Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Jan. 31, 2019 | Jun. 30, 2018 | |
Entity Registrant Name | Inovalon Holdings, Inc. | ||
Entity Central Index Key | 1,619,954 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 520.3 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Class A Common | |||
Entity Common Stock, Shares Outstanding | 72,046,008 | ||
Class B Common | |||
Entity Common Stock, Shares Outstanding | 80,608,685 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 115,591 | $ 208,944 |
Short-term investments | 7,000 | 267,288 |
Accounts receivable (net of allowances of $3,350 and $2,038 at December 31, 2018 and 2017, respectively) | 104,405 | 90,054 |
Prepaid expenses and other current assets | 34,801 | 10,441 |
Income tax receivable | 10,330 | 11,987 |
Total current assets | 272,127 | 588,714 |
Non-current assets: | ||
Property, equipment and capitalized software, net | 141,758 | 125,768 |
Goodwill | 956,029 | 184,932 |
Intangible assets, net | 535,343 | 89,326 |
Other assets | 16,158 | 6,338 |
Total assets | 1,921,415 | 995,078 |
Current liabilities: | ||
Accounts payable and accrued expenses | 31,295 | 34,109 |
Accrued compensation | 25,298 | 18,592 |
Other current liabilities | 50,765 | 15,277 |
Deferred revenue | 20,628 | 6,954 |
Deferred rent | 619 | 1,818 |
Credit facilities | 9,800 | 45,000 |
Capital lease obligation | 2,905 | 336 |
Total current liabilities | 141,310 | 122,086 |
Non-current liabilities: | ||
Credit facilities, less current portion | 939,514 | 191,250 |
Capital lease obligation, less current portion | 13,927 | 12,109 |
Deferred rent, less current portion | 3,186 | 219 |
Other liabilities | 30,220 | 0 |
Deferred income taxes | 110,669 | 26,642 |
Total liabilities | 1,238,826 | 352,306 |
Commitments and contingencies (Note 11) | ||
Stockholders’ equity: | ||
Common stock | 0 | 0 |
Preferred stock, $0.0001 par value, 100,000,000 shares authorized, zero shares issued and outstanding at December 31, 2018 and 2017, respectively | 0 | 0 |
Additional paid-in-capital | 618,674 | 534,159 |
Retained earnings | 270,471 | 308,905 |
Treasury stock, at cost, 14,620,175 shares at December 31, 2018 and 2017 | (199,817) | (199,817) |
Other comprehensive loss, net of tax | (6,740) | (476) |
Total stockholders’ equity | 682,589 | 642,772 |
Total liabilities and stockholders’ equity | 1,921,415 | 995,078 |
Class A Common | ||
Stockholders’ equity: | ||
Common stock | 0 | 0 |
Class B Common | ||
Stockholders’ equity: | ||
Common stock | $ 1 | $ 1 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accounts receivable, allowances | ||
Accounts receivable, allowances | $ 3,350 | $ 2,038 |
Common stock | ||
Common stock, par value (in dollars per share) | $ 0.000005 | $ 0.000005 |
Common stock, authorized (in shares) | 900,000,000 | 900,000,000 |
Common stock, issued (in shares) | 0 | 0 |
Common stock, outstanding (in shares) | 0 | 0 |
Preferred stock | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Treasury stock | ||
Treasury stock (in shares) | 14,620,175 | 14,620,175 |
Class A Common | ||
Common stock | ||
Common stock, par value (in dollars per share) | $ 0.000005 | $ 0.000005 |
Common stock, authorized (in shares) | 750,000,000 | 750,000,000 |
Common stock, issued (in shares) | 86,679,575 | 77,588,018 |
Common stock, outstanding (in shares) | 72,059,400 | 62,967,843 |
Class B Common | ||
Common stock | ||
Common stock, par value (in dollars per share) | $ 0.000005 | $ 0.000005 |
Common stock, authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, issued (in shares) | 80,608,685 | 80,957,495 |
Common stock, outstanding (in shares) | 80,608,685 | 80,957,495 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Income Statement [Abstract] | ||||
Revenue | $ 527,676 | $ 449,358 | $ 427,588 | |
Expenses: | ||||
Cost of revenue | [1] | 144,826 | 151,046 | 159,169 |
Sales and marketing | [1] | 45,534 | 34,103 | 27,078 |
Research and development | [1] | 28,638 | 27,383 | 29,148 |
General and administrative | [1] | 205,038 | 149,948 | 137,275 |
Depreciation and amortization | 96,725 | 53,089 | 37,284 | |
Restructuring expense | 9,500 | 0 | 0 | |
Total operating expenses | 530,261 | 415,569 | 389,954 | |
(Loss) Income from operations | (2,585) | 33,789 | 37,634 | |
Other income and (expenses): | ||||
Interest income | 2,181 | 5,429 | 5,792 | |
Interest expense | (50,898) | (6,225) | (5,065) | |
Other (expense) income, net | (2,255) | (406) | 538 | |
(Loss) Income before taxes | (53,557) | 32,587 | 38,899 | |
(Benefit from) Provision for income taxes | (14,393) | (2,231) | 11,795 | |
Net (loss) income | (39,164) | 34,818 | 27,104 | |
Net (loss) income attributable to common stockholders, basic and diluted | $ (39,164) | $ 33,828 | $ 26,943 | |
Net (loss) income per share attributable to common stockholders, basic and diluted: | ||||
Basic net income per share (in dollars per share) | $ (0.27) | $ 0.24 | $ 0.18 | |
Diluted net income per share (in dollars per share) | $ (0.27) | $ 0.24 | $ 0.18 | |
Weighted average shares of common stock outstanding: | ||||
Basic (in shares) | 145,389 | 142,225 | 150,048 | |
Diluted (in shares) | 145,389 | 142,737 | 150,955 | |
[1] | (1) Includes stock-based compensation expense as follows: Cost of revenue$237 $1,652 $483Sales and marketing735 2,011 613Research and development1,937 1,293 1,184General and administrative13,253 12,362 7,774Total stock-based compensation expense$16,162 $17,318 $10,054 |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Includes stock-based compensation expense as follows: | |||
Total stock-based compensation expense | $ 16,162 | $ 17,318 | $ 10,054 |
Cost of revenue | |||
Includes stock-based compensation expense as follows: | |||
Total stock-based compensation expense | 237 | 1,652 | 483 |
Sales and marketing | |||
Includes stock-based compensation expense as follows: | |||
Total stock-based compensation expense | 735 | 2,011 | 613 |
Research and development | |||
Includes stock-based compensation expense as follows: | |||
Total stock-based compensation expense | 1,937 | 1,293 | 1,184 |
General and administrative | |||
Includes stock-based compensation expense as follows: | |||
Total stock-based compensation expense | $ 13,253 | $ 12,362 | $ 7,774 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net (loss) income | $ (39,164) | $ 34,818 | $ 27,104 |
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, after Tax | 2,022 | 0 | 0 |
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), before Reclassification, after Tax | (8,751) | 0 | 0 |
Other comprehensive income (loss): | |||
Realized losses (gains) on short-term investments reclassified from accumulated other comprehensive income, net of tax of $(319), $0 and $4, respectively | 716 | 0 | (6) |
Net change in unrealized (losses) and gains on available-for-sale investments, net of tax of $69, $(94) and $(682), respectively | (149) | 104 | 1,008 |
Reclassification from AOCI to retained earnings, tax effect | (102) | 0 | 0 |
Comprehensive (loss) income | $ (45,428) | $ 34,922 | $ 28,106 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, Tax | $ (956) | $ 0 | $ 0 |
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), before Reclassification, Tax | 4,156 | 0 | 0 |
Realized (gains) losses on short-term investments reclassified from accumulated other comprehensive income, tax | (319) | 0 | 4 |
Net change in unrealized gains and (losses) on available-for-sale investments, tax | $ 69 | $ (94) | $ (682) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Total | Treasury Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Class A Common | Class A CommonCommon Stock | Class B CommonCommon Stock |
Consolidated Statements of Stockholders' Equity (Deficit) | ||||||||
Adjustment to adopt ASU 2016-09 | Accounting Standards Update 2016-09 | $ 200 | $ 757 | $ (557) | |||||
Balance (in shares) at Dec. 31, 2015 | 0 | 53,482,669 | 98,230,363 | |||||
Balance at Dec. 31, 2015 | 739,156 | $ 0 | 493,197 | 247,540 | $ (1,582) | $ 0 | $ 1 | |
Consolidated Statements of Stockholders' Equity (Deficit) | ||||||||
Repurchase of common stock (in shares) | (7,508,985) | |||||||
Repurchase of common stock | (106,231) | $ (106,231) | ||||||
Stock-based compensation expense | 9,914 | 9,914 | ||||||
Issuance of common stock related to business combination (in shares) | 651,355 | |||||||
Issuance of common stock related to business combination | 7,764 | 7,764 | ||||||
Exercise of stock options (in shares) | (660,156) | (158,753) | ||||||
Exercise of stock options | 6,200 | 6,200 | ||||||
Conversion Class B to Class A common stock (in shares) | (15,085,488) | (15,085,488) | ||||||
Issuance of shares related to restricted stock units and awards (in shares) | 2,453,593 | |||||||
Issuance of shares for Employee Stock Purchase Plan | (34) | (34) | ||||||
Shares withheld for employee taxes upon conversion of restricted stock (in shares) | (61,963) | |||||||
Shares withheld for employee taxes upon conversion of restricted stock | (1,498) | (1,498) | ||||||
Other comprehensive loss | 1,002 | 1,002 | ||||||
Net (loss) income | 27,104 | 27,104 | ||||||
Balance (in shares) at Dec. 31, 2016 | (7,508,985) | 72,271,298 | 83,303,628 | |||||
Balance at Dec. 31, 2016 | 683,577 | $ (106,231) | 516,300 | 274,087 | (580) | $ 0 | $ 1 | |
Consolidated Statements of Stockholders' Equity (Deficit) | ||||||||
Repurchase of common stock (in shares) | (7,111,190) | (7,508,985) | ||||||
Repurchase of common stock | (93,586) | $ (93,586) | $ (106,200) | |||||
Stock-based compensation expense | 17,164 | 17,164 | ||||||
Exercise of stock options (in shares) | (654,035) | (6,833) | ||||||
Exercise of stock options | 4,967 | 4,967 | ||||||
Conversion Class B to Class A common stock (in shares) | (2,352,966) | (2,352,966) | ||||||
Issuance of shares related to restricted stock units and awards (in shares) | 2,546,426 | |||||||
Shares withheld for employee taxes upon conversion of restricted stock (in shares) | (236,707) | |||||||
Shares withheld for employee taxes upon conversion of restricted stock | (4,272) | (4,272) | ||||||
Other comprehensive loss | 104 | 104 | ||||||
Net (loss) income | 34,818 | 34,818 | ||||||
Balance (in shares) at Dec. 31, 2017 | (14,620,175) | 77,588,018 | 80,957,495 | |||||
Balance at Dec. 31, 2017 | 642,772 | $ (199,817) | 534,159 | 308,905 | (476) | $ 0 | $ 1 | |
Consolidated Statements of Stockholders' Equity (Deficit) | ||||||||
Adjustment to adopt ASU 2016-09 | Calculated under Revenue Guidance in Effect before Topic 606 [Member] | 628 | 628 | ||||||
Adjustment to adopt ASU 2016-09 | Accounting Standards Update 2018-02 | 102 | |||||||
Repurchase of common stock (in shares) | (7,111,190) | |||||||
Repurchase of common stock | $ (93,600) | |||||||
Stock-based compensation expense | 16,044 | 16,044 | ||||||
Issuance of common stock related to business combination (in shares) | 7,598,731 | |||||||
Issuance of common stock related to business combination | 70,000 | 70,000 | ||||||
Exercise of stock options (in shares) | (258,921) | |||||||
Exercise of stock options | 1,834 | 1,834 | ||||||
Conversion Class B to Class A common stock (in shares) | (348,810) | (348,810) | ||||||
Issuance of shares related to restricted stock units and awards (in shares) | 1,168,541 | |||||||
Shares withheld for employee taxes upon conversion of restricted stock (in shares) | (283,446) | |||||||
Shares withheld for employee taxes upon conversion of restricted stock | (3,363) | (3,363) | ||||||
Other comprehensive loss | (6,264) | (6,264) | ||||||
Net (loss) income | (39,164) | (39,164) | ||||||
Balance (in shares) at Dec. 31, 2018 | (14,620,175) | 86,679,575 | 80,608,685 | |||||
Balance at Dec. 31, 2018 | $ 682,589 | $ (199,817) | $ 618,674 | $ 270,471 | $ (6,740) | $ 0 | $ 1 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | |||
Net (loss) income | $ (39,164) | $ 34,818 | $ 27,104 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Stock-based compensation expense | 16,162 | 17,318 | 10,054 |
Depreciation | 52,742 | 37,853 | 28,078 |
Amortization of intangibles | 43,983 | 15,236 | 9,206 |
Amortization of premiums on short-term investments | 289 | 1,958 | 3,163 |
Amortization of debt issuance costs and debt discount | 3,138 | 0 | 0 |
Deferred income taxes | (12,495) | (6,665) | (1,740) |
Restructuring expense, non-cash | 7,075 | 0 | 0 |
Change in fair value of contingent consideration | 7,212 | (5,200) | 706 |
Bargain purchase gain | 0 | (1,434) | 0 |
Other | 332 | 406 | (332) |
Changes in assets and liabilities: | |||
Accounts receivable | 3,280 | (977) | 4,683 |
Prepaid expenses and other current assets | (20,002) | 3,346 | (6,198) |
Income taxes receivable | 2,208 | 3,293 | 3,639 |
Other assets | (4,209) | (3,355) | 4,071 |
Accounts payable and accrued expenses | (6,007) | 8,252 | (3,463) |
Accrued compensation | 9,292 | 3,030 | 243 |
Other current and non-current liabilities | 17,672 | (5,373) | 10,479 |
Deferred rent | 2,219 | (440) | (770) |
Deferred revenue | 6,674 | (4,360) | 3,907 |
Net cash provided by operating activities | 90,401 | 97,706 | 92,830 |
Cash flows from investing activities: | |||
Maturities of short-term investments | 96,588 | 174,416 | 300,524 |
Sales of short-term investments | 161,772 | 1,175 | 31,549 |
Purchases of short-term investments | 0 | 0 | (164,737) |
Purchases of property and equipment | (25,505) | (32,565) | (19,360) |
Investment in capitalized software | (39,469) | (32,977) | (19,668) |
Acquisition, net of cash acquired of $23,850, $1,535 and $861, respectively | (1,082,740) | (3,490) | (88,509) |
Net cash (used in) provided by investing activities | (889,354) | 106,559 | 39,799 |
Cash flows from financing activities: | |||
Repurchase of common stock | 0 | (93,586) | (106,231) |
Proceeds from credit facility borrowings, net of discount | 965,300 | 0 | 0 |
Repayment of credit facility borrowings | (238,700) | (30,000) | (15,000) |
Payments for debt issuance costs | (18,269) | 0 | 0 |
Acquisition-related contingent consideration | 0 | 0 | (2,300) |
Proceeds from exercise of stock options | 1,833 | 4,967 | 6,165 |
Capital lease obligations paid | (1,201) | (113) | (116) |
Tax payments for equity award issuances | (3,363) | (4,272) | (1,498) |
Net cash provided by (used in) financing activities | 705,600 | (123,004) | (118,980) |
(Decrease) Increase in cash and cash equivalents | (93,353) | 81,261 | 13,649 |
Cash and cash equivalents, beginning of period | 208,944 | 127,683 | 114,034 |
Cash and cash equivalents, end of period | 115,591 | 208,944 | 127,683 |
Supplemental cash flow disclosure: | |||
Income taxes, net of refunds | (4,136) | 962 | 11,117 |
Interest | 43,573 | 5,972 | 4,835 |
Non-cash investing activities: | |||
Capital lease obligations incurred | 5,677 | 12,231 | 0 |
Accruals of purchases of property, equipment | 12,097 | 7,924 | 816 |
Accruals for investment in capitalized software | 1,495 | 2,711 | 913 |
Acquisition consideration | $ 84,156 | $ 0 | $ 0 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from investing activities: | |||
Acquisition, cash acquired | $ 23,850 | $ 1,535 | $ 861 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS | NATURE OF OPERATIONS Inovalon Holdings, Inc., (the “Company”), is a leading technology company providing cloud-based platforms empowering data-driven healthcare. Through the Inovalon ONE ® Platform, Inovalon brings to the marketplace a national-scale capability to interconnect with the healthcare ecosystem, aggregate and analyze data in real-time, and empower the application of resulting insights to drive meaningful impact at the point of care. Leveraging its platform, unparalleled proprietary data sets, and industry-leading subject matter expertise, Inovalon enables better care, efficiency, and financial performance across the healthcare ecosystem. From health plans and provider organizations, to pharmaceutical, medical device, and diagnostics companies, Inovalon’s unique achievement of value is delivered through the effective progression of “Turning Data into Insight, and Insight into Action ® .” |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation —The accompanying consolidated financial statements include the accounts of Inovalon Holdings, Inc. and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Basis of Presentation and Use of Estimates —These consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (“GAAP”). The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenue and expenses during the reported period. Certain prior period amounts have been reclassified within the consolidated statements of operations and within the operating section of the consolidated statements of cash flows to conform with current period presentation. Such reclassifications had no impact on net income or net cash provided by operating activities as previously reported. Significant estimates made by management include, but are not limited to: revenue recognition; accounts receivable allowances; fair value of intangibles and goodwill; fair value of contingent consideration; depreciable lives of property, equipment and capitalized software; and useful lives of intangible assets. Actual results could differ from management’s estimates, and such differences could be material to the Company’s consolidated financial position and results of operations. Cash and Cash Equivalents —Cash and cash equivalents consist of highly liquid investments with an original maturity of three months or less at the time of purchase, and demand deposits with financial institutions. Short-term investments —Short-term investments consists of investment grade debt securities. The Company classifies short-term investments as available-for-sale at the time of purchase and reevaluates such classification as of each balance sheet date. All short-term investments are recorded at estimated fair value. Unrealized gains and losses for available-for-sale securities 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. Impairments are considered to be other-than-temporary if they are related to deterioration in credit risk, if it is more likely than not that the Company will be required to sell or intends to sell the securities 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 as components of other income and (expenses), in the consolidated statements of operations. Interest, amortization of premiums, and accretion of discount on short-term investments classified as available for sale are included as a component of interest income, in the consolidated statements of operations. There were no other-than-temporary impairments during 2018 . The Company may sell short-term investments at any time, without significant penalty, for use in current operations or for other purposes, even if the short-term investments have not yet reached maturity. As a result, the Company classifies these investments, including securities with maturities beyond 12 months , as current assets in the accompanying consolidated balance sheets. Gains or losses realized from the sale of securities are reclassified out of other comprehensive income (loss) into earnings using the specific identification method. Concentrations of Credit Risk —Accounts receivable and cash and cash equivalents subject the Company to its highest potential concentrations of credit risk. Although the Company deposits its cash and cash equivalents with multiple financial institutions, the Company’s deposits may exceed federally insured limits. The Company has not experienced any losses on cash and cash equivalent accounts to date, and management believes the Company is not exposed to any significant credit risk related to cash and cash equivalents. The Company sells services to clients without requiring collateral, based on an evaluation of the client’s financial condition. Exposure to losses on receivables is principally dependent on each client’s financial condition. The Company monitors its exposure for credit losses and maintains allowances for anticipated losses. Revenue from a significant client, representing 10% or more of total revenue for the respective periods, is summarized as follows: Year Ended December 31, 2018 2017 2016 Client A * 12 % 17 % _______________________________________ *Less than 10% The Company did not have accounts receivable from a significant client, representing 10% or more of total accounts receivable as of December 31, 2018 and December 31, 2017 , respectively. Accounts Receivable and Allowances —Accounts receivable consists primarily of amounts due to the Company from its normal business activities. The Company provides an allowance for estimated losses resulting from the failure of clients to make required payments (credit losses) and a sales allowance for estimated future billing adjustments resulting from client concessions or resolutions of billing disputes. The provision for sales allowances are charged against revenue while credit losses are recorded in general and administrative expenses. Fair Value Measurements —The Company applies the Accounting Standards Codifications (“ASC”) 820-10, Fair Value Measurements and Disclosures . ASC 820-10 defines fair value, establishes a fair value hierarchy for assets and liabilities measured at fair value, and expands required disclosures about fair value measurements. This guidance requires the Company to classify and disclose assets and liabilities measured at fair value on a recurring basis, as well as fair value measurements of assets and liabilities measured on a nonrecurring basis in periods subsequent to initial measurement, in a three-tier fair value hierarchy as described below. The guidance defines fair value as the exchange price that would be received for an asset or 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 guidance describes three levels of inputs that may be used to measure fair value: Level 1—Financial assets and liabilities whose values are based on quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date. Level 2—Financial assets and liabilities whose values are based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3—Financial assets and liabilities whose values are based on unobservable inputs for the asset or liability. The carrying amounts of accounts receivable, other current assets, accounts payable, and accrued liabilities approximate fair value due to their short-term nature. The Company’s Credit Facilities (as defined in “Note 10 —Debt”) approximate fair value because of their floating rate structure. Interest Rate Swaps —The Company uses interest rate swaps to mitigate the risk of a rise in interest rates. The Company applies ASC 815, Derivatives and Hedging and the interest rate swaps are recorded on the balance sheet at fair value as either assets or liabilities and any changes to the fair value are recorded through accumulated other comprehensive income and reclassified into interest expense in the same period in which the hedged transaction is recognized in earnings. Cash flows from interest rate swaps are reported in the same category as the cash flows from the items being hedged. Property, Equipment and Capitalized Software, net —Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization on property, leasehold improvements, equipment, and software is computed on a straight-line basis over the estimated useful lives of the assets, as follows: Useful Life Office and computer equipment 3 - 5 years Purchased software 5 years Capitalized software 3 - 5 years Furniture and fixtures 7 years Building * Leasehold improvements * Assets under capital leases * _______________________________________ *Lesser of lease term or economic life Expenses for repairs and maintenance that do not extend the life of property and equipment are expensed as incurred. Expenses for major renewals and betterments, which significantly extend the useful lives of existing property and equipment, are capitalized and depreciated. Upon retirement or disposition of property and equipment, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized. In accordance with ASC 350-40, Internal-use Software , the Company capitalizes certain software development costs while in the application development stage related to software developed for internal use. All other costs to develop software for internal use, either in the preliminary project stage or post implementation stage, are expensed when incurred. Software development costs are amortized on a straight-line basis over a three to five year period, which management believes represents the useful life of these capitalized costs. In accordance with ASC 985-20, Software to be Sold, Leased, or Marketed , certain software development costs are expensed as incurred until technological feasibility has been established. Thereafter, all software development costs incurred through the software’s general release date are capitalized and subsequently reported at the lower of amortized cost or net realizable value. Capitalized costs are amortized based on current and expected future revenue for each software solution with minimum annual amortization equal to the straight-line amortization over the estimated economic life, which is typically over a three to five year period. Intangible Assets —Intangible assets consist of acquired technology, including developed and core technology, databases, trade names, and customer relationships. Intangible assets are initially recorded at fair value and amortized on a straight line basis over their estimated useful lives. Acquired intangible assets are being amortized over the following periods: Useful Life Technology 3 - 13 years Trademark and trade names 3 - 17 years Database 10 years Customer relationships 8 - 15.75 years Non-compete agreements Contractual term In-process research and development Indefinite At least annually, or whenever events or changes in circumstances indicate a revision to the useful life, the Company reviews the remaining useful lives of its definite-lived intangible assets. On an annual basis, the Company reviews its indefinite-lived in process research and development for impairment until the research and development is completed or abandoned. There were no impairment charges on indefinite-lived intangible assets for the years ended December 31, 2018 and 2017 . Goodwill —Goodwill represents the excess of acquisition costs over the fair value of tangible net assets and identifiable intangible assets of businesses acquired. Goodwill is not amortized and is subject to impairment testing annually, or whenever events or changes in circumstances indicate that the carrying amount may not be fully recoverable. Historically, the annual goodwill impairment assessment was performed as of December 31 st . During 2018, the Company changed the date of the goodwill impairment assessment to November 1 st for the year ended December 31, 2018 and thereafter. The Company believes this change in the Company’s measurement date does not represent a material change in method of applying the accounting principal as the new and old assessment dates are close in proximity and fall within the same quarter. Additionally, the change does not produce different results as similar valuation assumptions are used and the carrying values are stable. The change in the date of the Company’s goodwill impairment analysis will allow for more time to perform the analysis and prepare the valuations for certain reporting units. Impairment is the condition that exists when the carrying amount of a reporting unit exceeds its fair value. If the fair value of the reporting unit exceeds the carrying value of the reporting unit, goodwill is not impaired. If the carrying value of the reporting unit exceeds the fair value of the reporting unit, then the Company will record an impairment loss in the amount equal to the difference between the fair value and the carrying value. Significant judgment in testing goodwill for impairment includes assigning assets and liabilities to the reporting unit and assessing or determining the fair value of each reporting unit based on the Company’s best estimates and assumptions, as well as other information including valuations that utilize customary valuation procedures and techniques. The Company tests its goodwill for impairment at the reporting unit level which is one level below the operating segment and has identified four reporting units: Inovalon, ABILITY, Avalere and Creehan. Based on the Company’s annual impairment evaluation performed as of November 1, 2018, the Company concluded that there was no impairment of goodwill. Refer to “Note 9 —Goodwill and Intangible Assets” for a summary of changes in goodwill. Valuation of Long-Lived Assets —The Company reviews long-lived assets for events or changes in circumstances that would indicate potential impairment. If the Company determines that an asset may not be recoverable, an impairment charge is recorded. There were no impairment charges on long-lived assets for the years ended December 31, 2018 , and 2017 . Revenue Recognition —The Company generates a substantial majority of its revenue through the sale or subscription licensing of its platform solutions, as well as revenue from related arrangements for advisory, implementation, and support services. The Company recognizes revenue when performance obligations under the terms of a contract are satisfied. A performance obligation is a contractual promise to transfer a distinct good or service to the customer. This occurs when the control of the product or service is transferred to the customer. The majority of the Company’s platform solutions contracts contain a series of separately identifiable and distinct services that represent performance obligations that are satisfied over time. The Company allocates revenue to platform services by determining the standalone selling price of each performance obligation. The determination of standalone selling price for each performance obligation is determined based on the terms of the contract and can require judgment. Generally, the best estimate of standalone selling price is consistent with the contractual arrangement fee for each element. Revenue is generally recognized on platform offerings over the contract term. For these contracts, the Company has determined that it will use the practical expedient under ASC 606-10-55-18 to recognize revenue when it has the right to invoice. The Company qualifies for this practical expedient because the right to invoice corresponds directly with the value transferred to the customer. The Company also generates revenue from advisory, implementation, and support services. The Company primarily enters into arrangements for advisory services under fixed-price, time and materials, or retainer-based contracts. Revenues under fixed-price and retainer-based contracts are recognized ratably over the contract period or upon contract completion. Revenue for time and material contracts is recognized based upon contractually agreed upon billing rates applied to direct labor hours expended plus the costs of other items used in the performance of the contract. The Company recognizes revenue when the Company has the right to invoice the customer using the allowable practical expedient under ASC 606-10-55-18 since the right to invoice the customer corresponds with the performance obligations completed. Certain of the Company’s arrangements entitle a client to receive a refund if the Company fails to satisfy contractually specified performance obligations. The refund is limited to a portion or all of the consideration paid. In this case, revenue is recognized when performance obligations are satisfied. The Company maintains an allowance, charged to revenue, which reflects the Company’s estimated future billing adjustments resulting from client concessions or resolutions of billing disputes. Cost of Revenue —Cost of revenue consists primarily of employee-related expenses including salaries, benefits, discretionary incentive compensation, employment taxes, equity compensation costs, and severance for employees that provide direct revenue-generating services to clients. Cost of revenue also includes expenses associated with the integration and verification of data and other service costs incurred to fulfill the Company’s revenue contracts. Cost of revenue does not include allocated amounts for occupancy expense, depreciation and amortization. Research and Development —Research and development expenses consist primarily of employee-related expenses. All such costs are expensed as incurred, except for certain internal use software development costs that are capitalized. Research and development excludes any allocation of occupancy expense, depreciation and amortization. Selling and Marketing —Sales and marketing expense consists primarily of employee-related expenses including salaries, benefits, discretionary incentive compensation, employment taxes, severance and equity compensation costs for employees engaged in sales, sales support, business development, and marketing. Sales and marketing expense also includes operating expenses for marketing programs, research, trade shows and brand messages, and public relations costs. Sales and marketing expense excludes any allocation of occupancy expense, depreciation and amortization. General and Administrative —General and administrative expense consists primarily of employee-related expenses including salaries, benefits, discretionary incentive compensation, employment taxes, severance and equity compensation costs, for employees who are responsible for management information systems, administration, human resources, finance, legal, and executive management. General and administrative expense also includes occupancy expenses (including rent, utilities, communications, and facilities maintenance), professional fees, consulting fees, insurance, travel, and other expenses. General and administrative expense excludes any allocation of depreciation and amortization. Segments —The Company operates its business as one operating segment. The Company provides cloud-based platforms under a shared infrastructure and provides related services to its clients in order to achieve meaningful insight and improvement in clinical and quality outcomes, utilization, and financial performance. The Company derives substantially all of its revenue from the sale or subscription licensing of its platform solutions, as well as revenue from related arrangements for advisory, implementation, and support services of one group of similar product offerings—proprietary datasets, core connectivity, advanced integration technologies, sophisticated predictive analytics, and deep subject matter expertise that enable the Company to provide seamless, end-to-end platforms that bring the benefits of big data and large-scale analytics to clients. Operating segments are defined as components of an enterprise for which separate financial information is available and is evaluated regularly by the Company’s chief operating decision maker (“CODM”), in deciding how to allocate resources and in assessing performance. In the process of allocating resources and assessing performance, the Company’s CODM, its chief executive officer, reviews financial information presented on a consolidated basis. Income Taxes —The Company accounts for income taxes in accordance with ASC 740, Income Taxes , which prescribes the use of the asset and liability approach to the recognition of deferred tax assets and liabilities related to the expected future tax consequences of events that have been recognized in the Company’s financial statements or income tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Valuation allowances are established, when necessary, to reduce deferred tax assets when it is more likely than not that a portion or all of a given deferred tax asset will not be realized. In accordance with ASC 740, income tax expense includes (i) deferred tax expense, which represents the net change in the deferred tax asset or liability balance during the period and any change in valuation allowances and (ii) current tax expense, which represents the amount of tax currently payable to or receivable from a taxing authority and amounts accrued for expected tax contingencies (including both tax and interest). ASC 740 prescribes a recognition threshold of more-likely-than-not, and a measurement attribute for all tax positions taken or expected to be taken on a tax return, in order for those positions to be recognized in the financial statements. The Company continually reviews tax laws, regulations and related guidance in order to properly record any uncertain tax liability positions. The Company adjusts these reserves in light of changing facts and circumstances. As a result of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”), which was signed into law on December 22, 2017 and was effective January 1, 2018, the Company remeasured the ending deferred tax assets to reflect the decrease in the federal corporate tax rate resulting in a tax benefit. Refer to “Note 16—Income Taxes.” Stock-Based Compensation —All stock-based awards, including employee stock option grants, restricted stock unit (“RSU”) grants, and restricted stock award (“RSA”) grants, are recorded at fair value as of the grant date in accordance with ASC 718, Compensation—Stock Compensation , and recognized in the statement of operations over the service period of the applicable award using the straight-line method or using a graded vest schedule for RSAs with a performance condition and ratable vest terms. The Company determines the fair value of its stock option awards on the date of grant, using the Black-Scholes option pricing model. The assumptions used in calculating the fair value of stock-based awards represent management’s best estimates. The Company measures RSUs and RSAs that vest upon satisfaction of a service condition, a performance condition, or a liquidity condition, if such conditions are applicable, based on the fair market values of the underlying common stock on the dates of grant. RSUs are share awards that, upon vesting, will deliver to the holder shares of the Company’s common stock. Compensation expense is recognized based upon the satisfaction of the requisite service, liquidity condition as of that date, and/or the probability of achievement of the specified performance conditions following the straight-line method or using a graded vest method, depending on the specific terms of the award. Treasury Stock —The Company records treasury stock activities under the cost method whereby the cost of the acquired stock is recorded as treasury stock. The Company’s accounting policy upon the formal retirement of treasury stock is to deduct the par value from common stock and to reflect any excess of cost over par value as a reduction to additional paid-in capital (to the extent created by previous issuances of the shares) and then retained earnings. Deferred Rent —Deferred rent consists of rent escalation payment terms, tenant improvement allowances and other incentives received from landlords related to the Company’s operating leases for its facilities. Rent escalation represents the difference between actual operating lease payments due and straight-line rent expense, which is recorded by the Company over the term of the lease, including any construction period. The excess is recorded as a deferred credit in the early periods of the lease, when cash payments are generally lower than straight-line rent expense, and is reduced in the later periods of the lease when payments begin to exceed the straight-line expense. Tenant allowances from landlords for tenant improvements are generally comprised of cash received from the landlord as part of the negotiated terms of the lease or reimbursements of moving costs. These cash payments are recorded as deferred rent from landlords and are amortized as a reduction of periodic rent expense, over the term of the applicable lease. Recently Adopted Accounting Standards In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers and subsequent clarifying guidance (“ASU 2014-09”). The core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted this standard on January 1, 2018 using the modified retrospective approach. Refer to “Note 4—Revenue.” In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . The update amends the guidance in Accounting Standards Codification (“ASC”) 230, Statement of Cash Flows , and clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows with the objective of reducing the existing diversity in practice related to eight specific cash flow issues. The Company adopted the requirements of the new standard in the first quarter of 2018 and there was no material impact on its consolidated financial statements. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”) . The update amends the current hedge accounting model and eliminates the requirement to separately measure and report hedge ineffectiveness. This guidance also requires, for qualifying hedges, the entire change in the fair value of a hedging instrument to be presented in the same income statement line item as the hedged item. The update also eases documentation and assessment requirements, modifies certain disclosure requirements, and modifies the method of accounting for components excluded from the assessment of hedge effectiveness. The Company adopted the requirements of the new standard in the second quarter of 2018 concurrent with entering into four interest rate swaps. Refer to “Note 7—Fair Value Measurements.” In February 2018, the FASB issued ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The guidance is effective for all public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. This guidance allows for a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from Tax Act. Early adoption is permitted in any interim period or fiscal year before the effective date. The Company early adopted the requirements of the new standard in the first quarter of 2018, and elected to reclassify the income tax effects of the Tax Act of $0.1 million from other comprehensive income to retained earnings. Refer to the consolidated statements of comprehensive (loss) income. Recently Issued Accounting Standards In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) and, in July 2018, issued subsequent clarifying guidance (collectively, “ASU 2016-02”). ASU 2016-02 requires the recognition of lease assets and lease liabilities on the balance sheet and enhanced disclosure about leasing arrangements. The lease asset represents a right of use asset and the lease liability represents the obligation to make lease payments. This guidance is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company has finalized its portfolio of leases to determine the impact that will be recorded to the balance sheet, reviewed applicable lease agreements, and is in the process of implementing changes to our processes and internal controls. The standard initially required the use of a modified-retrospective method. In July 2018, the FASB issued updated guidance which allows for an additional transition method which requires that the cumulative effect of applying the new standard is recognized as an adjustment to the opening retained earnings balance. The Company adopted the new standard effective January 1, 2019 using the additional transition approach and has elected all applicable practical expedients under ASC 842-10-65-1. The Company is finalizing the calculation of the financial statement impact and currently expects the right of use asset to be in the approximate range of $34 million and $35 million and currently expects the lease liability to be in the approximate range of $36 million and $37 million . The adjustment to retained earnings is currently expected to be in the approximate range of $0.5 million to $1.5 million . The Company will provide additional disclosures as required by the new standard in the first quarter of 2019. In June 2016, the FASB issued ASU 2016-13, Financial Instruments–Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and subsequent clarifying guidance (“ASU 2016-13”) . ASU 2016-13 replaces the current incurred loss impairment method with a methodology that reflects the amortized cost basis net of expected credit losses that are calculated based on certain relevant information. The standard also amends the credit loss guidance for available-for-sale debt securities and requires the measurement and recognition of an expected allowance for credit losses for financial assets held at amortized cost. This guidance is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company is in the process of evaluating the timing and impact of adoption on the consolidated financial statements and notes disclosures. In June 2018, the FASB issued ASU 2018-07, Compensation–Stock Compensation (Topic 718) . ASU 2018-07 expands the scope of ASC 718, Compensation–Stock Compensation: Improvements to Nonemployee Share-Based Payment Accounting, to include share-based payment transactions for acquired goods and services from non-employees. This update includes changing the accounting for non-employee stock-based compensation as it relates to the award measurement date, the fair value measurement of the awards, and forfeitures, among other changes to align the accounting with ASC 718. This guidance is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company adopted the new standard effective January 1, 2019 and expects no material impact on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework–Changes to the Requirements for Fair Value Measurement. This update changes the fair value measurement disclosure requirements of ASC 820. The standard consists of removals, modifications, and additions to the existing disclosure requirements. This guidance is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company is in the process of evaluating the timing and impact of adoption on the notes disclosures. In August 2018, the FAS |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS 2018 Acquisition ABILITY Network, Inc. On April 2, 2018, the Company completed the acquisition (the “ABILITY Acquisition”) of Butler Group Holdings, Inc., a Delaware corporation, and its wholly-owned subsidiaries, including, without limitation, ABILITY Network Inc., a Delaware corporation (“ABILITY”), for aggregate consideration of $1.19 billion in cash and restricted shares of our Class A common stock (the “Purchase Price”). ABILITY is a leading cloud-based Software-as-a-service (“SaaS”) technology company helping to simplify the administrative and clinical complexities of healthcare. Through the my ABILITY ® software platform, an integrated set of cloud-based applications for providers, ABILITY provides core connectivity, administrative, clinical, and quality analysis, management, and performance improvement capabilities to more than 44,000 acute, post-acute and ambulatory point-of-care provider facilities. The extensive datasets, on-demand compute capability, advanced analytics, and broad healthcare ecosystem connectivity enabled by the Inovalon ONE ® Platform are expected to provide a significant expansion of application offerings within the my ABILITY ® software platform while also expanding the nature and reach of high-value solutions for Inovalon’s existing payer, pharma, and device client-base. The combination of Inovalon and ABILITY creates a vertically integrated cloud-based platform empowering the achievement of real-time, value-based care from payers, manufacturers, and diagnostics all the way to the patient’s point of care. A summary of the composition of the stated Purchase Price and fair value of the stated Purchase Price is as follows (in thousands): Purchase Price $ 1,220,800 Working capital adjustment (630 ) Shareholder payable adjustment 576 Subtotal 1,220,746 Fair value adjustments: Restricted stock marketability discount (30,000 ) Total fair value purchase price $ 1,190,746 The composition of the fair value of the consideration transferred is as follows (in thousands): Cash $ 1,107,220 Issuance of Class A common stock 70,000 Contingent consideration 14,156 Working capital adjustment (630 ) Total fair value purchase price $ 1,190,746 The ABILITY Acquisition was accounted for using the acquisition method of accounting under ASC No. 805, Business Combinations , which requires that assets acquired and liabilities assumed are recognized at their estimated fair values. The excess of the aggregate consideration over the estimated fair values has been allocated to goodwill. In addition, ASC No. 805 requires that the consideration transferred be measured at the closing date of the ABILITY Acquisition at the then-current market prices. The preliminary value of consideration and the purchase price allocation is subject to adjustment until the Company has completed its analysis within the measurement period. The Company is in the process of reviewing its assumptions related to the fair value of the consideration including any working capital adjustments and estimates of tax related matters. The Purchase Price allocation is preliminary and the finalization of the Company’s Purchase Price allocation may result in changes in the valuation of assets acquired and liabilities assumed. The Company will finalize the Purchase Price allocation as soon as practicable in accordance with ASC No. 805, but not to exceed one year following the ABILITY Acquisition. The preliminary estimates of fair value represent the Company’s best preliminary estimates and preliminary valuations. The following table summarizes the net assets acquired and liabilities assumed (in thousands): Preliminary Fair Value Cash and cash equivalents $ 23,850 Accounts receivable 16,739 Income tax receivable 551 Prepaid expenses and other current assets 3,025 Property and equipment 3,095 Goodwill (1)(2) 771,097 Intangible assets (1) 490,000 Other assets 1,252 Accounts payable and accrued expenses (6,863 ) Deferred revenue (7,000 ) Other current liabilities (507 ) Other liabilities (5,291 ) Deferred tax liabilities (2) (99,202 ) Total consideration transferred $ 1,190,746 ______________________________________ (1) The Company allocated a portion of the goodwill associated with the ABILITY Acquisition to the Inovalon reporting unit based on expected revenue synergies. As a result, the fair value of the customer relationships intangible asset was adjusted by $23.0 million during the third quarter of 2018. (2) The Company recognized a net purchase accounting adjustment of $1.6 million resulting in a decrease to goodwill. This adjustment was driven by a $7.2 million decrease to deferred tax liabilities primarily attributable to the tax impact related to the reduction to the fair value of the customer relationships intangible assets, which was partially offset by a $5.0 million increase in deferred tax liabilities related to tax basis goodwill and provision-to-tax adjustments from ABILITY’s 2017 tax return filings and an adjustment of $0.6 million to the shareholder payable attributable to the ABILITY Acquisition. The amounts attributed to identified intangible assets are summarized in the table below (in thousands): Estimated Preliminary Measurement Period Adjustments Adjusted Preliminary Fair Value Customer relationships 13 years $ 408,000 $ (23,000 ) $ 385,000 Technology 13 years 86,000 — 86,000 Tradenames 17 years 19,000 — 19,000 Total intangible assets $ 513,000 $ (23,000 ) $ 490,000 Acquisition-related costs were expensed as incurred. For the twelve months ended December 31, 2018 , the Company incurred acquisition-related costs of $6.5 million . Acquisition-related costs are recognized within “General and administrative” expenses in the accompanying consolidated statements of operations. The following table presents revenue and loss before taxes of ABILITY since the acquisition date, April 2, 2018, included in the consolidated statements of operations (in thousands): Total Revenue $ 113,578 Loss before taxes $ (3,902 ) The following pro forma financial information is based on Inovalon’s and ABILITY’s historical consolidated financial statements as adjusted to give effect to pro forma events that are (1) directly attributable to the ABILITY Acquisition, (2) factually supportable, and (3) with respect to the unaudited pro forma condensed combined statements of operations, expected to have a continuing impact on the combined results. The pro forma adjustments include, but are not limited to: (i) amortization of acquired intangible assets, (ii) net increase to interest expense resulting from the extinguishment of the 2014 Credit Facilities and historical ABILITY debt, borrowings under the 2018 Term Facility and the amortization of related debt issuance costs, and (iii) elimination of non-recurring acquisition and integration-related expenses. The following pro forma financial information is unaudited and gives effect to the transactions as if they had occurred on January 1, 2017 (in thousands): Year ended December 31, 2018 2017 Revenue $ 565,040 $ 589,197 Loss before taxes $ (56,016 ) $ (5,554 ) The unaudited pro forma revenue and loss before taxes was prepared for informational purposes only based on estimates and assumptions that the Company believes to be reasonable and is not necessarily indicative of the results of operations that would have occurred if the ABILITY Acquisition had been completed on the date indicated nor of the future financial position or results of operations following completion of the ABILITY Acquisition. 2017 Acquisition ComplexCare Solutions On July 6, 2017, the Company completed the acquisition of ComplexCare Solutions, Inc. and ComplexCare Solutions IPA, LLC (together, “CCS”). CCS is a company which provides technology-enabled interventions and member engagement coordination services for a number of payers and employers throughout the United States. The fair value included in the consolidated financial statements, in conformity with ASC No. 820, Fair Value Measurements and Disclosures , represent the Company’s best estimates and valuations. The final purchase price was allocated to identifiable assets acquired and liabilities assumed based upon valuation procedures performed to-date. The Company acquired all of the capital stock of CCS for approximately $4.5 million in cash and the settlement of an existing payable to CCS of $2.3 million . The Company acquired approximately $9.8 million of assets, including approximately $1.5 million of cash, and approximately $3.9 million of liabilities. The net assets acquired exceeded the consideration paid by approximately $1.4 million , and as such the Company recorded a bargain purchase gain in general and administrative expenses. 2016 Acquisition Creehan Holding Co., Inc. On October 3, 2016, the Company completed its acquisition of Creehan Holding Co., Inc. (“Creehan”). Creehan, through its subsidiary Creehan & Company Corporation, is a leading provider of specialty pharmacy software solutions to the pharmaceutical industry. Pursuant to the terms of the Stock Purchase Agreement between the Company and Creehan (the “Stock Purchase Agreement”), Creehan became a wholly owned subsidiary of Inovalon. Pursuant to the terms of the Stock Purchase Agreement, Inovalon acquired all of the issued and outstanding capital stock of Creehan for an aggregate purchase price of $130.0 million , which was comprised of $120.0 million in cash and $10.0 million in shares of Class A common stock of the Company. The Company completed the acquisition of Creehan through the use of cash on hand and the issuance of 651,355 shares of Class A common stock, subject to resale restrictions. Certain components, which are referred to below as contingent consideration, of the aggregate purchase price are subject to the achievement of financial performance objectives. The Company acquired Creehan for the assembled workforce, technology platform, client base, and to accelerate entry into the specialty pharmacy software market. Transaction costs in connection with the acquisition are expensed as incurred and are included in general and administrative expenses. The results of operations related to Creehan are included in our consolidated statements of operations beginning from the date of acquisition. A summary of the final composition of the stated purchase price and fair value of the stated purchase price is as follows (in thousands): Share Purchase Agreement purchase price $ 130,000 Working capital adjustment 755 Subtotal 130,755 Fair value adjustments: Marketability restrictions on equity consideration (2,236 ) Contingent consideration probability of achievement adjustment (12,400 ) Post-acquisition compensation expense (5,952 ) Total fair value purchase price $ 110,167 The Company finalized the working capital adjustment in the third quarter of 2017 resulting in an increase of approximately $0.4 million to the initial purchase price allocation. After adjusting for this difference the composition of the fair value of the consideration transferred is as follows (in thousands): Cash $ 89,803 Issuance of Class A common stock 7,764 Contingent consideration 12,600 Total fair value purchase price $ 110,167 Recording of Assets Acquired and Liabilities Assumed The Company finalized the fair value of acquired assets, assumed liabilities and tax related matters in the third quarter of 2017. The following table summarizes the purchase price allocation to assets acquired and liabilities assumed, including identification of measurement period adjustments (in thousands): Recorded Value Cash and cash equivalents $ 861 Accounts receivable 9,048 Other current assets 171 Property, equipment and capitalized software 641 Intangible assets (1) 50,900 Goodwill (2) 51,362 Total assets acquired 112,983 Current liabilities (916 ) Deferred revenue (1,900 ) Total liabilities assumed (2,816 ) Net assets acquired $ 110,167 ______________________________________ (1) Identifiable intangible assets were measured using a combination of an income approach and a market approach. (2) Goodwill is the excess of the consideration transferred over the net assets recognized and represents the future economic benefits, primarily as a result of other assets acquired that could not be individually identified and separately recognized. Goodwill is not amortized. The goodwill attributable to the Creehan acquisition is deductible for tax purposes. The amounts attributed to identified intangible assets are summarized in the table below (in thousands): Weighted Average Useful Life Recorded Value Customer relationships 8 years $ 36,500 Tradename 4 years 4,000 Technology 4 years 8,800 In-process Research and Development indefinite 1,600 Total intangible assets $ 50,900 Acquisition-related costs were expensed as incurred. For the year ended December 31, 2016, the Company incurred acquisition-related costs of $1.6 million recognized within “General and administrative” expenses in the accompanying consolidated statements of operations. Creehan Results and Pro Forma Impact of Acquisition The following table presents revenue and loss before taxes of Creehan since the acquisition date, October 3, 2016, included in the consolidated statements of operations and includes amortization expense related to acquired intangible assets (in thousands): Year Ended December 31, 2016 Revenue $ 8,106 Loss before taxes $ (976 ) The following table presents pro forma information, based on estimates and assumptions that the Company believes to be reasonable, for the Company as if the acquisition of Creehan had occurred at the beginning of the earliest period presented (unaudited, in thousands): Year Ended December 31, 2016 Pro forma revenue $ 453,613 Pro forma income before taxes $ 44,203 The pro forma information provided in the table above is not necessarily indicative of the consolidated results of operations for future periods or the results that actually would have been realized had the acquisition been completed at the beginning of the periods presented. |
REVENUE (Notes)
REVENUE (Notes) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer [Text Block] | REVENUE The Company adopted ASU 2014-09 as of January 1, 2018 using the modified retrospective approach. Revenues for periods beginning after January 1, 2018 are presented under ASC 606, Revenue from Contracts with Customers , while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under ASC 605. The Company recorded a cumulative effect net adjustment to increase retained earnings by $0.6 million as of January 1, 2018. The impact as a result of adopting ASC 606 was an increase of $0.7 million in revenue and an increase of $0.4 million in expense resulting from deferred commissions for the year ended December 31, 2018 . These adjustments primarily related to commissions for certain contracts which are now expensed over the remaining life of the contracts and credits provided to customers which are recorded as a reduction to revenue over the applicable service period. For the remaining contracts, the Company has elected to use the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less. On April 2, 2018, concurrent with the ABILITY Acquisition (as defined in “Note 3—Business Combinations”), the Company was required to comply with ASC 606 and adopted ASU 2014-09 with respect to ABILITY. There was no material impact on the consolidated financial statements as a result of adopting ASU 2014-09. The Company primarily derives its revenues through the sale or subscription licensing of its platform solutions and services. The following table disaggregates revenue by offering (in thousands): Year Ended December 31, 2018 2017 (1) Platform solutions (2) $ 466,544 $ 382,778 Services (3) 61,132 66,580 Total revenue $ 527,676 $ 449,358 ______________________________________ (1) Prior period amounts have not been adjusted under the modified retrospective method. (2) Platform solutions include arrangements for technology-based offerings representing subscription-based cloud-based platform offerings and legacy platform solutions that are not cloud-based and not billed under a subscription-based contract structure. (3) Services include advisory, implementation, and support services under time and materials, fixed price, or retainer-based contracts. Performance Obligations A performance obligation is a contractual promise to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct performance obligation based on standalone selling price and revenue is recognized when the performance obligations under the terms of a contract are satisfied. The determination of standalone selling price for each performance obligation requires judgment based on the terms of the contract. The majority of the Company’s platform solutions contracts contain a series of separately identifiable and distinct services that represent performance obligations that are satisfied over time. The Company allocates revenue to platform solutions by determining the standalone selling price of each performance obligation. Revenue is generally recognized on our platform offerings over the contract term. For these contracts, the Company has determined that it will use the practical expedient under ASC 606-10-55-18 to recognize revenue when it has the right to invoice. The Company qualifies for this practical expedient because the right to invoice corresponds directly with the value transferred to the customer. The Company allocates revenue to its service arrangements for advisory, implementation, and support services based on contractually agreed upon billing rates applied to direct labor hours expended plus the costs of other items used in the performance of the contract. The Company concluded that it will recognize revenue when it has the right to invoice the customer using the allowable practical expedient since the right to invoice the customer corresponds with the performance obligations completed. Revenues under fixed-price and retainer-based contracts are recognized ratably over the contract period or upon contract completion. Certain of the Company’s arrangements entitle a client to receive a refund if the Company fails to satisfy contractually specified performance obligations. The refund is limited to a portion or all of the consideration paid. In this case, revenue is recognized when performance obligations are satisfied. Historically, the Company has met contractually specified performance obligations. Contract Balances The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables, and deferred revenue. Invoices to clients are generated in accordance with the terms of the applicable contract, which may not be directly related to the performance of services. Unbilled receivables are invoiced when the achievement of specific events as defined by each contract occurs. The Company had an unbilled receivables balance of $20.5 million and $14.1 million as of December 31, 2018 and December 31, 2017 , respectively. The increase in the unbilled receivables balance was primarily driven by the timing of new contract signings, the timing of billings, and $2.3 million related to the acquisition of ABILITY. Refer to “Note 3—Business Combinations.” Unbilled receivables are classified as accounts receivable on the consolidated balance sheet. Advanced billings to clients in excess of revenue earned are recorded as deferred revenue until the aforementioned revenue recognition criteria are met. The Company had deferred commissions of $5.7 million as of December 31, 2018 and no deferred commissions as of December 31, 2017 . The change in deferred commissions was primarily driven by $4.9 million related to the acquisition of ABILITY. The Company had a deferred revenue balance of $20.6 million and $7.0 million as of December 31, 2018 and December 31, 2017 , respectively. The change in the deferred revenue balance was primarily driven by $9.5 million related to the acquisition of ABILITY. Revenue recognized during the year ended December 31, 2018 that was included in the deferred revenue balance at the beginning of the year, or as of the acquisition date as it relates to ABILITY, was $11.2 million . |
NET INCOME PER SHARE
NET INCOME PER SHARE | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
NET INCOME PER SHARE | NET (LOSS) INCOME PER SHARE During September 2014, the Company completed a holding company reorganization. As part of the reorganization, the Company implemented a multi-class stock structure. The Company presents the impact on net income per share (“EPS”) by calculating EPS based on the authorized, issued and outstanding shares of Class A and Class B common stock. Holders of all outstanding classes of common stock participate ratably in earnings on an identical per share basis as if all shares were a single class. The Company has issued RSAs of Class A common stock under the 2015 Omnibus Incentive Plan. The Company considers issued and unvested RSAs to be participating securities as the holders of these RSAs have a non-forfeitable right to dividends in the event of the Company’s declaration of a dividend on shares of Class A and Class B common stock. Subsequent to the issuance of the participating securities, the Company applied the two-class method required in calculating net income per share of Class A and Class B common stock. Undistributed net income for a given period is apportioned to participating securities based on the weighted-average shares of each class of common stock outstanding during the applicable period as a percentage of the total weighted-average shares outstanding during the same period. Under the two-class method, net income attributable to common stockholders is determined by allocating undistributed earnings, calculated as net income, less earnings attributable to participating securities. The net income per share attributable to common stockholders is allocated based on the contractual participation rights of the Class A common stock and Class B common stock as if the income for the period has been distributed. As the liquidation and dividend rights are identical for both classes of common stock, the net income attributable to common stockholders is allocated on a proportionate basis. If the Company incurs a loss from continuing operations, losses are not allocated to participating securities. The Company has issued Class A common stock and Class B common stock. Holders of Class A common stock generally have the same rights, including rights to dividends, as holders of Class B common stock, except that holders of Class A common stock have one vote per share while holders of Class B common stock have ten votes per share. Each share of Class B common stock will convert into one share of Class A common stock immediately upon its sale or transfer. As such, basic and fully diluted earnings per share for Class A common stock and Class B common stock are the same. Basic net (loss) income per share of common stock is computed by dividing the net (loss) income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. All participating securities are excluded from the basic weighted-average shares of common stock outstanding. Unvested RSAs are excluded from the calculation of the weighted-average shares of common stock until vesting occurs, as the restricted shares are subject to forfeiture and cancellation until vested. For purposes of the diluted net income per share attributable to common stockholders calculation, unvested shares of common stock resulting from RSAs are considered to be potentially dilutive shares of common stock. Diluted net income per share attributable to common stockholders is computed by dividing net income attributable to common stockholders by the weighted-average shares outstanding, including potentially dilutive shares of common stock assuming the dilutive effect of potential shares of common stock for the period determined using the treasury stock method. Potentially dilutive securities also include stock options, restricted stock units, and shares to be purchased under the employee stock purchase plan. Under the treasury stock method, dilutive securities are assumed to be exercised at the beginning of the periods and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Securities are excluded from the computations of diluted net income per share if their effect would be anti-dilutive to earnings per share. If the Company incurs a loss from continuing operations, diluted EPS is computed in the same manner as basic EPS. The numerators and denominators of the basic and diluted EPS computations, reconciliations of the weighted average shares outstanding, and resulting basic and diluted earnings per share for our common stock are calculated as follows (in thousands, except per share amounts): Year Ended December 31, 2018 2017 2016 Basic Numerator: Net (loss) income $ (39,164 ) $ 34,818 $ 27,104 Undistributed earnings allocated to participating securities — (990 ) (161 ) Net (loss) income attributable to common stockholders—basic $ (39,164 ) $ 33,828 $ 26,943 Denominator: Weighted average shares used in computing net (loss) income per share attributable to common stockholders—basic 145,389 142,225 150,048 Net (loss) income per share attributable to common stockholders—basic $ (0.27 ) $ 0.24 $ 0.18 Diluted Numerator: Net income attributable to common stockholders—diluted $ (39,164 ) $ 33,828 $ 26,943 Denominator: Number of shares used for basic EPS computation 145,389 142,225 150,048 Effect of dilutive securities — 512 907 Weighted average shares used in computing net income per share attributable to common stockholders—diluted 145,389 142,737 150,955 Net income per share attributable to common stockholders—diluted $ (0.27 ) $ 0.24 $ 0.18 The computation of diluted EPS does not include certain awards, on a weighted average basis, for the years ended December 31, 2018 , 2017 , and 2016 , respectively, because their inclusion would have an anti-dilutive effect on EPS. The awards excluded because of their anti-dilutive effect are as follows (in thousands): Year Ended December 31, 2018 2017 2016 Awards excluded from the computation of diluted net income per share because their inclusion would have been anti-dilutive 89 88 44 |
SHORT-TERM INVESTMENTS
SHORT-TERM INVESTMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
SHORT-TERM INVESTMENTS | SHORT-TERM INVESTMENTS As of December 31, 2018 , short-term investments consisted of the following (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Available-for-sale securities: Corporate notes and bonds $ 7,018 $ — $ (18 ) $ 7,000 Total available-for-sale securities $ 7,018 $ — $ (18 ) $ 7,000 As of December 31, 2017 , short-term investments consisted of the following (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Available-for-sale securities: Corporate notes and bonds $ 232,048 $ 3 $ (572 ) $ 231,479 U.S. agency obligations 15,341 — (99 ) 15,242 U.S. treasury securities 20,735 — (168 ) 20,567 Total available-for-sale securities $ 268,124 $ 3 $ (839 ) $ 267,288 The following table summarizes the estimated fair value of our short-term investments, designated as available-for-sale and classified by the contractual maturity date of the securities as of the dates shown (in thousands): December 31, 2018 2017 Due in one year or less $ 7,000 $ 204,725 Due after one year through two years — 62,563 Total $ 7,000 $ 267,288 The Company has certain available-for-sale securities in a gross unrealized loss position. 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 the Company’s 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, or if write downs related to credit losses are necessary, in one of these securities, the unrealized losses attributable to the respective investment would be reclassified to realized losses on short-term investments within the statement of operations. There were no impairments considered other-than-temporary as of December 31, 2018 . The following table shows the fair values and the gross unrealized losses of available-for-sale securities that were in a gross unrealized loss position, as of December 31, 2018 , aggregated by investment category (in thousands): Estimated Fair Value Gross Unrealized Losses Corporate notes and bonds $ 7,000 $ (18 ) |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The following table presents the fair value hierarchy for financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2018 (in thousands): Level 1 Level 2 Level 3 Total Cash Equivalents: Money market funds $ 34,064 $ — $ — $ 34,064 Short-term investments: Corporate notes and bonds — 7,000 — 7,000 Other current liabilities: Interest rate swaps — (1,778 ) — (1,778 ) Contingent consideration — — (15,182 ) (15,182 ) Other liabilities Interest rate swaps — (8,151 ) — (8,151 ) Contingent consideration — — (16,642 ) (16,642 ) Total $ 34,064 $ (2,929 ) $ (31,824 ) $ (689 ) The following table presents the fair value hierarchy for financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2017 (in thousands): Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 162,347 $ — $ — $ 162,347 Short-term investments: Corporate notes and bonds — 231,479 — 231,479 U.S. agency obligations — 15,242 — 15,242 U.S. treasury securities — 20,567 — 20,567 Other current liabilities: Contingent consideration — — (7,400 ) (7,400 ) Total $ 162,347 $ 267,288 $ (7,400 ) $ 422,235 The Company determines the fair value of its security 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). The Company performs procedures to ensure that appropriate fair values are recorded such as comparing prices obtained from other sources. The following table presents our financial instruments measured at fair value using unobservable inputs (Level 3) as of the years ended December 31 (in thousands): Fair Value Measurements Using Unobservable Inputs (Level 3) 2018 2017 Balance, beginning of period $ (7,400 ) $ (12,600 ) Fair value adjustment (1) (6,159 ) 5,200 Accretion expense (recognized in general and administrative expenses) (1,053 ) — Contingent consideration attributable to and assumed from ABILITY Acquisition (17,212 ) — Total $ (31,824 ) $ (7,400 ) ______________________________________ (1) The Company recognized an adjustment of $5.6 million in general and administrative expenses related to the change in fair value of contingent consideration, and an adjustment of $0.6 million recognized in goodwill, which was a purchase accounting adjustment attributable to the ABILITY Acquisition. 2018 Credit Facilities The Company records debt on the balance sheet at carrying value. The estimated fair value of the Company’s debt is determined based on Level 2 inputs including current market rates for similar types of borrowings. The following table presents the carrying value and fair value of the Company’s debt (including the current portion thereof) as of December 31, 2018 (in thousands): December 31, Carrying amount $ 949,314 Fair value $ 922,021 Interest Rate Swaps In connection with the 2018 Credit Agreement, the Company entered into four interest rate swaps during the second quarter of 2018, each of which mature in March 2025, to mitigate the risk of a rise in interest rates. These interest rate swaps mitigate the exposure on the variable component of interest on the Company’s 2018 Credit Facility. The interest rate swaps fix the LIBOR rate component of interest on $700.0 million of the 2018 Term Facility at a weighted average rate of approximately 2.8% . See “Note 10 —Debt” for additional information. These interest rate swaps are designated as cash flow hedges and are deemed highly effective under ASC 815, Derivatives and Hedging . The interest rate swaps are recorded on the balance sheet at fair value as either assets or liabilities and any changes to the fair value are recorded through accumulated other comprehensive income and reclassified into interest expense in the same period in which the hedged transaction is recognized in earnings. Cash flows from interest rate swaps are reported in the same category as the cash flows from the items being hedged. The following table presents the fair value of interest rate swaps on the balance sheet as of December 31, 2018 (in thousands): Liability Derivative Balance Sheet Location Fair Value Interest rate swap contract Other current liabilities $ (1,778 ) Interest rate swap contract Other liabilities $ (8,151 ) The following table presents the location and amount of gains and losses on interest rate swaps included in other comprehensive income (“OCI”) and the statement of operations for the year ended December 31, 2018 (in thousands): Gain (Loss) recognized in OCI Statement of Operations Location (Gain) Loss reclassified from OCI Interest rate swap contract $ (12,907 ) Interest expense $ 2,978 The net amount of accumulated other comprehensive income expected to be reclassified to interest expense in the next 12 months is $1.9 million . |
PROPERTY, EQUIPMENT AND CAPITAL
PROPERTY, EQUIPMENT AND CAPITALIZED SOFTWARE | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, EQUIPMENT AND CAPITALIZED SOFTWARE | PROPERTY, EQUIPMENT AND CAPITALIZED SOFTWARE Property, equipment and capitalized software consisted of the following (in thousands): December 31, 2018 2017 Office and computer equipment $ 76,748 $ 55,840 Leasehold improvements 13,158 10,096 Purchased software 45,304 26,425 Capitalized software 128,356 114,569 Furniture and fixtures 6,412 4,670 Land 390 390 Buildings 14,028 14,028 Work in process 5,811 16,323 Total 290,207 242,341 Less: accumulated depreciation and amortization (148,449 ) (116,573 ) Property, equipment and capitalized software, net $ 141,758 $ 125,768 The Company purchases software licenses and office equipment under capital lease agreements, with bargain purchase options at the end of the lease term. The total net amount of purchased software licenses and office equipment included in property and equipment at December 31, 2018 and 2017 was $5.5 million and $0.6 million , respectively. The Company leases certain office space under a lease agreement that was determined to be a capital lease. This capital lease is classified as buildings within property and equipment. The total net amount of the capital lease at December 31, 2018 and 2017 was $10.9 million and $12.0 million , respectively. There were no leases of office spaces that were determined to be capital leases in 2016. Depreciation expense for the years ended December 31, 2018 , 2017 , and 2016 was $52.7 million , $37.9 million , and $28.1 million , respectively. Amortization of the capital leases included in depreciation expense was $1.4 million , $0.3 million , and $0.1 million , for the years ended December 31, 2018 , 2017 , and 2016 , respectively. At December 31, 2018 and 2017 , the Company had unamortized capitalized software costs, including costs classified as work in progress, of $57.8 million and $54.2 million , respectively. At December 31, 2018 and 2017 , work in process consisted primarily of purchased software licenses, computer equipment, and capitalized software, which was not placed into service. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS Goodwill Goodwill is primarily derived from the Company’s acquisitions of ABILITY in 2018, Creehan in 2016, Avalere in 2015, Catalyst Information Technologies, Inc. in 2009, and Medical Reliance Group, Inc. in 2006. Refer to “Note 2 —Summary of Significant Accounting Policies” for a discussion of our accounting policy. Refer to “Note 3—Business Combinations” for further information regarding the goodwill that arose from the Company’s acquisitions of ABILITY during 2018 and Creehan during 2016. The following table summarizes the activity related to the carrying value of our goodwill during the years ended December 31, 2018 and 2017 (in thousands): Goodwill as of January 1, 2017 $ 184,557 Adjustments recorded in connection with the acquisition of Creehan (1) 375 Goodwill as of December 31, 2017 184,932 Goodwill recorded in connection with the acquisition of ABILITY 771,097 Goodwill as of December 31, 2018 $ 956,029 ______________________________________ (1) During 2017, the Company finalized the working capital adjustments for Creehan. The adjustments had no impact on the Company’s revenues or expenses. Based on our assessments of qualitative and quantitative factors, the adjustments were not considered to be material to our consolidated financial statements, individually or in the aggregate, to any previously issued consolidated financial statements. Intangible Assets Intangible assets at December 31, 2018 and 2017 were as follows (in thousands): December 31, 2018 Gross Accumulated Amortization Net Weighted Average Remaining Useful Life (years) Technology (1) $ 116,177 $ (28,882 ) $ 87,295 11.7 Trademark and trade names 31,860 (6,415 ) 25,445 13.4 Database 6,500 (6,012 ) 488 0.7 Customer relationships 480,950 (58,835 ) 422,115 11.6 Non-compete agreements 820 (820 ) — 0.0 Total $ 636,307 $ (100,964 ) $ 535,343 ______________________________________ (1) Upon completion of the development process of our in-process R&D the Company performed an impairment assessment and determined there was no impairment. As such, $1.6 million of in-process R&D was reclassified to a definite-lived technology intangible asset upon being placed into service. The Company evaluated the useful life of the asset resulting from the R&D activities pursuant to ASC 350 and determined a useful life of 5.0 years was appropriate based on the period over which the asset is expected to contribute to future cash flows. The Company began amortizing the asset over the useful life on the date the asset was placed into service. December 31, 2017 Gross Accumulated Amortization Net Weighted Average Remaining Useful Life (years) Technology $ 28,577 $ (20,313 ) $ 8,264 2.8 Trademark and tradenames 12,860 (3,580 ) 9,280 6.2 Database 6,500 (5,362 ) 1,138 1.8 Customer relationships 95,950 (27,088 ) 68,862 7.4 Non-compete agreements 820 (638 ) 182 0.7 In-Process R&D 1,600 — 1,600 Indefinite Total $ 146,307 $ (56,981 ) $ 89,326 Amortization expense for the years ended December 31, 2018 , 2017 , and 2016 was $44.0 million , $15.2 million , and $9.2 million , respectively. Estimated future amortization expense of intangible assets, based upon the Company’s intangible assets at December 31, 2018 , is as follows (in thousands): Amount Year ending December 31: 2019 $ 52,302 2020 50,821 2021 48,035 2022 48,035 2023 47,874 Thereafter 288,276 Total $ 535,343 |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT On September 19, 2014, the Company entered into a Credit and Guaranty Agreement with a group of lenders and Goldman Sachs Bank USA, as administrative agent (the “2014 Credit Agreement”). The terms of the 2014 Credit Agreement provided for credit facilities in the aggregate maximum principal amount of $400.0 million , consisting of a senior unsecured term loan facility in the original principal amount of $300.0 million (the “2014 Term Loan Facility”), and a senior unsecured revolving credit facility in the maximum principal amount of $100.0 million (the “2014 Revolving Credit Facility” and, together with the 2014 Term Loan Facility, the “2014 Credit Facilities”). The 2014 Term Loan Facility had a five-year term and was an amortizing facility with principal payments quarterly and interest payments monthly. On April 2, 2018, the Company paid in full all existing debt obligations under the 2014 Credit Agreement and terminated all commitments to extend further credit thereunder. On April 2, 2018, the Company entered into a credit agreement (the “2018 Credit Agreement”) with a group of lenders and Morgan Stanley Senior Funding, Inc. (“MSSF”), as administrative agent, providing for (i) a term loan B facility with the Company as borrower in a total principal amount of $980.0 million (the “2018 Term Facility”); and (ii) a revolving credit facility with the Company as borrower in a total principal amount of up to $100.0 million (the “2018 Revolving Facility” and, together with the 2018 Term Facility, the “2018 Credit Facilities”). The 2018 Revolving Facility will terminate on April 2, 2023 and the 2018 Term Facility will mature on April 2, 2025. The entire $980.0 million 2018 Term Facility was borrowed on April 2, 2018, and was used to pay off all of the Company’s existing debt obligations under the 2014 Credit Facilities as well as to provide the financing necessary to fund, in part, the cash consideration paid to acquire ABILITY. A loss on the early extinguishment of debt of $0.1 million was recognized during the year ended December 31, 2018 related to the write-off of unamortized deferred financing fees. At the option of the Company, the loans outstanding under the 2018 Term Facility will bear interest either at: (i) Adjusted London Interbank Offer Rate (“LIBOR”) plus an applicable rate of 3.50% or (ii) the Alternate Base Rate (“ABR”) plus an applicable margin. The Company may elect interest periods of one, two, three or six months for Adjusted LIBOR borrowings. As set forth in the 2018 Credit Agreement, the ABR is the higher of: (i) the rate that MSSF as Administrative Agent announces from time to time as its prime or base commercial lending rate, as in effect from time to time, (ii) the Federal Funds Effective Rate plus ½ of 1.0% and (iii) one-month Adjusted LIBOR plus 1.0% . The Company is required to pay a commitment fee ranging from 0.25% to 0.375% per annum in respect of the daily average unused commitments under the 2018 Revolving Facility based on the Company’s senior secured net leverage ratio. As of December 31, 2018 , the Company had $100.0 million available consisting of $99.0 million on the 2018 Revolving Facility and a letter of credit of $1.0 million . The following table discloses the outstanding debt at each balance date as follows (in thousands): December 31, 2018 December 31, 2017 2018 Term Facility (1) $ 949,314 $ — 2014 Revolving Credit Facility — 236,250 Total Credit Facilities 949,314 236,250 Less: current portion 9,800 45,000 Non-current Credit Facilities $ 939,514 $ 191,250 ______________________________________ (1) The 2018 Term Facility is presented net of unamortized deferred financing fees and original issue discount (“OID”) of $28.2 million . The Company incurred an OID of $14.7 million and deferred financing fees of $16.4 million related to the 2018 Term Facility, which are shown as a direct reduction to the face amount and amortized as interest expense, using the effective interest method, over the life of the 2018 Credit Agreement. The Company incurred $1.9 million in deferred financing fees related to the 2018 Revolving Facility, which is amortized as interest expense using the straight-line method. During the year ended December 31, 2018 , the Company recognized $1.4 million in OID amortization expense related to the 2018 Term Facility. The Company recognized $1.5 million in deferred financing fees related to the 2018 Term Facility during the year ended December 31, 2018 . The Company recognized $0.3 million in amortization expense related to the 2018 Revolving Facility during the year ended December 31, 2018 . The Company and its Restricted Subsidiaries (as defined in the 2018 Credit Agreement) are subject to certain affirmative and negative covenants under the 2018 Credit Agreement, and the 2018 Credit Agreement includes certain customary representations and warranties of the Company. As of December 31, 2018 , the Company is in compliance with the covenants under the 2018 Credit Agreement. Scheduled principal maturity of the 2018 Credit Facilities follows (in thousands): Amount 2019 $ 9,800 2020 9,800 2021 9,800 2022 9,800 2023 9,800 Thereafter 928,550 Total scheduled maturities 977,550 Unamortized deferred financing fees and OID (28,236 ) Total Credit Facilities $ 949,314 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Operating Leases —The Company leases office space and co-located data center facilities under operating lease arrangements, some of which contain renewal options. Future non-cancellable lease payments as of December 31, 2018 are as follows (in thousands): Amount Year ending December 31, 2019 $ 11,250 2020 7,059 2021 5,898 2022 5,303 2023 3,821 Thereafter 15,599 Total $ 48,930 Total expense under operating leases was $10.7 million , $11.3 million , and $8.9 million , during the years ended December 31, 2018 , 2017 , and 2016 , respectively. Certain operating leases contain rent escalation clauses, which are recorded on a straight-line basis over the initial term of the lease, with the difference between the rent paid and the straight-line rent recorded as a deferred rent liability. Lease incentives received from landlords are recorded as deferred rent liabilities and are amortized on a straight-line basis over the lease term as a reduction to rent expense. The deferred rent liability was $3.8 million and $2.0 million at December 31, 2018 and 2017 , respectively. Capital Leases —The total capital lease liability at December 31, 2018 and 2017 was $16.8 million and $12.4 million , respectively. Future minimum lease payments as of December 31, 2018 are as follows (in thousands): Amount Year ending December 31, 2019 $ 3,509 2020 2,567 2021 2,017 2022 1,181 2023 1,275 Thereafter 8,831 Total minimum lease payments 19,380 Less amount representing interest (2,548 ) Present value of minimum lease payments $ 16,832 Legal Proceedings —From time to time the Company is involved in various litigation matters arising out of the normal course of business. The Company consults with legal counsel on those issues related to litigation and seeks input from other experts and advisors with respect to such matters. Estimating the probable losses or a range of probable losses resulting from litigation, government actions and other legal proceedings is inherently difficult and requires an extensive degree of judgment, particularly where the matters involve indeterminate claims for monetary damages, may involve discretionary amounts, present novel legal theories, are in the early stages of the proceedings, or are subject to appeal. Whether any losses, damages or remedies ultimately resulting from such matters could reasonably have a material effect on the Company’s business, financial condition, results of operations, or cash flows will depend on a number of variables, including, for example, the timing and amount of such losses or damages (if any) and the structure and type of any such remedies. The Company’s management does not presently expect any litigation matters to have a material adverse impact on the condensed consolidated financial statements of the Company. There have been no significant or material developments to current legal proceedings, including the estimated effects on the Company’s condensed consolidated financial statements and note disclosures, other than the following updates with respect to the Xiang v. Inovalon Holdings, Inc., et.al ., No. 1:16-cv-04923 case filed in the United States District Court for the Southern District of New York on June 24, 2016 against the Company, certain officers, directors and underwriters in the Company’s initial public offering, which was previously disclosed. Expert discovery was completed on December 21, 2018. Subsequent to December 31, 2018, on January 23, 2019, the parties informed the court that they had accepted a mediator’s recommendation on the amount of a settlement, subject to agreement on the terms and settlement documentation. On the same day, the court stayed all proceedings for a period of not more than 60 days to enable the parties to finalize the settlement and settlement documentation and move for preliminary approval of the settlement. On January 24, 2019, the parties filed a motion with the U.S. Court of Appeals for the Second Circuit requesting that the pending petition seeking permission to appeal the court’s class certification order under Federal Rule of Civil Procedure 23(f) be held in abeyance pending the resolution of settlement negotiations, which request the court granted on January 28, 2019. On February 20, 2019, the parties executed a settlement agreement, which is subject to Court approval, and provides for the dismissal of all claims against the defendants in connection with the securities class action suit, and provides for a payment to the class of $17 million , of which the Company has agreed to contribute $1.7 million , with the remaining amounts to be paid by the Company’s insurance carriers. The settlement contains no admission of liability by the Company and the other defendants. The amounts owed by and due to the Company have been recorded within other current liabilities and within prepaid expenses and other current assets, respectively, on the consolidated balance sheet. |
RESTRUCTURING EXPENSE RESTRUCTU
RESTRUCTURING EXPENSE RESTRUCTURING EXPENSE | 12 Months Ended |
Dec. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Activities Disclosure [Text Block] | RESTRUCTURING EXPENSE During the second quarter of 2018, the Company completed actions under restructuring programs as part of its continuing efficiency-enhancement and cost-reduction initiatives, both as part of its ongoing margin expansion goals, as well as related to the recent acquisition and ongoing integration of ABILITY. The initiatives primarily related to workforce reductions, site closures, streamlining of software development initiatives, changes in the structure of certain business functions, and strategic initiatives to achieve cost and product development synergies in connection with the ABILITY Acquisition (as defined in “Note 3—Business Combinations”). During the year ended December 31, 2018 , the Company incurred $9.5 million in restructuring expense which includes $6.4 million related to a streamlining of software development initiatives, $1.8 million in severance expense, and $1.3 million for lease termination costs and accelerated depreciation related to associated leasehold improvements. As of December 31, 2018 , the Company had a remaining restructuring liability associated with severance and lease termination costs of $0.6 million . The following table presents restructuring liability activity for the year ended December 31, 2018 (in thousands): Balance as of December 31, 2017 $ — Accruals for severance 1,764 Accruals for lease termination 1,405 Severance payments (1,750 ) Lease termination accretion (830 ) Balance as of December 31, 2018 $ 589 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION On December 31, 2006, the Company and its stockholders established the 2007 Long-Term Incentive Plan (the “2007 Plan”), under which the Company’s Board of Directors, at its discretion, could grant stock options to employees and certain directors of the Company. During 2009, the Plan was amended and currently authorizes the grant of stock options or other equity instruments for up to 10,275,000 shares of common stock. The stock-based awards granted under the Plan generally expire at the earlier of a specified period after termination of service or the date specified by the Board of Directors at the date of grant, but not more than ten years from such grant date. Stock issued as a result of exercised stock options will be issued from the Company’s authorized available stock. Effective June 5, 2012, the 2007 Long-Term Incentive Plan changed its name to the Inovalon, Inc. 2007 Long-Term Incentive Plan. Options granted under the Plan may be incentive stock options or non-qualified stock options under the applicable provisions of the Internal Revenue Code. The 2007 Long-Term Incentive Plan was terminated upon completion of the IPO. Awards granted under the 2007 Long-Term Incentive Plan will remain outstanding until the earlier of exercise, forfeiture, cancellation or expiration. On February 18, 2015, the date of the completion of the Company’s IPO, the Company’s 2015 Omnibus Incentive Plan (the “2015 Plan”) became effective. The 2015 Plan provides for the grant of incentive stock options, within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), to the Company’s employees and any parent and subsidiary employees, and for the grant of non-qualified stock options, stock appreciation rights, restricted stock, RSAs, RSUs, dividend equivalent rights, cash-based awards (including annual cash incentives and long-term cash incentives), and any combination thereof to the Company’s employees, directors, and consultants and to employees, directors, and consultants of certain affiliated entities. The Company reserved for issuance under the 2015 Plan shares of its Class A common stock equal to the sum of: (i) 7,335,430 shares of Class A common stock; and (ii) the number of shares of its Class A common stock underlying awards granted under the Company’s 2007 Long-Term Incentive Plan, which was terminated upon completion of the IPO, that are forfeited, canceled, or expire (whether voluntarily or involuntarily). Stock Options The Company uses the Black-Scholes option-pricing model to determine the estimated fair value for stock option awards. The Black-Scholes option-pricing model requires the use of estimates, including the fair market value of the Company’s common stock prior to the Company’s IPO, expected stock price volatility, expected term, estimated forfeitures and the risk-free interest rate. The fair value of stock option awards is amortized on a straight-line basis over the requisite service period of the awards, which is generally the vesting period. Prior to the Company’s IPO, determining the fair value of the Company’s common stock required complex and subjective judgment and estimates. There is inherent uncertainty in making these judgments and estimates. Since the Company’s share price was not publicly quoted and lacked an active trading market prior to the Company’s IPO in February 2015, the Company’s Compensation Committee was required to estimate the fair value of the common stock at each meeting at which options were granted based on factors including, but not limited to, contemporaneous valuations of the Company’s common stock performed by an unrelated third-party specialist, the lack of marketability of the Company’s common stock, developments in the business, share repurchase arrangements, the status of the Company’s development and sales efforts, revenue growth, valuations of comparable companies, and additional objective and subjective factors relating to the Company’s business. Expected volatility was calculated as of each grant date based on reported data for several unrelated public companies within the Company’s industry that are considered to be comparable to the Company and for which historical information was available. The average expected term was determined under the simplified calculation as provided by the Securities and Exchange Commission’s Staff Accounting Bulletin No. 107, Share-Based Payment , which is the mid-point between the vesting date and the end of the contractual term. The dividend yield assumption of zero was based upon the fact that the Company does not have a formal dividend payment policy, the Company does not intend to pay cash dividends on its common stock in the future, and, to the extent the Company pays dividends in the future, there is no assurance that any such dividends will be comparable to those previously declared. Any declarations of dividends and the establishment of future record and payment dates are subject to the final determination of the Company’s Board of Directors. The risk-free interest rate was determined by reference to the U.S. Treasury yield curve rates with the remaining term commensurate with the expected life assumed at the date of grant. Forfeitures are recorded as adjustments to expense as they occur. The Company did not grant any options during the years ended December 31, 2018 , 2017 and 2016 . Stock option activity is as follows: Number of Shares Outstanding Weighted- Average Exercise Price Weighted- Average Grant-date Fair Value of Underlying Common Stock Weighted- Average Remaining Contractual Life (in years) Aggregate Intrinsic Value (in thousands) Balance at January 1, 2018 1,313,310 $ 7.47 5.4 $ 9,895 Stock options granted — $ — $ — Stock options exercised (258,921 ) $ 7.01 Stock options cancelled (197,305 ) $ 7.36 Balance at December 31, 2018 857,084 $ 7.63 4.3 $ 5,616 Exercisable at December 31, 2018 701,742 $ 7.63 4.1 $ 4,600 Vested and expected to vest at December 31, 2018 857,084 $ 7.63 4.3 $ 5,616 As of December 31, 2018 , there is $0.6 million of total unrecognized compensation expense related to unvested stock options, and this expense is expected to be recognized over a weighted-average period of 0.5 years . The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the fair value of the Company’s common stock and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options. This amount is subject to change based on changes to the fair market value of the Company’s common stock. The total intrinsic value of options exercised during the years ended December 31, 2018 , 2017 and 2016 was $1.2 million , $4.2 million , and $7.7 million , respectively. Restricted Stock Units In November 2014, the Company began issuing RSUs pursuant to the 2007 Plan. The Company uses the fair market value of the underlying common stock on the date of grant to determine the fair value of RSUs. The RSUs vest upon the satisfaction of both a service condition and a liquidity condition. The service condition for these awards is satisfied over five years. The liquidity condition is satisfied upon the occurrence of a qualifying event, defined as a change of control transaction or six months following the completion of the Company’s IPO. As of December 31, 2014, no stock-based compensation expense had been recognized for these RSUs because the qualifying events (described above) had not occurred. This six-month period following the IPO is not a substantive service condition and, accordingly, in 2015, the year in which the Company consummated its IPO, the Company recognized cumulative stock-based compensation expense for the portion of the RSUs that had met the service condition as of that date, following the straight-line method, net of estimated forfeitures. All remaining unrecognized stock-based compensation expense related to these RSUs is recorded over the remaining requisite service period using the straight-line method. During 2015, the Company began granting RSUs to employees pursuant to the 2015 Plan. These awards vest ratably over five years on each anniversary of the grant date. Upon vesting, the Company will deliver to the holder shares of the Company’s Class A common stock under the 2015 Plan. In 2017, the Company began issuing RSUs to non-employee directors. These awards fully vest upon the one-year anniversary of the award grant date, subject to continued service as a director through the vesting date. Upon vesting, the Company will deliver to the holder shares of the Company’s Class A common stock unless a deferral election has been made under certain circumstances. Pursuant to the terms of the awards, any unvested shares terminate upon the RSU holders’ separation from the Company. The Company recognizes stock-based compensation expense ratably over the requisite service period and records adjustments related to forfeitures as they occur. A summary of RSU activity is as follows: Number of RSUs Weighted Average Fair Value Per Unit RSUs granted and unvested at January 1, 2018 220,938 $ 19.94 RSUs granted during 2018 101,454 10.35 RSUs vested during 2018 (95,690 ) 19.14 RSUs forfeited during 2018 (34,834 ) 21.50 RSUs granted and unvested at December 31, 2018 191,868 $ 14.98 The weighted-average fair value of RSUs granted during the years ended December 31, 2018 , and 2017 was $10.35 and $13.70 , respectively. There were no RSUs granted during the year ended December 31, 2016. During the years ended December 31, 2018 and 2017 , these awards had an aggregate grant date fair value of $1.1 million and $0.6 million , respectively. The total fair value of RSUs vested during the years ended December 31, 2018 , 2017 and 2016 was $1.1 million , $1.3 million and $1.5 million , respectively. As of December 31, 2018 , there was a total of $1.7 million in unrecognized compensation cost related to unvested RSUs, which are expected to be recognized over a weighted-average period of approximately 0.8 years . Restricted Stock Awards During 2015, the Company began granting RSAs pursuant to the 2015 Plan. RSAs granted to directors fully vest upon the one year anniversary of the award grant date. RSAs granted to employees vest over two to five years either ratably on each anniversary of the grant date or cliff vest at the end of the vest period. Upon vesting, the Company will deliver shares of the Company’s Class A common stock to the holders. Pursuant to the terms of the awards, any unvested shares terminate upon the RSA holders’ separation from the Company. The Company recognizes stock-based compensation expense for the RSAs following the straight-line method over the requisite service period. The Company records adjustments related to forfeitures as they occur. In March 2017, the Company began issuing RSAs with performance conditions under the 2015 Plan. The awards have vesting conditions tied to the achievement of specified performance conditions, which have target performance levels that span from three to five years. Upon the conclusion of the performance period, the performance level achieved will be measured and the ultimate number of shares that vest will be determined. Stock-based compensation expense for these awards is recorded either ratably over the vesting period or based on a graded vest method, depending on the specific terms of the award and the probability of achievement of the specified performance conditions. During 2018, the Company granted 2.6 million RSAs, of which 0.4 million had performance vesting conditions. A summary of RSA activity is as follows: Number of RSAs Weighted Average Fair Value Per Unit RSAs granted and unvested at January 1, 2018 4,601,632 $ 13.43 RSAs granted during 2018 2,571,839 11.12 RSAs vested during 2018 (758,277 ) 13.57 RSAs forfeited during 2018 (1,475,775 ) 12.87 RSAs granted and unvested at December 31, 2018 4,939,419 $ 12.37 The weighted-average fair value of an RSA granted during the years ended December 31, 2018 , 2017 and 2016 was $11.12 , $12.64 and $13.81 , respectively. During the years ended December 31, 2018 , 2017 and 2016 , these awards had an aggregate grant date fair value of $28.6 million , $33.5 million and $36.9 million , respectively. The total fair value of RSAs vested during the years ended December 31, 2018 , 2017 and 2016 was $8.6 million , $9.3 million and $3.0 million , respectively. As of December 31, 2018 , there was a total of $52.6 million in unrecognized compensation cost related to unvested RSAs, which are expected to be recognized over a weighted-average period of approximately 3.4 years. Employee Stock Purchase Plan On February 18, 2015, the date of the completion of the Company’s IPO, the 2015 Employee Stock Purchase Plan (“2015 ESPP”) became effective. The 2015 ESPP provides (i) for six months purchase periods (commencing each March 1 and September 1) and (ii) that the purchase price for shares of Class A common stock purchased under the 2015 ESPP will be 85% of the fair market value of the Company’s Class A common stock on the last day of the applicable offering period. Eligible employees are able to select a rate of payroll deduction between 1% and 15% of their base cash compensation subject to a maximum payroll deduction per offering period of $7,500 . The 2015 ESPP is intended to qualify as an employee stock purchase plan under Section 423 of the Code. The Company reserved 1,833,857 shares of Class A common stock for issuance under the 2015 ESPP. The following table summarizes the ESPP activity during the years shown: Year Ended December 31, 2018 2017 2016 Shares purchased and issued 90,084 49,247 61,184 Weighted average discounted price per share $ 9.74 $ 11.08 $ 14.03 Stock-based compensation expense (in thousands) $ 141 $ 154 $ 140 |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS On June 1, 2007, the Company adopted a 401(k) Profit Sharing Plan and Trust (“401(k) Plan”). The 401(k) Plan was amended on February 1, 2010. The amended 401(k) Plan allows employees to become eligible to participate upon the completion of 30 days of service. The Company matches employee contributions up to 4.0% of their compensation and the employer contributions vest immediately. During the years ended December 31, 2018 , 2017 , and 2016 , total expense recorded for the Company’s matching 401(k) contributions were $6.3 million , $5.2 million , and $5.2 million , respectively. |
STOCKHOLDERS' EQUITY (DEFICIT)
STOCKHOLDERS' EQUITY (DEFICIT) | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY (DEFICIT) | STOCKHOLDERS’ EQUITY On May 4, 2016, the Company announced that its Board of Directors authorized a program to repurchase up to $100.0 million of Inovalon’s Class A common stock through December 31, 2017. Repurchases under the Company’s share repurchase program have been made in open-market or privately negotiated transactions. The Company funded repurchases through a combination of cash on hand, cash generated by operations and sales of short-term investments, if needed. On November 2, 2016, the Company announced that its Board of Directors authorized an expansion of the share repurchase program to repurchase up to an additional $100.0 million of shares of Inovalon’s Class A Common Stock (bringing the total to $200.0 million ) through December 31, 2017. The share repurchase program did not obligate the Company to acquire any particular amount of Class A common stock. During the years ended December 31, 2017 and 2016, the Company repurchased 7,111,190 and 7,508,985 Class A common shares for $93.6 million and $106.2 million , respectively, at an average cost of $13.16 and $14.15 per share, respectively, excluding commissions. The share repurchase program expired on December 31, 2017 and there were no repurchases during 2018. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | provision for income taxes consisted of the following (in thousands): Year Ended December 31, 2018 2017 2016 Current: Federal (1) $ (2,113 ) $ 2,272 $ 7,747 State 215 2,162 5,788 Total current (benefit) provision (1,898 ) 4,434 13,535 Deferred: Federal (8,009 ) (8,333 ) (1,533 ) State (4,486 ) 1,668 (207 ) Total deferred benefit (12,495 ) (6,665 ) (1,740 ) Total (benefit from) provision for income taxes $ (14,393 ) $ (2,231 ) $ 11,795 ______________________________________ (1) As of December 31, 2018 , the current income tax benefit reflects the recognition of a $2.1 million income tax receivable from amended federal income tax returns to carry back the net operating loss and tax credits generated in 2017 and refundable alternative minimum tax credit. The provision for income taxes reconciles to the amount computed by applying the federal statutory rate, 21.0% , to income before income taxes as follows (in thousands, except percentages): Year Ended December 31, 2018 2017 2016 Expected federal income tax 21.0 % $ (11,247 ) 35.0 % $ 11,406 35.0 % $ 13,650 State income taxes, net of federal income tax effect 8.0 % (4,270 ) 8.0 % 2,606 7.4 % 2,859 Permanent items 1.1 % (614 ) 0.3 % 88 (0.9 )% (357 ) Research and development tax credits 1.6 % (850 ) (2.6 )% (850 ) (1.9 )% (756 ) Excess tax benefits and stock-based compensation (1.0 )% 559 (0.7 )% (243 ) (3.0 )% (1,165 ) Acquisition-related tax adjustments (2.1 )% 1,144 (1.4 )% (445 ) (4.3 )% (1,686 ) Enactment of the Tax Act — % — (47.4 )% (15,461 ) — % — Other (1.7 )% 885 2.0 % 668 (2.0 )% (750 ) Income tax expense 26.9 % $ (14,393 ) (6.8 )% $ (2,231 ) 30.3 % $ 11,795 In December 2017, the Tax Act was enacted which included a number of changes to existing U.S. tax laws that impact the Company, most notably a reduction of the U.S. corporate income tax rate from 35% to 21% for tax years beginning after December 31, 2017. The Tax Act also provided for the acceleration of depreciation for certain assets placed into service after September 27, 2017 and prospective changes beginning in 2018, including repeal of the domestic manufacturing deduction, acceleration of tax revenue recognition, capitalization of research and development expenditures, additional limitations on executive compensation and limitations on the deductibility of interest. As a result of the reduction in the U.S. corporate income tax rate from 35% to 21% under the Tax Act, the Company revalued its ending net deferred tax liabilities at December 31, 2017 and recognized a $15.5 million tax benefit in the Company’s consolidated statement of operations for the year ended December 31, 2017. The Company completed its accounting for the income tax effects of the Tax Act in 2017. 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 tax assets and liabilities were as follows (in thousands): December 31, 2018 2017 Components of deferred tax assets and liabilities Deferred tax assets: Net operating loss carryforwards $ 17,258 $ 2,654 Interest expense carryforwards 11,278 — Accrued expenses and reserves 4,571 313 Stock-based compensation 3,553 3,040 Unrealized gains and losses in other comprehensive income 3,200 257 Tax credit carryforwards 3,114 217 Deferred rent 1,263 581 Other 1,371 284 Total deferred tax assets 45,608 7,346 Deferred tax liabilities: Intangibles 127,272 9,568 Property, equipment and capitalized software 26,612 21,564 Prepaids and other 2,092 2,639 Total deferred tax liabilities 155,976 33,771 Net deferred tax liabilities before valuation allowance 110,368 26,425 Valuation Allowance 301 217 Net deferred tax liabilities $ 110,669 $ 26,642 As of December 31, 2018 , the Company has U.S. federal and state net operating loss carryforwards of approximately $10.7 million and $8.3 million , respectively. The majority of the U.S. federal net operating loss carryforwards will not expire and the majority of the state net operating losses will expire by 2038. As of December 31, 2018 , the Company has interest expense carryforwards of approximately $11.3 million that can be carried forward indefinitely. As of December 31, 2018 , the Company has U.S. federal and state tax credit carryforwards of approximately $3.1 million and $0.5 million , respectively, gross of any uncertain tax position considerations. The tax credit carryforwards will expire between 2022 and 2038. Change of control provisions as defined in Section 382 of the Internal Revenue Code have been analyzed and are not expected to materially limit the Company’s use of the interest expense, net operating loss, or tax credit carryforwards. Uncertain Tax Positions —During the years ended December 31, 2018 , 2017 , and 2016 , changes in the liability for gross uncertain tax position, including interest were $1.2 million , $0.1 million , and $0.1 million , respectively. The interest and penalties related to uncertain tax positions are classified as a component of income tax expense. The following table presents the changes in uncertain tax position (in thousands). 2018 2017 2016 Uncertain tax position January 1 $ — $ 80 $ — Gross increase in tax positions in prior period 32 291 80 Gross decrease in tax positions in prior period (1 ) (160 ) — Gross increase in tax positions from acquisitions 1,162 — — Settlement — (211 ) — Lapse of statute of limitations (35 ) — — Uncertain tax position at December 31 $ 1,158 $ — $ 80 If the uncertain tax positions were to be resolved favorably, total uncertain tax position in an amount of approximately $1.2 million would reduce income tax expense and the Company’s effective tax rate in the future. While it is reasonably possible that the amount of the unrecognized tax benefits could increase or decrease during the next twelve months, we believe it is unlikely that the change would be a material amount. While the Company believes it has adequately provided for all tax positions, amounts asserted by taxing authorities could differ from the Company’s accrued position. Accordingly, additional provisions on federal, state and foreign tax-related matters could be recorded in the future as revised estimates are made or the underlying matters are settled or otherwise resolved. The Company is subject to taxation by the United States of America, various United States of America jurisdictions, and Puerto Rico. The number of years with open tax audits varies depending on the tax jurisdiction. |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts and Reserves | 12 Months Ended |
Dec. 31, 2018 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Schedule II - Valuation and Qualifying Accounts and Reserves | Schedule II Valuation and Qualifying Accounts and Reserves (in thousands) Allowance for Accounts Receivable Balance at Beginning of Year Additions Charged Against Revenue Additions Charged to Cost and Expense Deductions Balance at End of Year Year Ended December 31, 2018 $ 2,038 $ 3,039 $ 3,520 $ (5,247 ) $ 3,350 Year Ended December 31, 2017 $ 3,782 $ 8,886 $ — $ (10,630 ) $ 2,038 Year Ended December 31, 2016 $ 1,022 $ 3,792 $ — $ (1,032 ) $ 3,782 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation —The accompanying consolidated financial statements include the accounts of Inovalon Holdings, Inc. and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
Basis of Presentation | Basis of Presentation and Use of Estimates —These consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (“GAAP”). The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenue and expenses during the reported period. Certain prior period amounts have been reclassified within the consolidated statements of operations and within the operating section of the consolidated statements of cash flows to conform with current period presentation. Such reclassifications had no impact on net income or net cash provided by operating activities as previously reported. |
Use of Estimates | Significant estimates made by management include, but are not limited to: revenue recognition; accounts receivable allowances; fair value of intangibles and goodwill; fair value of contingent consideration; depreciable lives of property, equipment and capitalized software; and useful lives of intangible assets. Actual results could differ from management’s estimates, and such differences could be material to the Company’s consolidated financial position and results of operations. |
Cash and Cash Equivalents | Cash and Cash Equivalents —Cash and cash equivalents consist of highly liquid investments with an original maturity of three months or less at the time of purchase, and demand deposits with financial institutions. |
Short-term investments | Short-term investments —Short-term investments consists of investment grade debt securities. The Company classifies short-term investments as available-for-sale at the time of purchase and reevaluates such classification as of each balance sheet date. All short-term investments are recorded at estimated fair value. Unrealized gains and losses for available-for-sale securities 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. Impairments are considered to be other-than-temporary if they are related to deterioration in credit risk, if it is more likely than not that the Company will be required to sell or intends to sell the securities 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 as components of other income and (expenses), in the consolidated statements of operations. Interest, amortization of premiums, and accretion of discount on short-term investments classified as available for sale are included as a component of interest income, in the consolidated statements of operations. There were no other-than-temporary impairments during 2018 . The Company may sell short-term investments at any time, without significant penalty, for use in current operations or for other purposes, even if the short-term investments have not yet reached maturity. As a result, the Company classifies these investments, including securities with maturities beyond 12 months , as current assets in the accompanying consolidated balance sheets. Gains or losses realized from the sale of securities are reclassified out of other comprehensive income (loss) into earnings using the specific identification method. |
Concentrations of Credit Risk | Concentrations of Credit Risk —Accounts receivable and cash and cash equivalents subject the Company to its highest potential concentrations of credit risk. Although the Company deposits its cash and cash equivalents with multiple financial institutions, the Company’s deposits may exceed federally insured limits. The Company has not experienced any losses on cash and cash equivalent accounts to date, and management believes the Company is not exposed to any significant credit risk related to cash and cash equivalents. The Company sells services to clients without requiring collateral, based on an evaluation of the client’s financial condition. Exposure to losses on receivables is principally dependent on each client’s financial condition. The Company monitors its exposure for credit losses and maintains allowances for anticipated losses. |
Accounts Receivable and Allowances | Accounts Receivable and Allowances —Accounts receivable consists primarily of amounts due to the Company from its normal business activities. The Company provides an allowance for estimated losses resulting from the failure of clients to make required payments (credit losses) and a sales allowance for estimated future billing adjustments resulting from client concessions or resolutions of billing disputes. The provision for sales allowances are charged against revenue while credit losses are recorded in general and administrative expenses. |
Fair Value Measurements | Fair Value Measurements —The Company applies the Accounting Standards Codifications (“ASC”) 820-10, Fair Value Measurements and Disclosures . ASC 820-10 defines fair value, establishes a fair value hierarchy for assets and liabilities measured at fair value, and expands required disclosures about fair value measurements. This guidance requires the Company to classify and disclose assets and liabilities measured at fair value on a recurring basis, as well as fair value measurements of assets and liabilities measured on a nonrecurring basis in periods subsequent to initial measurement, in a three-tier fair value hierarchy as described below. The guidance defines fair value as the exchange price that would be received for an asset or 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 guidance describes three levels of inputs that may be used to measure fair value: Level 1—Financial assets and liabilities whose values are based on quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date. Level 2—Financial assets and liabilities whose values are based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3—Financial assets and liabilities whose values are based on unobservable inputs for the asset or liability. The carrying amounts of accounts receivable, other current assets, accounts payable, and accrued liabilities approximate fair value due to their short-term nature. The Company’s Credit Facilities (as defined in “Note 10 —Debt”) approximate fair value because of their floating rate structure. |
Interest Rate Swaps | Interest Rate Swaps —The Company uses interest rate swaps to mitigate the risk of a rise in interest rates. The Company applies ASC 815, Derivatives and Hedging and the interest rate swaps are recorded on the balance sheet at fair value as either assets or liabilities and any changes to the fair value are recorded through accumulated other comprehensive income and reclassified into interest expense in the same period in which the hedged transaction is recognized in earnings. Cash flows from interest rate swaps are reported in the same category as the cash flows from the items being hedged. |
Property, Equipment and Capitalized Software, net | Property, Equipment and Capitalized Software, net —Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization on property, leasehold improvements, equipment, and software is computed on a straight-line basis over the estimated useful lives of the assets, as follows: Useful Life Office and computer equipment 3 - 5 years Purchased software 5 years Capitalized software 3 - 5 years Furniture and fixtures 7 years Building * Leasehold improvements * Assets under capital leases * _______________________________________ *Lesser of lease term or economic life Expenses for repairs and maintenance that do not extend the life of property and equipment are expensed as incurred. Expenses for major renewals and betterments, which significantly extend the useful lives of existing property and equipment, are capitalized and depreciated. Upon retirement or disposition of property and equipment, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized. In accordance with ASC 350-40, Internal-use Software , the Company capitalizes certain software development costs while in the application development stage related to software developed for internal use. All other costs to develop software for internal use, either in the preliminary project stage or post implementation stage, are expensed when incurred. Software development costs are amortized on a straight-line basis over a three to five year period, which management believes represents the useful life of these capitalized costs. In accordance with ASC 985-20, Software to be Sold, Leased, or Marketed , certain software development costs are expensed as incurred until technological feasibility has been established. Thereafter, all software development costs incurred through the software’s general release date are capitalized and subsequently reported at the lower of amortized cost or net realizable value. Capitalized costs are amortized based on current and expected future revenue for each software solution with minimum annual amortization equal to the straight-line amortization over the estimated economic life, which is typically over a three to five year period. |
Intangible Assets | Intangible Assets —Intangible assets consist of acquired technology, including developed and core technology, databases, trade names, and customer relationships. Intangible assets are initially recorded at fair value and amortized on a straight line basis over their estimated useful lives. Acquired intangible assets are being amortized over the following periods: Useful Life Technology 3 - 13 years Trademark and trade names 3 - 17 years Database 10 years Customer relationships 8 - 15.75 years Non-compete agreements Contractual term In-process research and development Indefinite At least annually, or whenever events or changes in circumstances indicate a revision to the useful life, the Company reviews the remaining useful lives of its definite-lived intangible assets. On an annual basis, the Company reviews its indefinite-lived in process research and development for impairment until the research and development is completed or abandoned. There were no impairment charges on indefinite-lived intangible assets for the years ended December 31, 2018 and 2017 . |
Goodwill | Goodwill —Goodwill represents the excess of acquisition costs over the fair value of tangible net assets and identifiable intangible assets of businesses acquired. Goodwill is not amortized and is subject to impairment testing annually, or whenever events or changes in circumstances indicate that the carrying amount may not be fully recoverable. Historically, the annual goodwill impairment assessment was performed as of December 31 st . During 2018, the Company changed the date of the goodwill impairment assessment to November 1 st for the year ended December 31, 2018 and thereafter. The Company believes this change in the Company’s measurement date does not represent a material change in method of applying the accounting principal as the new and old assessment dates are close in proximity and fall within the same quarter. Additionally, the change does not produce different results as similar valuation assumptions are used and the carrying values are stable. The change in the date of the Company’s goodwill impairment analysis will allow for more time to perform the analysis and prepare the valuations for certain reporting units. Impairment is the condition that exists when the carrying amount of a reporting unit exceeds its fair value. If the fair value of the reporting unit exceeds the carrying value of the reporting unit, goodwill is not impaired. If the carrying value of the reporting unit exceeds the fair value of the reporting unit, then the Company will record an impairment loss in the amount equal to the difference between the fair value and the carrying value. Significant judgment in testing goodwill for impairment includes assigning assets and liabilities to the reporting unit and assessing or determining the fair value of each reporting unit based on the Company’s best estimates and assumptions, as well as other information including valuations that utilize customary valuation procedures and techniques. The Company tests its goodwill for impairment at the reporting unit level which is one level below the operating segment and has identified four reporting units: Inovalon, ABILITY, Avalere and Creehan. Based on the Company’s annual impairment evaluation performed as of November 1, 2018, the Company concluded that there was no impairment of goodwill. Refer to “Note 9 —Goodwill and Intangible Assets” for a summary of changes in goodwill. |
Valuation of Long-Lived Assets | Valuation of Long-Lived Assets —The Company reviews long-lived assets for events or changes in circumstances that would indicate potential impairment. If the Company determines that an asset may not be recoverable, an impairment charge is recorded. There were no impairment charges on long-lived assets for the years ended December 31, 2018 , and 2017 . |
Revenue | Revenue Recognition —The Company generates a substantial majority of its revenue through the sale or subscription licensing of its platform solutions, as well as revenue from related arrangements for advisory, implementation, and support services. The Company recognizes revenue when performance obligations under the terms of a contract are satisfied. A performance obligation is a contractual promise to transfer a distinct good or service to the customer. This occurs when the control of the product or service is transferred to the customer. The majority of the Company’s platform solutions contracts contain a series of separately identifiable and distinct services that represent performance obligations that are satisfied over time. The Company allocates revenue to platform services by determining the standalone selling price of each performance obligation. The determination of standalone selling price for each performance obligation is determined based on the terms of the contract and can require judgment. Generally, the best estimate of standalone selling price is consistent with the contractual arrangement fee for each element. Revenue is generally recognized on platform offerings over the contract term. For these contracts, the Company has determined that it will use the practical expedient under ASC 606-10-55-18 to recognize revenue when it has the right to invoice. The Company qualifies for this practical expedient because the right to invoice corresponds directly with the value transferred to the customer. The Company also generates revenue from advisory, implementation, and support services. The Company primarily enters into arrangements for advisory services under fixed-price, time and materials, or retainer-based contracts. Revenues under fixed-price and retainer-based contracts are recognized ratably over the contract period or upon contract completion. Revenue for time and material contracts is recognized based upon contractually agreed upon billing rates applied to direct labor hours expended plus the costs of other items used in the performance of the contract. The Company recognizes revenue when the Company has the right to invoice the customer using the allowable practical expedient under ASC 606-10-55-18 since the right to invoice the customer corresponds with the performance obligations completed. Certain of the Company’s arrangements entitle a client to receive a refund if the Company fails to satisfy contractually specified performance obligations. The refund is limited to a portion or all of the consideration paid. In this case, revenue is recognized when performance obligations are satisfied. The Company maintains an allowance, charged to revenue, which reflects the Company’s estimated future billing adjustments resulting from client concessions or resolutions of billing disputes. Cost of Revenue —Cost of revenue consists primarily of employee-related expenses including salaries, benefits, discretionary incentive compensation, employment taxes, equity compensation costs, and severance for employees that provide direct revenue-generating services to clients. Cost of revenue also includes expenses associated with the integration and verification of data and other service costs incurred to fulfill the Company’s revenue contracts. Cost of revenue does not include allocated amounts for occupancy expense, depreciation and amortization. |
Research and Development | Research and Development —Research and development expenses consist primarily of employee-related expenses. All such costs are expensed as incurred, except for certain internal use software development costs that are capitalized. Research and development excludes any allocation of occupancy expense, depreciation and amortization. |
Selling and Marketing and General and Administrative | Selling and Marketing —Sales and marketing expense consists primarily of employee-related expenses including salaries, benefits, discretionary incentive compensation, employment taxes, severance and equity compensation costs for employees engaged in sales, sales support, business development, and marketing. Sales and marketing expense also includes operating expenses for marketing programs, research, trade shows and brand messages, and public relations costs. Sales and marketing expense excludes any allocation of occupancy expense, depreciation and amortization. General and Administrative —General and administrative expense consists primarily of employee-related expenses including salaries, benefits, discretionary incentive compensation, employment taxes, severance and equity compensation costs, for employees who are responsible for management information systems, administration, human resources, finance, legal, and executive management. General and administrative expense also includes occupancy expenses (including rent, utilities, communications, and facilities maintenance), professional fees, consulting fees, insurance, travel, and other expenses. General and administrative expense excludes any allocation of depreciation and amortization. |
Segments | Segments —The Company operates its business as one operating segment. The Company provides cloud-based platforms under a shared infrastructure and provides related services to its clients in order to achieve meaningful insight and improvement in clinical and quality outcomes, utilization, and financial performance. The Company derives substantially all of its revenue from the sale or subscription licensing of its platform solutions, as well as revenue from related arrangements for advisory, implementation, and support services of one group of similar product offerings—proprietary datasets, core connectivity, advanced integration technologies, sophisticated predictive analytics, and deep subject matter expertise that enable the Company to provide seamless, end-to-end platforms that bring the benefits of big data and large-scale analytics to clients. Operating segments are defined as components of an enterprise for which separate financial information is available and is evaluated regularly by the Company’s chief operating decision maker (“CODM”), in deciding how to allocate resources and in assessing performance. In the process of allocating resources and assessing performance, the Company’s CODM, its chief executive officer, reviews financial information presented on a consolidated basis. |
Income Taxes | Income Taxes —The Company accounts for income taxes in accordance with ASC 740, Income Taxes , which prescribes the use of the asset and liability approach to the recognition of deferred tax assets and liabilities related to the expected future tax consequences of events that have been recognized in the Company’s financial statements or income tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Valuation allowances are established, when necessary, to reduce deferred tax assets when it is more likely than not that a portion or all of a given deferred tax asset will not be realized. In accordance with ASC 740, income tax expense includes (i) deferred tax expense, which represents the net change in the deferred tax asset or liability balance during the period and any change in valuation allowances and (ii) current tax expense, which represents the amount of tax currently payable to or receivable from a taxing authority and amounts accrued for expected tax contingencies (including both tax and interest). ASC 740 prescribes a recognition threshold of more-likely-than-not, and a measurement attribute for all tax positions taken or expected to be taken on a tax return, in order for those positions to be recognized in the financial statements. The Company continually reviews tax laws, regulations and related guidance in order to properly record any uncertain tax liability positions. The Company adjusts these reserves in light of changing facts and circumstances. As a result of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”), which was signed into law on December 22, 2017 and was effective January 1, 2018, the Company remeasured the ending deferred tax assets to reflect the decrease in the federal corporate tax rate resulting in a tax benefit. Refer to “Note 16—Income Taxes.” |
Stock-Based Compensation | Stock-Based Compensation —All stock-based awards, including employee stock option grants, restricted stock unit (“RSU”) grants, and restricted stock award (“RSA”) grants, are recorded at fair value as of the grant date in accordance with ASC 718, Compensation—Stock Compensation , and recognized in the statement of operations over the service period of the applicable award using the straight-line method or using a graded vest schedule for RSAs with a performance condition and ratable vest terms. The Company determines the fair value of its stock option awards on the date of grant, using the Black-Scholes option pricing model. The assumptions used in calculating the fair value of stock-based awards represent management’s best estimates. The Company measures RSUs and RSAs that vest upon satisfaction of a service condition, a performance condition, or a liquidity condition, if such conditions are applicable, based on the fair market values of the underlying common stock on the dates of grant. RSUs are share awards that, upon vesting, will deliver to the holder shares of the Company’s common stock. Compensation expense is recognized based upon the satisfaction of the requisite service, liquidity condition as of that date, and/or the probability of achievement of the specified performance conditions following the straight-line method or using a graded vest method, depending on the specific terms of the award. |
Treasury Stock | Treasury Stock —The Company records treasury stock activities under the cost method whereby the cost of the acquired stock is recorded as treasury stock. The Company’s accounting policy upon the formal retirement of treasury stock is to deduct the par value from common stock and to reflect any excess of cost over par value as a reduction to additional paid-in capital (to the extent created by previous issuances of the shares) and then retained earnings. |
Deferred Rent | Deferred Rent —Deferred rent consists of rent escalation payment terms, tenant improvement allowances and other incentives received from landlords related to the Company’s operating leases for its facilities. Rent escalation represents the difference between actual operating lease payments due and straight-line rent expense, which is recorded by the Company over the term of the lease, including any construction period. The excess is recorded as a deferred credit in the early periods of the lease, when cash payments are generally lower than straight-line rent expense, and is reduced in the later periods of the lease when payments begin to exceed the straight-line expense. Tenant allowances from landlords for tenant improvements are generally comprised of cash received from the landlord as part of the negotiated terms of the lease or reimbursements of moving costs. These cash payments are recorded as deferred rent from landlords and are amortized as a reduction of periodic rent expense, over the term of the applicable lease. |
Recently Adopted and Issued Accounting Standards | Recently Adopted Accounting Standards In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers and subsequent clarifying guidance (“ASU 2014-09”). The core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted this standard on January 1, 2018 using the modified retrospective approach. Refer to “Note 4—Revenue.” In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . The update amends the guidance in Accounting Standards Codification (“ASC”) 230, Statement of Cash Flows , and clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows with the objective of reducing the existing diversity in practice related to eight specific cash flow issues. The Company adopted the requirements of the new standard in the first quarter of 2018 and there was no material impact on its consolidated financial statements. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”) . The update amends the current hedge accounting model and eliminates the requirement to separately measure and report hedge ineffectiveness. This guidance also requires, for qualifying hedges, the entire change in the fair value of a hedging instrument to be presented in the same income statement line item as the hedged item. The update also eases documentation and assessment requirements, modifies certain disclosure requirements, and modifies the method of accounting for components excluded from the assessment of hedge effectiveness. The Company adopted the requirements of the new standard in the second quarter of 2018 concurrent with entering into four interest rate swaps. Refer to “Note 7—Fair Value Measurements.” In February 2018, the FASB issued ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The guidance is effective for all public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. This guidance allows for a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from Tax Act. Early adoption is permitted in any interim period or fiscal year before the effective date. The Company early adopted the requirements of the new standard in the first quarter of 2018, and elected to reclassify the income tax effects of the Tax Act of $0.1 million from other comprehensive income to retained earnings. Refer to the consolidated statements of comprehensive (loss) income. Recently Issued Accounting Standards In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) and, in July 2018, issued subsequent clarifying guidance (collectively, “ASU 2016-02”). ASU 2016-02 requires the recognition of lease assets and lease liabilities on the balance sheet and enhanced disclosure about leasing arrangements. The lease asset represents a right of use asset and the lease liability represents the obligation to make lease payments. This guidance is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company has finalized its portfolio of leases to determine the impact that will be recorded to the balance sheet, reviewed applicable lease agreements, and is in the process of implementing changes to our processes and internal controls. The standard initially required the use of a modified-retrospective method. In July 2018, the FASB issued updated guidance which allows for an additional transition method which requires that the cumulative effect of applying the new standard is recognized as an adjustment to the opening retained earnings balance. The Company adopted the new standard effective January 1, 2019 using the additional transition approach and has elected all applicable practical expedients under ASC 842-10-65-1. The Company is finalizing the calculation of the financial statement impact and currently expects the right of use asset to be in the approximate range of $34 million and $35 million and currently expects the lease liability to be in the approximate range of $36 million and $37 million . The adjustment to retained earnings is currently expected to be in the approximate range of $0.5 million to $1.5 million . The Company will provide additional disclosures as required by the new standard in the first quarter of 2019. In June 2016, the FASB issued ASU 2016-13, Financial Instruments–Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and subsequent clarifying guidance (“ASU 2016-13”) . ASU 2016-13 replaces the current incurred loss impairment method with a methodology that reflects the amortized cost basis net of expected credit losses that are calculated based on certain relevant information. The standard also amends the credit loss guidance for available-for-sale debt securities and requires the measurement and recognition of an expected allowance for credit losses for financial assets held at amortized cost. This guidance is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company is in the process of evaluating the timing and impact of adoption on the consolidated financial statements and notes disclosures. In June 2018, the FASB issued ASU 2018-07, Compensation–Stock Compensation (Topic 718) . ASU 2018-07 expands the scope of ASC 718, Compensation–Stock Compensation: Improvements to Nonemployee Share-Based Payment Accounting, to include share-based payment transactions for acquired goods and services from non-employees. This update includes changing the accounting for non-employee stock-based compensation as it relates to the award measurement date, the fair value measurement of the awards, and forfeitures, among other changes to align the accounting with ASC 718. This guidance is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company adopted the new standard effective January 1, 2019 and expects no material impact on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework–Changes to the Requirements for Fair Value Measurement. This update changes the fair value measurement disclosure requirements of ASC 820. The standard consists of removals, modifications, and additions to the existing disclosure requirements. This guidance is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company is in the process of evaluating the timing and impact of adoption on the notes disclosures. In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other— Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This update aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The standard requires that an entity in a hosting arrangement that is a service contract to follow the guidance in Subtopic 350-40 to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. This guidance is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company is in the process of evaluating the timing and impact of adoption on the consolidated financial statements and notes disclosures. In October 2018, the FASB issued ASU 2018-17, Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes in response to the potential transition away from the London Interbank Offer Rate (“LIBOR”). This update permits the use of the Overnight Index Swap (“OIS”) Rate based on the Secured Overnight Financing Rate (“SOFR”) as a U.S. benchmark interest rate for hedge accounting purposes under ASC Topic 815. For public companies that have adopted ASU 2017-12, the amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The Company adopted the guidance under ASU 2017-12 which applies to interest rate swap agreements that fix the LIBOR component on our 2018 Credit Facility. The Company will apply the requirements of the new standard on a prospective basis beginning January 1, 2019 for any new or redesignated hedging agreements. Refer to “Note 7—Fair Value Measurements.” |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of concentration risk by factor | Revenue from a significant client, representing 10% or more of total revenue for the respective periods, is summarized as follows: Year Ended December 31, 2018 2017 2016 Client A * 12 % 17 % _______________________________________ *Less than 10% |
Schedule of the useful life of property, plant and equipment | Depreciation and amortization on property, leasehold improvements, equipment, and software is computed on a straight-line basis over the estimated useful lives of the assets, as follows: Useful Life Office and computer equipment 3 - 5 years Purchased software 5 years Capitalized software 3 - 5 years Furniture and fixtures 7 years Building * Leasehold improvements * Assets under capital leases * _______________________________________ *Lesser of lease term or economic life |
Schedule of amortized life of acquired intangible assets | Acquired intangible assets are being amortized over the following periods: Useful Life Technology 3 - 13 years Trademark and trade names 3 - 17 years Database 10 years Customer relationships 8 - 15.75 years Non-compete agreements Contractual term In-process research and development Indefinite |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Schedule of composition of the fair value of the consideration transferred | After adjusting for this difference the composition of the fair value of the consideration transferred is as follows (in thousands): Cash $ 89,803 Issuance of Class A common stock 7,764 Contingent consideration 12,600 Total fair value purchase price $ 110,167 The composition of the fair value of the consideration transferred is as follows (in thousands): Cash $ 1,107,220 Issuance of Class A common stock 70,000 Contingent consideration 14,156 Working capital adjustment (630 ) Total fair value purchase price $ 1,190,746 A summary of the composition of the stated Purchase Price and fair value of the stated Purchase Price is as follows (in thousands): Purchase Price $ 1,220,800 Working capital adjustment (630 ) Shareholder payable adjustment 576 Subtotal 1,220,746 Fair value adjustments: Restricted stock marketability discount (30,000 ) Total fair value purchase price $ 1,190,746 A summary of the final composition of the stated purchase price and fair value of the stated purchase price is as follows (in thousands): Share Purchase Agreement purchase price $ 130,000 Working capital adjustment 755 Subtotal 130,755 Fair value adjustments: Marketability restrictions on equity consideration (2,236 ) Contingent consideration probability of achievement adjustment (12,400 ) Post-acquisition compensation expense (5,952 ) Total fair value purchase price $ 110,167 |
Schedule of purchase price allocation to assets acquired and liabilities assumed | The following table summarizes the purchase price allocation to assets acquired and liabilities assumed, including identification of measurement period adjustments (in thousands): Recorded Value Cash and cash equivalents $ 861 Accounts receivable 9,048 Other current assets 171 Property, equipment and capitalized software 641 Intangible assets (1) 50,900 Goodwill (2) 51,362 Total assets acquired 112,983 Current liabilities (916 ) Deferred revenue (1,900 ) Total liabilities assumed (2,816 ) Net assets acquired $ 110,167 ______________________________________ (1) Identifiable intangible assets were measured using a combination of an income approach and a market approach. (2) Goodwill is the excess of the consideration transferred over the net assets recognized and represents the future economic benefits, primarily as a result of other assets acquired that could not be individually identified and separately recognized. Goodwill is not amortized. The goodwill attributable to the Creehan acquisition is deductible for tax purposes. The preliminary estimates of fair value represent the Company’s best preliminary estimates and preliminary valuations. The following table summarizes the net assets acquired and liabilities assumed (in thousands): Preliminary Fair Value Cash and cash equivalents $ 23,850 Accounts receivable 16,739 Income tax receivable 551 Prepaid expenses and other current assets 3,025 Property and equipment 3,095 Goodwill (1)(2) 771,097 Intangible assets (1) 490,000 Other assets 1,252 Accounts payable and accrued expenses (6,863 ) Deferred revenue (7,000 ) Other current liabilities (507 ) Other liabilities (5,291 ) Deferred tax liabilities (2) (99,202 ) Total consideration transferred $ 1,190,746 ______________________________________ (1) The Company allocated a portion of the goodwill associated with the ABILITY Acquisition to the Inovalon reporting unit based on expected revenue synergies. As a result, the fair value of the customer relationships intangible asset was adjusted by $23.0 million during the third quarter of 2018. (2) The Company recognized a net purchase accounting adjustment of $1.6 million resulting in a decrease to goodwill. This adjustment was driven by a $7.2 million decrease to deferred tax liabilities primarily attributable to the tax impact related to the reduction to the fair value of the customer relationships intangible assets, which was partially offset by a $5.0 million increase in deferred tax liabilities related to tax basis goodwill and provision-to-tax adjustments from ABILITY’s 2017 tax return filings and an adjustment of $0.6 million to the shareholder payable attributable to the ABILITY Acquisition. |
Schedule of identified intangible assets | The amounts attributed to identified intangible assets are summarized in the table below (in thousands): Estimated Preliminary Measurement Period Adjustments Adjusted Preliminary Fair Value Customer relationships 13 years $ 408,000 $ (23,000 ) $ 385,000 Technology 13 years 86,000 — 86,000 Tradenames 17 years 19,000 — 19,000 Total intangible assets $ 513,000 $ (23,000 ) $ 490,000 The amounts attributed to identified intangible assets are summarized in the table below (in thousands): Weighted Average Useful Life Recorded Value Customer relationships 8 years $ 36,500 Tradename 4 years 4,000 Technology 4 years 8,800 In-process Research and Development indefinite 1,600 Total intangible assets $ 50,900 |
Schedule of pro forma acquisition | The following table presents pro forma information, based on estimates and assumptions that the Company believes to be reasonable, for the Company as if the acquisition of Creehan had occurred at the beginning of the earliest period presented (unaudited, in thousands): Year Ended December 31, 2016 Pro forma revenue $ 453,613 Pro forma income before taxes $ 44,203 The following table presents revenue and loss before taxes of Creehan since the acquisition date, October 3, 2016, included in the consolidated statements of operations and includes amortization expense related to acquired intangible assets (in thousands): Year Ended December 31, 2016 Revenue $ 8,106 Loss before taxes $ (976 ) The following pro forma financial information is unaudited and gives effect to the transactions as if they had occurred on January 1, 2017 (in thousands): Year ended December 31, 2018 2017 Revenue $ 565,040 $ 589,197 Loss before taxes $ (56,016 ) $ (5,554 ) The following table presents revenue and loss before taxes of ABILITY since the acquisition date, April 2, 2018, included in the consolidated statements of operations (in thousands): Total Revenue $ 113,578 Loss before taxes $ (3,902 ) |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Disaggregation of Revenue [Table Text Block] | The Company primarily derives its revenues through the sale or subscription licensing of its platform solutions and services. The following table disaggregates revenue by offering (in thousands): Year Ended December 31, 2018 2017 (1) Platform solutions (2) $ 466,544 $ 382,778 Services (3) 61,132 66,580 Total revenue $ 527,676 $ 449,358 ______________________________________ (1) Prior period amounts have not been adjusted under the modified retrospective method. (2) Platform solutions include arrangements for technology-based offerings representing subscription-based cloud-based platform offerings and legacy platform solutions that are not cloud-based and not billed under a subscription-based contract structure. (3) Services include advisory, implementation, and support services under time and materials, fixed price, or retainer-based contracts. |
NET INCOME PER SHARE (Tables)
NET INCOME PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of numerators and denominators of the basic and diluted EPS | The numerators and denominators of the basic and diluted EPS computations, reconciliations of the weighted average shares outstanding, and resulting basic and diluted earnings per share for our common stock are calculated as follows (in thousands, except per share amounts): Year Ended December 31, 2018 2017 2016 Basic Numerator: Net (loss) income $ (39,164 ) $ 34,818 $ 27,104 Undistributed earnings allocated to participating securities — (990 ) (161 ) Net (loss) income attributable to common stockholders—basic $ (39,164 ) $ 33,828 $ 26,943 Denominator: Weighted average shares used in computing net (loss) income per share attributable to common stockholders—basic 145,389 142,225 150,048 Net (loss) income per share attributable to common stockholders—basic $ (0.27 ) $ 0.24 $ 0.18 Diluted Numerator: Net income attributable to common stockholders—diluted $ (39,164 ) $ 33,828 $ 26,943 Denominator: Number of shares used for basic EPS computation 145,389 142,225 150,048 Effect of dilutive securities — 512 907 Weighted average shares used in computing net income per share attributable to common stockholders—diluted 145,389 142,737 150,955 Net income per share attributable to common stockholders—diluted $ (0.27 ) $ 0.24 $ 0.18 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The computation of diluted EPS does not include certain awards, on a weighted average basis, for the years ended December 31, 2018 , 2017 , and 2016 , respectively, because their inclusion would have an anti-dilutive effect on EPS. The awards excluded because of their anti-dilutive effect are as follows (in thousands): Year Ended December 31, 2018 2017 2016 Awards excluded from the computation of diluted net income per share because their inclusion would have been anti-dilutive 89 88 44 |
SHORT-TERM INVESTMENTS (Tables)
SHORT-TERM INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of short-term investments | As of December 31, 2018 , short-term investments consisted of the following (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Available-for-sale securities: Corporate notes and bonds $ 7,018 $ — $ (18 ) $ 7,000 Total available-for-sale securities $ 7,018 $ — $ (18 ) $ 7,000 As of December 31, 2017 , short-term investments consisted of the following (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Available-for-sale securities: Corporate notes and bonds $ 232,048 $ 3 $ (572 ) $ 231,479 U.S. agency obligations 15,341 — (99 ) 15,242 U.S. treasury securities 20,735 — (168 ) 20,567 Total available-for-sale securities $ 268,124 $ 3 $ (839 ) $ 267,288 |
Summary of estimated fair value of short-term investments, designated as available-for-sale and classified by the contractual maturity | The following table summarizes the estimated fair value of our short-term investments, designated as available-for-sale and classified by the contractual maturity date of the securities as of the dates shown (in thousands): December 31, 2018 2017 Due in one year or less $ 7,000 $ 204,725 Due after one year through two years — 62,563 Total $ 7,000 $ 267,288 |
Schedule of fair values and gross unrealized losses of available-for-sale securities aggregated by investment category | The following table shows the fair values and the gross unrealized losses of available-for-sale securities that were in a gross unrealized loss position, as of December 31, 2018 , aggregated by investment category (in thousands): Estimated Fair Value Gross Unrealized Losses Corporate notes and bonds $ 7,000 $ (18 ) |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value hierarchy for financial assets and liabilities measured at fair value on a recurring basis | The following table presents the fair value hierarchy for financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2018 (in thousands): Level 1 Level 2 Level 3 Total Cash Equivalents: Money market funds $ 34,064 $ — $ — $ 34,064 Short-term investments: Corporate notes and bonds — 7,000 — 7,000 Other current liabilities: Interest rate swaps — (1,778 ) — (1,778 ) Contingent consideration — — (15,182 ) (15,182 ) Other liabilities Interest rate swaps — (8,151 ) — (8,151 ) Contingent consideration — — (16,642 ) (16,642 ) Total $ 34,064 $ (2,929 ) $ (31,824 ) $ (689 ) The following table presents the fair value hierarchy for financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2017 (in thousands): Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 162,347 $ — $ — $ 162,347 Short-term investments: Corporate notes and bonds — 231,479 — 231,479 U.S. agency obligations — 15,242 — 15,242 U.S. treasury securities — 20,567 — 20,567 Other current liabilities: Contingent consideration — — (7,400 ) (7,400 ) Total $ 162,347 $ 267,288 $ (7,400 ) $ 422,235 |
Schedule of financial instruments measured at fair value using unobservable inputs (Level 3) | The following table presents our financial instruments measured at fair value using unobservable inputs (Level 3) as of the years ended December 31 (in thousands): Fair Value Measurements Using Unobservable Inputs (Level 3) 2018 2017 Balance, beginning of period $ (7,400 ) $ (12,600 ) Fair value adjustment (1) (6,159 ) 5,200 Accretion expense (recognized in general and administrative expenses) (1,053 ) — Contingent consideration attributable to and assumed from ABILITY Acquisition (17,212 ) — Total $ (31,824 ) $ (7,400 ) ______________________________________ (1) The Company recognized an adjustment of $5.6 million in general and administrative expenses related to the change in fair value of contingent consideration, and an adjustment of $0.6 million recognized in goodwill, which was a purchase accounting adjustment attributable to the ABILITY Acquisition. |
Fair Value, by Balance Sheet Grouping | The following table presents the carrying value and fair value of the Company’s debt (including the current portion thereof) as of December 31, 2018 (in thousands): December 31, Carrying amount $ 949,314 Fair value $ 922,021 |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block] | The following table presents the fair value of interest rate swaps on the balance sheet as of December 31, 2018 (in thousands): Liability Derivative Balance Sheet Location Fair Value Interest rate swap contract Other current liabilities $ (1,778 ) Interest rate swap contract Other liabilities $ (8,151 ) |
Reclassification out of Accumulated Other Comprehensive Income [Table Text Block] | The following table presents the location and amount of gains and losses on interest rate swaps included in other comprehensive income (“OCI”) and the statement of operations for the year ended December 31, 2018 (in thousands): Gain (Loss) recognized in OCI Statement of Operations Location (Gain) Loss reclassified from OCI Interest rate swap contract $ (12,907 ) Interest expense $ 2,978 |
PROPERTY, EQUIPMENT AND CAPIT_2
PROPERTY, EQUIPMENT AND CAPITALIZED SOFTWARE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, equipment and capitalized software | Property, equipment and capitalized software consisted of the following (in thousands): December 31, 2018 2017 Office and computer equipment $ 76,748 $ 55,840 Leasehold improvements 13,158 10,096 Purchased software 45,304 26,425 Capitalized software 128,356 114,569 Furniture and fixtures 6,412 4,670 Land 390 390 Buildings 14,028 14,028 Work in process 5,811 16,323 Total 290,207 242,341 Less: accumulated depreciation and amortization (148,449 ) (116,573 ) Property, equipment and capitalized software, net $ 141,758 $ 125,768 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of the activity related to the carrying value of goodwill | The following table summarizes the activity related to the carrying value of our goodwill during the years ended December 31, 2018 and 2017 (in thousands): Goodwill as of January 1, 2017 $ 184,557 Adjustments recorded in connection with the acquisition of Creehan (1) 375 Goodwill as of December 31, 2017 184,932 Goodwill recorded in connection with the acquisition of ABILITY 771,097 Goodwill as of December 31, 2018 $ 956,029 ______________________________________ (1) During 2017, the Company finalized the working capital adjustments for Creehan. The adjustments had no impact on the Company’s revenues or expenses. Based on our assessments of qualitative and quantitative factors, the adjustments were not considered to be material to our consolidated financial statements, individually or in the aggregate, to any previously issued consolidated financial statements. |
Schedule of intangible assets | Intangible assets at December 31, 2018 and 2017 were as follows (in thousands): December 31, 2018 Gross Accumulated Amortization Net Weighted Average Remaining Useful Life (years) Technology (1) $ 116,177 $ (28,882 ) $ 87,295 11.7 Trademark and trade names 31,860 (6,415 ) 25,445 13.4 Database 6,500 (6,012 ) 488 0.7 Customer relationships 480,950 (58,835 ) 422,115 11.6 Non-compete agreements 820 (820 ) — 0.0 Total $ 636,307 $ (100,964 ) $ 535,343 ______________________________________ (1) Upon completion of the development process of our in-process R&D the Company performed an impairment assessment and determined there was no impairment. As such, $1.6 million of in-process R&D was reclassified to a definite-lived technology intangible asset upon being placed into service. The Company evaluated the useful life of the asset resulting from the R&D activities pursuant to ASC 350 and determined a useful life of 5.0 years was appropriate based on the period over which the asset is expected to contribute to future cash flows. The Company began amortizing the asset over the useful life on the date the asset was placed into service. December 31, 2017 Gross Accumulated Amortization Net Weighted Average Remaining Useful Life (years) Technology $ 28,577 $ (20,313 ) $ 8,264 2.8 Trademark and tradenames 12,860 (3,580 ) 9,280 6.2 Database 6,500 (5,362 ) 1,138 1.8 Customer relationships 95,950 (27,088 ) 68,862 7.4 Non-compete agreements 820 (638 ) 182 0.7 In-Process R&D 1,600 — 1,600 Indefinite Total $ 146,307 $ (56,981 ) $ 89,326 |
Schedule of indefinite-lived intangible assets | Intangible assets at December 31, 2018 and 2017 were as follows (in thousands): December 31, 2018 Gross Accumulated Amortization Net Weighted Average Remaining Useful Life (years) Technology (1) $ 116,177 $ (28,882 ) $ 87,295 11.7 Trademark and trade names 31,860 (6,415 ) 25,445 13.4 Database 6,500 (6,012 ) 488 0.7 Customer relationships 480,950 (58,835 ) 422,115 11.6 Non-compete agreements 820 (820 ) — 0.0 Total $ 636,307 $ (100,964 ) $ 535,343 ______________________________________ (1) Upon completion of the development process of our in-process R&D the Company performed an impairment assessment and determined there was no impairment. As such, $1.6 million of in-process R&D was reclassified to a definite-lived technology intangible asset upon being placed into service. The Company evaluated the useful life of the asset resulting from the R&D activities pursuant to ASC 350 and determined a useful life of 5.0 years was appropriate based on the period over which the asset is expected to contribute to future cash flows. The Company began amortizing the asset over the useful life on the date the asset was placed into service. December 31, 2017 Gross Accumulated Amortization Net Weighted Average Remaining Useful Life (years) Technology $ 28,577 $ (20,313 ) $ 8,264 2.8 Trademark and tradenames 12,860 (3,580 ) 9,280 6.2 Database 6,500 (5,362 ) 1,138 1.8 Customer relationships 95,950 (27,088 ) 68,862 7.4 Non-compete agreements 820 (638 ) 182 0.7 In-Process R&D 1,600 — 1,600 Indefinite Total $ 146,307 $ (56,981 ) $ 89,326 |
Schedule of estimated future amortization expense of intangible assets | Estimated future amortization expense of intangible assets, based upon the Company’s intangible assets at December 31, 2018 , is as follows (in thousands): Amount Year ending December 31: 2019 $ 52,302 2020 50,821 2021 48,035 2022 48,035 2023 47,874 Thereafter 288,276 Total $ 535,343 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of line of credit facilities | The following table discloses the outstanding debt at each balance date as follows (in thousands): December 31, 2018 December 31, 2017 2018 Term Facility (1) $ 949,314 $ — 2014 Revolving Credit Facility — 236,250 Total Credit Facilities 949,314 236,250 Less: current portion 9,800 45,000 Non-current Credit Facilities $ 939,514 $ 191,250 ______________________________________ (1) The 2018 Term Facility is presented net of unamortized deferred financing fees and original issue discount (“OID”) of $28.2 million . |
Schedule of maturities of long-term debt | Scheduled principal maturity of the 2018 Credit Facilities follows (in thousands): Amount 2019 $ 9,800 2020 9,800 2021 9,800 2022 9,800 2023 9,800 Thereafter 928,550 Total scheduled maturities 977,550 Unamortized deferred financing fees and OID (28,236 ) Total Credit Facilities $ 949,314 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future non cancellable lease payments | Future non-cancellable lease payments as of December 31, 2018 are as follows (in thousands): Amount Year ending December 31, 2019 $ 11,250 2020 7,059 2021 5,898 2022 5,303 2023 3,821 Thereafter 15,599 Total $ 48,930 |
Schedule of future minimum lease payments for capital leases | Future minimum lease payments as of December 31, 2018 are as follows (in thousands): Amount Year ending December 31, 2019 $ 3,509 2020 2,567 2021 2,017 2022 1,181 2023 1,275 Thereafter 8,831 Total minimum lease payments 19,380 Less amount representing interest (2,548 ) Present value of minimum lease payments $ 16,832 |
RESTRUCTURING EXPENSE RESTRUC_2
RESTRUCTURING EXPENSE RESTRUCTURING EXPENSE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs [Table Text Block] | The following table presents restructuring liability activity for the year ended December 31, 2018 (in thousands): Balance as of December 31, 2017 $ — Accruals for severance 1,764 Accruals for lease termination 1,405 Severance payments (1,750 ) Lease termination accretion (830 ) Balance as of December 31, 2018 $ 589 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of stock option activity | Stock option activity is as follows: Number of Shares Outstanding Weighted- Average Exercise Price Weighted- Average Grant-date Fair Value of Underlying Common Stock Weighted- Average Remaining Contractual Life (in years) Aggregate Intrinsic Value (in thousands) Balance at January 1, 2018 1,313,310 $ 7.47 5.4 $ 9,895 Stock options granted — $ — $ — Stock options exercised (258,921 ) $ 7.01 Stock options cancelled (197,305 ) $ 7.36 Balance at December 31, 2018 857,084 $ 7.63 4.3 $ 5,616 Exercisable at December 31, 2018 701,742 $ 7.63 4.1 $ 4,600 Vested and expected to vest at December 31, 2018 857,084 $ 7.63 4.3 $ 5,616 |
Schedule of RSUs granted and unvested | A summary of RSU activity is as follows: Number of RSUs Weighted Average Fair Value Per Unit RSUs granted and unvested at January 1, 2018 220,938 $ 19.94 RSUs granted during 2018 101,454 10.35 RSUs vested during 2018 (95,690 ) 19.14 RSUs forfeited during 2018 (34,834 ) 21.50 RSUs granted and unvested at December 31, 2018 191,868 $ 14.98 |
Schedule of RSAs granted and unvested | A summary of RSA activity is as follows: Number of RSAs Weighted Average Fair Value Per Unit RSAs granted and unvested at January 1, 2018 4,601,632 $ 13.43 RSAs granted during 2018 2,571,839 11.12 RSAs vested during 2018 (758,277 ) 13.57 RSAs forfeited during 2018 (1,475,775 ) 12.87 RSAs granted and unvested at December 31, 2018 4,939,419 $ 12.37 |
Schedule of ESPP Activity | The following table summarizes the ESPP activity during the years shown: Year Ended December 31, 2018 2017 2016 Shares purchased and issued 90,084 49,247 61,184 Weighted average discounted price per share $ 9.74 $ 11.08 $ 14.03 Stock-based compensation expense (in thousands) $ 141 $ 154 $ 140 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of provision for income taxes | The provision for income taxes consisted of the following (in thousands): Year Ended December 31, 2018 2017 2016 Current: Federal (1) $ (2,113 ) $ 2,272 $ 7,747 State 215 2,162 5,788 Total current (benefit) provision (1,898 ) 4,434 13,535 Deferred: Federal (8,009 ) (8,333 ) (1,533 ) State (4,486 ) 1,668 (207 ) Total deferred benefit (12,495 ) (6,665 ) (1,740 ) Total (benefit from) provision for income taxes $ (14,393 ) $ (2,231 ) $ 11,795 |
Schedule of reconciliation of the provision for income taxes to the amount computed by applying the federal statutory rate to income before income taxes | The provision for income taxes reconciles to the amount computed by applying the federal statutory rate, 21.0% , to income before income taxes as follows (in thousands, except percentages): Year Ended December 31, 2018 2017 2016 Expected federal income tax 21.0 % $ (11,247 ) 35.0 % $ 11,406 35.0 % $ 13,650 State income taxes, net of federal income tax effect 8.0 % (4,270 ) 8.0 % 2,606 7.4 % 2,859 Permanent items 1.1 % (614 ) 0.3 % 88 (0.9 )% (357 ) Research and development tax credits 1.6 % (850 ) (2.6 )% (850 ) (1.9 )% (756 ) Excess tax benefits and stock-based compensation (1.0 )% 559 (0.7 )% (243 ) (3.0 )% (1,165 ) Acquisition-related tax adjustments (2.1 )% 1,144 (1.4 )% (445 ) (4.3 )% (1,686 ) Enactment of the Tax Act — % — (47.4 )% (15,461 ) — % — Other (1.7 )% 885 2.0 % 668 (2.0 )% (750 ) Income tax expense 26.9 % $ (14,393 ) (6.8 )% $ (2,231 ) 30.3 % $ 11,795 |
Schedule of components of the Company's deferred tax assets and liabilities | Significant components of the Company’s deferred tax assets and liabilities were as follows (in thousands): December 31, 2018 2017 Components of deferred tax assets and liabilities Deferred tax assets: Net operating loss carryforwards $ 17,258 $ 2,654 Interest expense carryforwards 11,278 — Accrued expenses and reserves 4,571 313 Stock-based compensation 3,553 3,040 Unrealized gains and losses in other comprehensive income 3,200 257 Tax credit carryforwards 3,114 217 Deferred rent 1,263 581 Other 1,371 284 Total deferred tax assets 45,608 7,346 Deferred tax liabilities: Intangibles 127,272 9,568 Property, equipment and capitalized software 26,612 21,564 Prepaids and other 2,092 2,639 Total deferred tax liabilities 155,976 33,771 Net deferred tax liabilities before valuation allowance 110,368 26,425 Valuation Allowance 301 217 Net deferred tax liabilities $ 110,669 $ 26,642 |
Schedule of unrecognized tax benefits | The following table presents the changes in uncertain tax position (in thousands). 2018 2017 2016 Uncertain tax position January 1 $ — $ 80 $ — Gross increase in tax positions in prior period 32 291 80 Gross decrease in tax positions in prior period (1 ) (160 ) — Gross increase in tax positions from acquisitions 1,162 — — Settlement — (211 ) — Lapse of statute of limitations (35 ) — — Uncertain tax position at December 31 $ 1,158 $ — $ 80 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($)operating_segmentgroup | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Mar. 31, 2019USD ($) | |
Property, Plant and Equipment [Line Items] | |||||
Highly liquid investments, maximum maturity term | 3 months | ||||
Other-than-temporary impairments | $ 0 | ||||
Certain short-term investments, term | 12 months | ||||
Impairment of intangible assets | $ 0 | $ 0 | |||
Impairment of goodwill | 0 | ||||
Impairment charge on long-lived assets | $ 0 | 0 | |||
Number of operating segments | operating_segment | 1 | ||||
Number of groups of similar products and related services | group | 1 | ||||
Reclassification from AOCI to retained earnings, tax effect | $ 100,000 | $ 102,000 | $ 0 | $ 0 | |
Minimum | Scenario, Forecast | Accounting Standards Update 2016-02 | |||||
Property, Plant and Equipment [Line Items] | |||||
Right-of-use asset | $ 34,000,000 | ||||
Operating lease, liability | 36,000,000 | ||||
Minimum | Scenario, Forecast | Accounting Standards Update 2016-02 | Retained Earnings | |||||
Property, Plant and Equipment [Line Items] | |||||
Effect on retained earnings | 500,000 | ||||
Minimum | Capitalized software | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful life | 3 years | ||||
Maximum | Scenario, Forecast | Accounting Standards Update 2016-02 | |||||
Property, Plant and Equipment [Line Items] | |||||
Right-of-use asset | 35,000,000 | ||||
Operating lease, liability | 37,000,000 | ||||
Maximum | Scenario, Forecast | Accounting Standards Update 2016-02 | Retained Earnings | |||||
Property, Plant and Equipment [Line Items] | |||||
Effect on retained earnings | $ 1,500,000 | ||||
Maximum | Capitalized software | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful life | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Concentrations of Credit Risk - Revenue (Details) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Credit Concentration Risk | Revenue | Client A | ||
Concentration Risk [Line Items] | ||
Concentration risk | 12.00% | 17.00% |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property, Equipment and Capitalized Software, Net (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Office and computer equipment | Minimum | |
Property, Equipment and Capitalized Software, net | |
Useful life | 3 years |
Office and computer equipment | Maximum | |
Property, Equipment and Capitalized Software, net | |
Useful life | 5 years |
Purchased software | |
Property, Equipment and Capitalized Software, net | |
Useful life | 5 years |
Capitalized software | Minimum | |
Property, Equipment and Capitalized Software, net | |
Useful life | 3 years |
Capitalized software | Maximum | |
Property, Equipment and Capitalized Software, net | |
Useful life | 5 years |
Furniture and fixtures | |
Property, Equipment and Capitalized Software, net | |
Useful life | 7 years |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Intangible Assets - Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Database | |
Intangible Assets | |
Useful life | 10 years |
Minimum | Proprietary software technologies | |
Intangible Assets | |
Useful life | 3 years |
Minimum | Trademark | |
Intangible Assets | |
Useful life | 3 years |
Minimum | Customer Relationships | |
Intangible Assets | |
Useful life | 8 years |
Maximum | Proprietary software technologies | |
Intangible Assets | |
Useful life | 13 years |
Maximum | Trademark | |
Intangible Assets | |
Useful life | 17 years |
Maximum | Customer Relationships | |
Intangible Assets | |
Useful life | 15 years 9 months |
BUSINESS COMBINATIONS - Additio
BUSINESS COMBINATIONS - Additional Information (Details) $ in Thousands | Apr. 02, 2018USD ($)facility | Jul. 06, 2017USD ($) | Oct. 03, 2016USD ($)shares | Sep. 30, 2017USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Business Acquisition [Line Items] | |||||||
Bargain purchase gain | $ 0 | $ 1,434 | $ 0 | ||||
ABILITY Network | |||||||
Business Acquisition [Line Items] | |||||||
Consideration transferred | $ 1,190,746 | ||||||
Number of provider facilities | facility | 44,000 | ||||||
Acquisition related costs | $ 6,500 | ||||||
Consideration paid in cash | $ 1,107,220 | ||||||
Cash and cash equivalents | 23,850 | ||||||
Purchase price | $ 1,220,800 | ||||||
ComplexCare Solutions, Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Consideration paid in cash | $ 4,500 | ||||||
Contingent consideration | 2,300 | ||||||
Assets acquired | 9,800 | ||||||
Cash and cash equivalents | 1,500 | ||||||
Liabilities assumed | 3,900 | ||||||
Bargain purchase gain | $ 1,400 | ||||||
Creehan Holding Co., Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Consideration transferred | $ 110,167 | ||||||
Acquisition related costs | $ 1,600 | ||||||
Consideration paid in cash | 89,803 | ||||||
Assets acquired | 112,983 | ||||||
Cash and cash equivalents | 861 | ||||||
Liabilities assumed | 2,816 | ||||||
Purchase price | 130,000 | ||||||
Payments to acquire businesses, gross before working capital adjustments | 120,000 | ||||||
Equity interests issued and issuable before working capital adjustments | $ 10,000 | ||||||
Issuance of Class A common stock (in shares) | shares | 651,355 | ||||||
Goodwill, adjustments | $ 400 |
BUSINESS COMBINATIONS - Stated
BUSINESS COMBINATIONS - Stated Purchase Price and Fair Value of the Purchase Price (Details) - USD ($) $ in Thousands | Apr. 02, 2018 | Oct. 03, 2016 |
ABILITY Network | ||
Business Acquisition [Line Items] | ||
Purchase Price | $ 1,220,800 | |
Working capital adjustment | (630) | |
Shareholder payable adjustment | 576 | |
Subtotal | 1,220,746 | |
Restricted stock marketability discount | (30,000) | |
Total fair value purchase price | $ 1,190,746 | |
Creehan Holding Co., Inc. | ||
Business Acquisition [Line Items] | ||
Purchase Price | $ 130,000 | |
Working capital adjustment | 755 | |
Subtotal | 130,755 | |
Restricted stock marketability discount | (2,236) | |
Contingent consideration probability of achievement adjustment | (12,400) | |
Post-acquisition compensation expense | (5,952) | |
Total fair value purchase price | $ 110,167 |
BUSINESS COMBINATIONS - Fair Va
BUSINESS COMBINATIONS - Fair Value of Consideration Transferred (Details) - USD ($) $ in Thousands | Apr. 02, 2018 | Oct. 03, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | |||||
Contingent consideration | $ (7,212) | $ 5,200 | $ (706) | ||
ABILITY Network | |||||
Business Acquisition [Line Items] | |||||
Cash | $ 1,107,220 | ||||
Issuance of Class A common stock | 70,000 | ||||
Contingent consideration | 14,156 | ||||
Working capital adjustment | (630) | ||||
Total fair value purchase price | $ 1,190,746 | ||||
Creehan Holding Co., Inc. | |||||
Business Acquisition [Line Items] | |||||
Cash | $ 89,803 | ||||
Issuance of Class A common stock | 7,764 | ||||
Contingent consideration | 12,600 | ||||
Total fair value purchase price | $ 110,167 |
BUSINESS COMBINATIONS - Purchas
BUSINESS COMBINATIONS - Purchase Price Allocation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2018 | Apr. 02, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Oct. 03, 2016 | |
Preliminary Recording of Assets Acquired and Liabilities Assumed | |||||||
Goodwill | $ 956,029 | $ 956,029 | $ 184,932 | $ 184,557 | |||
ABILITY Network | |||||||
Preliminary Recording of Assets Acquired and Liabilities Assumed | |||||||
Cash and cash equivalents | $ 23,850 | ||||||
Accounts receivable | 16,739 | ||||||
Income tax receivable | 551 | ||||||
Prepaid expenses and other current assets | 3,025 | ||||||
Property, equipment and capitalized software | 3,095 | ||||||
Intangible assets | 490,000 | ||||||
Other assets | 1,252 | ||||||
Accounts payable and accrued expenses | 6,863 | ||||||
Deferred revenue | 7,000 | ||||||
Other current liabilities | 507 | ||||||
Other liabilities | (5,291) | ||||||
Deferred tax liabilities | 99,202 | ||||||
Total consideration transferred | $ 1,190,746 | ||||||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustments [Abstract] | |||||||
Intangible assets | $ 23,000 | $ (23,000) | |||||
Goodwill | 1,600 | ||||||
Deferred tax liability | (5,000) | ||||||
Shareholder payable adjustment | 600 | ||||||
Creehan Holding Co., Inc. | |||||||
Preliminary Recording of Assets Acquired and Liabilities Assumed | |||||||
Cash and cash equivalents | $ 861 | ||||||
Accounts receivable | 9,048 | ||||||
Other current assets | 171 | ||||||
Property, equipment and capitalized software | 641 | ||||||
Intangible assets | 50,900 | ||||||
Goodwill | 51,362 | ||||||
Total assets acquired | 112,983 | ||||||
Current liabilities | (916) | ||||||
Deferred revenue | (1,900) | ||||||
Total liabilities assumed | (2,816) | ||||||
Net assets acquired | $ 110,167 | ||||||
Customer Relationships | ABILITY Network | |||||||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustments [Abstract] | |||||||
Deferred tax liability | $ (7,200) |
BUSINESS COMBINATIONS - Identif
BUSINESS COMBINATIONS - Identified Intangible Assets (Details) - USD ($) $ in Thousands | Apr. 02, 2018 | Oct. 03, 2016 | Sep. 30, 2018 | Dec. 31, 2018 |
ABILITY Network | ||||
Business Acquisition [Line Items] | ||||
Intangible asset adjustment | $ 23,000 | $ (23,000) | ||
Fair Value | $ 513,000 | 490,000 | ||
ABILITY Network | Customer Relationships | ||||
Business Acquisition [Line Items] | ||||
Estimated Useful Life | 13 years | |||
Intangible asset adjustment | (23,000) | |||
Fair Value | $ 408,000 | 385,000 | ||
ABILITY Network | Technology | ||||
Business Acquisition [Line Items] | ||||
Estimated Useful Life | 13 years | |||
Intangible asset adjustment | 0 | |||
Fair Value | $ 86,000 | 86,000 | ||
ABILITY Network | Trade Names | ||||
Business Acquisition [Line Items] | ||||
Estimated Useful Life | 17 years | |||
Intangible asset adjustment | 0 | |||
Fair Value | $ 19,000 | $ 19,000 | ||
Creehan Holding Co., Inc. | ||||
Business Acquisition [Line Items] | ||||
Fair Value | $ 50,900 | |||
Creehan Holding Co., Inc. | Customer Relationships | ||||
Business Acquisition [Line Items] | ||||
Estimated Useful Life | 8 years | |||
Fair Value | $ 36,500 | |||
Creehan Holding Co., Inc. | Technology | ||||
Business Acquisition [Line Items] | ||||
Estimated Useful Life | 4 years | |||
Fair Value | $ 8,800 | |||
Creehan Holding Co., Inc. | Trade Names | ||||
Business Acquisition [Line Items] | ||||
Estimated Useful Life | 4 years | |||
Fair Value | $ 4,000 | |||
Creehan Holding Co., Inc. | In-Process R&D | ||||
Business Acquisition [Line Items] | ||||
Fair Value | $ 1,600 |
BUSINESS COMBINATIONS - Results
BUSINESS COMBINATIONS - Results of Acquiree (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Dec. 31, 2016 | Dec. 31, 2018 | |
ABILITY Network | ||
Business Acquisition [Line Items] | ||
Revenue | $ 113,578 | |
Loss before taxes | $ (3,902) | |
Creehan Holding Co., Inc. | ||
Business Acquisition [Line Items] | ||
Revenue | $ 8,106 | |
Loss before taxes | $ (976) |
BUSINESS COMBINATIONS - Pro For
BUSINESS COMBINATIONS - Pro Forma Impact (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
ABILITY Network | |||
Pro Forma Impact of Acquisition | |||
Revenue | $ 565,040 | $ 589,197 | |
Loss before taxes | $ (56,016) | $ (5,554) | |
Creehan Holding Co., Inc. | |||
Pro Forma Impact of Acquisition | |||
Revenue | $ 453,613 | ||
Loss before taxes | $ 44,203 |
REVENUE - Additional Informatio
REVENUE - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2018 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue | $ 527,676 | $ 449,358 | $ 427,588 | |
Retained earnings | 270,471 | 308,905 | ||
Unbilled Receivables, Current | 20,500 | 14,100 | ||
Contract with Customer, Asset, Net | 5,700 | 0 | ||
Increase (Decrease) in Deferred Commissions | 4,900 | |||
Contract with Customer, Liability | 20,600 | 7,000 | ||
Deferred revenue | 6,674 | (4,360) | $ 3,907 | |
Contract with Customer, Liability, Revenue Recognized | 11,200 | |||
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member] | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue | 700 | |||
Retained earnings | $ 600 | |||
Sales Commissions and Fees | 400 | |||
ABILITY Network | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Increase (Decrease) in Contract with Customer, Asset | 2,300 | |||
Deferred revenue | 9,500 | |||
Platform Solutions [Member] | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue | 466,544 | 382,778 | ||
Services [Member] | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue | $ 61,132 | $ 66,580 |
REVENUE - Disaggregation of Rev
REVENUE - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue from Contract with Customer [Abstract] | |||
Disaggregation of Revenue [Table Text Block] | The Company primarily derives its revenues through the sale or subscription licensing of its platform solutions and services. The following table disaggregates revenue by offering (in thousands): Year Ended December 31, 2018 2017 (1) Platform solutions (2) $ 466,544 $ 382,778 Services (3) 61,132 66,580 Total revenue $ 527,676 $ 449,358 ______________________________________ (1) Prior period amounts have not been adjusted under the modified retrospective method. (2) Platform solutions include arrangements for technology-based offerings representing subscription-based cloud-based platform offerings and legacy platform solutions that are not cloud-based and not billed under a subscription-based contract structure. (3) Services include advisory, implementation, and support services under time and materials, fixed price, or retainer-based contracts. | ||
Revenue | $ 527,676 | $ 449,358 | $ 427,588 |
NET INCOME PER SHARE - General
NET INCOME PER SHARE - General Information (Details) | 12 Months Ended |
Dec. 31, 2018Vote | |
Class A Common | |
Common stock | |
Votes per share | 1 |
Class B Common | |
Common stock | |
Votes per share | 10 |
NET INCOME PER SHARE - Tabular
NET INCOME PER SHARE - Tabular Disclosure (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Basic | |||
Net (loss) income | $ (39,164) | $ 34,818 | $ 27,104 |
Undistributed earnings allocated to participating securities | 0 | (990) | (161) |
Net (loss) income attributable to common stockholders—basic | $ (39,164) | $ 33,828 | $ 26,943 |
Weighted average shares used in computing net income per share attributable to common stockholders - basic (in shares) | 145,389 | 142,225 | 150,048 |
Net income per share attributable to common stockholders - basic (in dollars per share) | $ (0.27) | $ 0.24 | $ 0.18 |
Diluted | |||
Net income attributable to common stockholders—diluted | $ (39,164) | $ 33,828 | $ 26,943 |
Weighted average shares used in computing net income per share attributable to common stockholders - basic (in shares) | 145,389 | 142,225 | 150,048 |
Effect of dilutive securities (in shares) | 0 | 512 | 907 |
Weighted average shares used in computing net income per share attributable to common stockholders - diluted (in shares) | 145,389 | 142,737 | 150,955 |
Net income per share attributable to common stockholders - diluted (in dollars per share) | $ (0.27) | $ 0.24 | $ 0.18 |
NET INCOME PER SHARE - Anti-dil
NET INCOME PER SHARE - Anti-dilutive Securities (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Equity awards | |||
NET INCOME PER SHARE | |||
Awards excluded from the computation of diluted net income per share because their inclusion would have been anti-dilutive (in shares) | 89 | 88 | 44 |
SHORT-TERM INVESTMENTS - Availa
SHORT-TERM INVESTMENTS - Available-for-sale Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 7,018 | $ 268,124 |
Gross Unrealized Gains | 0 | 3 |
Gross Unrealized Losses | (18) | (839) |
Estimated Fair Value | 7,000 | 267,288 |
Corporate notes and bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 7,018 | 232,048 |
Gross Unrealized Gains | 0 | 3 |
Gross Unrealized Losses | (18) | (572) |
Estimated Fair Value | $ 7,000 | 231,479 |
U.S. agency obligations | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 15,341 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (99) | |
Estimated Fair Value | 15,242 | |
U.S. treasury securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 20,735 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (168) | |
Estimated Fair Value | $ 20,567 |
SHORT-TERM INVESTMENTS - Estima
SHORT-TERM INVESTMENTS - Estimated Fair Value by Contractual Maturity Date (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Investments, Debt and Equity Securities [Abstract] | ||
Due in one year or less | $ 7,000 | $ 204,725 |
Due after one year through two years | 0 | 62,563 |
Total | $ 7,000 | $ 267,288 |
SHORT-TERM INVESTMENTS - Other-
SHORT-TERM INVESTMENTS - Other-than-temporary Impairments (Details) | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Investments, Debt and Equity Securities [Abstract] | |
Other-than-temporary impairments | $ 0 |
SHORT-TERM INVESTMENTS - Fair V
SHORT-TERM INVESTMENTS - Fair Values and Gross Unrealized Losses of Available-for-sale Securities in a Gross Loss Position (Details) - Corporate notes and bonds $ in Thousands | Dec. 31, 2018USD ($) |
Debt Securities, Available-for-sale [Line Items] | |
Estimated Fair Value | $ 7,000 |
Gross Unrealized Losses | $ (18) |
FAIR VALUE MEASUREMENTS - Fair
FAIR VALUE MEASUREMENTS - Fair Value Hierarchy (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Short-term investments: | ||
Short-term investments | $ 7,000 | $ 267,288 |
Corporate notes and bonds | ||
Short-term investments: | ||
Short-term investments | 7,000 | 231,479 |
U.S. agency obligations | ||
Short-term investments: | ||
Short-term investments | 15,242 | |
U.S. treasury securities | ||
Short-term investments: | ||
Short-term investments | 20,567 | |
Recurring | ||
Total | ||
Total | (689) | 422,235 |
Recurring | Contingent consideration | ||
Other liabilities: | ||
Contingent consideration | (7,400) | |
Recurring | Corporate notes and bonds | ||
Short-term investments: | ||
Short-term investments | 7,000 | 231,479 |
Recurring | U.S. agency obligations | ||
Short-term investments: | ||
Short-term investments | 15,242 | |
Recurring | U.S. treasury securities | ||
Short-term investments: | ||
Short-term investments | 20,567 | |
Recurring | Money market funds | ||
Cash equivalents: | ||
Cash equivalents | 34,064 | 162,347 |
Recurring | Level 1 | ||
Total | ||
Total | 34,064 | 162,347 |
Recurring | Level 1 | Contingent consideration | ||
Other liabilities: | ||
Contingent consideration | 0 | |
Recurring | Level 1 | Corporate notes and bonds | ||
Short-term investments: | ||
Short-term investments | 0 | 0 |
Recurring | Level 1 | U.S. agency obligations | ||
Short-term investments: | ||
Short-term investments | 0 | |
Recurring | Level 1 | U.S. treasury securities | ||
Short-term investments: | ||
Short-term investments | 0 | |
Recurring | Level 1 | Money market funds | ||
Cash equivalents: | ||
Cash equivalents | 34,064 | 162,347 |
Recurring | Level 2 | ||
Total | ||
Total | (2,929) | 267,288 |
Recurring | Level 2 | Contingent consideration | ||
Other liabilities: | ||
Contingent consideration | 0 | |
Recurring | Level 2 | Corporate notes and bonds | ||
Short-term investments: | ||
Short-term investments | 7,000 | 231,479 |
Recurring | Level 2 | U.S. agency obligations | ||
Short-term investments: | ||
Short-term investments | 15,242 | |
Recurring | Level 2 | U.S. treasury securities | ||
Short-term investments: | ||
Short-term investments | 20,567 | |
Recurring | Level 2 | Money market funds | ||
Cash equivalents: | ||
Cash equivalents | 0 | 0 |
Recurring | Level 3 | ||
Total | ||
Total | (31,824) | (7,400) |
Recurring | Level 3 | Contingent consideration | ||
Other liabilities: | ||
Contingent consideration | (7,400) | |
Recurring | Level 3 | Corporate notes and bonds | ||
Short-term investments: | ||
Short-term investments | 0 | 0 |
Recurring | Level 3 | U.S. agency obligations | ||
Short-term investments: | ||
Short-term investments | 0 | |
Recurring | Level 3 | U.S. treasury securities | ||
Short-term investments: | ||
Short-term investments | 0 | |
Recurring | Level 3 | Money market funds | ||
Cash equivalents: | ||
Cash equivalents | 0 | $ 0 |
Recurring | Other Current Liabilities | Contingent consideration | ||
Other liabilities: | ||
Contingent consideration | (15,182) | |
Recurring | Other Current Liabilities | Interest Rate Swap | ||
Other liabilities: | ||
Interest rate swaps | (1,778) | |
Recurring | Other Current Liabilities | Level 1 | Contingent consideration | ||
Other liabilities: | ||
Contingent consideration | 0 | |
Recurring | Other Current Liabilities | Level 1 | Interest Rate Swap | ||
Other liabilities: | ||
Interest rate swaps | 0 | |
Recurring | Other Current Liabilities | Level 2 | Contingent consideration | ||
Other liabilities: | ||
Contingent consideration | 0 | |
Recurring | Other Current Liabilities | Level 2 | Interest Rate Swap | ||
Other liabilities: | ||
Interest rate swaps | (1,778) | |
Recurring | Other Current Liabilities | Level 3 | Contingent consideration | ||
Other liabilities: | ||
Contingent consideration | (15,182) | |
Recurring | Other Current Liabilities | Level 3 | Interest Rate Swap | ||
Other liabilities: | ||
Interest rate swaps | 0 | |
Recurring | Other Liabilities | Contingent consideration | ||
Other liabilities: | ||
Contingent consideration | (16,642) | |
Recurring | Other Liabilities | Interest Rate Swap | ||
Other liabilities: | ||
Interest rate swaps | (8,151) | |
Recurring | Other Liabilities | Level 1 | Contingent consideration | ||
Other liabilities: | ||
Contingent consideration | 0 | |
Recurring | Other Liabilities | Level 1 | Interest Rate Swap | ||
Other liabilities: | ||
Interest rate swaps | 0 | |
Recurring | Other Liabilities | Level 2 | Contingent consideration | ||
Other liabilities: | ||
Contingent consideration | 0 | |
Recurring | Other Liabilities | Level 2 | Interest Rate Swap | ||
Other liabilities: | ||
Interest rate swaps | (8,151) | |
Recurring | Other Liabilities | Level 3 | Contingent consideration | ||
Other liabilities: | ||
Contingent consideration | (16,642) | |
Recurring | Other Liabilities | Level 3 | Interest Rate Swap | ||
Other liabilities: | ||
Interest rate swaps | $ 0 |
FAIR VALUE MEASUREMENTS - Unobs
FAIR VALUE MEASUREMENTS - Unobservable Inputs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value Measurements Using Unobservable Inputs (Level 3) | |||
Contingent consideration attributable to and assumed from ABILITY Acquisition | $ 7,212 | $ (5,200) | $ 706 |
Level 3 | |||
Fair Value Measurements Using Unobservable Inputs (Level 3) | |||
Balance, beginning of period | (7,400) | (12,600) | |
Fair value adjustment | (6,159) | 5,200 | |
Accretion expense (recognized in general and administrative expenses) | (1,053) | 0 | |
Balance, end of period | (31,824) | (7,400) | $ (12,600) |
Level 3 | General and administrative | |||
Fair Value Measurements Using Unobservable Inputs (Level 3) | |||
Fair value adjustment | 5,600 | ||
Level 3 | Goodwill | |||
Fair Value Measurements Using Unobservable Inputs (Level 3) | |||
Fair value adjustment | 600 | ||
Contingent Consideration Attributable to Acquisition | Level 3 | |||
Fair Value Measurements Using Unobservable Inputs (Level 3) | |||
Contingent consideration attributable to and assumed from ABILITY Acquisition | $ (17,212) | $ 0 |
FAIR VALUE MEASUREMENTS - Debt
FAIR VALUE MEASUREMENTS - Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value Disclosures [Abstract] | ||
Credit facilities | $ 949,314 | $ 236,250 |
Fair value | $ 922,021 |
FAIR VALUE MEASUREMENTS - Inter
FAIR VALUE MEASUREMENTS - Interest Rate Swaps Narrative (Details) | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Derivatives, Fair Value [Line Items] | |
Derivative Instruments, Gain (Loss) Reclassification from Accumulated OCI to Income, Estimate of Time to Transfer | 12 months |
Interest Rate Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months, Net | $ 1,900,000 |
Interest Rate Swap | |
Derivatives, Fair Value [Line Items] | |
Derivative, Amount of Hedged Item | $ 700,000,000 |
Derivative, Fixed Interest Rate | 2.80% |
FAIR VALUE MEASUREMENTS - Fai_2
FAIR VALUE MEASUREMENTS - Fair Value of Interest Rate Swaps (Details) - Interest Rate Swap $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Gain (Loss) recognized in OCI | $ (12,907) |
(Gain) Loss reclassified from OCI | 2,978 |
Other Current Liabilities | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Interest rate swap contract | (1,778) |
Other Liabilities | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Interest rate swap contract | $ (8,151) |
PROPERTY, EQUIPMENT AND CAPIT_3
PROPERTY, EQUIPMENT AND CAPITALIZED SOFTWARE - Tabular Information (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
PROPERTY, EQUIPMENT AND CAPITALIZED SOFTWARE | ||
Total | $ 290,207 | $ 242,341 |
Less: accumulated depreciation and amortization | (148,449) | (116,573) |
Property, equipment and capitalized software, net | 141,758 | 125,768 |
Office and computer equipment | ||
PROPERTY, EQUIPMENT AND CAPITALIZED SOFTWARE | ||
Total | 76,748 | 55,840 |
Leasehold improvements | ||
PROPERTY, EQUIPMENT AND CAPITALIZED SOFTWARE | ||
Total | 13,158 | 10,096 |
Purchased software | ||
PROPERTY, EQUIPMENT AND CAPITALIZED SOFTWARE | ||
Total | 45,304 | 26,425 |
Capitalized software | ||
PROPERTY, EQUIPMENT AND CAPITALIZED SOFTWARE | ||
Total | 128,356 | 114,569 |
Furniture and fixtures | ||
PROPERTY, EQUIPMENT AND CAPITALIZED SOFTWARE | ||
Total | 6,412 | 4,670 |
Land | ||
PROPERTY, EQUIPMENT AND CAPITALIZED SOFTWARE | ||
Total | 390 | 390 |
Building | ||
PROPERTY, EQUIPMENT AND CAPITALIZED SOFTWARE | ||
Total | 14,028 | 14,028 |
Work in process | ||
PROPERTY, EQUIPMENT AND CAPITALIZED SOFTWARE | ||
Total | $ 5,811 | $ 16,323 |
PROPERTY, EQUIPMENT AND CAPIT_4
PROPERTY, EQUIPMENT AND CAPITALIZED SOFTWARE - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
PROPERTY, EQUIPMENT AND CAPITALIZED SOFTWARE | |||
Property, equipment and capitalized software, net | $ 141,758 | $ 125,768 | |
Depreciation | 52,742 | 37,853 | $ 28,078 |
Amortization of capital leases | 1,400 | 300 | $ 100 |
Property, equipment and capitalized software, gross | 290,207 | 242,341 | |
Assets held under capital leases | |||
PROPERTY, EQUIPMENT AND CAPITALIZED SOFTWARE | |||
Property, equipment and capitalized software, net | 5,500 | 600 | |
Building | |||
PROPERTY, EQUIPMENT AND CAPITALIZED SOFTWARE | |||
Capital leases | 10,900 | 12,000 | |
Property, equipment and capitalized software, gross | 14,028 | 14,028 | |
Capitalized software and work in process | |||
PROPERTY, EQUIPMENT AND CAPITALIZED SOFTWARE | |||
Property, equipment and capitalized software, gross | $ 57,800 | $ 54,200 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Goodwill Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Summary of the activity related to the carrying value of goodwill | ||
Goodwill at beginning of period | $ 184,932 | $ 184,557 |
Goodwill at end of period | 956,029 | 184,932 |
Creehan Holding Co., Inc. | ||
Summary of the activity related to the carrying value of goodwill | ||
Goodwill adjustments in connection with the acquisition | $ 375 | |
ABILITY Network | ||
Summary of the activity related to the carrying value of goodwill | ||
Goodwill recorded in connection with the acquisition | $ 771,097 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Intangible Assets | ||
Gross | $ 636,307 | |
Accumulated Amortization | (100,964) | $ (56,981) |
Net | 535,343 | 89,326 |
Intangible assets, gross | 146,307 | |
Intangible assets, net | 89,326 | |
In-Process R&D | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible asset | 1,600 | |
Technology | ||
Intangible Assets | ||
Gross | 116,177 | 28,577 |
Accumulated Amortization | (28,882) | (20,313) |
Net | $ 87,295 | $ 8,264 |
Weighted Average Remaining Useful Life (years) | 11 years 8 months | 2 years 9 months 18 days |
Trademarks and trade names | ||
Intangible Assets | ||
Gross | $ 31,860 | $ 12,860 |
Accumulated Amortization | (6,415) | (3,580) |
Net | $ 25,445 | $ 9,280 |
Weighted Average Remaining Useful Life (years) | 13 years 5 months | 6 years 2 months |
Database | ||
Intangible Assets | ||
Gross | $ 6,500 | $ 6,500 |
Accumulated Amortization | (6,012) | (5,362) |
Net | $ 488 | $ 1,138 |
Weighted Average Remaining Useful Life (years) | 8 months | 1 year 9 months 18 days |
Customer Relationships | ||
Intangible Assets | ||
Gross | $ 480,950 | $ 95,950 |
Accumulated Amortization | (58,835) | (27,088) |
Net | $ 422,115 | $ 68,862 |
Weighted Average Remaining Useful Life (years) | 11 years 7 months | 7 years 4 months 18 days |
Non-compete agreements | ||
Intangible Assets | ||
Gross | $ 820 | $ 820 |
Accumulated Amortization | (820) | (638) |
Net | $ 0 | $ 182 |
Weighted Average Remaining Useful Life (years) | 0 months | 8 months 12 days |
In-Process R&D | ||
Intangible Assets | ||
Net | $ 1,600 | |
Weighted Average Remaining Useful Life (years) | 5 years |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization of intangibles | $ 43,983 | $ 15,236 | $ 9,206 |
GOODWILL AND INTANGIBLE ASSET_5
GOODWILL AND INTANGIBLE ASSETS - Future Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Estimated future amortization expense of intangible assets | ||
Net | $ 535,343 | $ 89,326 |
Excluding In-process R&D | ||
Estimated future amortization expense of intangible assets | ||
2,019 | 52,302 | |
2,020 | 50,821 | |
2,021 | 48,035 | |
2,022 | 48,035 | |
2,023 | 47,874 | |
Thereafter | 288,276 | |
Net | $ 535,343 |
DEBT - Additional Information (
DEBT - Additional Information (Details) - USD ($) | Apr. 02, 2018 | Dec. 31, 2018 | Dec. 31, 2018 |
Line of Credit Facility [Line Items] | |||
Proceeds from issuance of debt | $ 980,000,000 | ||
Gain (loss) on extinguishment of debt | $ (100,000) | ||
Line of Credit | London Interbank Offered Rate (LIBOR) | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 3.50% | ||
Line of Credit | Adjusted LIBOR | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 1.00% | ||
Morgan Stanley Senior Funding, Inc. | Revolving Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Debt issuance costs, net | 1,900,000 | ||
Amortization of debt issuance costs | 300,000 | ||
Morgan Stanley Senior Funding, Inc. | Secured Debt | |||
Line of Credit Facility [Line Items] | |||
Unamortized discount | 14,700,000 | ||
Debt issuance costs, net | 16,400,000 | ||
Amortization of debt discount | 1,400,000 | ||
Amortization of debt issuance costs | 1,500,000 | ||
Unsecured Debt | Goldman Sachs Bank USA | |||
Line of Credit Facility [Line Items] | |||
Face amount | $ 400,000,000 | 400,000,000 | |
Unsecured Debt | Goldman Sachs Bank USA | Unsecured Debt | |||
Line of Credit Facility [Line Items] | |||
Face amount | 300,000,000 | 300,000,000 | |
Unsecured Debt | Goldman Sachs Bank USA | Revolving Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Face amount | 100,000,000 | 100,000,000 | |
Secured Debt | Morgan Stanley Senior Funding, Inc. | |||
Line of Credit Facility [Line Items] | |||
Face amount | 980,000,000 | ||
Maximum borrowing capacity | 100,000,000 | 100,000,000 | |
Secured Debt | Morgan Stanley Senior Funding, Inc. | Revolving Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Face amount | $ 100,000,000 | $ 99,000,000 | 99,000,000 |
Secured Debt | Morgan Stanley Senior Funding, Inc. | Revolving Credit Facility | Minimum | |||
Line of Credit Facility [Line Items] | |||
Commitment fee percentage | 0.25% | ||
Secured Debt | Morgan Stanley Senior Funding, Inc. | Revolving Credit Facility | Maximum | |||
Line of Credit Facility [Line Items] | |||
Commitment fee percentage | 0.375% | ||
Secured Debt | Morgan Stanley Senior Funding, Inc. | Line of Credit | |||
Line of Credit Facility [Line Items] | |||
Face amount | $ 1,000,000 | $ 1,000,000 |
DEBT - Schedule of Debt Outstan
DEBT - Schedule of Debt Outstanding (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Total Credit Facilities | $ 949,314 | $ 236,250 |
Less: current portion | 9,800 | 45,000 |
Non-current Credit Facilities | 939,514 | 191,250 |
Deferred financing fees and discount | 28,236 | |
Morgan Stanley Senior Funding, Inc. | Secured Debt | ||
Debt Instrument [Line Items] | ||
Total Credit Facilities | 949,314 | 0 |
Deferred financing fees and discount | 28,200 | |
Goldman Sachs Bank USA | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Total Credit Facilities | $ 0 | $ 236,250 |
DEBT - Credit Facility Maturiti
DEBT - Credit Facility Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Disclosure [Abstract] | ||
2,019 | $ 9,800 | |
2,020 | 9,800 | |
2,021 | 9,800 | |
2,022 | 9,800 | |
2,023 | 9,800 | |
Thereafter | 928,550 | |
Total scheduled maturities | 977,550 | |
Unamortized deferred financing fees and OID | (28,236) | |
Total Credit Facilities | $ 949,314 | $ 236,250 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Future Non-cancellable Lease Payment Schedule (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Future non cancellable lease payments | |
2,018 | $ 11,250 |
2,019 | 7,059 |
2,020 | 5,898 |
2,021 | 5,303 |
2,022 | 3,821 |
Thereafter | 15,599 |
Total | $ 48,930 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Additional Information (Details) - USD ($) $ in Millions | Feb. 20, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Subsequent Event [Line Items] | ||||
Rent expense | $ 10.7 | $ 11.3 | $ 8.9 | |
Deferred Rent Credit and Incentive from Lessor | 3.8 | 2 | ||
Capital Lease Obligations | $ 16.8 | $ 12.4 | ||
Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Litigation Settlement, Amount Awarded to Other Party | $ 17 | |||
Gain (Loss) Related to Litigation Settlement | $ 1.7 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES - Capital Leases (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,018 | $ 3,509 |
2,019 | 2,567 |
2,020 | 2,017 |
2,021 | 1,181 |
2,022 | 1,275 |
Thereafter | 8,831 |
Total minimum lease payments | 19,380 |
Less amount representing interest | (2,548) |
Present value of minimum lease payments | $ 16,832 |
RESTRUCTURING EXPENSE Restruc_3
RESTRUCTURING EXPENSE Restructuring Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |||
Restructuring expense | $ 9,500 | $ 0 | $ 0 |
Capitalized Computer Software, Impairments | 6,400 | ||
Lease Termination Costs and Accelerated Depreciation Related to Leasehold Improvements | 1,300 | ||
Restructuring Reserve [Roll Forward] | |||
Restructuring Reserve | 589 | $ 0 | |
Severance Costs | 1,764 | ||
Accruals for Lease Termination | 1,405 | ||
Payments for Restructuring | (1,750) | ||
Lease Termination Accretion | $ (830) |
STOCK-BASED COMPENSATION - Addi
STOCK-BASED COMPENSATION - Additional Information (Details) - USD ($) | Feb. 18, 2015 | Nov. 30, 2014 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2009 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Exercises in period, intrinsic value | $ 1,200,000 | $ 4,200,000 | $ 7,700,000 | |||||
Stock-based compensation | $ 16,162,000 | $ 17,318,000 | 10,054,000 | |||||
Stock options | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of shares authorized (in shares) | 10,275,000 | |||||||
Purchase period | 10 years | |||||||
Expected dividend rate | 0.00% | |||||||
Unrecognized stock compensation | $ 600,000 | |||||||
Expected weighted-average recognition period for compensation expense | 6 months | |||||||
Restricted stock units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Expected weighted-average recognition period for compensation expense | 9 months 18 days | |||||||
Service period | 5 years | |||||||
Period following IPO required for satisfaction of liquidity condition | 6 months | |||||||
Stock-based compensation | $ 0 | |||||||
Vesting period | 5 years | |||||||
Granted (in dollars per share) | $ 10.35 | $ 13.70 | ||||||
Grant date fair value | $ 1,100,000 | $ 600,000 | ||||||
Vested in period, fair value | 1,100,000 | $ 1,300,000 | $ 1,500,000 | |||||
Unrecognized compensation cost | $ 1,700,000 | |||||||
Granted (in shares) | 101,454 | 0 | ||||||
Restricted stock awards | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Expected weighted-average recognition period for compensation expense | 3 years 4 months 24 days | |||||||
Granted (in dollars per share) | $ 11.12 | $ 12.64 | $ 13.81 | |||||
Grant date fair value | $ 28,600,000 | $ 33,500,000 | $ 36,900,000 | |||||
Vested in period, fair value | 8,600,000 | $ 9,300,000 | 3,000,000 | |||||
Unrecognized compensation cost | $ 52,600,000 | |||||||
Granted (in shares) | 2,571,839 | |||||||
Restricted stock awards | Minimum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Target performance term | 3 years | |||||||
Restricted stock awards | Maximum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Target performance term | 5 years | |||||||
Restricted stock awards | Employee | Minimum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting period | 2 years | |||||||
Restricted stock awards | Employee | Maximum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting period | 5 years | |||||||
Restricted stock awards | Directors | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting period | 1 year | |||||||
Performance Shares | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Granted (in shares) | 400,000 | |||||||
Employee Stock Purchase Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Purchase period | 6 months | |||||||
Stock-based compensation | $ 141,000 | $ 154,000 | $ 140,000 | |||||
Fair value of the company's stock taken for purchase price calculation | 85.00% | |||||||
Amount to be deducted from the payroll, minimum | 1.00% | |||||||
Amount to be deducted from the payroll, maximum | 15.00% | |||||||
Maximum amount of deduction from payroll | $ 7,500 | |||||||
Employee Stock Purchase Plan | Class A Common | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Shares reserved for future issuance (in shares) | 1,833,857 | |||||||
Omnibus Incentive Plan 2015 | Class A Common | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Shares reserved for future issuance (in shares) | 7,335,430 |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock Option Activity (Details) - Stock options - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Number of Shares Outstanding | ||
Beginning balance (in shares) | 1,313,310 | |
Stock options granted (in shares) | 0 | |
Stock options exercised (in shares) | (258,921) | |
Stock options cancelled (in shares) | (197,305) | |
Ending balance (in shares) | 857,084 | 1,313,310 |
Exercisable (in shares) | 701,742 | |
Vested and expected to vest (in shares) | 857,084 | |
Weighted-Average Exercise Price | ||
Beginning balance (in dollars per share) | $ 7.47 | |
Stock options granted (in dollars per share) | 0 | |
Stock options exercised (in dollars per share) | 7.01 | |
Stock options cancelled (in dollars per share) | 7.36 | |
Ending balance (in dollars per share) | 7.63 | $ 7.47 |
Exercisable (in dollars per share) | 7.63 | |
Vested and expected to vest (in dollars per share) | $ 7.63 | |
Stock option activity | ||
Weighted- Average Grant-date Fair Value of Underlying Common Stock | $ 0 | |
Balance, Weighted-Average Remaining Contractual Life | 4 years 3 months 18 days | 5 years 4 months 24 days |
Exercisable, Weighted-Average Remaining Contractual Life | 4 years 1 month 6 days | |
Vested and expected to vest, Weighted-Average Remaining Contractual Life | 4 years 3 months 18 days | |
Balance, Aggregate Intrinsic Value | $ 5,616,000 | $ 9,895,000 |
Exercisable, Aggregate Intrinsic Value | 4,600,000 | |
Vested and expected to vest, Aggregate Intrinsic Value | $ 5,616,000 |
STOCK-BASED COMPENSATION - Rest
STOCK-BASED COMPENSATION - Restricted Stock Unit Activity (Details) - Restricted stock units - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Number of RSUs | |||
Granted and unvested (in shares) | 220,938 | ||
Granted (in shares) | 101,454 | 0 | |
Vested (in shares) | (95,690) | ||
Forfeited (in shares) | (34,834) | ||
Granted and unvested (in shares) | 191,868 | 220,938 | |
Weighted Average Fair Value Per Unit | |||
Granted and unvested (in dollars per share) | $ 19.94 | ||
Granted (in dollars per share) | 10.35 | $ 13.70 | |
Vested (in dollars per share) | 19.14 | ||
Forfeited (in dollars per share) | 21.50 | ||
Granted and unvested (in dollars per share) | $ 14.98 | $ 19.94 |
STOCK-BASED COMPENSATION - Re_2
STOCK-BASED COMPENSATION - Restricted Stock Award Activity (Details) - Restricted stock awards - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Number of RSAs | |||
Granted and unvested (in shares) | 4,601,632 | ||
Granted (in shares) | 2,571,839 | ||
Vested (in shares) | (758,277) | ||
Forfeited (in shares) | (1,475,775) | ||
Granted and unvested (in shares) | 4,939,419 | 4,601,632 | |
Weighted Average Fair Value Per Unit | |||
Granted and unvested (in dollars per share) | $ 13.43 | ||
Granted (in dollars per share) | 11.12 | $ 12.64 | $ 13.81 |
Vested (in dollars per share) | 13.57 | ||
Forfeited (in dollars per share) | 12.87 | ||
Granted and unvested (in dollars per share) | $ 12.37 | $ 13.43 |
STOCK-BASED COMPENSATION - Empl
STOCK-BASED COMPENSATION - Employee Stock Purchase Plan (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Employee Stock Purchase Plan | |||
Stock-based compensation | $ 16,162 | $ 17,318 | $ 10,054 |
Employee Stock Purchase Plan | |||
Employee Stock Purchase Plan | |||
Shares purchased (in shares) | 90,084 | 49,247 | 61,184 |
Shares issued (in shares) | 90,084 | 49,247 | 61,184 |
Discounted price (in dollars per share) | $ 9.74 | $ 11.08 | $ 14.03 |
Stock-based compensation | $ 141 | $ 154 | $ 140 |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
EMPLOYEE BENEFIT PLANS | |||
Eligibility term | 30 days | ||
Employer's match percentage of employees deferrals | 4.00% | ||
Matching contributions | $ 6.3 | $ 5.2 | $ 5.2 |
STOCKHOLDERS' EQUITY (DEFICIT)
STOCKHOLDERS' EQUITY (DEFICIT) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Nov. 02, 2016 | May 04, 2016 | |
Equity, Class of Treasury Stock [Line Items] | |||||
Amount of shares repurchased | $ 93,586 | $ 106,231 | |||
Class A Common | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Share repurchase authorized amount (in shares) | $ 200,000 | $ 100,000 | |||
Amount of additional shares authorized | $ 100,000 | ||||
Number of shares repurchased (in shares) | 7,111,190 | 7,508,985 | |||
Amount of shares repurchased | $ 93,600 | $ 106,200 | |||
Average cost of shares repurchased (in dollars per shares) | $ 13.16 | $ 14.15 |
INCOME TAXES - Provision for In
INCOME TAXES - Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current: | |||
Federal1 | $ (2,113) | $ 2,272 | $ 7,747 |
State | 215 | 2,162 | 5,788 |
Total current (benefit) provision | (1,898) | 4,434 | 13,535 |
Deferred: | |||
Federal | (8,009) | (8,333) | (1,533) |
State | (4,486) | 1,668 | (207) |
Total deferred benefit | (12,495) | (6,665) | (1,740) |
Total (benefit from) provision for income taxes | $ (14,393) | $ (2,231) | $ 11,795 |
INCOME TAXES - Provision for _2
INCOME TAXES - Provision for Income Taxes Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income tax expense reconciliation (percent) | |||
Expected federal income tax | 21.00% | 35.00% | 35.00% |
State income taxes, net of federal income tax effect | 8.00% | 8.00% | 7.40% |
State income taxes, net of federal income tax effect | 1.10% | 0.30% | (0.90%) |
Research and development tax credits | 1.60% | (2.60%) | (1.90%) |
Excess tax benefits and stock-based compensation | (1.00%) | (0.70%) | (3.00%) |
Acquisition-related tax adjustments | (2.10%) | (1.40%) | (4.30%) |
Other | (1.70%) | 2.00% | (2.00%) |
Income tax expense | 26.90% | (6.80%) | 30.30% |
Income tax expense reconciliation | |||
Expected federal income tax | $ (11,247) | $ 11,406 | $ 13,650 |
State income taxes, net of federal income tax effect | (4,270) | 2,606 | 2,859 |
Permanent items | (614) | 88 | (357) |
Research and development tax credits | (850) | (850) | (756) |
Excess tax benefits and stock-based compensation | 559 | (243) | (1,165) |
Acquisition-related tax adjustments | 1,144 | (445) | (1,686) |
Other | 885 | 668 | (750) |
Total (benefit from) provision for income taxes | $ (14,393) | $ (2,231) | $ 11,795 |
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Percent | 0.00% | (47.40%) | 0.00% |
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount | $ 0 | $ (15,461) | $ 0 |
INCOME TAXES - Components of De
INCOME TAXES - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 17,258 | $ 2,654 |
Interest expense carryforwards | 11,278 | 0 |
Accrued expenses and reserves | 4,571 | 313 |
Stock-based compensation | 3,553 | 3,040 |
Unrealized gains and losses in other comprehensive income | 3,200 | 257 |
Tax credit carryforwards | 3,114 | 217 |
Deferred rent | 1,263 | 581 |
Other | 1,371 | 284 |
Total deferred tax assets | 45,608 | 7,346 |
Deferred tax liabilities: | ||
Intangibles | 127,272 | 9,568 |
Property, equipment and capitalized software | 26,612 | 21,564 |
Prepaids and other | 2,092 | 2,639 |
Total deferred tax liabilities | 155,976 | 33,771 |
Net deferred tax liabilities before valuation allowance | 110,368 | 26,425 |
Valuation Allowance | 301 | 217 |
Net deferred tax liabilities | $ 110,669 | $ 26,642 |
INCOME TAXES - Uncertain Tax Po
INCOME TAXES - Uncertain Tax Position (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Beginning balance | $ 0 | $ 80 | $ 0 |
Gross increase in tax positions in prior period | 32 | 291 | 80 |
Gross decrease in tax positions in prior period | (1) | (160) | 0 |
Gross increase in tax positions from acquisitions | 1,162 | 0 | 0 |
Settlement | 0 | (211) | 0 |
Lapse of statute of limitations | (35) | 0 | 0 |
Ending balance | $ 1,158 | $ 0 | $ 80 |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Net Operating Losses Carryforwards (NOLs) | |||
Provisional income tax benefit | $ 15.5 | ||
Unrecognized tax benefits, period increase (decrease) | $ 1.2 | $ (0.1) | $ (0.1) |
Federal | |||
Net Operating Losses Carryforwards (NOLs) | |||
Net operating loss carryforwards | 10.7 | ||
Tax Credit Carryforward, Amount | 3.1 | ||
State and Local Jurisdiction [Member] | |||
Net Operating Losses Carryforwards (NOLs) | |||
Net operating loss carryforwards | 8.3 | ||
Tax Credit Carryforward, Amount | $ 0.5 |
Schedule II - Valuation and Q_2
Schedule II - Valuation and Qualifying Accounts and Reserves (Details) - Accounts Receivable - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Movement in Valuation Allowances and Reserves | |||
Balance at beginning of year | $ 2,038 | $ 3,782 | $ 1,022 |
Additions Charged Against Revenue | 3,039 | 8,886 | 3,792 |
Additions Charged to Cost and Expense | 3,520 | 0 | 0 |
Deductions | (5,247) | (10,630) | (1,032) |
Balance at end of year | $ 3,350 | $ 2,038 | $ 3,782 |