ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 |
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Delaware
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13-3861628
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(State of Incorporation)
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(I.R.S. Employer
Identification Number)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, par value $0.001 per share
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The NASDAQ Stock Market LLC
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Large accelerated filer
o
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Accelerated filer
ý
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Non-accelerated filer
o
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Smaller reporting company
o
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Emerging growth company
o
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Page
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PART I
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Item 1.
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Business
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Item 1A.
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Risk Factors
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Item 1B.
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Unresolved Staff Comments
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Item 2.
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Properties
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Item 3.
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Legal Proceedings
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Item 4.
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Mine Safety Disclosures
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PART II
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Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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Item 6.
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Selected Consolidated Financial Data
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Item 7.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Item 7A.
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Quantitative and Qualitative Disclosures About Market Risk
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Item 8.
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Consolidated Financial Statements and Supplementary Data
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Item 9.
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Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
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Item 9A.
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Controls and Procedures
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Item 9B.
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Other Information
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PART III
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Item 10.
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Directors, Executive Officers and Corporate Governance
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Item 11.
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Executive Compensation
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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Item 13.
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Certain Relationships and Related Transactions, and Director Independence
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Item 14.
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Principal Accountant Fees and Services
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PART IV
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Item 15.
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Exhibits and Financial Statement Schedules
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Item 16.
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Form 10-K Summary
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•
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increase consumer satisfaction, improve the overall digital experience, and enhance retention and loyalty, while reducing customer service costs;
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•
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lower operating costs in the contact center by deflecting costly phone and email interactions to messaging, and incorporating agent and consumer-facing bots to further improve agent efficiency;
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•
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increase mobile app retention and engagement by providing a connected messaging experience and turning an app into an engaging support app;
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•
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maintain a valued connection with consumers via mobile devices, either through native applications, websites, text messages, or third-party messaging platforms.
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accelerate sales cycles, increase conversion rates, increase average order value and reduce abandonment by intelligently engaging website visitors;
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•
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leverage spending that drives visitor traffic by increasing visitor conversions;
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•
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refine and improve performance by understanding which initiatives deliver the highest rate of return; and
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•
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increase lead generation by providing a single platform that engages consumers through advertisements and listings on branded and third-party websites.
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•
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technology or service providers offering or powering competing digital engagement, contact center, communications or customer relationship management solutions such as, eGain, Genesys, Nuance, Oracle, Salesforce.com and Twilio;
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•
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service providers that offer basic messaging products or services with limited functionality free of charge or at significantly reduced entry level prices;
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•
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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;
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•
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customers that develop and manage their messaging solutions in-house; and
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•
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companies that provide cross-category and vertical-specific advice, such as About.com, UpWork and Yahoo Answers.
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•
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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.
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•
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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.
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•
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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.
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•
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our ability to attract and retain new customers;
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•
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our ability to retain and increase sales to existing customers;
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our customers’ demand for our services and business success;
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•
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consumer demand for our services;
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•
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the introduction of new services by us or our competitors;
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•
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changes in our pricing models or policies or the pricing policies of our current and future competitors;
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continued adoption by companies of mobile and cloud-based messaging solutions;
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continued adoption by experts and consumers of web-based advice services;
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our ability to avoid and/or manage service interruptions, disruptions, or security incidents;
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•
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exposure to foreign currency exchange rate fluctuations; and
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•
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the amount and timing of capital expenditures and other costs related to operation and expansion of our business, including those related to acquisitions.
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•
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economic conditions specific to the Internet, electronic commerce and cloud computing; and
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•
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general, regional and/or global economic and political conditions.
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•
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technology or service providers offering or powering competing digital engagement, contact center, communications or customer relationship management solutions, such as eGain, Genesys, Nuance. Oracle, Salesforce.com, and Twilio;
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•
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service providers that offer basic messaging products or services with limited functionality free of charge or at significantly reduced entry level prices ;
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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;
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•
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customers that develop and manage and their messaging solutions in-house; and
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companies that provide cross-category and vertical-specific advice, such as About.com, UpWork and Yahoo Answers.
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potential failure to achieve the expected benefits of the combination or acquisition;
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inability to generate sufficient revenue to offset acquisition or investment cost;
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difficulties in integrating operations, technologies, products and personnel;
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•
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diversion of financial and management resources from efforts related to existing operations;
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risks of entering new markets in which we have little or no experience or where competitors may have stronger market positions;
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potential loss of our existing key employees or key employees of the company we acquire;
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inability to maintain relationships with customers and partners of the acquired business
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•
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use of alternative investment or compensation structures;
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potential unknown liabilities associated with the acquired businesses; and
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the tax effects of any such acquisitions.
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varied, unfamiliar, unclear and changing legal and regulatory restrictions, including different legal and regulatory standards applicable to Internet services, communications, privacy, and data protection;
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•
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difficulties in staffing and managing foreign operations;
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•
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differing intellectual property laws that may not provide sufficient protection for our intellectual property;
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•
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adverse tax consequences or additional tax liabilities;
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•
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difficulty in addressing country-specific business requirements and regulations;
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•
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fluctuations in currency exchange rates;
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strains on financial and other systems to properly administer VAT and other taxes;
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•
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different consumer preferences and requirements in specific international markets; and
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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.
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•
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any issued patent or patents issued in the future may not be broad enough to protect our intellectual property rights;
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•
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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;
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•
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current and future competitors may independently develop similar technologies, duplicate our services or design around any patents we may have; and
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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.
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•
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damage to our reputation;
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•
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lost sales;
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•
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delays in or loss of market acceptance of our products; and
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•
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unexpected expenses and diversion of resources to remedy errors.
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•
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enhance the features and performance of our services;
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•
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develop and offer new services that are valuable to companies doing business online as well as Internet users; and
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•
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respond to technological advances and emerging industry and regulatory standards and practices in a cost-effective and timely manner.
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•
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concerns about transaction security or security problems such as “viruses” and “worms” or hackers;
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concerns about cybersecurity attacks or the security of confidential information online;
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continued growth in the number of users;
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•
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continued development of the necessary technological infrastructure;
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•
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development of enabling technologies;
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•
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uncertain and increasing government regulation; and
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•
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the development of complementary services and products.
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•
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quarterly variations in our operating results or those of our competitors;
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•
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earnings announcements that are not in line with analyst expectations;
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•
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changes in recommendations or financial estimates by securities analysts;
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•
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announcements or rumors about mergers or strategic acquisitions by us or by our competitors;
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announcements about customer additions and cancellations or failure to complete significant sales;
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•
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changes in market valuations of companies that investors believe are comparable to us;
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•
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additions or departures of key personnel; and
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•
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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.
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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.
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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.
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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.
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Our stockholders may only act at a duly called annual or special meeting and may not act by written consent.
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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.
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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.
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•
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Our amended and restated bylaws expressly authorize a super-majority of the board of directors to amend our amended and restated bylaws.
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High
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Low
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||||
Year ended December 31, 2017:
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||||
First Quarter
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$
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8.05
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$
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6.60
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Second Quarter
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$
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11.90
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$
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6.55
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Third Quarter
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$
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13.85
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$
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10.95
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Fourth Quarter
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$
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14.90
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$
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10.90
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Year ended December 31, 2016:
|
|
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|
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||
First Quarter
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$
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6.82
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|
|
$
|
4.10
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Second Quarter
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$
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7.20
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|
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$
|
5.69
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Third Quarter
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$
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8.50
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$
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6.26
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Fourth Quarter
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$
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8.65
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$
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7.45
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Period
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Total Number of Shares Purchased
(1) (2)
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Average Price Paid per Share
(1) (2)
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Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
(1) (2)
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Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
(1) (2) (3)
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||||||
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|
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|
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$
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18,395,372
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|
||||
10/1/2017 - 10/31/2017
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|
—
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|
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$
|
—
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|
|
—
|
|
|
18,395,372
|
|
|
11/1/2017 - 11/30/2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,395,372
|
|
||
12/1/2017 - 12/31/2017
|
|
—
|
|
|
—
|
|
|
—
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|
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18,395,372
|
|
||
Total
|
|
—
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$
|
—
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|
|
—
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|
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$
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18,395,372
|
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(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)
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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.
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(3)
|
Transaction fees related to the share purchases are deducted from the total remaining allowable expenditure amount.
|
(1)
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The graph covers the period from December 31,
2012
to December 31,
2017
.
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(2)
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The graph assumes that $100 was invested at the market close on December 31,
2012
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.
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(3)
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Stockholder returns over the indicated period should not be considered indicative of future stockholder returns.
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Year Ended December 31,
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||||||||||||||||||
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2017
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2016
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2015
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2014
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2013
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||||||||||
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(In Thousands, Except Share and per Share Data)
|
||||||||||||||||||
Consolidated Statement of Operations Data:
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Revenue
|
$
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218,876
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$
|
222,779
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|
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$
|
239,012
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|
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$
|
209,931
|
|
|
$
|
177,805
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of revenue
|
58,205
|
|
|
63,161
|
|
|
70,310
|
|
|
52,703
|
|
|
42,555
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|
|||||
Sales and marketing
|
90,905
|
|
|
89,529
|
|
|
94,728
|
|
|
83,253
|
|
|
62,488
|
|
|||||
General and administrative
|
43,124
|
|
|
43,046
|
|
|
37,171
|
|
|
40,192
|
|
|
39,968
|
|
|||||
Product development
|
40,034
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|
|
40,198
|
|
|
38,974
|
|
|
37,329
|
|
|
36,397
|
|
|||||
Restructuring costs
|
2,594
|
|
|
2,369
|
|
|
3,384
|
|
|
—
|
|
|
—
|
|
|||||
Amortization of purchased intangibles
|
1,840
|
|
|
3,885
|
|
|
4,873
|
|
|
1,621
|
|
|
871
|
|
|||||
Total costs and expenses
|
236,702
|
|
|
242,188
|
|
|
249,440
|
|
|
215,098
|
|
|
182,279
|
|
|||||
Loss from operations
|
(17,826
|
)
|
|
(19,409
|
)
|
|
(10,428
|
)
|
|
(5,167
|
)
|
|
(4,474
|
)
|
|||||
Other income (expense)
|
136
|
|
|
(530
|
)
|
|
(202
|
)
|
|
(322
|
)
|
|
337
|
|
|||||
Loss before provision for (benefit from) income taxes
|
(17,690
|
)
|
|
(19,939
|
)
|
|
(10,630
|
)
|
|
(5,489
|
)
|
|
(4,137
|
)
|
|||||
Provision for (benefit from) income taxes
|
501
|
|
|
5,934
|
|
|
15,814
|
|
|
1,859
|
|
|
(638
|
)
|
|||||
Net loss
|
$
|
(18,191
|
)
|
|
$
|
(25,873
|
)
|
|
$
|
(26,444
|
)
|
|
$
|
(7,348
|
)
|
|
$
|
(3,499
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net loss per share of common stock:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
(0.32
|
)
|
|
$
|
(0.46
|
)
|
|
$
|
(0.47
|
)
|
|
$
|
(0.13
|
)
|
|
$
|
(0.06
|
)
|
Diluted
|
$
|
(0.32
|
)
|
|
$
|
(0.46
|
)
|
|
$
|
(0.47
|
)
|
|
$
|
(0.13
|
)
|
|
$
|
(0.06
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted-average shares used to compute net loss per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
56,358,017
|
|
|
56,063,777
|
|
|
56,452,408
|
|
|
54,478,754
|
|
|
54,725,236
|
|
|||||
Diluted
|
56,358,017
|
|
|
56,063,777
|
|
|
56,452,408
|
|
|
54,478,754
|
|
|
54,725,236
|
|
|||||
Other Financial and Operational Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted EBITDA
(1)
|
$
|
18,400
|
|
|
$
|
19,198
|
|
|
$
|
21,244
|
|
|
$
|
22,672
|
|
|
$
|
18,767
|
|
Adjusted net income
(2) (3)
|
$
|
4,015
|
|
|
$
|
4,532
|
|
|
$
|
5,803
|
|
|
$
|
7,423
|
|
|
$
|
7,574
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Cost of revenue
|
$
|
448
|
|
|
$
|
429
|
|
|
$
|
1,396
|
|
|
$
|
1,492
|
|
|
$
|
1,954
|
|
Sales and marketing
|
2,500
|
|
|
2,515
|
|
|
3,088
|
|
|
3,399
|
|
|
2,851
|
|
|||||
General and administrative
|
3,691
|
|
|
3,304
|
|
|
3,692
|
|
|
3,809
|
|
|
4,148
|
|
|||||
Product development
|
2,305
|
|
|
3,488
|
|
|
3,638
|
|
|
3,606
|
|
|
3,555
|
|
|||||
Total stock-based compensation
|
$
|
8,944
|
|
|
$
|
9,736
|
|
|
$
|
11,814
|
|
|
$
|
12,306
|
|
|
$
|
12,508
|
|
|
As of December 31,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
(In Thousands)
|
||||||||||||||||||
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
56,115
|
|
|
$
|
50,889
|
|
|
$
|
48,803
|
|
|
$
|
49,372
|
|
|
$
|
91,906
|
|
Working capital
|
13,789
|
|
|
17,468
|
|
|
39,122
|
|
|
34,954
|
|
|
88,877
|
|
|||||
Total assets
|
232,799
|
|
|
219,638
|
|
|
226,194
|
|
|
239,817
|
|
|
205,090
|
|
|||||
Total stockholders’ equity
|
140,063
|
|
|
138,476
|
|
|
165,305
|
|
|
180,337
|
|
|
159,053
|
|
•
|
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,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Reconciliation of Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net loss
|
$
|
(18,191
|
)
|
|
$
|
(25,873
|
)
|
|
$
|
(26,444
|
)
|
|
$
|
(7,348
|
)
|
|
$
|
(3,499
|
)
|
Amortization of purchased intangibles
|
4,682
|
|
|
6,673
|
|
|
8,040
|
|
|
5,090
|
|
|
2,643
|
|
|||||
Stock-based compensation
|
8,944
|
|
|
9,736
|
|
|
11,814
|
|
|
12,306
|
|
|
12,508
|
|
|||||
Contingent earn-out adjustments
|
—
|
|
|
—
|
|
|
(3,680
|
)
|
|
—
|
|
|
—
|
|
|||||
Restructuring costs
|
2,594
|
|
(1)
|
2,369
|
|
(2)
|
3,384
|
|
(3)
|
—
|
|
|
—
|
|
|||||
Depreciation
|
12,358
|
|
|
12,011
|
|
|
12,114
|
|
|
9,071
|
|
|
8,090
|
|
|||||
Other non-recurring costs
|
7,648
|
|
(4)
|
7,818
|
|
(5)
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Provision for (benefit from) income taxes
|
501
|
|
|
5,934
|
|
|
15,814
|
|
|
1,859
|
|
|
(638
|
)
|
|||||
Acquisition costs
|
—
|
|
|
—
|
|
|
—
|
|
|
1,372
|
|
|
—
|
|
|||||
Other (income) expense, net
|
(136
|
)
|
|
530
|
|
|
202
|
|
|
322
|
|
|
(337
|
)
|
|||||
Adjusted EBITDA
|
$
|
18,400
|
|
|
$
|
19,198
|
|
|
$
|
21,244
|
|
|
$
|
22,672
|
|
|
$
|
18,767
|
|
•
|
although amortization is a non-cash charge, 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,
|
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
||||||||||
Reconciliation of Adjusted Net Income
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Pre-tax GAAP loss
|
$
|
(17,690
|
)
|
|
$
|
(19,939
|
)
|
|
$
|
(10,630
|
)
|
|
$
|
(7,348
|
)
|
|
$
|
(3,499
|
)
|
|
Amortization of purchased intangibles
|
4,682
|
|
|
6,673
|
|
|
8,040
|
|
|
5,090
|
|
|
2,643
|
|
|
|||||
Stock-based compensation
|
8,944
|
|
|
9,736
|
|
|
11,814
|
|
|
12,306
|
|
|
12,508
|
|
|
|||||
Restructuring costs
|
2,594
|
|
(1)
|
2,369
|
|
(2)
|
3,384
|
|
(3)
|
—
|
|
|
—
|
|
|
|||||
Other non-recurring costs
|
7,648
|
|
(4)
|
8,134
|
|
(6)
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||
Contingent earn-out adjustments
|
—
|
|
|
—
|
|
|
(3,680
|
)
|
|
—
|
|
|
—
|
|
|
|||||
Acquisition costs
|
—
|
|
|
—
|
|
|
—
|
|
|
1,372
|
|
|
—
|
|
|
|||||
Pre-tax GAAP adjusted net income
|
6,178
|
|
|
6,973
|
|
|
8,928
|
|
|
11,420
|
|
|
11,652
|
|
|
|||||
Income tax effect of non-GAAP items
|
(2,163
|
)
|
(7)
|
(2,441
|
)
|
(7)
|
(3,125
|
)
|
(7)
|
(3,997
|
)
|
(7)
|
(4,078
|
)
|
(7)
|
|||||
Adjusted net income
|
$
|
4,015
|
|
|
$
|
4,532
|
|
|
$
|
5,803
|
|
|
$
|
7,423
|
|
|
$
|
7,574
|
|
|
•
|
Revenue increased
2%
and decreased
2%
to
$57.4 million
and
$218.9 million
in the three and twelve months ended
December 31, 2017
, respectively, from
$56.1 million
and
$222.8 million
in the comparable periods in
2016
.
|
•
|
Revenue from our Business segment increased
2%
and decreased
2%
to
$52.9 million
and
$201.4 million
in the three and twelve months ended
December 31, 2017
, respectively, from $
51.9 million
and
$206.5 million
in the comparable periods in
2016
.
|
•
|
Gross profit margin increased to
74%
and
73%
in the three and twelve months ended
December 31, 2017
from
73%
and
72%
in the comparable periods in
2016
.
|
•
|
Cost and expenses decreased
2%
to $
63.3 million
and $
236.7 million
in the three and twelve months ended
December 31, 2017
, respectively, from $
64.4 million
and $
242.2 million
in the comparable periods in
2016
.
|
•
|
Net loss decreased to $
3.7 million
and $
18.2 million
in the three and twelve months ended
December 31, 2017
, respectively, from net loss of
$9.6 million
and
$25.9 million
for the three and twelve months ended
December 31, 2016
, respectively.
|
•
|
Trailing-twelve-month average revenue per enterprise and mid-market customer was greater than $220,000 in
2017
, as compared to approximately $200,000 in
2016
.
|
•
|
Revenue retention rate for enterprise and mid-market customers on LiveEngage was greater than 100% for the twelve-months ended
December 31, 2017
and
2016
.
|
•
|
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.
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Stock-based compensation expense
|
|
$
|
8,944
|
|
|
$
|
9,736
|
|
|
$
|
11,814
|
|
|
Year Ended December 31,
|
|
|
|
Year Ended December 31,
|
|
|
||||||||||||||
|
2017
|
|
2016
|
|
% Change
|
|
2016
|
|
2015
|
|
% Change
|
||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||
Revenue by Segment:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Business
|
$
|
201,426
|
|
|
$
|
206,521
|
|
|
(2
|
)%
|
|
$
|
206,521
|
|
|
$
|
223,803
|
|
|
(8
|
)%
|
Consumer
|
17,450
|
|
|
16,258
|
|
|
7
|
%
|
|
16,258
|
|
|
15,209
|
|
|
7
|
%
|
||||
Total
|
$
|
218,876
|
|
|
$
|
222,779
|
|
|
(2
|
)%
|
|
$
|
222,779
|
|
|
$
|
239,012
|
|
|
(7
|
)%
|
|
Year Ended December 31,
|
|
|
|
Year Ended December 31,
|
|
|
||||||||||||||
|
2017
|
|
2016
|
|
% Change
|
|
2016
|
|
2015
|
|
% Change
|
||||||||||
|
($ in thousands)
|
|
|
|
($ in thousands)
|
|
|
||||||||||||||
Cost of revenue - Business
|
$
|
54,600
|
|
|
$
|
60,352
|
|
|
(10
|
)%
|
|
$
|
60,352
|
|
|
$
|
67,901
|
|
|
(11
|
)%
|
Percentage of total revenue
|
25
|
%
|
|
27
|
%
|
|
|
|
27
|
%
|
|
28
|
%
|
|
|
||||||
Headcount (at period end)
|
205
|
|
|
236
|
|
|
(13
|
)%
|
|
236
|
|
|
286
|
|
|
(17
|
)%
|
||||
|
|
Year Ended December 31,
|
|
|
|
Year Ended December 31,
|
|
|
||||||||||||||
|
2017
|
|
2016
|
|
% Change
|
|
2016
|
|
2015
|
|
% Change
|
||||||||||
|
($ in thousands)
|
|
|
|
($ in thousands)
|
|
|
||||||||||||||
Sales and Marketing - Business
|
$
|
82,420
|
|
|
$
|
82,063
|
|
|
—
|
%
|
|
$
|
82,063
|
|
|
$
|
87,975
|
|
|
(7
|
)%
|
Percentage of total revenue
|
38
|
%
|
|
37
|
%
|
|
|
|
37
|
%
|
|
37
|
%
|
|
|
||||||
Headcount (at period end)
|
291
|
|
|
310
|
|
|
(6
|
)%
|
|
310
|
|
|
324
|
|
|
(4
|
)%
|
|
Year Ended December 31,
|
|
|
|
Year Ended December 31,
|
|
|
||||||||||||||
|
2017
|
|
2016
|
|
% Change
|
|
2016
|
|
2015
|
|
% Change
|
||||||||||
|
($ in thousands)
|
|
|
|
($ in thousands)
|
|
|
||||||||||||||
Sales and Marketing - Consumer
|
$
|
8,485
|
|
|
$
|
7,466
|
|
|
14
|
%
|
|
$
|
7,466
|
|
|
$
|
6,753
|
|
|
11
|
%
|
Percentage of total revenue
|
4
|
%
|
|
3
|
%
|
|
|
|
3
|
%
|
|
3
|
%
|
|
|
||||||
Headcount (at period end)
|
12
|
|
|
11
|
|
|
9
|
%
|
|
11
|
|
|
9
|
|
|
22
|
%
|
|
Year Ended December 31,
|
|
|
|
Year Ended December 31,
|
|
|
||||||||||||||
|
2017
|
|
2016
|
|
% Change
|
|
2016
|
|
2015
|
|
% Change
|
||||||||||
|
($ in thousands)
|
|
|
|
($ in thousands)
|
|
|
||||||||||||||
General and administrative
|
$
|
43,124
|
|
|
$
|
43,046
|
|
|
—
|
%
|
|
$
|
43,046
|
|
|
$
|
37,171
|
|
|
16
|
%
|
Percentage of total revenue
|
20
|
%
|
|
19
|
%
|
|
|
|
19
|
%
|
|
16
|
%
|
|
|
||||||
Headcount (at period end)
|
113
|
|
|
112
|
|
|
1
|
%
|
|
112
|
|
|
115
|
|
|
(3
|
)%
|
||||
|
|
Year Ended December 31,
|
|
|
|
Year Ended December 31,
|
|
|
||||||||||||||
|
2017
|
|
2016
|
|
% Change
|
|
2016
|
|
2015
|
|
% Change
|
||||||||||
|
($ in thousands)
|
|
|
|
($ in thousands)
|
|
|
||||||||||||||
Product development
|
$
|
40,034
|
|
|
$
|
40,198
|
|
|
—
|
%
|
|
$
|
40,198
|
|
|
$
|
38,974
|
|
|
3
|
%
|
Percentage of total revenue
|
18
|
%
|
|
18
|
%
|
|
|
|
18
|
%
|
|
16
|
%
|
|
|
||||||
Headcount (at period end)
|
342
|
|
|
300
|
|
|
14
|
%
|
|
300
|
|
|
253
|
|
|
19
|
%
|
||||
|
|
Year Ended December 31,
|
|
|
|
Year Ended December 31,
|
|
|
||||||||||||||
|
2017
|
|
2016
|
|
% Change
|
|
2016
|
|
2015
|
|
% Change
|
||||||||||
|
($ in thousands)
|
|
|
|
($ in thousands)
|
|
|
||||||||||||||
Restructuring Costs
|
$
|
2,594
|
|
|
$
|
2,369
|
|
|
9
|
%
|
|
$
|
2,369
|
|
|
$
|
3,384
|
|
|
(30
|
)%
|
Percentage of total revenue
|
1
|
%
|
|
1
|
%
|
|
|
|
1
|
%
|
|
1
|
%
|
|
|
|
Year Ended December 31,
|
|
|
|
Year Ended December 31,
|
|
|
||||||||||||||
|
2017
|
|
2016
|
|
% Change
|
|
2016
|
|
2015
|
|
% Change
|
||||||||||
|
($ in thousands)
|
|
|
|
($ in thousands)
|
|
|
||||||||||||||
Amortization of purchased intangibles
|
$
|
1,840
|
|
|
$
|
3,885
|
|
|
(53
|
)%
|
|
$
|
3,885
|
|
|
$
|
4,873
|
|
|
(20
|
)%
|
Percentage of total revenue
|
1
|
%
|
|
2
|
%
|
|
|
|
2
|
%
|
|
2
|
%
|
|
|
|
Year Ended December 31,
|
|
|
|
Year Ended December 31,
|
|
|
||||||||||||||
|
2017
|
|
2016
|
|
% Change
|
|
2016
|
|
2015
|
|
% Change
|
||||||||||
|
($ in thousands)
|
|
|
|
($ in thousands)
|
|
|
||||||||||||||
Other income (expense), net
|
$
|
136
|
|
|
$
|
(530
|
)
|
|
(126
|
)%
|
|
$
|
(530
|
)
|
|
$
|
(202
|
)
|
|
162
|
%
|
|
Year Ended December 31,
|
|
|
|
Year Ended December 31,
|
|
|
||||||||||||||
|
2017
|
|
2016
|
|
% Change
|
|
2016
|
|
2015
|
|
% Change
|
||||||||||
|
($ in thousands)
|
|
|
|
($ in thousands)
|
|
|
||||||||||||||
Provision for income taxes
|
$
|
501
|
|
|
$
|
5,934
|
|
|
(92
|
)%
|
|
$
|
5,934
|
|
|
$
|
15,814
|
|
|
(62
|
)%
|
|
|
||||||||||||||||||||||||||||||
|
Dec. 31, 2017
|
|
Sept. 30,
2017 |
|
June 30,
2017 |
|
March 31,
2017 |
|
Dec. 31, 2016
|
|
Sept. 30,
2016 |
|
June 30,
2016 |
|
March 31,
2016 |
||||||||||||||||
|
(in thousands, except share and per share data)
|
||||||||||||||||||||||||||||||
Consolidated Statements of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Revenue
|
$
|
57,390
|
|
|
$
|
56,493
|
|
|
$
|
54,074
|
|
|
$
|
50,919
|
|
|
$
|
56,118
|
|
|
$
|
54,518
|
|
|
$
|
56,679
|
|
|
$
|
55,464
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Costs and Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cost of revenue
|
14,749
|
|
|
14,541
|
|
|
15,134
|
|
|
13,781
|
|
|
14,952
|
|
|
14,837
|
|
|
17,508
|
|
|
15,864
|
|
||||||||
Sales and marketing
|
24,210
|
|
|
21,603
|
|
|
23,392
|
|
|
21,700
|
|
|
21,698
|
|
|
22,067
|
|
|
23,088
|
|
|
22,676
|
|
||||||||
General and administrative
|
12,596
|
|
|
10,398
|
|
|
10,437
|
|
|
9,692
|
|
|
13,287
|
|
|
10,069
|
|
|
10,161
|
|
|
9,529
|
|
||||||||
Product development
|
11,023
|
|
|
9,726
|
|
|
9,326
|
|
|
9,958
|
|
|
10,770
|
|
|
9,495
|
|
|
10,719
|
|
|
9,214
|
|
||||||||
Restructuring costs
|
279
|
|
|
—
|
|
|
2,076
|
|
|
240
|
|
|
2,753
|
|
|
(384
|
)
|
|
—
|
|
|
—
|
|
||||||||
Amortization of purchased intangibles
|
428
|
|
|
470
|
|
|
470
|
|
|
472
|
|
|
931
|
|
|
1,013
|
|
|
1,017
|
|
|
924
|
|
||||||||
Total costs and expenses
|
63,285
|
|
|
56,738
|
|
|
60,835
|
|
|
55,843
|
|
|
64,391
|
|
|
57,097
|
|
|
62,493
|
|
|
58,207
|
|
||||||||
Loss from operations
|
(5,895
|
)
|
|
(245
|
)
|
|
(6,761
|
)
|
|
(4,924
|
)
|
|
(8,273
|
)
|
|
(2,579
|
)
|
|
(5,814
|
)
|
|
(2,743
|
)
|
||||||||
Other (expense) income
|
(276
|
)
|
|
191
|
|
|
(99
|
)
|
|
320
|
|
|
(395
|
)
|
|
(123
|
)
|
|
(646
|
)
|
|
634
|
|
||||||||
Loss before (benefit from) provision for income taxes
|
(6,171
|
)
|
|
(54
|
)
|
|
(6,860
|
)
|
|
(4,604
|
)
|
|
(8,668
|
)
|
|
(2,702
|
)
|
|
(6,460
|
)
|
|
(2,109
|
)
|
||||||||
(Benefit from) provision for income taxes
|
(2,499
|
)
|
|
1,256
|
|
|
673
|
|
|
1,072
|
|
|
897
|
|
|
3,177
|
|
|
1,306
|
|
|
554
|
|
||||||||
Net loss
|
$
|
(3,672
|
)
|
|
$
|
(1,310
|
)
|
|
$
|
(7,533
|
)
|
|
$
|
(5,676
|
)
|
|
$
|
(9,565
|
)
|
|
$
|
(5,879
|
)
|
|
$
|
(7,766
|
)
|
|
$
|
(2,663
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net loss per share of common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic
|
(0.06
|
)
|
|
(0.02
|
)
|
|
(0.13
|
)
|
|
(0.10
|
)
|
|
(0.17
|
)
|
|
(0.10
|
)
|
|
(0.14
|
)
|
|
(0.05
|
)
|
||||||||
Diluted
|
(0.06
|
)
|
|
(0.02
|
)
|
|
(0.13
|
)
|
|
(0.10
|
)
|
|
(0.17
|
)
|
|
(0.10
|
)
|
|
(0.14
|
)
|
|
(0.05
|
)
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Weighted-average shares used to compute net loss per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic
|
56,965,111
|
|
|
56,524,990
|
|
|
55,954,158
|
|
|
55,975,093
|
|
|
55,861,872
|
|
|
56,047,645
|
|
|
55,965,525
|
|
|
56,386,003
|
|
||||||||
Diluted
|
56,965,111
|
|
|
56,524,990
|
|
|
55,954,158
|
|
|
55,975,093
|
|
|
55,861,872
|
|
|
56,047,645
|
|
|
55,965,525
|
|
|
56,386,003
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(in thousands)
|
||||||
Consolidated Statements of Cash Flows Data:
|
|
|
|
||||
Cash flows provided by operating activities
|
$
|
10,290
|
|
|
$
|
24,560
|
|
Cash flows used in investing activities
|
(15,320
|
)
|
|
(11,452
|
)
|
||
Cash flows provided by (used in) financing activities
|
7,209
|
|
|
(7,068
|
)
|
|
Payments Due by Period
|
||||||||||||||||||
Contractual Obligations
|
Total
|
|
Less Than
1 Year
|
|
1 – 3 Years
|
|
3 – 5 Years
|
|
More Than
5 Years
|
||||||||||
Operating leases
|
$
|
24,512
|
|
|
$
|
9,797
|
|
|
$
|
10,432
|
|
|
$
|
2,571
|
|
|
$
|
1,712
|
|
Total
|
$
|
24,512
|
|
|
$
|
9,797
|
|
|
$
|
10,432
|
|
|
$
|
2,571
|
|
|
$
|
1,712
|
|
|
Page
|
Report of BDO USA, LLP, Independent Registered Public Accounting Firm
|
|
Consolidated Balance Sheets as of December 31, 2017 and 2016
|
|
Consolidated Statements of Operations for each of the years ended December 31, 2017, 2016 and 2015
|
|
Consolidated Statements of Comprehensive Loss for each of the years ended December 31, 2017, 2016 and 2015
|
|
Consolidated Statements of Stockholders’ Equity for each of the years ended December 31, 2017, 2016 and 2015
|
|
Consolidated Statements of Cash Flows for each of the years ended December 31, 2017, 2016 and 2015
|
|
Notes to Consolidated Financial Statements
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Revenue
|
$
|
218,876
|
|
|
$
|
222,779
|
|
|
$
|
239,012
|
|
Costs and expenses:
(1) (2) (3)
|
|
|
|
|
|
||||||
Cost of revenue
|
58,205
|
|
|
63,161
|
|
|
70,310
|
|
|||
Sales and marketing
|
90,905
|
|
|
89,529
|
|
|
94,728
|
|
|||
General and administrative
|
43,124
|
|
|
43,046
|
|
|
37,171
|
|
|||
Product development
|
40,034
|
|
|
40,198
|
|
|
38,974
|
|
|||
Restructuring costs
|
2,594
|
|
|
2,369
|
|
|
3,384
|
|
|||
Amortization of purchased intangibles
|
1,840
|
|
|
3,885
|
|
|
4,873
|
|
|||
Total costs and expenses
|
236,702
|
|
|
242,188
|
|
|
249,440
|
|
|||
Loss from operations
|
(17,826
|
)
|
|
(19,409
|
)
|
|
(10,428
|
)
|
|||
Other income (expense), net
|
136
|
|
|
(530
|
)
|
|
(202
|
)
|
|||
Loss before provision for income taxes
|
(17,690
|
)
|
|
(19,939
|
)
|
|
(10,630
|
)
|
|||
Provision for income taxes
|
501
|
|
|
5,934
|
|
|
15,814
|
|
|||
Net loss
|
$
|
(18,191
|
)
|
|
$
|
(25,873
|
)
|
|
$
|
(26,444
|
)
|
|
|
|
|
|
|
||||||
Net loss per share of common stock:
|
|
|
|
|
|
||||||
Basic
|
$
|
(0.32
|
)
|
|
$
|
(0.46
|
)
|
|
$
|
(0.47
|
)
|
Diluted
|
$
|
(0.32
|
)
|
|
$
|
(0.46
|
)
|
|
$
|
(0.47
|
)
|
|
|
|
|
|
|
||||||
Weighted-average shares used to compute net loss income per share:
|
|
|
|
|
|
||||||
Basic
|
56,358,017
|
|
|
56,063,777
|
|
|
56,452,408
|
|
|||
Diluted
|
56,358,017
|
|
|
56,063,777
|
|
|
56,452,408
|
|
|||
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
(1)
Amounts include stock compensation expense, as follows:
|
|
|
|
|
|
||||||
Cost of revenue
|
$
|
448
|
|
|
$
|
429
|
|
|
$
|
1,396
|
|
Sales and marketing
|
2,500
|
|
|
2,515
|
|
|
3,088
|
|
|||
General and administrative
|
3,691
|
|
|
3,304
|
|
|
3,692
|
|
|||
Product development
|
2,305
|
|
|
3,488
|
|
|
3,638
|
|
|||
|
|
|
|
|
|
||||||
(2)
Amounts include depreciation expense, as follows:
|
|
|
|
|
|
||||||
Cost of revenue
|
$
|
7,150
|
|
|
$
|
8,234
|
|
|
$
|
9,091
|
|
Sales and marketing
|
1,625
|
|
|
1,315
|
|
|
1,232
|
|
|||
General and administrative
|
1,226
|
|
|
1,418
|
|
|
893
|
|
|||
Product development
|
2,357
|
|
|
1,044
|
|
|
898
|
|
|||
|
|
|
|
|
|
||||||
(3)
Amounts include amortization of purchased intangibles, as follows:
|
|
|
|
|
|
||||||
Cost of revenue
|
$
|
2,842
|
|
|
$
|
2,788
|
|
|
$
|
3,167
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net loss
|
$
|
(18,191
|
)
|
|
$
|
(25,873
|
)
|
|
$
|
(26,444
|
)
|
Foreign currency translation adjustment
|
3,625
|
|
|
(3,624
|
)
|
|
(1,398
|
)
|
|||
Comprehensive loss
|
$
|
(14,566
|
)
|
|
$
|
(29,497
|
)
|
|
$
|
(27,842
|
)
|
|
Common Stock
|
|
Treasury Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Deficit
|
|
Accumulated
Other Comprehensive
Loss
|
|
|
||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
Total
|
|||||||||||||||||
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
|
|
||||||
Common stock issued upon exercise of stock options
|
853,885
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
7,490
|
|
|
—
|
|
|
—
|
|
|
7,491
|
|
||||||
Common stock issued upon vesting of restricted stock units
|
363,429
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,944
|
|
|
—
|
|
|
—
|
|
|
8,944
|
|
||||||
Common stock issued under Employee Stock Purchase Plan
|
170,208
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,459
|
|
|
—
|
|
|
—
|
|
|
1,459
|
|
||||||
Common stock repurchase
|
—
|
|
|
—
|
|
|
(247,430
|
)
|
|
(1
|
)
|
|
(1,741
|
)
|
|
—
|
|
|
—
|
|
|
(1,742
|
)
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,191
|
)
|
|
—
|
|
|
(18,191
|
)
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,625
|
|
|
3,625
|
|
||||||
Balance at December 31, 2017
|
59,663,969
|
|
|
$
|
60
|
|
|
(2,587,535
|
)
|
|
$
|
(3
|
)
|
|
$
|
305,676
|
|
|
$
|
(163,135
|
)
|
|
$
|
(2,535
|
)
|
|
$
|
140,063
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(18,191
|
)
|
|
$
|
(25,873
|
)
|
|
$
|
(26,444
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Stock-based compensation expense
|
8,944
|
|
|
9,736
|
|
|
11,814
|
|
|||
Depreciation
|
12,358
|
|
|
12,011
|
|
|
12,114
|
|
|||
Impairment on investments
|
—
|
|
|
2,600
|
|
|
—
|
|
|||
Amortization of tenant allowance
|
(166
|
)
|
|
(180
|
)
|
|
—
|
|
|||
Amortization of purchased intangibles
|
4,682
|
|
|
6,673
|
|
|
8,040
|
|
|||
Change in fair value of contingent consideration
|
—
|
|
|
—
|
|
|
(3,680
|
)
|
|||
Provision for doubtful accounts, net
|
1,895
|
|
|
1,831
|
|
|
2,361
|
|
|||
Deferred income taxes
|
(2,397
|
)
|
|
1,852
|
|
|
14,456
|
|
|||
|
|
|
|
|
|
||||||
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
|
||||||
Accounts receivable
|
(7,998
|
)
|
|
(3,265
|
)
|
|
(1,368
|
)
|
|||
Prepaid expenses and other current assets
|
(1,867
|
)
|
|
3,845
|
|
|
724
|
|
|||
Other assets
|
(38
|
)
|
|
196
|
|
|
130
|
|
|||
Accounts payable
|
(2,743
|
)
|
|
185
|
|
|
(1,916
|
)
|
|||
Accrued expenses and other current liabilities
|
7,838
|
|
|
2,982
|
|
|
1,193
|
|
|||
Deferred revenue
|
8,418
|
|
|
13,283
|
|
|
1,869
|
|
|||
Other liabilities
|
(445
|
)
|
|
(1,316
|
)
|
|
2,538
|
|
|||
Net cash provided by operating activities
|
10,290
|
|
|
24,560
|
|
|
21,831
|
|
|||
|
|
|
|
|
|
||||||
INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Purchases of property and equipment, including capitalized software
|
(17,390
|
)
|
|
(12,344
|
)
|
|
(12,980
|
)
|
|||
Payments for acquisitions and intangible assets, net of cash acquired
|
(441
|
)
|
|
(555
|
)
|
|
(150
|
)
|
|||
Cash held as collateral
|
2,511
|
|
|
1,447
|
|
|
(5,409
|
)
|
|||
Net cash used in investing activities
|
(15,320
|
)
|
|
(11,452
|
)
|
|
(18,539
|
)
|
|||
|
|
|
|
|
|
||||||
FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Repurchase of common stock
|
(1,742
|
)
|
|
(9,967
|
)
|
|
(4,202
|
)
|
|||
Excess tax benefit from the exercise of employee stock options
|
—
|
|
|
—
|
|
|
797
|
|
|||
Payments related to contingent consideration
|
—
|
|
|
—
|
|
|
(2,883
|
)
|
|||
Proceeds from issuance of common stock in connection with the exercise of options
|
8,951
|
|
|
2,899
|
|
|
4,401
|
|
|||
Net cash provided by (used in) financing activities
|
7,209
|
|
|
(7,068
|
)
|
|
(1,887
|
)
|
|||
EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
|
3,047
|
|
|
(3,954
|
)
|
|
(1,974
|
)
|
|||
CHANGE IN CASH AND CASH EQUIVALENTS
|
5,226
|
|
|
2,086
|
|
|
(569
|
)
|
|||
CASH AND CASH EQUIVALENTS - Beginning of the year
|
50,889
|
|
|
48,803
|
|
|
49,372
|
|
|||
CASH AND CASH EQUIVALENTS - End of the year
|
$
|
56,115
|
|
|
$
|
50,889
|
|
|
$
|
48,803
|
|
|
|
|
|
|
|
||||||
SUPPLEMENTAL DISCLOSURE OF OTHER CASH FLOW INFORMATION:
|
|
|
|
|
|
||||||
Cash paid for income taxes
|
$
|
1,551
|
|
|
$
|
424
|
|
|
$
|
1,882
|
|
SUPPLEMENTAL DISCLOSURE OF NON CASH INVESTING AND FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Purchase of property and equipment recorded in accounts payable
|
$
|
936
|
|
|
$
|
2,497
|
|
|
$
|
1,926
|
|
Leasehold improvements funded by landlord
|
$
|
—
|
|
|
$
|
1,440
|
|
|
$
|
326
|
|
Year Ended December 31,
|
Beginning Balance
|
|
Additions
Charged to
Costs and
Expenses
|
|
Deductions /
Write-Offs
|
|
Ending Balance
|
||||||||
2015
|
$
|
1,275
|
|
|
$
|
2,361
|
|
|
$
|
(2,452
|
)
|
|
$
|
1,184
|
|
2016
|
$
|
1,184
|
|
|
$
|
1,831
|
|
|
$
|
(1,283
|
)
|
|
$
|
1,732
|
|
2017
|
$
|
1,732
|
|
|
$
|
1,895
|
|
|
$
|
(2,309
|
)
|
|
$
|
1,318
|
|
|
Year Ended December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
Basic
|
56,358,017
|
|
|
56,063,777
|
|
|
56,452,408
|
|
Effect of assumed exercised options
|
—
|
|
|
—
|
|
|
—
|
|
Diluted
|
56,358,017
|
|
|
56,063,777
|
|
|
56,452,408
|
|
|
Business
|
|
Consumer
|
|
Corporate
|
|
Consolidated
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Hosted services – Business
|
$
|
178,686
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
178,686
|
|
Hosted services – Consumer
|
—
|
|
|
17,450
|
|
|
—
|
|
|
17,450
|
|
||||
Professional services
|
22,740
|
|
|
—
|
|
|
—
|
|
|
22,740
|
|
||||
Total revenue
|
201,426
|
|
|
17,450
|
|
|
—
|
|
|
218,876
|
|
||||
Cost of revenue
|
54,600
|
|
|
3,605
|
|
|
—
|
|
|
58,205
|
|
||||
Sales and marketing
|
82,420
|
|
|
8,485
|
|
|
—
|
|
|
90,905
|
|
||||
Amortization of purchased intangibles
|
1,840
|
|
|
—
|
|
|
—
|
|
|
1,840
|
|
||||
Unallocated corporate expenses
|
—
|
|
|
—
|
|
|
85,752
|
|
|
85,752
|
|
||||
Operating income (loss)
|
$
|
62,566
|
|
|
$
|
5,360
|
|
|
$
|
(85,752
|
)
|
|
$
|
(17,826
|
)
|
|
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
|
)
|
|
December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
United States
|
$
|
137,433
|
|
|
$
|
146,733
|
|
|
$
|
159,539
|
|
Other Americas
(1)
|
6,987
|
|
|
6,818
|
|
|
12,296
|
|
|||
Total Americas
|
144,420
|
|
|
153,551
|
|
|
171,835
|
|
|||
EMEA
(2) (4)
|
56,310
|
|
|
50,511
|
|
|
51,548
|
|
|||
APAC
(3)
|
18,146
|
|
|
18,717
|
|
|
15,629
|
|
|||
Total revenue
|
$
|
218,876
|
|
|
$
|
222,779
|
|
|
$
|
239,012
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
United States
|
$
|
95,716
|
|
|
$
|
93,845
|
|
Israel
|
13,079
|
|
|
13,940
|
|
||
Australia
|
9,504
|
|
|
9,496
|
|
||
Netherlands
|
8,363
|
|
|
7,495
|
|
||
Other
(1)
|
3,293
|
|
|
2,711
|
|
||
Total long-lived assets
|
$
|
129,955
|
|
|
$
|
127,487
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Computer equipment and software
|
$
|
100,815
|
|
|
$
|
82,477
|
|
Furniture, equipment and building improvements
|
15,355
|
|
|
15,027
|
|
||
|
116,170
|
|
|
97,504
|
|
||
Less: accumulated depreciation
|
(81,465
|
)
|
|
(69,107
|
)
|
||
Total
|
$
|
34,705
|
|
|
$
|
28,397
|
|
|
Business
|
|
Consumer
|
|
Total
|
||||||
Balance as of December 31, 2016
|
$
|
72,221
|
|
|
$
|
8,024
|
|
|
$
|
80,245
|
|
Adjustments to goodwill:
|
|
|
|
|
|
||||||
Foreign exchange adjustments
|
286
|
|
|
—
|
|
|
286
|
|
|||
Balance as of December 31, 2017
|
$
|
72,507
|
|
|
$
|
8,024
|
|
|
$
|
80,531
|
|
|
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
|
|
|
December 31, 2017
|
||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Carrying Amount
|
|
Weighted
Average
Amortization
Period
|
||||||
Amortizing intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|||
Technology
|
$
|
28,259
|
|
|
$
|
(22,575
|
)
|
|
$
|
5,684
|
|
|
5.3 years
|
Customer relationships
|
15,857
|
|
|
(10,336
|
)
|
|
5,521
|
|
|
8.0 years
|
|||
Trade names
|
1,300
|
|
|
(1,294
|
)
|
|
6
|
|
|
2.1 years
|
|||
Non-compete agreements
|
1,450
|
|
|
(1,450
|
)
|
|
—
|
|
|
2.3 years
|
|||
Patents
|
1,621
|
|
|
(493
|
)
|
|
1,128
|
|
|
13.1 years
|
|||
Other
|
262
|
|
|
(235
|
)
|
|
27
|
|
|
2.7 years
|
|||
Total
|
$
|
48,749
|
|
|
$
|
(36,383
|
)
|
|
$
|
12,366
|
|
|
|
|
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
|
|
|
5.3 years
|
Customer relationships
|
16,009
|
|
|
(8,857
|
)
|
|
7,152
|
|
|
8.0 years
|
|||
Trade names
|
1,295
|
|
|
(1,277
|
)
|
|
18
|
|
|
2.1 years
|
|||
Non-compete agreements
|
1,446
|
|
|
(1,220
|
)
|
|
226
|
|
|
2.3 years
|
|||
Patents
|
1,180
|
|
|
(376
|
)
|
|
804
|
|
|
12.4 years
|
|||
Other
|
263
|
|
|
(235
|
)
|
|
28
|
|
|
2.7 years
|
|||
Total
|
$
|
48,211
|
|
|
$
|
(31,701
|
)
|
|
$
|
16,510
|
|
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Payroll and other employee related costs
|
$
|
16,431
|
|
|
$
|
13,887
|
|
Professional services, consulting and other vendor fees
|
15,674
|
|
|
14,559
|
|
||
Unrecognized tax benefits
|
4,924
|
|
|
4,240
|
|
||
Sales commissions
|
5,259
|
|
|
3,312
|
|
||
Contingent earn-out (Note 7)
|
—
|
|
|
210
|
|
||
Restructuring
|
2,338
|
|
|
2,551
|
|
||
Other
|
3,385
|
|
|
1,491
|
|
||
Total
|
$
|
48,011
|
|
|
$
|
40,250
|
|
•
|
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 or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means.
|
•
|
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, 2017
|
|
December 31, 2016
|
||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Money market funds
|
$
|
2,806
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,806
|
|
|
$
|
3,076
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,076
|
|
Foreign currency derivative contracts
|
—
|
|
|
65
|
|
|
—
|
|
|
65
|
|
|
—
|
|
|
108
|
|
|
—
|
|
|
108
|
|
||||||||
Total assets
|
$
|
2,806
|
|
|
$
|
65
|
|
|
$
|
—
|
|
|
$
|
2,871
|
|
|
$
|
3,076
|
|
|
$
|
108
|
|
|
$
|
—
|
|
|
$
|
3,184
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Contingent earn-out
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
210
|
|
|
$
|
210
|
|
||
Foreign currency derivative contracts
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
66
|
|
|
—
|
|
|
66
|
|
||||||||
Total liabilities
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
66
|
|
|
$
|
210
|
|
|
$
|
276
|
|
|
Contingent Earn-Out
|
||||||
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Balance, Beginning of year
|
$
|
210
|
|
|
$
|
377
|
|
Cash payment
|
(210
|
)
|
|
(167
|
)
|
||
Balance, End of year
|
$
|
—
|
|
|
$
|
210
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
Notional amount of foreign currency derivative contracts
|
$
|
2,866
|
|
|
$
|
44,438
|
|
Fair value of foreign currency derivatives contracts
|
63
|
|
|
42
|
|
|
Fair Value of Derivative Instruments
|
|||||||
|
Balance Sheet Location
|
|
December 31, 2017
|
|
December 31, 2016
|
|||
Derivative Assets
|
|
|
|
|
|
|||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|||
Foreign currency derivatives
contracts
|
Prepaid expenses and other current assets
|
|
$
|
65
|
|
|
108
|
|
|
|
|
|
|
|
|||
Derivative Liabilities
|
|
|
|
|
|
|||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|||
Foreign currency derivatives
contracts |
Accrued expenses and other liabilities
|
|
$
|
2
|
|
|
66
|
|
|
Gain (losses) on Derivative Instruments Recognized in Income Statement
|
|||||||
|
Income Statement Location
|
|
December 31, 2017
|
|
December 31, 2016
|
|||
Foreign currency derivatives contracts
|
Other (Expense) Income, net
|
|
$
|
236
|
|
|
73
|
|
Year Ending December 31,
|
|
Operating
Leases
|
||
2018
|
|
$
|
9,797
|
|
2019
|
|
6,319
|
|
|
2020
|
|
4,113
|
|
|
2021
|
|
1,373
|
|
|
2022
|
|
1,198
|
|
|
Thereafter
|
|
1,712
|
|
|
Total minimum lease payments
|
|
$
|
24,512
|
|
|
December 31,
|
||||
|
2017
|
|
2016
|
|
2015
|
Dividend yield
|
—%
|
|
—%
|
|
—%
|
Risk-free interest rate
|
1.7% – 2.1%
|
|
1.0% – 1.8%
|
|
1.3% – 1.7%
|
Expected life (in years)
|
5.0
|
|
5.0
|
|
5.0
|
Historical volatility
|
46.6% – 48.1%
|
|
46.8% – 48.2%
|
|
47.4% – 49.7%
|
|
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, 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
|
|
|
|
|
|
|
|
|
|
|||||
Balance outstanding at December 31, 2016
|
7,769
|
|
|
$
|
10.88
|
|
|
|
|
|
||
Granted
|
2,042
|
|
|
9.87
|
|
|
|
|
|
|||
Exercised
|
(854
|
)
|
|
8.80
|
|
|
|
|
|
|||
Cancelled or expired
|
(998
|
)
|
|
11.98
|
|
|
|
|
|
|||
Balance outstanding at December 31, 2017
|
7,959
|
|
|
$
|
10.71
|
|
|
5.85
|
|
$
|
14,881
|
|
Options vested and expected to vest
|
7,163
|
|
|
$
|
10.75
|
|
|
5.49
|
|
$
|
13,197
|
|
Options exercisable at December 31, 2017
|
5,163
|
|
|
$
|
11.17
|
|
|
4.50
|
|
$
|
8,648
|
|
|
|
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
|
|
825
|
|
|
2.81
|
|
$
|
5.21
|
|
|
656
|
|
|
$
|
4.85
|
|
$7.04 - $7.45
|
|
354
|
|
|
7.54
|
|
7.26
|
|
|
227
|
|
|
7.22
|
|
||
$7.60 - $7.60
|
|
873
|
|
|
8.27
|
|
7.60
|
|
|
—
|
|
|
—
|
|
||
$7.95 - $9.34
|
|
865
|
|
|
6.02
|
|
9.03
|
|
|
739
|
|
|
9.15
|
|
||
$9.44 - $10.13
|
|
1,468
|
|
|
6.46
|
|
9.97
|
|
|
977
|
|
|
10.04
|
|
||
$10.31 - $12.32
|
|
874
|
|
|
6.12
|
|
11.17
|
|
|
490
|
|
|
11.39
|
|
||
$12.46 - $13.28
|
|
924
|
|
|
3.99
|
|
13.13
|
|
|
880
|
|
|
13.13
|
|
||
$13.34 - $14.30
|
|
946
|
|
|
7.45
|
|
13.90
|
|
|
364
|
|
|
13.48
|
|
||
$15.66 - $18.09
|
|
825
|
|
|
4.27
|
|
17.11
|
|
|
825
|
|
|
17.11
|
|
||
$18.24 - $18.24
|
|
5
|
|
|
4.58
|
|
18.24
|
|
|
5
|
|
|
18.24
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
7,959
|
|
|
5.85
|
|
$
|
10.71
|
|
|
5,163
|
|
|
$
|
11.17
|
|
|
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, 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
|
|
|
|
|
|
|
|
|||||
Balance outstanding at December 31, 2016
|
1,188
|
|
|
$
|
8.44
|
|
|
$
|
8,968
|
|
Awarded
|
332
|
|
|
8.16
|
|
|
—
|
|
||
Released
|
(363
|
)
|
|
8.48
|
|
|
—
|
|
||
Forfeited
|
(284
|
)
|
|
8.46
|
|
|
—
|
|
||
Non-vested and outstanding at December 31, 2017
|
873
|
|
|
$
|
8.29
|
|
|
$
|
10,053
|
|
Expected to vest
|
680
|
|
|
$
|
8.41
|
|
|
$
|
7,820
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
United States
|
$
|
(25,585
|
)
|
|
$
|
(40,774
|
)
|
|
$
|
(16,362
|
)
|
Israel
|
3,458
|
|
|
15,622
|
|
|
2,257
|
|
|||
United Kingdom
|
2,087
|
|
|
2,345
|
|
|
1,564
|
|
|||
Netherlands
|
1,568
|
|
|
3,104
|
|
|
1,919
|
|
|||
Australia
|
(1,979
|
)
|
|
(2,774
|
)
|
|
(565
|
)
|
|||
Germany
|
2,424
|
|
|
2,085
|
|
|
327
|
|
|||
Other
(1)
|
337
|
|
|
453
|
|
|
230
|
|
|||
|
$
|
(17,690
|
)
|
|
$
|
(19,939
|
)
|
|
$
|
(10,630
|
)
|
(1)
Includes Japan, Italy, Singapore, Canada, and France
|
|
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Current income taxes:
|
|
|
|
|
|
||||||
U.S. Federal
|
$
|
—
|
|
|
$
|
1,829
|
|
|
$
|
(524
|
)
|
State and local
|
47
|
|
|
27
|
|
|
309
|
|
|||
Foreign
|
2,852
|
|
|
2,226
|
|
|
1,573
|
|
|||
Total current income taxes
|
2,899
|
|
|
4,082
|
|
|
1,358
|
|
|||
|
|
|
|
|
|
||||||
Deferred income taxes:
|
|
|
|
|
|
||||||
U.S. Federal
|
(1,289
|
)
|
|
841
|
|
|
13,791
|
|
|||
State and local
|
(1,144
|
)
|
|
99
|
|
|
876
|
|
|||
Foreign
|
35
|
|
|
912
|
|
|
(211
|
)
|
|||
Total deferred income taxes
|
(2,398
|
)
|
|
1,852
|
|
|
14,456
|
|
|||
Total provision for income taxes
|
$
|
501
|
|
|
$
|
5,934
|
|
|
$
|
15,814
|
|
|
Year Ended December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
Federal Statutory Rate
|
34.00
|
%
|
|
34.00
|
%
|
|
34.00
|
%
|
State taxes, net of federal benefit
|
4.09
|
%
|
|
3.24
|
%
|
|
0.35
|
%
|
Non-deductible expenses – ISO
|
(0.78
|
)%
|
|
(1.85
|
)%
|
|
(8.57
|
)%
|
Non-deductible expenses – Other
|
(1.19
|
)%
|
|
(0.88
|
)%
|
|
(2.20
|
)%
|
Foreign tax rate differential
|
(1.97
|
)%
|
|
0.89
|
%
|
|
(12.41
|
)%
|
Change in valuation allowance
|
26.12
|
%
|
|
(53.55
|
)%
|
|
(148.24
|
)%
|
Return to provision true-up adjustment
|
—
|
%
|
|
(9.22
|
)%
|
|
—
|
%
|
Effect of new tax legislation
|
(56.84
|
)%
|
|
—
|
%
|
|
—
|
%
|
Other
|
(6.26
|
)%
|
|
(2.42
|
)%
|
|
(11.15
|
)%
|
Total provision for income taxes
|
(2.83
|
)%
|
|
(29.79
|
)%
|
|
(148.22
|
)%
|
|
Year Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
Deferred tax assets:
|
|
|
|
||||
Net operating loss carryforwards
|
$
|
8,093
|
|
|
$
|
6,186
|
|
Accounts payable and accrued expenses
|
4,429
|
|
|
4,906
|
|
||
Non-cash compensation
|
9,510
|
|
|
12,541
|
|
||
Intangibles amortization
|
5,513
|
|
|
6,151
|
|
||
Allowance for doubtful accounts
|
232
|
|
|
447
|
|
||
Intangibles related to acquisitions
|
—
|
|
|
118
|
|
||
Total deferred tax assets
|
27,777
|
|
|
30,349
|
|
||
Less valuation allowance
|
(23,260
|
)
|
|
(27,881
|
)
|
||
Deferred tax assets, net of valuation allowance
|
4,517
|
|
|
2,468
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Property and equipment
|
(2,010
|
)
|
|
(1,695
|
)
|
||
Goodwill amortization and contingent earn-out adjustments
|
(2,669
|
)
|
|
(3,332
|
)
|
||
Total deferred tax liabilities
|
(4,679
|
)
|
|
(5,027
|
)
|
||
Net deferred tax liabilities
|
$
|
(162
|
)
|
|
$
|
(2,559
|
)
|
|
Year Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
Unrecognized tax benefits balance at January 1
|
$
|
4,240
|
|
|
$
|
3,519
|
|
Gross increase for tax positions of prior years
|
—
|
|
|
200
|
|
||
Gross increase for tax positions of current years
|
684
|
|
|
700
|
|
||
Decrease due to expiration of statue
|
—
|
|
|
(179
|
)
|
||
Gross unrecognized tax benefits at December 31
|
$
|
4,924
|
|
|
$
|
4,240
|
|
13.
|
Restructuring Costs
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
Balance, Beginning of the year
|
$
|
2,551
|
|
|
$
|
1,328
|
|
Severance and other associated costs
|
648
|
|
|
1,585
|
|
||
Cash payments
|
(2,807
|
)
|
|
(1,328
|
)
|
||
Wind down costs of legacy platform
|
1,946
|
|
|
966
|
|
||
Balance, End of year
|
$
|
2,338
|
|
|
$
|
2,551
|
|
|
December 31, 2017
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||
Contract termination benefit
|
$
|
—
|
|
|
$
|
(384
|
)
|
|
$
|
1,745
|
|
Severance and other associated costs
|
648
|
|
|
1,585
|
|
|
1,639
|
|
|||
Wind down costs of legacy platform
|
1,946
|
|
|
1,168
|
|
|
—
|
|
|||
Total restructuring costs
|
$
|
2,594
|
|
|
$
|
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)
|
|
14,743,089
|
|
|
$
|
10.71
|
|
|
4,907,194
|
|
Equity compensation plans not approved by stockholders
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
Total
|
|
14,743,089
|
|
|
$
|
10.71
|
|
|
4,907,194
|
|
(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 10 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/ Daryl J. Carlough
|
|
Senior Vice President, Global and Corporate Controller
|
Daryl J. Carlough
|
|
(Principal Financial Officer)
|
|
|
|
/s/ Peter Block
|
|
Director
|
Peter Block
|
|
|
|
|
|
/s/ Kevin C. Lavan
|
|
Director
|
Kevin C. Lavan
|
|
|
|
|
|
/s/ Jill Layfield
|
|
Director
|
Jill Layfield
|
|
|
|
|
|
/s/ Fred Mossler
|
|
Director
|
Fred Mossler
|
|
|
|
|
|
/s/ William G. Wesemann
|
|
Director
|
William G. Wesemann
|
|
|
Number
|
|
Description
|
2.1
|
|
|
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
4.1
|
|
|
|
|
|
4.2
|
|
|
|
|
|
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)*
|
|
|
|
|
|
10.2*
|
|
|
|
|
|
10.3*
|
|
|
|
|
|
10.4*
|
|
|
|
|
|
10.5*
|
|
|
|
|
|
10.6*
|
|
|
|
|
|
10.7*
|
|
|
|
|
|
10.8*
|
|
|
|
|
|
10.9
|
|
|
|
|
|
10.10*
|
|
|
|
|
|
10.11*
|
|
|
|
|
|
10.12*
|
|
|
10.13*
|
|
|
10.14*
|
|
|
10.15*
|
|
|
|
|
|
|
|
|
21.1
|
|
|
|
|
|
23.1
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1**
|
|
|
|
|
|
32.2**
|
|
|
|
|
|
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.
|
|
|
|
|
European Union
|
Data Privacy.
The following supplements the Section 20 of the RSU Agreement:
Participant understands that Personal Data will be held only as long as is necessary to implement, administer and manage Participant’s participation in the Plan. Participant understands that he or she may, at any time, view his or her Personal Data, request additional information about the storage and processing of Personal Data, require any necessary amendments to Personal Data or refuse or withdraw the consents herein, without cost, by contacting in writing Participant’s local human resources representative.
|
|
|
|
|
Australia
|
Securities Law Notice.
This disclosure has been prepared in connection with offers to employees in Australia under the Plan and the Agreement (copies of which are enclosed). It has been prepared to ensure that this grant and any other grant under the Plan (the “Offer”) satisfies the conditions for exemptions granted by the Australian Securities and Investments Commission (“ASIC”) under ASIC Class order 14/1000.
Any advice given to you in connection with the Offer is general advice only. It does not take into account the objectives, financial situation and needs of any particular person. No financial product advice is provided in the documentation relating to the Plan and nothing in the documentation should be taken to constitute a recommendation or statement of opinion that is intended to influence you in making a decision to participate in the Plan. This means that you should consider obtaining your own financial product advice from an independent person who is licensed by the ASIC to give such advice. LivePerson, Inc. will make available upon your request the Australian dollar equivalent of the current market price of the underlying Shares subject to your RSUs. You can get those details by contacting Human Resources.
Issue of RSUs.
RSUs will be issued for no consideration.
Risks of Participation in the Plan.
Participation in the Plan and acquiring Shares in LivePerson, Inc. carries inherent risks. You should carefully consider these risks in light of your investment objectives and personal circumstances.
Settlement in Shares Only.
Notwithstanding any discretion in the Plan or the RSU Agreement to the contrary, settlement of the Restricted Stock Units shall be in Shares only and not, in whole or in part, in the form of cash.
|
|
|
|
|
France
|
Foreign Exchange Information.
Residents of France with foreign account balances in excess of EUR 1 million or its equivalent must report monthly to the Bank of France.
Consent to Receive Information in English.
Participant confirms he or she has read and understands the documents relating to this grant (the Plan and this Agreement) which were provided to Participant in the English language. Participant accepts the terms of those documents accordingly.
Vous confirmez avoir lu et compris les documents relatifs à cette attribution (le Plan et ce Contrat) qui vous ont été communiqués en langue anglaise. Vous en acceptez les termes en connaissance de cause.
|
|
|
|
|
Israel
|
Sub-Plan for Israeli Participants.
Your RSUs are granted under the Sub-Plan for Israeli Participants (the “Israeli Sub-Plan”), which is considered part of the Plan. The terms used herein shall have the meaning ascribed to them in the Plan or Israeli Sub-Plan. In the event of any conflict, whether explicit or implied, between the provision of this Agreement and the Israeli Sub-Plan, the provisions set out in the Israeli Sub-Plan shall prevail. By accepting this grant, you acknowledge that a copy of the Israeli Sub-Plan has been provided to you. The Israeli Sub-Plan may also be obtained by contacting Human Resources.
Further Acknowledgement.
Participant also (iii) declares that she/he is familiar with Section 102 and the regulations and rules promulgated thereunder, including without limitations the provisions of the tax route applicable to the RSUs, and agrees to comply with such provisions, as amended from time to time, provided that if such terms are not met, Section 102 may not apply, and (iv) agrees to the terms and conditions of the trust deed signed between the Trustee and the Company and/or the applicable Subsidiary, which is available for the Participant’s review, during normal working hours, at Company’s offices, (v) acknowledges that releasing the RSUs and Shares from the control of the Trustee prior to the termination of the Holding Period constitutes a violation of the terms of Section 102 and agrees to bear the relevant sanctions, (vi) authorizes the Company and/or the applicable Subsidiary to provide the Trustee with any information required for the purpose of administering the Plan including executing its obligations under the Ordinance, the trust deed and the trust agreement, including without limitation information about his/her RSUs, Shares, income tax rates, salary bank account, contact details and identification number, (vii) declares that he/she is a resident of the State of Israel for tax purposes on the grant date and agrees to notify the Company upon any change in the residence address indicated above and acknowledges that if his/her engagement with the Company or Subsidiary is terminated and he/she is no longer employed by the Company or any Subsidiary, the RSUs and Shares shall remain subject to Section 102, the trust agreement, the Plan and this Agreement; (viii) understands and agrees that if he/she ceases to be employed or engaged by an Israeli resident Subsidiary but remains employed by the Company or any Subsidiary thereof, all unvested RSUs shall be forfeited to the Company with all rights of the Participant to such RSUs immediately terminating prior to his/her termination of employment or services, and any Shares already issued upon the previous vesting of RSUs shall remain subject to Section 102, the trust agreement, the Plan and this Agreement; (ix) warrants and undertakes that at the time of grant of the RSUs herein, or as a consequence of the grant, the Participant is not and will not become a holder of a “controlling interest” in the Company, as such term is defined in Section 32(9) of the Ordinance, (x) the grant of RSUs is conditioned upon the Participant signing all documents requested by the Company or the Trustee.
Section 102 Capital Gains Trustee Route.
The RSUs are intended to be subject to the Capital Gains Route under Section 102 of the Ordinance, subject to you consenting to the requirements of such tax route by accepting the terms of this agreement and the grant of RSUs, and subject further to the compliance with all the terms and conditions of such tax route. Under the Capital Gains Route tax is only due upon sale of the Shares or upon release of the Shares from the holding or control of the Trustee.
Trustee Arrangement.
The RSUs, the Shares issued upon vesting and/or any additional rights, including without limitation any right to receive any dividends or any shares received as a result of an adjustment made under the Plan that may be granted in connection with the RSUs (the “Additional Rights”), shall be issued to or controlled by the Trustee for the benefit of the Participant under the provisions of the 102 Capital Gains Route and will be controlled by the Trustee for at least the period stated in Section 102 of the Ordinance and the Income Tax Rules (Tax Benefits in Share Issuance to Employees) 5763-2003 (the “Rules”). In the event the RSUs do not meet the requirements of Section 102 of the Ordinance, such RSUs and the underlying Shares shall not qualify for the favorable tax treatment under Section 102 of the Ordinance. The Company makes no representations or guarantees that the RSUs will qualify for favorable tax treatment and will not be liable or responsible if favorable tax treatment is not available under Section 102 of the Ordinance. Any fees associated with any exercise, sale, transfer or any act in relation to the RSUs shall be borne by the Participant and the Trustee and/or the Company and/or any Subsidiary shall be entitled to withhold or deduct such fees from payments otherwise due to you from the Company or a Subsidiary or the Trustee.
Restrictions on Sale.
In accordance with the requirements of Section 102 of the Ordinance and the Capital Gains Route, the Participant shall not sell nor transfer the Shares or Additional Rights from the Trustee until the end of the required Holding Period. Notwithstanding the above, if any such sale or transfer occurs before the end of the required Holding Period, the sanctions under Section 102 shall apply to and shall be borne by the Participant.
Tax Treatment.
The following language supplements Section 5 of the Agreement: The RSUs are intended to be taxed in accordance with Section 102, subject to full and complete compliance with the terms of Section 102. Participants with dual residency for tax purposes may be subject to taxation in several jurisdictions.
Any Tax imposed in respect of the RSUs and/or Shares, including, but not limited to, the grant of RSUs, and/or the vesting, transfer, waiver, or expiration of RSUs and/or Shares, and/or the sale of Shares, shall be borne solely by the Participant, and in the event of death, by the Participant's heirs. The Company, any Subsidiary, the Trustee or anyone on their behalf shall not be required to bear the aforementioned Taxes, directly or indirectly, nor shall they be required to gross up such Tax in the Participant's salaries or remuneration. The applicable Tax shall be withheld from the proceeds of sale of Shares or shall be paid to the Company or a Subsidiary or the Trustee by the Participant. Without derogating from the aforementioned, the Company or a Subsidiary or the Trustee shall be entitled to withhold Taxes as it deems complying with applicable law and to deduct any Taxes from payments otherwise due to the Participant from the Company or a Subsidiary or the Trustee. The ramifications of any future modification of applicable law regarding the taxation of the RSUs granted to the Participant shall apply to the Participant accordingly and the Participant shall bear the full cost thereof, unless such modified laws expressly provide otherwise.
The issuance of the Shares upon the vesting of RSUs or in respect thereto, shall be subject to the full payments of any Tax (if applicable).
Securities Law.
The Company may rely on an exemption under applicable securities laws such that a prospectus in relation to the Plan will not be filed with the Israel Securities Authority. If required by law, copies of the Plan and the Form S-8 registration statement for the Plan filed with the U.S. Securities and Exchange Commission will be made available by Human Resources upon Participant’s request.
|
|
|
|
|
Italy
|
Data Privacy Consent.
Pursuant to Legislative Decree no. 196/2003, the Controller of personal data processing is LivePerson, Inc., with registered offices at 475 Tenth Avenue, New York, New York 10018, USA, and its Representative in Italy for privacy purposes is the EMEA HR Business Partner.
I understand that Personal Data processing related to the purposes specified above shall take place under automated or non-automated conditions, anonymously when possible, that comply with the purposes for which Personal Data are collected and with confidentiality and security provisions as set forth by applicable laws and regulations, with specific reference to Legislative Decree no. 196/200.
The processing activity, including the communication and transfer of my Personal Data abroad, including outside of the European Union, as herein specified and pursuant to applicable laws and regulations, does not require my consent thereto as the processing is necessary for the performance of contractual obligations related to the implementation, administration and management of the Plan. I understand that the use of my Personal Data will be minimized where it is not necessary for the implementation, administration and management of the Plan. I further understand that, pursuant to Section 7 of the Legislative Decree no. 196/2003, I have the right to, including but not limited to, access, delete, update, ask for rectification of my Personal Data and stop, for legitimate reason, the Personal Data processing. Furthermore, I am aware that my Personal Data will not be used for direct marketing purposes.
|
|
|
|
|
Japan
|
Foreign Exchange Information.
If you acquire Shares valued at more than ¥100,000,000 in a single transaction, you must file a Securities Acquisition Report with the Ministry of Finance (“MOF”) through the Bank of Japan within 20 days of the exercise of the Shares.
|
|
|
|
|
United Kingdom
|
Settlement in Shares Only.
Notwithstanding any discretion in the Plan, the RSU Agreement to the contrary, settlement of the Restricted Stock Units shall be in Shares only and not, in whole or in part, in the form of cash.
Withholding of Tax.
This provision supplements Section 5 of the RSU Agreement: If payment or withholding of the Tax-Related Items is not made within ninety (90) days of the event giving rise to the Tax-Related Items (the “
Due Date
”) or such other period specified in Section 222(1)(c) of the U.K. Income Tax (Earnings and Pensions) Act 2003, the amount of any uncollected Tax-Related Items will constitute a loan owed by Participant to the Employer, effective on the Due Date. Participant agrees that the loan will bear interest at the then-current Official Rate of Her Majesty’s Revenue and Customs (“
HMRC
”), it will be immediately due and repayable, and the Company or the employer may recover it at any time thereafter by any of the means referred to in Section 5 of the RSU Agreement. Notwithstanding the foregoing, if Participant is a director or executive officer of the Company (within the meaning of Section 13(k) of the U.S. Securities and Exchange Act of 1934, as amended), Participant will not be eligible for such a loan to cover the Tax-Related Items. In the event that Participant is a director or executive officer and the Tax-Related Items are not collected from or paid by Participant by the Due Date, the amount of any uncollected Tax-Related Items will constitute a benefit to Participant on which additional income tax and national insurance contributions will be payable. Participant will be responsible for reporting and paying any income tax due on this additional benefit directly to HMRC under the self-assessment regime.
|
|
|
|
|
(A)
|
Subject to Section 7(c)(1)(C) below, Participants holding shares of Restricted Stock will be entitled to all ordinary cash dividends paid with respect to such shares, unless otherwise provided by the Board.
|
(B)
|
Subject to Section 7(c)(1)(C) below, if any dividends or distributions are paid in shares, or consist of a dividend or distribution to holders of Common Stock other than an ordinary cash dividend, the shares, cash or other property will be subject to the same restrictions on transferability and forfeitability as the shares of Restricted Stock with respect to which they were paid.
|
(C)
|
Each dividend amount shall be credited to an account for the Participant and shall become payable if and when the Restricted Stock to which it relates vests or, if later, when the shareholders actually receive that dividend payment. Any such amount shall be paid within 30 days of the applicable vesting event or shareholder payment date, if later.
|
(A)
|
Subject to Section 7(d)(3)(C) below, to the extent provided by the Board, in its sole discretion, a grant of Restricted Stock Units may provide Participants with the right to receive an amount equal to any dividends or other distributions declared and paid on an equal number of outstanding shares of Common Stock (“
Dividend Equivalents
”).
|
(B)
|
Subject to Section 7(d)(3)(C) below, Dividend Equivalents may be settled in cash and/or shares of Common Stock, as determined by the Board in its sole discretion, and will be subject to the same restrictions on transfer and forfeitability as the Restricted Stock Units with respect to which paid, subject in each case to such terms and conditions as the Board shall establish, in each case to be set forth in the applicable Award agreement.
|
(C)
|
To the extent a Dividend Equivalent right is provided in an award agreement, each Dividend Equivalent shall be credited to an account for the Participant and become payable if and when the Restricted Stock Units to which it relates vest (and shall be paid at the same time as settlement of the Restricted Stock Units) or, if later, when the shareholders actually receive the
|
Robert LoCascio
|
Date:
|
|
|
LivePerson, Inc.
|
|
By:
|
Date:
|
/s/ BDO USA, LLP
|
BDO USA, LLP
|
New York, New York
|
|
March 15, 2018
|
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 15, 2018
|
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 15, 2018
|
By:
|
/s/ Daryl J. Carlough
|
|
|
Name:
|
Daryl J. Carlough
|
|
|
Title:
|
Senior Vice President, Global and Corporate Controller
(principal financial officer)
|
(1)
|
the Annual Report of the Company on Form 10-K for the period ended
December 31, 2017
, 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 15, 2018
|
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, 2017
, 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 15, 2018
|
By:
|
/s/ Daryl J. Carlough
|
|
|
Name:
|
Daryl J. Carlough
|
|
|
Title:
|
Senior Vice President, Global and Corporate Controller
(principal financial officer) |