STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

Non-cash compensation related to equity awards is included in the following line items in the accompanying consolidated statements of operations and comprehensive income (in thousands):

	Three Months Ended   March 31,
	2015		2014
Cost of revenue	$	20	$	6
Selling and marketing expense	270		233
General and administrative expense	1,606		1,061
Product development	440		316
Total non-cash compensation	$	2,336	$	1,616

Stock Options

A summary of changes in outstanding stock options is as follows:

	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value(a)
			(per option)		(in years)	(in thousands)
Options outstanding at January 1, 2015	2,136,679		$	18.16
Granted (b)	11,478		53.24
Exercised	(898	)	8.62
Forfeited	—		—
Expired	(611	)	7.32
Options outstanding at March 31, 2015	2,146,648		18.35		6.21	$	80,839
Options exercisable at March 31, 2015	1,045,843		$	9.33	3.63	$	48,819

(a) The aggregate intrinsic value represents the total pre-tax intrinsic value (the difference between the Company's closing stock price of $56.01 on the last trading day of the quarter ended March 31, 2015 and the exercise price, multiplied by the number of shares covered by in-the-money options) that would have been received by the option holders had all option holders exercised their options on March 31, 2015. The intrinsic value changes based on the market value of the Company's common stock.

(b) During the three months ended March 31, 2015, the Company granted stock options to certain employees with a weighted average grant date fair value per share of $20.78, which vest over a period of three years from the grant date.

For purposes of determining stock-based compensation expense, the weighted average grant date fair value per share of the stock options was estimated using the Black-Scholes option pricing model, which requires the use of various key assumptions. The weighted average assumptions used are as follows:

Expected term (1)	6 years
Expected dividend (2)	—
Expected volatility (3)	38%
Risk-free interest rate (4)	1.66% - 1.74%

(1) The expected term of stock options granted was calculated using the 'Simplified Method', which utilizes the midpoint between the weighted average time of vesting and the end of the contractual term. This method was utilized for the stock options due to a lack of historical exercise behavior by the Company's employees.

(2) For all stock options granted in 2015, no dividends are expected to be paid over the contractual term of the stock options, resulting in a zero expected dividend rate.

(3) The expected volatility rate is based on the historical volatility of the Company's common stock.

(4) The risk-free interest rate is specific to the date of grant. The risk-free interest rate is based on U.S. Treasury yields for notes with comparable expected terms as the awards, in effect at the grant date.

Restricted Stock Units and Restricted Stock

A summary of the changes in outstanding nonvested restricted stock units ("RSUs") and restricted stock is as follows:

	RSUs
	Number of Units		Weighted Average Grant Date Fair Value
			(per unit)
Nonvested at January 1, 2015	351,801		$	22.83
Granted	65,422		53.08
Vested	(104,543	)	22.43
Forfeited	(6,023	)	24.84
Nonvested at March 31, 2015	306,657		$	29.38

	Restricted Stock
	Number of Shares		Weighted Average Grant Date Fair Value
			(per share)
Nonvested at January 1, 2015	123,057		$	23.41
Granted	—		—
Vested	(20,833	)	17.49
Forfeited	—		—
Nonvested at March 31, 2015	102,224		$	24.62