x | QUARTERLY 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 | 54-2139807 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
Large accelerated filer o | Accelerated Filer o |
Non-accelerated filer (Do not check if a smaller reporting company) x | Smaller reporting company o |
Exhibit No. | Description |
3.1* | Amended and Restated Certificate of Incorporation of the Company as in effect (filed as exhibit 3.9 to Amendment No. 12 to the Registration Statement on Form S-1 filed on July 9, 2012). (1) |
3.2* | Amended and Restated By-Laws of the Company as in effect (filed as exhibit 3.11 to Amendment No. 12 to the Registration Statement on Form S-1 filed on July 9, 2012). (1) |
4.1* | Form of Registrant’s Class A Common Stock Certificate (filed as exhibit 4.1 to Amendment No. 12 to the Registration Statement on Form S-1 filed on July 9, 2012). (1) |
4.2* | Form of Registrant’s Class B Common Stock Certificate (filed as exhibit 4.8 to Amendment No. 12 to the Registration Statement on Form S-1 filed on July 9, 2012). (1) |
4.3* | Election and Amendment Agreement, dated April 19, 2012, between the Company and the stockholders named therein (filed as exhibit 4.9 to Amendment No. 10 to the Registration Statement on Form S-1 filed on April 20, 2012). (1) |
10.1* | 2012 Equity Incentive Plan (filed as exhibit 10.3 to Amendment No. 12 to the Registration Statement on Form S-1 filed on July 9, 2012). (1)† |
10.2* | KAYAK Insertion Order: IO10963, dated April 5, 2012, between the Company and Expedia (filed as exhibit 10.14 to Amendment No. 13 to the Registration Statement on Form S-1 filed on July 13, 2012). (1)^ |
10.3* | Form of Indemnification Agreement between the Company and certain of its directors and executive officers (filed as exhibit 10.59 to Amendment No. 12 to the Registration Statement on Form S-1 filed on July 9, 2012). (1)† |
10.4* | Form of Non-Qualified Stock Option Agreement under the 2012 Equity Incentive Plan (filed as exhibit 10.62 to Amendment No. 12 to the Registration Statement on Form S-1 filed on July 9, 2012). (1)† |
10.5* | Election and Amendment Agreement, dated April 19, 2012, between the Company and the stockholders named therein (included in Exhibit 4.3) (filed as exhibit 4.9 to Amendment No. 10 to the Registration Statement on Form S-1 filed on April 20, 2012). (1) |
10.6* | Eighth Amendment, dated May 3, 2012, to the Third Amended and Restated 2005 Equity Incentive Plan (filed as exhibit 10.68 to Amendment No. 12 to the Registration Statement on Form S-1 filed on July 9, 2012). (1)† |
10.7* | Employment and Non-Competition Agreement, dated May 14, 2012, between the Company and Daniel Stephen Hafner, as amended by First Amendment, dated May 17, 2012 (filed as exhibit 10.69 to Amendment No. 12 to the Registration Statement on Form S-1 filed on July 9, 2012). (1)† |
10.8* | Employment and Non-Competition Agreement, dated May 14, 2012, between the Company and Paul M. English, as amended by First Amendment, dated May 17, 2012 (filed as exhibit 10.70 to Amendment No. 12 to the Registration Statement on Form S-1 filed on July 9, 2012). (1)† |
10.9* | Employment and Non-Competition Agreement, dated May 14, 2012, between the Company and Melissa H. Reiter, as amended by First Amendment, dated May 17, 2012 (filed as exhibit 10.71 to Amendment No. 12 to the Registration Statement on Form S-1 filed on July 9, 2012). (1)† |
10.10* | Employment and Non-Competition Agreement, dated May 14, 2012, between the Company and Robert M. Birge, as amended by First Amendment, dated May 17, 2012 (filed as exhibit 10.72 to Amendment No. 12 to the Registration Statement on Form S-1 filed on July 9, 2012). (1)† |
10.11* | Employment and Non-Competition Agreement, dated May 14, 2012, between the Company and Karen Ruzic Klein, as amended by First Amendment, dated May 17, 2012 (filed as exhibit 10.73 to Amendment No. 12 to the Registration Statement on Form S-1 filed on July 9, 2012). (1)† |
10.12* | Amadeus Products and Services Agreement, effective as of January 1, 2012, between the Company and Amadeus IT Group S.A. (filed as exhibit 10.66 to Amendment No. 12 to the Registration Statement on Form S-1 filed on July 9, 2012). (1)^ |
10.13* | Lease, dated June 4, 2012, between the Company and Yale & Towne SPE LLC (filed as exhibit 10.74 to Amendment No. 12 to the Registration Statement on Form S-1 filed on July 9, 2012). (1) |
31.1* | Certification of Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2* | Certification of Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1* | Certifications of Chief Executive Officer and Chief Financial Officer, 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. |
* | These exhibits were previously included or incorporated by reference in KAYAK Software Corporation's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2012, filed with the Securities and Exchange Commission on August 24, 2012. |
** | Filed herewith. |
KAYAK SOFTWARE CORPORATION | ||
Date: September 19, 2012 | By: | /s/ Daniel Stephen Hafner |
Name: | Daniel Stephen Hafner | |
Title: | Chief Executive Officer and Director |
Exhibit No. | Description |
3.1* | Amended and Restated Certificate of Incorporation of the Company as in effect (filed as exhibit 3.9 to Amendment No. 12 to the Registration Statement on Form S-1 filed on July 9, 2012). (1) |
3.2* | Amended and Restated By-Laws of the Company as in effect (filed as exhibit 3.11 to Amendment No. 12 to the Registration Statement on Form S-1 filed on July 9, 2012). (1) |
4.1* | Form of Registrant’s Class A Common Stock Certificate (filed as exhibit 4.1 to Amendment No. 12 to the Registration Statement on Form S-1 filed on July 9, 2012). (1) |
4.2* | Form of Registrant’s Class B Common Stock Certificate (filed as exhibit 4.8 to Amendment No. 12 to the Registration Statement on Form S-1 filed on July 9, 2012). (1) |
4.3* | Election and Amendment Agreement, dated April 19, 2012, between the Company and the stockholders named therein (filed as exhibit 4.9 to Amendment No. 10 to the Registration Statement on Form S-1 filed on April 20, 2012). (1) |
10.1* | 2012 Equity Incentive Plan (filed as exhibit 10.3 to Amendment No. 12 to the Registration Statement on Form S-1 filed on July 9, 2012). (1)† |
10.2* | KAYAK Insertion Order: IO10963, dated April 5, 2012, between the Company and Expedia (filed as exhibit 10.14 to Amendment No. 13 to the Registration Statement on Form S-1 filed on July 13, 2012). (1)^ |
10.3* | Form of Indemnification Agreement between the Company and certain of its directors and executive officers (filed as exhibit 10.59 to Amendment No. 12 to the Registration Statement on Form S-1 filed on July 9, 2012). (1)† |
10.4* | Form of Non-Qualified Stock Option Agreement under the 2012 Equity Incentive Plan (filed as exhibit 10.62 to Amendment No. 12 to the Registration Statement on Form S-1 filed on July 9, 2012). (1)† |
10.5* | Election and Amendment Agreement, dated April 19, 2012, between the Company and the stockholders named therein (included in Exhibit 4.3) (filed as exhibit 4.9 to Amendment No. 10 to the Registration Statement on Form S-1 filed on April 20, 2012). (1) |
10.6* | Eighth Amendment, dated May 3, 2012, to the Third Amended and Restated 2005 Equity Incentive Plan (filed as exhibit 10.68 to Amendment No. 12 to the Registration Statement on Form S-1 filed on July 9, 2012). (1)† |
10.7* | Employment and Non-Competition Agreement, dated May 14, 2012, between the Company and Daniel Stephen Hafner, as amended by First Amendment, dated May 17, 2012 (filed as exhibit 10.69 to Amendment No. 12 to the Registration Statement on Form S-1 filed on July 9, 2012). (1)† |
10.8* | Employment and Non-Competition Agreement, dated May 14, 2012, between the Company and Paul M. English, as amended by First Amendment, dated May 17, 2012 (filed as exhibit 10.70 to Amendment No. 12 to the Registration Statement on Form S-1 filed on July 9, 2012). (1)† |
10.9* | Employment and Non-Competition Agreement, dated May 14, 2012, between the Company and Melissa H. Reiter, as amended by First Amendment, dated May 17, 2012 (filed as exhibit 10.71 to Amendment No. 12 to the Registration Statement on Form S-1 filed on July 9, 2012). (1)† |
10.10* | Employment and Non-Competition Agreement, dated May 14, 2012, between the Company and Robert M. Birge, as amended by First Amendment, dated May 17, 2012 (filed as exhibit 10.72 to Amendment No. 12 to the Registration Statement on Form S-1 filed on July 9, 2012). (1)† |
10.11* | Employment and Non-Competition Agreement, dated May 14, 2012, between the Company and Karen Ruzic Klein, as amended by First Amendment, dated May 17, 2012 (filed as exhibit 10.73 to Amendment No. 12 to the Registration Statement on Form S-1 filed on July 9, 2012). (1)† |
10.12* | Amadeus Products and Services Agreement, effective as of January 1, 2012, between the Company and Amadeus IT Group S.A. (filed as exhibit 10.66 to Amendment No. 12 to the Registration Statement on Form S-1 filed on July 9, 2012). (1)^ |
10.13* | Lease, dated June 4, 2012, between the Company and Yale & Towne SPE LLC (filed as exhibit 10.74 to Amendment No. 12 to the Registration Statement on Form S-1 filed on July 9, 2012). (1) |
31.1* | Certification of Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2* | Certification of Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1* | Certifications of Chief Executive Officer and Chief Financial Officer, 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. |
* | These exhibits were previously included or incorporated by reference in KAYAK Software Corporation's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2012, filed with the Securities and Exchange Commission on August 24, 2012. |
** | Filed herewith. |
Summary of Significant Accounting Policies - Concentrations of Credit Risk (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2012
|
Dec. 31, 2011
|
Jun. 30, 2012
Customer A
Customer Concentration Risk
|
Jun. 30, 2011
Customer A
Customer Concentration Risk
|
Jun. 30, 2012
Customer A
Customer Concentration Risk
|
Jun. 30, 2011
Customer A
Customer Concentration Risk
|
Jun. 30, 2012
Customer B
Customer Concentration Risk
|
Jun. 30, 2011
Customer B
Customer Concentration Risk
|
Jun. 30, 2012
Customer B
Customer Concentration Risk
|
Jun. 30, 2011
Customer B
Customer Concentration Risk
|
Jun. 30, 2012
Customer C
Customer Concentration Risk
|
Jun. 30, 2011
Customer C
Customer Concentration Risk
|
Jun. 30, 2012
Customer C
Customer Concentration Risk
|
Jun. 30, 2011
Customer C
Customer Concentration Risk
|
|
Concentration Risk [Line Items] | ||||||||||||||
Percentage of total revenues | 26.00% | 24.00% | 24.00% | 25.00% | 9.00% | 8.00% | 10.00% | 8.00% | 8.00% | 12.00% | 9.00% | 13.00% | ||
Accounts receivable | $ 50,247 | $ 37,332 | $ 11,438 | $ 7,354 | $ 11,438 | $ 7,354 | $ 3,259 | $ 1,511 | $ 3,259 | $ 1,511 | $ 4,070 | $ 4,242 | $ 4,070 | $ 4,242 |
Accrued Expenses and Other Current Liabilities (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2012
|
Dec. 31, 2011
|
---|---|---|
Accounts Payable and Accrued Liabilities, Current [Abstract] | ||
Accrued bonus | $ 3,475 | $ 5,792 |
Income taxes payable | 5,939 | 2,515 |
Accrued marketing | 7,812 | 1,141 |
Other accrued expenses | 7,534 | 6,772 |
Accrued expenses and other current liabilities | $ 24,760 | $ 16,220 |
Stock Options and Restricted Stock Stock Options, Valuation Assumptions (Details)
|
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2012
|
Dec. 31, 2011
|
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Risk-free interest rate | 1.00% | 1.80% |
Expected volatility | 44.60% | 43.80% |
Expected life (in years) | 6 years | 6 years |
Dividend yield | 0.00% | 0.00% |
Intangible Assets - Intangible Assets by Major Class (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | 1 Months Ended | 6 Months Ended | 12 Months Ended | 12 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2012
|
Jun. 30, 2011
|
Jun. 30, 2012
|
Jun. 30, 2011
|
Dec. 31, 2011
|
Jan. 31, 2011
Domain and trade names [Member]
|
Jun. 30, 2011
Domain and trade names [Member]
|
Dec. 31, 2011
Domain and trade names [Member]
|
Jun. 30, 2012
Domain and trade names [Member]
|
Jun. 30, 2012
Customer relationships [Member]
|
Dec. 31, 2011
Customer relationships [Member]
|
Jun. 30, 2012
Technology [Member]
|
Dec. 31, 2011
Technology [Member]
|
Jun. 30, 2012
Non-compete agreements [Member]
|
Dec. 31, 2011
Non-compete agreements [Member]
|
Dec. 31, 2011
Level 3 [Member]
Discounted cash flows [Member]
Domain and trade names [Member]
|
|
Finite-Lived Intangible Assets [Line Items] | ||||||||||||||||
Gross Carrying Amount | $ 49,091 | $ 49,091 | $ 33,345 | $ 10,651 | $ 10,878 | $ 4,141 | $ 4,160 | $ 954 | $ 982 | |||||||
Gross Carrying Amount | 49,525 | 33,505 | ||||||||||||||
Accumulated Amortization | (34,528) | (34,528) | (16,861) | (11,255) | (26,628) | (4,569) | (3,826) | (2,672) | (1,287) | (659) | (493) | |||||
Impairment | 0 | 0 | 0 | (14,980) | (14,980) | (14,980) | (14,980) | |||||||||
Intangible assets, net | 14,563 | 14,563 | 17,684 | 7,270 | 6,717 | 6,082 | 7,052 | 1,469 | 2,873 | 295 | 489 | |||||
Amortization expense | $ 1,400 | $ 1,900 | $ 2,815 | $ 3,535 | ||||||||||||
Discount rate | 17.00% |
Accrued Expenses and Other Current Liabilities (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2012
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Accounts Payable and Accrued Liabilities, Current [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following:
|
Earnings per share - Computation of Basic (Details) (USD $)
In Thousands, except Share data, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2012
|
Jun. 30, 2011
|
Jun. 30, 2012
|
Jun. 30, 2011
|
|
Basic earnings (loss) per share: | ||||
Net income (loss) | $ 7,288 | $ 3,776 | $ 11,433 | $ (3,138) |
Redeemable convertible preferred stock dividends declared | (2,936) | (2,936) | (5,872) | (5,872) |
Deemed dividend resulting from modification of redeemable convertible preferred stock | (2,929) | 0 | (2,929) | 0 |
Net income (loss) attributed to common stockholders | $ 1,423 | $ 840 | $ 2,632 | $ (9,010) |
Weighted average common shares outstanding (shares) | 7,049,863 | 7,505,505 | 7,043,571 | 7,451,737 |
Basic earnings (loss) per share (usd per share) | $ 0.20 | $ 0.11 | $ 0.37 | $ (1.21) |
Subsequent Events (unaudited)
|
6 Months Ended |
---|---|
Jun. 30, 2012
|
|
Subsequent Events [Abstract] | |
Subsequent Events (unaudited) | Subsequent Events (unaudited) On July 25, 2012, we completed our IPO whereby we sold 4,025,000 shares of our Class A common stock at a price of $26.00 per share before underwriting discounts and commissions. The IPO generated net proceeds of approximately $97.3 million, after deducting underwriting discounts and commissions but before estimated offering expenses of $3.8 million. Upon the closing of the IPO, all shares of our then-outstanding common stock and preferred stock automatically converted into an aggregate of 33,864,565 shares of Class B common stock. Additionally, all outstanding options and warrants as of that date automatically converted into options and warrant to purchase Class B common stock. Effective as of July 19, 2012, upon the pricing of our IPO, options to purchase 1,300,000 shares of our common stock were awarded to certain employees and officers of the Company. The exercise price of these stock options is $26.00 per share. These options will vest over four years with 25% of the shares subject to these stock options vesting on January 19, 2013 and then monthly thereafter. Total unrecognized estimated compensation expense relate to these non-vested options is approximately $14,800, calculated using a Black-Scholes Model as described in "-Note 13 - Stock Options and Restricted Stock." Upon the consummation of our IPO, we issued to certain stockholders, for no cash consideration, 308,032 shares of Class A common stock. In addition, certain of our stockholders also vested in a right to purchase from us, up to an aggregate of 352,178 shares of Class A common stock at an exercise price of $26.00 per share. This right terminated on August 1, 2012, and eligible stockholders elected to purchase 231,695 of these shares for an additional consideration of approximately $6.0 million. Issuances described in this paragraph were in consideration for such stockholders entry into that certain Election and Amendment Agreement, dated April 19, 2012, pursuant to which certain stockholders provided various elections, waivers, consents and amendments related to our capital structure as described in "- Note 11 - Redeemable Convertible Preferred Stock". Effective as of July 20, 2012, we entered into a settlement agreement with Orbitz Worldwide, LLC pursuant to which the parties agreed to resolve their ongoing disputes. The settlement agreement did not involve any material financial payments between the companies, nor did it involve any material changes in contractual terms. |
Commitments and Contingencies (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Jun. 30, 2012
|
Jun. 30, 2011
|
Jun. 30, 2012
|
Dec. 31, 2011
|
|
Operating leases | ||||
Operating leases, rent expense | $ 332 | $ 426 | $ 671 | $ 897 |
Other Commitments | ||||
Other Commitments Content Licensing Agreement Due In Remaining Fiscal Year | 3,500 | 3,500 | ||
Other commitments, product and services agreement, minimum future payments per year | 1,600 | 1,600 | ||
Other commitments, product and services agreement, minimum future payments due within six months | $ 800 | $ 800 |
Acquisitions Purchase price allocation (Details) (USD $)
In Thousands, unless otherwise specified |
0 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2012
|
Dec. 31, 2011
|
Apr. 02, 2011
JaBo Software [Member]
|
Apr. 02, 2011
Customer Relationships (useful life - 7 years) [Member]
JaBo Software [Member]
|
Apr. 02, 2011
Trade & Domain Names (usefule life - 10 years) [Member]
JaBo Software [Member]
|
Apr. 02, 2011
Current Technology (useful life - 2 years) [Member]
JaBo Software [Member]
|
Apr. 02, 2011
Noncompete Agreements (useful life - 2 years) [Member]
JaBo Software [Member]
|
|||||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||||||||||
Goodwill | $ 155,244 | $ 155,677 | $ 4,138 | ||||||||||
Useful life of intangible assets | 7 years | 10 years | 2 years | 2 years | |||||||||
Accounts receivable and other assets | 983 | ||||||||||||
Contingent asset | 230 | ||||||||||||
Identifiable intangible assets | |||||||||||||
Identifiable intangible assets | 3,200 | [1] | 2,600 | [1] | 700 | [1] | 300 | [1] | |||||
Total assets | 12,151 | ||||||||||||
Liabilities assumed: | |||||||||||||
Deferred tax liability | 1,700 | ||||||||||||
Other liabilities | 1,291 | ||||||||||||
Total net assets acquired | $ 9,160 | ||||||||||||
|
Fair Value Measurements (Tables)
|
6 Months Ended | ||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2012
|
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Liabilities, Fair Value Disclosure [Abstract] | |||||||||||||||||||||||||
Warrant Liability, Changes in Valuation | Changes in valuation during the years ended December 31, 2011 and the six months ended June 30, 2012, were as follows:
|
Redeemable Convertible Preferred Stock Preferred Stock Warrants (Details) (USD $)
In Thousands, except Share data, unless otherwise specified |
3 Months Ended | 6 Months Ended | 12 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 30, 2012
|
Jun. 30, 2012
Series D Redeemable Convertible Preferred Stock [Member]
|
Jun. 30, 2011
Series D Redeemable Convertible Preferred Stock [Member]
|
Jun. 30, 2012
Series D Redeemable Convertible Preferred Stock [Member]
|
Jun. 30, 2011
Series D Redeemable Convertible Preferred Stock [Member]
|
Dec. 31, 2011
Series D Redeemable Convertible Preferred Stock [Member]
|
Jun. 30, 2012
Series C Redeemable Convertible Preferred Stock [Member]
|
Jun. 30, 2011
Series C Redeemable Convertible Preferred Stock [Member]
|
Jun. 30, 2012
Series C Redeemable Convertible Preferred Stock [Member]
|
Jun. 30, 2011
Series C Redeemable Convertible Preferred Stock [Member]
|
Dec. 31, 2011
Series C Redeemable Convertible Preferred Stock [Member]
|
|
Class of Stock [Line Items] | |||||||||||
Number of shares entited by rights issued | 352,178 | 62,000 | 62,000 | 41,904 | 41,904 | ||||||
Exercise price of rights (usd per share) | 26 | 20.73 | 20.73 | 2.983 | 2.983 | ||||||
Warrant liability | $ 489 | $ 489 | $ 426 | $ 830 | $ 830 | $ 724 | |||||
Fair Value, Liabilities Measured on Recurring Basis, Change in Unrealized Gain (Loss) Included in Other Income | $ (84) | $ (183) | $ (63) | $ (66) | $ (106) | $ (55) | $ (106) | $ (143) | |||
Risk free interest rate | 0.40% | 0.40% | 0.30% | 0.30% | |||||||
Expected volatility | 41.20% | 42.90% | 42.00% | 41.00% | |||||||
Expected life (in years) | 3 years | 3 years | 2 years | 2 years | |||||||
Dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Related Party Transactions (Details) (Travel Post [Member], USD $)
In Thousands, except Share data, unless otherwise specified |
1 Months Ended | |
---|---|---|
May 31, 2011
|
Mar. 31, 2010
|
|
Related Party Transaction [Line Items] | ||
Monthy Licence Fee From Related Party | $ 10 | $ 50 |
Series A Preferred Stock [Member]
|
||
Related Party Transaction [Line Items] | ||
Amendment to commercial agreement, sale of subsidiary, shares received | 1,000,000 |
Goodwill (Details) (USD $)
In Thousands, unless otherwise specified |
6 Months Ended |
---|---|
Jun. 30, 2012
|
|
Goodwill [Roll Forward] | |
Balance, December 31, 2011 | $ 155,677 |
Foreign currency translation | (433) |
Balance, June 30, 2012 | $ 155,244 |
Summary of Significant Accounting Policies
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2012
|
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Significant Estimates and Judgments The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates relied upon in preparing these financial statements include the provision for uncollectible accounts, estimates used to determine the fair value of our common stock, preferred stock, put option, stock-based compensation and preferred stock warrants, recoverability of our net deferred tax assets and the fair value of long lived assets and goodwill. Changes in estimates are recorded in the period in which they become known. We base estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from our estimates. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, and have been prepared in accordance with accounting principles generally accepted in the United States of America. Operating results of acquired businesses are included in the consolidated statements of operations from the date of acquisition. All intercompany accounts and transactions have been eliminated. We have reclassified certain prior period amounts to conform to our current period presentation. The interim financial statements and footnotes are unaudited. In the opinion of our management, these statements include all adjustments, which are of a normal recurring nature, necessary to present a fair statement of the Company’s results of operations, financial position and cash flows. Interim results are not necessarily indicative of financial results for a full year. The interim information included in this Form 10-Q should be read in conjunction with our prospectus filed with the Securities and Exchange Commission, or SEC, pursuant to Rule 424 (b) on July 20, 2012 relating to our initial public offering, or IPO. Foreign Currency Translation Assets and liabilities for our international operations are translated to U.S. dollars at current exchange rates in effect at the balance sheet date. Income and expense accounts are translated at average exchange rates in effect during the year. Resulting translation adjustments are recorded as a separate component of accumulated other comprehensive income. Segments We have one operating segment for financial reporting purposes: travel search. Revenue Recognition KAYAK’s services are free for travelers. We earn revenues by sending referrals to travel suppliers and Online Travel Agents, OTAs after a traveler selects a specific itinerary (distribution revenues), and through advertising placements on our websites and mobile applications (advertising revenues). We recognize distribution revenue upon completion of the referral, provided that our fees are fixed and determinable, there is persuasive evidence of an arrangement and collection is reasonably assured. Advertising revenues are recognized when a traveler clicks on an advertisement that a customer has placed on our website or when we display an advertisement. Distribution Revenues We earn distribution revenues by sending qualified leads to travel suppliers and OTAs and by facilitating bookings directly through our websites and mobile applications. After a traveler has entered a query on our website, reviewed the results, and decided upon a specific itinerary, we send the user directly into the travel supplier's or OTA's purchase process to complete the transaction. In many cases, users may now complete bookings with the travel supplier or OTA without leaving our websites and mobile applications. Travel suppliers and OTAs have the flexibility to pay us either when these qualified leads click on a query result at a set cost per click, or CPC basis, or when they purchase a travel product on the travel supplier or OTA website which we refer to as a cost per acquisition, or CPA, basis. We separately negotiate and enter into our distribution agreements, and these agreements set forth the payment terms for the applicable travel supplier or OTA Advertising Revenues Advertising revenues primarily come from payments for compare units, text-based sponsored links and display advertisements. A “compare unit” is an advertising placement that, if selected by a KAYAK user, launches the advertiser’s website and initiates a query based on the same travel parameters provided on the KAYAK website. The major types of advertisers on our websites consist of OTAs, third party sponsored link providers, hotels, airlines and vacation package providers. Generally, our advertisers pay us on a CPC basis, which means advertisers pay us only when someone clicks on one of their advertisements, or on a cost per thousand impression basis, or CPM. Paying on a CPM basis means that advertisers pay us based on the number of times their advertisements appear on our websites. Concentrations of Credit Risk Financial instruments that subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents, marketable securities and accounts receivable. The Company’s cash and cash equivalents and marketable securities are primarily held in one financial institution that we believe to be of high credit quality. Significant customers accounted for the following percentages of total revenues:
Amounts due from these significant customers were:
We believe significant customer amounts outstanding at June 30, 2012 and December 31, 2011 are collectible. Cost of Revenues Cost of revenues consists primarily of expenses incurred related to airfare query costs, data center costs and related bandwidth charges. All costs of revenues are expensed as incurred. Marketing Marketing expenses are comprised primarily of costs of search engine and other digital marketing, brand advertising, affiliate referral fees, and public relations. All marketing costs are expensed as incurred. Stock-Based Compensation We estimate the value of stock option awards on the date of grant using the Black-Scholes option-pricing model (the Black-Scholes model). The determination of the fair value of stock option awards on the date of grant is affected by our estimated stock price as well as assumptions regarding a number of complex and subjective variables. These variables include our expected stock price volatility over the term of the awards, expected term, risk-free interest rate, expected dividends and expected forfeiture rates. The forfeiture rate is estimated using historical option cancellation information, adjusted for anticipated changes in exercise and employment termination behavior. Outstanding awards do not contain market or performance conditions and therefore, we recognize stock-based compensation expense on a straight-line basis over the requisite service period. We account for stock options issued to non-employees in accordance with the guidance for equity-based payments to non-employees. Stock option awards to non-employees are accounted for at fair value using the Black-Scholes option-pricing model. Our management believes that the fair value of stock options is more reliably measured than the fair value of the services received. The fair value of the unvested portion of the options granted to non-employees is re-measured each period. The resulting increase or decrease in value, if any, is recognized during the period the related services are rendered. The fair value of each non-employee stock-based compensation award is re-measured each period until a commitment date is reached, which is generally the vesting date. Fair Value of Financial Instruments The carrying amounts of the Company’s cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, approximate fair value because of their short maturities. Cash Equivalents and Marketable Securities Cash equivalents include all highly liquid investments maturing within 90 days from the date of purchase. Marketable securities are classified as held-to-maturity as we have the intent and ability to hold these investments to maturity. Marketable securities are reported at amortized cost. Cash equivalents and marketable securities are invested in instruments we believe to be of high-quality, primarily money market funds, U.S. Government obligations, State and Municipality obligations and corporate bonds with remaining contractual maturities of less than one year. Accounts Receivable and Allowance for Doubtful Accounts We review accounts receivable on a regular basis and estimate an amount of losses for uncollectible accounts based on our historical collections experience, age of the receivable and knowledge of the customer. We record changes in our estimate to the allowance for doubtful accounts through bad debt expense and relieve the allowance when accounts are ultimately collected or determined to be uncollectible. Deferred Financing Costs Related to Initial Public Offering As of June 30, 2012 and December 31, 2011 we had incurred $3,314 and $2,173, respectively, of legal and accounting costs related to our IPO. We capitalize such costs in prepaid expense and other current assets and will net these costs against the proceeds received from the IPO which occurred on July 25, 2012. Property and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation of property and equipment is computed on a straight-line basis over the estimated useful lives of the assets or, when applicable, the life of the lease, whichever is shorter. Software and Website Development Costs Certain costs to develop internal use computer software are capitalized provided these costs are expected to be recoverable. These costs are included in property and equipment and are amortized over three years beginning when the asset is substantially ready for use. Costs incurred during the preliminary project stage, as well as maintenance and training costs are expensed as incurred. We capitalized $248 and $278 of software development costs and amortized $267 and $213 in the three months ended June 30, 2012 and June 30, 2011, respectively, and capitalized $470 and $475 and amortized $527 and $413 in the six months ended June 30, 2012 and June 30, 2011, respectively. Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. When such events occur, we compare the carrying amounts of the assets to their undiscounted expected future cash flows. If this comparison indicates that there is impairment, the amount of the impairment is calculated as the difference between the carrying value and fair value. During the six months ended June 30, 2011 we recorded an impairment charge of $15.0 million on trade and domain name assets related to our decision to discontinue the sidestep.com URL. See “—Note 6—Intangible Assets” for additional description of our impairment charge. Goodwill Goodwill represents the excess of the cost of acquired business over the fair value of the assets acquired at the date of acquisition. Goodwill is tested for impairment at least annually and whenever events or changes in circumstances indicate that goodwill may be impaired. Goodwill is not deductible for tax purposes. We assess goodwill for possible impairment using a two-step process. The first step identifies if there is potential goodwill impairment. If step one indicates that an impairment may exist, a second step is performed to measure the amount of the goodwill impairment, if any. Goodwill impairment exists when the estimated fair value of goodwill is less than its carrying value. If impairment exists, the carrying value of the goodwill is reduced to fair value through an impairment charge in our consolidated statements of operations. For purposes of goodwill impairment testing, we estimate the fair value of the Company using generally accepted valuation methodologies, including market and income based approaches, and relevant data available through and as of the testing date. The market approach is a valuation method in which fair value is estimated based on observed prices in actual transactions and on asking prices for similar assets. Under the market approach, the valuation process is essentially that of comparison and correlation between the subject asset and other similar assets. The income approach is a method in which fair value is estimated based on the cash flows that an asset could be expected to generate over its useful life, including residual value cash flows. These cash flows are then discounted to their present value using a rate of return that accounts for the relative risk of not realizing the estimated annual cash flows and for the time value of money. Warrant liability Warrants to purchase redeemable convertible preferred stock are accounted for on the balance sheets at fair value as liabilities. Changes in fair value are recognized in earnings in the period of change. Accumulated Other Comprehensive Income Accumulated other comprehensive income consists of foreign currency translation adjustments. The financial statements of non-U.S. entities are translated from their functional currencies into U.S. dollars. Assets and liabilities are translated at period end rates of exchange and revenue and expenses are translated using average rates of exchange. The resulting gain or loss is included in accumulated other comprehensive income on the balance sheet. Income Taxes We record income taxes under the liability method. Interest and penalties related to income tax liabilities, if any, are included in income tax expense. Deferred tax assets and liabilities reflect our estimation of the future tax consequences of temporary differences between the carrying amounts of assets and liabilities for book and tax purposes. We determine deferred income taxes based on the differences in accounting methods and timing between financial statement and income tax reporting. Accordingly, we determine the deferred tax asset or liability for each temporary difference based on the enacted tax rates expected to be in effect when we realize the underlying items of income and expense. We consider many factors when assessing the likelihood of future realization of our deferred tax assets, including our recent earnings experience by jurisdiction, expectations of future taxable income, and the carryforward periods available to us for tax reporting purposes, as well as other relevant factors. We may establish a valuation allowance to reduce deferred tax assets to the amount we believe is more likely than not to be realized. Due to inherent complexities arising from the nature of our businesses, future changes in income tax law, tax sharing agreements or variances between our actual and anticipated operating results, we make certain judgments and estimates. Therefore, actual income taxes could materially vary from these estimates. Effective January 1, 2007, we adopted the authoritative guidance for uncertainty in income taxes. This guidance requires that we recognize a tax benefit from an uncertain position only if it is more likely than not that the position is sustainable, based solely on its technical merits and consideration of the relevant taxing authority’s widely understood administrative practices and precedents. If this threshold is met, we would measure the tax benefit as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. The adoption of this guidance did not have a material impact on our financial statements. Penalties and interest on uncertain tax positions are included in income tax expense. Recent Accounting Pronouncements In June 2011, the FASB issued amended disclosure requirements for the presentation of comprehensive income. The amended guidance eliminates the option to present components of other comprehensive income (OCI) as part of the statement of changes in equity. Under the amended guidance, all changes in OCI are to be presented either in a single continuous statement of comprehensive income or in two separate but consecutive financial statements. We adopted these changes effective January 1, 2012 and applied retrospectively for all periods presented. There was no impact to the consolidated results as the amendments related only to changes in financial statement presentation. In September 2011, the FASB issued amended guidance that will simplify how entities test goodwill for impairment. After an assessment of certain qualitative factors, if it is determined to be more likely than not that the fair value of a reporting unit is less than its carrying amount, entities must perform the quantitative analysis of the goodwill impairment test. Otherwise, the quantitative test becomes optional. The guidance is effective January 1, 2012, with early adoption permitted. We elected to adopt this guidance for the 2011 goodwill impairment test performed in the fourth quarter. Goodwill impairment testing did not result in any impact to our financial results. |
Information about Geographic Areas (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2012
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Jun. 30, 2011
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Jun. 30, 2012
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Jun. 30, 2011
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Revenues [Line Items] | ||||
Revenues | $ 76,938 | $ 56,753 | $ 150,276 | $ 109,427 |
United States
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Revenues [Line Items] | ||||
Revenues | 61,957 | 46,890 | 121,125 | 92,116 |
Germany
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Revenues [Line Items] | ||||
Revenues | 6,635 | 5,761 | 14,237 | 11,173 |
Rest of the world [Member]
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Revenues [Line Items] | ||||
Revenues | $ 8,346 | $ 4,102 | $ 14,914 | $ 6,138 |