ý | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 13-3861628 | |
(State of Incorporation) | (I.R.S. Employer Identification Number) |
Title of Each Class | Name of Each Exchange on Which Registered | |
Common Stock, par value $0.001 per share | The NASDAQ Stock Market LLC |
Large accelerated filer o | Accelerated filer ý | Non-accelerated filer o | Smaller reporting company o |
Page | ||
PART I | ||
Item 1. | Business | |
Item 1A. | Risk Factors | |
Item 1B. | Unresolved Staff Comments | |
Item 2. | Properties | |
Item 3. | Legal Proceedings | |
Item 4. | Mine Safety Disclosures | |
PART II | ||
Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | |
Item 6. | Selected Consolidated Financial Data | |
Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | |
Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | |
Item 8. | Consolidated Financial Statements and Supplementary Data | |
Item 9. | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure | |
Item 9A. | Controls and Procedures | |
Item 9B. | Other Information | |
PART III | ||
Item 10. | Directors, Executive Officers and Corporate Governance | |
Item 11. | Executive Compensation | |
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | |
Item 13. | Certain Relationships and Related Transactions, and Director Independence | |
Item 14. | Principal Accountant Fees and Services | |
PART IV | ||
Item 15. | Exhibits and Financial Statement Schedules | |
Item 16. | Form 10-K Summary |
• | increase consumer satisfaction, improve the overall digital experience, and enhance retention and loyalty, while reducing customer service costs; |
• | lower operating costs in the contact center by deflecting costly phone and email interactions and improving agent efficiency; |
• | increase mobile app retention and engagement by providing a connected messaging experience and turning an app into an engaging support app; |
• | maintain a valued connection with consumers via mobile devices, either through native applications, websites, text messages, or third-party messaging platforms. |
• | accelerate sales cycles, increase conversion rates, increase average order value and reduce abandonment by intelligently engaging website visitors; |
• | leverage spending that drives visitor traffic by increasing visitor conversions; |
• | refine and improve performance by understanding which initiatives deliver the highest rate of return; and |
• | increase lead generation by providing a single messaging platform that engages consumers through advertisements and listings on branded and third-party websites. |
• | technology or service providers offering or powering competing digital engagement, contact center, communications or customer relationship management solutions such as, eGain, Genesys, Oracle, Salesforce.com, TouchCommerce (now part of Nuance) and Twilio; |
• | service providers that offer basic messaging products or services with limited functionality free of charge or at significantly reduced entry level prices; |
• | social media, social listening, messaging, artificial intelligence, bots, e-commerce, and/or data and data analytics companies, such as Facebook, Google, and WeChat, which may leverage their existing or future capabilities and consumer relationships to offer competing B2B solutions; |
• | customers that develop and manage their messaging solutions in-house; and |
• | companies that provide cross-category and vertical-specific advice, such as About.com, UpWork and Yahoo Answers. |
• | We support our customers through a secure, scalable server infrastructure. In North America, our primary servers are hosted in a fully-secured, top-tier, third-party server center located in the Mid-Atlantic United States, and are supported by a top-tier backup server facility located in the Western United States. In Europe, our primary servers are hosted in a fully-secured, top-tier, third-party server center located in the United Kingdom and are supported by a top-tier backup server facility located in The Netherlands. In the Asia Pacific region, our primary and backup servers are hosted in fully-secured, top-tier, third-party server centers located in Australia. Nearly all of our larger customers outside of the United States are hosted within our UK- and Australia-based facilities. By managing our servers directly, we maintain greater flexibility and control over the production environment allowing us to be responsive to customer needs and to continue to provide a superior level of service. Utilizing advanced network infrastructure and protocols, our network, hardware and software are designed to accommodate our customers’ demand for secure, high-quality 24/7 service, including during peak times such as the holiday shopping season. |
• | As a hosted service, we are able to add additional capacity and new features quickly and efficiently. This has enabled us to provide these benefits simultaneously to our entire customer base. In addition, it allows us to maintain a relatively short development and implementation cycle. |
• | As a SaaS provider, we focus on the development of tightly integrated software design and network architecture. We dedicate significant resources to designing our software and network architecture based on the fundamental principles of security, reliability and scalability. |
• | our ability to attract and retain new customers; |
• | our ability to retain and increase sales to existing customers; |
• | our customers’ demand for our services and business success; |
• | consumer demand for our services; |
• | the introduction of new services by us or our competitors; |
• | changes in our pricing models or policies or the pricing policies of our current and future competitors; |
• | continued adoption by companies of mobile and cloud-based messaging solutions; |
• | continued adoption by experts and consumers of web-based advice services; |
• | our ability to avoid and/or manage service interruptions, disruptions, or security incidents; |
• | exposure to foreign currency exchange rate fluctuations; and |
• | the amount and timing of capital expenditures and other costs related to operation and expansion of our business, including those related to acquisitions. |
• | economic conditions specific to the Internet, electronic commerce and cloud computing; and |
• | general, regional and/or global economic and political conditions. |
• | technology or service providers offering or powering competing digital engagement, contact center, communications or customer relationship management solutions, such as eGain, Genesys, Oracle, Salesforce.com,TouchCommerce (now part of Nuance) and Twilio; |
• | service providers that offer basic messaging products or services with limited functionality free of charge or at significantly reduced entry level prices ; |
• | social media, social listening, messaging, artificial intelligence, bots, e-commerce, and/or data and data analytics companies, such as Facebook, Google and WeChat, which may leverage their existing or future capabilities and consumer relationships to offer competing solutions; |
• | customers that develop and manage and their messaging solutions in-house; and |
• | companies that provide cross-category and vertical-specific advice, such as About.com, UpWork and Yahoo Answers. |
• | potential failure to achieve the expected benefits of the combination or acquisition; |
• | inability to generate sufficient revenue to offset acquisition or investment cost; |
• | difficulties in integrating operations, technologies, products and personnel; |
• | diversion of financial and management resources from efforts related to existing operations; |
• | risks of entering new markets in which we have little or no experience or where competitors may have stronger market positions; |
• | potential loss of our existing key employees or key employees of the company we acquire; |
• | inability to maintain relationships with customers and partners of the acquired business |
• | use of alternative investment or compensation structures; |
• | potential unknown liabilities associated with the acquired businesses; and |
• | the tax effects of any such acquisitions. |
• | varied, unfamiliar, unclear and changing legal and regulatory restrictions, including different legal and regulatory standards applicable to Internet services, communications, privacy, and data protection; |
• | difficulties in staffing and managing foreign operations; |
• | differing intellectual property laws that may not provide sufficient protection for our intellectual property; |
• | adverse tax consequences or additional tax liabilities; |
• | difficulty in addressing country-specific business requirements and regulations; |
• | fluctuations in currency exchange rates; |
• | strains on financial and other systems to properly administer VAT and other taxes; |
• | different consumer preferences and requirements in specific international markets; and |
• | international legal, compliance, political, regulatory or systemic restrictions, or other international governmental scrutiny, applicable to United States companies with sales and operations in foreign countries, including, but not limited to, possible compliance issues involving the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act, and similar laws in other jurisdictions. |
• | any issued patent or patents issued in the future may not be broad enough to protect our intellectual property rights; |
• | any issued patent or any patents issued in the future could be successfully challenged by one or more third parties, which could result in our loss of the right to prevent others from exploiting the inventions claimed in the patents; |
• | current and future competitors may independently develop similar technologies, duplicate our services or design around any patents we may have; and |
• | effective intellectual property protection may not be available in every country in which we do business, where our services are sold or used, where the laws may not protect proprietary rights as fully as do the laws of the United States or where enforcement of laws protecting proprietary rights is not common or effective. |
• | damage to our reputation; |
• | lost sales; |
• | delays in or loss of market acceptance of our products; and |
• | unexpected expenses and diversion of resources to remedy errors. |
• | enhance the features and performance of our services; |
• | develop and offer new services that are valuable to companies doing business online as well as Internet users; and |
• | respond to technological advances and emerging industry and regulatory standards and practices in a cost-effective and timely manner. |
• | concerns about transaction security or security problems such as “viruses” and “worms” or hackers; |
• | concerns about cybersecurity attacks or the security of confidential information online; |
• | continued growth in the number of users; |
• | continued development of the necessary technological infrastructure; |
• | development of enabling technologies; |
• | uncertain and increasing government regulation; and |
• | the development of complementary services and products. |
• | quarterly variations in our operating results or those of our competitors; |
• | earnings announcements that are not in line with analyst expectations; |
• | changes in recommendations or financial estimates by securities analysts; |
• | announcements or rumors about mergers or strategic acquisitions by us or by our competitors; |
• | announcements about customer additions and cancellations or failure to complete significant sales; |
• | changes in market valuations of companies that investors believe are comparable to us; |
• | additions or departures of key personnel; and |
• | general economic, political and market conditions, such as recessions, political unrest or terrorist attacks, or in the specific locations where we operate, such as the United States, Israel and the United Kingdom. |
• | Our board of directors is divided into three classes, with each class serving three-year staggered terms, which prevents stockholders from electing an entirely new board of directors at any annual meeting. |
• | Vacancies on our board of directors may only be filled by a vote of a majority of directors then in office, even if less than a quorum. |
• | Our amended and restated certificate of incorporation prohibits cumulative voting in the election of directors or any other matters. This limits the ability of minority stockholders to elect director candidates. |
• | Our stockholders may only act at a duly called annual or special meeting and may not act by written consent. |
• | Stockholders must provide advance notice to nominate individuals for election to our board of directors or to propose other matters that can be acted upon at a stockholders’ meeting. |
• | We require super-majority voting by stockholders to amend certain provisions in our amended and restated certificate of incorporation and to amend our amended and restated bylaws. |
• | Our amended and restated bylaws expressly authorize a super-majority of the board of directors to amend our amended and restated bylaws. |
High | Low | ||||||
Year ended December 31, 2016: | |||||||
First Quarter | $ | 6.82 | $ | 4.10 | |||
Second Quarter | $ | 7.20 | $ | 5.69 | |||
Third Quarter | $ | 8.50 | $ | 6.26 | |||
Fourth Quarter | $ | 8.65 | $ | 7.45 | |||
Year ended December 31, 2015: | |||||||
First Quarter | $ | 13.66 | $ | 10.24 | |||
Second Quarter | $ | 10.49 | $ | 8.53 | |||
Third Quarter | $ | 10.16 | $ | 7.56 | |||
Fourth Quarter | $ | 8.24 | $ | 6.75 |
Period | Total Number of Shares Purchased (1) (2) | Average Price Paid per Share (1) (2) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) (2) | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) (2) (3) | ||||||||||
$ | 14,329,958 | |||||||||||||
10/1/2016 - 10/31/2016 | — | $ | — | — | 14,329,958 | |||||||||
11/1/2016 - 11/30/2016 | — | — | — | 14,329,958 | ||||||||||
12/1/2016 - 12/31/2016 | 491,000 | 8.53 | 491,000 | 20,136,441 | ||||||||||
Total | 491,000 | $ | 8.53 | 491,000 | $ | 20,136,441 |
(1) | On December 10, 2012, the Company announced that its Board of Directors approved a stock repurchase program through June 30, 2014. Under the stock repurchase program, the Company was authorized to repurchase shares of the Company's common stock, in the open market or privately negotiated transactions, at times and prices considered appropriate by the Board of Directors depending upon prevailing market conditions and other corporate considerations. |
(2) | As of June 30, 2014, approximately $1.1 million remained available for purchases under the program as in effect at that time. On July 23, 2014, the Company's Board of Directors extended the expiration date of the program out to December 31, 2014 and also increased the aggregate purchase price of the stock repurchase program from $40.0 million to $50.0 million. On March 5, 2015, the Company's Board of Directors extended the expiration date of the program out to December 31, 2016. As of December 31, 2015, approximately $6.1 million remained available for purchases under the program. On February 16, 2016, the Company's Board of Directors increased the aggregate purchase price of the stock repurchase program by an additional $14.0 million. On November 21, 2016, the Company's Board of Directors increased the aggregate purchase price of the stock repurchase program from $64.0 million to $74.0 million and extended the expiration date of the program out to December 31, 2017. |
(3) | Transaction fees related to the share purchases are deducted from the total remaining allowable expenditure amount. |
(1) | The graph covers the period from December 31, 2011 to December 31, 2016. |
(2) | The graph assumes that $100 was invested at the market close on December 31, 2011 in LivePerson’s Common Stock, in the Standard & Poor’s SmallCap 600 Index and in the Standard & Poor’s Information Technology Index, and that all dividends were reinvested. No cash dividends have been declared on LivePerson’s Common Stock. |
(3) | Stockholder returns over the indicated period should not be considered indicative of future stockholder returns. |
Year Ended December 31, | |||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||
(In Thousands, Except Share and per Share Data) | |||||||||||||||||||
Consolidated Statement of Operations Data: | |||||||||||||||||||
Revenue | $ | 222,779 | $ | 239,012 | $ | 209,931 | $ | 177,805 | $ | 157,409 | |||||||||
Costs and expenses: | |||||||||||||||||||
Cost of revenue | 63,161 | 70,310 | 52,703 | 42,555 | 35,579 | ||||||||||||||
Sales and marketing | 89,529 | 94,728 | 83,253 | 62,488 | 49,614 | ||||||||||||||
General and administrative | 43,046 | 37,171 | 40,192 | 39,968 | 31,606 | ||||||||||||||
Product development | 40,198 | 38,974 | 37,329 | 36,397 | 30,051 | ||||||||||||||
Restructuring costs | 2,369 | 3,384 | — | — | — | ||||||||||||||
Amortization of purchased intangibles | 3,885 | 4,873 | 1,621 | 871 | 218 | ||||||||||||||
Total costs and expenses | 242,188 | 249,440 | 215,098 | 182,279 | 147,068 | ||||||||||||||
(Loss) income from operations | (19,409 | ) | (10,428 | ) | (5,167 | ) | (4,474 | ) | 10,341 | ||||||||||
Other (expense) income | (530 | ) | (202 | ) | (322 | ) | 337 | 376 | |||||||||||
(Loss) income before provision for (benefit from) income taxes | (19,939 | ) | (10,630 | ) | (5,489 | ) | (4,137 | ) | 10,717 | ||||||||||
Provision for (benefit from) income taxes | 5,934 | 15,814 | 1,859 | (638 | ) | 4,362 | |||||||||||||
Net (loss) income | $ | (25,873 | ) | $ | (26,444 | ) | $ | (7,348 | ) | $ | (3,499 | ) | $ | 6,355 | |||||
Net (loss) income per share of common stock: | |||||||||||||||||||
Basic | $ | (0.46 | ) | $ | (0.47 | ) | $ | (0.13 | ) | $ | (0.06 | ) | $ | 0.11 | |||||
Diluted | $ | (0.46 | ) | $ | (0.47 | ) | $ | (0.13 | ) | $ | (0.06 | ) | $ | 0.11 | |||||
Weighted-average shares used to compute net (loss) income per share: | |||||||||||||||||||
Basic | 56,063,777 | 56,452,408 | 54,478,754 | 54,725,236 | 55,292,597 | ||||||||||||||
Diluted | 56,063,777 | 56,452,408 | 54,478,754 | 54,725,236 | 57,131,041 | ||||||||||||||
Other Financial and Operational Data: | |||||||||||||||||||
Adjusted EBITDA (1) | $ | 19,198 | $ | 21,244 | $ | 22,672 | $ | 18,767 | $ | 29,999 | |||||||||
Adjusted net (loss) income (2) | $ | (7,688 | ) | $ | 8,927 | $ | 5,068 | $ | 9,278 | $ | 14,084 |
Year Ended December 31, | |||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||
Cost of revenue | $ | 429 | $ | 1,396 | $ | 1,492 | $ | 1,954 | $ | 1,579 | |||||||||
Sales and marketing | 2,515 | 3,088 | 3,399 | 2,851 | 2,878 | ||||||||||||||
General and administrative | 3,304 | 3,692 | 3,809 | 4,148 | 3,294 | ||||||||||||||
Product development | 3,488 | 3,638 | 3,606 | 3,555 | 2,964 | ||||||||||||||
Total stock-based compensation | $ | 9,736 | $ | 11,814 | $ | 12,306 | $ | 12,508 | $ | 10,715 |
As of December 31, | |||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||
(In Thousands) | |||||||||||||||||||
Consolidated Balance Sheet Data: | |||||||||||||||||||
Cash and cash equivalents | $ | 50,889 | $ | 48,803 | $ | 49,372 | $ | 91,906 | $ | 103,339 | |||||||||
Working capital | 17,468 | 39,122 | 34,954 | 88,877 | 100,593 | ||||||||||||||
Total assets | 219,638 | 226,194 | 239,817 | 205,090 | 208,576 | ||||||||||||||
Total stockholders’ equity | 138,476 | 165,305 | 180,337 | 159,053 | 170,243 |
• | although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; |
• | adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; |
• | adjusted EBITDA does not consider the potentially dilutive impact of equity-based compensation; |
• | adjusted EBITDA does not consider the impact of acquisition costs; |
• | adjusted EBITDA does not consider the impact of restructuring costs; |
• | adjusted EBITDA does not consider the impact of other non-recurring costs; |
• | adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us; and |
• | other companies, including companies in our industry, may calculate adjusted EBITDA differently, which reduces its usefulness as a comparative measure. |
Year Ended December 31, | |||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||
Reconciliation of Adjusted EBITDA: | |||||||||||||||||||
Net (loss) income | $ | (25,873 | ) | $ | (26,444 | ) | $ | (7,348 | ) | $ | (3,499 | ) | $ | 6,355 | |||||
Amortization of purchased intangibles | 6,673 | 8,040 | 5,090 | 2,643 | 580 | ||||||||||||||
Stock-based compensation | 9,736 | 11,814 | 12,306 | 12,508 | 10,715 | ||||||||||||||
Contingent earn-out adjustments | — | (3,680 | ) | — | — | — | |||||||||||||
Restructuring costs | 2,369 | (1) | 3,384 | (2) | — | — | — | ||||||||||||
Depreciation | 12,011 | 12,114 | 9,071 | 8,090 | 7,329 | ||||||||||||||
Other non-recurring costs | 7,818 | (3) | — | — | — | — | |||||||||||||
Provision for (benefit from) income taxes | 5,934 | 15,814 | 1,859 | (638 | ) | 4,362 | |||||||||||||
Acquisition costs | — | — | 1,372 | — | 1,034 | ||||||||||||||
Other expense (income), net | 530 | 202 | 322 | (337 | ) | (376 | ) | ||||||||||||
Adjusted EBITDA | $ | 19,198 | $ | 21,244 | $ | 22,672 | $ | 18,767 | $ | 29,999 |
• | although amortization are non-cash charges, the assets being amortized may have to be replaced in the future, and adjusted net income does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; |
• | adjusted net income does not consider the potentially dilutive impact of equity-based compensation; |
• | adjusted net income does not consider the impact of acquisition costs; |
• | adjusted net income does not consider the impact of restructuring costs; |
• | adjusted net income does not consider the impact of other non-recurring costs; |
• | adjusted net income does not consider the potentially dilutive impact of deferred tax asset valuation allowance; and |
• | other companies, including companies in our industry, may calculate adjusted net income differently, which reduces its usefulness as a comparative measure. |
Year Ended December 31, | ||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | ||||||||||||||||
Reconciliation of Adjusted Net (Loss) Income | ||||||||||||||||||||
Net (loss) income | $ | (25,873 | ) | $ | (26,444 | ) | $ | (7,348 | ) | $ | (3,499 | ) | $ | 6,355 | ||||||
Amortization of purchased intangibles | 6,673 | 8,040 | 5,090 | 2,643 | 580 | |||||||||||||||
Stock-based compensation | 9,736 | 11,814 | 12,306 | 12,508 | 10,715 | |||||||||||||||
Contingent earn-out adjustments | — | (3,680 | ) | — | — | — | ||||||||||||||
Deferred tax asset valuation allowance | 692 | 15,820 | ||||||||||||||||||
Restructuring costs | 2,369 | (1) | 3,384 | (2) | — | — | — | |||||||||||||
Other non-recurring costs | 8,134 | (4) | — | — | — | — | ||||||||||||||
Acquisition costs | — | — | 1,372 | — | 1,034 | |||||||||||||||
Income tax effect of non-GAAP items | (9,419 | ) | (5) | (7 | ) | (6) | (6,352 | ) | (6) | (2,374 | ) | (6) | (4,600 | ) | (6) | |||||
Adjusted net (loss) income | $ | (7,688 | ) | $ | 8,927 | $ | 5,068 | $ | 9,278 | $ | 14,084 |
• | Strengthening Our Position in both Existing and New Markets and Growing Our Recurring Revenue Base. LivePerson plans to continue to develop its market position by increasing its customer base, and expanding within its installed base. We will continue to focus primarily on key target markets: automotive, financial services, retail, technology, telecommunications, and travel/hospitality within both our enterprise and midmarket sectors, as well as the small business (SMB) sector. Healthcare, insurance, real estate and energy utilities are new target industries and natural extensions of our primary target markets. We plan to leverage our new LiveEngage platform to replace a portion of calls traditionally made to 1-800 numbers with text and mobile messaging, and to increase adoption of intelligent business campaigns across our customer's online properties that target consumers with real-time messaging. We intend to collaborate with our large installed customer base to optimize the value and effectiveness that brands derive from our services. We are also focused on strengthening our recurring revenue stream by signing larger, long-term, and more strategic deals which empower brands to run business campaigns on their websites that engage consumers via messaging |
• | Fuel Increased Usage by Expanding our Engagement Tools and Offering Platform Pricing. In 2011, we began expanding on our market leading real-time chat messaging product by adding new technologies that augment digital consumer engagement, including targeted content delivery and transcript analytics. In 2014, we introduced LiveEngage, whereby we seamlessly integrated into a single platform an expanded suite of mobile and online business messaging technologies, including traditional desktop chat messaging, mobile chat messaging, content delivery, analytics, cobrowse, PCI, customer sentiment, and mobile messaging via in-app, SMS, browser-based search and Facebook Messenger. LiveEngage delivers rich, contextually aware targeting and personalized experiences across mobile and desktop devices. We also began offering a new platform pricing model, which provides brands access to our entire suite of messaging technologies across their entire agent pool for a pre-negotiated cost per interaction. We believe this model is more attractive and will lead to increased usage versus our historic approach of requiring brands to negotiate each agent seat and product license separately. In late 2016, we began launching product programs designed to promote usage of our broader suite of capabilities for targeted customers. |
• | Leverage Partners to Enhance our Offering. In addition to developing our own applications, we continue to cultivate a partner eco-system capable of offering additional applications and services to our customers. For example, in 2015 we integrated LiveEngage with one of the leading consumer messaging platforms and in 2016 we integrated LiveEngage with one of the leading mobile search ad extensions. We have also integrated LiveEngage with several artificial intelligence/bots vendors. In addition, we have opened up access to our platform and our products with application programming interfaces (APIs) that allow third parties to develop on top of our platform. Customers and partners can utilize these APIs to build our capabilities into their own applications and to enhance our applications with their services. |
• | Maintaining Market Leadership in Technology and Security Expertise. As described above, we are devoting significant resources to creating new products and enabling technologies designed to accelerate innovation and delivery of new products and technologies to our customer base. We evaluate emerging technologies and industry standards and continually update our technology in order to retain our leadership position in each market we serve. We monitor legal and technological developments in the area of information security and confidentiality to ensure our policies and procedures meet or exceed the demands of the world’s largest and most demanding corporations. We believe that these efforts will allow us to effectively anticipate changing customer and consumer requirements in our rapidly evolving industry. |
• | International Presence. LivePerson is focused on expanding its international revenue contribution, which increased to 34% of total revenue in 2016, from 33% in 2015, despite approximately $3.5 million of adverse foreign currency exchange impact. LivePerson generated positive results from previous investments in direct sales and services personnel in the United Kingdom and Western Europe. We also continued to focus on expanding our presence in the Asia Pacific region, leveraging our relationships with partners such as NTT Solco, a subsidiary of telecom firm NTT Docomo and Information Services International-Dentsu, Ltd. (ISID). |
• | Continuing to Build Brand Recognition. As a pioneer of brand-to-consumer digital messaging, LivePerson enjoys strong brand recognition and credibility. Our focus on creating meaningful connections among employees, with our customers, and between brands and their consumers, is a key component of our culture and our market strategy. We strategically target decision makers and influencers within key vertical markets, leveraging customer successes to generate increased awareness and demand for brand-to-consumer messaging. In addition, we continue to develop relationships with the media, industry analysts and relevant business associations to enhance awareness of our leadership within the industry. Our brand name is also visible to both business users and consumers. When a consumer messages a customer care professional on a brand’s website, our brand name is usually displayed on the dialog messaging window. We believe that this high-visibility placement will continue to create brand awareness for our solutions. |
• | Increasing the Value of Our Service to Our Customers. We believe the introduction of LiveEngage marks the most important product launch in our history, as it empowers brands to deploy messaging at scale for customer care and sales, instead of demanding that consumers use email or call a 1-800 number. Furthermore, our platform strategy makes available the full suite of LivePerson’s capabilities through a single solution. In addition, the open architecture of LiveEngage will enable LivePerson to rapidly add new capabilities either directly or through partners. For example, we see opportunities for additional efficiencies in the contact center through the integration of artificial intelligence and bots. Because we directly manage the server infrastructure, we can make new features available to our customers immediately upon release, without customer or end-user installation of software or hardware. Our strategy is to continue to enhance the LiveEngage messaging platform and to leverage the substantial amount of mobile and online consumer data we collect, with the aim of increasing agent efficiency, decreasing customer care costs, improving the customer experience and increasing customer lifetime value. |
• | Evaluating Strategic Alliances and Acquisitions When Appropriate. We have successfully integrated several acquisitions over the past decade. While we have in the past, and may from time to time in the future, engage in discussions regarding acquisitions or strategic transactions or to acquire other companies that can accelerate our growth or broaden our product offerings, we currently have no binding commitments with respect to any future acquisitions or strategic transactions. |
• | Revenue decreased 5% and 7% to $56.1 million and $222.8 million in the three and twelve months ended December 31, 2016, respectively, from $59.2 million and $239.0 million in the comparable periods in 2015. |
• | Revenue from our Business segment decreased 6% and 8% to $51.9 million and $206.5 million in the three and twelve months ended December 31, 2016, respectively, from $55.2 million and $223.8 million in the comparable periods in 2015. |
• | Gross profit margin increased to 73% and 72% in the three and twelve months ended December 31, 2016 from 70% and 71% in the comparable periods in 2015. |
• | Cost and expenses increased 4% and decreased 3% to $64.4 million and $242.2 million in the three and twelve months ended December 31, 2016, respectively, from $61.6 million and $249.4 million in the comparable periods in 2015. |
• | Net loss decreased to $9.6 million and $25.9 million in the three and twelve months ended December 31, 2016, respectively, from net loss of $20.9 million and $26.4 million for the three and twelve months ended December 31, 2015, respectively. |
• | Trailing-twelve-month average revenue per enterprise and mid-market customer was greater than $200,000 in 2016, as compared to $197,000 in 2015. The trailing-twelve-month revenue figures are pro forma to exclude contributions from a previously disclosed customer contract that ended in the second quarter of 2015. |
• | Customer renewal rate for enterprise and mid-market customers was 83% and 84% over the trailing twelve months ended December 31, 2016 and 2015, respectively. |
• | compensation costs relating to employees who provide customer support and implementation services to our customers; |
• | outside labor provider costs; |
• | compensation costs relating to our network support staff; |
• | depreciation of certain hardware and software; |
• | allocated occupancy costs and related overhead; |
• | the cost of supporting our infrastructure, including expenses related to server leases, infrastructure support costs and Internet connectivity; |
• | the credit card fees and related payment processing costs associated with the consumer and SMB services; and |
• | amortization of certain intangibles. |
2016 | 2015 | 2014 | ||||||||||
Stock-based compensation expense | $ | 9,736 | $ | 11,814 | $ | 12,306 |
Year Ended December 31, | ||||||||
2016 | 2015 | 2014 | ||||||
(as a percentage of revenue) | ||||||||
Consolidated Statements of Operations Data: (1) | ||||||||
Revenue | 100 | % | 100 | % | 100 | % | ||
Costs and expenses: | ||||||||
Cost of revenue | 28 | % | 29 | % | 25 | % | ||
Sales and marketing | 40 | % | 40 | % | 40 | % | ||
General and administrative | 19 | % | 16 | % | 19 | % | ||
Product development | 18 | % | 16 | % | 18 | % | ||
Restructuring costs | 1 | % | 1 | % | — | % | ||
Amortization of purchased intangibles | 2 | % | 2 | % | 1 | % | ||
Total costs and expenses | 109 | % | 104 | % | 102 | % | ||
Loss from operations | (9 | )% | (4 | )% | (2 | )% | ||
Other (expense) income, net | — | % | — | % | — | % | ||
Loss before provision for income taxes | (9 | )% | (4 | )% | (3 | )% | ||
Provision for income taxes | 3 | % | 7 | % | 1 | % | ||
Net loss | (12 | )% | (11 | )% | (4 | )% | ||
(1) Certain items may not total due to rounding. |
Year Ended December 31, | Year Ended December 31, | ||||||||||||||||||||
2016 | 2015 | % Change | 2015 | 2014 | % Change | ||||||||||||||||
(in thousands) | (in thousands) | ||||||||||||||||||||
Revenue by Segment: | |||||||||||||||||||||
Business | $ | 206,521 | $ | 223,803 | (8 | )% | $ | 223,803 | $ | 193,302 | 16 | % | |||||||||
Consumer | 16,258 | 15,209 | 7 | % | 15,209 | 16,629 | (9 | )% | |||||||||||||
Total | $ | 222,779 | $ | 239,012 | (7 | )% | $ | 239,012 | $ | 209,931 | 14 | % |
Year Ended December 31, | Year Ended December 31, | ||||||||||||||||||||
2016 | 2015 | % Change | 2015 | 2014 | % Change | ||||||||||||||||
($ in thousands) | ($ in thousands) | ||||||||||||||||||||
Cost of revenue - Business | $ | 60,352 | $ | 67,901 | (11 | )% | $ | 67,901 | $ | 50,192 | 35 | % | |||||||||
Percentage of total revenue | 27 | % | 28 | % | 28 | % | 24 | % | |||||||||||||
Headcount (at period end) | 236 | 286 | (17 | )% | 286 | 301 | (5 | )% | |||||||||||||
Year Ended December 31, | Year Ended December 31, | ||||||||||||||||||||
2016 | 2015 | % Change | 2015 | 2014 | % Change | ||||||||||||||||
($ in thousands) | ($ in thousands) | ||||||||||||||||||||
Cost of revenue - Consumer | $ | 2,809 | $ | 2,409 | 17 | % | $ | 2,409 | $ | 2,511 | (4 | )% | |||||||||
Percentage of total revenue | 1 | % | 1 | % | 1 | % | 1 | % | |||||||||||||
Headcount (at period end) | 16 | 17 | (6 | )% | 17 | 16 | 6 | % |
Year Ended December 31, | Year Ended December 31, | ||||||||||||||||||||
2016 | 2015 | % Change | 2015 | 2014 | % Change | ||||||||||||||||
($ in thousands) | ($ in thousands) | ||||||||||||||||||||
Sales and Marketing - Business | $ | 82,063 | $ | 87,975 | (7 | )% | $ | 87,975 | $ | 77,118 | 14 | % | |||||||||
Percentage of total revenue | 37 | % | 37 | % | 37 | % | 37 | % | |||||||||||||
Headcount (at period end) | 310 | 324 | (4 | )% | 324 | 355 | (9 | )% |
Year Ended December 31, | Year Ended December 31, | ||||||||||||||||||||
2016 | 2015 | % Change | 2015 | 2014 | % Change | ||||||||||||||||
($ in thousands) | ($ in thousands) | ||||||||||||||||||||
Sales and Marketing - Consumer | $ | 7,466 | $ | 6,753 | 11 | % | $ | 6,753 | $ | 6,135 | 10 | % | |||||||||
Percentage of total revenue | 3 | % | 3 | % | 3 | % | 3 | % | |||||||||||||
Headcount (at period end) | 11 | 9 | 22 | % | 9 | 8 | 13 | % |
Year Ended December 31, | Year Ended December 31, | ||||||||||||||||||||
2016 | 2015 | % Change | 2015 | 2014 | % Change | ||||||||||||||||
($ in thousands) | ($ in thousands) | ||||||||||||||||||||
General and administrative | $ | 43,046 | $ | 37,171 | 16 | % | $ | 37,171 | $ | 40,192 | (8 | )% | |||||||||
Percentage of total revenue | 19 | % | 16 | % | 16 | % | 19 | % | |||||||||||||
Headcount (at period end) | 112 | 115 | (3 | )% | 115 | 125 | (8 | )% | |||||||||||||
Year Ended December 31, | Year Ended December 31, | ||||||||||||||||||||
2016 | 2015 | % Change | 2015 | 2014 | % Change | ||||||||||||||||
($ in thousands) | ($ in thousands) | ||||||||||||||||||||
Product development | $ | 40,198 | $ | 38,974 | 3 | % | $ | 38,974 | $ | 37,329 | 4 | % | |||||||||
Percentage of total revenue | 18 | % | 16 | % | 16 | % | 18 | % | |||||||||||||
Headcount (at period end) | 300 | 253 | 19 | % | 253 | 253 | — | % | |||||||||||||
Year Ended December 31, | Year Ended December 31, | ||||||||||||||||||||
2016 | 2015 | % Change | 2015 | 2014 | % Change | ||||||||||||||||
($ in thousands) | ($ in thousands) | ||||||||||||||||||||
Restructuring Costs | $ | 2,369 | $ | 3,384 | (30 | )% | $ | 3,384 | $ | — | 100 | % | |||||||||
Percentage of total revenue | 1 | % | 1 | % | 1 | % | — | % |
Year Ended December 31, | Year Ended December 31, | ||||||||||||||||||||
2016 | 2015 | % Change | 2015 | 2014 | % Change | ||||||||||||||||
($ in thousands) | ($ in thousands) | ||||||||||||||||||||
Amortization of purchased intangibles | $ | 3,885 | $ | 4,873 | (20 | )% | $ | 4,873 | $ | 1,621 | 201 | % | |||||||||
Percentage of total revenue | 2 | % | 2 | % | 2 | % | 1 | % |
Year Ended December 31, | Year Ended December 31, | ||||||||||||||||||||
2016 | 2015 | % Change | 2015 | 2014 | % Change | ||||||||||||||||
($ in thousands) | ($ in thousands) | ||||||||||||||||||||
Other (expense) income, net | $ | (530 | ) | $ | (202 | ) | 162 | % | $ | (202 | ) | $ | (322 | ) | (37 | )% |
Year Ended December 31, | Year Ended December 31, | ||||||||||||||||||||
2016 | 2015 | % Change | 2015 | 2014 | % Change | ||||||||||||||||
($ in thousands) | ($ in thousands) | ||||||||||||||||||||
Provision for income taxes | $ | 5,934 | $ | 15,814 | (62 | )% | $ | 15,814 | $ | 1,859 | 751 | % |
For the Three Months Ended | |||||||||||||||||||||||||||||||
Dec. 31, 2016 | Sept. 30, 2016 | June 30, 2016 | March 31, 2016 | Dec. 31, 2015 | Sept. 30, 2015 | June 30, 2015 | March 31, 2015 | ||||||||||||||||||||||||
(in thousands, except share and per share data) | |||||||||||||||||||||||||||||||
Consolidated Statements of Operations Data: | |||||||||||||||||||||||||||||||
Revenue | $ | 56,118 | $ | 54,518 | $ | 56,679 | $ | 55,464 | $ | 59,151 | $ | 60,757 | $ | 59,334 | $ | 59,770 | |||||||||||||||
Costs and Expenses: | |||||||||||||||||||||||||||||||
Cost of revenue | 14,952 | 14,837 | 17,508 | 15,864 | 17,779 | 18,225 | (1) | 18,052 | (1) | 16,254 | |||||||||||||||||||||
Sales and marketing | 21,698 | 22,067 | 23,088 | 22,676 | 22,766 | 23,286 | 24,382 | 24,294 | |||||||||||||||||||||||
General and administrative | 13,287 | 10,069 | 10,161 | 9,529 | 10,014 | 6,587 | (1) | 10,306 | (1) | 10,164 | |||||||||||||||||||||
Product development | 10,770 | 9,495 | 10,719 | 9,214 | 9,498 | 9,567 | 10,109 | 9,800 | |||||||||||||||||||||||
Restructuring costs | 2,753 | (384 | ) | — | — | 396 | — | 2,988 | — | ||||||||||||||||||||||
Amortization of purchased intangibles | 931 | 1,013 | 1,017 | 924 | 1,189 | 1,193 | 1,178 | 1,313 | |||||||||||||||||||||||
Total costs and expenses | 64,391 | 57,097 | 62,493 | 58,207 | 61,642 | 58,858 | 67,015 | 61,825 | |||||||||||||||||||||||
(Loss) income from operations | (8,273 | ) | (2,579 | ) | (5,814 | ) | (2,743 | ) | (2,491 | ) | 1,899 | (7,681 | ) | (2,055 | ) | ||||||||||||||||
Other income (expense) income | (395 | ) | (123 | ) | (646 | ) | 634 | 169 | (369 | ) | 229 | (231 | ) | ||||||||||||||||||
(Loss) income before provision for (benefit from) income taxes | (8,668 | ) | (2,702 | ) | (6,460 | ) | (2,109 | ) | (2,322 | ) | 1,530 | (7,452 | ) | (2,286 | ) | ||||||||||||||||
Provision for (benefit from) income taxes | 897 | 3,177 | 1,306 | 554 | 18,535 | (395 | ) | (2,098 | ) | (228 | ) | ||||||||||||||||||||
Net (loss) income | $ | (9,565 | ) | $ | (5,879 | ) | $ | (7,766 | ) | $ | (2,663 | ) | $ | (20,857 | ) | $ | 1,925 | $ | (5,354 | ) | $ | (2,058 | ) | ||||||||
Net (loss) income per share of common stock: | |||||||||||||||||||||||||||||||
Basic | (0.17 | ) | (0.10 | ) | (0.14 | ) | (0.05 | ) | (0.37 | ) | 0.03 | (0.09 | ) | (0.04 | ) | ||||||||||||||||
Diluted | (0.17 | ) | (0.10 | ) | (0.14 | ) | (0.05 | ) | (0.37 | ) | 0.03 | (0.09 | ) | (0.04 | ) | ||||||||||||||||
Weighted-average shares used to compute net (loss) income per share | |||||||||||||||||||||||||||||||
Basic | 55,861,872 | 56,047,645 | 55,965,525 | 56,386,003 | 56,497,544 | 56,525,647 | 56,491,989 | 56,291,383 | |||||||||||||||||||||||
Diluted | 55,861,872 | 56,047,645 | 55,965,525 | 56,386,003 | 56,497,544 | 57,084,437 | 56,491,989 | 56,291,383 |
December 31, | |||||||
2016 | 2015 | ||||||
(in thousands) | |||||||
Consolidated Statements of Cash Flows Data: | |||||||
Cash flows provided by operating activities | $ | 24,560 | $ | 21,831 | |||
Cash flows used in investing activities | (11,452 | ) | (18,539 | ) | |||
Cash flows used in financing activities | (7,068 | ) | (1,887 | ) |
Payments Due by Period | |||||||||||||||||||
Contractual Obligations | Total | Less Than 1 Year | 1 – 3 Years | 3 – 5 Years | More Than 5 Years | ||||||||||||||
Operating leases | $ | 28,574 | $ | 8,889 | $ | 13,953 | $ | 2,914 | $ | 2,818 | |||||||||
Total | $ | 28,574 | $ | 8,889 | $ | 13,953 | $ | 2,914 | $ | 2,818 |
Page | |
Report of BDO USA, LLP, Independent Registered Public Accounting Firm | |
Consolidated Balance Sheets as of December 31, 2016 and 2015 | |
Consolidated Statements of Operations for each of the years ended December 31, 2016, 2015 and 2014 | |
Consolidated Statements of Comprehensive Loss for each of the years ended December 31, 2016, 2015 and 2014 | |
Consolidated Statements of Stockholders’ Equity for each of the years ended December 31, 2016, 2015 and 2014 | |
Consolidated Statements of Cash Flows for each of the years ended December 31, 2016, 2015 and 2014 | |
Notes to Consolidated Financial Statements |
December 31, | |||||||
2016 | 2015 | ||||||
ASSETS | |||||||
CURRENT ASSETS: | |||||||
Cash and cash equivalents | $ | 50,889 | $ | 48,803 | |||
Cash held as collateral | 3,962 | 5,409 | |||||
Accounts receivable, net of allowance for doubtful accounts of $1,732 and $1,184, in 2016 and 2015, respectively | 31,823 | 30,388 | |||||
Prepaid expenses and other current assets | 5,477 | 9,327 | |||||
Deferred tax assets, net | — | 455 | |||||
Total current assets | 92,151 | 94,382 | |||||
Property and equipment, net | 28,397 | 24,129 | |||||
Intangibles, net | 16,510 | 24,619 | |||||
Goodwill | 80,245 | 80,322 | |||||
Deferred tax assets, net | 773 | 785 | |||||
Other assets | 1,562 | 1,957 | |||||
Total assets | $ | 219,638 | $ | 226,194 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
CURRENT LIABILITIES: | |||||||
Accounts payable | $ | 7,288 | $ | 7,102 | |||
Accrued expenses and other current liabilities | 40,250 | 34,296 | |||||
Deferred revenue | 27,145 | 13,862 | |||||
Total current liabilities | 74,683 | 55,260 | |||||
Other liabilities | 3,147 | 3,270 | |||||
Deferred tax liability | 3,332 | 2,359 | |||||
Total liabilities | 81,162 | 60,889 | |||||
Commitments and contingencies (See Note 10) | |||||||
STOCKHOLDERS' EQUITY: | |||||||
Common stock | 58 | 57 | |||||
Additional paid-in capital | 289,524 | 286,856 | |||||
Treasury stock | (2 | ) | (1 | ) | |||
Accumulated deficit | (144,944 | ) | (119,071 | ) | |||
Accumulated other comprehensive loss | (6,160 | ) | (2,536 | ) | |||
Total stockholders’ equity | 138,476 | 165,305 | |||||
Total liabilities and stockholders’ equity | $ | 219,638 | $ | 226,194 |
Year Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Revenue | $ | 222,779 | $ | 239,012 | $ | 209,931 | |||||
Costs and expenses:(1) (2) (3) | |||||||||||
Cost of revenue | 63,161 | 70,310 | 52,703 | ||||||||
Sales and marketing | 89,529 | 94,728 | 83,253 | ||||||||
General and administrative | 43,046 | 37,171 | 40,192 | ||||||||
Product development | 40,198 | 38,974 | 37,329 | ||||||||
Restructuring costs | 2,369 | 3,384 | — | ||||||||
Amortization of purchased intangibles | 3,885 | 4,873 | 1,621 | ||||||||
Total costs and expenses | 242,188 | 249,440 | 215,098 | ||||||||
Loss from operations | (19,409 | ) | (10,428 | ) | (5,167 | ) | |||||
Other (expense) income, net | (530 | ) | (202 | ) | (322 | ) | |||||
Loss before provision for income taxes | (19,939 | ) | (10,630 | ) | (5,489 | ) | |||||
Provision for income taxes | 5,934 | 15,814 | 1,859 | ||||||||
Net loss | $ | (25,873 | ) | $ | (26,444 | ) | $ | (7,348 | ) | ||
Net loss per share of common stock: | |||||||||||
Basic | $ | (0.46 | ) | $ | (0.47 | ) | $ | (0.13 | ) | ||
Diluted | $ | (0.46 | ) | $ | (0.47 | ) | $ | (0.13 | ) | ||
Weighted-average shares used to compute net loss income per share: | |||||||||||
Basic | 56,063,777 | 56,452,408 | 54,478,754 | ||||||||
Diluted | 56,063,777 | 56,452,408 | 54,478,754 | ||||||||
(1) Amounts include stock compensation expense, as follows: | |||||||||||
Cost of revenue | $ | 429 | $ | 1,396 | $ | 1,492 | |||||
Sales and marketing | 2,515 | 3,088 | 3,399 | ||||||||
General and administrative | 3,304 | 3,692 | 3,809 | ||||||||
Product development | 3,488 | 3,638 | 3,606 | ||||||||
(2) Amounts include depreciation expense, as follows: | |||||||||||
Cost of revenue | $ | 8,234 | $ | 9,091 | $ | 6,658 | |||||
Sales and marketing | 1,315 | 1,232 | 871 | ||||||||
General and administrative | 1,418 | 893 | 820 | ||||||||
Product development | 1,044 | 898 | 722 | ||||||||
(3) Amounts include amortization of purchased intangibles, as follows: | |||||||||||
Cost of revenue | $ | 2,788 | $ | 3,167 | $ | 3,469 |
Year Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Net loss | $ | (25,873 | ) | $ | (26,444 | ) | $ | (7,348 | ) | ||
Foreign currency translation adjustment | (3,624 | ) | (1,398 | ) | (795 | ) | |||||
Comprehensive loss | $ | (29,497 | ) | $ | (27,842 | ) | $ | (8,143 | ) |
Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | |||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Total | |||||||||||||||||||||||||
Balance at December 31, 2013 | 54,484,760 | $ | 54 | — | $ | — | $ | 244,621 | $ | (85,279 | ) | $ | (343 | ) | $ | 159,053 | |||||||||||||
Issuance of common stock in connection with CAO! acquisition | 1,627,753 | 2 | — | — | 20,121 | — | — | 20,123 | |||||||||||||||||||||
Common stock issued upon exercise of stock options | 1,097,543 | 1 | — | — | 7,882 | — | — | 7,883 | |||||||||||||||||||||
Stock-based compensation | — | — | — | — | 12,306 | — | — | 12,306 | |||||||||||||||||||||
Common stock issued under Employee Stock Purchase Plan | 142,064 | 1 | — | — | 1,430 | — | — | 1,431 | |||||||||||||||||||||
Common stock repurchase | (650,789 | ) | (1 | ) | (544,396 | ) | (1 | ) | (12,978 | ) | — | — | (12,980 | ) | |||||||||||||||
Tax benefit from exercise of employee stock options | — | — | — | — | 664 | — | — | 664 | |||||||||||||||||||||
Net loss | — | — | — | — | — | (7,348 | ) | — | (7,348 | ) | |||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | — | (795 | ) | (795 | ) | |||||||||||||||||||
Balance at December 31, 2014 | 56,701,331 | 57 | (544,396 | ) | (1 | ) | 274,046 | (92,627 | ) | (1,138 | ) | 180,337 | |||||||||||||||||
Common stock issued upon exercise of stock options | 645,531 | — | — | — | 2,904 | — | — | 2,904 | |||||||||||||||||||||
Stock-based compensation | — | — | — | — | 11,814 | — | — | 11,814 | |||||||||||||||||||||
Common stock issued under Employee Stock Purchase Plan | 170,857 | — | — | — | 1,497 | — | — | 1,497 | |||||||||||||||||||||
Common stock repurchase | (142,812 | ) | — | (277,360 | ) | — | (4,202 | ) | — | — | (4,202 | ) | |||||||||||||||||
Tax benefit from exercise of employee stock options | — | — | — | — | 797 | — | — | 797 | |||||||||||||||||||||
Net loss | — | — | — | — | — | (26,444 | ) | — | (26,444 | ) | |||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | — | (1,398 | ) | (1,398 | ) | |||||||||||||||||||
Balance at December 31, 2015 | 57,374,907 | 57 | (821,756 | ) | (1 | ) | 286,856 | (119,071 | ) | (2,536 | ) | 165,305 | |||||||||||||||||
Common stock issued upon exercise of stock options | 324,502 | — | — | — | 1,806 | — | — | 1,806 | |||||||||||||||||||||
Common stock issued upon vesting of restricted stock units | 393,504 | 1 | — | — | — | — | — | 1 | |||||||||||||||||||||
Stock-based compensation | — | — | — | — | 9,736 | — | — | 9,736 | |||||||||||||||||||||
Common stock issued under Employee Stock Purchase Plan | 183,534 | — | — | — | 1,092 | — | — | 1,092 | |||||||||||||||||||||
Common stock repurchase | — | — | (1,518,349 | ) | (1 | ) | (9,966 | ) | — | — | (9,967 | ) | |||||||||||||||||
Net loss | — | — | — | — | — | (25,873 | ) | — | (25,873 | ) | |||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | — | (3,624 | ) | (3,624 | ) | |||||||||||||||||||
Balance at December 31, 2016 | 58,276,447 | $ | 58 | (2,340,105 | ) | $ | (2 | ) | $ | 289,524 | $ | (144,944 | ) | $ | (6,160 | ) | $ | 138,476 |
Year Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
OPERATING ACTIVITIES: | |||||||||||
Net loss | $ | (25,873 | ) | $ | (26,444 | ) | $ | (7,348 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||
Stock-based compensation expense | 9,736 | 11,814 | 12,306 | ||||||||
Depreciation | 12,011 | 12,114 | 9,071 | ||||||||
Impairment on investments | 2,600 | — | — | ||||||||
Amortization of tenant allowance | (180 | ) | — | — | |||||||
Amortization of purchased intangibles | 6,673 | 8,040 | 5,090 | ||||||||
Change in fair value of contingent consideration | — | (3,680 | ) | — | |||||||
Provision for doubtful accounts, net | 1,831 | 2,361 | 1,843 | ||||||||
Deferred income taxes | 1,852 | 14,456 | (1,736 | ) | |||||||
Changes in operating assets and liabilities, net of acquisitions: | |||||||||||
Accounts receivable | (3,265 | ) | (1,368 | ) | (1,354 | ) | |||||
Prepaid expenses and other current assets | 3,845 | 724 | (4,056 | ) | |||||||
Other assets | 196 | 130 | 614 | ||||||||
Accounts payable | 185 | (1,916 | ) | (1,528 | ) | ||||||
Accrued expenses and other current liabilities | 2,982 | 1,193 | 576 | ||||||||
Deferred revenue | 13,283 | 1,869 | 2,710 | ||||||||
Other liabilities | (1,316 | ) | 2,538 | (515 | ) | ||||||
Net cash provided by operating activities | 24,560 | 21,831 | 15,673 | ||||||||
INVESTING ACTIVITIES: | |||||||||||
Purchases of property and equipment, including capitalized software | (12,344 | ) | (12,980 | ) | (10,589 | ) | |||||
Payments for acquisitions and intangible assets, net of cash acquired | (555 | ) | (150 | ) | (40,871 | ) | |||||
Cash held as collateral | 1,447 | (5,409 | ) | — | |||||||
Investment in technology licenses | — | — | (3,451 | ) | |||||||
Net cash used in investing activities | (11,452 | ) | (18,539 | ) | (54,911 | ) | |||||
FINANCING ACTIVITIES: | |||||||||||
Repurchase of common stock | (9,967 | ) | (4,202 | ) | (12,980 | ) | |||||
Excess tax benefit from the exercise of employee stock options | — | 797 | 664 | ||||||||
Payments related to contingent consideration | — | (2,883 | ) | — | |||||||
Proceeds from issuance of common stock in connection with the exercise of options | 2,899 | 4,401 | 9,314 | ||||||||
Net cash used in financing activities | (7,068 | ) | (1,887 | ) | (3,002 | ) | |||||
EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (3,954 | ) | (1,974 | ) | (294 | ) | |||||
CHANGE IN CASH AND CASH EQUIVALENTS | 2,086 | (569 | ) | (42,534 | ) | ||||||
CASH AND CASH EQUIVALENTS - Beginning of the year | 48,803 | 49,372 | 91,906 | ||||||||
CASH AND CASH EQUIVALENTS - End of the year | $ | 50,889 | $ | 48,803 | $ | 49,372 | |||||
SUPPLEMENTAL DISCLOSURE OF OTHER CASH FLOW INFORMATION: | |||||||||||
Cash paid for income taxes | $ | 424 | $ | 1,882 | $ | 4,386 | |||||
SUPPLEMENTAL DISCLOSURE OF NON CASH INVESTING AND FINANCING ACTIVITIES: | |||||||||||
Purchase of property and equipment recorded in accounts payable | $ | 2,497 | $ | 1,926 | $ | 964 | |||||
Leasehold improvements funded by landlord | $ | 1,440 | $ | 326 | $ | — | |||||
Issuance of 1,627,753 shares of common stock in connection with the acquisition of CAO! on November 7, 2014 | $ | — | $ | — | $ | 20,121 | |||||
Contingent earn-out in connection with the acquisition of CAO! recorded in accrued expenses | $ | — | $ | — | $ | 4,220 | |||||
Contingent earn-out in connection with the acquisition of Synchronite recorded in accrued expenses | $ | — | $ | — | $ | 1,810 |
Year Ended December 31, | Beginning Balance | Additions Charged to Costs and Expenses | Deductions / Write-Offs | Ending Balance | |||||||||||
2014 | $ | 1,165 | $ | 1,337 | $ | (1,227 | ) | $ | 1,275 | ||||||
2015 | $ | 1,275 | $ | 2,361 | $ | (2,452 | ) | $ | 1,184 | ||||||
2016 | $ | 1,184 | $ | 1,831 | $ | (1,283 | ) | $ | 1,732 |
Year Ended December 31, | ||||||||
2016 | 2015 | 2014 | ||||||
Basic | 56,063,777 | 56,452,408 | 54,478,754 | |||||
Effect of assumed exercised options | — | — | — | |||||
Diluted | 56,063,777 | 56,452,408 | 54,478,754 |
Business | Consumer | Corporate | Consolidated | ||||||||||||
Revenue: | |||||||||||||||
Hosted services – Business | $ | 183,551 | $ | — | $ | — | $ | 183,551 | |||||||
Hosted services – Consumer | — | 16,258 | — | 16,258 | |||||||||||
Professional services | 22,970 | — | — | 22,970 | |||||||||||
Total revenue | 206,521 | 16,258 | — | 222,779 | |||||||||||
Cost of revenue | 60,352 | 2,809 | — | 63,161 | |||||||||||
Sales and marketing | 82,063 | 7,466 | — | 89,529 | |||||||||||
Amortization of purchased intangibles | 3,885 | — | — | 3,885 | |||||||||||
Unallocated corporate expenses | — | — | 85,613 | 85,613 | |||||||||||
Operating income (loss) | $ | 60,221 | $ | 5,983 | $ | (85,613 | ) | $ | (19,409 | ) |
Business | Consumer | Corporate | Consolidated | ||||||||||||
Revenue: | |||||||||||||||
Hosted services – Business | $ | 200,576 | $ | — | $ | — | $ | 200,576 | |||||||
Hosted services – Consumer | — | 15,209 | — | 15,209 | |||||||||||
Professional services | 23,227 | — | — | 23,227 | |||||||||||
Total revenue | 223,803 | 15,209 | — | 239,012 | |||||||||||
Cost of revenue | 67,901 | 2,409 | — | 70,310 | |||||||||||
Sales and marketing | 87,975 | 6,753 | — | 94,728 | |||||||||||
Amortization of purchased intangibles | 4,873 | — | — | 4,873 | |||||||||||
Unallocated corporate expenses | — | — | 79,529 | 79,529 | |||||||||||
Operating income (loss) | $ | 63,054 | $ | 6,047 | $ | (79,529 | ) | $ | (10,428 | ) |
Business | Consumer | Corporate | Consolidated | ||||||||||||
Revenue: | |||||||||||||||
Hosted services – Business | $ | 172,783 | $ | — | $ | — | $ | 172,783 | |||||||
Hosted services – Consumer | — | 16,629 | — | 16,629 | |||||||||||
Professional services | 20,519 | — | — | 20,519 | |||||||||||
Total revenue | 193,302 | 16,629 | — | 209,931 | |||||||||||
Cost of revenue | 50,192 | 2,511 | — | 52,703 | |||||||||||
Sales and marketing | 77,118 | 6,135 | — | 83,253 | |||||||||||
Amortization of purchased intangibles | 1,621 | — | 1,621 | ||||||||||||
Unallocated corporate expenses | — | — | 77,521 | 77,521 | |||||||||||
Operating income (loss) | $ | 64,371 | $ | 7,983 | $ | (77,521 | ) | $ | (5,167 | ) |
December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
United States | $ | 146,733 | $ | 159,539 | $ | 138,533 | |||||
Other Americas (1) | 6,818 | 12,296 | 10,508 | ||||||||
Total Americas | 153,551 | 171,835 | 149,041 | ||||||||
EMEA (2) (4) | 50,511 | 51,548 | 44,506 | ||||||||
APAC (3) | 18,717 | 15,629 | 16,384 | ||||||||
Total revenue | $ | 222,779 | $ | 239,012 | $ | 209,931 |
December 31, | |||||||
2016 | 2015 | ||||||
United States | $ | 93,845 | $ | 96,362 | |||
Israel | 13,940 | 16,393 | |||||
Australia | 9,496 | 8,290 | |||||
Netherlands | 7,495 | 8,285 | |||||
Other (1) | 2,711 | 2,482 | |||||
Total long-lived assets | $ | 127,487 | $ | 131,812 |
December 31, | |||||||
2016 | 2015 | ||||||
Computer equipment and software | $ | 82,477 | $ | 67,631 | |||
Furniture, equipment and building improvements | 15,027 | 13,761 | |||||
97,504 | 81,392 | ||||||
Less: accumulated depreciation | (69,107 | ) | (57,263 | ) | |||
Total | $ | 28,397 | $ | 24,129 |
Business | Consumer | Total | |||||||||
Balance as of December 31, 2015 | $ | 72,298 | $ | 8,024 | $ | 80,322 | |||||
Adjustments to goodwill: | |||||||||||
Foreign exchange adjustments | (77 | ) | — | (77 | ) | ||||||
Balance as of December 31, 2016 | $ | 72,221 | $ | 8,024 | $ | 80,245 |
Business | Consumer | Total | |||||||||
Balance as of December 31, 2014 | $ | 72,824 | $ | 8,024 | $ | 80,848 | |||||
Adjustments to goodwill: | |||||||||||
Foreign exchange adjustments | (526 | ) | — | (526 | ) | ||||||
Balance as of December 31, 2015 | $ | 72,298 | $ | 8,024 | $ | 80,322 |
December 31, 2016 | |||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Weighted Average Amortization Period | ||||||||||
Amortizing intangible assets: | |||||||||||||
Technology | $ | 28,018 | $ | (19,736 | ) | $ | 8,282 | 4.7 years | |||||
Customer relationships | 16,009 | (8,857 | ) | 7,152 | 5.8 years | ||||||||
Trade names | 1,295 | (1,277 | ) | 18 | 2.6 years | ||||||||
Non-compete agreements | 1,446 | (1,220 | ) | 226 | 1.7 years | ||||||||
Patents | 1,180 | (376 | ) | 804 | 11.0 years | ||||||||
Other | 263 | (235 | ) | 28 | 3.0 years | ||||||||
Total | $ | 48,211 | $ | (31,701 | ) | $ | 16,510 |
December 31, 2015 | |||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Weighted Average Amortization Period | ||||||||||
Amortizing intangible assets: | |||||||||||||
Technology | $ | 28,005 | $ | (15,723 | ) | $ | 12,282 | 4.7 years | |||||
Customer relationships | 16,008 | (6,873 | ) | 9,135 | 5.8 years | ||||||||
Trade names | 1,287 | (1,250 | ) | 37 | 2.6 years | ||||||||
Non-compete agreements | 1,446 | (936 | ) | 510 | 1.7 years | ||||||||
Patents | 3,440 | (848 | ) | 2,592 | 9.3 years | ||||||||
Other | 312 | (249 | ) | 63 | 3.0 years | ||||||||
Total | $ | 50,498 | $ | (25,879 | ) | $ | 24,619 |
Estimated Amortization Expense | ||||
2017 | $ | 4,598 | ||
2018 | 2,550 | |||
2019 | 2,343 | |||
2020 | 2,146 | |||
2021 | 1,945 | |||
Thereafter | 2,928 | |||
Total | $ | 16,510 |
December 31, | |||||||
2016 | 2015 | ||||||
Payroll and other employee related costs | $ | 15,468 | $ | 14,107 | |||
Professional services, consulting and other vendor fees | 15,277 | 11,745 | |||||
Unrecognized tax benefits | 4,240 | 3,519 | |||||
Sales commissions | 3,312 | 4,522 | |||||
Contingent earn-out (Note 7 and 8) | 210 | 377 | |||||
Other | 1,743 | 26 | |||||
Total | $ | 40,250 | $ | 34,296 |
• | Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. |
• | Level 2: Inputs reflect: quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets |
• | Level 3: Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. |
December 31, 2016 | December 31, 2015 | ||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||
Cash equivalents: | |||||||||||||||||||||||||||||||
Money market funds | $ | 3,076 | $ | — | $ | — | $ | 3,076 | $ | 4,059 | $ | — | $ | — | $ | 4,059 | |||||||||||||||
Foreign currency derivative contracts | — | 108 | — | 108 | — | 102 | — | 102 | |||||||||||||||||||||||
Total assets | $ | 3,076 | $ | 108 | $ | — | $ | 3,184 | $ | 4,059 | $ | 102 | $ | — | $ | 4,161 | |||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||
Contingent earn-out | $ | — | $ | — | $ | 210 | $ | 210 | $ | — | $ | — | $ | 377 | $ | 377 | |||||||||||||||
Foreign currency derivative contracts | — | 66 | — | 66 | — | 310 | — | 310 | |||||||||||||||||||||||
Total liabilities | $ | — | $ | 66 | $ | 210 | $ | 276 | $ | — | $ | 310 | $ | 377 | $ | 687 |
Contingent Earn-Out | |||||||
December 31, | |||||||
2016 | 2015 | ||||||
Balance, Beginning of year | $ | 377 | $ | 6,940 | |||
Cash payment | (167 | ) | (2,883 | ) | |||
Changes in fair value | — | (3,680 | ) | ||||
Balance, End of year | $ | 210 | $ | 377 |
As of December 31, 2016 | As of December 31, 2015 | ||||||
Notional amount of foreign currency derivative contracts | $ | 44,438 | $ | 43,431 | |||
Fair value of foreign currency derivatives contracts | 42 | (208 | ) |
Fair Value of Derivative Instruments | ||||||||
Balance Sheet Location | As of December 31, 2016 | As of December 31, 2015 | ||||||
Derivative Assets | ||||||||
Derivatives not designated as hedging instruments: | ||||||||
Foreign currency derivatives contracts | Prepaid expenses and other current assets | $ | 108 | 102 | ||||
Derivative Liabilities | ||||||||
Derivatives not designated as hedging instruments: | ||||||||
Foreign currency derivatives contracts | Accrued expenses and other liabilities | $ | 66 | 310 |
Gain (losses) on Derivative Instruments Recognized in Income Statement | ||||||||
Income Statement Location | December 31, 2016 | December 31, 2015 | ||||||
Foreign currency derivatives contracts | Other (Expense) Income, net | $ | 73 | (54 | ) |
Year Ending December 31, | Operating Leases | |||
2017 | $ | 8,889 | ||
2018 | 8,239 | |||
2019 | 5,714 | |||
2020 | 1,656 | |||
2021 | 1,258 | |||
Thereafter | 2,818 | |||
Total minimum lease payments | $ | 28,574 |
December 31, | |||||
2016 | 2015 | 2014 | |||
Dividend yield | —% | —% | —% | ||
Risk-free interest rate | 1.0% – 1.8% | 1.3% – 1.7% | 1.5% – 1.7% | ||
Expected life (in years) | 5.0 | 5.0 | 5.0 | ||
Historical volatility | 46.8% – 48.2% | 47.4% – 49.7% | 49.6% – 53.7% |
Stock Option Activity | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in thousands) | ||||||||||
Options (in thousands) | Weighted Average Exercise Price | |||||||||||
Balance outstanding at December 31, 2013 | 9,724 | $ | 10.86 | |||||||||
Granted | 3,827 | 11.04 | ||||||||||
Exercised | (1,098 | ) | 7.10 | |||||||||
Cancelled or expired | (1,684 | ) | 12.70 | |||||||||
Balance outstanding at December 31, 2014 | 10,769 | $ | 10.95 | 7.01 | $ | 38,752 | ||||||
Options vested and expected to vest | 9,043 | $ | 10.89 | 6.69 | $ | 33,566 | ||||||
Options exercisable at December 31, 2014 | 4,737 | $ | 10.01 | 5.28 | $ | 22,083 | ||||||
Balance outstanding at December 31, 2014 | 10,769 | $ | 10.95 | |||||||||
Granted | 857 | 10.06 | ||||||||||
Exercised | (646 | ) | 4.41 | |||||||||
Cancelled or expired | (1,837 | ) | 12.22 | |||||||||
Balance outstanding at December 31, 2015 | 9,144 | $ | 11.05 | 6.66 | $ | 2,117 | ||||||
Options vested and expected to vest | 8,356 | $ | 11.08 | 6.49 | $ | 2,117 | ||||||
Options exercisable at December 31, 2015 | 5,401 | $ | 10.95 | 5.60 | $ | 2,117 | ||||||
Balance outstanding at December 31, 2015 | 9,144 | $ | 11.05 | |||||||||
Granted | 635 | 7.32 | ||||||||||
Exercised | (325 | ) | 5.66 | |||||||||
Cancelled or expired | (1,685 | ) | 11.49 | |||||||||
Balance outstanding at December 31, 2016 | 7,769 | $ | 10.88 | 6.05 | $ | 2,641 | ||||||
Options vested and expected to vest | 7,348 | $ | 11.00 | 5.90 | $ | 2,529 | ||||||
Options exercisable at December 31, 2016 | 5,580 | $ | 11.31 | 5.27 | $ | 2,347 |
Options Outstanding | Options Exercisable | |||||||||||||||
Range of Exercise Prices | Number of Shares Outstanding (in thousands) | Weighted-Average Remaining Contractual Life (Years) | Weighted-Average Exercise Price | Number of Shares (in thousands) | Weighted-Average Exercise Price | |||||||||||
$1.79 - $7.02 | 1,006 | 3.55 | $ | 5.04 | 839 | $ | 4.79 | |||||||||
$7.04 - $9.24 | 1,340 | 7.31 | 8.51 | 717 | 8.93 | |||||||||||
$9.34 - $10.05 | 864 | 7.50 | 9.79 | 559 | 9.77 | |||||||||||
$10.13 - $10.13 | 977 | 7.15 | 10.13 | 500 | 10.13 | |||||||||||
$10.31 - $12.32 | 891 | 5.51 | 11.21 | 654 | 11.46 | |||||||||||
$12.46 - $13.28 | 1,115 | 5.13 | 13.11 | 969 | 13.11 | |||||||||||
$13.34 - $16.98 | 1,205 | 6.23 | 15.27 | 971 | 15.70 | |||||||||||
$17.88 - $17.88 | 60 | 5.43 | 17.88 | 60 | 17.88 | |||||||||||
$18.09 - $18.09 | 306 | 5.57 | 18.09 | 306 | 18.09 | |||||||||||
$18.24 - $18.24 | 5 | 5.58 | 18.24 | 5 | 18.24 | |||||||||||
7,769 | 6.05 | $ | 10.88 | 5,580 | $ | 11.31 |
Restricted Stock Unit Activity | ||||||||||
Number of Shares (in thousands) | Weighted Average Grant Date Fair Value (Per Share) | Aggregate Fair Value (in thousands) | ||||||||
Balance outstanding at December 31, 2014 | — | $ | — | $ | — | |||||
Awarded | 1,257 | 10.31 | — | |||||||
Released | — | — | — | |||||||
Forfeited | (55 | ) | 10.31 | 8,110 | ||||||
Non-vested and outstanding at December 31, 2015 | 1,202 | $ | 10.31 | $ | 6,220 | |||||
Balance outstanding at December 31, 2015 | 1,202 | $ | 10.31 | $ | 6,220 | |||||
Awarded | 571 | 6.32 | — | |||||||
Released | (394 | ) | 10.31 | — | ||||||
Forfeited | (191 | ) | 10.01 | — | ||||||
Non-vested and outstanding at December 31, 2016 | 1,188 | $ | 8.44 | $ | 8,968 | |||||
Expected to vest | 903 | $ | 8.76 | $ | 6,817 |
Year Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
United States | $ | (40,774 | ) | $ | (16,362 | ) | $ | (12,933 | ) | ||
Israel | 15,622 | 2,257 | 4,614 | ||||||||
United Kingdom | 2,345 | 1,564 | 1,612 | ||||||||
Netherlands | 3,104 | 1,919 | 1,462 | ||||||||
Australia | (2,774 | ) | (565 | ) | (513 | ) | |||||
Germany | 2,085 | 327 | 172 | ||||||||
Other (1) | 453 | 230 | 97 | ||||||||
$ | (19,939 | ) | $ | (10,630 | ) | $ | (5,489 | ) | |||
(1) Includes Japan, Italy, and France |
Year Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Current income taxes: | |||||||||||
U.S. Federal | $ | 1,829 | $ | (524 | ) | $ | 155 | ||||
State and local | 27 | 309 | 186 | ||||||||
Foreign | 2,226 | 1,573 | 3,254 | ||||||||
Total current income taxes | 4,082 | 1,358 | 3,595 | ||||||||
Deferred income taxes: | |||||||||||
U.S. Federal | 841 | 13,791 | (1,194 | ) | |||||||
State and local | 99 | 876 | 41 | ||||||||
Foreign | 912 | (211 | ) | (583 | ) | ||||||
Total deferred income taxes | 1,852 | 14,456 | (1,736 | ) | |||||||
Total provision for income taxes | $ | 5,934 | $ | 15,814 | $ | 1,859 |
Year Ended December 31, | ||||||||
2016 | 2015 | 2014 | ||||||
Federal Statutory Rate | 34.00 | % | 34.00 | % | 34.00 | % | ||
State taxes, net of federal benefit | 3.24 | % | 0.35 | % | (2.74 | )% | ||
Non-deductible expenses – ISO | (1.85 | )% | (8.57 | )% | (14.68 | )% | ||
Non-deductible expenses – Other | (0.88 | )% | (2.20 | )% | (4.17 | )% | ||
Foreign tax rate differential | 0.89 | % | (12.41 | )% | (46.50 | )% | ||
Change in valuation allowance | (53.55 | )% | (148.24 | )% | — | % | ||
Return to provision true-up adjustment | (9.22 | )% | — | % | — | % | ||
Other | (2.42 | )% | (11.15 | )% | 0.23 | % | ||
Total provision for income taxes | (29.79 | )% | (148.22 | )% | (33.86 | )% |
Year Ended December 31, | |||||||
2016 | 2015 | ||||||
Deferred tax assets: | |||||||
Net operating loss carryforwards | $ | 6,186 | $ | 2,243 | |||
Accounts payable and accrued expenses | 4,906 | 5,017 | |||||
Non-cash compensation | 12,541 | 10,034 | |||||
Intangibles amortization | 6,151 | 3,826 | |||||
Allowance for doubtful accounts | 447 | 274 | |||||
Intangibles related to acquisitions | 118 | — | |||||
Total deferred tax assets | 30,349 | 21,394 | |||||
Less valuation allowance | (27,881 | ) | (15,820 | ) | |||
Deferred tax assets, net of valuation allowance | 2,468 | 5,574 | |||||
Deferred tax liabilities: | |||||||
Plant and equipment | (1,695 | ) | (2,973 | ) | |||
Intangibles related to acquisitions | — | (1,361 | ) | ||||
Goodwill amortization and contingent earn-out adjustments | (3,332 | ) | (2,359 | ) | |||
Total deferred tax liabilities | (5,027 | ) | (6,693 | ) | |||
Net deferred (liabilities)/assets | $ | (2,559 | ) | $ | (1,119 | ) |
Year Ended December 31, | |||||||
2016 | 2015 | ||||||
Unrecognized tax benefits balance at January 1 | $ | 3,519 | $ | 2,320 | |||
Gross increase for tax positions of prior years | 200 | — | |||||
Gross increase for tax positions of current years | 700 | 1,199 | |||||
Decrease due to expiration of statue | (179 | ) | — | ||||
Gross unrecognized tax benefits at December 31 | $ | 4,240 | $ | 3,519 |
14. | Restructuring Costs |
December 31, 2016 | December 31, 2015 | ||||||
Balance, Beginning of the year | $ | 1,328 | $ | — | |||
Contract termination costs | — | 427 | |||||
Severance and other associated costs | 1,585 | 901 | |||||
Cash payments | (1,328 | ) | — | ||||
Wind down costs of legacy platform | 966 | — | |||||
Balance, End of year | $ | 2,551 | $ | 1,328 |
Year Ended December 31, 2016 | Year Ended December 31, 2015 | ||||||
Contract termination benefit | $ | (384 | ) | $ | 1,745 | ||
Severance and other associated costs | 1,585 | 1,639 | |||||
Wind down costs of legacy platform | 1,168 | — | |||||
Total restructuring costs | $ | 2,369 | $ | 3,384 |
Plan Category | Number of Securities to Be Issued Upon Exercise of Outstanding Options, (a) | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (b) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (2) (c) | |||||||
Equity compensation plans approved by stockholders (1) | 11,988,434 | $ | 10.88 | 2,437,598 | ||||||
Equity compensation plans not approved by stockholders | — | $ | — | — | ||||||
Total | 11,988,434 | $ | 10.88 | 2,437,598 |
(1) | Our equity compensation plans which were approved by our stockholders are the 2009 Stock Incentive Plan and the 2010 Employee Stock Purchase Plan. |
(2) | Excludes securities reflected in column (a). Also see Note 11 to our consolidated financial statements. |
1. | Financial Statements. |
2. | Financial Statements Schedules. |
3. | Exhibits. |
LIVEPERSON, INC. | ||
By: | /s/ Robert P. LoCascio | |
Name: Robert P. LoCascio | ||
Title: Chief Executive Officer |
Signature | Title(s) | |
/s/Robert P. LoCascio | Chief Executive Officer and Chairman of the Board of Directors | |
Robert P. LoCascio | (Principal Executive Officer) | |
/s/ Daniel R. Murphy | Chief Financial Officer | |
Daniel R. Murphy | (Principal Financial Officer) | |
/s/ Peter Block | Director | |
Peter Block | ||
/s/ Kevin C. Lavan | Director | |
Kevin C. Lavan | ||
/s/ Jill Layfield | Director | |
Jill Layfield | ||
/s/ David Vaskevitch | Director | |
David Vaskevitch | ||
/s/ William G. Wesemann | Director | |
William G. Wesemann |
Number | Description | |
2.1 | Agreement and Plan of Merger, dated as of June 22, 2006, among LivePerson, Inc., Soho Acquisition Corp., Proficient Systems, Inc. and Gregg Freishtat as Shareholders’ Representative (incorporated by reference to the identically numbered exhibit in the Current Report on Form 8-K filed on June 22, 2006) | |
3.1 | Fourth Amended and Restated Certificate of Incorporation (incorporated by reference to the identically-numbered exhibit to LivePerson’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000 and filed March 30, 2001 (the “2000 Form 10-K”)) | |
3.2 | Second Amended and Restated Bylaws, as amended (incorporated by reference to the identically-numbered exhibit to the 2000 Form 10-K) | |
4.1 | Specimen common stock certificate (incorporated by reference to the identically-numbered exhibit to LivePerson’s Registration Statement on Form S-1, as amended (Registration No. 333-96689) (“Registration No. 333-96689”)) | |
4.2 | Second Amended and Restated Registration Rights Agreement, dated as of January 27, 2000, by and among LivePerson, the several persons and entities named on the signature pages thereto as Investors, and Robert LoCascio (incorporated by reference to the identically-numbered exhibit to Registration No. 333-96689) | |
10.1(a)* | 2009 Stock Incentive Plan (incorporated by reference to Exhibit 99.1 to LivePerson’s Registration Statement on Form S-8 filed on June 9, 2009) and Forms of Grant Agreements under the 2009 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to LivePerson’s Quarterly Report on Form 10-Q filed on May 6, 2011) | |
10.1(b)* | 2009 Stock Incentive Plan (amended and restated as of June 7, 2012) (incorporated by reference to Exhibit 99.1 to LivePerson’s Current Report on Form 8-K filed on June 8, 2012) | |
10.2* | LivePerson, Inc. 2010 Employee Stock Purchase Plan (incorporated by reference to Exhibit 99.1 to the LivePerson’s Registration Statement on Form S-8 filed on August 19, 2010) | |
10.3* | Employment Agreement between LivePerson and Robert P. LoCascio, dated as of January 1, 1999 (incorporated by reference to Exhibit 10.1 to Registration No. 333-96689) | |
10.4(a)* | Employment Agreement between LivePerson and Timothy E. Bixby, dated as of June 23, 1999 (incorporated by reference to Exhibit 10.3 to Registration No. 333-96689) | |
10.4(b)* | Modification to Employment Agreement between LivePerson and Timothy E. Bixby, dated as of April 1, 2003 (incorporated by reference to Exhibit 10.2.1 to LivePerson’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2003 and filed August 13, 2003) | |
10.4(c)* | Separation Agreement and General Release between LivePerson and Timothy E. Bixby, dated as of November 2, 2010 (incorporated by reference to Exhibit 10.4(c) to LivePerson’s Annual Report on Form 10-K for the year ended December 31, 2010 and filed March 15, 2011) | |
10.5* | Agreement between LivePerson and Dan Murphy, dated as of March 27, 2011 (incorporated by reference to Exhibit 10.5 to LivePerson’s Annual Report on Form 10-K for the year ended December 31, 2011 and filed March 13, 2012) | |
10.6* | Form of Indemnification Agreement entered into with Executive Officers and Directors of LivePerson (incorporated by reference to Exhibit 10.6 to LivePerson’s Annual Report on Form 10-K for the year ended December 31, 2011 and filed March 13, 2012) | |
10.7* | Agreement between LivePerson and Eli Campo, dated as of December 22, 2006 (incorporated by reference to Exhibit 10.7 to LivePerson’s Annual Report on Form 10-K for the year ended December 31, 2011 and filed March 13, 2012) | |
10.8* | Agreement between LivePerson and Monica L. Greenberg, dated as of October 25, 2006 (incorporated by reference to Exhibit 10.8 to LivePerson’s Annual Report on Form 10-K for the year ended December 31, 2011 and filed March 13, 2012) | |
10.9* | Agreement between LivePerson and Michael Kovach, dated as of November 6, 2009 (incorporated by reference to Exhibit 10.9 to LivePerson’s Annual Report on Form 10-K for the year ended December 31, 2011 and filed March 13, 2012) | |
10.10* | Incentive Plan (incorporated by reference to Exhibit 10.1 to LivePerson’s Current Report on Form 8-K filed on April 28, 2011) | |
10.11* | Separation Agreement General Release between LivePerson and Eli Campo, dated as of December 16, 2013 (incorporated by reference to Exhibit 10.1 to LivePerson's Quarterly Report on Form 10-Q filed on May 9, 2014). | |
10.12* | Employment Agreement between LivePerson and Eran Vanounou, dated as of February 22, 2014(incorporated by reference to Exhibit 10.2 to LivePerson's Quarterly Report on Form 10-Q filed on May 9, 2014). | |
10.13 | Agreement and Plan Merger, dated as of November 5, 2014, among LivePerson, Inc. Catalyst Lightning LLC, Contact At Once!, LLC and Fulcrum Growth Fund II QP, LLC (incorporated by reference to Exhibit 2.1 to LivePerson's Current Report on Form 8-K filed on November 12, 2014). | |
10.14 | Employment agreement between LivePerson and Dustin Dean, dated February 25, 2015 (incorporated by reference to Exhibit 10.1 to LivePerson's Quarterly Report on Form 10-Q filed on May 11, 2015). | |
10.15 | Amendment to the employment agreement between LivePerson and Dustin Dean, dated March 27, 2015 (incorporated by reference to Exhibit 10.1 to LivePerson's Quarterly Report on Form 10-Q filed on May 11, 2015). | |
21.1 | Subsidiaries | |
23.1 | Consent of BDO USA, LLP | |
31.1 | Certification by Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
31.2 | Certification by Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
32.1** | Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
32.2** | Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
101.INS† | XBRL Instance Document | |
101.SCH† | XBRL Taxonomy Extension Schema Document | |
101.CAL† | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF† | XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB† | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE† | XBRL Taxonomy Extension Presentation Linkbase Document |
* | Management contract or compensatory plan or arrangement |
** | The certifications attached as Exhibit 32.1 and Exhibit 32.2 accompany the Annual Report on Form 10-K pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed “filed” by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. |
† | Pursuant to applicable securities laws and regulations, the Registrant is deemed to have complied with the reporting obligation relating to the submission of interactive data files in such exhibits and is not subject to liability under any anti-fraud provisions of the federal securities laws as long as the Registrant has made a good faith attempt to comply with the submission requirements and promptly amends the interactive data files after becoming aware that the interactive data files fail to comply with the submission requirements. These interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under these sections. |
/s/ BDO USA, LLP |
BDO USA, LLP |
New York, New York |
March 10, 2017 |
1. | I have reviewed this Annual Report on Form 10-K of LivePerson, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | March 10, 2017 | By: | /s/ ROBERT P. LOCASCIO |
Name: | Robert P. LoCascio | ||
Title: | Chief Executive Officer (principal executive officer) |
1. | I have reviewed this Annual Report on Form 10-K of LivePerson, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | March 10, 2017 | By: | /s/ DANIEL R. MURPHY |
Name: | Daniel R. Murphy | ||
Title: | Chief Financial Officer (principal financial officer) |
(1) | the Annual Report of the Company on Form 10-K for the period ended December 31, 2016, as filed with the Securities and Exchange Commission (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | March 10, 2017 | By: | /s/ ROBERT P. LOCASCIO |
Name: | Robert P. LoCascio | ||
Title: | Chief Executive Officer (principal executive officer) |
(1) | the Annual Report of the Company on Form 10-K for the period ended December 31, 2016, as filed with the Securities and Exchange Commission (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | March 10, 2017 | By: | /s/ DANIEL R. MURPHY |
Name: | Daniel R. Murphy | ||
Title: | Chief Financial Officer (principal financial officer) |
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Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Feb. 28, 2017 |
Jun. 30, 2016 |
|
Document - Document And Entity Information [Abstract] | |||
Entity Registrant Name | LIVEPERSON INC | ||
Entity Central Index Key | 0001102993 | ||
Trading Symbol | lpsn | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2016 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 58,299,557 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 334,703,334 |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 1,732 | $ 1,184 |
Consolidated Statements Of Operations - USD ($) $ in Thousands |
12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
||||||||
Revenue | $ 222,779 | $ 239,012 | $ 209,931 | |||||||
Costs and expenses: | ||||||||||
Cost of revenue | [1],[2],[3] | 63,161 | 70,310 | 52,703 | ||||||
Sales and marketing | [1],[2],[3] | 89,529 | 94,728 | 83,253 | ||||||
General and administrative | [1],[2],[3] | 43,046 | 37,171 | 40,192 | ||||||
Product development | [1],[2],[3] | 40,198 | 38,974 | 37,329 | ||||||
Restructuring costs | [1],[2],[3] | 2,369 | 3,384 | 0 | ||||||
Amortization of purchased intangibles | [1],[2],[3] | 3,885 | 4,873 | 1,621 | ||||||
Total costs and expenses | [1],[2],[3] | 242,188 | 249,440 | 215,098 | ||||||
Loss from operations | (19,409) | (10,428) | (5,167) | |||||||
Other (expense) income, net | (530) | (202) | (322) | |||||||
Loss before provision for income taxes | (19,939) | (10,630) | (5,489) | |||||||
Provision for income taxes | 5,934 | 15,814 | 1,859 | |||||||
Net loss | $ (25,873) | $ (26,444) | $ (7,348) | |||||||
Net loss per share of common stock: | ||||||||||
Basic (in dollars per share) | $ (0.46) | $ (0.47) | $ (0.13) | |||||||
Diluted (in dollars per share) | $ (0.46) | $ (0.47) | $ (0.13) | |||||||
Weighted-average shares used to compute net loss income per share: | ||||||||||
Basic (in shares) | 56,063,777 | 56,452,408 | 54,478,754 | |||||||
Diluted (in shares) | 56,063,777 | 56,452,408 | 54,478,754 | |||||||
Stock-based compensation expense | $ 9,736 | $ 11,814 | $ 12,306 | |||||||
Cost Of Revenue [Member] | ||||||||||
Costs and expenses: | ||||||||||
Amortization of purchased intangibles | 2,788 | 3,167 | 3,469 | |||||||
Weighted-average shares used to compute net loss income per share: | ||||||||||
Stock-based compensation expense | 429 | 1,396 | 1,492 | |||||||
Depreciation expense | 8,234 | 9,091 | 6,658 | |||||||
Sales and Marketing [Member] | ||||||||||
Weighted-average shares used to compute net loss income per share: | ||||||||||
Stock-based compensation expense | 2,515 | 3,088 | 3,399 | |||||||
Depreciation expense | 1,315 | 1,232 | 871 | |||||||
General and Administrative [Member] | ||||||||||
Weighted-average shares used to compute net loss income per share: | ||||||||||
Stock-based compensation expense | 3,304 | 3,692 | 3,809 | |||||||
Depreciation expense | 1,418 | 893 | 820 | |||||||
Product Development [Member] | ||||||||||
Weighted-average shares used to compute net loss income per share: | ||||||||||
Stock-based compensation expense | 3,488 | 3,638 | 3,606 | |||||||
Depreciation expense | $ 1,044 | $ 898 | $ 722 | |||||||
|
Consolidated Statements Of Comprehensive Loss - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (25,873) | $ (26,444) | $ (7,348) |
Foreign currency translation adjustment | (3,624) | (1,398) | (795) |
Comprehensive loss | $ (29,497) | $ (27,842) | $ (8,143) |
Consolidated Statements Of Cash Flows (Parenthetical) |
Nov. 07, 2014
shares
|
---|---|
Contact At Once! [Member] | |
SUPPLEMENTAL DISCLOSURE OF NON CASH INVESTING AND FINANCING ACTIVITIES: | |
Issuance of shares of common stock in connection with acquisitions | 1,627,753 |
Description of Business and Summary of Significant Accounting Policies |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Description of Business and Summary of Significant Accounting Policies | Description of Business and Summary of Significant Accounting Policies LivePerson, Inc. (the “Company” or “LivePerson”) was incorporated in the State of Delaware in November 1995 and the LivePerson service was introduced in November 1998. In April 2000, the Company completed an initial public offering and is currently traded on the NASDAQ Global Select Market and the Tel Aviv Stock Exchange. LivePerson is headquartered in New York City with an U.S. office in Alpharetta (Georgia), and international offices in Amsterdam, Berlin, London, Mannheim, Melbourne, Milan, Paris, Ra'anana (Israel), Reading (UK), and Tokyo. LivePerson provides mobile and online business messaging solutions that power digital communication between brands and consumers. LiveEngage, the Company’s enterprise-class, cloud-based platform, enables businesses to create a meaningful connection with consumers via messaging. As consumers have reoriented their digital lives around the smartphone, messaging apps have become their preferred communication channel to connect with each other. LivePerson allows brands to align with this new consumer preference, and deploy messaging at scale for customer care and sales, instead of demanding that consumers use email or call a 1-800 number. LiveEngage was designed to securely deploy messaging at scale for brands with tens of millions of customers and many thousands of customer care agents. Key benefits include a sophisticated proactive targeting engine and a robust suite of text and mobile messaging, real-time chat messaging, content delivery, customer sentiment, and cobrowsing offerings that power intelligent digital engagement with consumers. LiveEngage powers conversations across each of a brand’s primary digital channels, including mobile apps, mobile and desktop web browsers, social media and third-party consumer messaging platforms. LivePerson optimizes campaign outcomes for sales and service transaction by combining website visitor data with other historical, behavioral, and operational information to develop insights into each step of a consumer’s journey. LivePerson’s products, coupled with its domain knowledge, industry expertise and consulting services, have been proven to maximize the effectiveness of consumer engagement. The Company’s primary revenue source is from the sale of LivePerson services to businesses of all sizes. The Company also offers an online marketplace that connects independent service providers (“Experts”) who provide information and knowledge for a fee via real-time chat with individual consumers (“Users”). Principles of Consolidation The consolidated financial statements reflect the operations of LivePerson and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Reclassification For comparability, certain 2014 and 2015 amounts have been reclassified where appropriate, to conform to the financial presentation in 2016. Use of Estimates The preparation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires the Company’s management to make a number of estimates and assumptions relating to the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the period. Significant items subject to such estimates and assumptions include revenue recognition, stock-based compensation, accounts receivable, the valuation of goodwill and intangible assets, income taxes and legal contingencies. Actual results could differ from those estimates. Concentration of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable which approximate fair value at December 31, 2016 because of the short-term nature of these instruments. The Company invests its cash and cash equivalents with financial institutions that it believes are of high quality, and the Company performs periodic evaluations of these instruments and the relative credit standings of the institutions with which it invests. At certain times, the Company’s cash balances with any one financial institution may exceed Federal Deposit Insurance Corporation insurance limits. The Company believes it mitigates its risk by depositing its cash balances with high credit, quality financial institutions. The Company’s customers are located primarily in the United States. The Company performs ongoing credit evaluations of its customers’ financial condition (except for customers who purchase the LivePerson services by credit card via Internet download) and has established an allowance for doubtful accounts based upon factors surrounding the credit risk of customers, historical trends and other information. Concentration of credit risk is limited due to the Company’s large number of customers. No single customer accounted for or exceeded 10% of revenue in 2016, 2015 or 2014. No single customer accounted for or exceeded 10% of the Company's total accounts receivable in 2016 and 2015. Foreign Currency Translation The Company's operations are conducted in various countries around the world and the financial statements of its foreign subsidiaries are reported in the applicable foreign currencies (functional currencies). Financial information is translated from the applicable functional currency to the U.S. dollar (the reporting currency) for inclusion in the Company's consolidated financial statements. Income, expenses and cash flows are translated at weighted average exchange rates prevailing during the fiscal period, and assets and liabilities are translated at fiscal period-end exchange rates. Resulting translation adjustments are included as a component of accumulated other comprehensive income (loss) in stockholders' equity. Foreign exchange transaction gain or losses are included in Other Income, net in the accompanying consolidated statements of operations. Cash and Cash Equivalents The Company considers all highly liquid securities with original maturities of 3 months or less when acquired to be cash equivalents. Cash equivalents, which primarily consist of money market funds, are recorded at cost, which approximates fair value. Accounts Receivable Accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company determines the allowance based on historical write-off experience. The Company reviews its allowance for doubtful accounts monthly. Past due balances over 90 days and over a specified amount are reviewed individually for collectability. All other balances are reviewed on a pooled basis. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance sheet credit exposure related to its customers. The activity in the allowance for for doubtful accounts is as follows (amounts in thousands):
Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets, generally three to five years for equipment and software. Leasehold improvements are depreciated using the straight-line method over the shorter of the lease term or the estimated useful life of the asset. Depreciation expense totaled $12.0 million, $12.1 million, and $9.1 million for the years ended December 31, 2016, 2015 and 2014, respectively. Internal-Use Software Development Costs In accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350-40, Internal-Use Software, the Company capitalizes its costs to develop its internal use software when preliminary development efforts are successfully completed, management has authorized and committed project funding, and it is probable that the project will be completed and the software will be used as intended. These costs are included in property and equipment in the Company's consolidated balance sheets and are amortized on a straight-line basis over the estimated useful life of the related asset, which approximates three years. Costs incurred prior to meeting these criteria, together with costs incurred for training and maintenance, are expensed as incurred. The Company capitalized internal-use software costs of $3.7 million, $2.4 million, and $2.5 million for the years ended December 31, 2016, 2015 and 2014, respectively. Goodwill and Intangible Assets In accordance with ASC 350, Goodwill and Other Intangible Assets, goodwill and indefinite-lived intangible assets are not amortized, but reviewed for impairment upon the occurrence of events or changes in circumstances that would reduce the fair value below its carrying amount. Goodwill is required to be tested for impairment at least annually. In September 2011, the FASB issued ASU No. 2011-8, “Intangibles — Goodwill and Other (Topic 350).” ASU 2011-8 permits an entity to first assess qualitative factors to determine whether it is “more likely than not” that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in Topic 350. The more-likely-than-not threshold is defined as having a likelihood of more than 50%. If it is determined that the fair value of a reporting unit is more likely than not to be less than its carrying value (including unrecognized intangible assets) then it is necessary to perform the second step of the goodwill impairment test. The second step of the goodwill impairment test is judgmental in nature and often involves the use of significant estimates and assumptions. Similarly, estimates and assumptions are used in determining the fair value of other intangible assets. These estimates and assumptions could have a significant impact on whether or not an impairment charge is recognized and also the magnitude of any such charge. The Company performs internal valuation analyses and considers other market information that is publicly available. Estimates of fair value are primarily determined using discounted cash flows and market comparisons. These approaches use significant estimates and assumptions including projected future cash flows (including timing), discount rates reflecting the risk inherent in future cash flows, perpetual growth rates, determination of appropriate market comparables and the determination of whether a premium or discount should be applied to comparables. ASC 350-10 also requires that intangible assets with estimable useful lives be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with ASC 360-10-35, “Accounting for Impairment or Disposal of Long-Lived Assets.” The Company evaluates for goodwill impairment annually at September 30th and at the end of the third quarter of 2016, the Company determined that it was not more-likely that the fair value of the reporting units is less than their carrying amount. Accordingly, the Company did not perform the two-step goodwill impairment test on both the Company's Business and Consumer segments. The Company assessed qualitative facts while summarizing the totality of events and circumstances and considered the extent to which adverse events or circumstances could affect the reporting unit's fair value as well as the consideration of positive and mitigating events and circumstances that would affect the determination of whether it was more likely than not that the fair value of a reporting unit is less than its carrying amount. Impairment of Long-Lived Assets In accordance with ASC 360-10, “Accounting for the Impairment or Disposal of Long-lived Assets,” long-lived assets, such as property, plant and equipment and purchased intangibles subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. During December 31, 2016, the Company determined certain long-lived assets related to the legacy platform and purchased intangibles of technology licenses to be impaired. The net book value of these assets, of approximately $0.2 million and $2.6 million, was included in restructuring costs and general and administrative expenses, respectively. Fair Value of Financial Instruments The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties. Cash and cash equivalents, accounts receivable, security deposits and accounts payable carrying amounts approximate fair value because of the short maturity of these instruments. Revenue Recognition The majority of the Company’s revenue is generated from monthly service revenues and related professional services from the sale of the LivePerson services. Because the Company provides its application as a service, the Company follows the provisions of FASB Accounting Standards Codification (“ASC”) 605-10-S99, “Revenue Recognition” and ASC 605-25, “Revenue Recognition with Multiple-Element Arrangements.” The Company charges a monthly, quarterly or annual fee, which varies by type of service, the level of customer usage and website traffic, and in some cases, the number of orders placed via the Company’s online engagement solutions. For certain of the Company’s larger customers, the Company may provide call center labor through an arrangement with one or more of several qualified vendors. For most of these customers, the Company passes the fee it incurs with the labor provider and its fee for the hosted services through to its customers in the form of a fixed fee for each order placed via the Company’s online engagement solutions. For these Pay for Performance (“PFP”) arrangements, in accordance with ASC 605-45, “Principal Agent Considerations,” the Company records revenue for transactions in which it acts as an agent on a net basis, and revenue for transactions in which it acts as a principal on a gross basis. The Company also sells certain of the LivePerson services directly via Internet download. These services are marketed as LiveEngage for small to medium-sized businesses (“SMBs”), and are paid for almost exclusively by credit card. Credit card payments accelerate cash flow and reduce the Company’s collection risk, subject to the merchant bank's right to hold back cash pending settlement of the transactions. Sales of LiveEngage may occur with or without the assistance of an online sales representative, rather than through face-to-face or telephone contact that is typically required for traditional direct sales. The Company recognizes monthly service revenue based upon the fee charged for the LivePerson services, provided that there is persuasive evidence of an arrangement, no significant Company obligations remain, collection of the resulting receivable is probable and the amount of fees to be paid is fixed or determinable. The Company’s service agreements typically have 12 month terms and, in some cases, are terminable or may terminate upon 30 to 90 days’ notice without penalty. When professional service fees add value to the customer on a standalone basis, the Company recognizes professional service fees upon completion of services and customer acceptance. This guidance establishes a selling price hierarchy for determining the selling price of a deliverable, which is based on: (a) vendor-specific objective evidence; (b) third-party evidence; or (c) best estimated selling price. If a professional services arrangement does not qualify for separate accounting, the Company recognizes the fees, and the related labor costs, ratably over the contracted period. For revenue from our Consumer segment generated from online transactions between Experts and Users, the Company recognizes revenue net of the Expert fees in accordance with ASC 605-45, “Principal Agent Considerations,” due primarily to the fact that the Expert is the primary obligor. Additionally, the Company performs as an agent without any risk of loss for collection, and is not involved in selecting the Expert or establishing the Expert’s fee. The Company collects a fee from the User and retains a portion of the fee, and then remits the balance to the Expert. Revenue from these transactions is recognized when there is persuasive evidence of an arrangement, no significant Company obligations remain, collection of the resulting receivable is probable and the amount of fees to be paid is fixed and determinable. Advertising Costs The Company expenses the cost of advertising and promoting its services as incurred. Such costs totaled approximately $10.9 million, $10.7 million, and $9.7 million for the years ended December 31, 2016, 2015 and 2014, respectively. Stock-based Compensation In accordance with ASC Topic 718 -10, "Stock Compensation", the Company measures stock based awards at fair value and recognizes compensation expense for all share-based payment awards made to its employees and directors, including employee stock options. The Company estimates the fair value of stock options granted using the Black-Scholes valuation model. This model requires the Company to make estimates and assumptions including, among other things, estimates regarding the length of time an employee will retain vested stock options before exercising them, the estimated volatility of its common stock price and the number of options that will be forfeited prior to vesting. The fair value is then recognized on a straight line basis over the requisite service period of the award, which is generally four years. Changes in these estimates and assumptions can materially affect the determination of the fair value of the stock-based compensation and consequently, the related amount recognized in the consolidated statement of operations. Deferred Rent The Company records rent expense on a straight-line basis over the term of the related lease. The difference between the rent expense recognized for financial reporting purposes and the actual payments made in accordance with the lease agreement is recognized as deferred rent liability included in other liabilities on the Company’s consolidated balance sheets. Income Taxes Income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. 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. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in results of operations in the period that the tax change occurs. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. Comprehensive Loss In accordance with ASC 220, Comprehensive Income, the Company reports by major components and as a single total, the change in its net assets during the period from non-owner sources. Comprehensive income (loss) consists of net income (loss), and accumulated other comprehensive income (loss), which includes certain changes in equity that are excluded from net income (loss). The Company’s comprehensive loss for all periods presented is related to the effect of foreign currency translation. Recently Issued Accounting Standards In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2017-04, "Intangibles —Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment" (“ASU 2017-04”). This update addresses concerns over the cost and complexity of the two-step goodwill impairment test. The amendments in this update remove the second step of the test. An entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit's carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance does not amend the optional qualitative assessment of goodwill impairment. ASU 2017-04 is effective for financial statements issued for annual periods beginning after December 15, 2019, and interim periods within those annual periods. The Company does not expect the adoption of ASU 2017-04 to have a material effect on its financial position, results of operations or cash flows. In January 2017, the FASB issued Accounting Standards Update No. 2017-01, "Business Combinations (Topic 805): Clarifying the Definition of a Business" (“ASU 2017-01”). This update clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of businesses. The amendments in this update provide a screen to determine when a set is not a business. If the screen is not met, it (1) requires that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and (2) removes the evaluation of whether a market participant could replace the missing elements. ASU 2017-01 is effective for financial statements issued for annual periods beginning after December 15, 2017, and interim periods within those annual periods. The Company does not expect the adoption of ASU 2017-01 to have a material effect on its financial position, results of operations or cash flows. In March 2016, the FASB issued Accounting Standards Update No. 2016-09, “Compensation -Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). This update is intended to improve the accounting for employee share-based payments and affects all organizations that issue share-based payment awards to their employees. Several aspects of the accounting for share-based payment award transactions are simplified, including:(a) income tax consequences; (b) classification of awards as either equity or liabilities; and(c)classification on the statement of cash flows. ASU 2016-09 is effective for financial statements issued for annual periods beginning after December 15, 2016. The Company does not expect the adoption of ASU 2016-09 to have a material effect on its financial position, results of operations or cash flows. On February 2016, the FASB issued Accounting Standards Update No. 2016-02, "Leases" ("ASU 2016-02"). ASU 2016-02 requires lessees to recognize the following for all leases (with the exception of short-term leases) at the commencement date: a lease liability, which is a lessee‘s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. Certain targeted improvements were made to align, where necessary, lessor accounting with the lessee accounting model and Topic 606, Revenue from Contracts with Customers. The new lease guidance also simplified the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. Lessees will no longer be provided with a source of off-balance sheet financing. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. ASU 2016-02 is effective for financial statements issued for annual periods beginning after December 15, 2018. While the Company is currently assessing the impact ASU 2016-02 will have on the consolidated financial statements, the Company expects the primary impact to its consolidated financial position upon adoption will be the recognition, on a discounted basis, of its minimum commitments under non-cancelable operating leases on the consolidated balance sheets resulting in the recording of right of use assets and lease obligations. The Company's current minimum commitments under noncancelable operating leases are disclosed in Note 10. In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which supersedes most existing revenue recognition guidance under GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP. The standard is effective for annual periods beginning after December 15, 2017, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). In March 2016, the FASB issued implementation guidance that clarified the considerations in principal versus agent determination. In April 2016, FASB issued guidance that clarified identifying performance obligations and licensing implementation guidance contained in the new revenue recognition standard. In May 2016, FASB issued guidance that addresses narrow-scope improvements to the guidance on collectability, noncash consideration, and completed contracts at transition. In December 2016, FASB issued guidance to make minor corrections or minor improvements to the Codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. The Company's current revenue policy meets five core principles of ASU 2014-09 and the Company currently capitalizes the contract costs over the contracted period also in accordance with ASU 2014-09. The Company is still analyzing the impact of this ASU, but based on the current work to date the Company believes that the current revenue recognition policy currently in place already depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services and as a result the adoption of this ASU is not expected to have a material impact on the Company's financial statements. |
Net Loss per Share |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Loss Per Share | Net Loss per Share The Company calculates earnings per share (“EPS”) in accordance with the provisions of ASC 260-10 and the guidance of SEC Staff Accounting Bulletin (“SAB”) No. 98. Under ASC 260-10, basic EPS excludes dilution for common stock equivalents and is computed by dividing net income or loss attributable to common shareholders by the weighted average number of common shares outstanding for the period. All options, warrants or other potentially dilutive instruments issued for nominal consideration are required to be included in the calculation of basic and diluted net income attributable to common stockholders. Diluted EPS is calculated using the treasury stock method and reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock and resulted in the issuance of common stock. Diluted net loss per common share for the year ended December 31, 2016 does not include the effect of options to purchase 8,956,932 shares of common stock awards as the effect of their inclusion is anti-dilutive. Diluted net income per common share for the year ended December 31, 2015 does not include the effect of options to purchase 10,345,356 shares of common stock awards as the effect of their inclusion is anti-dilutive. Diluted net income per common share for the year ended December 31, 2014 does not include the effect of options to purchase 10,769,149 shares of common stock awards as the effect of their inclusion is anti-dilutive. A reconciliation of shares used in calculating basic and diluted earnings per share follows:
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Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information The Company accounts for its segment information in accordance with the provisions of ASC 280-10, “Segment Reporting.” ASC 280-10 establishes annual and interim reporting standards for operating segments of a company. ASC 280-10 requires disclosures of selected segment-related financial information about products, major customers, and geographic areas based on the Company’s internal accounting methods. The Company is organized into two operating segments for purposes of making operating decisions and assessing performance. The Business segment facilitates real-time online interactions — chat, voice and content delivery across multiple channels and screens for global corporations of all sizes. The Consumer segment facilitates online transactions between Experts and Users and sells its services to consumers. The chief operating decision-maker evaluates performance, makes operating decisions, and allocates resources based on the operating income of each segment. The reporting segments follow the same accounting polices used in the preparation of the Company’s consolidated financial statements which are described in the summary of significant accounting policies. The Company allocates cost of revenue, sales and marketing and amortization of purchased intangibles to the segments, but it does not allocate product development expenses, general and administrative expenses and income tax expense because management does not use this information to measure performance of the operating segments. There are currently no intersegment sales. Additionally, assets are not available for review by segment and therefore no segment asset disclosure is presented. Summarized financial information by segment for the year ended December 31, 2016, based on the Company’s internal financial reporting system utilized by the Company’s chief operating decision maker, follows (amounts in thousands):
Summarized financial information by segment for the year ended December 31, 2015, based on the Company’s internal financial reporting system utilized by the Company’s chief operating decision maker, follows (amounts in thousands):
Summarized financial information by segment for the year ended December 31, 2014, based on the Company’s internal financial reporting system utilized by the Company’s chief operating decision maker, follows (amounts in thousands):
Geographic Information The Company is domiciled in the United States and has international operations in the United Kingdom, Asia-Pacific, Latin America and Western Europe, particularly France and Germany. The following table presents the Company's revenues attributable to domestic and foreign operations for the years ended (amounts in thousands):
(1) Canada, Latin America and South America (2) Europe, the Middle East and Africa (“EMEA”) (3) Asia-Pacific (“APAC”) (4) Includes revenues from the United Kingdom of $35.3 million and $38.2 million for the twelve months ended December 31, 2016 and 2015, respectively. The following table presents the Company's long-lived assets by geographic region for the years ended (amounts in thousands):
(1) United Kingdom, Germany, Japan, France, and Italy |
Property and Equipment |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment | Property and Equipment The following table presents the detail of property and equipment for the periods presented (amounts in thousands):
In accordance with its policy, the Company reviews the estimated useful lives of its fixed assets on an ongoing basis. This review indicated that the actual lives of certain co-location assets were longer than the estimated useful lives used for depreciation purposes in the Company's financial statements. As a result, effective August 1, 2016, the Company changed its estimates of the useful lives of its co-location assets to better reflect the estimated periods during which these assets will remain in service. The estimated useful lives of the co-location assets that previously averaged three years were increased to an average of four years. The effect of this change in estimate was to reduce depreciation expense and net loss for the twelve months ended December 31, 2016 by $1.0 million and decrease basic and diluted loss per share by $0.02. Aggregate depreciation expense for property and equipment was $12.0 million, $12.1 million and $9.1 million for the years ended December 31, 2016, 2015 and 2014, respectively. |
Goodwill and Intangible Assets |
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Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill The changes in the carrying amount of goodwill for the year ended December 31, 2016 are as follows (amounts in thousands):
The changes in the carrying amount of goodwill for the year ended December 31, 2015 are as follows (amounts in thousands):
The total accumulated goodwill impairment charges are $23.5 million through December 31, 2016. No impairment was recognized for the years ended December 31, 2016, 2015 and 2014. Intangible Assets Intangible assets are summarized as follows (see Note 7) (amounts in thousands):
Amortization expense is calculated over the estimated useful life of the asset. Aggregate amortization expense for intangible assets was $6.7 million, $8.0 million and $5.1 million for the years ended December 31, 2016, 2015 and 2014, respectively. For the years ended December 31, 2016, 2015 and 2014, a portion of this amortization is included in cost of revenue. Estimated amortization expense for the next five years are as follows (amounts in thousands):
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Accrued Liabilities and Other Current Liabilities |
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Accrued Liabilities and Other Current Liabilities | Accrued Liabilities and Other Current Liabilities The following table presents the detail of accrued liabilities and other current liabilities for the periods presented (amounts in thousands):
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Acquisitions |
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Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Synchronite LLC On June 2, 2014, the Company acquired Synchronite LLC (“Synchronite”), a German based start-up that provides co-browsing technology. The transaction was accounted for under the purchase method of accounting and, accordingly, the operating results of Synchronite were included in the Company’s consolidated results of operations from the date of acquisition. The allocation of the total purchase price of approximately $4.1 million was based upon the estimated fair value of Synchronite's net tangible and identifiable intangible assets as of the date of acquisition. The total acquisition costs incurred were approximately $0.4 million and are included in general and administrative expenses in the Company’s consolidated statements of operations. Of the total purchase price, $45,000 was allocated to the net book values of the acquired assets and assumed liabilities. The historical carrying amounts of such assets and liabilities approximated their fair values. All receivables acquired are expected to be collectible. The purchase price includes approximately $2.7 million of goodwill and approximately $1.5 million of intangible assets. The goodwill will be deductible for tax purposes. The intangible assets are being amortized over their expected period of benefit. The purchase price includes $1.8 million of potential earn-out consideration for the shareholders if complete product integration is achieved. The earn-out is payable in shares of LivePerson common stock and cash. The Company recorded the contingent earn-out as part of the purchase price. In accordance with ASC 480, the Company has classified this amount as a liability and the amount is included in accrued expenses in the December 31, 2016 consolidated balance sheet, due to the variable number of shares that will be issued if and when the targets are achieved. During the year ended December 31, 2015, the Company made $1.6 million of payments. The ending balance at December 31, 2016 is $0.2 million. The Company will continue to assess the earn-out calculation in future periods and any future adjustments will affect operating income. Contact At Once!, LLC On November 7, 2014, the Company acquired Contact At Once!, LLC (“CAO!”), a software company with a cloud-based platform that instantly connects consumers with businesses through instant messaging, text messaging, chat, social media and video over the internet for consumer-to-business sales conversions. The transaction was accounted for under the purchase method of accounting and, accordingly, the operating results of CAO! were included in the Company’s consolidated results of operations from the date of acquisition. The allocation of the total purchase price of approximately $67.0 million, which includes approximately $42.8 million in cash, approximately $20.0 million in shares of common stock and approximately $4.2 million of potential earn-out consideration in cash, was based upon the estimated fair value of CAO!'s net tangible and identifiable intangible assets as of the date of acquisition. The historical carrying amounts of such assets and liabilities approximated their fair values. All receivables acquired are expected to be collectible. The purchase price included approximately $45.1 million of goodwill and approximately $20.4 million of intangible assets. The goodwill will be deductible for tax purposes. The intangible assets are being amortized over their expected period of benefit. The purchase price includes $4.2 million of potential earn-out consideration for the shareholders if certain targeted financial, strategic and integration objectives is achieved. The earn-out is payable in cash. The Company recorded the contingent earn-out as part of the purchase price. During the year ended December 31, 2015, the Company assessed this earn-out and recorded a $3.2 million fair value re-measurement adjustment, which was recorded in loss from operations as a decrease in general and administrative expenses. During the year ended December 31, 2016, the Company made cash payments of $0.2 million. There is no remaining liability included in accrued expenses relating to this contingent earn-out as of December 31, 2016. |
Fair Value Measurements |
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Fair Value Measurements | Fair Value Measurements The Company measures its cash equivalents at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. The following are the hierarchical levels of inputs to measure fair value:
Financial Assets and Liabilities The carrying amount of cash, accounts receivable, and accounts payable approximate their fair value due to their short-term nature. The Company's assets and liabilities that are measured at fair value on a recurring basis, by level, within the fair value hierarchy as of December 31, 2016 and December 31, 2015, are summarized as follows (amounts in thousands). The Company’s restricted cash balance of $4.0 million at December 31, 2016 and $5.4 million at December 31, 2015 is not held in a money market account and is not included in the following table.
In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value. Observable or market inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company's assumptions based on the best information available. The Company's money market funds are measured at fair value on a recurring basis based on quoted market prices in active markets and are classified as level 1 within the fair value hierarchy. The Company's contingent earn-out liability and foreign currency derivative contracts are measured at fair value on a recurring basis and are classified as level 3 and level 2, respectively, within the fair value hierarchy. On a nonrecurring basis, the Company uses fair value measures when analyzing asset impairment. Long-lived tangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If it is determined such indicators are present and the review indicates that the assets will not be fully recoverable, based on undiscounted estimated cash flows over the remaining amortization periods, their carrying values are reduced to estimated fair value. The Company uses an income approach and inputs that constitute level 3. During the third quarter of each year, the Company evaluates goodwill for impairment at the reporting unit level. The Company uses qualitative factors in accordance with ASU No. 2011-08 to determine whether it is "more likely than not" that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. This measurement is classified based on level 3 input. During the twelve months ended December 31, 2015, the contingent earn-out decreased by $4.1 million in connection with the acquisition of CAO! due to both re-measurement to fair value of $3.2 million and cash payments of $0.9 million. The contingent earnout was also decreased by $0.9 million in connection with the Engage acquisition and by $1.6 million in connection with the acquisition of Synchronite due to both re-measurement to fair value and cash payments. During the twelve months ended December 31, 2016, the contingent earnout was decreased by $0.2 million in connection with the acquisition of CAO! due to cash payments. The contingent earn-out amounts are recorded in accrued expense on the consolidated balance sheets as they are payable in 2017. The contingent earn-out relating to Engage was based on the potential earn-out consideration if certain revenue targets are achieved. There was no remaining contingent earn-out in connection with the acquisition of Engage as of December 31, 2016. The contingent earn-out relating to Synchronite is based on the fulfillment of a complete product integration and a minimum number of “Co-Browse” interactions per month. There was $0.2 million of contingent earn-out remaining in connection with the acquisition of Synchronite as of December 31, 2016. There was no remaining contingent earn-out in connection with the acquisition of CAO! as of December 31, 2016. The changes in fair value of the Level 3 liabilities are as follows (amounts in thousands):
Derivative Financial Instruments The Company is exposed to foreign exchange risks that are managed in part by using derivative financial instruments. Beginning in January 2015, the Company entered into foreign currency forward contracts related to risks associated with foreign operations. The Company does not use derivatives for trading purposes and at December 31, 2016 has no derivatives that are designated as fair value hedges. Derivatives are recorded at their estimated fair values based upon Level 2 inputs. Derivatives designated and effective as cash flow hedges are reported as a component of other comprehensive income and reclassified to earnings in the same periods in which the hedged transactions impact earnings. Gains and losses related to derivatives not meeting the requirements of hedge accounting and the portion of derivatives related to hedge ineffectiveness are recognized in current earnings. In accordance with the foreign currency forward contracts, the Company was required to pledge cash as collateral security to be maintained at the bank. The collateral shall remain in control of the lender, and these funds can be used to satisfy the outstanding obligation. Accordingly, the Company had cash at the bank of approximately $4.0 million at December 31, 2016 and is recorded as cash held as collateral in current assets. The following summarizes certain information regarding the Company’s outstanding foreign currency derivative contracts related primarily to intercompany receivables and payables for the periods presented (in thousands):
The fair value of the Company’s derivative instruments is summarized below (in thousands):
The following summarizes certain information regarding the Company’s derivatives that are not designated or are not effective as hedges (in thousands):
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Investments |
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Dec. 31, 2016 | |
Investments, All Other Investments [Abstract] | |
Investments | Investments In February 2014, the Company purchased technology licenses and consulting services at fair value from a company in the amount of $3.5 million. The Company received access to this company's patents as well as certain consulting services. During the year ended December 31, 2014, the Company allocated approximately $2.8 million to intangible assets, which is being amortized over the life of the patents. The remaining amount was allocated to other assets. During the year ended December 31, 2016, the Company determined the investment was impaired and wrote off approximately $0.6 million that was allocated to other assets and $2.0 million that represented remaining net book value in intangible assets. |
Commitments and Contingencies |
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Commitments and Contingencies | Commitments and Contingencies Contractual Obligations The Company leases facilities and certain equipment under agreements accounted for as operating leases. These leases generally require the Company to pay all executory costs such as maintenance and insurance. Rental expense for operating leases for the years ended December 31, 2016, 2015 and 2014 was approximately $10.0 million, $9.9 million and $9.5 million, respectively. Future minimum lease payments under non-cancellable operating leases (with an initial or remaining lease terms in excess of one year) are as follows (amounts in thousands):
Employee Benefit Plans The Company has a 401(k) defined contribution plan covering all eligible employees. The Company provides for employer matching contributions equal to 50% of employee contributions, up to the lesser of 5% of eligible compensation or $6,000. Matching contributions are deposited in to the employees 401(k) account and are subject to 5 year graded vesting. Salaries and related expenses include $1.3 million, $1.3 million and $0.9 million of employer matching contributions for the years ended December 31, 2016, 2015 and 2014, respectively. Indemnifications The Company enters into service and license agreements in its ordinary course of business. Pursuant to some of these agreements, the Company agrees to indemnify certain customers from and against certain types of claims and losses suffered or incurred by them as a result of using the Company’s products. The Company also has agreements whereby its executive officers and directors are indemnified for certain events or occurrences while the officer or director is, or was serving, at the Company’s request in such capacity. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited; however, the Company has a directors and officers insurance policy that reduces its exposure and enables the Company to recover a portion of any future amounts paid. As a result of its insurance policy coverage, the Company believes the estimated fair value of these indemnification agreements is minimal. Currently, the Company has no liabilities recorded for these agreements as of December 31, 2016. |
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Stockholders' Equity | Stockholders' Equity Common Stock At December 31, 2016, there were 100,000,000 shares of common stock authorized, and 58,276,447 shares issued and outstanding. As of December 31, 2015, there were 100,000,000 shares of common stock authorized, and 57,374,907 shares issued and outstanding. The par value for common shares is $0.001. Preferred Stock As of December 31, 2016 and 2015, there were 5,000,000 shares of preferred stock authorized, and zero shares issued and outstanding. The par value for preferred shares is $0.001. Stock Repurchase Program On December 10, 2012, the Company’s Board of Directors approved a stock repurchase program through June 30, 2014. Under the stock repurchase program, the Company is authorized to repurchase shares of its common stock, in the open market or privately negotiated transactions, at times and prices considered appropriate by the Board of Directors depending upon prevailing market conditions and other corporate considerations. On March 13, 2014, the Company's Board of Directors increased the aggregate purchase price of the stock repurchase program from $30.0 million to $40.0 million. On July 23, 2014, the Company's Board of Directors increased the aggregate purchase price of the stock repurchase program from $40.0 million to $50.0 million. On February 16, 2016, the Company's Board of Directors increased the aggregate purchase price of the total stock repurchase program by an additional $14.0 million. On November 21, 2016, the Company's Board of Directors increased the aggregate purchase price of the stock repurchase program from $64.0 million to $74.0 million and extended the expiration date of the program out to December 31, 2017. There were 1,518,349 shares repurchased under this program during 2016 which were recorded in treasury stock at par on the consolidated balance sheets as of December 31, 2016. As of December 31, 2016, approximately $20.1 million remained available for purchase under the program. Stock-Based Compensation The Company follows FASB ASC 718-10, “Stock Compensation,” which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions. ASC 718-10 requires measurement of the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). Incremental compensation costs arising from subsequent modifications of awards after the grant date must be recognized. The per share weighted average fair value of stock options granted during the years ended December 31, 2016, 2015 and 2014 was $3.10, $4.45, and $5.15, respectively. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions for the years ended December 31, 2016, 2015 and 2014:
A description of the methods used in the significant assumptions used to estimate the fair value of stock-based-based compensation awards follows: Dividend yield – The Company uses 0% as it has never issued dividends and does not anticipate issuing dividends in the near term. Risk-free interest rate – The Company uses the market yield on U.S. Treasury securities at five years with constant maturity, representing the current expected life of stock options in years. Expected life – The Company uses historical data to estimate the expected life of a stock option. Historical volatility – The Company uses a trailing five year from grant date to determine volatility. Stock Option Plans During 1998, the Company established the Stock Option and Restricted Stock Purchase Plan (the “1998 Plan”). Under the 1998 Plan, the Board of Directors could issue incentive stock options or nonqualified stock options to purchase up to 5,850,000 shares of common stock. The 2000 Stock Incentive Plan (the “2000 Plan”) succeeded the 1998 Plan. Under the 2000 Plan, the options which had been outstanding under the 1998 Plan were incorporated in the 2000 Plan increasing the number of shares available for issuance under the plan by approximately 4,150,000, thereby reserving for issuance 10,000,000 shares of common stock in the aggregate. The Company established the 2009 Stock Incentive Plan (as amended and restated, the “2009 Plan”) as a successor to the 2000 Plan. Under the 2009 Plan, the options which had been outstanding under the 2000 Plan were incorporated into the 2009 Plan and the Company increased the number of shares available for issuance under the plan by 6,000,000. The Company amended the 2009 Stock Incentive Plan (the “Amended 2009 Plan”) effective June 7, 2012. The Amended 2009 Plan increased the number of shares authorized for issuance under the plan by an additional 4,250,000, thereby reserving for issuance 23,817,744 shares of common stock in the aggregate. Options to acquire common stock granted thereunder have 10-year terms. As of December 31, 2016, approximately 2.4 million shares of common stock were reserved for issuance under the 2009 Plan (taking into account all option exercises through December 31, 2016). Employee Stock Purchase Plan In June 2010, our stockholders approved the 2010 Employee Stock Purchase Plan with 1,000,000 shares of common stock initially reserved for issuance. As of December 31, 2016, approximately 197,000 shares of common stock were reserved for issuance under the Employee Stock Purchase Plan (taking into account all share purchases through December 31, 2016). Stock Option Activity A summary of the Company’s stock option activity and weighted average exercise prices follows:
The total fair value of stock options exercised during the years ended December 31, 2016 and 2015 was approximately $1.1 million and $1.7 million, respectively. As of December 31, 2016, there was approximately $7.1 million of total unrecognized compensation cost related to nonvested share-based compensation arrangements. That cost is expected to be recognized over a weighted average period of approximately 1.9 years. The following table summarizes information about outstanding and vested stock options as of December 31, 2016:
Restricted Stock Unit Activity A summary of the Company’s restricted stock units (“RSUs”) activity and weighted average exercise prices follows:
RSUs granted to employees generally vest over a four-year period. As of December 31, 2016, total unrecognized compensation cost, adjusted for estimated forfeitures, related to nonvested RSUs was approximately $9.3 million and the weighted-average remaining vesting period was 2.8 years. |
Income Taxes |
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. 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. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences are expected to become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. The Company includes interest accrued on the underpayment of income taxes in interest expense and penalties, if any, related to unrecognized tax benefits in general and administrative expenses. The Company recorded a valuation allowance against its U.S. deferred tax asset as it considered its cumulative loss in recent years as a significant piece of negative evidence. Since valuation allowances are evaluated on a jurisdiction by jurisdiction basis, we believe that the deferred tax assets related to LivePerson UK, Engage Australia, Kasamba Israel and LivePerson LTD Israel are “more likely than not” to be realized as these jurisdictions have positive cumulative pre-tax book income after adjusting for permanent and onetime items. During the year ended December 31, 2016, the valuation recorded was $12.1 million. Under Section 382 of the Internal Revenue Code of 1986, as amended, the Company’s use of its federal net operating loss (“NOL”) carryforwards may be limited if the Company experiences an ownership change, as defined in Section 382. Such an annual limitation could result in the expiration of the net operating loss carryforwards before utilization. As of December 31, 2016, the Company had approximately $16.6 million of federal NOL carryforwards available to offset future taxable income. Included in this amount is $5.1 million of federal NOL carryovers from the Company’s acquisition of Proficient. These carryforwards expire in various years through 2027. The domestic and foreign components of loss before provision for income taxes consist of the following (amounts in thousands):
No additional provision has been made for U.S. income taxes on the undistributed earnings of its Israeli subsidiary, LivePerson Ltd. (formerly HumanClick Ltd.), as such earnings have been taxed in the U.S. and accumulated earnings of the Company’s other foreign subsidiaries are immaterial through December 31, 2016. The provision for income taxes consists of the following (amounts in thousands):
The difference between the total income taxes computed at the federal statutory rate and the provision for income taxes consists of the following:
The effects of temporary differences and tax loss carryforwards that give rise to significant portions of federal deferred tax assets and deferred tax liabilities at December 31, 2016 and 2015 are presented below (amounts in thousands):
ASC Topic 740-10 clarifies the accounting for uncertainty in income taxes recognized in the financial statements in accordance with other provisions contained within this guidance. This topic prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by the taxing authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate audit settlement. The Company had unrecognized tax benefits of $4.2 million and $3.5 million as of December 31, 2016 and 2015, respectively. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
The tax years subject to examination by major tax jurisdictions include the years 2011 and forward for U.S states and New York City, the years 2012 and forward for U.S. Federal, and the years 2012 and forward for certain foreign jurisdictions. |
Legal Matters |
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Loss Contingency, Information about Litigation Matters [Abstract] | |
Legal Matters | Legal Matters The Company previously filed an intellectual property suit against [24]7 Customer, Inc. in the Southern District of New York on March 6, 2014 seeking damages on the grounds that [24]7 reverse engineered and misappropriated the Company's technology to develop competing products and misused the Company's business information. Discovery in the New York case is in process. On June 22, 2015, [24]7 Customer, Inc. filed suit against the Company in the Northern District of California alleging patent infringement. On December 7, 2015, [24]7 Customer Inc. filed a second patent infringement suit against the Company, also in the Northern District of California. On January 5, 2016, the two California cases were consolidated for all pre-trial purposes. On March 9, 2017, the Court for the Southern District of New York in the Company's case against [24]7 granted the parties’ joint request to voluntarily transfer the Southern District of New York case to the Northern District of California for consolidation with the referenced California cases. The Company believes the claims filed by [24]7 Customer Inc. are entirely without merit and intends to defend them vigorously. The Company routinely assesses all of its litigation and threatened litigation as to the probability of ultimately incurring a liability, and records its best estimate of the ultimate loss in situations where the Company assesses the likelihood of loss as probable. From time to time, the Company is involved in or subject to legal, administrative and regulatory proceedings, claims, demands and investigations arising in the ordinary course of business, including direct claims brought by or against the Company with respect to intellectual property, contracts, employment and other matters, as well as claims brought against the Company’s customers for whom the Company has a contractual indemnification obligation. The Company accrues for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Significant judgment is required in both the determination of probability and the determination as to whether a loss is reasonably estimable. In addition, in the event the Company determines that a loss is not probable, but is reasonably possible, and it becomes possible to develop what the Company believes to be a reasonable range of possible loss, then the Company will include disclosure related to such matter as appropriate and in compliance with ASC 450. The accruals or estimates, if any, resulting from the foregoing analysis, are reviewed at least quarterly and adjusted to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular matter. To the extent there is a reasonable possibility that the losses could exceed the amounts already accrued, the Company will, as applicable, adjust the accrual in the period the determination is made, disclose an estimate of the additional loss or range of loss, indicate that the estimate is immaterial with respect to its financial statements as a whole or, if the amount of such adjustment cannot be reasonably estimated, disclose that an estimate cannot be made. From time to time, third parties assert claims against the Company regarding intellectual property rights, privacy issues and other matters arising in the ordinary course of business. Although the Company cannot be certain of the outcome of any litigation or the disposition of any claims, nor the amount of damages and exposure, if any, that the Company could incur, the Company currently believes that the final disposition of all existing matters will not have a material adverse effect on our business, results of operations, financial condition or cash flows. In addition, in the ordinary course of business, the Company is also subject to periodic threats of lawsuits, investigations and claims. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors. |
Restructuring Costs |
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Restructuring Costs | Restructuring Costs The Company’s restructuring costs relate to wind-down and severance costs associated with re-prioritizing and reallocating resources to focus on areas showing high growth potential, as well as the termination of a large customer contract. The expense associated with this restructuring was approximately $2.8 million, offset partially by a benefit of approximately $0.4 million due to the cash collection of a previously written off bad debt during the year ended December 31, 2016 and is classified in the consolidated statements of operations as restructuring costs. The expense associated with this restructuring was approximately $3.4 million during the twelve months ended December 31, 2015 and is classified in the consolidated statements of operations as restructuring costs. The restructuring liability was approximately $2.6 million and $1.3 million as of December 31, 2016 and 2015 and is classified as accrued expenses and other current liabilities on the consolidated balance sheets. The following table presents the detail of the liability for the Company’s restructuring charges for the periods presented (amounts in thousands):
The following table presents the detail of expenses for the Company’s restructuring charges for the periods presented (amounts in thousands):
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Description of Business and Summary of Significant Accounting Policies (Policy) |
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Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary Of Operations | LivePerson, Inc. (the “Company” or “LivePerson”) was incorporated in the State of Delaware in November 1995 and the LivePerson service was introduced in November 1998. In April 2000, the Company completed an initial public offering and is currently traded on the NASDAQ Global Select Market and the Tel Aviv Stock Exchange. LivePerson is headquartered in New York City with an U.S. office in Alpharetta (Georgia), and international offices in Amsterdam, Berlin, London, Mannheim, Melbourne, Milan, Paris, Ra'anana (Israel), Reading (UK), and Tokyo. LivePerson provides mobile and online business messaging solutions that power digital communication between brands and consumers. LiveEngage, the Company’s enterprise-class, cloud-based platform, enables businesses to create a meaningful connection with consumers via messaging. As consumers have reoriented their digital lives around the smartphone, messaging apps have become their preferred communication channel to connect with each other. LivePerson allows brands to align with this new consumer preference, and deploy messaging at scale for customer care and sales, instead of demanding that consumers use email or call a 1-800 number. LiveEngage was designed to securely deploy messaging at scale for brands with tens of millions of customers and many thousands of customer care agents. Key benefits include a sophisticated proactive targeting engine and a robust suite of text and mobile messaging, real-time chat messaging, content delivery, customer sentiment, and cobrowsing offerings that power intelligent digital engagement with consumers. LiveEngage powers conversations across each of a brand’s primary digital channels, including mobile apps, mobile and desktop web browsers, social media and third-party consumer messaging platforms. LivePerson optimizes campaign outcomes for sales and service transaction by combining website visitor data with other historical, behavioral, and operational information to develop insights into each step of a consumer’s journey. LivePerson’s products, coupled with its domain knowledge, industry expertise and consulting services, have been proven to maximize the effectiveness of consumer engagement. The Company’s primary revenue source is from the sale of LivePerson services to businesses of all sizes. The Company also offers an online marketplace that connects independent service providers (“Experts”) who provide information and knowledge for a fee via real-time chat with individual consumers (“Users”). |
Principles Of Consolidation | Principles of Consolidation The consolidated financial statements reflect the operations of LivePerson and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. |
Reclassification | Reclassification For comparability, certain 2014 and 2015 amounts have been reclassified where appropriate, to conform to the financial presentation in 2016. |
Use Of Estimates | Use of Estimates The preparation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires the Company’s management to make a number of estimates and assumptions relating to the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the period. Significant items subject to such estimates and assumptions include revenue recognition, stock-based compensation, accounts receivable, the valuation of goodwill and intangible assets, income taxes and legal contingencies. Actual results could differ from those estimates. |
Concentration Of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable which approximate fair value at December 31, 2016 because of the short-term nature of these instruments. The Company invests its cash and cash equivalents with financial institutions that it believes are of high quality, and the Company performs periodic evaluations of these instruments and the relative credit standings of the institutions with which it invests. At certain times, the Company’s cash balances with any one financial institution may exceed Federal Deposit Insurance Corporation insurance limits. The Company believes it mitigates its risk by depositing its cash balances with high credit, quality financial institutions. The Company’s customers are located primarily in the United States. The Company performs ongoing credit evaluations of its customers’ financial condition (except for customers who purchase the LivePerson services by credit card via Internet download) and has established an allowance for doubtful accounts based upon factors surrounding the credit risk of customers, historical trends and other information. Concentration of credit risk is limited due to the Company’s large number of customers. No single customer accounted for or exceeded 10% of revenue in 2016, 2015 or 2014. No single customer accounted for or exceeded 10% of the Company's total accounts receivable in 2016 and 2015. |
Foreign Currency Translation | Foreign Currency Translation The Company's operations are conducted in various countries around the world and the financial statements of its foreign subsidiaries are reported in the applicable foreign currencies (functional currencies). Financial information is translated from the applicable functional currency to the U.S. dollar (the reporting currency) for inclusion in the Company's consolidated financial statements. Income, expenses and cash flows are translated at weighted average exchange rates prevailing during the fiscal period, and assets and liabilities are translated at fiscal period-end exchange rates. Resulting translation adjustments are included as a component of accumulated other comprehensive income (loss) in stockholders' equity. Foreign exchange transaction gain or losses are included in Other Income, net in the accompanying consolidated statements of operations. |
Cash And Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid securities with original maturities of 3 months or less when acquired to be cash equivalents. Cash equivalents, which primarily consist of money market funds, are recorded at cost, which approximates fair value. |
Accounts Receivable | Accounts Receivable Accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company determines the allowance based on historical write-off experience. The Company reviews its allowance for doubtful accounts monthly. Past due balances over 90 days and over a specified amount are reviewed individually for collectability. All other balances are reviewed on a pooled basis. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance sheet credit exposure related to its customers. |
Property And Equipment | Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets, generally three to five years for equipment and software. Leasehold improvements are depreciated using the straight-line method over the shorter of the lease term or the estimated useful life of the asset. |
Internal-Use Software Development Costs | Internal-Use Software Development Costs In accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350-40, Internal-Use Software, the Company capitalizes its costs to develop its internal use software when preliminary development efforts are successfully completed, management has authorized and committed project funding, and it is probable that the project will be completed and the software will be used as intended. These costs are included in property and equipment in the Company's consolidated balance sheets and are amortized on a straight-line basis over the estimated useful life of the related asset, which approximates three years. Costs incurred prior to meeting these criteria, together with costs incurred for training and maintenance, are expensed as incurred. |
Goodwill And Intangible Assets | Goodwill and Intangible Assets In accordance with ASC 350, Goodwill and Other Intangible Assets, goodwill and indefinite-lived intangible assets are not amortized, but reviewed for impairment upon the occurrence of events or changes in circumstances that would reduce the fair value below its carrying amount. Goodwill is required to be tested for impairment at least annually. In September 2011, the FASB issued ASU No. 2011-8, “Intangibles — Goodwill and Other (Topic 350).” ASU 2011-8 permits an entity to first assess qualitative factors to determine whether it is “more likely than not” that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in Topic 350. The more-likely-than-not threshold is defined as having a likelihood of more than 50%. If it is determined that the fair value of a reporting unit is more likely than not to be less than its carrying value (including unrecognized intangible assets) then it is necessary to perform the second step of the goodwill impairment test. The second step of the goodwill impairment test is judgmental in nature and often involves the use of significant estimates and assumptions. Similarly, estimates and assumptions are used in determining the fair value of other intangible assets. These estimates and assumptions could have a significant impact on whether or not an impairment charge is recognized and also the magnitude of any such charge. The Company performs internal valuation analyses and considers other market information that is publicly available. Estimates of fair value are primarily determined using discounted cash flows and market comparisons. These approaches use significant estimates and assumptions including projected future cash flows (including timing), discount rates reflecting the risk inherent in future cash flows, perpetual growth rates, determination of appropriate market comparables and the determination of whether a premium or discount should be applied to comparables. ASC 350-10 also requires that intangible assets with estimable useful lives be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with ASC 360-10-35, “Accounting for Impairment or Disposal of Long-Lived Assets.” The Company evaluates for goodwill impairment annually at September 30th and at the end of the third quarter of 2016, the Company determined that it was not more-likely that the fair value of the reporting units is less than their carrying amount. Accordingly, the Company did not perform the two-step goodwill impairment test on both the Company's Business and Consumer segments. The Company assessed qualitative facts while summarizing the totality of events and circumstances and considered the extent to which adverse events or circumstances could affect the reporting unit's fair value as well as the consideration of positive and mitigating events and circumstances that would affect the determination of whether it was more likely than not that the fair value of a reporting unit is less than its carrying amount. |
Impairment Of Long-Lived Assets | Impairment of Long-Lived Assets In accordance with ASC 360-10, “Accounting for the Impairment or Disposal of Long-lived Assets,” long-lived assets, such as property, plant and equipment and purchased intangibles subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. During December 31, 2016, the Company determined certain long-lived assets related to the legacy platform and purchased intangibles of technology licenses to be impaired. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties. Cash and cash equivalents, accounts receivable, security deposits and accounts payable carrying amounts approximate fair value because of the short maturity of these instruments. |
Revenue Recognition | Revenue Recognition The majority of the Company’s revenue is generated from monthly service revenues and related professional services from the sale of the LivePerson services. Because the Company provides its application as a service, the Company follows the provisions of FASB Accounting Standards Codification (“ASC”) 605-10-S99, “Revenue Recognition” and ASC 605-25, “Revenue Recognition with Multiple-Element Arrangements.” The Company charges a monthly, quarterly or annual fee, which varies by type of service, the level of customer usage and website traffic, and in some cases, the number of orders placed via the Company’s online engagement solutions. For certain of the Company’s larger customers, the Company may provide call center labor through an arrangement with one or more of several qualified vendors. For most of these customers, the Company passes the fee it incurs with the labor provider and its fee for the hosted services through to its customers in the form of a fixed fee for each order placed via the Company’s online engagement solutions. For these Pay for Performance (“PFP”) arrangements, in accordance with ASC 605-45, “Principal Agent Considerations,” the Company records revenue for transactions in which it acts as an agent on a net basis, and revenue for transactions in which it acts as a principal on a gross basis. The Company also sells certain of the LivePerson services directly via Internet download. These services are marketed as LiveEngage for small to medium-sized businesses (“SMBs”), and are paid for almost exclusively by credit card. Credit card payments accelerate cash flow and reduce the Company’s collection risk, subject to the merchant bank's right to hold back cash pending settlement of the transactions. Sales of LiveEngage may occur with or without the assistance of an online sales representative, rather than through face-to-face or telephone contact that is typically required for traditional direct sales. The Company recognizes monthly service revenue based upon the fee charged for the LivePerson services, provided that there is persuasive evidence of an arrangement, no significant Company obligations remain, collection of the resulting receivable is probable and the amount of fees to be paid is fixed or determinable. The Company’s service agreements typically have 12 month terms and, in some cases, are terminable or may terminate upon 30 to 90 days’ notice without penalty. When professional service fees add value to the customer on a standalone basis, the Company recognizes professional service fees upon completion of services and customer acceptance. This guidance establishes a selling price hierarchy for determining the selling price of a deliverable, which is based on: (a) vendor-specific objective evidence; (b) third-party evidence; or (c) best estimated selling price. If a professional services arrangement does not qualify for separate accounting, the Company recognizes the fees, and the related labor costs, ratably over the contracted period. For revenue from our Consumer segment generated from online transactions between Experts and Users, the Company recognizes revenue net of the Expert fees in accordance with ASC 605-45, “Principal Agent Considerations,” due primarily to the fact that the Expert is the primary obligor. Additionally, the Company performs as an agent without any risk of loss for collection, and is not involved in selecting the Expert or establishing the Expert’s fee. The Company collects a fee from the User and retains a portion of the fee, and then remits the balance to the Expert. Revenue from these transactions is recognized when there is persuasive evidence of an arrangement, no significant Company obligations remain, collection of the resulting receivable is probable and the amount of fees to be paid is fixed and determinable. |
Advertising Costs | Advertising Costs The Company expenses the cost of advertising and promoting its services as incurred. |
Stock-Based Compensation | Stock-based Compensation In accordance with ASC Topic 718 -10, "Stock Compensation", the Company measures stock based awards at fair value and recognizes compensation expense for all share-based payment awards made to its employees and directors, including employee stock options. The Company estimates the fair value of stock options granted using the Black-Scholes valuation model. This model requires the Company to make estimates and assumptions including, among other things, estimates regarding the length of time an employee will retain vested stock options before exercising them, the estimated volatility of its common stock price and the number of options that will be forfeited prior to vesting. The fair value is then recognized on a straight line basis over the requisite service period of the award, which is generally four years. Changes in these estimates and assumptions can materially affect the determination of the fair value of the stock-based compensation and consequently, the related amount recognized in the consolidated statement of operations. |
Deferred Rent | Deferred Rent The Company records rent expense on a straight-line basis over the term of the related lease. The difference between the rent expense recognized for financial reporting purposes and the actual payments made in accordance with the lease agreement is recognized as deferred rent liability included in other liabilities on the Company’s consolidated balance sheets. |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. 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. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in results of operations in the period that the tax change occurs. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. |
Comprehensive Income (Loss) | Comprehensive Loss In accordance with ASC 220, Comprehensive Income, the Company reports by major components and as a single total, the change in its net assets during the period from non-owner sources. Comprehensive income (loss) consists of net income (loss), and accumulated other comprehensive income (loss), which includes certain changes in equity that are excluded from net income (loss). The Company’s comprehensive loss for all periods presented is related to the effect of foreign currency translation. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2017-04, "Intangibles —Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment" (“ASU 2017-04”). This update addresses concerns over the cost and complexity of the two-step goodwill impairment test. The amendments in this update remove the second step of the test. An entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit's carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance does not amend the optional qualitative assessment of goodwill impairment. ASU 2017-04 is effective for financial statements issued for annual periods beginning after December 15, 2019, and interim periods within those annual periods. The Company does not expect the adoption of ASU 2017-04 to have a material effect on its financial position, results of operations or cash flows. In January 2017, the FASB issued Accounting Standards Update No. 2017-01, "Business Combinations (Topic 805): Clarifying the Definition of a Business" (“ASU 2017-01”). This update clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of businesses. The amendments in this update provide a screen to determine when a set is not a business. If the screen is not met, it (1) requires that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and (2) removes the evaluation of whether a market participant could replace the missing elements. ASU 2017-01 is effective for financial statements issued for annual periods beginning after December 15, 2017, and interim periods within those annual periods. The Company does not expect the adoption of ASU 2017-01 to have a material effect on its financial position, results of operations or cash flows. In March 2016, the FASB issued Accounting Standards Update No. 2016-09, “Compensation -Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). This update is intended to improve the accounting for employee share-based payments and affects all organizations that issue share-based payment awards to their employees. Several aspects of the accounting for share-based payment award transactions are simplified, including:(a) income tax consequences; (b) classification of awards as either equity or liabilities; and(c)classification on the statement of cash flows. ASU 2016-09 is effective for financial statements issued for annual periods beginning after December 15, 2016. The Company does not expect the adoption of ASU 2016-09 to have a material effect on its financial position, results of operations or cash flows. On February 2016, the FASB issued Accounting Standards Update No. 2016-02, "Leases" ("ASU 2016-02"). ASU 2016-02 requires lessees to recognize the following for all leases (with the exception of short-term leases) at the commencement date: a lease liability, which is a lessee‘s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. Certain targeted improvements were made to align, where necessary, lessor accounting with the lessee accounting model and Topic 606, Revenue from Contracts with Customers. The new lease guidance also simplified the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. Lessees will no longer be provided with a source of off-balance sheet financing. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. ASU 2016-02 is effective for financial statements issued for annual periods beginning after December 15, 2018. While the Company is currently assessing the impact ASU 2016-02 will have on the consolidated financial statements, the Company expects the primary impact to its consolidated financial position upon adoption will be the recognition, on a discounted basis, of its minimum commitments under non-cancelable operating leases on the consolidated balance sheets resulting in the recording of right of use assets and lease obligations. The Company's current minimum commitments under noncancelable operating leases are disclosed in Note 10. In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which supersedes most existing revenue recognition guidance under GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP. The standard is effective for annual periods beginning after December 15, 2017, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). In March 2016, the FASB issued implementation guidance that clarified the considerations in principal versus agent determination. In April 2016, FASB issued guidance that clarified identifying performance obligations and licensing implementation guidance contained in the new revenue recognition standard. In May 2016, FASB issued guidance that addresses narrow-scope improvements to the guidance on collectability, noncash consideration, and completed contracts at transition. In December 2016, FASB issued guidance to make minor corrections or minor improvements to the Codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. The Company's current revenue policy meets five core principles of ASU 2014-09 and the Company currently capitalizes the contract costs over the contracted period also in accordance with ASU 2014-09. The Company is still analyzing the impact of this ASU, but based on the current work to date the Company believes that the current revenue recognition policy currently in place already depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services and as a result the adoption of this ASU is not expected to have a material impact on the Company's financial statements. |
Description of Business and Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Activity in the Allowance for Doubtful Accounts | The activity in the allowance for for doubtful accounts is as follows (amounts in thousands):
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Net Loss per Share (Tables) |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation Of Shares Used In Calculating Basic And Diluted Earnings Per Share | A reconciliation of shares used in calculating basic and diluted earnings per share follows:
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Segment Information (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Financial Information By Segment | Summarized financial information by segment for the year ended December 31, 2016, based on the Company’s internal financial reporting system utilized by the Company’s chief operating decision maker, follows (amounts in thousands):
Summarized financial information by segment for the year ended December 31, 2015, based on the Company’s internal financial reporting system utilized by the Company’s chief operating decision maker, follows (amounts in thousands):
Summarized financial information by segment for the year ended December 31, 2014, based on the Company’s internal financial reporting system utilized by the Company’s chief operating decision maker, follows (amounts in thousands):
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Revenues Attributable To Domestic And Foreign Operations | The following table presents the Company's revenues attributable to domestic and foreign operations for the years ended (amounts in thousands):
(1) Canada, Latin America and South America (2) Europe, the Middle East and Africa (“EMEA”) (3) Asia-Pacific (“APAC”) (4) Includes revenues from the United Kingdom of $35.3 million and $38.2 million for the twelve months ended December 31, 2016 and 2015, respectively. |
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Long-Lived Assets By Geographic Region | The following table presents the Company's long-lived assets by geographic region for the years ended (amounts in thousands):
(1) United Kingdom, Germany, Japan, France, and Italy |
Property and Equipment (Tables) |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Property And Equipment | The following table presents the detail of property and equipment for the periods presented (amounts in thousands):
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Goodwill and Intangible Assets (Tables) |
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Changes In Carrying Amount Of Goodwill | The changes in the carrying amount of goodwill for the year ended December 31, 2016 are as follows (amounts in thousands):
The changes in the carrying amount of goodwill for the year ended December 31, 2015 are as follows (amounts in thousands):
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Summary Of Intangible Assets | Intangible assets are summarized as follows (see Note 7) (amounts in thousands):
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Schedule Of Future Amortization Expense | Estimated amortization expense for the next five years are as follows (amounts in thousands):
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Accrued Liabilities and Other Current Liabilities (Tables) |
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Schedule of Accrued Liabilities | The following table presents the detail of accrued liabilities and other current liabilities for the periods presented (amounts in thousands):
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Fair Value Measurements (Tables) |
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Assets Measured on Recurring Basis | The Company's assets and liabilities that are measured at fair value on a recurring basis, by level, within the fair value hierarchy as of December 31, 2016 and December 31, 2015, are summarized as follows (amounts in thousands). The Company’s restricted cash balance of $4.0 million at December 31, 2016 and $5.4 million at December 31, 2015 is not held in a money market account and is not included in the following table.
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Change in Fair Value of Level 3 Liabilities | The changes in fair value of the Level 3 liabilities are as follows (amounts in thousands):
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Schedule of Derivative Instruments | The following summarizes certain information regarding the Company’s outstanding foreign currency derivative contracts related primarily to intercompany receivables and payables for the periods presented (in thousands):
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Schedule of Derivative Liabilities at Fair Value | The fair value of the Company’s derivative instruments is summarized below (in thousands):
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Schedule of Derivative Assets at Fair Value | The fair value of the Company’s derivative instruments is summarized below (in thousands):
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Schedule of Gains (Losses) on Derivative Instruments Recognized in the Income Statement | The following summarizes certain information regarding the Company’s derivatives that are not designated or are not effective as hedges (in thousands):
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Commitments and Contingencies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||
Future Minimum Lease Payments Under Non-Cancelable Operating Leases | Future minimum lease payments under non-cancellable operating leases (with an initial or remaining lease terms in excess of one year) are as follows (amounts in thousands):
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Stockholders' Equity (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted Average Assumptions Of Fair Value Options Using Black-Scholes Option-Pricing Model | The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions for the years ended December 31, 2016, 2015 and 2014:
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Summary Of Stock Option Activity And Weighted Average Exercise Prices | A summary of the Company’s stock option activity and weighted average exercise prices follows:
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Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range | The following table summarizes information about outstanding and vested stock options as of December 31, 2016:
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Schedule of Share-based Compensation, Restricted Stock Units Award Activity | Restricted Stock Unit Activity A summary of the Company’s restricted stock units (“RSUs”) activity and weighted average exercise prices follows:
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Domestic And Foreign Components Of Income Before Provision For Income Taxes | The domestic and foreign components of loss before provision for income taxes consist of the following (amounts in thousands):
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Schedule Of Provision For Income Taxes | The provision for income taxes consists of the following (amounts in thousands):
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Schedule Of Reconciliations Of Federal Statutory Tax Rate To Effective Income Tax Rate | The difference between the total income taxes computed at the federal statutory rate and the provision for income taxes consists of the following:
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Schedule Of Federal Deferred Tax Assets And Deferred Tax Liabilities | The effects of temporary differences and tax loss carryforwards that give rise to significant portions of federal deferred tax assets and deferred tax liabilities at December 31, 2016 and 2015 are presented below (amounts in thousands):
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Schedule of Unrecognized Tax Benefits Roll Forward | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
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Restructuring Costs (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Costs | The following table presents the detail of the liability for the Company’s restructuring charges for the periods presented (amounts in thousands):
The following table presents the detail of expenses for the Company’s restructuring charges for the periods presented (amounts in thousands):
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Net Loss per Share - Narrative (Details) - shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
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Earnings Per Share [Abstract] | |||
Shares excluded from computation of earnings per share (in shares) | 8,956,932 | 10,345,356 | 10,769,149 |
Net Loss per Share - Reconciliation Of Shares Used In Calculating Basic and Diluted Earnings Per Share (Details) - shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
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Earnings Per Share [Abstract] | |||
Basic (in shares) | 56,063,777 | 56,452,408 | 54,478,754 |
Effect of assumed exercised options (in shares) | 0 | 0 | 0 |
Diluted (in shares) | 56,063,777 | 56,452,408 | 54,478,754 |
Segment Information - Narrative (Details) |
12 Months Ended |
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Dec. 31, 2016
segment
| |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Segment Information - Summary Of Financial Information By Segment (Details) - USD ($) $ in Thousands |
12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
||||||||
Segment Reporting Information [Line Items] | ||||||||||
Hosted services – Business | $ 183,551 | $ 200,576 | $ 172,783 | |||||||
Hosted services – Consumer | 16,258 | 15,209 | 16,629 | |||||||
Professional services | 22,970 | 23,227 | 20,519 | |||||||
Total revenue | 222,779 | 239,012 | 209,931 | |||||||
Cost of revenue | [1],[2],[3] | 63,161 | 70,310 | 52,703 | ||||||
Sales and marketing | [1],[2],[3] | 89,529 | 94,728 | 83,253 | ||||||
Amortization of purchased intangibles | [1],[2],[3] | 3,885 | 4,873 | 1,621 | ||||||
Unallocated corporate expenses | 85,613 | 79,529 | 77,521 | |||||||
Loss from operations | (19,409) | (10,428) | (5,167) | |||||||
Corporate [Member] | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Unallocated corporate expenses | 85,613 | 79,529 | 77,521 | |||||||
Loss from operations | (85,613) | (79,529) | (77,521) | |||||||
Business [Member] | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Hosted services – Business | 183,551 | 200,576 | 172,783 | |||||||
Professional services | 22,970 | 23,227 | 20,519 | |||||||
Total revenue | 206,521 | 223,803 | 193,302 | |||||||
Cost of revenue | 60,352 | 67,901 | 50,192 | |||||||
Sales and marketing | 82,063 | 87,975 | 77,118 | |||||||
Amortization of purchased intangibles | 3,885 | 4,873 | 1,621 | |||||||
Loss from operations | 60,221 | 63,054 | 64,371 | |||||||
Consumer [Member] | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Hosted services – Consumer | 16,258 | 15,209 | 16,629 | |||||||
Total revenue | 16,258 | 15,209 | 16,629 | |||||||
Cost of revenue | 2,809 | 2,409 | 2,511 | |||||||
Sales and marketing | 7,466 | 6,753 | 6,135 | |||||||
Loss from operations | $ 5,983 | $ 6,047 | $ 7,983 | |||||||
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Segment Information - Revenues Attributable To Domestic And Foreign Operations (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Segment Reporting Information [Line Items] | |||
Revenue | $ 222,779 | $ 239,012 | $ 209,931 |
Total Americas [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 153,551 | 171,835 | 149,041 |
United States [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 146,733 | 159,539 | 138,533 |
Other Americas [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 6,818 | 12,296 | 10,508 |
EMEA [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 50,511 | 51,548 | 44,506 |
APAC [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 18,717 | 15,629 | $ 16,384 |
United Kingdom [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | $ 35,300 | $ 38,200 |
Segment Information - Long-Lived Assets By Geographic Region (Details) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Segment Reporting Information [Line Items] | ||
Total long-lived assets | $ 127,487 | $ 131,812 |
United States [Member] | ||
Segment Reporting Information [Line Items] | ||
Total long-lived assets | 93,845 | 96,362 |
Israel [Member] | ||
Segment Reporting Information [Line Items] | ||
Total long-lived assets | 13,940 | 16,393 |
Australia [Member] | ||
Segment Reporting Information [Line Items] | ||
Total long-lived assets | 9,496 | 8,290 |
Netherlands [Member] | ||
Segment Reporting Information [Line Items] | ||
Total long-lived assets | 7,495 | 8,285 |
Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Total long-lived assets | $ 2,711 | $ 2,482 |
Property and Equipment (Details) - USD ($) $ / shares in Units, $ in Thousands |
5 Months Ended | 7 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Dec. 31, 2016 |
Jul. 31, 2016 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Property, Plant and Equipment [Line Items] | |||||
Property and equipment gross | $ 97,504 | $ 97,504 | $ 81,392 | ||
Less: accumulated depreciation | (69,107) | (69,107) | (57,263) | ||
Total | $ 28,397 | 28,397 | 24,129 | ||
Property and equipment, useful life | 4 years | 3 years | |||
Reduction in depreciation expense | $ 1,000 | ||||
Reduction in basic loss per share (in dollars per share) | $ 0.02 | ||||
Reduction in diluted loss per share (in dollars per share) | $ 0.02 | ||||
Depreciation | $ 12,011 | 12,114 | $ 9,071 | ||
Computer Equipment And Software [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment gross | $ 82,477 | 82,477 | 67,631 | ||
Furniture, Equipment And Building Improvements [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment gross | $ 15,027 | $ 15,027 | $ 13,761 |
Goodwill and Intangible Assets - Changes in Carrying Amount of Goodwill (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Goodwill [Roll Forward] | |||
Beginning Balance | $ 80,322,000 | $ 80,848,000 | |
Foreign exchange adjustments | (77,000) | (526,000) | |
Ending Balance | 80,245,000 | 80,322,000 | $ 80,848,000 |
Accumulated goodwill impairment charges | 23,500,000 | ||
Impairment recognized | 0 | 0 | 0 |
Business [Member] | |||
Goodwill [Roll Forward] | |||
Beginning Balance | 72,298,000 | 72,824,000 | |
Foreign exchange adjustments | (77,000) | (526,000) | |
Ending Balance | 72,221,000 | 72,298,000 | 72,824,000 |
Consumer [Member] | |||
Goodwill [Roll Forward] | |||
Beginning Balance | 8,024,000 | 8,024,000 | |
Foreign exchange adjustments | 0 | 0 | |
Ending Balance | $ 8,024,000 | $ 8,024,000 | $ 8,024,000 |
Goodwill and Intangible Assets - Summary of Amortization Expense (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization | $ 6,673 | $ 8,040 | $ 5,090 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||
2017 | 4,598 | ||
2018 | 2,550 | ||
2019 | 2,343 | ||
2020 | 2,146 | ||
2021 | 1,945 | ||
Thereafter | 2,928 | ||
Total | $ 16,510 | $ 24,619 |
Accrued Liabilities and Other Current Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Payables and Accruals [Abstract] | ||
Payroll and other employee related costs | $ 15,468 | $ 14,107 |
Professional services, consulting and other vendor fees | 15,277 | 11,745 |
Unrecognized tax benefits | 4,240 | 3,519 |
Sales commissions | 3,312 | 4,522 |
Contingent earn-out (Note 7 and 8) | 210 | 377 |
Other | 1,743 | 26 |
Total | $ 40,250 | $ 34,296 |
Fair Value Measurements - Level 3 Liabilities (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Business Combination, Contingent Consideration, Liability [Roll Forward] | |||
Changes in fair value | $ 0 | $ 3,680 | $ 0 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | |||
Business Combination, Contingent Consideration, Liability [Roll Forward] | |||
Balance, Beginning of year | 377 | 6,940 | |
Cash payment | (167) | (2,883) | |
Changes in fair value | 0 | (3,680) | |
Balance, End of year | $ 210 | $ 377 | $ 6,940 |
Fair Value Measurements - Derivative Financial Instruments (Details) - Foreign Exchange Contract [Member] - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Derivative [Line Items] | ||
Notional amount of foreign currency derivative contracts | $ 44,438 | $ 43,431 |
Fair value of foreign currency derivatives contracts | 42 | (208) |
Other Expense [Member] | ||
Derivative [Line Items] | ||
Gain (losses) on Derivative Instruments Recognized in Income Statement | 73 | (54) |
Not Designated as Hedging Instrument [Member] | Prepaid Expenses and Other Current Assets [Member] | ||
Derivative [Line Items] | ||
Derivative Assets | 108 | 102 |
Not Designated as Hedging Instrument [Member] | Accrued Expenses and Other Liabilities [Member] | ||
Derivative [Line Items] | ||
Derivative Liabilities | $ 66 | $ 310 |
Investments (Details) - USD ($) $ in Thousands |
1 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Feb. 28, 2014 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Investments, All Other Investments [Abstract] | ||||
Technology licenses and consulting services purchased | $ 3,500 | $ 0 | $ 0 | $ 3,451 |
Intangible assets | 2,000 | $ 2,800 | ||
Intangible assets written off due to impairment of investment | $ 600 |
Commitments and Contingencies - Narrative (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Commitments and Contingencies Disclosure [Abstract] | |||
Rental expense for operating leases | $ 10,000,000 | $ 9,900,000 | $ 9,500,000 |
Defined benefit plan employer matching contribution on first five percent of employee compensation | 50.00% | ||
Percentage of employees' eligible compensation for employer matching contribution | 5.00% | ||
Defined benefit plan employer contribution limit per employee | $ 6,000 | ||
Defined benefit plan employer contribution vesting period | 5 years | ||
Compensation | $ 1,300,000 | $ 1,300,000 | $ 900,000 |
Commitments and Contingencies - Future Minimum Lease Payments Under Non-Cancelable Operating Leases (Details) $ in Thousands |
Dec. 31, 2016
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
2017 | $ 8,889 |
2018 | 8,239 |
2019 | 5,714 |
2020 | 1,656 |
2021 | 1,258 |
Thereafter | 2,818 |
Total minimum lease payments | $ 28,574 |
Stockholders' Equity - Weighted Average Assumptions Of Fair Value Options Using Black-Scholes Option-Pricing Model (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Equity [Abstract] | |||
Dividend yield | 0.00% | 0.00% | 0.00% |
Risk-free interest rate, minimum | 1.00% | 1.30% | 1.50% |
Risk-free interest rate, maximum | 1.80% | 1.70% | 1.70% |
Expected life (in years) | 5 years | 5 years | 5 years |
Historical volatility, minimum | 46.80% | 47.40% | 49.60% |
Historical volatility, maximum | 48.20% | 49.70% | 53.70% |
Income Taxes - Narrative (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Operating Loss Carryforwards [Line Items] | |||
Valuation recorded | $ 12,100 | ||
Operating loss carryforwards | 16,600 | ||
Unrecognized tax benefits | 4,240 | $ 3,519 | $ 2,320 |
Proficient [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | $ 5,100 |
Income Taxes - Domestic And Foreign Components Of Income Before Provision For Income Taxes (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Income Tax Contingency [Line Items] | |||
United States | $ (40,774) | $ (16,362) | $ (12,933) |
(Loss) income before provision for (benefit from) income taxes | (19,939) | (10,630) | (5,489) |
Israel [Member] | |||
Income Tax Contingency [Line Items] | |||
Foreign | 15,622 | 2,257 | 4,614 |
United Kingdom [Member] | |||
Income Tax Contingency [Line Items] | |||
Foreign | 2,345 | 1,564 | 1,612 |
Netherlands [Member] | |||
Income Tax Contingency [Line Items] | |||
Foreign | 3,104 | 1,919 | 1,462 |
Australia [Member] | |||
Income Tax Contingency [Line Items] | |||
Foreign | (2,774) | (565) | (513) |
Germany [Member] | |||
Income Tax Contingency [Line Items] | |||
Foreign | 2,085 | 327 | 172 |
Japan [Member] | |||
Income Tax Contingency [Line Items] | |||
Foreign | $ 453 | $ 230 | $ 97 |
Income Taxes - Schedule Of Provision For Income Taxes (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Income Tax Disclosure [Abstract] | |||
Current income taxes, U.S. Federal | $ 1,829 | $ (524) | $ 155 |
Current income taxes, State and local | 27 | 309 | 186 |
Current income taxes, Foreign | 2,226 | 1,573 | 3,254 |
Total current income taxes | 4,082 | 1,358 | 3,595 |
Deferred income taxes, U.S. Federal | 841 | 13,791 | (1,194) |
Deferred income taxes, State and local | 99 | 876 | 41 |
Deferred income taxes, Foreign | 912 | (211) | (583) |
Total deferred income taxes | 1,852 | 14,456 | (1,736) |
Total income taxes | $ 5,934 | $ 15,814 | $ 1,859 |
Income Taxes - Schedule Of Reconciliations Of Federal Statutory Tax Rate To Effective Income Tax Rate (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Income Tax Disclosure [Abstract] | |||
Federal Statutory Rate | 34.00% | 34.00% | 34.00% |
State taxes, net of federal benefit | 3.24% | 0.35% | (2.74%) |
Non-deductible expenses – ISO | (1.85%) | (8.57%) | (14.68%) |
Non-deductible expenses – Other | (0.88%) | (2.20%) | (4.17%) |
Foreign tax rate differential | 0.89% | (12.41%) | (46.50%) |
Change in valuation allowance | (53.55%) | (148.24%) | 0.00% |
Return to provision true-up adjustment | (9.22%) | 0.00% | 0.00% |
Other | (2.42%) | (11.15%) | 0.23% |
Total provision for income taxes | (29.79%) | (148.22%) | (33.86%) |
Income Taxes - Schedule Of Federal Deferred Tax Assets And Deferred Tax Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 6,186 | $ 2,243 |
Accounts payable and accrued expenses | 4,906 | 5,017 |
Non-cash compensation | 12,541 | 10,034 |
Intangibles amortization | 6,151 | 3,826 |
Allowance for doubtful accounts | 447 | 274 |
Intangibles related to acquisitions | 118 | 0 |
Total deferred tax assets | 30,349 | 21,394 |
Less valuation allowance | (27,881) | (15,820) |
Deferred tax assets, net of valuation allowance | 2,468 | 5,574 |
Plant and equipment | (1,695) | (2,973) |
Intangibles related to acquisitions | 0 | (1,361) |
Goodwill amortization and contingent earn-out adjustments | (3,332) | (2,359) |
Total deferred tax liabilities | (5,027) | (6,693) |
Net deferred (liabilities) | $ (2,559) | $ (1,119) |
Income Taxes - Schedule of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Unrecognized tax benefits balance at January 1 | $ 3,519 | $ 2,320 |
Gross increase for tax positions of prior years | 200 | 0 |
Gross increase for tax positions of current years | 700 | 1,199 |
Decrease due to expiration of statue | (179) | 0 |
Gross unrecognized tax benefits at December 31 | $ 4,240 | $ 3,519 |
Restructuring Costs - Narrative (Details) - USD ($) $ in Thousands |
12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Restructuring charges before benefit | $ 2,800 | ||||||||
Restructuring costs | [1],[2],[3] | 2,369 | $ 3,384 | $ 0 | |||||
Restructuring liability | 2,551 | 1,328 | $ 0 | ||||||
Contract termination costs [Member] | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Restructuring costs | $ (384) | $ 1,745 | |||||||
|
Restructuring Costs - Components of Restructuring Charges (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Restructuring Reserve [Roll Forward] | ||
Balance, Beginning of the year | $ 1,328 | $ 0 |
Contract termination costs | 0 | 427 |
Severance and other associated costs | 1,585 | 901 |
Cash payments | (1,328) | 0 |
Wind down costs of legacy platform | 966 | 0 |
Balance, End of year | $ 2,551 | $ 1,328 |
Restructuring Costs - Expenses Related to Restructuring Charges (Details) - USD ($) $ in Thousands |
12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Restructuring costs | [1],[2],[3] | $ 2,369 | $ 3,384 | $ 0 | |||||
Contract termination costs [Member] | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Restructuring costs | (384) | 1,745 | |||||||
Severance and other associated costs [Member] | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Restructuring costs | 1,585 | 1,639 | |||||||
Wind down costs of legacy platform [Member] | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Restructuring costs | $ 1,168 | $ 0 | |||||||
|
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