BALANCE SHEET COMPONENTS

Property and Equipment, net

Property and equipment consisted of the following (in thousands):



	September 30,			December 31,
	2016			2015
Computer equipment	$	16,403		$	13,195
Leasehold improvements	11,196			9,882
Capitalized software development costs	1,878			1,888
Office equipment	2,608			2,336
Software licenses	2,932			1,768
Building, leased	16,438			16,438
Property and equipment – gross	51,455			45,507
Less: accumulated depreciation and amortization	(17,797		)	(13,753		)
Property and equipment – net	$	33,658		$	31,754

Depreciation and amortization expense, excluding amortization of capitalized software and intangible assets, for the three months ended September 30, 2016 and 2015 was $1,839,000 and $1,655,000, respectively. Depreciation and amortization expense, excluding amortization of capitalized software and intangible assets, for the nine months ended September 30, 2016 and 2015 was $5,190,000 and $4,164,000, respectively.

The Company amortized software development costs of $65,000 and $76,000 during the three months ended September 30, 2016 and 2015, respectively. The Company amortized software development costs of $220,000 and $232,000 during the nine months ended September 30, 2016 and 2015, respectively. The net book value of capitalized software development costs was $121,000 and $351,000 as of September 30, 2016 and December 31, 2015, respectively.

During the year ended December 31, 2013, the Company executed a lease for a 64,000 square foot office building in San Luis Obispo, California. This facility provides additional capacity to accommodate continued growth, and became operational in the second quarter of 2015. Both the landlord and the Company incurred costs to construct the facility according to the Company’s operating specifications, and as a result, the Company has concluded that it was the “deemed owner” of the building (for accounting purposes only) during the construction period. During April 2015, the Company began to occupy the additional office space and no additional construction costs have been incurred since then. Upon completion of the construction, the Company was also the “deemed owner” of the building for accounting purposes as the asset did not qualify for sale-leaseback accounting treatment due to the Company’s continuing involvement. As such, costs included in construction-in-progress for the building were recorded to “Building, leased” within “Property and equipment, net” and the related financing obligation of $15,975,000 remained recorded as of September 30, 2016. The obligation is being settled through monthly lease payments to the landlord since completion of the construction, and the asset is being depreciated over the initial term of the lease. The lease has an initial term of 15 years and the Company has an option to extend the term of the lease for three consecutive terms of five years each. The Company is responsible for paying the landlord’s insurance costs, real property taxes, and operating expenses related to the premises as additional rent.

Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities consisted of the following (in thousands):



	September 30,		December 31,
	2016		2015
Accrued payroll	$	6,396	$	3,918
Accrued vacation	2,224		1,699
Employee stock purchase plan contributions	427		1,496
Other liabilities	1,052		798
Total accrued expenses and other liabilities	$	10,099	$	7,911