Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Jan. 31, 2018 | Jun. 30, 2017 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | Q2 Holdings, Inc. | ||
Entity Central Index Key | 1,410,384 | ||
Trading Symbol | qtwo | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock Shares Outstanding | 42,028,275 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 1,225,118,154 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 57,961 | $ 54,873 |
Restricted cash | 2,315 | 1,315 |
Investments | 41,685 | 42,249 |
Accounts receivable, net | 13,203 | 12,240 |
Prepaid expenses and other current assets | 3,115 | 3,215 |
Deferred solution and other costs, current portion | 9,246 | 8,839 |
Deferred implementation costs, current portion | 3,562 | 2,938 |
Total current assets | 131,087 | 125,669 |
Property and equipment, net | 34,544 | 27,480 |
Deferred solution and other costs, net of current portion | 12,973 | 11,125 |
Deferred implementation costs, net of current portion | 8,295 | 8,096 |
Intangible assets, net | 12,034 | 15,208 |
Goodwill | 12,876 | 12,876 |
Other long-term assets | 1,006 | 526 |
Total assets | 212,815 | 200,980 |
Current liabilities: | ||
Accounts payable | 7,621 | 4,231 |
Accrued liabilities | 10,562 | 8,822 |
Accrued compensation | 11,511 | 16,035 |
Deferred revenues, current portion | 38,379 | 30,123 |
Total current liabilities | 68,073 | 59,211 |
Deferred revenues, net of current portion | 28,289 | 31,707 |
Deferred rent, net of current portion | 9,393 | 9,466 |
Other long-term liabilities | 438 | 361 |
Total liabilities | 106,193 | 100,745 |
Commitments and contingencies (Note 11) | ||
Stockholders' equity: | ||
Preferred stock: $0.0001 par value; 5,000 shares authorized, no shares issued or outstanding as of December 31, 2017 and 2016 | 0 | 0 |
Common stock: $0.0001 par value; 150,000 shares authorized, 41,994 shares issued, and 41,967 shares outstanding as of December 31, 2017, and 40,441 shares issued, and 40,425 shares outstanding as of December 31, 2016 | 4 | 4 |
Treasury stock at cost; 27 and 16 shares at December 31, 2017 and 2016, respectively | (855) | (417) |
Additional paid-in capital | 259,726 | 226,485 |
Accumulated other comprehensive loss | (139) | (54) |
Accumulated deficit | (152,114) | (125,783) |
Total stockholders' equity | 106,622 | 100,235 |
Total liabilities and stockholders' equity | $ 212,815 | $ 200,980 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares issued (in shares) | 41,994,000 | 40,441,000 |
Common stock, shares outstanding (in shares) | 41,967,000 | 40,425,000 |
Treasury stock (in shares) | 27,000 | 16,000 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Income Statement [Abstract] | ||||
Revenues | $ 193,978 | $ 150,224 | $ 108,867 | |
Cost of revenues | [1] | 99,485 | 77,429 | 59,128 |
Gross profit | 94,493 | 72,795 | 49,739 | |
Operating expenses: | ||||
Sales and marketing | [1] | 41,170 | 36,284 | 26,999 |
Research and development | [1] | 40,338 | 32,460 | 21,534 |
General and administrative | [1] | 37,179 | 31,959 | 22,977 |
Acquisition related costs | 1,232 | 6,307 | 2,493 | |
Amortization of acquired intangibles | 1,481 | 1,470 | 576 | |
Unoccupied lease charges | 0 | 33 | 0 | |
Total operating expenses | 121,400 | 108,513 | 74,579 | |
Loss from operations | (26,907) | (35,718) | (24,840) | |
Other income (expense): | ||||
Interest and other income | 553 | 358 | 280 | |
Interest and other expense | (124) | (567) | (283) | |
Total other income (expense), net | 429 | (209) | (3) | |
Loss before income taxes | (26,478) | (35,927) | (24,843) | |
Benefit from (provision for) income taxes | 314 | (427) | (220) | |
Net loss | (26,164) | (36,354) | (25,063) | |
Other comprehensive gain (loss): | ||||
Unrealized gain (loss) on available-for-sale investments | (85) | 47 | (87) | |
Comprehensive loss | $ (26,249) | $ (36,307) | $ (25,150) | |
Net loss per common share, basic and diluted (in dollars per share) | $ (0.63) | $ (0.92) | $ (0.67) | |
Weighted average common shares outstanding: | ||||
Basic and diluted (in shares) | 41,218 | 39,649 | 37,275 | |
[1] | Includes stock-based compensation expenses as follows: Year Ended December 31, 2017 2016 2015Cost of revenues $3,729 $2,043 $1,134Sales and marketing 3,243 2,231 1,570Research and development 4,464 2,934 1,186General and administrative 9,503 5,432 3,472Total stock-based compensation expenses $20,939 $12,640 $7,362 |
Consolidated Statements of Com5
Consolidated Statements of Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Stock-based compensation expenses | $ 20,939 | $ 12,640 | $ 7,362 |
Cost of revenues | |||
Stock-based compensation expenses | 3,729 | 2,043 | 1,134 |
Sales and marketing | |||
Stock-based compensation expenses | 3,243 | 2,231 | 1,570 |
Research and development | |||
Stock-based compensation expenses | 4,464 | 2,934 | 1,186 |
General and administrative | |||
Stock-based compensation expenses | $ 9,503 | $ 5,432 | $ 3,472 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit |
Common stock, beginning balance (in shares) at Dec. 31, 2014 | 34,696 | |||||
Beginning balance at Dec. 31, 2014 | $ 78,940 | $ 3 | $ (20) | $ 143,337 | $ (14) | $ (64,366) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | 7,362 | 7,362 | ||||
Follow-on offering, net of issuance costs (in shares) | 2,611 | |||||
Follow-on offerings, net of issuance costs | 52,566 | $ 1 | 52,565 | |||
Shares acquired to settle the exercise of stock options (in shares) | (1) | |||||
Shares acquired to settle the exercise of stock options | (21) | (21) | ||||
Exercise of stock options (in shares) | 1,578 | |||||
Exercise of stock options | 4,277 | 4,277 | ||||
Shares issued for the vesting of restricted stock awards (in shares) | 7 | |||||
Shares issued for the vesting of restricted stock awards | 0 | |||||
Other comprehensive (loss) gain | (87) | (87) | ||||
Net loss | (25,063) | (25,063) | ||||
Common stock, ending balance (in shares) at Dec. 31, 2015 | 38,891 | |||||
Ending balance at Dec. 31, 2015 | 117,974 | $ 4 | (41) | 207,541 | (101) | (89,429) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | 12,640 | 12,640 | ||||
Follow-on offerings, net of issuance costs | 3 | 3 | ||||
Shares acquired to settle the exercise of stock options (in shares) | (14) | |||||
Shares acquired to settle the exercise of stock options | (376) | (376) | ||||
Exercise of stock options (in shares) | 1,379 | |||||
Exercise of stock options | 6,301 | 6,301 | ||||
Shares issued for the vesting of restricted stock awards (in shares) | 169 | |||||
Shares issued for the vesting of restricted stock awards | 0 | |||||
Other comprehensive (loss) gain | 47 | 47 | ||||
Net loss | $ (36,354) | (36,354) | ||||
Common stock, ending balance (in shares) at Dec. 31, 2016 | 40,425 | 40,425 | ||||
Ending balance at Dec. 31, 2016 | $ 100,235 | $ 4 | (417) | 226,485 | (54) | (125,783) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Adoption of new accounting standard (see Note 2) | 0 | 167 | (167) | |||
Net loss | $ (7,040) | |||||
Common stock, beginning balance (in shares) at Dec. 31, 2016 | 40,425 | 40,425 | ||||
Beginning balance at Dec. 31, 2016 | $ 100,235 | $ 4 | (417) | 226,485 | (54) | (125,783) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | 20,939 | 20,939 | ||||
Shares acquired to settle the exercise of stock options (in shares) | (11) | |||||
Shares acquired to settle the exercise of stock options | (438) | (438) | ||||
Exercise of stock options (in shares) | 1,205 | |||||
Exercise of stock options | 12,135 | 12,135 | ||||
Shares issued for the vesting of restricted stock awards (in shares) | 348 | |||||
Shares issued for the vesting of restricted stock awards | 0 | |||||
Other comprehensive (loss) gain | (85) | (85) | ||||
Net loss | $ (26,164) | (26,164) | ||||
Common stock, ending balance (in shares) at Dec. 31, 2017 | 41,967 | 41,967 | ||||
Ending balance at Dec. 31, 2017 | $ 106,622 | $ 4 | $ (855) | $ 259,726 | $ (139) | $ (152,114) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | |||
Net loss | $ (26,164) | $ (36,354) | $ (25,063) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Amortization of deferred implementation, solution and other costs | 7,455 | 6,775 | 5,007 |
Depreciation and amortization | 14,946 | 12,199 | 6,847 |
Amortization of debt issuance costs | 28 | 96 | 96 |
Amortization of premiums on investments | 319 | 425 | 319 |
Stock-based compensation expenses | 20,939 | 12,640 | 7,362 |
Deferred income taxes | (350) | 281 | 85 |
Allowance for sales credits | (3) | 17 | 38 |
Loss on disposal of long-lived assets | 33 | 184 | 0 |
Impairment of intangible assets | 0 | 20 | 0 |
Unoccupied lease charges | 0 | 33 | 0 |
Changes in operating assets and liabilities: | |||
Accounts receivable, net | (961) | (3,247) | (3,322) |
Prepaid expenses and other current assets | 240 | (237) | (150) |
Deferred solution and other costs | (5,353) | (7,100) | (4,659) |
Deferred implementation costs | (5,179) | (6,076) | (4,118) |
Other long-term assets | (236) | 47 | (1) |
Accounts payable | 3,367 | 426 | 1,343 |
Accrued liabilities | (4,369) | 10,641 | 4,056 |
Deferred revenue | 4,837 | 9,593 | 14,021 |
Deferred rent and other long-term liabilities | (77) | 3,031 | 3,538 |
Net cash provided by operating activities | 9,472 | 3,394 | 5,399 |
Cash flows from investing activities: | |||
Purchases of investments | (27,749) | (40,160) | (43,928) |
Maturities of investments | 27,907 | 41,105 | 20,908 |
Purchases of property and equipment | (12,315) | (14,349) | (7,128) |
Business combinations and asset acquisitions, net of cash acquired | (3,816) | (95) | (27,469) |
Purchase of intangible assets | 0 | (323) | 0 |
Capitalized software development costs | (970) | (2,692) | (313) |
Increase in restricted cash | (1,000) | 0 | (486) |
Net cash used in investing activities | (17,943) | (16,514) | (58,416) |
Cash flows from financing activities: | |||
Payments on financing obligations | 0 | (4,890) | (4,241) |
Payments on capital lease obligations | 0 | (161) | (418) |
Proceeds from the issuance of common stock, net of issuance costs | 0 | (8) | 52,575 |
Proceeds from exercise of stock options to purchase common stock | 11,559 | 6,003 | 4,171 |
Net cash provided by financing activities | 11,559 | 944 | 52,087 |
Net increase (decrease) in cash and cash equivalents | 3,088 | (12,176) | (930) |
Cash and cash equivalents, beginning of period | 54,873 | 67,049 | 67,979 |
Cash and cash equivalents, end of period | 57,961 | 54,873 | 67,049 |
Supplemental disclosures of cash flow information: | |||
Cash paid for taxes | 128 | 120 | 60 |
Cash paid for interest | 68 | 217 | 212 |
Supplemental disclosure of non-cash investing and financing activities: | |||
Acquisition consideration payable to seller - working capital adjustment | 0 | 0 | 95 |
Acquisition consideration payable to seller - hold back | 150 | 0 | 2,500 |
Shares acquired to settle the exercise of stock options | 438 | 376 | 21 |
Data center assets acquired under deferred payment arrangements or financing arrangements | $ 4,102 | $ 0 | $ 4,087 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Organization and Description of Business Q2 Holdings, Inc. and its wholly-owned subsidiaries, collectively the "Company," is a leading provider of secure, cloud-based digital banking solutions. The Company enables regional and community financial institutions, or RCFIs, to deliver a robust suite of integrated digital banking services to more effectively engage with their consumer and commercial account holders who expect to bank anytime, anywhere and on any device. The Company delivers its solutions to the substantial majority of its customers using a software-as-a-service, or SaaS, model under which its RCFI customers pay subscription fees for the use of the Company's solutions. The Company was incorporated in Delaware in March 2005 and is a holding company that owns 100% of the outstanding capital stock of Q2 Software, Inc. The Company's headquarters are located in Austin, Texas. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP, and Securities and Exchange Commission, or SEC, requirements. The consolidated financial statements include the accounts of the Q2 Holdings, Inc. and its direct and indirect wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Reclassifications Certain amounts appearing in the prior year's Consolidated Statements of Cash Flows have been reclassified to conform to the current year's presentation. Use of Estimates The preparation of the accompanying consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses. Significant items subject to such estimates include revenue recognition, stock-based compensation, the carrying value of goodwill, the fair value of acquired intangibles, the capitalization of software development costs, the useful lives of property and equipment and long-lived intangible assets, and income taxes. In accordance with GAAP, management bases its estimates on historical experience and on various other assumptions that management believes are reasonable under the circumstances. Management regularly evaluates its estimates and assumptions using historical experience and other factors; however, actual results could differ significantly from those estimates. Cash and Cash Equivalents The Company considers all highly liquid investments acquired with an original maturity of ninety days or less at the date of purchase to be cash equivalents. Cash equivalents are stated at cost or fair value based on the underlying security. Restricted Cash Restricted cash consists of deposits held as collateral for the Company's secured letters of credit issued in place of the security deposit for the Company's corporate headquarters. Investments Investments consist primarily of U.S. government agency bonds, corporate bonds, commercial paper, certificates of deposit and money market funds. All investments are considered available for sale and are carried at fair value. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents, restricted cash, investments and accounts receivable. The Company's cash and cash equivalents, restricted cash and investments are placed with high credit quality financial institutions and issuers, and at times may exceed federally-insured limits. The Company has not experienced any loss relating to cash and cash equivalents or restricted cash in these accounts. The Company provides credit, in the normal course of business, to a number of its customers. The Company performs periodic credit evaluations of its customers' financial condition and generally does not require collateral. No individual customer accounted for 10% or more of revenues for each of the years ended December 31, 2017 , 2016 and 2015 . No individual customer accounted for 10% of accounts receivable, net, as of December 31, 2017 , and a single customer accounted for 15% of accounts receivable, net, as of December 31, 2016 . Accounts Receivable Accounts receivable are stated at net realizable value, including both billed and unbilled receivables to customers. Unbilled receivable balances arise primarily when the Company provides services in advance of billing for these services and also when the Company earns revenues based on the number of registered users and the number of bill-pay and certain other transactions that registered users perform on the Company's solutions in excess of the levels included in the Company's minimum subscription fee. Generally, billing for revenues related to the number of registered users and the number of transactions processed by the Company's registered users occurs one month in arrears. Included in the accounts receivable balances as of December 31, 2017 and 2016 were unbilled receivables of $2.1 million and $1.2 million , respectively. The Company assesses the collectability of outstanding accounts receivable on an ongoing basis and maintains an allowance for doubtful accounts for accounts receivable deemed uncollectable. As of December 31, 2017 and 2016 , the Company did not provide for an allowance for doubtful accounts, as all amounts outstanding were deemed collectable. Historically, the Company's collection experience has not varied significantly, and bad debt expenses have been insignificant. The Company maintains a reserve for estimated sales credits issued to customers for billing disputes or other service-related reasons. This allowance is recorded as a reduction against current period revenues and accounts receivable. In estimating this allowance, the Company analyzes prior periods to determine the amounts of sales credits issued to customers compared to the revenues in the period that related to the original customer invoice. This estimate is analyzed quarterly and adjusted as necessary. The following table shows the Company's allowance for sales credits as follows: Beginning Balance Additions Deductions Ending Balance Year Ended December 31, 2015 $ 173 $ 513 $ (474 ) $ 212 Year Ended December 31, 2016 212 488 (472 ) 228 Year Ended December 31, 2017 $ 228 $ 683 $ (685 ) $ 226 Deferred Implementation Costs The Company capitalizes certain personnel and other costs such as employee salaries, benefits and the associated payroll taxes that are direct and incremental to the implementation of its solutions. The Company analyzes implementation costs that may be capitalized to assess their recoverability, and only capitalizes costs that it anticipates to be recoverable. The Company assesses the recoverability of its deferred implementation costs by comparing the greater of the amount of the non-cancellable portion of a customer's contract and the non-refundable customer prepayments received as it relates to the specific implementation costs incurred. The Company begins amortizing the deferred implementation costs for an implementation once the revenue recognition criteria have been met, and the Company amortizes those deferred implementation costs ratably over the remaining term of the customer agreement. The portion of deferred implementation costs expected to be amortized during the succeeding twelve-month period is recorded in current assets as deferred implementation costs, current portion, and the remainder is recorded in long-term assets as deferred implementation costs, net of current portion. Deferred Solution and Other Costs The Company capitalizes sales commissions and other third-party costs such as third-party licenses and maintenance related to its customer agreements. The Company capitalizes sales commissions because the commission charges are so closely related to the revenues from the non-cancellable customer agreements that they should be recorded as an asset and charged to expense over the same period that the related revenue is recognized. The Company begins amortizing deferred solution and other costs for a particular customer agreement once the revenue recognition criteria are met and amortizes those deferred costs over the remaining term of the customer agreement. The Company analyzes solution and other costs that may be capitalized to assess their recoverability and only capitalizes costs that it anticipates to be recoverable. The portion of capitalized costs expected to be amortized during the succeeding twelve-month period is recorded in current assets as deferred solution and other costs, current portion, and the remainder is recorded in long-term assets as deferred solution and other costs, net of current portion. Property and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is calculated on a straight-line basis over the estimated useful lives of the related assets. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful lives of the related assets. Maintenance and repairs that do not extend the life of or improve an asset are expensed in the period incurred. The estimated useful lives of property and equipment are as follows: Computer hardware and equipment 3 - 5 years Purchased software and licenses 3 - 5 years Furniture and fixtures 7 years Leasehold improvements Lesser of estimated useful life or lease term Purchase Price Allocation, Intangible Assets, and Goodwill The purchase price allocation for business combinations and asset acquisitions requires extensive use of accounting estimates and judgments to allocate the purchase price to the identifiable tangible and intangible assets acquired and liabilities assumed based on their respective fair values. The Company early adopted Accounting Standards Update, or ASU, No. 2017-01, "Business Combinations (Topic 805): Clarifying the Definition of a Business" as of January 1, 2017. Under ASU 2017-01, the Company first determines whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If this threshold is met, the single asset or group of assets, as applicable, is not a business. If it's not met, the Company determines whether the single asset or group of assets, as applicable, meets the definition of a business. In connection with the Company's acquisitions of Centrix Solutions, Inc., or Centrix, in July 2015, Smarty Pig, LLC, doing business as Social Money, or Social Money, in November 2015, and an asset purchase in January 2017, the Company recorded certain intangible assets, including acquired technology, customer relationships, trademarks, non-compete agreements and assembled workforce. Amounts allocated to the acquired intangible assets are being amortized on a straight-line basis over the estimated useful lives. The Company periodically reviews the estimated useful lives and fair values of its identifiable intangible assets, taking into consideration any events or circumstances which might result in a diminished fair value or revised useful life. The excess purchase price over the fair value of assets acquired is recorded as goodwill. The Company tests goodwill for impairment annually in October, or whenever events or changes in circumstances indicate an impairment may have occurred. Because the Company operates in a single reporting unit, the impairment test is performed at the consolidated entity level by comparing the estimated fair value of the Company to the carrying value of the Company. The Company estimates the fair value of the reporting unit using a "step one" analysis using a fair-value-based approach based on the market capitalization or a discounted cash flow analysis of projected future results to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Determining the fair value of goodwill is subjective in nature and often involves the use of estimates and assumptions including, without limitation, use of estimates of future prices and volumes for the Company's products, capital needs, economic trends and other factors which are inherently difficult to forecast. If actual results, or the plans and estimates used in future impairment analyses are lower than the original estimates used to assess the recoverability of these assets, the Company could incur impairment charges in a future period. Deferred Revenues Deferred revenues primarily consist of amounts that have been billed to or received from customers in advance of revenue recognition and prepayments received from customers in advance for implementation, maintenance and other services, as well as initial subscription fees. The Company recognizes deferred revenues as revenues when the services are performed and the corresponding revenue recognition criteria are met. Customer prepayments are generally applied against invoices issued to customers when services are performed and billed. Deferred revenues that are expected to be recognized as revenues during the succeeding twelve-month period are recorded in current liabilities as deferred revenues, current portion, and the remaining portion is recorded in long-term liabilities as deferred revenues, net of current portion. Revenues All revenue-generating activities are directly related to the sale, implementation and support of the Company's solutions within a single operating segment. The Company derives the substantial majority of its revenues from subscription fees for the use of its solutions hosted in the Company's data centers as well as revenues for implementation and customer support services related to the Company's solutions. A small portion of the Company's customers host the Company's solutions in their own data centers under term license and maintenance agreements, and the Company recognizes the corresponding revenues ratably over the term of those customer agreements. Revenues are recognized net of sales credits and allowances. The Company begins to recognize revenues for a customer when all of the following criteria are satisfied: • there is persuasive evidence of an arrangement; • the service has been or is being provided to the customer; • the collection of the fees is reasonably assured; and • the amount of fees to be paid by the customer is fixed or determinable. Determining whether and when these criteria have been met can require significant judgment and estimates. In general, revenue recognition commences when the Company's solutions are implemented and made available to the customers. The Company's software solutions are available for use in hosted application arrangements under subscription fee agreements. Subscription fees from these applications, including related customer support, are recognized ratably over the customer agreement term beginning on the date the solution is made available to the customer. Amounts that have been invoiced are recorded in accounts receivable and deferred revenues or revenues, depending on whether the Company's revenue recognition criteria have been met. The Company considers subscription fees to be fixed or determinable unless the fees are subject to refund or adjustment or are not payable within the Company's standard payment terms. In determining whether collection of subscription fees is reasonably assured, the Company considers financial and other information about customers, such as a customer's current credit-worthiness and payment history over time. Historically, bad debt expenses have been insignificant. The Company enters into arrangements with multiple-deliverables that generally include multiple subscription and implementation services. Additional agreements with existing customers that are not in close proximity to the original arrangements are treated as separate contracts for accounting purposes. For multiple-deliverable arrangements, arrangement consideration is allocated to deliverables based on their relative selling price. In order to treat deliverables in a multiple-deliverable arrangement as separate units of accounting, the deliverables must have standalone value upon delivery. The Company's subscription services have standalone value as such services are often sold separately. In determining whether implementation services have standalone value apart from the subscription services, the Company considers various factors including the availability of the services from other vendors. To date, the Company has concluded that the implementation services included in multiple-deliverable arrangements do not have standalone value. As a result, when implementation services are sold in a multiple-deliverable arrangement, the Company defers any arrangement fees for implementation services and recognizes such amounts ratably over the period of performance for the initial agreement term. When multiple-deliverables included in an arrangement are separated into different units of accounting, the arrangement consideration is allocated to the identified separate units based on a relative selling price hierarchy. The selling price for a deliverable is based on its vendor-specific objective evidence of selling price, or VSOE, if available, third-party evidence of selling price, or TPE, if VSOE is not available or best estimate of selling price, or BESP, if neither VSOE nor TPE is available. The Company has not established VSOE for its subscription services due to lack of pricing consistency, the introduction of new services and other factors. The Company has determined that TPE is not a practical alternative due to differences in its service offerings compared to other parties and the availability of relevant third-party pricing information. Accordingly, the Company uses BESP to determine the relative selling price. The amount of revenue allocated to delivered items is limited by contingent revenues. The Company determines BESP by considering its overall pricing objectives and market conditions. Significant pricing practices taken into consideration include the Company's discounting practices, the size and volume of transactions, customer characteristics, price lists, go-to-market strategy, historical standalone sales and agreement prices. As the Company's go-to-market strategies evolve, it may modify its pricing practices in the future, which could result in changes in relative selling prices, and include both VSOE and BESP. Subscription Fee Revenues The Company's solutions are available as hosted solutions under subscription fee agreements without licensing perpetual rights to the software. Subscription fees from a hosted solution are recognized monthly over the customer agreement term beginning on the date the Company's solution is made available to the customer. Additional fees for monthly usage above the levels included in the standard subscription fee, which include fees for transactions processed during the period, are recognized as revenue in the month when the usage amounts are determined and reported. Any revenues related to upfront implementation services are recognized ratably over the same customer agreement term. Amounts that have been invoiced are recorded in accounts receivable and deferred revenues or revenues, depending on whether the revenue recognition criteria have been met. Professional Services Revenues When professional services are not combined with subscription services or term licenses as a single unit of accounting, these professional services revenues are recognized as the services are performed. Certain out-of-pocket expenses billed to customers are recorded as revenues rather than an offset to the related expense. Revenues recorded from out-of-pocket expense reimbursements totaled approximately $1.5 million , $1.5 million and $1.3 million during the years ended December 31, 2017 , 2016 and 2015 , respectively. The out-of-pocket expenses are reported in cost of revenues. Term Licenses and Maintenance Revenues A small portion of the Company's customers host and manage the Company's solutions on-premises or in third-party data centers under term license and maintenance agreements. Term licenses sold with maintenance, which entitles the customer to technical support, upgrades and updates to the software made available on a when-and-if-available basis, are accounted for under Accounting Standards Codification, or ASC, 985-605, "Software Revenue Recognition." The Company does not have VSOE of fair value for the maintenance and professional services so the entire arrangement consideration is recognized monthly over the term of the software license when all of the other revenue recognition criteria have been met. Revenues from term licenses and maintenance agreements were not significant in the periods presented. Cost of Revenues Cost of revenues is comprised primarily of salaries and other personnel-related costs, including employee benefits, bonuses and stock-based compensation, for employees providing services to the Company's customers. Costs associated with these services include the costs of the Company's implementation, customer support, data center and customer training personnel, as well as costs related to research and development personnel who perform implementation and customer support services. Cost of revenues also includes the direct costs of bill-pay and other third-party intellectual property included in the Company's solutions, the amortization of deferred solution and services costs, co-location facility costs and depreciation of the Company's data center assets, an allocation of general overhead costs and referral fees. Direct costs of third-party intellectual property include amounts paid for third-party licenses and related maintenance that are incorporated into the Company's software and the amortization of acquired technology from the Company's recent acquisitions, with the costs amortized to cost of revenues over the useful lives of the purchased assets. The Company capitalizes certain personnel costs directly related to the implementation of its solutions to the extent those costs are considered to be recoverable from future revenues. The Company amortizes the costs for a particular implementation once revenue recognition commences, and the Company amortizes those implementation costs over the remaining term of the customer agreement. Other costs not directly recoverable from future revenues are expensed in the period incurred. The Company capitalized implementation costs in the amount of $5.2 million , $6.1 million and $4.1 million during the years ended December 31, 2017 , 2016 and 2015 , respectively. Software Development Costs Software development costs include salaries and other personnel-related costs, including employee benefits and bonuses attributed to programmers, software engineers and quality control teams working on the Company's software solutions. The costs related to software development that are incurred between reaching technological feasibility of a solution and the point at which the solution is ready for general release are capitalized and are included in intangible assets, net on the consolidated balance sheet. Capitalized software development costs are computed on an individual product basis, and products available for market are amortized to cost of revenues over the products' estimated economic lives. The Company recognized $0.5 million of amortization of capitalized software development costs for the year ended December 31, 2017 as all of the related individual products reached general release during 2017. The Company capitalized software development costs in the amount of $1.0 million , $2.7 million and $0.3 million during the years ended December 31, 2017 , 2016 , and 2015 , respectively. Research and Development Costs Research and development costs include salaries and other personnel-related costs, including employee benefits, bonuses and stock-based compensation, third-party contractor expenses, software development tools, an allocation of facilities and depreciation expenses and other related expenses incurred in developing new solutions and upgrading and enhancing existing solutions. Research and development costs are expensed as incurred. Advertising All advertising costs of the Company are expensed the first time the advertising takes place. Advertising costs were $0.7 million , $0.3 million and $0.3 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. Sales Tax The Company presents sales taxes and other taxes collected from customers and remitted to governmental authorities on a net basis and, as such, excludes them from revenues. Comprehensive Loss Comprehensive loss includes net loss as well as other changes in stockholders' equity that result from transactions and economic events other than those with stockholders. Other comprehensive loss consists of net loss and unrealized gains and losses on available-for-sale investments. Stock-Based Compensation Stock options and restricted stock units awarded to employees, directors and consultants are measured at fair value at each grant date. The Company recognizes compensation expense ratably over the requisite service period of the option or restricted stock unit award. As of January 1, 2017, the Company no longer uses a forfeiture rate to recognize compensation expense as a result of the adoption of ASU No. 2016-09, "Improvements to Employee Share-Based Payment Accounting." Generally, options vest 25% on the one -year anniversary of the grant date with the balance vesting monthly over the following 36 months, and restricted stock unit awards vest in four annual installments of 25% each. The Company values stock options using the Black-Scholes option-pricing model, which requires the input of subjective assumptions, including the risk-free interest rate, expected life, expected stock price volatility and dividend yield. The risk-free interest rate assumption is based upon observed interest rates for constant maturity U.S. Treasury securities consistent with the expected term of the Company's employee stock options. The expected life represents the period of time the stock options are expected to be outstanding and is based on the simplified method. Under the simplified method, the expected life of an option is presumed to be the mid-point between the vesting date and end of the contractual term. The Company used the simplified method due to the lack of sufficient historical exercise data to provide a reasonable basis upon which to otherwise estimate the expected life of the stock options. Due to the Company's limited history as a public company, expected volatility is based on historical volatilities for publicly traded stock of comparable companies over the estimated expected life of the stock options. The Company assumed no dividend yield because it does not expect to pay dividends in the near future, which is consistent with the Company's history of not paying dividends. The Company values restricted stock units at the closing market price on the date of grant, and recognizes compensation expense ratably over the requisite service period of the restricted stock unit award. Income Taxes Deferred income taxes are provided for the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes and operating loss carryforwards and credits using enacted tax rates expected to be in effect in the years in which the differences are expected to reverse. The Company assesses the likelihood that deferred tax assets will be realized and recognizes a valuation allowance if it is more likely than not that some portion of the deferred tax assets will not be realized. This assessment requires judgment as to the likelihood and amounts of future taxable income by tax jurisdiction. To date, the Company has provided a full valuation allowance against its deferred tax assets as it believes the objective and verifiable evidence of its historical pretax net losses outweighs any positive evidence of its forecasted future results. Although the Company believes that its tax estimates are reasonable, the ultimate tax determination involves significant judgment that is subject to audit by tax authorities in the ordinary course of business. The Company will continue to monitor the positive and negative evidence, and it will adjust the valuation allowance as sufficient objective positive evidence becomes available. No tax related impact was recorded in the financial statements as a result of the adoption of ASU No. 2016-09. The Company evaluates its uncertain tax positions based on a determination of whether and how much of a tax benefit taken by the Company in its tax filings or positions is more likely than not to be realized. Potential interest and penalties associated with any uncertain tax positions are recorded as a component of income tax expense. Through December 31, 2017 , the Company has not identified any material uncertain tax positions for which liabilities would be required to be recorded. Basic and Diluted Net Loss per Common Share The following table sets forth the computations of net loss per share for the periods listed: Year ended December 31, 2017 2016 2015 Numerators: Net loss $ (26,164 ) $ (36,354 ) $ (25,063 ) Denominator: Weighted-average common shares outstanding, basic and diluted 41,218 39,649 37,275 Net loss per common share, basic and diluted $ (0.63 ) $ (0.92 ) $ (0.67 ) Due to net losses for each of the years ended December 31, 2017 , 2016 and 2015 , basic and diluted loss per share were the same, as the effect of all potentially dilutive securities would have been anti-dilutive. The following table sets forth the anti-dilutive common share equivalents for the periods listed: Year ended December 31, 2017 2016 2015 Stock options and restricted stock units 5,372 5,643 5,760 Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board, or FASB, issued ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)," or ASU 2014-09, which amends the existing accounting standards for revenue recognition. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled to when products are transferred to customers. In August 2015, the FASB issued ASU No. 2015-14, "Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date," or ASU 2015-14, that deferred the effective date by one year to December 15, 2017 for interim and annual reporting periods beginning after that date. In 2016, the FASB issued the following amendments to ASC 606: ASU No. 2016-08, "Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)," which clarifies the implementation guidance on principal versus agent considerations; ASU No. 2016-10, "Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing," which clarifies guidance on identification of performance obligations and licensing implementation; ASU No. 2016-12, "Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients," which provides clarifying guidance on assessing collectibility, presentation of sales taxes, noncash consideration, contract modifications and completed contracts; and ASU No. 2016-20, "Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers," which clarifies narrow aspects of ASC 606 or corrects unintended application of the guidance. ASC 606 will be effective for the Company beginning in its first quarter of 2018 using the modified retrospective method. The Company continues to evaluate all potential impacts of the new standard, as well as the changes that are required to systems, processes and internal controls to meet the new standard's reporting and disclosure requirements. The Company currently believes the most significant impact relates to its accounting for arrangements that include contractual provisions providing for periodic price increases in subscription fee arrangements. Under current GAAP, the Company accounts for periodic price increases in the period in which they occur, and under the new standard, the Company will recognize revenue from periodic price increases on a ratable basis over the term of the contract. Additionally under current GAAP, for contracts in which customers host and manage the Company's solutions on-premises or in third-party data centers under term license and maintenance agreements, the Company recognizes the entire arrangement consideration monthly over the term of the software license as the Company does not have VSOE of fair value for the license and maintenance. Under the new standard, the Company will be able to recognize software license revenue once the customer obtains control of the license, which will generally occur at the start of each license term. Under current GAAP, the Company also defers only direct and incremental commission costs to obtain a contract and amortizes those costs over the term of the related contract. Under the new standard, the Company will be required to defer additional incremental |
Business Combinations and Asset
Business Combinations and Asset Acquisitions | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Business Combinations and Asset Acquisitions | Business Combinations and Asset Acquisitions Asset Acquisition In January 2017, the Company acquired the outstanding shares of a privately-owned company. In accordance with ASU 2017-01, the Company determined the set of assets acquired was not a business as substantially all of the fair value of the gross assets acquired was concentrated in a single identifiable asset, and the transaction was accounted for as an asset purchase. The Company acquired the assets for $1.5 million in cash from existing balances which includes a hold-back of $0.2 million payable twelve months after the closing date. Consideration was allocated on a relative fair value basis and resulted in $1.5 million in intangible assets including acquired technology and assembled workforce. Intangible assets do not have a tax basis, and therefore, are amortized on a straight-line basis over their estimated useful lives of three years. The acquired intangible assets are not amortizable for income tax purposes, which will result in an increase to deferred tax liabilities and a decrease of valuation allowance of $0.3 million . Social Money On November 30, 2015, the Company's wholly-owned subsidiary, Q2 Software, Inc. acquired all of the outstanding ownership interests of Social Money, a privately-owned financial services software company that offers a modern, cloud-based platform that assists financial institutions in its direct digital strategies. The purchase price paid was in excess of the fair value of the net assets acquired and, as a result, the Company recorded goodwill. Social Money was acquired for approximately $10.7 million in cash from existing balances, including a customary post-closing working capital adjustment of $0.1 million , and a hold back of $2.5 million payable 18 months after closing date. At closing, the Company held back $2.5 million of the initial consideration, or hold-back amount, to compensate for any breach of a representation or warranty or any violation or default of any obligation by the sellers subsequent to the acquisition during a period of 18 months following the acquisition date. To the extent not utilized, the hold-back amount shall be paid to the former unit holders of Social Money at the end of the 18 -month period unless there are any unresolved claims remaining at that time. During 2017, the Company paid out $0.2 million in retention bonuses to certain of the Social Money employees based upon their continued employment with the Company. In addition, the Company released the entire $2.5 million hold-back to the former owners of Social Money upon the expiration of the hold-back period. The Company recognized $0.1 million and $0.2 million under these agreements in compensation expense which is included in acquisition related costs in the consolidated statement of comprehensive loss for the years ended December 31, 2017 and 2016 , respectively. The Company recorded the purchase of Social Money using the acquisition method of accounting and accordingly, recognized assets acquired and liabilities assumed at their fair values as of the date of acquisition. The results of Social Money's operations are included in the Company's consolidated results of operations beginning with the date of acquisition. Proforma results of operations related to this acquisition have not been presented since Social Money's operating results up to the date of acquisition were not material to the Company's consolidated financial statements. The following table summarizes the allocation of the purchase price based on the estimated fair value of the assets acquired and the liabilities assumed: Assets acquired: Cash $ 204 Restricted cash 1,238 Accounts receivable 123 Other prepaid assets 86 Property and equipment, net 87 Intangible assets 6,424 Goodwill 4,090 Total assets acquired 12,252 Liabilities assumed: Accounts payable 62 Accrued liabilities and accrued compensation 257 Customer deposit liability 1,238 Total liabilities assumed 1,557 Fair value of assets acquired and liabilities assumed $ 10,695 The goodwill recognized is attributable primarily to synergies expected from the integration of the acquired product offering into the Company's integrated solutions including an increasing customer base, the expanded service capabilities that are expected to become available from planned investments in the acquired products, and the value of the assembled work force in accordance with generally accepted accounting principles. The fair value of the intangible assets was based on the income approach, discounted cash flow method and relief from royalty method, as appropriate. Intangible assets are amortized on a straight-line basis over their estimated useful lives. For the non-compete agreements, the estimated useful life is based upon the term of each individual agreement with certain key employees of Social Money. The acquisition is expected to be treated as a taxable asset acquisition for tax purposes, resulting in amortizable tax basis in acquired intangibles, including $4.1 million of tax basis goodwill. Centrix On July 31, 2015, the Company's wholly-owned subsidiary, Q2 Software, Inc. acquired all of the outstanding shares of Centrix, a privately-owned company that provides financial institutions with products that detect fraud, manage risk and simplify compliance. The purchase price paid was in excess of the fair value of the net assets acquired and, as a result, the Company recorded goodwill. Centrix was acquired for approximately $21.0 million in cash from existing balances, including a customary post-closing working capital adjustment of $1.0 million which was paid in the fourth quarter of 2015. At closing, the Company deposited into an escrow account $2.0 million of the initial consideration, or escrow amount, to compensate for any breach of a representation or warranty or any violation or default of any obligation by the sellers subsequent to the acquisition during a period of 24 months following the acquisition date. The escrow amount was paid to the former shareholders of Centrix in the third quarter of 2017, less $0.3 million which was withheld as it related to miscellaneous liabilities that existed pre-acquisition. The former shareholders of Centrix also have the right to receive in the aggregate up to $9.0 million based upon the achievement of certain milestone-based objectives and the continued employment of certain shareholders. Payouts under these agreements are contingent upon the future employment of these Centrix employees with the Company and were therefore not included as consideration in recording the business combination but will be recorded as compensation expense as earned. During the year ended December 31, 2017 , the Company paid out $7.2 million to the former Centrix shareholders based upon the achievement of certain milestone-based objectives and continued employment. The Company has recognized approximately $1.1 million and $5.9 million under these agreements in compensation expense included in acquisition related costs in the consolidated statement of comprehensive loss for the years ended December 31, 2017 and 2016 , respectively. The Company continues to accrue for payouts contingent upon future employment of acquired employees, and the unpaid amounts due to the former shareholders or continuing employees, as applicable, are recorded in accrued compensation in the consolidated balance sheets. The Company recorded the purchase of Centrix using the acquisition method of accounting and accordingly, recognized assets acquired and liabilities assumed at their fair values as of the date of acquisition. The results of Centrix's operations are included in the Company's consolidated results of operations beginning with the date of acquisition. Proforma results of operations related to this acquisition have not been presented since Centrix's operating results up to the date of acquisition were not material to the Company's consolidated financial statements. The following table summarizes the allocation of the purchase price based on the estimated fair value of the assets acquired and the liabilities assumed: Assets acquired: Cash $ 1,417 Accounts receivable 579 Other prepaid assets 42 Deferred solution and other costs 106 Property and equipment, net 156 Intangible assets 11,690 Goodwill 8,786 Total assets acquired 22,776 Liabilities assumed: Accounts payable 46 Accrued liabilities and accrued compensation 267 Deferred revenue 1,483 Total liabilities assumed 1,796 Fair value of assets acquired and liabilities assumed $ 20,980 The goodwill recognized is attributable primarily to synergies expected from the integration of the acquired product offering into the Company's integrated solutions, the expanded service capabilities that are expected to become available from planned investments in the acquired products, and the value of the assembled work force in accordance with generally accepted accounting principles. The fair value of the intangible assets was based on the income approach, discounted cash flow method and relief from royalty method. For the non-compete agreements, the estimated useful life is based upon the term of each individual agreement with certain former shareholders of Centrix. The acquisition is expected to be treated as a taxable asset acquisition for tax purposes, resulting in amortizable tax basis in acquired intangibles, including $13.4 million of tax basis goodwill. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The carrying values of the Company's financial instruments, principally cash equivalents, investments, accounts receivable, restricted cash and accounts payable, approximated their fair values due to the short period of time to maturity or repayment. Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The current accounting guidance for fair value measurements defines a three-level valuation hierarchy for disclosures as follows: • Level I—Unadjusted quoted prices in active markets for identical assets or liabilities; • Level II—Inputs other than quoted prices included within Level I that are observable, unadjusted quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data; and • Level III—Unobservable inputs that are supported by little or no market activity, which requires the Company to develop its own assumptions. The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The following table details the fair value hierarchy of the Company's financial assets measured at fair value on a recurring basis as of December 31, 2017 : Fair Value Measurements Using: Cash Equivalents: Fair Value Quoted Prices Significant Other Significant Money market funds $ 9,279 $ 9,279 $ — $ — Investments: Fair Value Quoted Prices Significant Other Significant U.S. government agency bonds $ 16,194 $ — $ 16,194 $ — Corporate bonds and commercial paper 15,815 — 15,815 — Certificates of deposit 9,676 — 9,676 — $ 41,685 $ — $ 41,685 $ — The following table details the fair value hierarchy of the Company's financial assets measured at fair value on a recurring basis as of December 31, 2016 : Fair Value Measurements Using: Cash Equivalents: Fair Value Quoted Prices Significant Other Significant Money market funds $ 8,306 $ 8,306 $ — $ — Investments: Fair Value Quoted Prices Significant Other Significant U.S. government agency bonds $ 12,998 $ — $ 12,998 $ — Corporate bonds and commercial paper 14,647 — 14,647 — Certificates of deposit 14,604 — 14,604 — $ 42,249 $ — $ 42,249 $ — The Company determines the fair value of its investment holdings based on pricing from its pricing vendors. The valuation techniques used to measure the fair value of financial instruments having Level 2 inputs were derived from non-binding consensus prices that are corroborated by observable market data or quoted market prices for similar instruments. Such market prices may be quoted prices in active markets for identical assets (Level 1 inputs) or pricing determined using inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs). |
Cash, Cash Equivalents and Inve
Cash, Cash Equivalents and Investments | 12 Months Ended |
Dec. 31, 2017 | |
Cash and Cash Equivalents [Abstract] | |
Cash, Cash Equivalents and Investments | Cash, Cash Equivalents and Investments The Company's cash, cash equivalents and investments as of December 31, 2017 and 2016 consisted primarily of cash, U.S. government agency bonds, corporate bonds, commercial paper, certificates of deposit and money market funds. The Company classifies investments as available-for-sale at the time of purchase and reevaluates such classification as of each balance sheet date. All investments are recorded at estimated fair value. Unrealized gains and losses on available-for-sale investments are included in accumulated other comprehensive loss, a component of stockholders' equity. The Company evaluates its investments to assess whether those with unrealized loss positions are other than temporarily impaired. The Company considers impairments to be other than temporary if they are related to deterioration in credit risk or if it is likely the Company will sell the investments before the recovery of their cost basis. Realized gains and losses and declines in value judged to be other than temporary are determined based on the specific identification method and are reported in other income (expense), net, in the consolidated statements of comprehensive loss. Interest, amortization of premiums and accretion of discount on all investments classified as available-for-sale are also included as a component of other income (expense), net, in the consolidated statements of comprehensive loss. As of December 31, 2017 and 2016 , the Company's cash was $ 48.7 million and $46.6 million , respectively. A summary of the cash equivalents and investments as of December 31, 2017 is as follows: Cash Equivalents: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Money market funds $ 9,279 $ — $ — $ 9,279 Investments: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. government agency bonds $ 16,277 $ — $ (83 ) $ 16,194 Corporate bonds and commercial paper 15,871 — (56 ) 15,815 Certificates of deposit 9,676 — — 9,676 $ 41,824 $ — $ (139 ) $ 41,685 A summary of the cash equivalents and investments as of December 31, 2016 is as follows: Cash Equivalents: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Money market funds $ 8,306 $ — $ — $ 8,306 Investments: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. government agency bonds $ 13,028 $ — $ (30 ) $ 12,998 Corporate bonds and commercial paper 14,671 — (24 ) 14,647 Certificates of deposit 14,604 — — 14,604 $ 42,303 $ — $ (54 ) $ 42,249 The Company may sell its investments at any time, without significant penalty, for use in current operations or for other purposes, even if they have not yet reached maturity. As a result, the Company classifies its investments, including investments with maturities beyond twelve months, as current assets in the accompanying consolidated balance sheets. The following table summarizes the estimated fair value of the Company's investments, designated as available-for-sale and classified by the contractual maturity date of the investments as of the dates shown: December 31, 2017 2016 Due within one year or less $ 27,324 $ 26,577 Due after one year through five years 14,361 15,672 $ 41,685 $ 42,249 The Company has certain available-for-sale investments in a gross unrealized loss position, all of which have been in such position for less than twelve months. The Company reviews its debt securities classified as short-term investments on a regular basis to evaluate whether or not any security has experienced an other than temporary decline in fair value. The Company considers factors such as the length of time and extent to which the market value has been less than the cost, the financial position and near-term prospects of the issuer and its intent to sell, or whether it is more likely than not the Company will be required to sell the investment before recovery of the investment's amortized-cost basis. If the Company determines that an other than temporary decline exists in one of these investments, the respective investment would be written down to fair value. For debt securities, the portion of the write-down related to credit loss would be recognized in other income, net in the consolidated statements of comprehensive loss. Any portion not related to credit loss would be included in accumulated other comprehensive loss. Because the Company does not intend to sell any investments which have an unrealized loss position at this time, and it is not more likely than not that the Company will be required to sell the investment before recovery of its amortized cost basis, which may be maturity, the Company does not consider the investments with unrealized loss positions to be other than temporarily impaired as of December 31, 2017 . The following table shows the fair values and the gross unrealized losses of these available-for-sale investments aggregated by investment category as of December 31, 2017 : Adjusted Cost Gross Unrealized Loss Fair Value U.S. government agency bonds $ 16,277 $ (83 ) $ 16,194 Corporate bonds and commercial paper 15,871 (56 ) 15,815 $ 32,148 $ (139 ) $ 32,009 The following table shows the fair values and the gross unrealized losses of these available-for-sale investments aggregated by investment category as of December 31, 2016 : Adjusted Cost Gross Unrealized Loss Fair Value U.S. government agency bonds $ 13,028 $ (30 ) $ 12,998 Corporate bonds and commercial paper 13,668 (24 ) 13,644 $ 26,696 $ (54 ) $ 26,642 |
Deferred Solution and Other Cos
Deferred Solution and Other Costs | 12 Months Ended |
Dec. 31, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Deferred Solution and Other Costs | Deferred Solution and Other Costs Deferred solution and other costs, current portion and net of current portion, consisted of the following: December 31, 2017 2016 Deferred solution costs $ 6,505 $ 6,295 Deferred commissions 2,741 2,544 Deferred solution and other costs, current portion $ 9,246 $ 8,839 Deferred solution costs $ 5,291 $ 4,741 Deferred commissions 7,682 6,384 Deferred solution and other costs, net of current portion $ 12,973 $ 11,125 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consisted of the following: December 31, 2017 2016 Computer hardware and equipment $ 30,734 $ 20,335 Purchased software and licenses 8,788 6,089 Furniture and fixtures 5,387 4,673 Leasehold improvements 13,470 11,597 58,379 42,694 Accumulated depreciation (23,835 ) (15,214 ) Property and equipment, net $ 34,544 $ 27,480 Depreciation expense was $9.2 million , $7.3 million and $5.5 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. Depreciation expense included amortization of assets held under capital leases in the years ended December 31, 2016 and 2015. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The carrying amount of goodwill was $12.9 million at December 31, 2017 and 2016 . Goodwill represents the excess purchase price over the fair value of assets acquired. During 2015, the Company completed the acquisitions of Centrix and Social Money. The Company has one operating segment and one reporting unit. Goodwill is tested for impairment on an annual basis, and between annual tests if indicators of potential impairment exist, using a fair-value-based approach based on the market capitalization of the reporting unit. The annual impairment test was performed as of October 31, 2017 . No impairment of goodwill was identified during 2017 . Intangible assets at December 31, 2017 and 2016 were as follows: As of December 31, 2017 As of December 31, 2016 Gross Amount Accumulated Amortization Net Carrying Amount Gross Amount Accumulated Amortization Net Carrying Amount Customer relationships $ 3,130 $ (1,294 ) $ 1,836 $ 3,130 $ (749 ) $ 2,381 Non-compete agreements 884 (451 ) 433 884 (266 ) 618 Trademarks 2,140 (1,724 ) 416 2,140 (1,010 ) 1,130 Acquired technology 13,293 (7,464 ) 5,829 11,920 (3,846 ) 8,074 Assembled workforce 121 (38 ) 83 — — — Capitalized software development costs 3,975 (538 ) 3,437 3,005 — 3,005 $ 23,543 $ (11,509 ) $ 12,034 $ 21,079 $ (5,871 ) $ 15,208 The estimated useful lives and weighted average amortization periods for intangible assets at December 31, 2017 are as follows (in years): Estimated Useful Life Weighted Average Amortization Period Customer relationships 4 - 6 3.7 Non-compete agreements 2 - 5 2.7 Trademarks 2 - 3 0.8 Acquired technology 3 - 5 2.1 Assembled workforce 3 2.1 Capitalized software development costs 5 4.5 Total 3.0 The Company recorded intangible assets from the business combinations in 2015 and an asset acquisition in 2017, discussed in Note 3, Business Combinations and Asset Acquisitions. Intangible assets are amortized on a straight-line basis over their estimated useful lives, which range from two to six years. Amortization expense included in cost of revenues in the consolidated statement of comprehensive loss was $3.6 million and $3.2 million for each of the years ended December 31, 2017 and 2016 , respectively, and amortization expense included in operating expenses in the consolidated statement of comprehensive loss was $1.5 million for each of the years ended December 31, 2017 and 2016 . Capitalized software development costs were $4.0 million and $3.0 million as of December 31, 2017 and 2016, respectively. During the year ended 2017, all of the products related to capitalized software development costs reached general release, and the Company has commenced amortization of these costs. Amortization expense included in cost of revenues in the consolidated statement of comprehensive loss for capitalized software development costs was $0.5 million for the year ended December 31, 2017 . Capitalized software development costs are computed on an individual product basis and those products available for market are amortized to cost of revenues over the products' estimated economic lives, which are expected to be five years. The estimated future amortization expense related to intangible assets as of December 31, 2017 was as follows: Amortization Year Ended December 31, 2018 $ 5,446 2019 3,183 2020 2,076 2021 1,072 2022 and thereafter 257 Total amortization $ 12,034 |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Accrued Liabilities Accrued liabilities consisted of the following: December 31, 2017 2016 Accrued data center equipment and software purchases $ 4,410 $ 232 Accrued transaction processing fees 1,687 1,790 Accrued professional services 1,419 1,518 Acquisition hold back 150 2,500 Deferred rent 1,197 1,066 Other 1,699 1,716 $ 10,562 $ 8,822 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Debt In April 2013, the Company entered into a secured credit facility agreement, or Credit Facility, with Wells Fargo Bank, National Association, or Wells Fargo, which the Company and Wells Fargo subsequently amended several times, most recently on March 31, 2016, to modify the Credit Facility to allow for the acquisition of Social Money. The Credit Facility, as amended, provided for a line of credit of up to $25.0 million , with an accordion feature, or Accordion Feature, allowing the Company to increase its maximum borrowings by up to an additional $25.0 million , subject to certain conditions and limitations, including that borrowings at any time would be limited to 75% of the Company's trailing twelve -month recurring revenues. Access to the total borrowings available under the Credit Facility was restricted based on covenants related to the Company's minimum liquidity and adjusted EBITDA. Amounts borrowed under the Credit Facility accrued interest, at the Company's election at either: (i) the per annum rate equal to the LIBOR rate plus an applicable margin; or (ii) the then current base rate plus the greater of the U.S. Federal Funds rate plus one percentage point, the one-month LIBOR plus one percentage point, or the lending financial institution's prime rate. The Company paid a monthly fee based on the total unused borrowings balance, an annual administrative fee and the initial closing fee, which was paid in three equal annual installments over the first three years of the Credit Facility. The Accordion Feature expired in October 2016, at which time maximum borrowings under the Facility were reduced to $25.0 million . On April 11, 2017, the Credit Facility expired pursuant to its original terms. Upon the expiration of the Credit Facility, the Company paid off the outstanding balance, which was less than $0.1 million , and the secured letter of credit which had been issued against the facility for the security deposit for its corporate headquarters is now secured by a $1.0 million restricted deposit with Wells Fargo. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Operating Lease Commitments The Company leases office space under non-cancellable operating leases for its corporate headquarters in Austin, Texas in two adjacent buildings under separate lease agreements, pursuant to the first of which the Company leases approximately 67 square feet of office space with an initial term that expires on April 30, 2021, with the option to extend the lease for an additional five -year term, and pursuant to the second of which the Company leases approximately 129 square feet of office space with an initial term that expires on April 30, 2028, with the option to extend the lease for an additional ten -year term. The Company also leases office space in: Lincoln, Nebraska; Des Moines, Iowa; Atlanta, Georgia; Asheville, North Carolina; and, south Austin, Texas. The Company believes its current facilities will be adequate for its needs for the foreseeable future. Rent expense under operating leases was $4.4 million , $3.7 million and $1.8 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. Future minimum payments required under operating leases that have initial or remaining non-cancelable lease terms in excess of one year at December 31, 2017 were as follows: Operating Leases Year Ended December 31, 2018 $ 5,675 2019 5,692 2020 5,694 2021 4,781 2022 4,296 Thereafter 20,442 Total minimum lease payments $ 46,580 Contractual Commitments The Company has non-cancelable contractual commitments related to third-party products, co-location fees and other product costs. The Company is party to several purchase commitments for third-party products that contain both a contractual minimum obligation and a variable obligation based upon usage or other factors which can change on a monthly basis. The estimated amounts for usage and other factors are not included within the table below. Future minimum contractual commitments that have initial or remaining non-cancelable terms in excess of one year were as follows: Contractual Commitments Year Ended December 31, 2018 $ 13,227 2019 11,060 2020 7,413 2021 7,355 2022 7,355 Thereafter 5,517 Total commitments $ 51,927 Legal Proceedings From time to time, the Company may become involved in legal proceedings arising in the ordinary course of its business. The Company is not presently a party to any legal proceedings that, if determined adversely to the Company, would have a material adverse effect on the Company. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders' Equity Follow-On Offerings On March 4, 2015, the Company and certain selling stockholders completed a follow-on offering of 5,122 shares of common stock at $19.75 per share, and sold an additional 768 shares of common stock at $19.75 per share when the underwriters exercised their over-allotment option to purchase additional shares. The total shares sold in the follow-on offering and shares sold when the underwriters exercised their over-allotment option included 4,133 shares sold by selling stockholders and 1,757 shares sold by the Company. After deducting the payment of underwriters' discounts and commissions and offering costs, the net proceeds to the Company from the sale of shares in the offering and the sale of shares when the underwriters exercised their over-allotment option was approximately $32.3 million . On September 30, 2015, the Company and certain selling stockholders completed a follow-on offering of 3,799 shares of common stock at $25.50 per share, and on October 15, 2015, selling stockholders sold an additional 570 shares of common stock at $25.50 per share when the underwriters exercised their over-allotment option to purchase additional shares. The total shares sold in the follow-on offering and shares sold when the underwriters exercised their over-allotment option included 3,516 shares sold by selling stockholders and 853 shares sold by the Company. After deducting the payment of underwriters' discounts and commissions and offering costs, the net proceeds to the Company from the sale of shares in the offering was approximately $20.3 million . |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation In March 2014, the Company's board of directors approved the 2014 Equity Incentive Plan, or 2014 Plan, under which stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares and units and other cash-based or stock-based awards may be granted to employees, consultants and directors. Shares of common stock that are issued and available for issuance under the 2014 Plan consist of authorized, but unissued or reacquired shares of common stock or any combination thereof. As of December 31, 2016 , a total of 5,413 shares had been reserved for issuance under the 2014 Plan. The 2014 Plan contains a provision that automatically increases the shares available for issuance under the plan on January 1 of each year subsequent to the 2014 Plan's adoption through 2024, by an amount equal to the smaller of (a) 4.5% of the number of shares of common stock issued and outstanding on the immediately preceding December 31, or (b) an amount determined by the Company's board of directors. On January 1, 2017, 1,819 shares were added to the 2014 Plan in accordance with the annual automatic increase provision of the 2014 Plan. In addition, the 2014 Plan reserve is automatically increased to include any shares issuable upon expiration or termination of options granted under the Company's 2007 Stock Plan, or 2007 Plan, for options that expire or terminate without having been exercised. For the year ended December 31, 2017 , 66 shares have been transferred to the 2014 Plan from the 2007 Plan, and as of December 31, 2017 , a total of 7,298 shares were allocated for issuance under the 2014 Plan. As of December 31, 2017 , options to purchase a total of 2,695 shares of common stock have been granted under the 2014 Plan, 2,425 shares have been reserved under the 2014 Plan for the vesting of restricted stock units, 439 shares have been returned to the 2014 Plan as a result of termination of options that expired or terminated without having been exercised and restricted stock awards that terminated prior to the awards vesting, and 2,617 shares of common stock remain available for future issuance under the 2014 Plan. Shares of common stock that are issued and were available for issuance under the 2014 Plan consist of authorized, but unissued or reacquired shares of common stock or any combination thereof. In July 2007, the Company adopted the 2007 Plan under which options or stock purchase rights may be granted to employees, consultants and directors. Upon the completion of the Company's initial public offering, or IPO, in March 2014, the board of directors terminated the 2007 Plan in connection with the IPO and all shares that were available for future issuance under the 2007 Plan at such time were transferred to the 2014 Plan. The 2007 Plan will continue to govern the terms and conditions of all outstanding equity awards granted under the 2007 Plan. As of December 31, 2017 , no shares remain available for future issuance under the 2007 Plan. Shares of common stock that are issued and were available for issuance under the 2007 Plan consist of authorized, but unissued or reacquired shares of common stock or any combination thereof. Stock Options The following summarizes the assumptions used for estimating the fair value of stock options granted during the periods indicated: Year Ended December 31, 2017 2016 2015 Risk-free interest rate 1.7 - 2.1% 1.0 - 1.8% 1.5 - 1.6% Expected life (in years) 4.8 3.8 - 4.8 4.3 - 4.8 Expected volatility 41.5 - 43.1% 43.9 - 46.5% 45.7 - 46.9% Dividend yield — — — Weighted-average grant date fair value per share $14.17 $9.32 $9.38 Stock option activity was as follows: Number of Options Weighted Average Exercise Price Balance as of January 1, 2015 6,111 $ 5.90 Granted 582 23.12 Exercised (1,578 ) 2.71 Forfeited (71 ) 8.95 Balance as of December 31, 2015 5,044 8.84 Granted 892 23.49 Exercised (1,379 ) 4.57 Forfeited (123 ) 16.08 Balance as of December 31, 2016 4,434 12.91 Granted 643 36.44 Exercised (1,205 ) 10.07 Forfeited (180 ) 19.15 Balance as of December 31, 2017 3,692 $ 17.63 The summary of stock options outstanding as of December 31, 2017 is as follows: Options Outstanding Options Exercisable Range of Exercise Prices Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) $0.29 - $5.05 385 $ 2.24 3.1 385 $ 2.24 3.1 $5.93 - $13.00 1,265 8.39 2.9 1,221 8.39 2.9 $15.07 - $24.33 932 18.57 4.4 527 18.40 4.3 $24.89 - $39.85 1,044 32.14 5.8 160 27.75 5.2 $41.90 66 41.90 6.8 — — 0.0 3,692 $ 17.63 4.2 2,293 $ 11.01 3.4 Restricted Stock Units The Company's restricted stock units typically vest over a four -year period and upon vesting, the vested shares are issued to the recipient of the restricted stock units. Restricted stock unit activity was as follows: Number of Shares Weighted Average Grant Date Fair Value Nonvested as of January 1, 2015 28 $ 19.44 Granted 707 26.39 Vested (7 ) 19.44 Forfeited (12 ) 26.14 Nonvested as of December 31, 2015 716 26.19 Granted 751 25.55 Vested (171 ) 26.00 Forfeited (86 ) 25.54 Nonvested as of December 31, 2016 1,210 25.87 Granted 939 38.58 Vested (349 ) 26.35 Forfeited (120 ) 28.94 Nonvested as of December 31, 2017 1,680 $ 32.65 The aggregate intrinsic value of stock options exercised during each of the years ended December 31, 2017 , 2016 and 2015 was $33.9 million , $29.4 million and $32.7 million , respectively. The total fair value of stock options vested during each of the years ended December 31, 2017 , 2016 and 2015 was $8.1 million , $8.7 million and $3.4 million , respectively. As of December 31, 2017 , the aggregate intrinsic value of options outstanding was $71.3 million , the total unrecognized stock-based compensation expense related to stock options was $13.6 million , which the Company expects to recognize over the next 2.7 years, and total unrecognized stock-based compensation expense related to restricted stock units was $47.1 million , which the Company expects to recognize over the next 3.0 years. |
Provision for Income Taxes
Provision for Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Provision for Income Taxes | Provision for Income Taxes The components of the Company's (benefit from) provision for income taxes from continuing operations consisted of the following: Year Ended December 31, 2017 2016 2015 Current taxes: Federal $ (100 ) $ — $ — Foreign 62 33 — State 74 112 135 Total current taxes $ 36 $ 145 $ 135 Deferred taxes: Federal $ 32 $ 262 $ — State (382 ) 20 85 Total deferred taxes (350 ) 282 85 (Benefit from) provision for income taxes $ (314 ) $ 427 $ 220 The Company had federal net operating loss carryforwards of approximately $168.1 million and $129.5 million at December 31, 2017 and 2016 , respectively, which will expire at various dates beginning in 2026 , if not utilized. The Company also held state tax credits of $0.5 million and $0.2 million for the years ended December 31, 2017 and 2016 , respectively, federal alternative minimum tax credits of $0.1 million for each of the years ended December 31, 2017 and 2016 , and federal R&D tax credits of $1.2 million and zero for the years ended December 31, 2017 and 2016 , respectively. The state tax credits will expire in 2026 if not utilized, the federal R&D tax credits will expire at various dates beginning in 2027, if not utilized, and the federal alternative minimum tax credits have an indefinite carryforward period. Utilization of the net operating losses and credit carryforwards may be subject to a substantial annual limitation due to the "change in ownership" provisions of the Internal Revenue Code of 1986. The annual limitation may result in the expiration of net operating losses and credit carryforwards before utilization. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred taxes consisted of the following: December 31, 2017 2016 Deferred tax assets: NOL and credit carryforwards $ 40,716 $ 29,034 Deferred revenue 8,216 9,910 Accrued expenses and other 6,802 9,829 Stock-based compensation 4,615 4,598 Total deferred tax assets 60,349 53,371 Deferred tax liabilities: Deferred expenses (6,198 ) (8,337 ) Depreciation and amortization (1,426 ) (2,887 ) Total deferred tax liabilities (7,624 ) (11,224 ) Deferred tax assets less tax liabilities 52,725 42,147 Less: valuation allowance (52,629 ) (42,401 ) Net deferred tax asset (liability) $ 96 $ (254 ) The Company has established a valuation allowance due to uncertainties regarding the realization of deferred tax assets based on the Company's lack of earnings history. During 2017 , the valuation allowance increased by approximately $20.4 million due to continuing operations. The Company's benefit from (provision for) income taxes attributable to continuing operations differs from the expected tax benefit amount computed by applying the statutory federal income tax rate of 34% to income before taxes for the years ended December 31, 2017 , 2016 and 2015 primarily as a result of the following: Year Ended December 31, 2017 2016 2015 Income tax at U.S. statutory rate 34.0 % 34.0 % 34.0 % Effect of: Increase in deferred tax valuation allowance (77.1 ) (36.3 ) (34.5 ) Stock compensation 32.7 — — R&D Credit 4.7 — — State taxes, net of federal benefit 6.2 1.7 1.6 Tax impact of federal law change 1.2 — — Other permanent items (0.5 ) (0.6 ) (2.0 ) Income tax benefit (provision) effective rate 1.2 % (1.2 )% (0.9 )% The Company files income tax returns in the U.S. federal jurisdiction and several state jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state or local income tax examinations by tax authorities for years before 2014. Operating losses generated in years prior to 2014 remain open to adjustment until the statute of limitations closes for the tax year in which the net operating losses are utilized. The tax years 2014 through 2017 remain open to examination by all the major taxing jurisdictions to which the Company is subject, though the Company is not currently under examination by any major taxing jurisdiction. The Company did not have any uncertain tax positions as of December 31, 2017 , 2016 and 2015 . The Company's policy is to accrue interest and penalties related to uncertain tax positions as a component of income tax expense. For the years ended December 31, 2017 , 2016 and 2015 , the Company did not recognize any interest or penalties. The Tax Cuts and Jobs Act, or the Tax Act, was enacted on December 22, 2017. The Tax Act reduces the U.S. federal corporate tax rate from 35% to 21%, requiring companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign sourced earnings. At December 31, 2017, the Company does not have any foreign subsidiaries and the international aspects of the Tax Act are not applicable. In connection with the initial analysis of the impact of the Tax Act, the Company remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. The remeasurement of the Company's deferred tax balance was primarily offset by application of its valuation allowance. The Company is still analyzing certain aspects of the Tax Act and refining its calculations, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts. Where the Company has been able to make reasonable estimates of the effects for which its analysis is not yet complete, the Company has recorded provisional amounts related to the remeasurement of the deferred tax balance as a tax benefit of $0.2 million . Where the Company has not yet been able to make reasonable estimates of the impact of certain elements, the Company has not recorded any amounts related to those elements and has continued accounting for them in accordance with ASC 740 on the basis of the tax laws in effect immediately prior to the enactment of the Tax Act. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plan | Employee Benefit Plan In January 2009, the Company adopted a 401(k) profit-sharing plan, or 401(k) Plan, covering substantially all employees. Employees can contribute between 1% and 90% of their total earnings. The 401(k) Plan also provides for employer contributions to be made at the Company's discretion. As of December 31, 2017 , the Company had no t made any discretionary contributions. Centrix had a 401(k) plan, or the Centrix 401(k) Plan, covering substantially all employees. Under the Centrix 401(k) Plan, employees could elect to contribute up to $18,000 of their eligible compensation to the Centrix 401(k) Plan, subject to certain limitations. The 401(k) Plan also provides for employer contributions to be made at the Company's discretion. For the years ended December 31, 2015 Centrix made contributions of approximately $0.1 million to the Centrix 401(k) Plan. Centrix employees who participated in the Centrix 401(k) Plan remained enrolled subsequent to the acquisition and through January 2016, when the Centrix 401(k) Plan was merged into the 401(k) Plan. |
Segments and Geographic Informa
Segments and Geographic Information | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Segments and Geographic Information | Segments and Geographic Information All revenue-generating activities are directly related to the sale, implementation and support of the Company's solutions in a single operating segment. The Company's chief operating decision maker, the Chief Executive Officer, reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. All of the Company's principal operations, assets and decision-making functions are located in the United States. |
Related Parties
Related Parties | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Parties | Related Parties For the years ended December 31, 2017 , 2016 and 2015 , the Company recorded revenues from a related-party customer of $0.4 million , $0.5 million and $0.4 million , respectively. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data (unaudited) | Selected Quarterly Financial Data (unaudited) Selected summarized quarterly financial information for the years ended 2017 and 2016 is as follows: Three Months Ended March 31, 2016 June 30, 2016 September 30, 2016 December 31, 2016 March 31, 2017 June 30, 2017 September 30, 2017 December 31, 2017 Revenues $ 33,759 $ 36,005 $ 38,305 $ 42,155 $ 44,534 $ 47,625 $ 50,116 $ 51,703 Cost of revenues 17,814 18,870 19,599 21,146 22,772 24,328 25,813 26,572 Gross profit 15,945 17,135 18,706 21,009 21,762 23,297 24,303 25,131 Operating expenses: Sales and marketing 8,207 9,611 8,980 9,486 9,878 11,096 9,904 10,292 Research and development 7,903 7,830 8,219 8,508 9,651 9,922 10,092 10,673 General and administrative 7,421 7,437 8,624 8,477 8,452 9,268 9,596 9,863 Acquisition related costs 1,482 1,476 1,835 1,514 348 351 270 263 Amortization of acquired intangibles 368 368 368 366 371 373 369 368 Unoccupied lease charges — 33 — — — — — — Total operating expenses 25,381 26,755 28,026 28,351 28,700 31,010 30,231 31,459 Loss from operations (9,436 ) (9,620 ) (9,320 ) (7,342 ) (6,938 ) (7,713 ) (5,928 ) (6,328 ) Total other income (expense), net 14 (85 ) (64 ) (74 ) 34 109 149 137 Loss before income taxes (9,422 ) (9,705 ) (9,384 ) (7,416 ) (6,904 ) (7,604 ) (5,779 ) (6,191 ) (Benefit from) provision for income taxes (230 ) (3 ) (97 ) (97 ) (136 ) (217 ) (3 ) 670 Net loss $ (9,652 ) $ (9,708 ) $ (9,481 ) $ (7,513 ) $ (7,040 ) $ (7,821 ) $ (5,782 ) $ (5,521 ) |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP, and Securities and Exchange Commission, or SEC, requirements. The consolidated financial statements include the accounts of the Q2 Holdings, Inc. and its direct and indirect wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
Reclassifications | Reclassifications Certain amounts appearing in the prior year's Consolidated Statements of Cash Flows have been reclassified to conform to the current year's presentation. |
Use of Estimates | Use of Estimates The preparation of the accompanying consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses. Significant items subject to such estimates include revenue recognition, stock-based compensation, the carrying value of goodwill, the fair value of acquired intangibles, the capitalization of software development costs, the useful lives of property and equipment and long-lived intangible assets, and income taxes. In accordance with GAAP, management bases its estimates on historical experience and on various other assumptions that management believes are reasonable under the circumstances. Management regularly evaluates its estimates and assumptions using historical experience and other factors; however, actual results could differ significantly from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments acquired with an original maturity of ninety days or less at the date of purchase to be cash equivalents. Cash equivalents are stated at cost or fair value based on the underlying security. |
Restricted Cash | Restricted Cash Restricted cash consists of deposits held as collateral for the Company's secured letters of credit issued in place of the security deposit for the Company's corporate headquarters. |
Investments | Investments Investments consist primarily of U.S. government agency bonds, corporate bonds, commercial paper, certificates of deposit and money market funds. All investments are considered available for sale and are carried at fair value. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents, restricted cash, investments and accounts receivable. The Company's cash and cash equivalents, restricted cash and investments are placed with high credit quality financial institutions and issuers, and at times may exceed federally-insured limits. The Company has not experienced any loss relating to cash and cash equivalents or restricted cash in these accounts. The Company provides credit, in the normal course of business, to a number of its customers. The Company performs periodic credit evaluations of its customers' financial condition and generally does not require collateral. |
Accounts Receivable | Accounts Receivable Accounts receivable are stated at net realizable value, including both billed and unbilled receivables to customers. Unbilled receivable balances arise primarily when the Company provides services in advance of billing for these services and also when the Company earns revenues based on the number of registered users and the number of bill-pay and certain other transactions that registered users perform on the Company's solutions in excess of the levels included in the Company's minimum subscription fee. Generally, billing for revenues related to the number of registered users and the number of transactions processed by the Company's registered users occurs one month in arrears. Included in the accounts receivable balances as of December 31, 2017 and 2016 were unbilled receivables of $2.1 million and $1.2 million , respectively. The Company assesses the collectability of outstanding accounts receivable on an ongoing basis and maintains an allowance for doubtful accounts for accounts receivable deemed uncollectable. As of December 31, 2017 and 2016 , the Company did not provide for an allowance for doubtful accounts, as all amounts outstanding were deemed collectable. Historically, the Company's collection experience has not varied significantly, and bad debt expenses have been insignificant. The Company maintains a reserve for estimated sales credits issued to customers for billing disputes or other service-related reasons. This allowance is recorded as a reduction against current period revenues and accounts receivable. In estimating this allowance, the Company analyzes prior periods to determine the amounts of sales credits issued to customers compared to the revenues in the period that related to the original customer invoice. This estimate is analyzed quarterly and adjusted as necessary. |
Deferred Implementation Costs and Deferred Solution and Other Costs | Deferred Implementation Costs The Company capitalizes certain personnel and other costs such as employee salaries, benefits and the associated payroll taxes that are direct and incremental to the implementation of its solutions. The Company analyzes implementation costs that may be capitalized to assess their recoverability, and only capitalizes costs that it anticipates to be recoverable. The Company assesses the recoverability of its deferred implementation costs by comparing the greater of the amount of the non-cancellable portion of a customer's contract and the non-refundable customer prepayments received as it relates to the specific implementation costs incurred. The Company begins amortizing the deferred implementation costs for an implementation once the revenue recognition criteria have been met, and the Company amortizes those deferred implementation costs ratably over the remaining term of the customer agreement. The portion of deferred implementation costs expected to be amortized during the succeeding twelve-month period is recorded in current assets as deferred implementation costs, current portion, and the remainder is recorded in long-term assets as deferred implementation costs, net of current portion. Deferred Solution and Other Costs The Company capitalizes sales commissions and other third-party costs such as third-party licenses and maintenance related to its customer agreements. The Company capitalizes sales commissions because the commission charges are so closely related to the revenues from the non-cancellable customer agreements that they should be recorded as an asset and charged to expense over the same period that the related revenue is recognized. The Company begins amortizing deferred solution and other costs for a particular customer agreement once the revenue recognition criteria are met and amortizes those deferred costs over the remaining term of the customer agreement. The Company analyzes solution and other costs that may be capitalized to assess their recoverability and only capitalizes costs that it anticipates to be recoverable. The portion of capitalized costs expected to be amortized during the succeeding twelve-month period is recorded in current assets as deferred solution and other costs, current portion, and the remainder is recorded in long-term assets as deferred solution and other costs, net of current portion. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is calculated on a straight-line basis over the estimated useful lives of the related assets. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful lives of the related assets. Maintenance and repairs that do not extend the life of or improve an asset are expensed in the period incurred. The estimated useful lives of property and equipment are as follows: Computer hardware and equipment 3 - 5 years Purchased software and licenses 3 - 5 years Furniture and fixtures 7 years Leasehold improvements Lesser of estimated useful life or lease term |
Purchase Price Allocation, Intangible Assets, and Goodwill | Purchase Price Allocation, Intangible Assets, and Goodwill The purchase price allocation for business combinations and asset acquisitions requires extensive use of accounting estimates and judgments to allocate the purchase price to the identifiable tangible and intangible assets acquired and liabilities assumed based on their respective fair values. The Company early adopted Accounting Standards Update, or ASU, No. 2017-01, "Business Combinations (Topic 805): Clarifying the Definition of a Business" as of January 1, 2017. Under ASU 2017-01, the Company first determines whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If this threshold is met, the single asset or group of assets, as applicable, is not a business. If it's not met, the Company determines whether the single asset or group of assets, as applicable, meets the definition of a business. In connection with the Company's acquisitions of Centrix Solutions, Inc., or Centrix, in July 2015, Smarty Pig, LLC, doing business as Social Money, or Social Money, in November 2015, and an asset purchase in January 2017, the Company recorded certain intangible assets, including acquired technology, customer relationships, trademarks, non-compete agreements and assembled workforce. Amounts allocated to the acquired intangible assets are being amortized on a straight-line basis over the estimated useful lives. The Company periodically reviews the estimated useful lives and fair values of its identifiable intangible assets, taking into consideration any events or circumstances which might result in a diminished fair value or revised useful life. The excess purchase price over the fair value of assets acquired is recorded as goodwill. The Company tests goodwill for impairment annually in October, or whenever events or changes in circumstances indicate an impairment may have occurred. Because the Company operates in a single reporting unit, the impairment test is performed at the consolidated entity level by comparing the estimated fair value of the Company to the carrying value of the Company. The Company estimates the fair value of the reporting unit using a "step one" analysis using a fair-value-based approach based on the market capitalization or a discounted cash flow analysis of projected future results to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Determining the fair value of goodwill is subjective in nature and often involves the use of estimates and assumptions including, without limitation, use of estimates of future prices and volumes for the Company's products, capital needs, economic trends and other factors which are inherently difficult to forecast. If actual results, or the plans and estimates used in future impairment analyses are lower than the original estimates used to assess the recoverability of these assets, the Company could incur impairment charges in a future period. |
Deferred Revenues | Deferred Revenues Deferred revenues primarily consist of amounts that have been billed to or received from customers in advance of revenue recognition and prepayments received from customers in advance for implementation, maintenance and other services, as well as initial subscription fees. The Company recognizes deferred revenues as revenues when the services are performed and the corresponding revenue recognition criteria are met. Customer prepayments are generally applied against invoices issued to customers when services are performed and billed. Deferred revenues that are expected to be recognized as revenues during the succeeding twelve-month period are recorded in current liabilities as deferred revenues, current portion, and the remaining portion is recorded in long-term liabilities as deferred revenues, net of current portion. |
Revenues | Revenues All revenue-generating activities are directly related to the sale, implementation and support of the Company's solutions within a single operating segment. The Company derives the substantial majority of its revenues from subscription fees for the use of its solutions hosted in the Company's data centers as well as revenues for implementation and customer support services related to the Company's solutions. A small portion of the Company's customers host the Company's solutions in their own data centers under term license and maintenance agreements, and the Company recognizes the corresponding revenues ratably over the term of those customer agreements. Revenues are recognized net of sales credits and allowances. The Company begins to recognize revenues for a customer when all of the following criteria are satisfied: • there is persuasive evidence of an arrangement; • the service has been or is being provided to the customer; • the collection of the fees is reasonably assured; and • the amount of fees to be paid by the customer is fixed or determinable. Determining whether and when these criteria have been met can require significant judgment and estimates. In general, revenue recognition commences when the Company's solutions are implemented and made available to the customers. The Company's software solutions are available for use in hosted application arrangements under subscription fee agreements. Subscription fees from these applications, including related customer support, are recognized ratably over the customer agreement term beginning on the date the solution is made available to the customer. Amounts that have been invoiced are recorded in accounts receivable and deferred revenues or revenues, depending on whether the Company's revenue recognition criteria have been met. The Company considers subscription fees to be fixed or determinable unless the fees are subject to refund or adjustment or are not payable within the Company's standard payment terms. In determining whether collection of subscription fees is reasonably assured, the Company considers financial and other information about customers, such as a customer's current credit-worthiness and payment history over time. Historically, bad debt expenses have been insignificant. The Company enters into arrangements with multiple-deliverables that generally include multiple subscription and implementation services. Additional agreements with existing customers that are not in close proximity to the original arrangements are treated as separate contracts for accounting purposes. For multiple-deliverable arrangements, arrangement consideration is allocated to deliverables based on their relative selling price. In order to treat deliverables in a multiple-deliverable arrangement as separate units of accounting, the deliverables must have standalone value upon delivery. The Company's subscription services have standalone value as such services are often sold separately. In determining whether implementation services have standalone value apart from the subscription services, the Company considers various factors including the availability of the services from other vendors. To date, the Company has concluded that the implementation services included in multiple-deliverable arrangements do not have standalone value. As a result, when implementation services are sold in a multiple-deliverable arrangement, the Company defers any arrangement fees for implementation services and recognizes such amounts ratably over the period of performance for the initial agreement term. When multiple-deliverables included in an arrangement are separated into different units of accounting, the arrangement consideration is allocated to the identified separate units based on a relative selling price hierarchy. The selling price for a deliverable is based on its vendor-specific objective evidence of selling price, or VSOE, if available, third-party evidence of selling price, or TPE, if VSOE is not available or best estimate of selling price, or BESP, if neither VSOE nor TPE is available. The Company has not established VSOE for its subscription services due to lack of pricing consistency, the introduction of new services and other factors. The Company has determined that TPE is not a practical alternative due to differences in its service offerings compared to other parties and the availability of relevant third-party pricing information. Accordingly, the Company uses BESP to determine the relative selling price. The amount of revenue allocated to delivered items is limited by contingent revenues. The Company determines BESP by considering its overall pricing objectives and market conditions. Significant pricing practices taken into consideration include the Company's discounting practices, the size and volume of transactions, customer characteristics, price lists, go-to-market strategy, historical standalone sales and agreement prices. As the Company's go-to-market strategies evolve, it may modify its pricing practices in the future, which could result in changes in relative selling prices, and include both VSOE and BESP. Subscription Fee Revenues The Company's solutions are available as hosted solutions under subscription fee agreements without licensing perpetual rights to the software. Subscription fees from a hosted solution are recognized monthly over the customer agreement term beginning on the date the Company's solution is made available to the customer. Additional fees for monthly usage above the levels included in the standard subscription fee, which include fees for transactions processed during the period, are recognized as revenue in the month when the usage amounts are determined and reported. Any revenues related to upfront implementation services are recognized ratably over the same customer agreement term. Amounts that have been invoiced are recorded in accounts receivable and deferred revenues or revenues, depending on whether the revenue recognition criteria have been met. Professional Services Revenues When professional services are not combined with subscription services or term licenses as a single unit of accounting, these professional services revenues are recognized as the services are performed. Certain out-of-pocket expenses billed to customers are recorded as revenues rather than an offset to the related expense. Revenues recorded from out-of-pocket expense reimbursements totaled approximately $1.5 million , $1.5 million and $1.3 million during the years ended December 31, 2017 , 2016 and 2015 , respectively. The out-of-pocket expenses are reported in cost of revenues. Term Licenses and Maintenance Revenues A small portion of the Company's customers host and manage the Company's solutions on-premises or in third-party data centers under term license and maintenance agreements. Term licenses sold with maintenance, which entitles the customer to technical support, upgrades and updates to the software made available on a when-and-if-available basis, are accounted for under Accounting Standards Codification, or ASC, 985-605, "Software Revenue Recognition." The Company does not have VSOE of fair value for the maintenance and professional services so the entire arrangement consideration is recognized monthly over the term of the software license when all of the other revenue recognition criteria have been met. Revenues from term licenses and maintenance agreements were not significant in the periods presented. |
Cost of Revenues | Cost of Revenues Cost of revenues is comprised primarily of salaries and other personnel-related costs, including employee benefits, bonuses and stock-based compensation, for employees providing services to the Company's customers. Costs associated with these services include the costs of the Company's implementation, customer support, data center and customer training personnel, as well as costs related to research and development personnel who perform implementation and customer support services. Cost of revenues also includes the direct costs of bill-pay and other third-party intellectual property included in the Company's solutions, the amortization of deferred solution and services costs, co-location facility costs and depreciation of the Company's data center assets, an allocation of general overhead costs and referral fees. Direct costs of third-party intellectual property include amounts paid for third-party licenses and related maintenance that are incorporated into the Company's software and the amortization of acquired technology from the Company's recent acquisitions, with the costs amortized to cost of revenues over the useful lives of the purchased assets. The Company capitalizes certain personnel costs directly related to the implementation of its solutions to the extent those costs are considered to be recoverable from future revenues. The Company amortizes the costs for a particular implementation once revenue recognition commences, and the Company amortizes those implementation costs over the remaining term of the customer agreement. Other costs not directly recoverable from future revenues are expensed in the period incurred. |
Software Development Costs | Software Development Costs Software development costs include salaries and other personnel-related costs, including employee benefits and bonuses attributed to programmers, software engineers and quality control teams working on the Company's software solutions. The costs related to software development that are incurred between reaching technological feasibility of a solution and the point at which the solution is ready for general release are capitalized and are included in intangible assets, net on the consolidated balance sheet. Capitalized software development costs are computed on an individual product basis, and products available for market are amortized to cost of revenues over the products' estimated economic lives. |
Research and Development Costs | Research and Development Costs Research and development costs include salaries and other personnel-related costs, including employee benefits, bonuses and stock-based compensation, third-party contractor expenses, software development tools, an allocation of facilities and depreciation expenses and other related expenses incurred in developing new solutions and upgrading and enhancing existing solutions. Research and development costs are expensed as incurred. |
Advertising | Advertising All advertising costs of the Company are expensed the first time the advertising takes place. |
Sales Tax | Sales Tax The Company presents sales taxes and other taxes collected from customers and remitted to governmental authorities on a net basis and, as such, excludes them from revenues. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss includes net loss as well as other changes in stockholders' equity that result from transactions and economic events other than those with stockholders. Other comprehensive loss consists of net loss and unrealized gains and losses on available-for-sale investments. |
Stock-Based Compensation | Stock-Based Compensation Stock options and restricted stock units awarded to employees, directors and consultants are measured at fair value at each grant date. The Company recognizes compensation expense ratably over the requisite service period of the option or restricted stock unit award. As of January 1, 2017, the Company no longer uses a forfeiture rate to recognize compensation expense as a result of the adoption of ASU No. 2016-09, "Improvements to Employee Share-Based Payment Accounting." Generally, options vest 25% on the one -year anniversary of the grant date with the balance vesting monthly over the following 36 months, and restricted stock unit awards vest in four annual installments of 25% each. The Company values stock options using the Black-Scholes option-pricing model, which requires the input of subjective assumptions, including the risk-free interest rate, expected life, expected stock price volatility and dividend yield. The risk-free interest rate assumption is based upon observed interest rates for constant maturity U.S. Treasury securities consistent with the expected term of the Company's employee stock options. The expected life represents the period of time the stock options are expected to be outstanding and is based on the simplified method. Under the simplified method, the expected life of an option is presumed to be the mid-point between the vesting date and end of the contractual term. The Company used the simplified method due to the lack of sufficient historical exercise data to provide a reasonable basis upon which to otherwise estimate the expected life of the stock options. Due to the Company's limited history as a public company, expected volatility is based on historical volatilities for publicly traded stock of comparable companies over the estimated expected life of the stock options. The Company assumed no dividend yield because it does not expect to pay dividends in the near future, which is consistent with the Company's history of not paying dividends. The Company values restricted stock units at the closing market price on the date of grant, and recognizes compensation expense ratably over the requisite service period of the restricted stock unit award. |
Income Taxes | Income Taxes Deferred income taxes are provided for the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes and operating loss carryforwards and credits using enacted tax rates expected to be in effect in the years in which the differences are expected to reverse. The Company assesses the likelihood that deferred tax assets will be realized and recognizes a valuation allowance if it is more likely than not that some portion of the deferred tax assets will not be realized. This assessment requires judgment as to the likelihood and amounts of future taxable income by tax jurisdiction. To date, the Company has provided a full valuation allowance against its deferred tax assets as it believes the objective and verifiable evidence of its historical pretax net losses outweighs any positive evidence of its forecasted future results. Although the Company believes that its tax estimates are reasonable, the ultimate tax determination involves significant judgment that is subject to audit by tax authorities in the ordinary course of business. The Company will continue to monitor the positive and negative evidence, and it will adjust the valuation allowance as sufficient objective positive evidence becomes available. No tax related impact was recorded in the financial statements as a result of the adoption of ASU No. 2016-09. The Company evaluates its uncertain tax positions based on a determination of whether and how much of a tax benefit taken by the Company in its tax filings or positions is more likely than not to be realized. Potential interest and penalties associated with any uncertain tax positions are recorded as a component of income tax expense. Through December 31, 2017 , the Company has not identified any material uncertain tax positions for which liabilities would be required to be recorded. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board, or FASB, issued ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)," or ASU 2014-09, which amends the existing accounting standards for revenue recognition. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled to when products are transferred to customers. In August 2015, the FASB issued ASU No. 2015-14, "Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date," or ASU 2015-14, that deferred the effective date by one year to December 15, 2017 for interim and annual reporting periods beginning after that date. In 2016, the FASB issued the following amendments to ASC 606: ASU No. 2016-08, "Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)," which clarifies the implementation guidance on principal versus agent considerations; ASU No. 2016-10, "Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing," which clarifies guidance on identification of performance obligations and licensing implementation; ASU No. 2016-12, "Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients," which provides clarifying guidance on assessing collectibility, presentation of sales taxes, noncash consideration, contract modifications and completed contracts; and ASU No. 2016-20, "Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers," which clarifies narrow aspects of ASC 606 or corrects unintended application of the guidance. ASC 606 will be effective for the Company beginning in its first quarter of 2018 using the modified retrospective method. The Company continues to evaluate all potential impacts of the new standard, as well as the changes that are required to systems, processes and internal controls to meet the new standard's reporting and disclosure requirements. The Company currently believes the most significant impact relates to its accounting for arrangements that include contractual provisions providing for periodic price increases in subscription fee arrangements. Under current GAAP, the Company accounts for periodic price increases in the period in which they occur, and under the new standard, the Company will recognize revenue from periodic price increases on a ratable basis over the term of the contract. Additionally under current GAAP, for contracts in which customers host and manage the Company's solutions on-premises or in third-party data centers under term license and maintenance agreements, the Company recognizes the entire arrangement consideration monthly over the term of the software license as the Company does not have VSOE of fair value for the license and maintenance. Under the new standard, the Company will be able to recognize software license revenue once the customer obtains control of the license, which will generally occur at the start of each license term. Under current GAAP, the Company also defers only direct and incremental commission costs to obtain a contract and amortizes those costs over the term of the related contract. Under the new standard, the Company will be required to defer additional incremental costs related to the customer contract and amortize those costs over the expected period of customer benefit. Also a portion of the commission payment will now be expensed as incurred. The Company is substantially complete with its evaluation of the effect that the adoption will have on its consolidated financial statements. In connection with the adoption of Topic 606, the Company expects to record a cumulative-effect adjustment to accumulated deficit of approximately $14 million to $16 million on December 31, 2017. The adjustment reflects the acceleration of revenues and deferral of expenses. In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)," to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The standard is effective for public entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and early application is permitted. The Company anticipates that the adoption of Topic 842 will impact its consolidated balance sheets as most of its operating lease commitments will be subject to the new standard and recognized as right-of-use assets and corresponding operating lease liabilities upon the adoption of ASU 2016-02, which will increase the total assets and total liabilities that it reports relative to such amounts prior to adoption. In March 2016, the FASB issued ASU No. 2016-09, "Improvements to Employee Share-Based Payment Accounting," or ASU 2016-09, which amends ASC Topic 718, "Compensation – Stock Compensation." ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The standard became effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. The Company adopted this standard as of January 1, 2017 and has elected not to use a forfeiture rate. The adoption resulted in a cumulative-effect adjustment to accumulated deficit of $0.2 million , which was included in the condensed consolidated financial statements for the quarter ended March 31, 2017. In August 2016, the FASB issued ASU No. 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments," to clarify and provide specific guidance on eight cash flow classification issues that are not addressed by current GAAP and thereby reduce the current diversity in practice. The standard is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years and early adoption is permitted. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash," which provides guidance on the classification of restricted cash in the statement of cash flows. The standard is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years and early adoption is permitted. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-01, "Business Combinations (Topic 805): Clarifying the Definition of a Business" to clarify 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 standard is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years and early adoption is permitted. The Company early adopted this standard as of January 1, 2017, and its adoption did not have a material impact on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-03, "Accounting Changes and Error Corrections (Topic 250) and Investments - Equity Method and Joint Ventures (Topic 323)" to clarify the scope of Subtopic 610-20, "Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets," and to add guidance for partial sales of nonfinancial assets. This ASU amends the disclosure requirements for ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)," ASU No. 2016-02, "Leases (Topic 842)" and ASU No. 2016-13, "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments." This ASU states that if a registrant does not know or cannot reasonably estimate the impact that the adoption of the above ASUs is expected to have on the financial statements, then in addition to making a statement to that effect, the registrant should consider additional qualitative financial statement disclosures to assist the reader in assessing the significance of the impact that the standard will have on the financial statements of the registrant when adopted. This ASU was effective upon issuance. The Company adopted this ASU and added qualitative financial statement disclosures as necessary. In January 2017, the FASB issued ASU No. 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment" which simplifies the accounting for goodwill impairment by removing Step 2 of the goodwill impairment test and requires an entity to write down the carrying value of goodwill up to the amount by which the carrying amount of a reporting unit exceeds its fair value. The standard is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years and early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements. In May 2017, the FASB issued ASU No. 2017-09, "Compensation - Stock Compensation (Topic 718)" to provide clarity and reduce both diversity in practice and cost and complexity when applying the guidance in Topic 718, Compensation-Stock Compensation, to a change to the terms or conditions of a share-based payment award. The standard is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years and early adoption is permitted. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements. |
Summary of Significant Accoun27
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Schedule of Allowance for Sales Credits | The following table shows the Company's allowance for sales credits as follows: Beginning Balance Additions Deductions Ending Balance Year Ended December 31, 2015 $ 173 $ 513 $ (474 ) $ 212 Year Ended December 31, 2016 212 488 (472 ) 228 Year Ended December 31, 2017 $ 228 $ 683 $ (685 ) $ 226 |
Schedule of Useful Lives of Property and Equipment | The estimated useful lives of property and equipment are as follows: Computer hardware and equipment 3 - 5 years Purchased software and licenses 3 - 5 years Furniture and fixtures 7 years Leasehold improvements Lesser of estimated useful life or lease term Property and equipment consisted of the following: December 31, 2017 2016 Computer hardware and equipment $ 30,734 $ 20,335 Purchased software and licenses 8,788 6,089 Furniture and fixtures 5,387 4,673 Leasehold improvements 13,470 11,597 58,379 42,694 Accumulated depreciation (23,835 ) (15,214 ) Property and equipment, net $ 34,544 $ 27,480 |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computations of net loss per share for the periods listed: Year ended December 31, 2017 2016 2015 Numerators: Net loss $ (26,164 ) $ (36,354 ) $ (25,063 ) Denominator: Weighted-average common shares outstanding, basic and diluted 41,218 39,649 37,275 Net loss per common share, basic and diluted $ (0.63 ) $ (0.92 ) $ (0.67 ) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table sets forth the anti-dilutive common share equivalents for the periods listed: Year ended December 31, 2017 2016 2015 Stock options and restricted stock units 5,372 5,643 5,760 |
Business Combinations and Ass28
Business Combinations and Asset Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
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: Assets acquired: Cash $ 1,417 Accounts receivable 579 Other prepaid assets 42 Deferred solution and other costs 106 Property and equipment, net 156 Intangible assets 11,690 Goodwill 8,786 Total assets acquired 22,776 Liabilities assumed: Accounts payable 46 Accrued liabilities and accrued compensation 267 Deferred revenue 1,483 Total liabilities assumed 1,796 Fair value of assets acquired and liabilities assumed $ 20,980 The following table summarizes the allocation of the purchase price based on the estimated fair value of the assets acquired and the liabilities assumed: Assets acquired: Cash $ 204 Restricted cash 1,238 Accounts receivable 123 Other prepaid assets 86 Property and equipment, net 87 Intangible assets 6,424 Goodwill 4,090 Total assets acquired 12,252 Liabilities assumed: Accounts payable 62 Accrued liabilities and accrued compensation 257 Customer deposit liability 1,238 Total liabilities assumed 1,557 Fair value of assets acquired and liabilities assumed $ 10,695 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table details the fair value hierarchy of the Company's financial assets measured at fair value on a recurring basis as of December 31, 2017 : Fair Value Measurements Using: Cash Equivalents: Fair Value Quoted Prices Significant Other Significant Money market funds $ 9,279 $ 9,279 $ — $ — Investments: Fair Value Quoted Prices Significant Other Significant U.S. government agency bonds $ 16,194 $ — $ 16,194 $ — Corporate bonds and commercial paper 15,815 — 15,815 — Certificates of deposit 9,676 — 9,676 — $ 41,685 $ — $ 41,685 $ — The following table details the fair value hierarchy of the Company's financial assets measured at fair value on a recurring basis as of December 31, 2016 : Fair Value Measurements Using: Cash Equivalents: Fair Value Quoted Prices Significant Other Significant Money market funds $ 8,306 $ 8,306 $ — $ — Investments: Fair Value Quoted Prices Significant Other Significant U.S. government agency bonds $ 12,998 $ — $ 12,998 $ — Corporate bonds and commercial paper 14,647 — 14,647 — Certificates of deposit 14,604 — 14,604 — $ 42,249 $ — $ 42,249 $ — |
Cash, Cash Equivalents and In30
Cash, Cash Equivalents and Investments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Cash and Cash Equivalents [Abstract] | |
Summary of Cash, Cash Equivalents and Investments | A summary of the cash equivalents and investments as of December 31, 2017 is as follows: Cash Equivalents: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Money market funds $ 9,279 $ — $ — $ 9,279 Investments: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. government agency bonds $ 16,277 $ — $ (83 ) $ 16,194 Corporate bonds and commercial paper 15,871 — (56 ) 15,815 Certificates of deposit 9,676 — — 9,676 $ 41,824 $ — $ (139 ) $ 41,685 A summary of the cash equivalents and investments as of December 31, 2016 is as follows: Cash Equivalents: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Money market funds $ 8,306 $ — $ — $ 8,306 Investments: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. government agency bonds $ 13,028 $ — $ (30 ) $ 12,998 Corporate bonds and commercial paper 14,671 — (24 ) 14,647 Certificates of deposit 14,604 — — 14,604 $ 42,303 $ — $ (54 ) $ 42,249 |
Investments Classified by Contractual Maturity Date | The following table summarizes the estimated fair value of the Company's investments, designated as available-for-sale and classified by the contractual maturity date of the investments as of the dates shown: December 31, 2017 2016 Due within one year or less $ 27,324 $ 26,577 Due after one year through five years 14,361 15,672 $ 41,685 $ 42,249 |
Schedule of Fair Values and Gross Unrealized Losses for Available-for-sale Securities | The following table shows the fair values and the gross unrealized losses of these available-for-sale investments aggregated by investment category as of December 31, 2017 : Adjusted Cost Gross Unrealized Loss Fair Value U.S. government agency bonds $ 16,277 $ (83 ) $ 16,194 Corporate bonds and commercial paper 15,871 (56 ) 15,815 $ 32,148 $ (139 ) $ 32,009 The following table shows the fair values and the gross unrealized losses of these available-for-sale investments aggregated by investment category as of December 31, 2016 : Adjusted Cost Gross Unrealized Loss Fair Value U.S. government agency bonds $ 13,028 $ (30 ) $ 12,998 Corporate bonds and commercial paper 13,668 (24 ) 13,644 $ 26,696 $ (54 ) $ 26,642 |
Deferred Solution and Other C31
Deferred Solution and Other Costs (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Deferred Solution and Other Costs | Deferred solution and other costs, current portion and net of current portion, consisted of the following: December 31, 2017 2016 Deferred solution costs $ 6,505 $ 6,295 Deferred commissions 2,741 2,544 Deferred solution and other costs, current portion $ 9,246 $ 8,839 Deferred solution costs $ 5,291 $ 4,741 Deferred commissions 7,682 6,384 Deferred solution and other costs, net of current portion $ 12,973 $ 11,125 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | The estimated useful lives of property and equipment are as follows: Computer hardware and equipment 3 - 5 years Purchased software and licenses 3 - 5 years Furniture and fixtures 7 years Leasehold improvements Lesser of estimated useful life or lease term Property and equipment consisted of the following: December 31, 2017 2016 Computer hardware and equipment $ 30,734 $ 20,335 Purchased software and licenses 8,788 6,089 Furniture and fixtures 5,387 4,673 Leasehold improvements 13,470 11,597 58,379 42,694 Accumulated depreciation (23,835 ) (15,214 ) Property and equipment, net $ 34,544 $ 27,480 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible assets at December 31, 2017 and 2016 were as follows: As of December 31, 2017 As of December 31, 2016 Gross Amount Accumulated Amortization Net Carrying Amount Gross Amount Accumulated Amortization Net Carrying Amount Customer relationships $ 3,130 $ (1,294 ) $ 1,836 $ 3,130 $ (749 ) $ 2,381 Non-compete agreements 884 (451 ) 433 884 (266 ) 618 Trademarks 2,140 (1,724 ) 416 2,140 (1,010 ) 1,130 Acquired technology 13,293 (7,464 ) 5,829 11,920 (3,846 ) 8,074 Assembled workforce 121 (38 ) 83 — — — Capitalized software development costs 3,975 (538 ) 3,437 3,005 — 3,005 $ 23,543 $ (11,509 ) $ 12,034 $ 21,079 $ (5,871 ) $ 15,208 |
Schedule of Useful Life | The estimated useful lives and weighted average amortization periods for intangible assets at December 31, 2017 are as follows (in years): Estimated Useful Life Weighted Average Amortization Period Customer relationships 4 - 6 3.7 Non-compete agreements 2 - 5 2.7 Trademarks 2 - 3 0.8 Acquired technology 3 - 5 2.1 Assembled workforce 3 2.1 Capitalized software development costs 5 4.5 Total 3.0 |
Estimated Future Amortization Expense | The estimated future amortization expense related to intangible assets as of December 31, 2017 was as follows: Amortization Year Ended December 31, 2018 $ 5,446 2019 3,183 2020 2,076 2021 1,072 2022 and thereafter 257 Total amortization $ 12,034 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following: December 31, 2017 2016 Accrued data center equipment and software purchases $ 4,410 $ 232 Accrued transaction processing fees 1,687 1,790 Accrued professional services 1,419 1,518 Acquisition hold back 150 2,500 Deferred rent 1,197 1,066 Other 1,699 1,716 $ 10,562 $ 8,822 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | Future minimum payments required under operating leases that have initial or remaining non-cancelable lease terms in excess of one year at December 31, 2017 were as follows: Operating Leases Year Ended December 31, 2018 $ 5,675 2019 5,692 2020 5,694 2021 4,781 2022 4,296 Thereafter 20,442 Total minimum lease payments $ 46,580 |
Schedule of Future Minimum Contractual Commitments | Future minimum contractual commitments that have initial or remaining non-cancelable terms in excess of one year were as follows: Contractual Commitments Year Ended December 31, 2018 $ 13,227 2019 11,060 2020 7,413 2021 7,355 2022 7,355 Thereafter 5,517 Total commitments $ 51,927 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share-based Payment Award Assumptions for Estimating Fair Value of Stock Option Grants | The following summarizes the assumptions used for estimating the fair value of stock options granted during the periods indicated: Year Ended December 31, 2017 2016 2015 Risk-free interest rate 1.7 - 2.1% 1.0 - 1.8% 1.5 - 1.6% Expected life (in years) 4.8 3.8 - 4.8 4.3 - 4.8 Expected volatility 41.5 - 43.1% 43.9 - 46.5% 45.7 - 46.9% Dividend yield — — — Weighted-average grant date fair value per share $14.17 $9.32 $9.38 |
Schedule of Share-based Compensation, Stock Options, Activity | Stock option activity was as follows: Number of Options Weighted Average Exercise Price Balance as of January 1, 2015 6,111 $ 5.90 Granted 582 23.12 Exercised (1,578 ) 2.71 Forfeited (71 ) 8.95 Balance as of December 31, 2015 5,044 8.84 Granted 892 23.49 Exercised (1,379 ) 4.57 Forfeited (123 ) 16.08 Balance as of December 31, 2016 4,434 12.91 Granted 643 36.44 Exercised (1,205 ) 10.07 Forfeited (180 ) 19.15 Balance as of December 31, 2017 3,692 $ 17.63 |
Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range | The summary of stock options outstanding as of December 31, 2017 is as follows: Options Outstanding Options Exercisable Range of Exercise Prices Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) $0.29 - $5.05 385 $ 2.24 3.1 385 $ 2.24 3.1 $5.93 - $13.00 1,265 8.39 2.9 1,221 8.39 2.9 $15.07 - $24.33 932 18.57 4.4 527 18.40 4.3 $24.89 - $39.85 1,044 32.14 5.8 160 27.75 5.2 $41.90 66 41.90 6.8 — — 0.0 3,692 $ 17.63 4.2 2,293 $ 11.01 3.4 |
Schedule of Restricted Stock Units Activity | Restricted stock unit activity was as follows: Number of Shares Weighted Average Grant Date Fair Value Nonvested as of January 1, 2015 28 $ 19.44 Granted 707 26.39 Vested (7 ) 19.44 Forfeited (12 ) 26.14 Nonvested as of December 31, 2015 716 26.19 Granted 751 25.55 Vested (171 ) 26.00 Forfeited (86 ) 25.54 Nonvested as of December 31, 2016 1,210 25.87 Granted 939 38.58 Vested (349 ) 26.35 Forfeited (120 ) 28.94 Nonvested as of December 31, 2017 1,680 $ 32.65 |
Provision for Income Taxes (Tab
Provision for Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Provision for Income Taxes | The components of the Company's (benefit from) provision for income taxes from continuing operations consisted of the following: Year Ended December 31, 2017 2016 2015 Current taxes: Federal $ (100 ) $ — $ — Foreign 62 33 — State 74 112 135 Total current taxes $ 36 $ 145 $ 135 Deferred taxes: Federal $ 32 $ 262 $ — State (382 ) 20 85 Total deferred taxes (350 ) 282 85 (Benefit from) provision for income taxes $ (314 ) $ 427 $ 220 |
Significant Components of Deferred Taxes | Significant components of the Company's deferred taxes consisted of the following: December 31, 2017 2016 Deferred tax assets: NOL and credit carryforwards $ 40,716 $ 29,034 Deferred revenue 8,216 9,910 Accrued expenses and other 6,802 9,829 Stock-based compensation 4,615 4,598 Total deferred tax assets 60,349 53,371 Deferred tax liabilities: Deferred expenses (6,198 ) (8,337 ) Depreciation and amortization (1,426 ) (2,887 ) Total deferred tax liabilities (7,624 ) (11,224 ) Deferred tax assets less tax liabilities 52,725 42,147 Less: valuation allowance (52,629 ) (42,401 ) Net deferred tax asset (liability) $ 96 $ (254 ) |
Schedule of Effective Income Tax Rate Reconciliation | The Company's benefit from (provision for) income taxes attributable to continuing operations differs from the expected tax benefit amount computed by applying the statutory federal income tax rate of 34% to income before taxes for the years ended December 31, 2017 , 2016 and 2015 primarily as a result of the following: Year Ended December 31, 2017 2016 2015 Income tax at U.S. statutory rate 34.0 % 34.0 % 34.0 % Effect of: Increase in deferred tax valuation allowance (77.1 ) (36.3 ) (34.5 ) Stock compensation 32.7 — — R&D Credit 4.7 — — State taxes, net of federal benefit 6.2 1.7 1.6 Tax impact of federal law change 1.2 — — Other permanent items (0.5 ) (0.6 ) (2.0 ) Income tax benefit (provision) effective rate 1.2 % (1.2 )% (0.9 )% |
Selected Quarterly Financial 38
Selected Quarterly Financial Data (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Data | Selected summarized quarterly financial information for the years ended 2017 and 2016 is as follows: Three Months Ended March 31, 2016 June 30, 2016 September 30, 2016 December 31, 2016 March 31, 2017 June 30, 2017 September 30, 2017 December 31, 2017 Revenues $ 33,759 $ 36,005 $ 38,305 $ 42,155 $ 44,534 $ 47,625 $ 50,116 $ 51,703 Cost of revenues 17,814 18,870 19,599 21,146 22,772 24,328 25,813 26,572 Gross profit 15,945 17,135 18,706 21,009 21,762 23,297 24,303 25,131 Operating expenses: Sales and marketing 8,207 9,611 8,980 9,486 9,878 11,096 9,904 10,292 Research and development 7,903 7,830 8,219 8,508 9,651 9,922 10,092 10,673 General and administrative 7,421 7,437 8,624 8,477 8,452 9,268 9,596 9,863 Acquisition related costs 1,482 1,476 1,835 1,514 348 351 270 263 Amortization of acquired intangibles 368 368 368 366 371 373 369 368 Unoccupied lease charges — 33 — — — — — — Total operating expenses 25,381 26,755 28,026 28,351 28,700 31,010 30,231 31,459 Loss from operations (9,436 ) (9,620 ) (9,320 ) (7,342 ) (6,938 ) (7,713 ) (5,928 ) (6,328 ) Total other income (expense), net 14 (85 ) (64 ) (74 ) 34 109 149 137 Loss before income taxes (9,422 ) (9,705 ) (9,384 ) (7,416 ) (6,904 ) (7,604 ) (5,779 ) (6,191 ) (Benefit from) provision for income taxes (230 ) (3 ) (97 ) (97 ) (136 ) (217 ) (3 ) 670 Net loss $ (9,652 ) $ (9,708 ) $ (9,481 ) $ (7,513 ) $ (7,040 ) $ (7,821 ) $ (5,782 ) $ (5,521 ) |
Organization and Description 39
Organization and Description of Business (Details) | Dec. 31, 2017 |
Q2 Software, Inc. | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
Ownership percentage | 100.00% |
Summary of Significant Accoun40
Summary of Significant Accounting Policies (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | |||||||||||
Unbilled receivables | $ 2,100 | $ 1,200 | $ 2,100 | $ 1,200 | |||||||
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||||||||||
Allowance for sales credits, beginning balance | $ 228 | $ 212 | 228 | 212 | $ 173 | ||||||
Additions | 683 | 488 | 513 | ||||||||
Deductions | (685) | (472) | (474) | ||||||||
Allowance for sales credits, ending balance | 226 | 228 | 226 | 228 | 212 | ||||||
Property and Equipment [Abstract] | |||||||||||
Revenues recorded from out-of-pocket expense reimbursements | 1,500 | 1,500 | 1,300 | ||||||||
Capitalized implementation costs | (5,200) | (6,100) | (4,100) | ||||||||
Amortization of capitalized software development costs | 500 | ||||||||||
Capitalized software development costs | 1,000 | 2,700 | 300 | ||||||||
Advertising costs | 700 | 300 | 300 | ||||||||
Numerators: | |||||||||||
Net loss | (5,521) | $ (5,782) | $ (7,821) | (7,040) | (7,513) | $ (9,481) | $ (9,708) | $ (9,652) | $ (26,164) | $ (36,354) | $ (25,063) |
Denominator: | |||||||||||
Weighted-average common shares outstanding, basic and diluted (in shares) | 41,218 | 39,649 | 37,275 | ||||||||
Net loss per common share, basic and diluted (in dollars per share) | $ (0.63) | $ (0.92) | $ (0.67) | ||||||||
Antidilutive securities excluded (in shares) | 5,372 | 5,643 | 5,760 | ||||||||
Accumulated deficit | 152,114 | 125,783 | $ 152,114 | $ 125,783 | |||||||
Adoption of new accounting standard | 0 | 0 | |||||||||
Computer hardware and equipment | Minimum | |||||||||||
Property and Equipment [Abstract] | |||||||||||
Estimated useful life | 3 years | ||||||||||
Computer hardware and equipment | Maximum | |||||||||||
Property and Equipment [Abstract] | |||||||||||
Estimated useful life | 5 years | ||||||||||
Purchased software and licenses | Minimum | |||||||||||
Property and Equipment [Abstract] | |||||||||||
Estimated useful life | 3 years | ||||||||||
Purchased software and licenses | Maximum | |||||||||||
Property and Equipment [Abstract] | |||||||||||
Estimated useful life | 5 years | ||||||||||
Furniture and fixtures | |||||||||||
Property and Equipment [Abstract] | |||||||||||
Estimated useful life | 7 years | ||||||||||
Stock Options | |||||||||||
Stock-Based Compensation [Abstract] | |||||||||||
Period of monthly vesting of options after first anniversary of grant date | 36 months | ||||||||||
Restricted Stock Units (RSUs) | |||||||||||
Stock-Based Compensation [Abstract] | |||||||||||
Period of monthly vesting of options after first anniversary of grant date | 4 years | ||||||||||
Vesting Installment One | Stock Options | |||||||||||
Stock-Based Compensation [Abstract] | |||||||||||
Option vesting percentage on first anniversary of grant date | 25.00% | ||||||||||
Period of monthly vesting of options after first anniversary of grant date | 1 year | ||||||||||
Vesting Installment One | Restricted Stock Units (RSUs) | |||||||||||
Stock-Based Compensation [Abstract] | |||||||||||
Option vesting percentage on first anniversary of grant date | 25.00% | ||||||||||
Vesting Installment Two | Restricted Stock Units (RSUs) | |||||||||||
Stock-Based Compensation [Abstract] | |||||||||||
Option vesting percentage on first anniversary of grant date | 25.00% | ||||||||||
Vesting Installment Three | Restricted Stock Units (RSUs) | |||||||||||
Stock-Based Compensation [Abstract] | |||||||||||
Option vesting percentage on first anniversary of grant date | 25.00% | ||||||||||
Vesting Installment Four | Restricted Stock Units (RSUs) | |||||||||||
Stock-Based Compensation [Abstract] | |||||||||||
Option vesting percentage on first anniversary of grant date | 25.00% | ||||||||||
Additional Paid-In Capital | |||||||||||
Denominator: | |||||||||||
Adoption of new accounting standard | 167 | 167 | |||||||||
Accumulated Deficit | |||||||||||
Numerators: | |||||||||||
Net loss | $ (26,164) | (36,354) | $ (25,063) | ||||||||
Denominator: | |||||||||||
Adoption of new accounting standard | $ (167) | $ (167) | |||||||||
Accounting Standards Update 2016-09, Forfeiture Rate Component [Member] | Additional Paid-In Capital | |||||||||||
Denominator: | |||||||||||
Adoption of new accounting standard | 200 | ||||||||||
Accounting Standards Update 2016-09, Forfeiture Rate Component [Member] | Accumulated Deficit | |||||||||||
Denominator: | |||||||||||
Adoption of new accounting standard | $ (200) | ||||||||||
Accounts Receivable | Customer Concentration Risk | |||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||
Concentration risk | 15.00% | ||||||||||
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | Minimum | |||||||||||
Denominator: | |||||||||||
Accumulated deficit | 14,000 | 14,000 | |||||||||
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | Maximum | |||||||||||
Denominator: | |||||||||||
Accumulated deficit | $ 16,000 | $ 16,000 |
Business Combinations and Ass41
Business Combinations and Asset Acquisitions - Narrative (Details) - USD ($) $ in Thousands | Nov. 30, 2015 | Jul. 31, 2015 | Jan. 31, 2017 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | ||||||
Cash paid for assets | $ 1,500 | |||||
Hold-back payable | $ 200 | |||||
Hold-back payable period | 12 months | |||||
Acquisition hold back | $ 150 | $ 2,500 | ||||
Release of hold-back deposit | 2,500 | |||||
Social Money | ||||||
Business Acquisition [Line Items] | ||||||
Hold-back payable period | 18 months | |||||
Cash payment to acquire business from existing balances | $ 10,700 | |||||
Working capital adjustment | 100 | |||||
Acquisition hold back | 2,500 | |||||
Milestone and retention bonuses | 200 | |||||
Compensation expense | 100 | 200 | ||||
Tax basis goodwill | 4,100 | |||||
Accrued liabilities and accrued compensation | 257 | |||||
Centrix Solutions, Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Hold-back payable period | 24 months | |||||
Cash payment to acquire business from existing balances | $ 21,000 | |||||
Working capital adjustment | $ 1,000 | |||||
Milestone and retention bonuses | 7,200 | |||||
Compensation expense | $ 1,100 | $ 5,900 | ||||
Tax basis goodwill | $ 13,400 | |||||
Initial consideration deposited in escrow | 2,000 | |||||
Accrued liabilities and accrued compensation | 267 | |||||
Contingent future amount due to former shareholders (up to) | $ 9,000 | |||||
Acquired Technology and Assembled Workforce | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets acquired | $ 1,500 | |||||
Estimated useful life | 3 years | |||||
Increase in deferred tax liabilities related to intangible assets | $ 300 |
Business Combinations and Ass42
Business Combinations and Asset Acquisitions - Social Money Purchase Price Allocation (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Nov. 30, 2015 |
Assets acquired: | |||
Intangible assets | $ 12,034 | $ 15,208 | |
Goodwill | $ 12,876 | $ 12,876 | |
Social Money | |||
Assets acquired: | |||
Cash | $ 204 | ||
Restricted cash | 1,238 | ||
Accounts receivable | 123 | ||
Other prepaid assets | 86 | ||
Property and equipment, net | 87 | ||
Intangible assets | 6,424 | ||
Goodwill | 4,090 | ||
Total assets acquired | 12,252 | ||
Liabilities assumed: | |||
Accounts payable | 62 | ||
Accrued liabilities and accrued compensation | 257 | ||
Customer deposit liability | 1,238 | ||
Total liabilities assumed | 1,557 | ||
Fair value of assets acquired and liabilities assumed | $ 10,695 |
Business Combinations and Ass43
Business Combinations and Asset Acquisitions - Centrix Purchase Price Allocation (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Jul. 31, 2015 |
Assets acquired: | |||
Intangible assets | $ 12,034 | $ 15,208 | |
Goodwill | $ 12,876 | $ 12,876 | |
Centrix Solutions, Inc. | |||
Assets acquired: | |||
Cash | $ 1,417 | ||
Accounts receivable | 579 | ||
Other prepaid assets | 42 | ||
Deferred solution and other costs | 106 | ||
Property and equipment, net | 156 | ||
Intangible assets | 11,690 | ||
Goodwill | 8,786 | ||
Total assets acquired | 22,776 | ||
Liabilities assumed: | |||
Accounts payable | 46 | ||
Accrued liabilities and accrued compensation | 267 | ||
Deferred revenue | 1,483 | ||
Total liabilities assumed | 1,796 | ||
Fair value of assets acquired and liabilities assumed | $ 20,980 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments at fair value | $ 41,685 | $ 42,249 |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments at fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments at fair value | 41,685 | 42,249 |
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments at fair value | 0 | 0 |
U.S. government agency bonds | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments at fair value | 16,194 | 12,998 |
U.S. government agency bonds | Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments at fair value | 0 | 0 |
U.S. government agency bonds | Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments at fair value | 16,194 | 12,998 |
U.S. government agency bonds | Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments at fair value | 0 | 0 |
Corporate bonds and commercial paper | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments at fair value | 15,815 | 14,647 |
Corporate bonds and commercial paper | Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments at fair value | 0 | 0 |
Corporate bonds and commercial paper | Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments at fair value | 15,815 | 14,647 |
Corporate bonds and commercial paper | Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments at fair value | 0 | 0 |
Certificates of deposit | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments at fair value | 9,676 | 14,604 |
Certificates of deposit | Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments at fair value | 0 | 0 |
Certificates of deposit | Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments at fair value | 9,676 | 14,604 |
Certificates of deposit | Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments at fair value | 0 | 0 |
Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents at fair value | 9,279 | 8,306 |
Money market funds | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents at fair value | 9,279 | 8,306 |
Money market funds | Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents at fair value | 9,279 | 8,306 |
Money market funds | Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents at fair value | 0 | 0 |
Money market funds | Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents at fair value | $ 0 | $ 0 |
Cash, Cash Equivalents and In45
Cash, Cash Equivalents and Investments - Summary of Cash, Cash Equivalents and Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Schedule of Available-for-sale Securities [Line Items] | ||||
Cash equivalents, amortized cost | $ 57,961 | $ 54,873 | $ 67,049 | $ 67,979 |
Investments, amortized cost | 41,824 | 42,303 | ||
Gross unrealized gains | 0 | 0 | ||
Gross unrealized losses | (139) | (54) | ||
Investments, fair value | 41,685 | 42,249 | ||
Cash | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Cash equivalents, amortized cost | 48,700 | 46,600 | ||
Money market funds | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Cash equivalents, amortized cost | 9,279 | 8,306 | ||
Cash equivalents, fair value | 9,279 | 8,306 | ||
U.S. government agency bonds | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Investments, amortized cost | 16,277 | 13,028 | ||
Gross unrealized gains | 0 | 0 | ||
Gross unrealized losses | (83) | (30) | ||
Investments, fair value | 16,194 | 12,998 | ||
Corporate bonds and commercial paper | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Investments, amortized cost | 15,871 | 14,671 | ||
Gross unrealized gains | 0 | 0 | ||
Gross unrealized losses | (56) | (24) | ||
Investments, fair value | 15,815 | 14,647 | ||
Certificates of deposit | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Investments, amortized cost | 9,676 | 14,604 | ||
Gross unrealized gains | 0 | 0 | ||
Gross unrealized losses | 0 | 0 | ||
Investments, fair value | $ 9,676 | $ 14,604 |
Cash, Cash Equivalents and In46
Cash, Cash Equivalents and Investments - Contractual Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Cash and Cash Equivalents [Abstract] | ||
Due within one year or less | $ 27,324 | $ 26,577 |
Due after one year through five years | 14,361 | 15,672 |
Total | $ 41,685 | $ 42,249 |
Cash, Cash Equivalents and In47
Cash, Cash Equivalents and Investments - Securities in Continuous Loss Position (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Schedule of Available-for-sale Securities [Line Items] | ||
Adjusted Cost | $ 32,148 | $ 26,696 |
Gross Unrealized Loss | (139) | (54) |
Fair Value | 32,009 | 26,642 |
U.S. government agency bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Adjusted Cost | 16,277 | 13,028 |
Gross Unrealized Loss | (83) | (30) |
Fair Value | 16,194 | 12,998 |
Corporate bonds and commercial paper | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Adjusted Cost | 15,871 | 13,668 |
Gross Unrealized Loss | (56) | (24) |
Fair Value | $ 15,815 | $ 13,644 |
Deferred Solution and Other C48
Deferred Solution and Other Costs (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Deferred solution costs | $ 6,505 | $ 6,295 |
Deferred commissions | 2,741 | 2,544 |
Deferred solution and other costs, current portion | 9,246 | 8,839 |
Deferred solution costs | 5,291 | 4,741 |
Deferred commissions | 7,682 | 6,384 |
Deferred solution and other costs, net of current portion | $ 12,973 | $ 11,125 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 58,379 | $ 42,694 | |
Accumulated depreciation | (23,835) | (15,214) | |
Property and equipment, net | 34,544 | 27,480 | |
Depreciation and amortization | 14,946 | 12,199 | $ 6,847 |
Fixed Assets [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation and amortization | 9,200 | 7,300 | $ 5,500 |
Computer hardware and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 30,734 | 20,335 | |
Purchased software and licenses | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 8,788 | 6,089 | |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 5,387 | 4,673 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 13,470 | $ 11,597 |
Goodwill and Intangible Asset50
Goodwill and Intangible Assets - Narrative (Details) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2017USD ($)operating_segmentreporting_unit | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |||||||||||
Goodwill | $ 12,876,000 | $ 12,876,000 | $ 12,876,000 | $ 12,876,000 | |||||||
Number of operating segments | operating_segment | 1 | ||||||||||
Number of reporting units | reporting_unit | 1 | ||||||||||
Impairment of goodwill | $ 0 | ||||||||||
Amortization of acquired intangibles | 368,000 | $ 369,000 | $ 373,000 | $ 371,000 | 366,000 | $ 368,000 | $ 368,000 | $ 368,000 | 1,481,000 | 1,470,000 | $ 576,000 |
Capitalized software and development costs | $ 4,000,000 | $ 3,000,000 | 4,000,000 | 3,000,000 | |||||||
Amortization of capitalized software development costs | $ 500,000 | ||||||||||
Minimum | |||||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||||
Estimated useful life | 2 years | ||||||||||
Maximum | |||||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||||
Estimated useful life | 6 years | ||||||||||
Cost of revenues | |||||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||||
Amortization of acquired intangibles | $ 3,600,000 | 3,200,000 | |||||||||
Operating Expense | |||||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||||
Amortization of acquired intangibles | $ 1,500,000 | $ 1,500,000 | |||||||||
Purchased software and licenses | |||||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||||
Estimated useful life | 5 years | ||||||||||
Purchased software and licenses | Maximum | |||||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||||
Estimated useful life | 5 years |
Goodwill and Intangible Asset51
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | $ 23,543 | $ 21,079 |
Accumulated Amortization | (11,509) | (5,871) |
Net Carrying Amount | 12,034 | 15,208 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 3,130 | 3,130 |
Accumulated Amortization | (1,294) | (749) |
Net Carrying Amount | 1,836 | 2,381 |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 884 | 884 |
Accumulated Amortization | (451) | (266) |
Net Carrying Amount | 433 | 618 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 2,140 | 2,140 |
Accumulated Amortization | (1,724) | (1,010) |
Net Carrying Amount | 416 | 1,130 |
Acquired technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 13,293 | 11,920 |
Accumulated Amortization | (7,464) | (3,846) |
Net Carrying Amount | 5,829 | 8,074 |
Assembled workforce | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 121 | 0 |
Accumulated Amortization | (38) | 0 |
Net Carrying Amount | 83 | 0 |
Purchased software and licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 3,975 | 3,005 |
Accumulated Amortization | (538) | 0 |
Net Carrying Amount | $ 3,437 | $ 3,005 |
Goodwill and Intangible Asset52
Goodwill and Intangible Assets - Intangible Asset Useful Life (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Weighted Average Amortization Period | 3 years 6 days |
Customer relationships | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Weighted Average Amortization Period | 3 years 8 months 6 days |
Non-compete agreements | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Weighted Average Amortization Period | 2 years 8 months 6 days |
Trademarks | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Weighted Average Amortization Period | 9 months 6 days |
Acquired technology | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Weighted Average Amortization Period | 2 years 1 month 6 days |
Assembled workforce | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Life | 3 years |
Weighted Average Amortization Period | 2 years 1 month 6 days |
Purchased software and licenses | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Life | 5 years |
Weighted Average Amortization Period | 4 years 6 months 6 days |
Minimum | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Life | 2 years |
Minimum | Customer relationships | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Life | 4 years |
Minimum | Non-compete agreements | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Life | 2 years |
Minimum | Trademarks | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Life | 2 years |
Minimum | Acquired technology | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Life | 3 years |
Maximum | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Life | 6 years |
Maximum | Customer relationships | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Life | 6 years |
Maximum | Non-compete agreements | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Life | 5 years |
Maximum | Trademarks | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Life | 3 years |
Maximum | Acquired technology | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Life | 5 years |
Maximum | Purchased software and licenses | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Life | 5 years |
Goodwill and Intangible Asset53
Goodwill and Intangible Assets - Estimated Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2,018 | $ 5,446 | |
2,019 | 3,183 | |
2,020 | 2,076 | |
2,021 | 1,072 | |
2022 and thereafter | 257 | |
Net Carrying Amount | $ 12,034 | $ 15,208 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Accrued data center equipment and software purchases | $ 4,410 | $ 232 |
Accrued transaction processing fees | 1,687 | 1,790 |
Accrued professional services | 1,419 | 1,518 |
Acquisition hold back | 150 | 2,500 |
Deferred rent | 1,197 | 1,066 |
Other | 1,699 | 1,716 |
Total accrued liabilities | $ 10,562 | $ 8,822 |
Debt (Details)
Debt (Details) - 2013 Secured Credit Facility - Wells Fargo | Apr. 11, 2017USD ($) | Jul. 31, 2015USD ($) | Apr. 30, 2013annual_installment | Dec. 31, 2017USD ($) | Oct. 31, 2016USD ($) |
Line of Credit | |||||
Line of Credit Facility [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 25,000,000 | $ 25,000,000 | |||
Line of credit facility, increase to borrowing capacity (up to) | $ 25,000,000 | ||||
Line of credit facility, maximum borrowing capacity as a percentage of the Company's trailing twelve-month recurring revenues | 75.00% | ||||
Line of credit facility, initial closing fee, number of annual installments | annual_installment | 3 | ||||
Period of repayment for initial closing fee on line of credit facility | 3 years | ||||
Payment of outstanding balance on credit facility | $ 100,000 | ||||
Line of Credit | U.S. Federal Funds Rate | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable interest rate | 1.00% | ||||
Line of Credit | One Month LIBOR | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable interest rate | 1.00% | ||||
Letter of Credit | |||||
Line of Credit Facility [Line Items] | |||||
Secured letters of credit amount | $ 1,000,000 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) ft² in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($)ft²building | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Long-term Purchase Commitment [Line Items] | |||
Number of buildings occupied | building | 2 | ||
Monthly rent expense under operating lease | $ | $ 4.4 | $ 3.7 | $ 1.8 |
Lease One | |||
Long-term Purchase Commitment [Line Items] | |||
Leased square feet | 67 | ||
Lease renewal term | 5 years | ||
Lease Two | |||
Long-term Purchase Commitment [Line Items] | |||
Leased square feet | 129 | ||
Lease renewal term | 10 years |
Commitments and Contingencies57
Commitments and Contingencies - Future Minimum Payments for Operating Leases (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Operating Leases | |
2,018 | $ 5,675 |
2,019 | 5,692 |
2,020 | 5,694 |
2,021 | 4,781 |
2,022 | 4,296 |
Thereafter | 20,442 |
Total minimum lease payments | $ 46,580 |
Commitments and Contingencies58
Commitments and Contingencies - Future Minimum Payments for Contractual Commitments (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Contractual Commitments | |
2,018 | $ 13,227 |
2,019 | 11,060 |
2,020 | 7,413 |
2,021 | 7,355 |
2,022 | 7,355 |
Thereafter | 5,517 |
Total commitments | $ 51,927 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - Common Stock - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | Oct. 15, 2015 | Sep. 30, 2015 | Mar. 04, 2015 |
Class of Stock [Line Items] | |||
Shares issued in follow-on offering (in shares) | 3,799 | 5,122 | |
Share price for shares issued in follow-on offering (in dollars per share) | $ 25.50 | $ 19.75 | |
Shares sold by shareholders (in shares) | 570 | ||
Proceeds from follow-on offering, net of issuance costs | $ 20.3 | $ 32.3 | |
Over-Allotment Option | |||
Class of Stock [Line Items] | |||
Shares issued in follow-on offering (in shares) | 768 | ||
Share price for shares issued in follow-on offering (in dollars per share) | $ 25.50 | $ 19.75 | |
Shares sold by shareholders (in shares) | 3,516 | 4,133 | |
Shares sold by the company (in shares) | 853 | 1,757 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ in Millions | Jan. 01, 2017 | Mar. 31, 2014 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 643,000 | 892,000 | 582,000 | ||
Aggregate intrinsic value of options exercised in period | $ 33.9 | $ 29.4 | $ 32.7 | ||
Aggregate intrinsic value of options outstanding | 71.3 | ||||
Unrecognized stock-based compensation expense, adjusted for estimated forfeitures related to stock options | $ 13.6 | ||||
2014 Stock Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares reserved for future issuance under the plan (in shares) | 5,413 | ||||
Additional shares authorized under the plan, percentage increase | 4.50% | ||||
Shares added to plan, automatic increase provision (in shares) | 1,819,000 | ||||
Shares transferred from the previous plan that expired or terminated (in shares) | 66,000 | ||||
Initial reserve of shares under the plan (in shares) | 7,298,000 | ||||
Granted (in shares) | 2,695,000 | ||||
Shares available for future issuance under the plan (in shares) | 2,617,000 | ||||
Total fair market value of stock options vested during the period | $ 8.1 | $ 8.7 | $ 3.4 | ||
2007 Stock Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares available for future issuance under the plan (in shares) | 0 | ||||
Restricted Stock Units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 4 years | ||||
Unrecognized stock-based compensation, related to stock options, period for recognition | 3 years | ||||
Unrecognized stock-based compensation expense, adjusted for estimated forfeitures, related to stock units | $ 47.1 | ||||
Restricted Stock Units (RSUs) | 2014 Stock Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares reserved for future issuance under the plan (in shares) | 2,425,000 | ||||
Shares transferred from the previous plan that expired or terminated (in shares) | 439,000 | ||||
Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 36 months | ||||
Unrecognized stock-based compensation, related to stock options, period for recognition | 2 years 8 months |
Stock-Based Compensation - Assu
Stock-Based Compensation - Assumptions Used in Estimating Fair Value of Options Granted (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate, minimum | 1.70% | 1.00% | 1.50% |
Risk-free interest rate, maximum | 2.10% | 1.80% | 1.60% |
Expected life (in years) | 4 years 9 months 18 days | ||
Expected volatility, minimum | 41.50% | 43.90% | 45.70% |
Expected volatility, maximum | 43.10% | 46.50% | 46.90% |
Dividend yield | 0.00% | 0.00% | 0.00% |
Weighted-average grant date fair value per share (in dollars per share) | $ 14.17 | $ 9.32 | $ 9.38 |
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected life (in years) | 3 years 9 months 18 days | 4 years 3 months 18 days | |
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected life (in years) | 4 years 9 months 18 days | 4 years 9 months 18 days |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Details) - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Number of Options | |||
Beginning balance (in shares) | 4,434 | 5,044 | 6,111 |
Granted (in shares) | 643 | 892 | 582 |
Exercised (in shares) | (1,205) | (1,379) | (1,578) |
Forfeited (in shares) | (180) | (123) | (71) |
Ending balance (in shares) | 3,692 | 4,434 | 5,044 |
Weighted Average Exercise Price | |||
Options outstanding, beginning (in dollars per share) | $ 12.91 | $ 8.84 | $ 5.90 |
Granted (in dollars per share) | 36.44 | 23.49 | 23.12 |
Exercised (in dollars per share) | 10.07 | 4.57 | 2.71 |
Forfeited (in dollars per share) | 19.15 | 16.08 | 8.95 |
Options outstanding, ending (in dollars per share) | $ 17.63 | $ 12.91 | $ 8.84 |
Stock-Based Compensation - St63
Stock-Based Compensation - Stock Options by Range of Exercise Prices (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Options outstanding, number of options (in shares) | shares | 3,692 |
Options outstanding, weighted average exercise price (in dollars per share) | $ 17.63 |
Options outstanding, weighted average remaining contractual life (in years) | 4 years 2 months |
Options exercisable, number of options (in shares) | shares | 2,293 |
Options exercisable, weighted average exercise price (in dollars per share) | $ 11.01 |
Options exercisable, weighted average remaining contractual life (in years) | 3 years 5 months |
$0.29 - $5.05 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price range, lower range limit (in dollars per share) | $ 0.29 |
Exercise price range, upper range limit (in dollars per share) | $ 5.05 |
Options outstanding, number of options (in shares) | shares | 385 |
Options outstanding, weighted average exercise price (in dollars per share) | $ 2.24 |
Options outstanding, weighted average remaining contractual life (in years) | 3 years 1 month |
Options exercisable, number of options (in shares) | shares | 385 |
Options exercisable, weighted average exercise price (in dollars per share) | $ 2.24 |
Options exercisable, weighted average remaining contractual life (in years) | 3 years 1 month |
$5.93 - $13.00 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price range, lower range limit (in dollars per share) | $ 5.93 |
Exercise price range, upper range limit (in dollars per share) | $ 13 |
Options outstanding, number of options (in shares) | shares | 1,265 |
Options outstanding, weighted average exercise price (in dollars per share) | $ 8.39 |
Options outstanding, weighted average remaining contractual life (in years) | 2 years 11 months |
Options exercisable, number of options (in shares) | shares | 1,221 |
Options exercisable, weighted average exercise price (in dollars per share) | $ 8.39 |
Options exercisable, weighted average remaining contractual life (in years) | 2 years 11 months |
$15.07 - $24.33 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price range, lower range limit (in dollars per share) | $ 15.07 |
Exercise price range, upper range limit (in dollars per share) | $ 24.33 |
Options outstanding, number of options (in shares) | shares | 932 |
Options outstanding, weighted average exercise price (in dollars per share) | $ 18.57 |
Options outstanding, weighted average remaining contractual life (in years) | 4 years 5 months |
Options exercisable, number of options (in shares) | shares | 527 |
Options exercisable, weighted average exercise price (in dollars per share) | $ 18.40 |
Options exercisable, weighted average remaining contractual life (in years) | 4 years 4 months |
$24.89 - $39.85 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price range, lower range limit (in dollars per share) | $ 24.89 |
Exercise price range, upper range limit (in dollars per share) | $ 39.85 |
Options outstanding, number of options (in shares) | shares | 1,044 |
Options outstanding, weighted average exercise price (in dollars per share) | $ 32.14 |
Options outstanding, weighted average remaining contractual life (in years) | 5 years 10 months |
Options exercisable, number of options (in shares) | shares | 160 |
Options exercisable, weighted average exercise price (in dollars per share) | $ 27.75 |
Options exercisable, weighted average remaining contractual life (in years) | 5 years 2 months |
$ 41.90 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price range, lower range limit (in dollars per share) | $ 41.9 |
Exercise price range, upper range limit (in dollars per share) | $ 41.9 |
Options outstanding, number of options (in shares) | shares | 66 |
Options outstanding, weighted average exercise price (in dollars per share) | $ 41.90 |
Options outstanding, weighted average remaining contractual life (in years) | 6 years 10 months |
Options exercisable, number of options (in shares) | shares | 0 |
Options exercisable, weighted average exercise price (in dollars per share) | $ 0 |
Options exercisable, weighted average remaining contractual life (in years) | 0 years |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Activity (Details) - Restricted Stock Units (RSUs) - $ / shares shares in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Number of Shares | ||||
Nonvested, beginning (in shares) | 1,210 | 716 | 28 | |
Granted (in shares) | 939 | 751 | 707 | |
Vested (in shares) | (349) | (171) | (7) | |
Forfeited (in shares) | (120) | (86) | (12) | |
Nonvested, ending (in shares) | 1,680 | 1,210 | 716 | |
Weighted Average Grant Date Fair Value | ||||
Nonvested, beginning (in dollars per share) | $ 32.65 | $ 25.87 | $ 26.19 | $ 19.44 |
Granted (in dollars per share) | 38.58 | 25.55 | 26.39 | |
Vested (in dollars per share) | 26.35 | 26 | 19.44 | |
Forfeited (in dollars per share) | 28.94 | 25.54 | 26.14 | |
Nonvested, ending (in dollars per share) | $ 32.65 | $ 25.87 | $ 26.19 |
Provision for Income Taxes - Co
Provision for Income Taxes - Components of Income Tax Provision (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current taxes: | |||||||||||
Federal | $ (100) | $ 0 | $ 0 | ||||||||
Foreign | 62 | 33 | 0 | ||||||||
State | 74 | 112 | 135 | ||||||||
Total current taxes | 36 | 145 | 135 | ||||||||
Deferred taxes: | |||||||||||
Federal | 32 | 262 | 0 | ||||||||
State | (382) | 20 | 85 | ||||||||
Total deferred taxes | (350) | 282 | 85 | ||||||||
(Benefit from) provision for income taxes | $ (670) | $ 3 | $ 217 | $ 136 | $ 97 | $ 97 | $ 3 | $ 230 | $ (314) | $ 427 | $ 220 |
Provision for Income Taxes - Na
Provision for Income Taxes - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating Loss Carryforwards [Line Items] | |||
Increase in valuation allowance | $ 20,400,000 | ||
Income tax at U.S. statutory rate | 34.00% | 34.00% | 34.00% |
Tax benefit related to remeasurement | $ 200,000 | ||
Federal | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | 168,100,000 | $ 129,500,000 | |
State | |||
Operating Loss Carryforwards [Line Items] | |||
Tax credits | 500,000 | 200,000 | |
Alternative Minimum Tax Credit Carryforward | Federal | |||
Operating Loss Carryforwards [Line Items] | |||
Tax credits | 100,000 | 100,000 | |
Research Tax Credit Carryforward | Federal | |||
Operating Loss Carryforwards [Line Items] | |||
Tax credits | $ 1,200,000 | $ 0 |
Provision for Income Taxes - Si
Provision for Income Taxes - Significant Components of Deferred Taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
NOL and credit carryforwards | $ 40,716 | $ 29,034 |
Deferred revenue | 8,216 | 9,910 |
Accrued expenses and other | 6,802 | 9,829 |
Stock-based compensation | 4,615 | 4,598 |
Total deferred tax assets | 60,349 | 53,371 |
Deferred tax liabilities: | ||
Deferred expenses | (6,198) | (8,337) |
Depreciation and amortization | (1,426) | (2,887) |
Total deferred tax liabilities | (7,624) | (11,224) |
Deferred tax assets less tax liabilities | 52,725 | 42,147 |
Less: valuation allowance | (52,629) | (42,401) |
Net deferred tax asset | $ 96 | |
Net deferred tax (liability) | $ (254) |
Provision for Income Taxes - In
Provision for Income Taxes - Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Income tax at U.S. statutory rate | 34.00% | 34.00% | 34.00% |
Increase in deferred tax valuation allowance | (77.10%) | (36.30%) | (34.50%) |
Stock compensation | 32.70% | 0.00% | 0.00% |
R&D Credit | 4.70% | 0.00% | 0.00% |
State taxes, net of federal benefit | 6.20% | 1.70% | 1.60% |
Tax impact of federal law change | 1.20% | 0.00% | 0.00% |
Other permanent items | (0.50%) | (0.60%) | (2.00%) |
Income tax benefit (provision) effective rate | 1.20% | (1.20%) | (0.90%) |
Employee Benefit Plan - Additio
Employee Benefit Plan - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | ||
401(K) Plan, minimum annual contributions per employee, percent of total earnings | 1.00% | |
401 (K) Plan, maximum annual contributions per employee, percent of total earnings | 90.00% | |
Discretionary contribution | $ 0 | |
Other Postretirement Benefits Plan | Centrix 401(k) Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Discretionary contribution | $ 100,000 | |
Maximum employee contribution | $ 18,000 |
Related Parties (Details)
Related Parties (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |||
Revenue from a related-party customer | $ 0.4 | $ 0.5 | $ 0.4 |
Selected Quarterly Financial 71
Selected Quarterly Financial Data (unaudited) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||
Revenues | $ 51,703 | $ 50,116 | $ 47,625 | $ 44,534 | $ 42,155 | $ 38,305 | $ 36,005 | $ 33,759 | $ 193,978 | $ 150,224 | $ 108,867 | |||
Cost of revenues | 26,572 | 25,813 | 24,328 | 22,772 | 21,146 | 19,599 | 18,870 | 17,814 | 99,485 | [1] | 77,429 | [1] | 59,128 | [1] |
Gross profit | 25,131 | 24,303 | 23,297 | 21,762 | 21,009 | 18,706 | 17,135 | 15,945 | 94,493 | 72,795 | 49,739 | |||
Operating expenses: | ||||||||||||||
Sales and marketing | 10,292 | 9,904 | 11,096 | 9,878 | 9,486 | 8,980 | 9,611 | 8,207 | 41,170 | [1] | 36,284 | [1] | 26,999 | [1] |
Research and development | 10,673 | 10,092 | 9,922 | 9,651 | 8,508 | 8,219 | 7,830 | 7,903 | 40,338 | [1] | 32,460 | [1] | 21,534 | [1] |
General and administrative | 9,863 | 9,596 | 9,268 | 8,452 | 8,477 | 8,624 | 7,437 | 7,421 | 37,179 | [1] | 31,959 | [1] | 22,977 | [1] |
Acquisition related costs | 263 | 270 | 351 | 348 | 1,514 | 1,835 | 1,476 | 1,482 | 1,232 | 6,307 | 2,493 | |||
Amortization of acquired intangibles | 368 | 369 | 373 | 371 | 366 | 368 | 368 | 368 | 1,481 | 1,470 | 576 | |||
Unoccupied lease charges | 0 | 0 | 0 | 0 | 0 | 0 | 33 | 0 | 0 | 33 | 0 | |||
Total operating expenses | 31,459 | 30,231 | 31,010 | 28,700 | 28,351 | 28,026 | 26,755 | 25,381 | 121,400 | 108,513 | 74,579 | |||
Loss from operations | (6,328) | (5,928) | (7,713) | (6,938) | (7,342) | (9,320) | (9,620) | (9,436) | (26,907) | (35,718) | (24,840) | |||
Total other income (expense), net | 137 | 149 | 109 | 34 | (74) | (64) | (85) | 14 | 429 | (209) | (3) | |||
Loss before income taxes | (6,191) | (5,779) | (7,604) | (6,904) | (7,416) | (9,384) | (9,705) | (9,422) | (26,478) | (35,927) | (24,843) | |||
(Benefit from) provision for income taxes | 670 | (3) | (217) | (136) | (97) | (97) | (3) | (230) | 314 | (427) | (220) | |||
Net loss | $ (5,521) | $ (5,782) | $ (7,821) | $ (7,040) | $ (7,513) | $ (9,481) | $ (9,708) | $ (9,652) | $ (26,164) | $ (36,354) | $ (25,063) | |||
[1] | Includes stock-based compensation expenses as follows: Year Ended December 31, 2017 2016 2015Cost of revenues $3,729 $2,043 $1,134Sales and marketing 3,243 2,231 1,570Research and development 4,464 2,934 1,186General and administrative 9,503 5,432 3,472Total stock-based compensation expenses $20,939 $12,640 $7,362 |