed software is substantially complete and ready for its intended use, which is typically upon completion of all substantial testing. Qualifying costs capitalized during the application development stage include those related to specific upgrades and enhancements when it is probable that those costs incurred will result in additional functionality. Overhead costs, including general and administrative costs, as well as maintenance, training and all other costs associated with post-implementation stage activities are expensed as incurred. In addition, internal costs that cannot be reasonably separated between maintenance and relatively minor upgrades and enhancements are expensed as incurred. |
Software development costs, software to be sold | Historically, we have also incurred and capitalized costs in connection with the development of certain of our software solutions licensed to customers on a perpetual basis, which are accounted for as costs of software to be sold, leased or otherwise marketed; however, costs capitalized related to those solutions were insignificant as of December 31, 2016 and 2015 . Qualifying capitalized software development costs are amortized on a straight line basis over the software asset's estimated useful life, which is generally three to seven years. We evaluate the useful lives of these assets on an annual basis and test for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. |
Sales returns and allowance for doubtful accounts | Sales returns and allowance for doubtful accounts We maintain a reserve for returns and credits which is estimated based on several factors including historical experience, known credits yet to be issued, the aging of customer accounts and the nature of service level commitments. A considerable amount of judgment is required in assessing these factors. Provisions for sales returns and credits are charged against the related revenue items. |
Accounts receivable | Accounts receivable are recorded at original invoice amounts less an allowance for doubtful accounts, an amount we estimate to be sufficient to provide adequate protection against losses resulting from extending credit to our customers. In judging the adequacy of the allowance for doubtful accounts, we consider multiple factors including historical bad debt experience, the general economic environment and the aging of our receivables. A considerable amount of judgment is required in assessing these factors and if any receivables were to deteriorate, an additional provision for doubtful accounts could be required. Accounts are written off after all means of collection are exhausted and recovery is considered remote. Provisions for doubtful accounts are recorded in general and administrative expense. |
Sales commissions | Sales commissions We pay sales commissions at the time contracts with customers are signed or shortly thereafter, depending on the size and duration of the sales contract. To the extent that these commissions relate to revenue not yet recognized, the amounts are recorded as deferred sales commission costs. Subsequently, the commissions are recognized as sales, marketing and customer success expense as the revenue is recognized. |
Advertising costs | Advertising costs We expense advertising costs as incurred |
Restructuring costs | Restructuring costs Restructuring costs include charges for the costs of exit or disposal activities. The liability for costs associated with exit or disposal activities is measured initially at fair value and only recognized when the liability is incurred. |
Impairment of long-lived assets | Impairment of long-lived assets We review long-lived assets for impairment when events change or circumstances indicate the carrying amount may not be recoverable. Events or changes in circumstances that indicate the carrying amount may not be recoverable include, but are not limited to, a significant decrease in the market value of the business or asset acquired, a significant adverse change in the extent or manner in which the business or asset acquired is used or significant adverse change in the business climate. If such events or changes in circumstances are present, the undiscounted cash flow method is used to determine whether the asset is impaired. |
Contingencies | Contingencies We are subject to the possibility of various loss contingencies in the normal course of business. We record an accrual for a contingency when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Often these issues are subject to substantial uncertainties and, therefore, the probability of loss and the estimation of damages are difficult to ascertain. These assessments can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions that have been deemed reasonable by us. Although we believe we have substantial defenses in these matters, we could incur judgments or enter into settlements of claims that could have a material adverse effect on our consolidated financial position, results of operations or cash flows in any particular period. |
Earnings per share | Earnings per share We compute basic earnings per share by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income available to common stockholders by the weighted average number of common shares and dilutive potential common shares outstanding during the period. Diluted earnings per share reflect the assumed exercise, settlement and vesting of all dilutive securities using the “treasury stock method” except when the effect is anti-dilutive. Potentially dilutive securities consist of shares issuable upon the exercise of stock options and stock appreciation rights and vesting of restricted stock awards and units. |
Recently adopted accounting pronouncements | Recently adopted accounting pronouncements In September 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2015-16, Simplifying the Accounting for Measurement-Period Adjustments ("ASU 2015-16") . ASU 2015-16 requires for acquirers in business combinations to recognize adjustments to provisional amounts identified during measurement periods in the reporting periods in which adjusted amounts are determined. The update requires that acquirers record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization or other income effects, if any, resulting from changes in provisional amounts, calculated as if the accounting had been completed at acquisition date. The update also requires separate income statement presentation or note disclosure of amounts recorded in current period earnings by line item that would have been recorded in previous reporting periods if the provisional amount adjustments had been recognized at the acquisition date (requirements to retrospectively account for those adjustments have been eliminated). The guidance is effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period. Amendments in this update should be applied prospectively to adjustments to provisional amounts that occur after its effective date, with earlier application permitted for financial statements that have not been issued. We adopted ASU 2015-16 on January 1, 2016 and it did not have a material impact on our consolidated financial statements. See Note 3 to these consolidated financial statements for details of any measurement period adjustments. In April 2015, the FASB issued ASU No. 2015-05, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) - Customer's Accounting for Fees Paid in a Cloud Computing Arrangement ("ASU 2015-05") . The amendments in this update provide guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the update specifies that the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. The update further specifies that the customer should account for a cloud computing arrangement as a service contract if the arrangement does not include a software license. An entity can elect to adopt the amendments either (1) prospectively to all arrangements entered into or materially modified after the effective date or (2) retrospectively. We adopted ASU 2015-05 on January 1, 2016 on a prospective basis and it did not have a material impact on our consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest - Simplifying the Presentation of Debt Issuance Costs ("ASU 2015-03") . ASU 2015-03 sets forth a requirement that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs is not affected by the amendments in this update. An entity should apply the new guidance on a retrospective basis, wherein the balance sheet of each individual period presented is adjusted to reflect the period-specific effects of applying the new guidance. We adopted ASU 2015-03 on January 1, 2016 and retrospectively adjusted "other assets" and "debt, net of current portion", which had the effect of reducing each of those respective line items in our December 31, 2015 consolidated balance sheet by approximately $0.5 million . In March 2016, the FASB issued ASU 2016-09, Compensation — Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09") . The new guidance requires excess tax benefits and tax deficiencies to be recorded in the income statement when the awards vest or are settled and provides an accounting policy election to account for forfeitures as they occur. In addition, cash flows related to excess tax benefits will no longer be separately classified as a financing activity apart from other income tax cash flows within operating activities. The standard also allows entities to repurchase more of an employee’s shares for tax withholding purposes without triggering liability accounting and clarifies that all cash payments made on an employee’s behalf for withheld shares should be presented as a financing activity on the statements of cash flows. The new standard is effective for fiscal years beginning after December 15, 2016, with early adoption permitted. We early adopted ASU 2016-09 during the three months ended September 30, 2016, which required us to reflect any adjustments as of January 1, 2016, the beginning of the annual period that includes the interim period of adoption. Upon adoption, we elected to account for forfeitures as they occur using a modified retrospective transition method, which resulted in a cumulative-effect adjustment of $0.9 million to reduce our January 1, 2016 opening retained earnings balance. The following table summarizes the impact to our consolidated balance sheet, including the net amount charged to retained earnings as of January 1, 2016: (dollars in thousands) As of January 1, 2016 Balance sheet location Amount Decrease in deferred tax liabilities related to the cumulative effect adjustment from our election to recognize forfeitures as they occur rather than applying an estimated forfeiture rate Deferred tax liability $ (606 ) Increase in additional paid-in capital resulting from our election to recognize forfeitures as they occur Additional paid-in capital $ 1,540 Net charge to retained earnings for cumulative effect adjustment from adoption of ASU 2016-09 Retained earnings $ (934 ) We elected to retrospectively apply the changes in presentation to the statements of cash flows and no longer classify excess tax benefits as a financing activity, which increased net cash provided by operating activities and reduced net cash provided by financing activities by $5.5 million and $7.5 million for the years ended December 31, 2015 and 2014, respectively. The presentation requirements for cash flows related to employee taxes paid for withheld shares increased net cash provided by operating activities and reduced net cash provided by financing activities for the years ended December 31, 2015 and 2014 by $9.4 million and $7.2 million , respectively, as such cash flows were historically presented within operating cash flows. Adoption of the new standard resulted in the recognition of excess tax benefits in our provision for income taxes rather than paid-in capital of $7.7 million for the year ended December 31, 2016. The adoption of ASU 2016-09 impacted our previously reported quarterly results for fiscal year 2016 as follows: Consolidated balance sheets: (dollars in thousands) As of March 31, 2016 As of June 30, 2016 As Reported As Adjusted As Reported As Adjusted Additional paid-in capital $ 285,376 $ 285,606 $ 294,810 $ 294,019 Retained earnings $ 134,192 $ 134,500 $ 136,338 $ 137,893 Consolidated statements of comprehensive income: (dollars in thousands, except per share amounts) Three months ended March 31, 2016 Three months ended June 30, 2016 As Reported As Adjusted As Reported As Adjusted Income tax provision $ 2,664 $ 1,595 $ 3,598 $ 1,778 Net income $ 4,995 $ 6,237 $ 7,813 $ 9,060 Basic earnings per share $ 0.11 $ 0.14 $ 0.17 $ 0.20 Diluted earnings per share $ 0.11 $ 0.13 $ 0.17 $ 0.19 Diluted weighted average shares outstanding 46,757,458 47,064,164 46,927,626 47,263,844 Consolidated statements of cash flows: (dollars in thousands) Three months ended March 31, 2016 Six months ended June 30, 2016 As Reported As Adjusted As Reported As Adjusted Net cash provided by operating activities $ 104 $ 6,757 $ 37,987 $ 48,753 Net cash provided by (used in) financing activities $ 9,546 $ 2,893 $ (13,852 ) $ (24,618 ) |
Recently issued accounting pronouncements | Recently issued accounting pronouncements In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment ("ASU 2017-04") , which removes the requirement to perform a hypothetical purchase price allocation to measure goodwill impairment. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU 2017-04 is effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted, and applied prospectively. We do not expect ASU 2017-04 to have a material impact on our consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business ("ASU 2017-01") , 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. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. ASU 2017-01 is effective for annual and interim periods beginning after December 15, 2017, with early adoption permitted, and applied prospectively. We are currently evaluating the impact of adopting this standard. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230) - Restricted Cash ("ASU 2016-18") , which requires entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. ASU 2016-18 is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. Early adoption is permitted, including adoption in an interim period, but any adjustments must be reflected as of the beginning of the fiscal year that includes that interim period. The new standard must be adopted retrospectively. We are currently evaluating the impact of this standard on our consolidated statements of cash flows. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) ("ASU 2016-02") . ASU 2016-02 will require lessees to record most leases on their balance sheets but recognize expenses in the income statement in a manner similar to current guidance. The updated guidance also eliminates certain real estate-specific provisions and changes the guidance on sale-leaseback transactions, initial direct costs and lease executory costs for all entities. For lessors, the standard modifies the classification criteria and the accounting for sales-type and direct financing leases. All entities will classify leases to determine how to recognize lease-related revenue and expense. Classification will continue to affect amounts that lessors record on the balance sheet. ASU 2016-02 is effective for annual periods beginning after December 15, 2018, and interim periods within those years. Early adoption is permitted. Upon adoption, entities will be required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply. We expect ASU 2016-02 will impact our consolidated financial statements and are currently evaluating the extent of the impact that implementation of this standard will have on adoption. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"), which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The standard also provides guidance on the recognition of costs related to obtaining customer contracts. ASU 2014-09 will replace most existing revenue recognition guidance in GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. ASU 2014-09 is effective for us beginning in the first quarter of 2018 and we have not selected a transition method. We are currently evaluating the impact that the adoption of ASU 2014-9 will have on our consolidated financial statements and related disclosures. As a result of our evaluation to date, we expect that ASU 2014-09 will generally result in a longer deferral of commissions expense as compared with our current amortization periods for such costs. In addition, we expect changes in the allocation of transactions prices for contracts where we sell perpetual software licenses as ASU 2014-09 requires that the transaction price in a contract be allocated based on relative standalone selling prices of the separate performance obligations. We also anticipate incremental disclosures, including, but not limited to, quantitative reconciliations of opening and closing balances of contract assets and liabilities, the value of remaining performance obligations at the end of each reporting period, and disaggregation of revenue. |
Legal contingencies | Legal contingencies We are subject to legal proceedings and claims that arise in the ordinary course of business. We record an accrual for a contingency when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. |
Summary of Significant Accoun27
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Finite-Lived Intangible Assets | We amortize finite-lived intangible assets over their estimated useful lives as follows. Basis of amortization Amortization period (in years) Customer relationships Straight-line and accelerated (1) 8-17 Marketing assets Straight-line 3-9 Acquired software and technology Straight-line and accelerated (2) 5-10 Non-compete agreements Straight-line 3-5 Database Straight-line 8 (1) Certain of the customer relationships are amortized on an accelerated basis. (2) Certain of the acquired software and technology assets are amortized on an accelerated basis. |
Schedule of Changes in Allowance for Sales Returns and Doubtful Accounts | Below is a summary of the changes in our allowance for sales returns. Years ended December 31, (in thousands) Balance at beginning of year Provision/adjustment Write-off Balance at end of year 2016 $ 4,431 $ 3,060 $ (4,787 ) $ 2,704 2015 4,185 5,834 (5,588 ) 4,431 2014 5,158 4,407 (5,380 ) 4,185 Below is a summary of the changes in our allowance for doubtful accounts. Years ended December 31, (in thousands) Balance at beginning of year Provision/adjustment Write-off Balance at end of year 2016 $ 512 $ 499 $ (424 ) $ 587 2015 354 699 (541 ) 512 2014 455 777 (878 ) 354 |
Schedule of Changes in Deferred Sales Commission Costs | Below is a summary of the changes in our deferred sales commission costs included in prepaid expenses and other current assets. Years ended December 31, (in thousands) Balance at beginning of year Additions Expense Balance at end of year 2016 $ 30,141 $ 37,553 $ (30,235 ) $ 37,459 2015 22,630 55,934 (48,423 ) 30,141 2014 20,088 24,615 (22,073 ) 22,630 |
Adoption of New Standard Impact on Previously Reported Quarterly Results | The following table summarizes the impact to our consolidated balance sheet, including the net amount charged to retained earnings as of January 1, 2016: (dollars in thousands) As of January 1, 2016 Balance sheet location Amount Decrease in deferred tax liabilities related to the cumulative effect adjustment from our election to recognize forfeitures as they occur rather than applying an estimated forfeiture rate Deferred tax liability $ (606 ) Increase in additional paid-in capital resulting from our election to recognize forfeitures as they occur Additional paid-in capital $ 1,540 Net charge to retained earnings for cumulative effect adjustment from adoption of ASU 2016-09 Retained earnings $ (934 ) The adoption of ASU 2016-09 impacted our previously reported quarterly results for fiscal year 2016 as follows: Consolidated balance sheets: (dollars in thousands) As of March 31, 2016 As of June 30, 2016 As Reported As Adjusted As Reported As Adjusted Additional paid-in capital $ 285,376 $ 285,606 $ 294,810 $ 294,019 Retained earnings $ 134,192 $ 134,500 $ 136,338 $ 137,893 Consolidated statements of comprehensive income: (dollars in thousands, except per share amounts) Three months ended March 31, 2016 Three months ended June 30, 2016 As Reported As Adjusted As Reported As Adjusted Income tax provision $ 2,664 $ 1,595 $ 3,598 $ 1,778 Net income $ 4,995 $ 6,237 $ 7,813 $ 9,060 Basic earnings per share $ 0.11 $ 0.14 $ 0.17 $ 0.20 Diluted earnings per share $ 0.11 $ 0.13 $ 0.17 $ 0.19 Diluted weighted average shares outstanding 46,757,458 47,064,164 46,927,626 47,263,844 Consolidated statements of cash flows: (dollars in thousands) Three months ended March 31, 2016 Six months ended June 30, 2016 As Reported As Adjusted As Reported As Adjusted Net cash provided by operating activities $ 104 $ 6,757 $ 37,987 $ 48,753 Net cash provided by (used in) financing activities $ 9,546 $ 2,893 $ (13,852 ) $ (24,618 ) |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Smart Tuition [Member] | |
Business Acquisition [Line Items] | |
Purchase Price Allocation | The following table summarizes the allocation of the purchase price based on the estimated fair value of the assets acquired and the liabilities assumed: (dollars in thousands) Purchase Price Allocation Net working capital, excluding deferred revenue $ 202 Property and equipment 2,457 Deferred revenue (6,500 ) Deferred tax asset 2,637 Intangible assets 97,800 Goodwill 90,376 Total purchase price (1) $ 186,972 (1) The purchase price differs from the net cash outlay of $187.3 million due to certain insignificant acquisition-related expenses included therein. |
Acquired Intangible Assets | The Smart Tuition acquisition resulted in the identification of the following identifiable intangible assets: Intangible assets acquired Weighted average amortization period (in thousands) (in years) Customer relationships $ 72,300 17 Marketing assets 1,200 3 Acquired technology 22,100 7 Non-compete agreements 2,200 5 Total intangible assets $ 97,800 14 |
Pro Forma Financial Information | The following unaudited pro forma condensed combined consolidated results of operations assume that the acquisition of Smart Tuition occurred on January 1, 2014. This unaudited pro forma financial information does not reflect any adjustments for anticipated synergies resulting from the acquisition and should not be relied upon as being indicative of the historical results that would have been attained had the transaction been consummated as of January 1, 2014, or of the results that may occur in the future. The unaudited pro forma information reflects adjustments for amortization of intangibles related to the fair value adjustments of the assets acquired, write-down of acquired deferred revenue to fair value, additional interest expense related to the financing of the transaction and the related tax effects of the adjustments. Years ended December 31, (dollars in thousands, except per share amounts) 2015 2014 Revenue $ 666,131 $ 587,459 Net income $ 26,334 $ 17,952 Basic earnings per share $ 0.58 $ 0.40 Diluted earnings per share $ 0.57 $ 0.39 |
MicroEdge [Member] | |
Business Acquisition [Line Items] | |
Pro Forma Financial Information | The following unaudited pro forma condensed combined consolidated results of operations assume that the acquisition of MicroEdge occurred on January 1, 2013. This unaudited pro forma financial information does not reflect any adjustments for anticipated synergies resulting from the acquisition and should not be relied upon as being indicative of the historical results that would have been attained had the transaction been consummated as of January 1, 2013, or of the results that may occur in the future. The unaudited pro forma information reflects adjustments for amortization of intangibles related to the fair value adjustments of the assets acquired, write-down of acquired deferred revenue to fair value, additional interest expense related to the financing of the transaction and the related tax effects of the adjustments. Year ended December 31, (in thousands, except per share amounts) 2014 Revenue $ 592,930 Net income $ 26,944 Basic earnings per share $ 0.60 Diluted earnings per share $ 0.59 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share: Years ended December 31, (dollars in thousands, except per share amounts) 2016 2015 2014 Numerator: Net income $ 41,515 $ 25,649 $ 28,290 Denominator: Weighted average common shares 46,132,389 45,623,854 45,215,138 Add effect of dilutive securities: Stock-based awards 1,184,149 874,850 584,736 Weighted average common shares assuming dilution 47,316,538 46,498,704 45,799,874 Earnings per share: Basic $ 0.90 $ 0.56 $ 0.63 Diluted $ 0.88 $ 0.55 $ 0.62 Anti-dilutive shares excluded from calculations of diluted earnings per share 7,339 18,554 23,159 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Financial assets and liabilities measured at fair value on a recurring basis consisted of the following, as of: Fair value measurement using (dollars in thousands) Level 1 Level 2 Level 3 Total Fair value as of December 31, 2016 Financial assets: Derivative instruments (1) $ — $ 206 $ — $ 206 Total financial assets $ — $ 206 $ — $ 206 Fair value as of December 31, 2016 Financial liabilities: Derivative instruments (1) $ — $ 163 $ — $ 163 Total financial liabilities $ — $ 163 $ — $ 163 Fair value as of December 31, 2015 Financial assets: Derivative instruments (1) $ — $ 406 $ — $ 406 Total financial assets $ — $ 406 $ — $ 406 Fair value as of December 31, 2015 Financial liabilities: Derivative instruments (1) $ — $ 438 $ — $ 438 Total financial liabilities $ — $ 438 $ — $ 438 (1) The fair value of our interest rate swaps was based on model-driven valuations using LIBOR rates, which are observable at commonly quoted intervals. Accordingly, our interest rate swaps are classified within Level 2 of the fair value hierarchy. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property and equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Schedule of Property and Equipment | Property and equipment consisted of the following, as of: Estimated useful life (years) December 31, (dollars in thousands) 2016 2015 Equipment 3 - 5 $ 2,403 $ 3,868 Computer hardware 3 - 5 81,260 77,668 Computer software 3 - 5 31,604 26,457 Construction in progress - 2,972 2,337 Furniture and fixtures 5 - 7 7,989 7,146 Leasehold improvements Lesser of lea se term or 10 years 19,942 17,171 Total property and equipment 146,170 134,647 Less: accumulated depreciation (95,901 ) (81,996 ) Property and equipment, net $ 50,269 $ 52,651 |
Software development [Member] | |
Property, Plant and Equipment [Line Items] | |
Schedule of Property and Equipment | Software development costs consisted of the following, as of: Estimated useful life (years) December 31, (dollars in thousands) 2016 2015 Software development costs 3 - 7 $ 55,126 $ 28,767 Less: accumulated amortization (17,544 ) (9,216 ) Software development costs, net $ 37,582 $ 19,551 |
Goodwill and Other Intangible32
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Change in Goodwill by Reportable Segment | The change in goodwill for each reportable segment (as defined in Note 16 ) during 2016 consisted of the following: (dollars in thousands) ECBU GMBU IBU Total Balance at December 31, 2015 $ 240,494 $ 190,976 $ 4,979 $ 436,449 Additions related to current year business combination 840 1,444 58 2,342 Adjustments related to prior year business combination — (182 ) — (182 ) Effect of foreign currency translation — — (369 ) (369 ) Balance at December 31, 2016 $ 241,334 $ 192,238 $ 4,668 $ 438,240 |
Fair Values Of Intangible Assets Acquired In Various Business Combinations By Class | The table below sets forth the balances of each class of intangible asset and related amortization as of: December 31, (dollars in thousands) 2016 2015 Finite-lived gross carrying amount Customer relationships $ 248,287 $ 247,462 Marketing assets 16,187 16,187 Acquired software and technology 147,269 148,615 Non-compete agreements 3,493 3,402 Database 4,275 4,378 Total finite-lived gross carrying amount 419,511 420,044 Accumulated amortization Customer relationships (77,983 ) (57,748 ) Marketing assets (9,826 ) (7,753 ) Acquired software and technology (74,975 ) (57,548 ) Non-compete agreements (1,553 ) (864 ) Database (4,093 ) (4,061 ) Total accumulated amortization (168,430 ) (127,974 ) Indefinite-lived gross carrying amount Marketing assets 2,595 2,602 Intangible assets, net $ 253,676 $ 294,672 |
Summary of Amortization Expense | The following table summarizes amortization expense of our finite-lived intangible assets: Years ended December 31, (dollars in thousands) 2016 2015 2014 Included in cost of revenue: Cost of subscriptions $ 31,270 $ 23,075 $ 20,239 Cost of maintenance 5,327 4,162 772 Cost of services 2,621 2,382 2,910 Cost of license fees and other 340 368 424 Total included in cost of revenue 39,558 29,987 24,345 Included in operating expenses 2,840 2,231 1,803 Total amortization of intangibles from business combinations $ 42,398 $ 32,218 $ 26,148 |
Future Amortization Expense for Finite-Lived Intangible Assets | The following table outlines the estimated future amortization expense for each of the next five years for our finite-lived intangible assets as of December 31, 2016 : Years ending December 31, (dollars in thousands) Amortization expense 2017 $ 41,711 2018 40,001 2019 36,541 2020 27,975 2021 21,062 Total $ 167,290 |
Consolidated Financial Statem33
Consolidated Financial Statement Details (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Components of Prepaid Expenses and Other Assets | Prepaid expenses and other assets (dollars in thousands) December 31, December 31, Deferred sales commissions $ 37,459 $ 30,141 Prepaid software maintenance 18,130 15,308 Taxes, prepaid and receivable 4,111 9,121 Deferred professional services costs 1,722 3,603 Deferred tax asset 2,379 2,869 Prepaid royalties 1,373 1,767 Other assets 5,664 6,758 Total prepaid expenses and other assets 70,838 69,567 Less: Long-term portion 22,524 20,901 Prepaid expenses and other current assets $ 48,314 $ 48,666 |
Components of Accrued Expenses and Other Liabilities | Accrued expenses and other liabilities (dollars in thousands) December 31, December 31, Accrued bonuses $ 19,217 $ 24,591 Accrued commissions and salaries 9,352 8,391 Taxes payable 3,452 3,923 Deferred rent liabilities 4,110 4,070 Lease incentive obligations 5,604 4,734 Unrecognized tax benefit 3,295 3,147 Customer credit balances 5,148 3,515 Accrued vacation costs 2,214 2,446 Accrued health care costs 1,495 2,356 Other liabilities 8,842 7,911 Total accrued expenses and other liabilities 62,729 65,084 Less: Long-term portion 8,533 7,623 Accrued expenses and other current liabilities $ 54,196 $ 57,461 |
Components of Deferred Revenue | Deferred revenue (dollars in thousands) December 31, December 31, Subscriptions $ 144,606 $ 122,524 Maintenance 76,803 85,901 Services 29,039 28,517 License fees and other 492 393 Total deferred revenue 250,940 237,335 Less: Long-term portion 6,440 7,119 Deferred revenue, current portion $ 244,500 $ 230,216 |
Components of Other Income and Expense | Other expense, net Years ended December 31, (dollars in thousands) 2016 2015 2014 Interest income $ 581 $ 155 $ 59 Loss on sale of business — (1,976 ) — Loss on debt extinguishment and termination of derivative instruments (1) — — (996 ) Other (expense) income, net (872 ) 134 (182 ) Other expense, net $ (291 ) $ (1,687 ) $ (1,119 ) (1) See Notes 9 and 10 to these consolidated financial statements for details of the loss on debt extinguishment and termination of derivative instruments. |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Summary of Debt | The following table summarizes our debt balances and the related weighted average effective interest rates, which includes the effect of interest rate swap agreements. Debt balance at Weighted average effective interest rate at (dollars in thousands) December 31, December 31, December 31, December 31, Credit facility: Revolving credit loans $ 180,900 $ 242,900 2.36 % 2.15 % Term loans 162,969 167,344 2.62 % 2.51 % Total debt 343,869 410,244 2.48 % 2.30 % Less: Unamortized debt discount 1,476 2,157 Less: Debt, current portion 4,375 4,375 2.50 % 2.11 % Debt, net of current portion $ 338,018 $ 403,712 2.48 % 2.30 % |
Annual Maturities Related to Credit Facility | As of December 31, 2016 , the required annual maturities related to the 2014 Credit Facility were as follows: Years ending December 31, (dollars in thousands) Annual maturities 2017 $ 4,375 2018 4,375 2019 335,119 2020 — 2021 — Thereafter — Total required maturities $ 343,869 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair Values of Derivative Instruments | The fair values of our derivative instruments were as follows as of: (dollars in thousands) Balance sheet location December 31, December 31, Derivative instruments designated as hedging instruments: Interest rate swap, long-term portion Other assets $ 206 $ 406 Total derivative instruments designated as hedging instruments $ 206 $ 406 December 31, December 31, Derivative instruments designated as hedging instruments: Interest rate swaps, current portion Accrued expenses and $ — $ 2 Interest rate swaps, long-term portion Other liabilities 163 436 Total derivative instruments designated as hedging instruments $ 163 $ 438 |
Effects of Derivative Instruments in Cash Flow Hedging Relationships | The effects of derivative instruments in cash flow hedging relationships were as follows: Gain (loss) recognized in accumulated other comprehensive loss as of Location of gain (loss) reclassified from accumulated other comprehensive loss into income Gain (loss) reclassified from accumulated other comprehensive loss into income (dollars in thousands) December 31, Year ended Interest rate swaps $ 42 Interest expense $ (1,106 ) December 31, Year ended Interest rate swaps $ (31 ) Interest expense $ (1,569 ) December 31, Year ended Interest rate swaps $ (268 ) Interest expense $ (1,215 ) Interest rate swaps — Loss on debt extinguishment (587 ) Total $ (268 ) $ (1,802 ) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future Minimum Lease Commitments Related to Lease Agreements, Net of Related Lease Incentives | As of December 31, 2016 , the future minimum lease commitments related to lease agreements, net of related lease incentives, were as follows: Years ending December 31, (dollars in thousands) Operating leases (1) 2017 $ 16,085 2018 17,103 2019 16,004 2020 15,461 2021 14,724 Thereafter 95,385 Total minimum lease payments $ 174,762 (1) Our future minimum lease commitments related to operating leases do not include payments related to Phase Two of our New Headquarters Facility, as that option had not been exercised as of December 31, 2016 . |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense | The following summarizes the components of income tax expense: Years ended December 31, (dollars in thousands) 2016 2015 2014 Current taxes: U.S. Federal $ 4,655 $ 5,890 $ 5,757 U.S. State and local 1,670 2,215 2,158 International 53 33 (21 ) Total current taxes 6,378 8,138 7,894 Deferred taxes: U.S. Federal 2,544 2,702 4,725 U.S. State and local 304 585 (1,329 ) International 185 (122 ) (346 ) Total deferred taxes 3,033 3,165 3,050 Total income tax provision $ 9,411 $ 11,303 $ 10,944 |
Schedule of Income Before Provision for Income Taxes | The following summarizes the components of income before provision for income taxes: Years ended December 31, (dollars in thousands) 2016 2015 2014 U.S. $ 49,320 $ 37,523 $ 39,638 International 1,606 (571 ) (404 ) Income before provision for income taxes $ 50,926 $ 36,952 $ 39,234 |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation between the effect of applying the federal statutory rate and the effective income tax rate used to calculate our income tax provision is as follows: Years ended December 31, 2016 2015 2014 Federal statutory rate 35.0 % 35.0 % 35.0 % Effect of: State income taxes, net of federal benefit 4.1 5.7 3.2 Change in state income tax rate applied to deferred tax balances 0.2 2.1 (1.1 ) Fixed assets — (0.1 ) (0.3 ) Unrecognized tax benefit 0.2 (1.1 ) (2.9 ) State credits, net of federal benefit (0.1 ) 6.0 (1.0 ) Change in valuation reserve (primarily state credit reserves) (1.6 ) (8.6 ) 1.3 Federal credits generated (6.2 ) (6.1 ) (4.7 ) Foreign tax rate (0.4 ) (0.7 ) (0.1 ) Acquisition costs 0.1 0.1 0.6 Section 162(m) limitation 1.7 0.1 0.4 Loss from sale of foreign subsidiary — 1.9 — Domestic production activities deduction (1.2 ) (1.8 ) (1.2 ) Stock-based compensation (13.6 ) — — Other 0.3 (1.9 ) (1.3 ) Income tax provision effective rate 18.5 % 30.6 % 27.9 % |
Schedule of Deferred Tax Assets and Liabilities | The significant components of our deferred tax assets and liabilities were as follows: December 31, (dollars in thousands) 2016 2015 Deferred tax assets relating to: Federal and state and foreign net operating loss carryforwards $ 12,906 $ 13,913 Federal, state and foreign tax credits 9,924 10,464 Intangible assets 652 449 Stock-based compensation 11,480 7,848 Accrued bonuses 7,426 9,335 Deferred revenue 5,371 6,049 Allowance for doubtful accounts 1,294 780 Other 6,781 6,593 Total deferred tax assets 55,834 55,431 Deferred tax liabilities relating to: Intangible assets (44,885 ) (49,559 ) Fixed assets (9,200 ) (10,323 ) Other (21,934 ) (12,765 ) Total deferred tax liabilities (76,019 ) (72,647 ) Valuation allowance (6,994 ) (7,911 ) Net deferred tax liability $ (27,179 ) $ (25,127 ) |
Summary of Changes in Deferred Tax Asset Valuation Allowance | The following table illustrates the change in our deferred tax asset valuation allowance: Years ended December 31, Balance at beginning of year Acquisition related change Charges to expense Balance at end of year (dollars in thousands) 2016 $ 7,911 $ — $ (917 ) $ 6,994 2015 11,161 — (3,250 ) 7,911 2014 11,042 — 119 11,161 |
Summary of Changes in Unrecognized Tax Benefits | The following table sets forth the change to our unrecognized tax benefit for the years ended December 31, 2016 , 2015 and 2014 : Years ended December 31, (dollars in thousands) 2016 2015 2014 Balance at December 31, 2015 $ 3,024 $ 3,564 $ 3,698 Increases from prior period positions 23 129 195 Decreases in prior year positions (17 ) (651 ) (102 ) Increases from current period positions 358 257 1,046 Settlements (payments) — (274 ) — Lapse of statute of limitations (243 ) (1 ) (1,273 ) Balance at December 31, 2016 $ 3,145 $ 3,024 $ 3,564 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Awards Outstanding by Each Award Type | The following table sets forth the number of awards outstanding for each award type as of: Outstanding at December 31, Award type 2016 2015 Restricted stock awards 1,178,592 1,096,839 Restricted stock units 465,395 396,198 Stock appreciation rights 469,075 757,203 Stock options 3,502 4,745 |
Summary of Stock-Based Compensation Expense | The following table summarizes stock-based compensation expense: Years ended December 31, (in thousands) 2016 2015 2014 Included in cost of revenue: Cost of subscriptions $ 1,168 $ 1,130 $ 687 Cost of maintenance 508 420 689 Cost of services 1,621 1,944 2,229 Total included in cost of revenue 3,297 3,494 3,605 Included in operating expenses: Sales, marketing and customer success 3,844 2,979 2,147 Research and development 6,467 4,865 3,264 General and administrative 19,030 13,908 8,329 Total included in operating expenses 29,341 21,752 13,740 Total stock-based compensation expense $ 32,638 $ 25,246 $ 17,345 |
Summary of Unvested Restricted Stock Awards, Activity | The following table summarizes our unvested restricted stock awards as of December 31, 2016 , and changes during the year then ended: Restricted stock awards Restricted stock awards Weighted average grant-date fair value Weighted average remaining contractual term (in years) Aggregate intrinsic value (1) (in thousands) Unvested at January 1, 2016 1,096,839 $ 43.28 Granted 574,309 53.59 Vested (375,413 ) 38.70 Forfeited (117,143 ) 46.05 Unvested at December 31, 2016 1,178,592 49.49 8.2 $ 75,430 (1) The intrinsic value is calculated as the market value as of the end of the fiscal period. |
Summary of Unvested Restricted Stock Units, Activity | The following table summarizes our unvested restricted stock units as of December 31, 2016 , and changes during the year then ended: Restricted stock units Restricted stock units Weighted average grant-date fair value Weighted average remaining contractual term (in years) Aggregate intrinsic value (1) (in thousands) Unvested at January 1, 2016 396,198 $ 40.51 Granted 276,499 51.98 Forfeited (33,274 ) 47.20 Expired (3,500 ) 23.13 Vested (170,528 ) 39.04 Unvested at December 31, 2016 465,395 47.51 7.5 $ 29,785 (1) The intrinsic value is calculated as the market value as of the end of the fiscal period. |
Summary of Stock Appreciation Rights, Activity | The following table summarizes our outstanding SARs as of December 31, 2016 , and changes during the year then ended: Stock appreciation rights Stock appreciation rights Weighted average exercise price Weighted average remaining contractual term (in years) Aggregate intrinsic value (1) (in thousands) Outstanding at January 1, 2016 757,203 $ 24.27 Exercised (284,424 ) 25.29 Forfeited (3,704 ) 27.92 Outstanding at December 31, 2016 469,075 23.63 2.6 $ 18,938 Unvested and expected to vest at December 31, 2016 8,610 29.17 3.3 300 Vested and exercisable at December 31, 2016 460,465 23.52 2.6 18,638 (1) The intrinsic value is calculated as the difference between the market value as of the end of the fiscal period and the exercise price of the shares. |
Summary of Stock Options, Activity | The following table summarizes our outstanding stock options as of December 31, 2016 , and changes during the year then ended: Stock options Stock options Weighted average exercise price Weighted average remaining contractual term (in years) Aggregate intrinsic value (1) (in thousands) Outstanding at January 1, 2016 4,745 $ 11.60 Exercised (1,243 ) 12.61 Outstanding at December 31, 2016 3,502 11.25 1.8 $ 185 Vested and exercisable at December 31, 2016 3,502 11.25 1.8 185 (1) The intrinsic value is calculated as the difference between the market value as of the end of the fiscal period and the exercise price of the shares. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Changes in accumulated other comprehensive loss by component | The changes in accumulated other comprehensive loss by component, consisted of the following: Years ended December 31, (in thousands) 2016 2015 2014 Accumulated other comprehensive loss, beginning of period $ (825 ) $ (1,032 ) $ (1,385 ) By component: Gains and losses on cash flow hedges: Accumulated other comprehensive loss balance, beginning of period $ (19 ) $ (164 ) $ (256 ) Other comprehensive income (loss) before reclassifications, net of tax effects of $406, $514 and $644 (626 ) (818 ) (999 ) Amounts reclassified from accumulated other comprehensive loss to interest expense 1,106 1,569 1,215 Amounts reclassified from accumulated other comprehensive loss to loss on debt extinguishment and termination of derivative instruments — — 587 Tax benefit included in provision for income taxes (436 ) (606 ) (711 ) Total amounts reclassified from accumulated other comprehensive loss 670 963 1,091 Net current-period other comprehensive income 44 145 92 Accumulated other comprehensive income (loss) balance, end of period $ 25 $ (19 ) $ (164 ) Foreign currency translation adjustment: Accumulated other comprehensive loss balance, beginning of period $ (806 ) $ (868 ) $ (1,129 ) Translation adjustments 324 62 261 Accumulated other comprehensive loss balance, end of period (482 ) (806 ) (868 ) Accumulated other comprehensive loss, end of period $ (457 ) $ (825 ) $ (1,032 ) |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Reportable Segment Financial Results | Summarized reportable segment financial results, were as follows: Years ended December 31, (dollars in thousands) 2016 2015 2014 Revenue by segment: GMBU $ 383,319 $ 313,935 $ 270,637 ECBU 302,968 279,897 245,119 IBU 42,539 41,997 47,068 Other (1) 1,989 2,111 1,597 Total revenue $ 730,815 $ 637,940 $ 564,421 Segment operating income (2) : GMBU $ 185,539 $ 156,876 $ 139,310 ECBU 154,415 137,162 121,285 IBU 4,014 5,404 4,291 Other (1) (106 ) (120 ) 1,585 343,862 299,322 266,471 Less: Corporate unallocated costs (3) (207,026 ) (195,146 ) (176,614 ) Stock-based compensation costs (32,638 ) (25,246 ) (17,345 ) Amortization expense (42,398 ) (32,218 ) (26,148 ) Interest expense (10,583 ) (8,073 ) (6,011 ) Other expense, net (291 ) (1,687 ) (1,119 ) Income before provision for income taxes $ 50,926 $ 36,952 $ 39,234 (1) Other includes revenue and the related costs from the sale of solutions and services not directly attributable to a reportable segment. (2) Segment operating income includes direct, controllable costs related to the sale of solutions and services by the reportable segment. (3) Corporate unallocated costs include research and development, depreciation expense, and certain corporate sales, marketing, general and administrative expenses. |
Revenue by Product and Service Group by Reportable Segment | Revenue by solution and service group for each of our reportable segments was as follows: Years ended December 31, (dollars in thousands) 2016 2015 2014 GMBU revenue: Subscriptions $ 238,177 $ 167,010 $ 125,223 Maintenance 77,068 83,974 86,840 Services 62,884 56,294 48,814 License fees and other 5,190 6,657 9,760 Total GMBU revenue $ 383,319 $ 313,935 $ 270,637 ECBU revenue: Subscriptions $ 171,279 $ 147,719 $ 121,484 Maintenance 57,290 56,196 45,069 Services 67,875 66,741 67,756 License fees and other 6,524 9,241 10,810 Total ECBU revenue $ 302,968 $ 279,897 $ 245,119 IBU revenue: Subscriptions $ 19,363 $ 16,885 $ 16,703 Maintenance 12,588 13,631 15,509 Services 8,931 9,943 11,801 License fees and other 1,657 1,538 3,055 Total IBU revenue $ 42,539 $ 41,997 $ 47,068 Other revenue: Subscriptions $ 168 $ 145 $ 25 Maintenance — — — Services — — — License fees and other 1,821 1,966 1,572 Total Other revenue $ 1,989 $ 2,111 $ 1,597 Total consolidated revenue $ 730,815 $ 637,940 $ 564,421 |
Revenue And Long-Lived Assets By Geographic Region | The following table presents revenue by geographic region based on country of invoice origin and identifiable, long-lived assets by geographic region based on the location of the assets. (dollars in thousands) United States Total Foreign Total Revenue from external customers: 2016 $ 660,339 $ 70,476 $ 730,815 2015 570,519 67,421 637,940 2014 491,731 72,690 564,421 Property and equipment: December 31, 2016 $ 47,663 $ 2,606 $ 50,269 December 31, 2015 49,682 2,969 52,651 |
Quarterly Results (Tables)
Quarterly Results (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | (dollars in thousands, except per share data) December 31, September 30, June 30, March 31, Total revenue $ 198,305 $ 183,063 $ 180,191 $ 169,256 Gross profit 105,903 99,746 96,579 89,367 Income from operations 24,024 13,540 13,624 10,612 Income before provision for income taxes 21,372 10,884 10,838 7,832 Net income 17,284 8,934 9,060 6,237 Earnings per share Basic $ 0.37 $ 0.19 $ 0.20 $ 0.14 Diluted 0.36 0.19 0.19 0.13 (dollars in thousands, except per share data) December 31, September 30, June 30, March 31, Total revenue $ 175,877 $ 158,811 $ 156,259 $ 146,993 Gross profit 90,661 84,638 82,829 75,181 Income from operations 10,271 13,968 14,461 8,012 Income before provision for income taxes 7,255 12,344 11,314 6,039 Net income 6,411 7,911 7,042 4,285 Earnings per share Basic $ 0.14 $ 0.17 $ 0.15 $ 0.09 Diluted 0.14 0.17 0.15 0.09 Note: The individual amounts for each quarter may not sum to full year totals due to rounding. |
Disposition of Business (Tables
Disposition of Business (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
RLC [Member] | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Carrying Amounts of Assets and Liabilities Excluded from Consolidated Balance Sheet | The following table presents the carrying amounts of RLC's assets and liabilities immediately preceding the disposition on May 18, 2015, which are excluded from our consolidated balance sheets as of December 31, 2016 and 2015. (in thousands) Cash and cash equivalents $ 952 Accounts receivable, net of allowance 132 Prepaid expenses and other assets 38 Property and equipment, net 31 Deferred tax asset 6 Goodwill 1,374 Intangible assets, net 289 Total assets held-for-sale $ 2,822 Trade accounts payable $ 82 Accrued expenses and other liabilities 181 Deferred revenue 490 Deferred tax liability 90 Total liabilities held-for-sale $ 843 |
Organization (Details)
Organization (Details) | Dec. 31, 2016Customers |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Approximate number of customers distributed across verticals | 35,000 |
Summary of Significant Accoun44
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2016 | Mar. 31, 2016 | Jun. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Jan. 01, 2016 | |
Significant Accounting Policies [Line Items] | |||||||
Impairment of capitalized software development costs | $ 0 | $ 239 | $ 1,626 | ||||
Advertising costs | 2,300 | 2,300 | 1,600 | ||||
Increase to net cash provided by operating activities | $ 6,757 | $ 48,753 | 153,628 | 129,227 | 116,884 | ||
Income tax provision | $ 1,778 | 1,595 | $ 9,411 | 11,303 | 10,944 | ||
Period to exceed for customary payment terms (days) | 90 days | ||||||
Contract term of the maintenance services (years) | 1 year | ||||||
Contract term of fixed-rate programs (years) | 1 year | ||||||
Customary advanced billing period (years) | 1 year | ||||||
Impairment of goodwill | $ 0 | 0 | 0 | ||||
Impairment of intangible assets (excluding goodwill) | 0 | 0 | 0 | ||||
Impairment of long-lived assets | 0 | 0 | 0 | ||||
Decrease in net cash provided by financing activities | $ (2,893) | $ 24,618 | $ 104,546 | (95,499) | (97,437) | ||
Minimum [Member] | |||||||
Significant Accounting Policies [Line Items] | |||||||
Recognition period of revenue from cloud-based solutions (years) | 1 year | ||||||
Recognition period of revenue from hosting services (years) | 1 year | ||||||
Maximum [Member] | |||||||
Significant Accounting Policies [Line Items] | |||||||
Recognition period of revenue from cloud-based solutions (years) | 3 years | ||||||
Recognition period of revenue from hosting services (years) | 3 years | ||||||
ASU 2015-03 [Member] | |||||||
Significant Accounting Policies [Line Items] | |||||||
New accounting pronouncement, cumulative effect of change on equity or net assets | $ 500 | ||||||
ASU 2016-09 adjustments [Member] | |||||||
Significant Accounting Policies [Line Items] | |||||||
Income tax provision | $ (7,700) | ||||||
ASU 2016-09 adjustments related to excess tax benefits [Member] | |||||||
Significant Accounting Policies [Line Items] | |||||||
Increase to net cash provided by operating activities | 5,500 | 7,500 | |||||
Decrease in net cash provided by financing activities | (5,500) | (7,500) | |||||
ASU 2016-09 adjustments related to employee taxes for withheld shares [Member] | |||||||
Significant Accounting Policies [Line Items] | |||||||
Increase to net cash provided by operating activities | 9,400 | 7,200 | |||||
Decrease in net cash provided by financing activities | $ (9,400) | $ (7,200) | |||||
Retained earnings [Member] | ASU 2016-09 adjustments [Member] | |||||||
Significant Accounting Policies [Line Items] | |||||||
Cumulative effect of a change in accounting principle | $ (900) |
Summary of Significant Accoun45
Summary of Significant Accounting Policies (Finite-Lived Intangible Assets by Major Class) (Details) | 12 Months Ended | |
Dec. 31, 2016 | ||
Customer relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, amortization method | Straight-line and accelerated(1) | [1] |
Customer relationships [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful life | 8 years | |
Customer relationships [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful life | 17 years | |
Marketing assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, amortization method | Straight-line | |
Marketing assets [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful life | 3 years | |
Marketing assets [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful life | 9 years | |
Acquired software and technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, amortization method | Straight-line and accelerated(2) | [2] |
Acquired software and technology | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful life | 5 years | |
Acquired software and technology | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful life | 10 years | |
Non-compete agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, amortization method | Straight-line | |
Non-compete agreements [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful life | 3 years | |
Non-compete agreements [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful life | 5 years | |
Database [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, amortization method | Straight-line | |
Finite-lived intangible assets, useful life | 8 years | |
[1] | Certain of the customer relationships are amortized on an accelerated basis. | |
[2] | Certain of the acquired software and technology assets are amortized on an accelerated basis. |
Summary of Significant Accoun46
Summary of Significant Accounting Policies (Changes in Allowance for Sales Returns and Doubtful Accounts) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Allowance for sales returns [Member] | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at beginning of year | $ 4,431 | $ 4,185 | $ 5,158 |
Provision/adjustment | 3,060 | 5,834 | 4,407 |
Write-off | (4,787) | (5,588) | (5,380) |
Balance at end of year | 2,704 | 4,431 | 4,185 |
Allowance for doubtful accounts [Member] | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at beginning of year | 512 | 354 | 455 |
Provision/adjustment | 499 | 699 | 777 |
Write-off | (424) | (541) | (878) |
Balance at end of year | $ 587 | $ 512 | $ 354 |
Summary of Significant Accoun47
Summary of Significant Accounting Policies (Changes in Deferred Sales Commission Costs) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Deferred sales commissions [Roll Forward] | |||
Balance at beginning of year | $ 30,141 | $ 22,630 | $ 20,088 |
Additions | 37,553 | 55,934 | 24,615 |
Expense | (30,235) | (48,423) | (22,073) |
Balance at end of year | $ 37,459 | $ 30,141 | $ 22,630 |
Summary of Significant Accoun48
Summary of Significant Accounting Policies (Adoption of New Standard Impact on Previously Reported Quarterly Results) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Jan. 01, 2016 | |
Consolidated balance sheets: | |||||||||||||
Deferred tax liability | $ 29,558 | $ 27,996 | $ 29,558 | $ 27,996 | |||||||||
Additional paid-in capital | 310,452 | $ 294,019 | $ 285,606 | 276,340 | $ 294,019 | 310,452 | 276,340 | ||||||
Retained earnings | 152,729 | 137,893 | 134,500 | 134,877 | 137,893 | 152,729 | 134,877 | ||||||
Consolidated statements of comprehensive income: | |||||||||||||
Income tax provision | 1,778 | 1,595 | 9,411 | 11,303 | $ 10,944 | ||||||||
Net income | $ 17,284 | $ 8,934 | $ 9,060 | $ 6,237 | $ 6,411 | $ 7,911 | $ 7,042 | $ 4,285 | $ 41,515 | $ 25,649 | $ 28,290 | ||
Basic earnings per share | $ 0.37 | $ 0.19 | $ 0.20 | $ 0.14 | $ 0.14 | $ 0.17 | $ 0.15 | $ 0.09 | $ 0.90 | $ 0.56 | $ 0.63 | ||
Diluted earnings per share | $ 0.36 | $ 0.19 | $ 0.19 | $ 0.13 | $ 0.14 | $ 0.17 | $ 0.15 | $ 0.09 | $ 0.88 | $ 0.55 | $ 0.62 | ||
Diluted weighted average shares outstanding | 47,263,844 | 47,064,164 | 47,316,538 | 46,498,704 | 45,799,874 | ||||||||
Consolidated statements of cash flows: | |||||||||||||
Net cash provided by operating activities | $ 6,757 | 48,753 | $ 153,628 | $ 129,227 | $ 116,884 | ||||||||
Net cash provided by (used in) financing activities | 2,893 | (24,618) | (104,546) | $ 95,499 | $ 97,437 | ||||||||
Scenario, previously reported [Member] | |||||||||||||
Consolidated balance sheets: | |||||||||||||
Additional paid-in capital | $ 294,810 | 285,376 | 294,810 | ||||||||||
Retained earnings | 136,338 | 134,192 | 136,338 | ||||||||||
Consolidated statements of comprehensive income: | |||||||||||||
Income tax provision | 3,598 | 2,664 | |||||||||||
Net income | $ 7,813 | $ 4,995 | |||||||||||
Basic earnings per share | $ 0.17 | $ 0.11 | |||||||||||
Diluted earnings per share | $ 0.17 | $ 0.11 | |||||||||||
Diluted weighted average shares outstanding | 46,927,626 | 46,757,458 | |||||||||||
Consolidated statements of cash flows: | |||||||||||||
Net cash provided by operating activities | $ 104 | 37,987 | |||||||||||
Net cash provided by (used in) financing activities | $ 9,546 | $ (13,852) | |||||||||||
ASU 2016-09 adjustments [Member] | |||||||||||||
Consolidated balance sheets: | |||||||||||||
Deferred tax liability | $ (606) | ||||||||||||
Additional paid-in capital | 1,540 | ||||||||||||
Retained earnings | $ (934) | ||||||||||||
Consolidated statements of comprehensive income: | |||||||||||||
Income tax provision | $ (7,700) |
Business Combinations (Details)
Business Combinations (Details) - USD ($) $ in Thousands | Jul. 11, 2016 | Oct. 02, 2015 | Oct. 01, 2014 | Jun. 16, 2014 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Business Acquisition [Line Items] | ||||||||||||||||
Goodwill additions related to business combinations | $ 2,342 | |||||||||||||||
Goodwill, purchase accounting adjustments | (182) | |||||||||||||||
Total revenue | $ 198,305 | $ 183,063 | $ 180,191 | $ 169,256 | $ 175,877 | $ 158,811 | $ 156,259 | $ 146,993 | 730,815 | $ 637,940 | $ 564,421 | |||||
Income from operations | $ 24,024 | $ 13,540 | $ 13,624 | 10,612 | $ 10,271 | $ 13,968 | $ 14,461 | $ 8,012 | 61,800 | 46,712 | 46,364 | |||||
ECBU [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Goodwill, purchase accounting adjustments | 0 | |||||||||||||||
Total revenue | 302,968 | 279,897 | 245,119 | |||||||||||||
Income from operations | [1] | 154,415 | 137,162 | 121,285 | ||||||||||||
GMBU [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Goodwill, purchase accounting adjustments | (182) | |||||||||||||||
Total revenue | 383,319 | 313,935 | 270,637 | |||||||||||||
Income from operations | [1] | 185,539 | $ 156,876 | $ 139,310 | ||||||||||||
Attentive.ly [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Total cash consideration paid for the acquisition | $ 3,900 | |||||||||||||||
Goodwill, tax deductible amount | 0 | |||||||||||||||
Attentive.ly [Member] | ECBU [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Goodwill additions related to business combinations | 840 | |||||||||||||||
Attentive.ly [Member] | GMBU [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Goodwill additions related to business combinations | 1,444 | |||||||||||||||
Smart Tuition [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Total cash consideration paid for the acquisition | $ 187,300 | |||||||||||||||
Finite-lived intangible assets acquired | 97,800 | |||||||||||||||
Goodwill, purchase accounting adjustments | $ (500) | |||||||||||||||
Total revenue | $ 39,800 | |||||||||||||||
Estimated fair value of accounts receivable acquired | $ 2,800 | |||||||||||||||
Weighted average amortization period (in years) | 14 years | |||||||||||||||
Smart Tuition [Member] | GMBU [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Goodwill, tax deductible amount | $ 86,300 | |||||||||||||||
MicroEdge [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Total cash consideration paid for the acquisition | $ 159,800 | |||||||||||||||
WhippleHill [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Total cash consideration paid for the acquisition | $ 35,000 | |||||||||||||||
Revolving Credit Facility [Member] | Smart Tuition [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Proceeds from lines of credit | 186,000 | |||||||||||||||
Revolving Credit Facility [Member] | MicroEdge [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Proceeds from lines of credit | $ 140,000 | |||||||||||||||
Acquired technology [Member] | Attentive.ly [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Finite-lived intangible assets acquired | $ 1,300 | |||||||||||||||
Weighted average amortization period (in years) | 5 years | |||||||||||||||
Acquired technology [Member] | Smart Tuition [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Finite-lived intangible assets acquired | $ 22,100 | |||||||||||||||
Weighted average amortization period (in years) | 7 years | |||||||||||||||
[1] | Segment operating income includes direct, controllable costs related to the sale of solutions and services by the reportable segment. |
Business Combinations (Purchase
Business Combinations (Purchase Price Allocation) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Oct. 02, 2015 | |
Business Acquisition [Line Items] | ||||
Goodwill | $ 438,240 | $ 436,449 | ||
Smart Tuition [Member] | ||||
Business Acquisition [Line Items] | ||||
Net working capital, excluding deferred revenue | $ 202 | |||
Property and equipment | 2,457 | |||
Deferred revenue | (6,500) | |||
Deferred tax asset | 2,637 | |||
Intangible assets | 97,800 | |||
Goodwill | 90,376 | |||
Total purchase price | [1] | $ 186,972 | ||
[1] | The purchase price differs from the net cash outlay of $187.3 million due to certain insignificant acquisition-related expenses included therein. |
Business Combinations (Acquired
Business Combinations (Acquired Intangible Assets) (Details) - Smart Tuition [Member] $ in Thousands | Oct. 02, 2015USD ($) |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets acquired | $ 97,800 |
Weighted average amortization period (in years) | 14 years |
Customer relationships [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets acquired | $ 72,300 |
Weighted average amortization period (in years) | 17 years |
Marketing assets [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets acquired | $ 1,200 |
Weighted average amortization period (in years) | 3 years |
Acquired technology [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets acquired | $ 22,100 |
Weighted average amortization period (in years) | 7 years |
Non-compete agreements [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets acquired | $ 2,200 |
Weighted average amortization period (in years) | 5 years |
Business Combinations (Pro Form
Business Combinations (Pro Forma Financial Information) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Smart Tuition [Member] | ||
Business Acquisition [Line Items] | ||
Revenue | $ 666,131 | $ 587,459 |
Net income | $ 26,334 | $ 17,952 |
Basic earnings per share | $ 0.58 | $ 0.40 |
Diluted earnings per share | $ 0.57 | $ 0.39 |
MicroEdge [Member] | ||
Business Acquisition [Line Items] | ||
Revenue | $ 592,930 | |
Net income | $ 26,944 | |
Basic earnings per share | $ 0.60 | |
Diluted earnings per share | $ 0.59 |
Earnings Per Share (Computation
Earnings Per Share (Computation of Basic and Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Earnings Per Share [Abstract] | |||||||||||
Net income | $ 17,284 | $ 8,934 | $ 9,060 | $ 6,237 | $ 6,411 | $ 7,911 | $ 7,042 | $ 4,285 | $ 41,515 | $ 25,649 | $ 28,290 |
Weighted average common shares | 46,132,389 | 45,623,854 | 45,215,138 | ||||||||
Stock-based compensation | 1,184,149 | 874,850 | 584,736 | ||||||||
Weighted average common shares assuming dilution | 47,263,844 | 47,064,164 | 47,316,538 | 46,498,704 | 45,799,874 | ||||||
Earnings (Loss) Per Share, Basic and Diluted [Abstract] | |||||||||||
Basic earnings per share | $ 0.37 | $ 0.19 | $ 0.20 | $ 0.14 | $ 0.14 | $ 0.17 | $ 0.15 | $ 0.09 | $ 0.90 | $ 0.56 | $ 0.63 |
Diluted earnings per share | $ 0.36 | $ 0.19 | $ 0.19 | $ 0.13 | $ 0.14 | $ 0.17 | $ 0.15 | $ 0.09 | $ 0.88 | $ 0.55 | $ 0.62 |
Shares excluded from calculations of diluted earnings per share | 7,339 | 18,554 | 23,159 |
Fair Value Measurements (Assets
Fair Value Measurements (Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) - Fair value measurements, recurring [Member] - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative assets | $ 206 | $ 406 | |
Total financial assets | 206 | 406 | |
Derivative liabilities | 163 | 438 | |
Total financial liabilities | 163 | 438 | |
Level 1 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative assets | 0 | 0 | |
Total financial assets | 0 | 0 | |
Derivative liabilities | 0 | 0 | |
Total financial liabilities | 0 | 0 | |
Level 2 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative assets | [1] | 206 | 406 |
Total financial assets | 206 | 406 | |
Derivative liabilities | [1] | 163 | 438 |
Total financial liabilities | 163 | 438 | |
Level 3 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative assets | 0 | 0 | |
Total financial assets | 0 | 0 | |
Derivative liabilities | 0 | 0 | |
Total financial liabilities | $ 0 | $ 0 | |
[1] | The fair value of our interest rate swaps was based on model-driven valuations using LIBOR rates, which are observable at commonly quoted intervals. Accordingly, our interest rate swaps are classified within Level 2 of the fair value hierarchy. |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation | $ 19.8 | $ 18.5 | $ 17.3 |
Software development costs, amortization | $ 8.3 | $ 5.4 | $ 2 |
Property and Equipment (Schedul
Property and Equipment (Schedule of Property and Equipment) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 146,170 | $ 134,647 |
Less: accumulated depreciation | (95,901) | (81,996) |
Property and equipment, net | 50,269 | 52,651 |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 2,403 | 3,868 |
Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, estimated useful life (years) | 3 years | |
Equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, estimated useful life (years) | 5 years | |
Computer hardware [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 81,260 | 77,668 |
Computer hardware [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, estimated useful life (years) | 3 years | |
Computer hardware [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, estimated useful life (years) | 5 years | |
Computer software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 31,604 | 26,457 |
Computer software [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, estimated useful life (years) | 3 years | |
Computer software [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, estimated useful life (years) | 5 years | |
Construction in progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 2,972 | 2,337 |
Furniture and fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 7,989 | 7,146 |
Furniture and fixtures [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, estimated useful life (years) | 5 years | |
Furniture and fixtures [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, estimated useful life (years) | 7 years | |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 19,942 | $ 17,171 |
Property and Equipment (Sched57
Property and Equipment (Schedule of Software Development Costs) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | ||
Software development costs, gross | $ 55,126 | $ 28,767 |
Less: accumulated amortization | (17,544) | (9,216) |
Software development costs, net | $ 37,582 | $ 19,551 |
Software Development [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Software development costs, estimated useful life (years) | 3 years | |
Software Development [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Software development costs, estimated useful life (years) | 7 years |
Goodwill and Other Intangible58
Goodwill and Other Intangible Assets (Change in Goodwill by Reportable Segment) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Goodwill [Roll Forward] | |
Balance at December 31, 2015 | $ 436,449 |
Additions related to current year business combination | 2,342 |
Adjustments related to prior year business combination | (182) |
Effect of foreign currency translation | (369) |
Balance at December 31, 2016 | 438,240 |
ECBU [Member] | |
Goodwill [Roll Forward] | |
Balance at December 31, 2015 | 240,494 |
Adjustments related to prior year business combination | 0 |
Effect of foreign currency translation | 0 |
Balance at December 31, 2016 | 241,334 |
GMBU [Member] | |
Goodwill [Roll Forward] | |
Balance at December 31, 2015 | 190,976 |
Adjustments related to prior year business combination | (182) |
Effect of foreign currency translation | 0 |
Balance at December 31, 2016 | 192,238 |
IBU [Member] | |
Goodwill [Roll Forward] | |
Balance at December 31, 2015 | 4,979 |
Additions related to current year business combination | 58 |
Adjustments related to prior year business combination | 0 |
Effect of foreign currency translation | (369) |
Balance at December 31, 2016 | $ 4,668 |
Goodwill and Other Intangible59
Goodwill and Other Intangible Assets Goodwill And Other Intangible Assets (Fair Values Of Intangible Assets Acquired In Various Business Combinations By Class) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Schedule of Acquired Intangible Assets by Major Class [Line Items] | ||
Finite-lived intangible assets, gross carrying amount | $ 419,511 | $ 420,044 |
Finite-lived intangible assets, accumulated amortization | (168,430) | (127,974) |
Intangible assets, net (excluding goodwill) | 253,676 | 294,672 |
Customer relationships [Member] | ||
Schedule of Acquired Intangible Assets by Major Class [Line Items] | ||
Finite-lived intangible assets, gross carrying amount | 248,287 | 247,462 |
Finite-lived intangible assets, accumulated amortization | (77,983) | (57,748) |
Marketing assets [Member] | ||
Schedule of Acquired Intangible Assets by Major Class [Line Items] | ||
Finite-lived intangible assets, gross carrying amount | 16,187 | 16,187 |
Finite-lived intangible assets, accumulated amortization | (9,826) | (7,753) |
Acquired software and technology [Member] | ||
Schedule of Acquired Intangible Assets by Major Class [Line Items] | ||
Finite-lived intangible assets, gross carrying amount | 147,269 | 148,615 |
Finite-lived intangible assets, accumulated amortization | (74,975) | (57,548) |
Non-compete agreements [Member] | ||
Schedule of Acquired Intangible Assets by Major Class [Line Items] | ||
Finite-lived intangible assets, gross carrying amount | 3,493 | 3,402 |
Finite-lived intangible assets, accumulated amortization | (1,553) | (864) |
Database [Member] | ||
Schedule of Acquired Intangible Assets by Major Class [Line Items] | ||
Finite-lived intangible assets, gross carrying amount | 4,275 | 4,378 |
Finite-lived intangible assets, accumulated amortization | (4,093) | (4,061) |
Marketing assets [Member] | ||
Schedule of Acquired Intangible Assets by Major Class [Line Items] | ||
Indefinite-lived intangible assets (excluding goodwill), gross carrying amount | $ 2,595 | $ 2,602 |
Goodwill and Other Intangible60
Goodwill and Other Intangible Assets (Summary of Amortization Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Amortization of Intangible Assets Acquired by Income Statement Location [Line Items] | |||
Amortization | $ 42,398 | $ 32,218 | $ 26,148 |
Cost of subscriptions [Member] | |||
Amortization of Intangible Assets Acquired by Income Statement Location [Line Items] | |||
Amortization | 31,270 | 23,075 | 20,239 |
Cost of maintenance [Member] | |||
Amortization of Intangible Assets Acquired by Income Statement Location [Line Items] | |||
Amortization | 5,327 | 4,162 | 772 |
Cost of services [Member] | |||
Amortization of Intangible Assets Acquired by Income Statement Location [Line Items] | |||
Amortization | 2,621 | 2,382 | 2,910 |
Cost of license fees and other [Member] | |||
Amortization of Intangible Assets Acquired by Income Statement Location [Line Items] | |||
Amortization | 340 | 368 | 424 |
Total included in cost of revenue [Member] | |||
Amortization of Intangible Assets Acquired by Income Statement Location [Line Items] | |||
Amortization | 39,558 | 29,987 | 24,345 |
Included in operating expenses [Member] | |||
Amortization of Intangible Assets Acquired by Income Statement Location [Line Items] | |||
Amortization | $ 2,840 | $ 2,231 | $ 1,803 |
Goodwill and Other Intangible61
Goodwill and Other Intangible Assets (Future Amortization Expense for Finite-Lived Intangible Assets) (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Future amortization expense for finite-lived intangible assets: | |
2,017 | $ 41,711 |
2,018 | 40,001 |
2,019 | 36,541 |
2,020 | 27,975 |
2,021 | 21,062 |
Total | $ 167,290 |
Consolidated Financial Statem62
Consolidated Financial Statement Details (Components of Prepaid Expenses and Other Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Deferred sales commissions | $ 37,459 | $ 30,141 |
Prepaid software maintenance | 18,130 | 15,308 |
Taxes, prepaid and receivable | 4,111 | 9,121 |
Deferred professional services costs | 1,722 | 3,603 |
Deferred tax asset | 2,379 | 2,869 |
Prepaid royalties | 1,373 | 1,767 |
Other assets | 5,664 | 6,758 |
Total prepaid expenses and other assets | 70,838 | 69,567 |
Less: Long-term portion | 22,524 | 20,901 |
Prepaid expenses and other current assets | $ 48,314 | $ 48,666 |
Consolidated Financial Statem63
Consolidated Financial Statement Details (Components of Accrued Expenses and Other Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued bonuses | $ 19,217 | $ 24,591 |
Accrued commissions and salaries | 9,352 | 8,391 |
Taxes payable | 3,452 | 3,923 |
Deferred rent liabilities | 4,110 | 4,070 |
Lease incentive obligations | 5,604 | 4,734 |
Unrecognized tax benefit | 3,295 | 3,147 |
Customer credit balances | 5,148 | 3,515 |
Accrued vacation costs | 2,214 | 2,446 |
Accrued health care costs | 1,495 | 2,356 |
Other liabilities | 8,842 | 7,911 |
Total accrued expenses and other liabilities | 62,729 | 65,084 |
Less: Long-term portion | 8,533 | 7,623 |
Accrued expenses and other current liabilities | $ 54,196 | $ 57,461 |
Consolidated Financial Statem64
Consolidated Financial Statement Details (Components of Deferred Revenue) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred Revenue Arrangement [Line Items] | ||
Total deferred revenue | $ 250,940 | $ 237,335 |
Less: Long-term portion | 6,440 | 7,119 |
Deferred revenue, current portion | 244,500 | 230,216 |
Subscriptions [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Total deferred revenue | 144,606 | 122,524 |
Maintenance [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Total deferred revenue | 76,803 | 85,901 |
Services [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Total deferred revenue | 29,039 | 28,517 |
License fees and other [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Total deferred revenue | $ 492 | $ 393 |
Consolidated Financial Statem65
Consolidated Financial Statement Details Consolidated Financial Statement Details (Components of Other Income and Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Interest income | $ 581 | $ 155 | $ 59 | |
Loss on sale of business | 0 | (1,976) | 0 | |
Loss on debt extinguishment and termination of derivative instruments | 0 | 0 | (996) | [1] |
Other (expense) income, net | (872) | 134 | (182) | |
Other expense, net | $ (291) | $ (1,687) | $ (1,119) | |
[1] | See Notes 9 and 10 to these consolidated financial statements for details of the loss on debt extinguishment and termination of derivative instruments. |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | Oct. 02, 2015 | Oct. 01, 2014 | Feb. 28, 2014 | Feb. 29, 2012 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Jul. 17, 2015 |
Line of Credit Facility [Line Items] | ||||||||
Credit facility, maximum borrowing capacity | $ 325,000 | $ 325,000 | ||||||
Change in present value of future cash flows to financing investors | 10.00% | |||||||
Loss on debt extinguishment related to write-off of deferred financing costs | $ 400 | |||||||
Payment of financing costs | 2,500 | $ 0 | $ 429 | $ 3,003 | ||||
Capitalized financing costs to be amortized over term of facility | 1,100 | |||||||
Total deferred financing costs included in other assets | $ 600 | $ 900 | ||||||
Commitment fee on unused portion of revolving credit facility | 0.225% | |||||||
Line of credit facility, available increase capacity, amount | $ 200,000 | |||||||
Credit facility, term | 5 years | 5 years | ||||||
Minimum [Member] | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Commitment fee on unused portion of revolving credit facility | 0.15% | |||||||
Maximum [Member] | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Commitment fee on unused portion of revolving credit facility | 0.225% | |||||||
Revolving credit loans bear interest rate [Member] | Base rate option Federal Funds Rate plus [Member] | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Credit facility, variable interest rate | 0.50% | |||||||
Revolving credit loans bear interest rate [Member] | Variable rate one month LIBOR plus [Member] | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Credit facility, variable interest rate | 1.00% | |||||||
Revolving credit loans bear interest rate [Member] | Base rate [Member] | Minimum [Member] | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Credit facility, basis spread on variable rate | 0.00% | |||||||
Revolving credit loans bear interest rate [Member] | Base rate [Member] | Maximum [Member] | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Credit facility, basis spread on variable rate | 0.50% | |||||||
Revolving credit loans bear interest rate [Member] | LIBOR [Member] | Minimum [Member] | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Credit facility, basis spread on variable rate | 1.00% | |||||||
Revolving credit loans bear interest rate [Member] | LIBOR [Member] | Maximum [Member] | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Credit facility, basis spread on variable rate | 1.50% | |||||||
Term loans [Member] | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Proceeds from lines of credit | $ 175,000 | |||||||
Revolving credit loans [Member] | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Line of credit facility, exercised capacity increase, amount | $ 100,000 | $ 100,000 | ||||||
Line of credit facility, current borrowing capacity | 250,000 | $ 350,000 | ||||||
MicroEdge [Member] | Revolving credit loans [Member] | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Proceeds from lines of credit | $ 140,000 | |||||||
Smart Tuition [Member] | Revolving credit loans [Member] | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Proceeds from lines of credit | $ 186,000 |
Debt (Summary of Debt) (Details
Debt (Summary of Debt) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Line of Credit Facility [Line Items] | ||
Debt, gross | $ 343,869 | $ 410,244 |
Less: Unamortized debt discount | 1,476 | 2,157 |
Less: Debt, current portion | 4,375 | 4,375 |
Debt, net of current portion | $ 338,018 | $ 403,712 |
Weighted average effective interest rate | 2.48% | 2.30% |
Revolving credit loans [Member] | ||
Line of Credit Facility [Line Items] | ||
Debt, gross | $ 180,900 | $ 242,900 |
Weighted average effective interest rate | 2.36% | 2.15% |
Term loans [Member] | ||
Line of Credit Facility [Line Items] | ||
Debt, gross | $ 162,969 | $ 167,344 |
Weighted average effective interest rate | 2.62% | 2.51% |
Short-term debt [Member] | ||
Line of Credit Facility [Line Items] | ||
Weighted average effective interest rate | 2.50% | 2.11% |
Long-term debt [Member] | ||
Line of Credit Facility [Line Items] | ||
Weighted average effective interest rate | 2.48% | 2.30% |
Debt (Annual Maturities Related
Debt (Annual Maturities Related to Credit Facility) (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Debt Disclosure [Abstract] | |
2,017 | $ 4,375 |
2,018 | 4,375 |
2,019 | 335,119 |
2,020 | 0 |
2,021 | 0 |
Thereafter | 0 |
Total required maturities | $ 343,869 |
Derivative Instruments (Details
Derivative Instruments (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |||
Feb. 28, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Oct. 31, 2015 | Mar. 31, 2014 | |
Derivative [Line Items] | |||||
Loss related to termination of derivative instruments | $ 0.6 | ||||
Ineffective portion of interest rate swap(s) | $ 0 | $ 0 | |||
March 2014 Swap [Member] | |||||
Derivative [Line Items] | |||||
Notional value of the swap agreement | $ 125 | ||||
Future notional value of the swap agreement | $ 75 | ||||
October 2015 Swap [Member] | |||||
Derivative [Line Items] | |||||
Notional value of the swap agreement | $ 75 |
Derivative Instruments (Fair Va
Derivative Instruments (Fair Value of Derivative Instruments) (Details) - Designated as hedging instrument [Member] - Interest rate swap [Member] - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Derivatives, Fair Value [Line Items] | ||
Total derivative assets designated as hedging instruments | $ 206 | $ 406 |
Total derivative liabilities designated as hedging instruments | 163 | 438 |
Other assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Interest rate swap assets, long-term portion | 206 | 406 |
Accrued expenses and other current liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Interest rate swap liabilities, current portion | 0 | 2 |
Other liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Interest rate swap liabilities, long-term portion | $ 163 | $ 436 |
Derivative Instruments (Effects
Derivative Instruments (Effects of Derivative Instruments in Cash Flow Hedging Relationships) (Details) - Interest rate swap [Member] - Cash flow hedging [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) recognized in accumulated other comprehensive loss | $ 42 | $ (31) | $ (268) |
Gain (loss) reclassified from accumulated other comprehensive loss into income | (1,802) | ||
2014 Credit Facility [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) recognized in accumulated other comprehensive loss | (268) | ||
Interest expense [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) reclassified from accumulated other comprehensive loss into income | $ (1,106) | $ (1,569) | |
Interest expense [Member] | 2014 Credit Facility [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) reclassified from accumulated other comprehensive loss into income | (1,215) | ||
Loss on debt extinguishment and termination of derivative instruments [Member] | 2012 Credit Facility [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) reclassified from accumulated other comprehensive loss into income | $ (587) |
Commitments and Contingencies72
Commitments and Contingencies (Details) $ in Millions | May 04, 2012lease | May 31, 2016USD ($)ft²lease | Oct. 31, 2008lease | Dec. 31, 2016USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Operating Leased Assets [Line Items] | |||||||
Total rent expense | $ 11.7 | $ 10.3 | $ 9.4 | ||||
Building [Member] | Texas [Member] | |||||||
Operating Leased Assets [Line Items] | |||||||
Annual base rent of operating lease | $ 2.8 | 2.8 | |||||
Standby letter of credit for security deposit | 2 | 2 | |||||
Number of renewal options (leases) | lease | 2 | ||||||
Lease agreement renewal term | 5 years | ||||||
Building [Member] | Texas [Member] | Minimum [Member] | |||||||
Operating Leased Assets [Line Items] | |||||||
Percentage of change in base rent | 2.00% | ||||||
Building [Member] | Texas [Member] | Maximum [Member] | |||||||
Operating Leased Assets [Line Items] | |||||||
Percentage of change in base rent | 4.00% | ||||||
Third-party technology [Member] | |||||||
Long-term Purchase Commitment [Line Items] | |||||||
Remaining aggregate minimum purchase commitment | $ 38.2 | 38.2 | |||||
Third-party technology [Member] | Minimum [Member] | |||||||
Long-term Purchase Commitment [Line Items] | |||||||
Contractual arrangement length | 1 year | ||||||
Third-party technology [Member] | Maximum [Member] | |||||||
Long-term Purchase Commitment [Line Items] | |||||||
Contractual arrangement length | 5 years | ||||||
Current HQ Facility [Member] | South Carolina [Member] | |||||||
Operating Leased Assets [Line Items] | |||||||
Reduction in rent expense | 2.9 | $ 2.3 | $ 2.2 | ||||
Current HQ Facility [Member] | Building [Member] | South Carolina [Member] | |||||||
Operating Leased Assets [Line Items] | |||||||
Lease agreement term | 15 years | ||||||
Annual base rent of operating lease | $ 5.1 | 5.1 | |||||
Number of renewal options (leases) | lease | 2 | ||||||
Lease agreement renewal term | 5 years | ||||||
Current HQ Facility [Member] | Building [Member] | South Carolina [Member] | Maximum [Member] | |||||||
Operating Leased Assets [Line Items] | |||||||
Percentage of change in base rent | 5.50% | ||||||
Current HQ Facility [Member] | Leasehold improvements [Member] | |||||||
Operating Leased Assets [Line Items] | |||||||
Remaining aggregate reimbursable leasehold improvements | $ 5.1 | $ 5.1 | |||||
New HQ Facility [Member] | Building [Member] | South Carolina [Member] | |||||||
Operating Leased Assets [Line Items] | |||||||
Lease agreement term | 20 years | ||||||
Rentable Square Feet | ft² | 172,000 | ||||||
Estimated Total Future Rent | $ 102.1 | ||||||
Estimated Total Leasehold Improvement Allowances | $ 12.9 | ||||||
Number of renewal options (leases) | lease | 4 | ||||||
Lease agreement renewal term | 5 years |
Commitments and Contingencies73
Commitments and Contingencies (Future Minimum Lease Commitments Related to Lease Agreements, Net of Related Lease Incentives) (Details) $ in Thousands | Dec. 31, 2016USD ($) | [1] |
Commitments and Contingencies Disclosure [Abstract] | ||
2,017 | $ 16,085 | |
2,018 | 17,103 | |
2,019 | 16,004 | |
2,020 | 15,461 | |
2,021 | 14,724 | |
Thereafter | 95,385 | |
Total minimum lease payments | $ 174,762 | |
[1] | Our future minimum lease commitments related to operating leases do not include payments related to Phase Two of our New Headquarters Facility, as that option had not been exercised as of December 31, 2016. |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Taxes [Line Items] | |||||
Income tax provision | $ 1,778 | $ 1,595 | $ 9,411 | $ 11,303 | $ 10,944 |
Net excess tax benefits from equity-based compensation recorded in stockholder's equity | $ 5,466 | $ 7,455 | |||
Unrecognized tax benefit that, if recognized, would favorably affect the effective tax rate | 2,400 | ||||
Domestic Tax Authority [Member] | |||||
Income Taxes [Line Items] | |||||
Operating loss carryforwards | 28,800 | ||||
Foreign Tax Authority [Member] | |||||
Income Taxes [Line Items] | |||||
Operating loss carryforwards | 6,400 | ||||
State and Local Jurisdiction [Member] | |||||
Income Taxes [Line Items] | |||||
Operating loss carryforwards | 36,500 | ||||
Tax credit carryforwards | 9,900 | ||||
ASU 2016-09 adjustments [Member] | |||||
Income Taxes [Line Items] | |||||
Income tax provision | $ (7,700) |
Income Taxes (Schedule of Compo
Income Taxes (Schedule of Components of Income Tax Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||||
U.S. Federal | $ 4,655 | $ 5,890 | $ 5,757 | ||
U.S. State and local | 1,670 | 2,215 | 2,158 | ||
International | 53 | 33 | (21) | ||
Total current taxes | 6,378 | 8,138 | 7,894 | ||
U.S. Federal | 2,544 | 2,702 | 4,725 | ||
U.S. State and local | 304 | 585 | (1,329) | ||
International | 185 | (122) | (346) | ||
Total deferred taxes | 3,033 | 3,165 | 3,050 | ||
Total income tax provision | $ 1,778 | $ 1,595 | $ 9,411 | $ 11,303 | $ 10,944 |
Income Taxes (Schedule of Incom
Income Taxes (Schedule of Income Before Provision for Income Taxes) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||||||||||
U.S. | $ 49,320 | $ 37,523 | $ 39,638 | ||||||||
International | 1,606 | (571) | (404) | ||||||||
Income before provision for income taxes | $ 21,372 | $ 10,884 | $ 10,838 | $ 7,832 | $ 7,255 | $ 12,344 | $ 11,314 | $ 6,039 | $ 50,926 | $ 36,952 | $ 39,234 |
Income Taxes (Schedule of Effec
Income Taxes (Schedule of Effective Income Tax Rate Reconciliation) (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory rate | 35.00% | 35.00% | 35.00% |
Effect of: | |||
State income taxes, net of federal benefit | 4.10% | 5.70% | 3.20% |
Change in state income tax rate applied to deferred tax balances | 0.20% | 2.10% | (1.10%) |
Fixed assets | 0.00% | (0.10%) | (0.30%) |
Unrecognized tax benefit | 0.20% | (1.10%) | (2.90%) |
State credits, net of federal benefit | (0.10%) | 6.00% | (1.00%) |
Change in valuation reserve (primarily state credit reserves) | (1.60%) | (8.60%) | 1.30% |
Federal credits generated | (6.20%) | (6.10%) | (4.70%) |
Foreign tax rate | (0.40%) | (0.70%) | (0.10%) |
Acquisition costs | 0.10% | 0.10% | 0.60% |
Section 162(m) limitation | 1.70% | 0.10% | 0.40% |
Loss from sale of foreign subsidiary | 0.00% | 1.90% | 0.00% |
Domestic production activities deduction | (1.20%) | (1.80%) | (1.20%) |
Stock-based compensation | (13.60%) | (0.00%) | (0.00%) |
Other | 0.30% | (1.90%) | (1.30%) |
Income tax provision effective rate | 18.50% | 30.60% | 27.90% |
Income Taxes (Schedule of Defer
Income Taxes (Schedule of Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Deferred tax assets relating to: | ||||
Federal and state and foreign net operating loss carryforwards | $ 12,906 | $ 13,913 | ||
Federal, state and foreign tax credits | 9,924 | 10,464 | ||
Intangible assets | 652 | 449 | ||
Stock-based compensation | 11,480 | 7,848 | ||
Accrued bonuses | 7,426 | 9,335 | ||
Deferred revenue | 5,371 | 6,049 | ||
Allowance for doubtful accounts | 1,294 | 780 | ||
Other | 6,781 | 6,593 | ||
Total deferred tax assets | 55,834 | 55,431 | ||
Deferred tax liabilities relating to: | ||||
Intangible assets | (44,885) | (49,559) | ||
Fixed assets | (9,200) | (10,323) | ||
Other | (21,934) | (12,765) | ||
Total deferred tax liabilities | (76,019) | (72,647) | ||
Valuation allowance | (6,994) | (7,911) | $ (11,161) | $ (11,042) |
Net deferred tax liability | $ (27,179) | $ (25,127) |
Income Taxes (Summary of Change
Income Taxes (Summary of Changes in Deferred Tax Asset Valuation Allowance) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Balance at beginning of year | $ 7,911 | $ 11,161 | $ 11,042 |
Acquisition related change | 0 | 0 | 0 |
Charges to expense | (917) | (3,250) | 119 |
Balance at end of year | $ 6,994 | $ 7,911 | $ 11,161 |
Income Taxes (Summary of Chan80
Income Taxes (Summary of Changes in Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Balance at December 31, 2015 | $ 3,024 | $ 3,564 | $ 3,698 |
Increases from prior period positions | 23 | 129 | 195 |
Decreases in prior year positions | (17) | (651) | (102) |
Increases from current period positions | 358 | 257 | 1,046 |
Settlements (payments) | 0 | (274) | 0 |
Lapse of statute of limitations | (243) | (1) | (1,273) |
Balance at December 31, 2016 | $ 3,145 | $ 3,024 | $ 3,564 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total number of authorized stock-based awards available (in shares) | 7,014,287 | ||
Unvested awards, compensation cost not yet recognized | $ 52.5 | ||
Unvested awards, compensation cost not yet recognized, period of recognition (in years) | 1 year 9 months 18 days | ||
Restricted stock awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Contractual term (in years) | 10 years | ||
Restricted stock vested, total fair value | $ 14.5 | $ 10.6 | $ 10.5 |
Restricted stock granted, weighted average grant date fair value | $ 53.59 | $ 48.82 | $ 37.89 |
Restricted stock units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Contractual term (in years) | 10 years | ||
Restricted stock vested, total fair value | $ 6.7 | $ 3.9 | $ 1.4 |
Restricted stock granted, weighted average grant date fair value | $ 51.98 | $ 45.15 | $ 33.38 |
Stock appreciation rights (SARs) [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Contractual term (in years) | 7 years | ||
Options exercised, total intrinsic value | $ 10.7 | $ 5.2 | $ 5 |
Options vested, total fair value | $ 1 | $ 1.9 | $ 2.5 |
Stock options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Contractual term (in years) | 10 years |
Stock-Based Compensation (Summa
Stock-Based Compensation (Summary of Awards Outstanding by Each Award Type) (Details) - shares | Dec. 31, 2016 | Dec. 31, 2015 |
Restricted stock awards [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding, number | 1,178,592 | 1,096,839 |
Restricted stock units [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding, number | 465,395 | 396,198 |
Stock appreciation rights (SARs) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding, number | 469,075 | 757,203 |
Stock options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding, number | 3,502 | 4,745 |
Stock-Based Compensation (Sum83
Stock-Based Compensation (Summary of Stock-Based Compensation Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Employee Service Stock-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated stock-based compensation expense | $ 32,638 | $ 25,246 | $ 17,345 |
Cost of subscriptions [Member] | |||
Employee Service Stock-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated stock-based compensation expense | 1,168 | 1,130 | 687 |
Cost of maintenance [Member] | |||
Employee Service Stock-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated stock-based compensation expense | 508 | 420 | 689 |
Cost of services [Member] | |||
Employee Service Stock-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated stock-based compensation expense | 1,621 | 1,944 | 2,229 |
Total included in cost of revenue [Member] | |||
Employee Service Stock-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated stock-based compensation expense | 3,297 | 3,494 | 3,605 |
Sales, marketing and customer success [Member] | |||
Employee Service Stock-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated stock-based compensation expense | 3,844 | 2,979 | 2,147 |
Research and development [Member] | |||
Employee Service Stock-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated stock-based compensation expense | 6,467 | 4,865 | 3,264 |
General and administrative [Member] | |||
Employee Service Stock-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated stock-based compensation expense | 19,030 | 13,908 | 8,329 |
Total included in operating expense [Member] | |||
Employee Service Stock-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated stock-based compensation expense | $ 29,341 | $ 21,752 | $ 13,740 |
Stock-Based Compensation (Sum84
Stock-Based Compensation (Summary of Unvested Restricted Stock Awards, Activity) (Details) - Restricted stock awards [Member] - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unvested, number, beginning of period | 1,096,839 | |||
Unvested, weighted average grant date fair value, beginning of period | $ 43.28 | |||
Granted, number | 574,309 | |||
Granted, weighted average grant date fair value | $ 53.59 | $ 48.82 | $ 37.89 | |
Vested, number | (375,413) | |||
Vested, weighted average grant date fair value | $ 38.70 | |||
Forfeited, number | (117,143) | |||
Forfeited, weighted average grant date fair value | $ 46.05 | |||
Unvested, number, end of period | 1,178,592 | 1,096,839 | ||
Unvested, weighted average grant date fair value, end of period | $ 49.49 | $ 43.28 | ||
Unvested, weighted average remaining contractual term | 8 years 2 months 12 days | |||
Unvested, aggregate intrinsic value | [1] | $ 75,430 | ||
[1] | The intrinsic value is calculated as the market value as of the end of the fiscal period. |
Stock-Based Compensation (Sum85
Stock-Based Compensation (Summary of Unvested Restricted Stock Units, Activity) (Details) - Restricted stock units [Member] - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unvested, number, beginning of period | 396,198 | |||
Unvested, weighted average grant date fair value, beginning of period | $ 40.51 | |||
Granted, number | 276,499 | |||
Granted, weighted average grant date fair value | $ 51.98 | $ 45.15 | $ 33.38 | |
Forfeited, number | (33,274) | |||
Forfeited, weighted average grant date fair value | $ 47.20 | |||
Expired, number | (3,500) | |||
Expired, weighted average grant date fair value | $ 23.13 | |||
Vested, number | (170,528) | |||
Vested, weighted average grant date fair value | $ 39.04 | |||
Unvested, number, end of period | 465,395 | 396,198 | ||
Unvested, weighted average grant date fair value, end of period | $ 47.51 | $ 40.51 | ||
Unvested, weighted average remaining contractual term | 7 years 6 months | |||
Unvested, aggregate intrinsic value | [1] | $ 29,785 | ||
[1] | The intrinsic value is calculated as the market value as of the end of the fiscal period. |
Stock-Based Compensation (Sum86
Stock-Based Compensation (Summary of Stock Appreciation Rights, Activity) (Details) - Stock appreciation rights (SARs) [Member] $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2016USD ($)$ / sharesshares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding, number, beginning of period | shares | 757,203 | |
Outstanding, weighted average exercise price, beginning of period | $ / shares | $ 24.27 | |
Exercised, number | shares | (284,424) | |
Exercised, weighted average exercise price | $ / shares | $ 25.29 | |
Forfeited, number | shares | (3,704) | |
Forfeited, weighted average exercise price | $ / shares | $ 27.92 | |
Outstanding, number, end of period | shares | 469,075 | |
Outstanding, weighted average exercise price, end of period | $ / shares | $ 23.63 | |
Outstanding, weighted average remaining contractual term | 2 years 7 months 6 days | |
Outstanding, aggregate intrinsic value | $ | $ 18,938 | [1] |
Unvested and expected to vest, number | shares | 8,610 | |
Unvested and expected to vest, weighted average exercise price | $ / shares | $ 29.17 | |
Unvested and expected to vest, weighted average remaining contractual term | 3 years 3 months 18 days | |
Unvested and expected to vest, aggregate intrinsic value | $ | $ 300 | [1] |
Vested and exercisable, number | shares | 460,465 | |
Vested and exercisable, weighted average exercise price | $ / shares | $ 23.52 | |
Vested and exercisable, weighted average remaining contractual term | 2 years 7 months 6 days | |
Vested and exercisable, aggregate intrinsic value | $ | $ 18,638 | [1] |
[1] | The intrinsic value is calculated as the difference between the market value as of the end of the fiscal period and the exercise price of the shares |
Stock-Based Compensation (Sum87
Stock-Based Compensation (Summary of Stock Options, Activity) (Details) - Stock options [Member] $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2016USD ($)$ / sharesshares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding, number, beginning of period | shares | 4,745 | |
Outstanding, weighted average exercise price, beginning of period | $ / shares | $ 11.60 | |
Exercised, number | shares | (1,243) | |
Exercised, weighted average exercise price | $ / shares | $ 12.61 | |
Outstanding, number, end of period | shares | 3,502 | |
Outstanding, weighted average exercise price, end of period | $ / shares | $ 11.25 | |
Outstanding, weighted average remaining contractual term | 1 year 9 months 18 days | |
Outstanding, aggregate intrinsic value | $ | $ 185 | [1] |
Vested and exercisable, number | shares | 3,502 | |
Vested and exercisable, weighted average exercise price | $ / shares | $ 11.25 | |
Vested and exercisable, weighted average remaining contractual term | 1 year 9 months 18 days | |
Vested and exercisable, aggregate intrinsic value | $ | $ 185 | [1] |
[1] | The intrinsic value is calculated as the difference between the market value as of the end of the fiscal period and the exercise price of the shares. |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Millions | Dec. 15, 2016 | Sep. 15, 2016 | Jun. 15, 2016 | Mar. 15, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Mar. 15, 2017 |
Equity [Abstract] | ||||||||
Dividends paid per share (in dollars per share) | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.48 | $ 0.48 | $ 0.48 | |
Stock repurchase program, authorized amount | $ 50 | |||||||
Stock repurchase program, remaining authorized repurchase amount | $ 50 | |||||||
Subsequent event [Member] | ||||||||
Dividends Payable [Line Items] | ||||||||
Dividends payable per share (in dollars per share) | $ 0.12 |
Stockholders' Equity (Changes i
Stockholders' Equity (Changes in accumulated other comprehensive loss by component) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accumulated Other Comprehensive Income [Roll Forward] | |||
Accumulated other comprehensive (loss) income, beginning of period | $ (825) | $ (1,032) | $ (1,385) |
Translation adjustments | 324 | 62 | 261 |
Accumulated other comprehensive (loss) income, end of period | (457) | (825) | (1,032) |
Gains and losses on cash flow hedges [Member] | |||
Accumulated Other Comprehensive Income [Roll Forward] | |||
Accumulated other comprehensive (loss) income, beginning of period | (19) | (164) | (256) |
Other comprehensive loss before reclassifications | (626) | (818) | (999) |
Amounts reclassified from accumulated other comprehensive loss to interest expense | 1,106 | 1,569 | 1,215 |
Amounts reclassified from accumulated other comprehensive loss to loss on debt extinguishment and termination of derivative instruments | 0 | 0 | 587 |
Tax benefit included in provision for income taxes | (436) | (606) | (711) |
Total amounts reclassified from accumulated other comprehensive loss | 670 | 963 | 1,091 |
Net current-period other comprehensive (loss) income | 44 | 145 | 92 |
Accumulated other comprehensive (loss) income, end of period | 25 | (19) | (164) |
Unrealized gains (losses), tax effects | 406 | 514 | 644 |
Foreign currency translation adjustment [Member] | |||
Accumulated Other Comprehensive Income [Roll Forward] | |||
Accumulated other comprehensive (loss) income, beginning of period | (806) | (868) | (1,129) |
Translation adjustments | 324 | 62 | 261 |
Accumulated other comprehensive (loss) income, end of period | $ (482) | $ (806) | $ (868) |
Defined Contribution Plan (Deta
Defined Contribution Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Employer matching contribution, percent of qualified employees' contribution | 50.00% | 50.00% | 50.00% |
Employer matching contributions, total | $ 7.6 | $ 5.3 | $ 5.6 |
Employer discretionary contributions, total | $ 0 | $ 0 | $ 0 |
Minimum [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employee contribution, percent of salary | 1.00% | 1.00% | 1.00% |
Maximum [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employee contribution, percent of salary | 30.00% | 30.00% | 30.00% |
Employer matching contribution, percent of employees' salary | 6.00% | 6.00% | 6.00% |
Segment Information (Reportable
Segment Information (Reportable Segment Financial Results) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Segment Reporting Information [Line Items] | ||||||||||||
Total revenue | $ 198,305 | $ 183,063 | $ 180,191 | $ 169,256 | $ 175,877 | $ 158,811 | $ 156,259 | $ 146,993 | $ 730,815 | $ 637,940 | $ 564,421 | |
Total segment operating income | 24,024 | 13,540 | 13,624 | 10,612 | 10,271 | 13,968 | 14,461 | 8,012 | 61,800 | 46,712 | 46,364 | |
Corporate unallocated costs | [1] | (207,026) | (195,146) | (176,614) | ||||||||
Stock based compensation costs | (32,638) | (25,246) | (17,345) | |||||||||
Amortization expense | (42,398) | (32,218) | (26,148) | |||||||||
Interest expense | (10,583) | (8,073) | (6,011) | |||||||||
Other expense, net | 291 | 1,687 | 1,119 | |||||||||
Income before provision for income taxes | $ 21,372 | $ 10,884 | $ 10,838 | $ 7,832 | $ 7,255 | $ 12,344 | $ 11,314 | $ 6,039 | 50,926 | 36,952 | 39,234 | |
GMBU [Member] | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Total revenue | 383,319 | 313,935 | 270,637 | |||||||||
Total segment operating income | [2] | 185,539 | 156,876 | 139,310 | ||||||||
ECBU [Member] | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Total revenue | 302,968 | 279,897 | 245,119 | |||||||||
Total segment operating income | [2] | 154,415 | 137,162 | 121,285 | ||||||||
IBU [Member] | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Total revenue | 42,539 | 41,997 | 47,068 | |||||||||
Total segment operating income | [2] | 4,014 | 5,404 | 4,291 | ||||||||
Other [Member] | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Total revenue | [3] | 1,989 | 2,111 | 1,597 | ||||||||
Total segment operating income | [2],[3] | (106) | (120) | 1,585 | ||||||||
Operating Segments [Member] | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Total segment operating income | [2] | $ 343,862 | $ 299,322 | $ 266,471 | ||||||||
[1] | Corporate unallocated costs include research and development, depreciation expense, and certain corporate sales, marketing, general and administrative expenses. | |||||||||||
[2] | Segment operating income includes direct, controllable costs related to the sale of solutions and services by the reportable segment. | |||||||||||
[3] | Other includes revenue and the related costs from the sale of solutions and services not directly attributable to a reportable segment. |
Segment Information (Revenue by
Segment Information (Revenue by Product and Service Group by Reportable Segment) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenue from External Customer [Line Items] | |||||||||||
Subscriptions | $ 428,987 | $ 331,759 | $ 263,435 | ||||||||
Maintenance | 146,946 | 153,801 | 147,418 | ||||||||
Services | 139,690 | 132,978 | 128,371 | ||||||||
License fees and other | 15,192 | 19,402 | 25,197 | ||||||||
Total revenue | $ 198,305 | $ 183,063 | $ 180,191 | $ 169,256 | $ 175,877 | $ 158,811 | $ 156,259 | $ 146,993 | 730,815 | 637,940 | 564,421 |
GMBU [Member] | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Subscriptions | 238,177 | 167,010 | 125,223 | ||||||||
Maintenance | 77,068 | 83,974 | 86,840 | ||||||||
Services | 62,884 | 56,294 | 48,814 | ||||||||
License fees and other | 5,190 | 6,657 | 9,760 | ||||||||
Total revenue | 383,319 | 313,935 | 270,637 | ||||||||
ECBU [Member] | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Subscriptions | 171,279 | 147,719 | 121,484 | ||||||||
Maintenance | 57,290 | 56,196 | 45,069 | ||||||||
Services | 67,875 | 66,741 | 67,756 | ||||||||
License fees and other | 6,524 | 9,241 | 10,810 | ||||||||
Total revenue | 302,968 | 279,897 | 245,119 | ||||||||
IBU [Member] | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Subscriptions | 19,363 | 16,885 | 16,703 | ||||||||
Maintenance | 12,588 | 13,631 | 15,509 | ||||||||
Services | 8,931 | 9,943 | 11,801 | ||||||||
License fees and other | 1,657 | 1,538 | 3,055 | ||||||||
Total revenue | 42,539 | 41,997 | 47,068 | ||||||||
Other [Member] | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Subscriptions | 168 | 145 | 25 | ||||||||
Maintenance | 0 | 0 | 0 | ||||||||
Services | 0 | 0 | 0 | ||||||||
License fees and other | 1,821 | 1,966 | 1,572 | ||||||||
Total revenue | $ 1,989 | $ 2,111 | $ 1,597 |
Segment Information (Revenue An
Segment Information (Revenue And Long-Lived Assets By Geographic Region) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total revenue | $ 198,305 | $ 183,063 | $ 180,191 | $ 169,256 | $ 175,877 | $ 158,811 | $ 156,259 | $ 146,993 | $ 730,815 | $ 637,940 | $ 564,421 |
Property and equipment | 50,269 | 52,651 | 50,269 | 52,651 | |||||||
United States [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total revenue | 660,339 | 570,519 | 491,731 | ||||||||
Property and equipment | 47,663 | 49,682 | 47,663 | 49,682 | |||||||
Total Foreign [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Total revenue | 70,476 | 67,421 | $ 72,690 | ||||||||
Property and equipment | $ 2,606 | $ 2,969 | $ 2,606 | $ 2,969 |
Quarterly Results (Schedule of
Quarterly Results (Schedule of Quarterly Financial Information) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total revenue | $ 198,305 | $ 183,063 | $ 180,191 | $ 169,256 | $ 175,877 | $ 158,811 | $ 156,259 | $ 146,993 | $ 730,815 | $ 637,940 | $ 564,421 |
Gross profit | 105,903 | 99,746 | 96,579 | 89,367 | 90,661 | 84,638 | 82,829 | 75,181 | 391,595 | 333,309 | 290,983 |
Income from operations | 24,024 | 13,540 | 13,624 | 10,612 | 10,271 | 13,968 | 14,461 | 8,012 | 61,800 | 46,712 | 46,364 |
Income before provision for income taxes | 21,372 | 10,884 | 10,838 | 7,832 | 7,255 | 12,344 | 11,314 | 6,039 | 50,926 | 36,952 | 39,234 |
Net income | $ 17,284 | $ 8,934 | $ 9,060 | $ 6,237 | $ 6,411 | $ 7,911 | $ 7,042 | $ 4,285 | $ 41,515 | $ 25,649 | $ 28,290 |
Earnings per share, basic | $ 0.37 | $ 0.19 | $ 0.20 | $ 0.14 | $ 0.14 | $ 0.17 | $ 0.15 | $ 0.09 | $ 0.90 | $ 0.56 | $ 0.63 |
Earnings per share, diluted | $ 0.36 | $ 0.19 | $ 0.19 | $ 0.13 | $ 0.14 | $ 0.17 | $ 0.15 | $ 0.09 | $ 0.88 | $ 0.55 | $ 0.62 |
Disposition of Business (Detail
Disposition of Business (Details) - RLC [Member] - Disposal group, disposed of by sale, not discontinued operations [Member] - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | May 18, 2015 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Gross cash proceeds from disposition of business | $ 0.4 | |
Goodwill, derecognized related to disposition of business | $ 1.4 | |
Loss on disposition of business | $ 2 |
Disposition of Business (Carryi
Disposition of Business (Carrying Amounts of Assets and Liabilities Excluded from Consolidated Balance Sheet) (Details) - Disposal group, disposed of by sale, not discontinued operations [Member] - RLC [Member] $ in Thousands | May 18, 2015USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Cash and cash equivalents | $ 952 |
Accounts receivable, net of allowance | 132 |
Prepaid expenses and other assets | 38 |
Property and equipment, net | 31 |
Deferred tax asset | 6 |
Goodwill | 1,374 |
Intangible assets, net | 289 |
Total assets held-for-sale | 2,822 |
Trade accounts payable | 82 |
Accrued expenses and other liabilities | 181 |
Deferred revenue | 490 |
Deferred tax liability | 90 |
Total liabilities held-for-sale | $ 843 |