Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2012

Summary of Stock-Based Compensation Expense

The following table summarizes stock-based compensation expense for the years ended December 31, 2012, 2011 and 2010, respectively:

	Year Ended December 31,
(in thousands)	2012			2011			2010
Cost of revenue	$	335		$	78		$	39
Operating expenses:
Marketing and sales		418			215			84
Research and development		486			274			73
General and administrative		1,800			563			135
Total stock-based compensation expense		3,039			1,130			331
Income tax benefits		(844	)		(338	)		(56	)
Total stock-based compensation expense, net of tax	$	2,195		$	792		$	275

Assumptions Used in Black-Scholes Option Pricing Model

The following table provides the assumptions used in the Black-Scholes option pricing model for the years ended December 31, 2012, 2011 and 2010:

	Year Ended December 31,
	2012			2011			2010
Risk-free interest rate		0.95 - 1.16	%		3.68	%		3.35	%
Expected life (years)		5.5 - 6.5			5			10
Expected volatility		53.00 - 53.14	%		47.32	%		38.05	%
Expected dividend yield		0	%		0	%		0	%
Weighted average grant date fair value		$  14.79		$	8.99		$	4.27

Summary of Stock Option Activity

The following table summarizes stock option activity and the weighted average exercise price for the years ended December 31, 2012, 2011 and 2010:

				Weighted-
				Average
	Stock Options			Exercise Price
Options outstanding at January 1, 2010		2,080,666		$	1.83
Granted		658,000			7.86
Exercised		(615,328	)		0.09
Cancelled		(84,000	)		4.02
Options outstanding at December 31, 2010		2,039,338			5.25
Granted		224,000			20.07
Exercised		(164,038	)		0.29
Cancelled		—			—
Options outstanding at December 31, 2011		2,099,300			6.18
Granted		259,800			28.67
Exercised		(667,243	)		2.41
Cancelled		(500	)		30.58
Options outstanding at December 31, 2012		1,691,357		$	11.11
Exercisable at December 31, 2012		802,990		$	5.91

Summary of Stock Options Outstanding

The following table summarizes information about stock options outstanding at December 31, 2012:

	Options Outstanding, Vested and Expected to Vest						Options Exercisable
Range of Exercise Prices	Number Outstanding		Weighted Average  Remaining Contractual Life		Weighted Average Exercise Price ($)		Number Exercisable		Weighted Average Exercise Price ($)
$0.50 to $1.79		162,850		2.17	$	1.12		162,850	$	1.12
$2.66 to $5.00		283,852		4.30		3.53		255,852		3.40
$5.56		127,005		6.34		5.56		62,605		5.56
$7.86		635,750		7.97		7.86		254,950		7.86
$16.00 to $20.07		264,600		8.58		19.42		66,733		20.07
$30.58 to $36.41		217,300		9.40		31.12		—		—

Assumptions Used to Estimate Fair Value of Employee Stock Purchase Plan

The following table presents the assumptions used to estimate the fair value of the ESPP during the year ended December 31, 2012:

	Year ended December 31, 2012
Risk-free interest rate		0.13 - 0.16	%
Expected life (months)		6 - 8.5
Expected volatility		53.00 - 53.14	%
Expected dividend yield		0	%