|
|
ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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|
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Delaware
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|
75-2788861
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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2201 Lakeside Boulevard
Richardson, Texas
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|
75082-4305
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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|
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Emerging growth company
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¨
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Class
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July 20, 2018
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Common Stock, $0.001 par value
|
|
93,817,205
|
|
|
|
|
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June 30, 2018
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December 31, 2017
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||||
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(unaudited)
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|
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
373,174
|
|
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$
|
69,343
|
|
Restricted cash
|
102,518
|
|
|
96,002
|
|
||
Accounts receivable, less allowance for doubtful accounts of $8,442 and $3,951 at June 30, 2018 and December 31, 2017, respectively
|
112,484
|
|
|
124,505
|
|
||
Prepaid expenses
|
15,493
|
|
|
12,107
|
|
||
Other current assets
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15,812
|
|
|
6,622
|
|
||
Total current assets
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619,481
|
|
|
308,579
|
|
||
Property, equipment, and software, net
|
145,340
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148,428
|
|
||
Goodwill
|
918,785
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|
751,052
|
|
||
Identified intangible assets, net
|
276,983
|
|
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252,337
|
|
||
Deferred tax assets, net
|
42,607
|
|
|
44,887
|
|
||
Other assets
|
20,710
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|
|
11,010
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|
||
Total assets
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$
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2,023,906
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|
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$
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1,516,293
|
|
Liabilities and stockholders’ equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
28,394
|
|
|
$
|
26,733
|
|
Accrued expenses and other current liabilities
|
97,484
|
|
|
79,379
|
|
||
Current portion of deferred revenue
|
111,238
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|
|
116,622
|
|
||
Current portion of term loans
|
16,133
|
|
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14,116
|
|
||
Convertible notes, net
|
286,908
|
|
|
—
|
|
||
Customer deposits held in restricted accounts
|
102,512
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|
|
96,057
|
|
||
Total current liabilities
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642,669
|
|
|
332,907
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|
||
Deferred revenue
|
5,181
|
|
|
5,538
|
|
||
Revolving facility
|
—
|
|
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50,000
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|
||
Term loans, net
|
295,382
|
|
|
303,261
|
|
||
Convertible notes, net
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—
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|
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281,199
|
|
||
Other long-term liabilities
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41,299
|
|
|
41,513
|
|
||
Total liabilities
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984,531
|
|
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1,014,418
|
|
||
Commitments and contingencies (Note 9)
|
|
|
|
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.001 par value: 10,000,000 shares authorized and zero shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively
|
—
|
|
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—
|
|
||
Common stock, $0.001 par value: 250,000,000 and 125,000,000 shares authorized, 96,485,983 and 87,153,085 shares issued and 93,959,957 and 83,180,401 shares outstanding at June 30, 2018 and December 31, 2017, respectively
|
96
|
|
|
87
|
|
||
Additional paid-in capital
|
1,159,831
|
|
|
637,851
|
|
||
Treasury stock, at cost: 2,526,026 and 3,972,684 shares at June 30, 2018 and December 31, 2017, respectively
|
(67,360
|
)
|
|
(61,260
|
)
|
||
Accumulated deficit
|
(53,445
|
)
|
|
(75,046
|
)
|
||
Accumulated other comprehensive income
|
253
|
|
|
243
|
|
||
Total stockholders’ equity
|
1,039,375
|
|
|
501,875
|
|
||
Total liabilities and stockholders’ equity
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$
|
2,023,906
|
|
|
$
|
1,516,293
|
|
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Three Months Ended June 30,
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|
Six Months Ended June 30,
|
||||||||||||
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2018
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2017
|
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2018
|
|
2017
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
On demand
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$
|
206,945
|
|
|
$
|
154,727
|
|
|
$
|
400,245
|
|
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$
|
300,940
|
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Professional and other
|
9,307
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|
|
6,579
|
|
|
17,308
|
|
|
13,285
|
|
||||
Total revenue
|
216,252
|
|
|
161,306
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|
|
417,553
|
|
|
314,225
|
|
||||
Cost of revenue
|
85,741
|
|
|
67,544
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|
|
162,401
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|
|
130,586
|
|
||||
Gross profit
|
130,511
|
|
|
93,762
|
|
|
255,152
|
|
|
183,639
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Product development
|
30,771
|
|
|
21,290
|
|
|
59,811
|
|
|
41,677
|
|
||||
Sales and marketing
|
54,488
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|
|
39,235
|
|
|
104,729
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|
|
74,382
|
|
||||
General and administrative
|
28,444
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|
|
27,370
|
|
|
55,534
|
|
|
51,621
|
|
||||
Total operating expenses
|
113,703
|
|
|
87,895
|
|
|
220,074
|
|
|
167,680
|
|
||||
Operating income
|
16,808
|
|
|
5,867
|
|
|
35,078
|
|
|
15,959
|
|
||||
Interest expense and other, net
|
(8,518
|
)
|
|
(2,786
|
)
|
|
(16,188
|
)
|
|
(3,872
|
)
|
||||
Income before income taxes
|
8,290
|
|
|
3,081
|
|
|
18,890
|
|
|
12,087
|
|
||||
Income tax benefit
|
(189
|
)
|
|
(3,132
|
)
|
|
(490
|
)
|
|
(2,321
|
)
|
||||
Net income
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$
|
8,479
|
|
|
$
|
6,213
|
|
|
$
|
19,380
|
|
|
$
|
14,408
|
|
|
|
|
|
|
|
|
|
||||||||
Net income per share attributable to common stockholders:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.10
|
|
|
$
|
0.08
|
|
|
$
|
0.23
|
|
|
$
|
0.18
|
|
Diluted
|
$
|
0.09
|
|
|
$
|
0.08
|
|
|
$
|
0.22
|
|
|
$
|
0.18
|
|
Weighted average shares used in computing net income per share attributable to common stockholders:
|
|
|
|
|
|
|
|
||||||||
Basic
|
85,124
|
|
|
79,018
|
|
|
83,156
|
|
|
78,642
|
|
||||
Diluted
|
90,005
|
|
|
81,925
|
|
|
87,332
|
|
|
81,644
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income
|
$
|
8,479
|
|
|
$
|
6,213
|
|
|
$
|
19,380
|
|
|
$
|
14,408
|
|
(Loss) gain on interest rate swaps, net
|
(36
|
)
|
|
(24
|
)
|
|
123
|
|
|
82
|
|
||||
Foreign currency translation adjustment
|
14
|
|
|
48
|
|
|
(113
|
)
|
|
(2
|
)
|
||||
Comprehensive income
|
$
|
8,457
|
|
|
$
|
6,237
|
|
|
$
|
19,390
|
|
|
$
|
14,488
|
|
|
Common Stock
|
|
Additional
Paid-in Capital
|
|
Accumulated Other Comprehensive Income
|
|
Accumulated Deficit
|
|
Treasury Stock
|
|
Total
Stockholders’ Equity
|
||||||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
Shares
|
|
Amount
|
|
||||||||||||||||||
Balance as of December 31, 2017
|
87,153
|
|
|
$
|
87
|
|
|
$
|
637,851
|
|
|
$
|
243
|
|
|
$
|
(75,046
|
)
|
|
(3,973
|
)
|
|
$
|
(61,260
|
)
|
|
$
|
501,875
|
|
Cumulative effect of adoption of ASU 2014-09
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,221
|
|
|
—
|
|
|
—
|
|
|
2,221
|
|
||||||
Public offering of common stock, net of $17,051 of offering costs
|
8,050
|
|
|
8
|
|
|
441,791
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
441,799
|
|
||||||
Issuance of common stock at closing for acquisition of ClickPay
|
683
|
|
|
1
|
|
|
35,854
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35,855
|
|
||||||
Shares held in escrow for acquisition of ClickPay
|
187
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Redemption of noncontrolling interest in connection with acquisition of ClickPay
|
395
|
|
|
—
|
|
|
20,756
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,756
|
|
||||||
Stock option exercises
|
18
|
|
|
—
|
|
|
5,469
|
|
|
—
|
|
|
—
|
|
|
367
|
|
|
2,270
|
|
|
7,739
|
|
||||||
Issuance of restricted stock
|
—
|
|
|
—
|
|
|
(6,394
|
)
|
|
—
|
|
|
—
|
|
|
1,533
|
|
|
6,394
|
|
|
—
|
|
||||||
Treasury stock purchases, at cost
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
(453
|
)
|
|
(14,764
|
)
|
|
(14,760
|
)
|
||||||
Stock-based expense
|
—
|
|
|
—
|
|
|
24,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24,500
|
|
||||||
Interest rate swap agreements
|
—
|
|
|
—
|
|
|
—
|
|
|
367
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
367
|
|
||||||
Foreign currency translation
|
—
|
|
|
—
|
|
|
—
|
|
|
(113
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(113
|
)
|
||||||
Reclassification of realized gain on cash flow hedge to earnings, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(244
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(244
|
)
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,380
|
|
|
—
|
|
|
—
|
|
|
19,380
|
|
||||||
Balance as of June 30, 2018
|
96,486
|
|
|
$
|
96
|
|
|
$
|
1,159,831
|
|
|
$
|
253
|
|
|
$
|
(53,445
|
)
|
|
(2,526
|
)
|
|
$
|
(67,360
|
)
|
|
$
|
1,039,375
|
|
|
Six Months Ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
19,380
|
|
|
$
|
14,408
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
48,389
|
|
|
29,533
|
|
||
Amortization of debt discount and issuance costs
|
6,121
|
|
|
1,424
|
|
||
Deferred taxes
|
(2,973
|
)
|
|
(3,088
|
)
|
||
Stock-based expense
|
24,013
|
|
|
23,968
|
|
||
Loss on disposal and impairment of other long-lived assets
|
1,098
|
|
|
87
|
|
||
Acquisition-related consideration
|
1,124
|
|
|
1,024
|
|
||
Changes in assets and liabilities, net of assets acquired and liabilities assumed in business combinations:
|
|
|
|
||||
Accounts receivable
|
6,815
|
|
|
6,430
|
|
||
Prepaid expenses and other current assets
|
(9,395
|
)
|
|
(1,369
|
)
|
||
Other assets
|
(2,248
|
)
|
|
(464
|
)
|
||
Accounts payable
|
5,899
|
|
|
4,066
|
|
||
Accrued compensation, taxes, and benefits
|
(1,379
|
)
|
|
(759
|
)
|
||
Deferred revenue
|
(2,034
|
)
|
|
3,607
|
|
||
Customer deposits
|
5,142
|
|
|
15,389
|
|
||
Other current and long-term liabilities
|
2,268
|
|
|
1,396
|
|
||
Net cash provided by operating activities
|
102,220
|
|
|
95,652
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of property, equipment, and software
|
(22,493
|
)
|
|
(27,129
|
)
|
||
Acquisition of businesses, net of cash and restricted cash acquired
|
(137,475
|
)
|
|
(123,241
|
)
|
||
Purchase of other investment
|
(1,800
|
)
|
|
—
|
|
||
Net cash used in investing activities
|
(161,768
|
)
|
|
(150,370
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Payments on term loans
|
(6,049
|
)
|
|
(767
|
)
|
||
Proceeds from revolving credit facility
|
140,000
|
|
|
—
|
|
||
Payments on revolving line of credit
|
(190,000
|
)
|
|
—
|
|
||
Proceeds from borrowings on convertible notes
|
—
|
|
|
345,000
|
|
||
Purchase of convertible note hedges
|
—
|
|
|
(62,549
|
)
|
||
Proceeds from issuance of warrants
|
—
|
|
|
31,499
|
|
||
Deferred financing costs
|
(1,139
|
)
|
|
(10,755
|
)
|
||
Payments on capital lease obligations
|
(211
|
)
|
|
(136
|
)
|
||
Payments of acquisition-related consideration
|
(7,371
|
)
|
|
(7,185
|
)
|
||
Proceeds from public offering, net of underwriters’ discount and offering costs
|
441,799
|
|
|
—
|
|
||
Proceeds from exercise of stock options
|
7,739
|
|
|
13,151
|
|
||
Purchase of treasury stock related to stock-based compensation
|
(14,760
|
)
|
|
(11,008
|
)
|
||
Net cash provided by financing activities
|
370,008
|
|
|
297,250
|
|
||
Net increase in cash, cash equivalents and restricted cash
|
310,460
|
|
|
242,532
|
|
||
Effect of exchange rate on cash
|
(113
|
)
|
|
(2
|
)
|
||
Cash, cash equivalents and restricted cash:
|
|
|
|
||||
Beginning of period
|
165,345
|
|
|
188,540
|
|
||
End of period
|
$
|
475,692
|
|
|
$
|
431,070
|
|
•
|
identification of the contract, or contracts, with a client;
|
•
|
identification of the performance obligations in the contract;
|
•
|
determination of the transaction price;
|
•
|
allocation of the transaction price to the performance obligations in the contract; and
|
•
|
recognition of revenue when, or as, we satisfy a performance obligation.
|
|
Balance at
December 31, 2017
|
|
Adjustments due
to ASU 2014-09
|
|
Balance at
January 1, 2018 |
||||||
|
(in thousands)
|
||||||||||
Assets
|
|
|
|
|
|
||||||
Accounts receivable, less allowance for doubtful accounts
|
$
|
124,505
|
|
|
$
|
(7,925
|
)
|
|
$
|
116,580
|
|
Other current assets
|
6,622
|
|
|
2,771
|
|
|
9,393
|
|
|||
Deferred tax assets, net
|
44,887
|
|
|
(780
|
)
|
|
44,107
|
|
|||
Other assets
|
11,010
|
|
|
4,459
|
|
|
15,469
|
|
|||
Liabilities
|
|
|
|
|
|
||||||
Current portion of deferred revenue
|
116,622
|
|
|
(3,696
|
)
|
|
112,926
|
|
|||
Stockholders’ Equity
|
|
|
|
|
|
||||||
Accumulated deficit
|
(75,046
|
)
|
|
2,221
|
|
|
(72,825
|
)
|
|
Originally Reported
|
|
Effect of Change
|
|
As Adjusted
|
||||||
|
(in thousands)
|
||||||||||
Statement of Cash Flows for the six months ended June 30, 2017
|
|
|
|
|
|
||||||
Net cash provided by operating activities
|
$
|
80,464
|
|
|
$
|
15,188
|
|
|
$
|
95,652
|
|
Net cash used in investing activities
|
(158,007
|
)
|
|
7,637
|
|
|
(150,370
|
)
|
|||
Cash, cash equivalents and restricted cash at end of period
|
324,591
|
|
|
106,479
|
|
|
431,070
|
|
Restricted cash
|
|
|
|
|
|
|
|
|
$
|
1,313
|
|
Accounts receivable
|
|
|
|
|
|
|
|
|
2,714
|
|
|
Property, equipment, and software
|
|
|
|
|
|
|
|
|
89
|
|
|
Intangible assets:
|
|
|
|
|
|
|
|
|
|
||
Developed product technologies
|
|
|
|
|
|
|
|
|
29,100
|
|
|
Client relationships
|
|
|
|
|
|
|
|
|
20,700
|
|
|
Trade names
|
|
|
|
|
|
|
|
|
2,900
|
|
|
Goodwill
|
|
|
|
|
|
|
|
|
168,033
|
|
|
Other assets
|
|
|
|
|
|
|
|
|
489
|
|
|
Accounts payable and accrued liabilities
|
|
|
|
|
|
|
|
|
(2,698
|
)
|
|
Client deposits held in restricted accounts
|
|
|
|
|
|
|
|
|
(1,313
|
)
|
|
Deferred tax liability, net
|
|
|
|
|
|
|
|
|
(4,430
|
)
|
|
Total purchase price
|
|
|
|
|
|
|
|
|
$
|
216,897
|
|
|
Axiometrics
|
|
AUM
|
|
On-Site
|
|
PEX
|
|
LRO
|
||||||||||
|
(Final)
|
|
(Final)
|
|
(Provisional)
|
|
(Provisional)
|
|
(Provisional)
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Restricted cash
|
$
|
—
|
|
|
$
|
5,954
|
|
|
$
|
3,458
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Accounts receivable
|
1,620
|
|
|
2,409
|
|
|
4,718
|
|
|
107
|
|
|
4,498
|
|
|||||
Property, equipment, and software
|
400
|
|
|
319
|
|
|
789
|
|
|
8
|
|
|
1,507
|
|
|||||
Intangible assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Developed product technologies
|
15,500
|
|
|
10,800
|
|
|
16,960
|
|
|
2,350
|
|
|
42,000
|
|
|||||
Client relationships
|
6,830
|
|
|
7,470
|
|
|
41,360
|
|
|
590
|
|
|
49,000
|
|
|||||
Trade names
|
3,200
|
|
|
208
|
|
|
7,000
|
|
|
160
|
|
|
666
|
|
|||||
Non-compete agreements
|
—
|
|
|
3,920
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Goodwill
|
54,190
|
|
|
45,907
|
|
|
184,520
|
|
|
3,309
|
|
|
202,852
|
|
|||||
Other assets
|
273
|
|
|
850
|
|
|
826
|
|
|
78
|
|
|
475
|
|
|||||
Accounts payable and accrued liabilities
|
(367
|
)
|
|
(2,150
|
)
|
|
(938
|
)
|
|
(242
|
)
|
|
(214
|
)
|
|||||
Client deposits held in restricted accounts
|
—
|
|
|
(5,954
|
)
|
|
(3,458
|
)
|
|
—
|
|
|
—
|
|
|||||
Deferred revenue
|
(7,115
|
)
|
|
(321
|
)
|
|
(565
|
)
|
|
(221
|
)
|
|
(861
|
)
|
|||||
Other long-term liabilities
|
(774
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Deferred tax liability
|
—
|
|
|
—
|
|
|
(1,240
|
)
|
|
(108
|
)
|
|
—
|
|
|||||
Total purchase price
|
$
|
73,757
|
|
|
$
|
69,412
|
|
|
$
|
253,430
|
|
|
$
|
6,031
|
|
|
$
|
299,923
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
Pro Forma
|
|
2017
Pro Forma
|
|
2018
Pro Forma
|
|
2017
Pro Forma
|
||||||||
|
(unaudited)
|
||||||||||||||
|
(in thousands, except per share amounts)
|
||||||||||||||
Total revenue
|
$
|
218,259
|
|
|
$
|
197,492
|
|
|
$
|
427,145
|
|
|
$
|
386,592
|
|
Net income
|
8,966
|
|
|
4,867
|
|
|
18,757
|
|
|
8,001
|
|
||||
Net income per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.11
|
|
|
$
|
0.06
|
|
|
$
|
0.23
|
|
|
$
|
0.10
|
|
Diluted
|
$
|
0.10
|
|
|
$
|
0.06
|
|
|
$
|
0.21
|
|
|
$
|
0.10
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in thousands)
|
||||||||||||||
On demand
|
|
|
|
|
|
|
|
||||||||
Property management
|
$
|
46,523
|
|
|
$
|
41,405
|
|
|
$
|
91,842
|
|
|
$
|
81,746
|
|
Resident services
|
85,330
|
|
|
64,860
|
|
|
162,507
|
|
|
125,829
|
|
||||
Leasing and marketing
|
42,841
|
|
|
29,325
|
|
|
82,257
|
|
|
57,140
|
|
||||
Asset optimization
|
32,251
|
|
|
19,137
|
|
|
63,639
|
|
|
36,225
|
|
||||
Total on demand revenue
|
206,945
|
|
|
154,727
|
|
|
400,245
|
|
|
300,940
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Professional and other
|
9,307
|
|
|
6,579
|
|
|
17,308
|
|
|
13,285
|
|
||||
Total revenue
|
$
|
216,252
|
|
|
$
|
161,306
|
|
|
$
|
417,553
|
|
|
$
|
314,225
|
|
•
|
professional and usage-based services that are billed and recognized based on services performed in a certain period;
|
•
|
amounts attributable to unexercised contract renewals that represent a material right; or
|
•
|
amounts attributable to unexercised client options to purchase services that do not represent a material right.
|
|
Three Months Ended June 30, 2018
|
|
Six Months Ended June 30, 2018
|
||||||||||||||||||||
|
As reported
|
|
Balances without adoption of ASU 2014-09
|
|
Effect of Change
on Net Income Higher/(Lower) |
|
As reported
|
|
Balances without adoption of ASU 2014-09
|
|
Effect of Change
on Net Income Higher/(Lower) |
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
On demand
|
$
|
206,945
|
|
|
$
|
207,421
|
|
|
$
|
(476
|
)
|
|
$
|
400,245
|
|
|
$
|
400,876
|
|
|
$
|
(631
|
)
|
Professional and other
|
9,307
|
|
|
8,676
|
|
|
631
|
|
|
17,308
|
|
|
16,095
|
|
|
1,213
|
|
||||||
Total revenue
|
$
|
216,252
|
|
|
$
|
216,097
|
|
|
$
|
155
|
|
|
$
|
417,553
|
|
|
$
|
416,971
|
|
|
$
|
582
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Sales and marketing
|
$
|
54,488
|
|
|
$
|
56,785
|
|
|
$
|
2,297
|
|
|
$
|
104,729
|
|
|
$
|
108,886
|
|
|
$
|
4,157
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income before income taxes
|
$
|
8,290
|
|
|
$
|
5,838
|
|
|
$
|
2,452
|
|
|
$
|
18,890
|
|
|
$
|
14,151
|
|
|
$
|
4,739
|
|
Income tax (benefit) expense
|
(189
|
)
|
|
(1,096
|
)
|
|
(907
|
)
|
|
(490
|
)
|
|
(2,243
|
)
|
|
(1,753
|
)
|
||||||
Net income
|
$
|
8,479
|
|
|
$
|
6,934
|
|
|
$
|
1,545
|
|
|
$
|
19,380
|
|
|
$
|
16,394
|
|
|
$
|
2,986
|
|
|
Balances at June 30, 2018 - as reported
|
|
Balances at June 30, 2018 without adoption of ASU 2014-09
|
|
Effect of Change
Higher/(Lower) |
||||||
|
(in thousands)
|
||||||||||
Assets
|
|
|
|
|
|
||||||
Accounts receivable, less allowance for doubtful accounts
|
$
|
112,484
|
|
|
$
|
119,930
|
|
|
$
|
(7,446
|
)
|
Other current assets
|
15,812
|
|
|
11,085
|
|
|
4,727
|
|
|||
Other assets
|
20,710
|
|
|
14,109
|
|
|
6,601
|
|
|||
Liabilities
|
|
|
|
|
|
||||||
Current portion of deferred revenue
|
111,238
|
|
|
115,161
|
|
|
(3,923
|
)
|
|||
Deferred revenue
|
5,181
|
|
|
5,181
|
|
|
—
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
|
(in thousands)
|
||||||
Leasehold improvements
|
$
|
61,357
|
|
|
$
|
59,179
|
|
Data processing and communications equipment
|
76,357
|
|
|
83,922
|
|
||
Furniture, fixtures, and other equipment
|
31,635
|
|
|
28,752
|
|
||
Software
|
118,735
|
|
|
107,924
|
|
||
Property, equipment, and software, gross
|
288,084
|
|
|
279,777
|
|
||
Less: Accumulated depreciation and amortization
|
(142,744
|
)
|
|
(131,349
|
)
|
||
Property, equipment, and software, net
|
$
|
145,340
|
|
|
$
|
148,428
|
|
Balance as of December 31, 2017
|
$
|
751,052
|
|
Goodwill acquired
|
168,033
|
|
|
Measurement period adjustments
|
(300
|
)
|
|
Balance as of June 30, 2018
|
$
|
918,785
|
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
|
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
|
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
||||||||||||
|
|
(in thousands)
|
||||||||||||||||||||||
Finite-lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Developed technologies
|
|
$
|
194,194
|
|
|
$
|
(88,434
|
)
|
|
$
|
105,760
|
|
|
$
|
164,640
|
|
|
$
|
(76,577
|
)
|
|
$
|
88,063
|
|
Client relationships
|
|
234,418
|
|
|
(91,120
|
)
|
|
143,298
|
|
|
213,728
|
|
|
(78,390
|
)
|
|
135,338
|
|
||||||
Vendor relationships
|
|
5,650
|
|
|
(5,650
|
)
|
|
—
|
|
|
5,650
|
|
|
(5,650
|
)
|
|
—
|
|
||||||
Trade names
|
|
20,406
|
|
|
(7,786
|
)
|
|
12,620
|
|
|
17,556
|
|
|
(4,325
|
)
|
|
13,231
|
|
||||||
Non-compete agreements
|
|
4,173
|
|
|
(1,000
|
)
|
|
3,173
|
|
|
4,173
|
|
|
(605
|
)
|
|
3,568
|
|
||||||
Total finite-lived intangible assets
|
|
458,841
|
|
|
(193,990
|
)
|
|
264,851
|
|
|
405,747
|
|
|
(165,547
|
)
|
|
240,200
|
|
||||||
Indefinite-lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Trade names
|
|
12,132
|
|
|
—
|
|
|
12,132
|
|
|
12,137
|
|
|
—
|
|
|
12,137
|
|
||||||
Total identified intangible assets
|
|
$
|
470,973
|
|
|
$
|
(193,990
|
)
|
|
$
|
276,983
|
|
|
$
|
417,884
|
|
|
$
|
(165,547
|
)
|
|
$
|
252,337
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||
|
Term Loan
|
|
Delayed Draw Term Loan
|
|
Term Loan
|
|
Delayed Draw Term Loan
|
||||||||
|
(in thousands)
|
||||||||||||||
Principal outstanding
|
$
|
118,057
|
|
|
$
|
195,000
|
|
|
$
|
120,356
|
|
|
$
|
198,750
|
|
Unamortized issuance costs
|
(202
|
)
|
|
(754
|
)
|
|
(233
|
)
|
|
(821
|
)
|
||||
Unamortized discount
|
(161
|
)
|
|
(425
|
)
|
|
(185
|
)
|
|
(490
|
)
|
||||
Carrying value
|
$
|
117,694
|
|
|
$
|
193,821
|
|
|
$
|
119,938
|
|
|
$
|
197,439
|
|
|
Term Loans
|
||
2018
|
$
|
8,066
|
|
2019
|
16,133
|
|
|
2020
|
28,232
|
|
|
2021
|
32,266
|
|
|
Thereafter
|
228,360
|
|
|
|
$
|
313,057
|
|
•
|
during any calendar quarter commencing after the calendar quarter ending on
June 30, 2017
(and only during such calendar quarter), if the last reported sale price of our common stock for at least
20
trading days (whether or not consecutive) during a period of
30
consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to
130%
of the conversion price on each applicable trading day;
|
•
|
during the
five
business day period after any
five
consecutive trading day period (the “Measurement Period”) in which the trading price per
$1,000
principal amount of the Convertible Notes for each trading day of the Measurement Period was less than
98%
of the product of the last reported sales price of our common stock and the conversion rate on each such trading day; or
|
•
|
upon the occurrence of specified corporate events, as defined in the Indenture.
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
|
(in thousands)
|
||||||
Liability component:
|
|
|
|
||||
Principal amount
|
$
|
345,000
|
|
|
$
|
345,000
|
|
Unamortized discount
|
(51,471
|
)
|
|
(56,557
|
)
|
||
Unamortized debt issuance costs
|
(6,621
|
)
|
|
(7,244
|
)
|
||
|
$
|
286,908
|
|
|
$
|
281,199
|
|
|
|
|
|
||||
Equity component, net of issuance costs and deferred tax:
|
$
|
61,390
|
|
|
$
|
61,390
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in thousands)
|
||||||||||||||
Contractual interest expense
|
$
|
1,294
|
|
|
$
|
561
|
|
|
$
|
2,588
|
|
|
$
|
561
|
|
Amortization of debt discount
|
2,562
|
|
|
1,052
|
|
|
5,086
|
|
|
1,052
|
|
||||
Amortization of debt issuance costs
|
328
|
|
|
134
|
|
|
651
|
|
|
134
|
|
||||
|
$
|
4,184
|
|
|
$
|
1,747
|
|
|
$
|
8,325
|
|
|
$
|
1,747
|
|
Three Months Ended June 30, 2018
|
|
Six Months Ended June 30, 2018
|
|
Vesting
|
||
163,766
|
|
|
978,444
|
|
|
Shares vest ratably over a period of twelve quarters beginning on the first day of the second calendar quarter immediately following the grant date.
|
—
|
|
|
3,600
|
|
|
Shares fully vested on the first day of the calendar quarter immediately following the grant date.
|
33,846
|
|
|
33,846
|
|
|
Shares vest ratably over a period of four quarters beginning on the first day of the calendar quarter immediately following the grant date.
|
Three Months Ended June 30, 2018
|
|
Six Months Ended June 30, 2018
|
|
Condition to Become Eligible to Vest
|
||
—
|
|
|
129,341
|
|
|
After the grant date and prior to July 1, 2021, the average closing price per share of our common stock equals or exceeds $60.89 for twenty consecutive trading days.
|
—
|
|
|
129,341
|
|
|
After the grant date and prior to July 1, 2021, the average closing price per share of our common stock equals or exceeds $66.98 for twenty consecutive trading days.
|
—
|
|
|
129,341
|
|
|
After the grant date and prior to July 1, 2021, the average closing price per share of our common stock equals or exceeds $73.07 for twenty consecutive trading days.
|
—
|
|
|
129,341
|
|
|
After the grant date and prior to July 1, 2021, the average closing price per share of our common stock equals or exceeds $85.24 for twenty consecutive trading days.
|
2018
|
$
|
8,085
|
|
2019
|
14,342
|
|
|
2020
|
11,829
|
|
|
2021
|
10,986
|
|
|
2022
|
9,336
|
|
|
Thereafter
|
46,121
|
|
|
|
$
|
100,699
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in thousands, except per share amounts)
|
||||||||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
8,479
|
|
|
$
|
6,213
|
|
|
$
|
19,380
|
|
|
$
|
14,408
|
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Basic:
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares used in computing basic net income per share
|
85,124
|
|
|
79,018
|
|
|
83,156
|
|
|
78,642
|
|
||||
Diluted:
|
|
|
|
|
|
|
|
||||||||
Add weighted average effect of dilutive securities:
|
|
|
|
|
|
|
|
||||||||
Stock options and restricted stock
|
2,474
|
|
|
2,907
|
|
|
2,310
|
|
|
3,002
|
|
||||
Convertible Notes
|
2,116
|
|
|
—
|
|
|
1,720
|
|
|
—
|
|
||||
Contingently issuable shares in connection with ClickPay acquisition
|
291
|
|
|
—
|
|
|
146
|
|
|
—
|
|
||||
Weighted average common shares used in computing diluted net income per share
|
90,005
|
|
|
81,925
|
|
|
87,332
|
|
|
81,644
|
|
||||
Net income per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.10
|
|
|
$
|
0.08
|
|
|
$
|
0.23
|
|
|
$
|
0.18
|
|
Diluted
|
$
|
0.09
|
|
|
$
|
0.08
|
|
|
$
|
0.22
|
|
|
$
|
0.18
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||
Discount rates
|
16.5
|
%
|
|
16.3
|
%
|
Volatility rates
|
25.0
|
%
|
|
24.0
|
%
|
Risk free rate of return
|
2.2
|
%
|
|
1.6
|
%
|
|
Fair value at June 30, 2018
|
||||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
|
(in thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Interest rate swap agreements
|
$
|
1,465
|
|
|
$
|
—
|
|
|
$
|
1,465
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Contingent consideration related to the acquisition of:
|
|
|
|
|
|
|
|
||||||||
Axiometrics
|
52
|
|
|
—
|
|
|
—
|
|
|
52
|
|
||||
Total liabilities measured at fair value
|
$
|
52
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
52
|
|
|
Fair value at December 31, 2017
|
||||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
|
(in thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Interest rate swap agreements
|
$
|
1,329
|
|
|
$
|
—
|
|
|
$
|
1,329
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Contingent consideration related to the acquisition of:
|
|
|
|
|
|
|
|
||||||||
AssetEye
|
247
|
|
|
—
|
|
|
—
|
|
|
247
|
|
||||
Axiometrics
|
167
|
|
|
—
|
|
|
—
|
|
|
167
|
|
||||
Total liabilities measured at fair value
|
$
|
414
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
414
|
|
|
Six Months Ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(in thousands)
|
||||||
Balance at beginning of period
|
$
|
414
|
|
|
$
|
541
|
|
Initial contingent consideration
|
—
|
|
|
812
|
|
||
Settlements through cash payments
|
(247
|
)
|
|
—
|
|
||
Net (gain) loss on change in fair value
|
(115
|
)
|
|
41
|
|
||
Balance at end of period
|
$
|
52
|
|
|
$
|
1,394
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
||||||||
|
(in thousands)
|
||||||||||||||
Term Loans
|
$
|
303,280
|
|
|
$
|
311,515
|
|
|
$
|
303,806
|
|
|
$
|
317,377
|
|
Convertible Notes
|
491,177
|
|
|
286,908
|
|
|
430,301
|
|
|
281,199
|
|
|
Balance Sheet Location
|
|
Notional
|
|
Fair Value
|
||||
|
|
|
(in thousands)
|
||||||
Derivatives designated as cash flow hedging instruments:
|
|
|
|
|
|
||||
Swap agreements as of June 30, 2018
|
Other assets
|
|
$
|
75,000
|
|
|
$
|
1,465
|
|
Swap agreements as of December 31, 2017
|
Other assets
|
|
$
|
75,000
|
|
|
$
|
1,329
|
|
|
|
Effective Portion
|
|
Ineffective Portion
|
||||||||||||
Derivatives Designated as Cash Flow Hedges
|
|
Gain (Loss) Recognized in OCI
|
|
Location of Gain (Loss) Recognized in Income
|
|
Gain (Loss) Recognized in Income
|
|
Location of Gain (Loss) Recognized in Income
|
|
Gain (Loss) Recognized in Income
|
||||||
Three months ended June 30, 2018:
|
|
|
|
|
|
|
|
|
||||||||
Swap agreements, net of tax
|
|
$
|
108
|
|
|
Interest expense and other
|
|
$
|
145
|
|
|
Interest expense and other
|
|
$
|
(15
|
)
|
Three months ended June 30, 2017:
|
|
|
|
|
|
|
|
|
||||||||
Swap agreements, net of tax
|
|
$
|
(21
|
)
|
|
Interest expense and other
|
|
$
|
(3
|
)
|
|
Interest expense and other
|
|
$
|
10
|
|
|
|
Effective Portion
|
|
Ineffective Portion
|
||||||||||||
Derivatives Designated as Cash Flow Hedges
|
|
Gain (Loss) Recognized in OCI
|
|
Location of Gain (Loss) Recognized in Income
|
|
Gain (Loss) Recognized in Income
|
|
Location of Gain (Loss) Recognized in Income
|
|
Gain (Loss) Recognized in Income
|
||||||
Six months ended June 30, 2018:
|
|
|
|
|
|
|
|
|
||||||||
Swap agreements, net of tax
|
|
$
|
367
|
|
|
Interest expense and other
|
|
$
|
244
|
|
|
Interest expense and other
|
|
$
|
(31
|
)
|
Six months ended June 30, 2017:
|
|
|
|
|
|
|
|
|
||||||||
Swap agreements, net of tax
|
|
$
|
73
|
|
|
Interest expense and other
|
|
$
|
9
|
|
|
Interest expense and other
|
|
$
|
28
|
|
•
|
conventional single family properties;
|
•
|
conventional multifamily properties;
|
•
|
affordable Housing and Urban Development ("HUD") properties;
|
•
|
affordable tax credit properties;
|
•
|
rural housing properties;
|
•
|
privatized military housing;
|
•
|
commercial properties;
|
•
|
student housing;
|
•
|
senior living; and
|
•
|
vacation rentals.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in thousands, except dollar per unit data and percentages)
|
||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Total revenue
|
$
|
216,252
|
|
|
$
|
161,306
|
|
|
$
|
417,553
|
|
|
$
|
314,225
|
|
On demand revenue
|
$
|
206,945
|
|
|
$
|
154,727
|
|
|
$
|
400,245
|
|
|
$
|
300,940
|
|
On demand revenue as a percentage of total revenue
|
95.7
|
%
|
|
95.9
|
%
|
|
95.9
|
%
|
|
95.8
|
%
|
||||
|
|
|
|
|
|
|
|
||||||||
Non-GAAP total revenue
|
$
|
216,355
|
|
|
$
|
162,251
|
|
|
$
|
417,969
|
|
|
$
|
315,875
|
|
Non-GAAP on demand revenue
|
$
|
207,048
|
|
|
$
|
155,672
|
|
|
$
|
400,661
|
|
|
$
|
302,590
|
|
Adjusted EBITDA
|
$
|
57,125
|
|
|
$
|
39,444
|
|
|
$
|
111,286
|
|
|
$
|
76,522
|
|
|
|
|
|
|
|
|
|
||||||||
Ending on demand units
|
15,531
|
|
|
11,485
|
|
|
|
|
|
||||||
Average on demand units
|
14,352
|
|
|
11,298
|
|
|
|
|
|
||||||
On demand annual client value
|
$
|
837,897
|
|
|
$
|
649,017
|
|
|
|
|
|
||||
Annualized on demand revenue per average on demand unit
|
$
|
53.95
|
|
|
$
|
56.51
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in thousands)
|
||||||||||||||
Total revenue
|
$
|
216,252
|
|
|
$
|
161,306
|
|
|
$
|
417,553
|
|
|
$
|
314,225
|
|
Acquisition-related and other deferred revenue adjustments
|
103
|
|
|
945
|
|
|
416
|
|
|
1,650
|
|
||||
Non-GAAP total revenue
|
$
|
216,355
|
|
|
$
|
162,251
|
|
|
$
|
417,969
|
|
|
$
|
315,875
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in thousands)
|
||||||||||||||
On demand revenue
|
$
|
206,945
|
|
|
$
|
154,727
|
|
|
$
|
400,245
|
|
|
$
|
300,940
|
|
Acquisition-related and other deferred revenue adjustments
|
103
|
|
|
945
|
|
|
416
|
|
|
1,650
|
|
||||
Non-GAAP on demand revenue
|
$
|
207,048
|
|
|
$
|
155,672
|
|
|
$
|
400,661
|
|
|
$
|
302,590
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in thousands)
|
||||||||||||||
Net income
|
$
|
8,479
|
|
|
$
|
6,213
|
|
|
$
|
19,380
|
|
|
$
|
14,408
|
|
Acquisition-related and other deferred revenue adjustments
|
103
|
|
|
945
|
|
|
416
|
|
|
1,650
|
|
||||
Depreciation, asset impairment, and loss on disposal of assets
|
7,662
|
|
|
6,929
|
|
|
15,480
|
|
|
13,604
|
|
||||
Amortization of intangible assets
|
17,623
|
|
|
8,227
|
|
|
34,007
|
|
|
16,016
|
|
||||
Acquisition-related expense
|
1,168
|
|
|
1,354
|
|
|
2,175
|
|
|
2,564
|
|
||||
Costs arising from Hart-Scott-Rodino review process
|
—
|
|
|
2,228
|
|
|
—
|
|
|
2,709
|
|
||||
Interest expense, net
|
8,584
|
|
|
2,804
|
|
|
16,305
|
|
|
3,924
|
|
||||
Income tax benefit
|
(189
|
)
|
|
(3,132
|
)
|
|
(490
|
)
|
|
(2,321
|
)
|
||||
Stock-based expense
|
13,695
|
|
|
13,876
|
|
|
24,013
|
|
|
23,968
|
|
||||
Adjusted EBITDA
|
$
|
57,125
|
|
|
$
|
39,444
|
|
|
$
|
111,286
|
|
|
$
|
76,522
|
|
•
|
Revenue recognition;
|
•
|
Business combinations;
|
•
|
Stock-based expense;
|
•
|
Income taxes, including deferred tax assets and liabilities; and
|
•
|
Capitalized product development costs.
|
|
Balance at
December 31, 2017
|
|
Adjustments due
to ASU 2014-09
|
|
Balance at
January 1, 2018 |
||||||
|
(in thousands)
|
||||||||||
Assets
|
|
|
|
|
|
||||||
Accounts receivable, less allowance for doubtful accounts
|
$
|
124,505
|
|
|
$
|
(7,925
|
)
|
|
$
|
116,580
|
|
Other current assets
|
6,622
|
|
|
2,771
|
|
|
9,393
|
|
|||
Deferred tax assets, net
|
44,887
|
|
|
(780
|
)
|
|
44,107
|
|
|||
Other assets
|
11,010
|
|
|
4,459
|
|
|
15,469
|
|
|||
Liabilities
|
|
|
|
|
|
||||||
Current portion of deferred revenue
|
116,622
|
|
|
(3,696
|
)
|
|
112,926
|
|
|||
Stockholders’ Equity
|
|
|
|
|
|
||||||
Accumulated deficit
|
(75,046
|
)
|
|
2,221
|
|
|
(72,825
|
)
|
|
Three Months Ended June 30,
|
||||||||||||
|
2018
|
|
2018
|
|
2017
|
|
2017
|
||||||
|
(in thousands, except per share and ratio amounts)
|
||||||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||
On demand
|
$
|
206,945
|
|
|
95.7
|
%
|
|
$
|
154,727
|
|
|
95.9
|
%
|
Professional and other
|
9,307
|
|
|
4.3
|
|
|
6,579
|
|
|
4.1
|
|
||
Total revenue
|
216,252
|
|
|
100.0
|
|
|
161,306
|
|
|
100.0
|
|
||
Cost of revenue
(1)
|
85,741
|
|
|
39.6
|
|
|
67,544
|
|
|
41.9
|
|
||
Gross profit
|
130,511
|
|
|
60.4
|
|
|
93,762
|
|
|
58.1
|
|
||
Operating expenses:
|
|
|
|
|
|
|
|
||||||
Product development
(1)
|
30,771
|
|
|
14.2
|
|
|
21,290
|
|
|
13.2
|
|
||
Sales and marketing
(1)
|
54,488
|
|
|
25.2
|
|
|
39,235
|
|
|
24.3
|
|
||
General and administrative
(1)
|
28,444
|
|
|
13.2
|
|
|
27,370
|
|
|
17.0
|
|
||
Total operating expenses
|
113,703
|
|
|
52.6
|
|
|
87,895
|
|
|
54.5
|
|
||
Operating income
|
16,808
|
|
|
7.8
|
|
|
5,867
|
|
|
3.6
|
|
||
Interest expense and other, net
|
(8,518
|
)
|
|
(4.0
|
)
|
|
(2,786
|
)
|
|
(1.7
|
)
|
||
Income before income taxes
|
8,290
|
|
|
3.8
|
|
|
3,081
|
|
|
1.9
|
|
||
Income tax benefit
|
(189
|
)
|
|
(0.1
|
)
|
|
(3,132
|
)
|
|
(1.9
|
)
|
||
Net income
|
$
|
8,479
|
|
|
3.9
|
%
|
|
$
|
6,213
|
|
|
3.8
|
%
|
|
|
|
|
|
|
|
|
||||||
Net income per share attributable to common stockholders:
|
|
|
|
|
|
|
|
||||||
Basic
|
$
|
0.10
|
|
|
|
|
$
|
0.08
|
|
|
|
||
Diluted
|
$
|
0.09
|
|
|
|
|
$
|
0.08
|
|
|
|
||
Weighted average shares used in computing net income per share attributable to common stockholders:
|
|
|
|
|
|
|
|
||||||
Basic
|
85,124
|
|
|
|
|
79,018
|
|
|
|
||||
Diluted
|
90,005
|
|
|
|
|
81,925
|
|
|
|
||||
|
|
|
|
|
|
|
|
||||||
(1)
Includes stock-based expense as follows:
|
|
|
|
|
|
|
|
||||||
Cost of revenue
|
$
|
1,168
|
|
|
|
|
$
|
1,050
|
|
|
|
||
Product development
|
2,645
|
|
|
|
|
2,454
|
|
|
|
||||
Sales and marketing
|
4,470
|
|
|
|
|
4,266
|
|
|
|
||||
General and administrative
|
5,412
|
|
|
|
|
6,106
|
|
|
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2018
|
|
2017
|
|
2017
|
||||||
|
(in thousands, except per share and ratio amounts)
|
||||||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||
On demand
|
$
|
400,245
|
|
|
95.9
|
%
|
|
$
|
300,940
|
|
|
95.8
|
%
|
Professional and other
|
17,308
|
|
|
4.1
|
|
|
13,285
|
|
|
4.2
|
|
||
Total revenue
|
417,553
|
|
|
100.0
|
|
|
314,225
|
|
|
100.0
|
|
||
Cost of revenue
(1)
|
162,401
|
|
|
38.9
|
|
|
130,586
|
|
|
41.6
|
|
||
Gross profit
|
255,152
|
|
|
61.1
|
|
|
183,639
|
|
|
58.4
|
|
||
Operating expenses:
|
|
|
|
|
|
|
|
||||||
Product development
(1)
|
59,811
|
|
|
14.3
|
|
|
41,677
|
|
|
13.3
|
|
||
Sales and marketing
(1)
|
104,729
|
|
|
25.1
|
|
|
74,382
|
|
|
23.7
|
|
||
General and administrative
(1)
|
55,534
|
|
|
13.3
|
|
|
51,621
|
|
|
16.4
|
|
||
Total operating expenses
|
220,074
|
|
|
52.7
|
|
|
167,680
|
|
|
53.4
|
|
||
Operating income
|
35,078
|
|
|
8.4
|
|
|
15,959
|
|
|
5.0
|
|
||
Interest expense and other, net
|
(16,188
|
)
|
|
(3.9
|
)
|
|
(3,872
|
)
|
|
(1.2
|
)
|
||
Income before income taxes
|
18,890
|
|
|
4.5
|
|
|
12,087
|
|
|
3.8
|
|
||
Income tax benefit
|
(490
|
)
|
|
(0.1
|
)
|
|
(2,321
|
)
|
|
(0.7
|
)
|
||
Net income
|
$
|
19,380
|
|
|
4.6
|
%
|
|
$
|
14,408
|
|
|
4.5
|
%
|
|
|
|
|
|
|
|
|
||||||
Net income per share attributable to common stockholders:
|
|
|
|
|
|
|
|
||||||
Basic
|
$
|
0.23
|
|
|
|
|
$
|
0.18
|
|
|
|
||
Diluted
|
$
|
0.22
|
|
|
|
|
$
|
0.18
|
|
|
|
||
Weighted average shares used in computing net income per share attributable to common stockholders:
|
|
|
|
|
|
|
|
||||||
Basic
|
83,156
|
|
|
|
|
78,642
|
|
|
|
||||
Diluted
|
87,332
|
|
|
|
|
81,644
|
|
|
|
||||
|
|
|
|
|
|
|
|
||||||
(1)
Includes stock-based expense as follows:
|
|
|
|
|
|
|
|
||||||
Cost of revenue
|
$
|
2,003
|
|
|
|
|
$
|
1,903
|
|
|
|
||
Product development
|
4,808
|
|
|
|
|
4,333
|
|
|
|
||||
Sales and marketing
|
8,011
|
|
|
|
|
7,394
|
|
|
|
||||
General and administrative
|
9,191
|
|
|
|
|
10,338
|
|
|
|
|
Three Months Ended June 30,
|
|||||||||||||
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
|||||||
|
(in thousands, except per unit data and percentages)
|
|||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
On demand
|
$
|
206,945
|
|
|
$
|
154,727
|
|
|
$
|
52,218
|
|
|
33.7
|
%
|
Professional and other
|
9,307
|
|
|
6,579
|
|
|
2,728
|
|
|
41.5
|
|
|||
Total revenue
|
$
|
216,252
|
|
|
$
|
161,306
|
|
|
$
|
54,946
|
|
|
34.1
|
|
|
|
|
|
|
|
|
|
|||||||
Non-GAAP on demand revenue
|
$
|
207,048
|
|
|
$
|
155,672
|
|
|
$
|
51,376
|
|
|
33.0
|
|
|
|
|
|
|
|
|
|
|||||||
Ending on demand units
|
15,531
|
|
|
11,485
|
|
|
4,046
|
|
|
35.2
|
|
|||
Average on demand units
|
14,352
|
|
|
11,298
|
|
|
3,054
|
|
|
27.0
|
|
|||
On demand annual client value
|
$
|
837,897
|
|
|
$
|
649,017
|
|
|
$
|
188,880
|
|
|
29.1
|
|
Annualized on demand revenue per average on demand unit
|
$
|
53.95
|
|
|
$
|
56.51
|
|
|
$
|
(2.56
|
)
|
|
(4.5
|
)%
|
|
Six Months Ended June 30,
|
|||||||||||||
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
|||||||
|
(in thousands, except per unit data and percentages)
|
|||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
On demand
|
$
|
400,245
|
|
|
$
|
300,940
|
|
|
$
|
99,305
|
|
|
33.0
|
%
|
Professional and other
|
17,308
|
|
|
13,285
|
|
|
4,023
|
|
|
30.3
|
|
|||
Total revenue
|
$
|
417,553
|
|
|
$
|
314,225
|
|
|
$
|
103,328
|
|
|
32.9
|
|
|
|
|
|
|
|
|
|
|||||||
Non-GAAP on demand revenue
|
$
|
400,661
|
|
|
$
|
302,590
|
|
|
$
|
98,071
|
|
|
32.4
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
||||||||||||||
|
(in thousands, except percentages)
|
||||||||||||||||||||||||||||
Cost of revenue
|
$
|
77,675
|
|
|
$
|
59,740
|
|
|
$
|
17,935
|
|
|
30.0
|
%
|
|
$
|
146,743
|
|
|
$
|
115,357
|
|
|
$
|
31,386
|
|
|
27.2
|
%
|
Stock-based expense
|
1,168
|
|
|
1,050
|
|
|
118
|
|
|
11.2
|
|
|
2,003
|
|
|
1,903
|
|
|
100
|
|
|
5.3
|
|
||||||
Depreciation and amortization
|
6,898
|
|
|
6,754
|
|
|
144
|
|
|
2.1
|
|
|
13,655
|
|
|
13,326
|
|
|
329
|
|
|
2.5
|
|
||||||
Total cost of revenue
|
$
|
85,741
|
|
|
$
|
67,544
|
|
|
$
|
18,197
|
|
|
26.9
|
%
|
|
$
|
162,401
|
|
|
$
|
130,586
|
|
|
$
|
31,815
|
|
|
24.4
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
||||||||||||||
|
(in thousands, except percentages)
|
||||||||||||||||||||||||||||
Product development
|
$
|
26,569
|
|
|
$
|
17,275
|
|
|
$
|
9,294
|
|
|
53.8
|
%
|
|
$
|
52,108
|
|
|
$
|
34,253
|
|
|
$
|
17,855
|
|
|
52.1
|
%
|
Stock-based expense
|
2,645
|
|
|
2,454
|
|
|
191
|
|
|
7.8
|
|
|
4,808
|
|
|
4,333
|
|
|
475
|
|
|
11.0
|
|
||||||
Depreciation
|
1,557
|
|
|
1,561
|
|
|
(4
|
)
|
|
(0.3
|
)
|
|
2,895
|
|
|
3,091
|
|
|
(196
|
)
|
|
(6.3
|
)
|
||||||
Total product development expense
|
$
|
30,771
|
|
|
$
|
21,290
|
|
|
$
|
9,481
|
|
|
44.5
|
%
|
|
$
|
59,811
|
|
|
$
|
41,677
|
|
|
$
|
18,134
|
|
|
43.5
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
||||||||||||||
|
(in thousands, except percentages)
|
||||||||||||||||||||||||||||
Sales and marketing
|
$
|
34,828
|
|
|
$
|
29,770
|
|
|
$
|
5,058
|
|
|
17.0
|
%
|
|
$
|
67,739
|
|
|
$
|
57,101
|
|
|
$
|
10,638
|
|
|
18.6
|
%
|
Stock-based expense
|
4,470
|
|
|
4,266
|
|
|
204
|
|
|
4.8
|
|
|
8,011
|
|
|
7,394
|
|
|
617
|
|
|
8.3
|
|
||||||
Depreciation and amortization
|
15,190
|
|
|
5,199
|
|
|
9,991
|
|
|
192.2
|
|
|
28,979
|
|
|
9,887
|
|
|
19,092
|
|
|
193.1
|
|
||||||
Total sales and marketing expense
|
$
|
54,488
|
|
|
$
|
39,235
|
|
|
$
|
15,253
|
|
|
38.9
|
%
|
|
$
|
104,729
|
|
|
$
|
74,382
|
|
|
$
|
30,347
|
|
|
40.8
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
||||||||||||||
|
(in thousands, except percentages)
|
||||||||||||||||||||||||||||
General and administrative
|
$
|
21,548
|
|
|
$
|
19,685
|
|
|
$
|
1,863
|
|
|
9.5
|
%
|
|
$
|
43,483
|
|
|
$
|
38,054
|
|
|
$
|
5,429
|
|
|
14.3
|
%
|
Stock-based expense
|
5,412
|
|
|
6,106
|
|
|
(694
|
)
|
|
(11.4
|
)
|
|
9,191
|
|
|
10,338
|
|
|
(1,147
|
)
|
|
(11.1
|
)
|
||||||
Depreciation
|
1,484
|
|
|
1,579
|
|
|
(95
|
)
|
|
(6.0
|
)
|
|
2,860
|
|
|
3,229
|
|
|
(369
|
)
|
|
(11.4
|
)
|
||||||
Total general and administrative expense
|
$
|
28,444
|
|
|
$
|
27,370
|
|
|
$
|
1,074
|
|
|
3.9
|
%
|
|
$
|
55,534
|
|
|
$
|
51,621
|
|
|
$
|
3,913
|
|
|
7.6
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
||||||||||||||
|
(in thousands, except percentages)
|
||||||||||||||||||||||||||||
Stock-based expense
|
$
|
13,695
|
|
|
$
|
13,876
|
|
|
$
|
(181
|
)
|
|
(1.3
|
)%
|
|
$
|
24,013
|
|
|
$
|
23,968
|
|
|
$
|
45
|
|
|
0.2
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
||||||||||||||
|
(in thousands, except percentages)
|
||||||||||||||||||||||||||||
Depreciation expense
|
$
|
7,506
|
|
|
$
|
6,866
|
|
|
$
|
640
|
|
|
9.3
|
%
|
|
$
|
14,382
|
|
|
$
|
13,517
|
|
|
$
|
865
|
|
|
6.4
|
%
|
Amortization expense
|
17,623
|
|
|
8,227
|
|
|
9,396
|
|
|
114.2
|
|
|
34,007
|
|
|
16,016
|
|
|
17,991
|
|
|
112.3
|
|
||||||
Total depreciation and amortization expense
|
$
|
25,129
|
|
|
$
|
15,093
|
|
|
$
|
10,036
|
|
|
66.5
|
%
|
|
$
|
48,389
|
|
|
$
|
29,533
|
|
|
$
|
18,856
|
|
|
63.8
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
||||||||||||||
|
(in thousands, except percentages)
|
||||||||||||||||||||||||||||
Interest expense
|
$
|
(9,015
|
)
|
|
$
|
(3,063
|
)
|
|
$
|
(5,952
|
)
|
|
194.3
|
%
|
|
$
|
(16,772
|
)
|
|
$
|
(4,183
|
)
|
|
$
|
(12,589
|
)
|
|
301.0
|
%
|
Interest income
|
431
|
|
|
259
|
|
|
172
|
|
|
66.4
|
|
|
467
|
|
|
259
|
|
|
208
|
|
|
80.3
|
|
||||||
Other income
|
66
|
|
|
18
|
|
|
48
|
|
|
266.7
|
|
|
117
|
|
|
52
|
|
|
65
|
|
|
125.0
|
|
||||||
Total interest expense and other, net
|
$
|
(8,518
|
)
|
|
$
|
(2,786
|
)
|
|
$
|
(5,732
|
)
|
|
205.7
|
%
|
|
$
|
(16,188
|
)
|
|
$
|
(3,872
|
)
|
|
$
|
(12,316
|
)
|
|
318.1
|
%
|
|
Six Months Ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(in thousands)
|
||||||
Net cash provided by operating activities
|
$
|
102,220
|
|
|
$
|
95,652
|
|
Net cash used in investing activities
|
(161,768
|
)
|
|
(150,370
|
)
|
||
Net cash provided by financing activities
|
370,008
|
|
|
297,250
|
|
|
Payments Due by Period
|
||||||||||||||||||
|
Total
|
|
Less Than
1 year
|
|
1-3 years
|
|
3-5 years
|
|
More Than
5 years
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Convertible Notes
(1)
|
$
|
367,641
|
|
|
$
|
2,588
|
|
|
$
|
10,350
|
|
|
$
|
354,703
|
|
|
$
|
—
|
|
Term Loans
(2)
|
358,391
|
|
|
14,065
|
|
|
70,286
|
|
|
274,040
|
|
|
—
|
|
|||||
Operating lease obligations
|
100,699
|
|
|
8,085
|
|
|
26,171
|
|
|
20,322
|
|
|
46,121
|
|
|||||
Acquisition-related liabilities
(3)
|
44,222
|
|
|
29,670
|
|
|
13,552
|
|
|
1,000
|
|
|
—
|
|
|||||
|
$
|
870,953
|
|
|
$
|
54,408
|
|
|
$
|
120,359
|
|
|
$
|
650,065
|
|
|
$
|
46,121
|
|
(1)
|
Represents the aggregate principal amount of
$345.0 million
and anticipated coupon interest payments related to our Convertible Notes and excludes the unamortized discount and debt issuance costs reflected in our Condensed Consolidated Balance Sheets.
|
(2)
|
Represents the contractually required principal payments for our Term Loan and Delayed Draw Term Loan and excludes unamortized debt issuance costs reflected in our Condensed Consolidated Balance Sheets. These amounts also include the future interest obligations of our Term Loans, which were estimated using a LIBOR forward rate curve and include the related effects of our interest rate swap agreements.
|
(3)
|
Represents undiscounted amounts payable for our deferred cash obligations, excluding potential reductions related to the sellers’ indemnification obligations, deferred stock obligations in connection with our acquisition of ClickPay, and the estimated fair value for our contingent consideration obligations.
|
•
|
further enforcement of multifactor authentication;
|
•
|
further restricting of privileged access;
|
•
|
enhancement of processes and controls surrounding third party systems; and
|
•
|
additional security awareness training for all employees.
|
•
|
the extent to which on demand software solutions maintain market acceptance;
|
•
|
fluctuations in leasing activity by our clients;
|
•
|
our ability to timely introduce enhancements to our existing solutions and new solutions;
|
•
|
our ability to renew the use of our on demand solutions for units managed by our existing clients and to increase the use of our on demand solutions for the management of units by our existing and new clients;
|
•
|
changes in our pricing policies or those of our competitors or new competitors;
|
•
|
the variable nature of our sales and implementation cycles;
|
•
|
our ability to anticipate and adapt to external forces and the emergence of new technologies and products;
|
•
|
our ability to enter into new markets and capture additional market share;
|
•
|
our ability to integrate acquisitions in a cost-effective and timely manner;
|
•
|
the timing of revenue and expenses related to recent and potential acquisitions or dispositions of businesses or technologies;
|
•
|
changes in local economic, political and regulatory environments of our international operations;
|
•
|
general economic, industry and market conditions in the rental housing industry that impact our current and potential clients;
|
•
|
the amount and timing of our investment in research and development activities;
|
•
|
technical difficulties, service interruptions, data or document losses or security breaches;
|
•
|
our ability to hire and retain qualified key personnel, including particular key positions in our sales force and IT department;
|
•
|
changes in the legal, regulatory or compliance environment related to the rental housing industry or the markets in which we operate, including without limitation changes related to fair credit reporting, payment processing, data protection and privacy, utility billing, insurance, the Internet and e-commerce, licensing, telemarketing, electronic communications, the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) and the Health Information Technology Economic and Clinical Health Act (“HITECH”);
|
•
|
the amount and timing of operating expenses and capital expenditures related to the expansion of our operations and infrastructure;
|
•
|
increase in the number or severity of insurance claims on policies sold by us;
|
•
|
litigation and settlement costs, including unforeseen costs;
|
•
|
new accounting pronouncements and changes in accounting standards or practices, particularly any affecting the recognition of subscription revenue or accounting for mergers and acquisitions; and
|
•
|
changes in tax policy in the United States and globally that affect the deductibility of certain expenses and how our profits are taxed, including the “Tax Reform Act,” as defined below.
|
•
|
successfully supporting and maintaining a broad range of current and emerging solutions;
|
•
|
identifying suitable acquisition targets and efficiently managing the closing of acquisitions and the integration of targets into our operations;
|
•
|
maintaining continuity in our senior management and key personnel;
|
•
|
attracting, retaining, training and motivating our employees, particularly technical, client service and sales personnel;
|
•
|
enhancing our financial and accounting systems and controls;
|
•
|
enhancing our information technology infrastructure, processes and controls;
|
•
|
successfully completing system upgrades and enhancements; and
|
•
|
managing expanded operations in geographically dispersed locations.
|
•
|
difficulties in integrating and managing the operations and technologies of the companies we acquire;
|
•
|
diversion of our management’s attention from normal daily operations of our business;
|
•
|
our inability to maintain the clients, the key employees, the key business relationships and the reputations of the businesses we acquire;
|
•
|
our inability to generate sufficient revenue from acquisitions to offset our increased expenses associated with acquisitions;
|
•
|
difficulties in predicting or achieving the synergies between acquired businesses and our own businesses;
|
•
|
our responsibility for the liabilities of the businesses we acquire, including, without limitation, liabilities arising out of their failure to maintain effective data security, data integrity, disaster recovery and privacy controls prior to the acquisition, or their infringement or alleged infringement of third-party intellectual property, contract or data access rights prior to the acquisition;
|
•
|
difficulties in complying with new markets or regulatory standards to which we were not previously subject;
|
•
|
delays in our ability to implement internal standards, controls, procedures and policies in the businesses we acquire; and
|
•
|
adverse effects of acquisition activity on the key performance indicators we use to monitor our performance.
|
•
|
decreasing demand for leasing and marketing solutions;
|
•
|
reducing the number of occupied sites and units on which we earn revenue;
|
•
|
preventing our clients from expanding their businesses and managing new properties;
|
•
|
causing our clients to reduce spending on our solutions;
|
•
|
subjecting us to increased pricing pressure in order to add new clients and retain existing clients;
|
•
|
causing our clients to switch to lower-priced solutions provided by our competitors or internally developed solutions;
|
•
|
delaying or preventing our collection of outstanding accounts receivable; and
|
•
|
causing payment processing losses related to an increase in client insolvency.
|
•
|
incur additional indebtedness or guarantee indebtedness of others;
|
•
|
create liens on our assets;
|
•
|
enter into mergers or consolidations;
|
•
|
dispose of assets;
|
•
|
prepay certain indebtedness;
|
•
|
make changes to our governing documents and certain of our agreements;
|
•
|
pay dividends and make other distributions on our capital stock, and redeem and repurchase our capital stock;
|
•
|
make investments, including acquisitions; and
|
•
|
enter into transactions with affiliates.
|
•
|
our failure to develop new or additional solutions;
|
•
|
our inability to market our solutions in a cost-effective manner to new clients or in new vertical or geographic markets;
|
•
|
our inability to expand our sales to existing clients;
|
•
|
our inability to build and promote our brand; and
|
•
|
perceived or actual security, integrity, reliability, quality or compatibility problems with our solutions.
|
•
|
develop superior products or services, gain greater market acceptance and expand their offerings more efficiently or more rapidly;
|
•
|
adapt to new or emerging technologies and changes in client requirements more quickly;
|
•
|
take advantage of acquisition and other opportunities more readily;
|
•
|
adopt more aggressive pricing policies, such as offering discounted pricing for purchasing multiple bundled products;
|
•
|
devote greater resources to the promotion of their brand and marketing and sales of their products and services; and
|
•
|
devote greater resources to the research and development of their products and services.
|
•
|
a reduction in new sales or subscription renewal rates;
|
•
|
unexpected sales credits or refunds to our clients, loss of clients and other potential liabilities;
|
•
|
delays in client payments, increasing our collection reserve and collection cycle;
|
•
|
diversion of development resources and associated costs;
|
•
|
harm to our reputation and brand; and
|
•
|
unanticipated litigation costs.
|
•
|
political, social, economic or environmental instability, terrorist attacks and security concerns in general;
|
•
|
limitations of local infrastructure;
|
•
|
fluctuations in currency exchange rates;
|
•
|
higher levels of credit risk and payment fraud;
|
•
|
reduced protection for intellectual property rights in some countries;
|
•
|
difficulties in staffing and managing global operations and the increased travel, infrastructure and legal compliance costs associated with multiple international locations;
|
•
|
compliance with statutory equity requirements and management of tax consequences; and
|
•
|
outbreaks of highly contagious diseases.
|
•
|
liability for client costs related to disputed or fraudulent transactions if those costs exceed the amount of the client reserves we have during the clearing period or after renter payments have been settled to our clients;
|
•
|
electronic processing limits on the amount of custodial balances that any single ODFI, or collectively all of our ODFIs, will underwrite;
|
•
|
reliance on sponsor banks, card payment processors and other payment service provider partners to process electronic transactions;
|
•
|
failure by us or our sponsor banks to adhere to applicable laws and regulatory requirements or the standards of the electronic payments rules and regulations and other rules and regulations that may impact the provision of electronic payment services;
|
•
|
continually evolving and developing laws and regulations governing payment processing and money transmission, the application or interpretation of which is not clear in some jurisdictions;
|
•
|
incidences of fraud, a security breach or our failure to comply with required external audit standards;
|
•
|
our inability to increase or modify our fees at times when sponsor banks, electronic payment partners or associations increase their transaction processing fees or impose restrictions on the type, structure or amount of fees we can charge;
|
•
|
repricing actions taken by card associations or payment networks or imposed as a result of governmental regulation or due to competitive pressures, which could negatively impact the prices we can charge customers for our services; and
|
•
|
inconsistent and conflicting laws, regulations and card association or payment network rules that may result in fee structures that cause consumer confusion, complaints or litigation.
|
•
|
variations in our operating results or in expectations regarding our operating results;
|
•
|
variations in operating results of similar companies;
|
•
|
changes in our financial guidance and how our actual results compare to such guidance;
|
•
|
changes in the estimates of our operating results or changes in recommendations by any research analysts that elect to follow our common stock;
|
•
|
announcements of technological innovations, new solutions or enhancements, acquisitions, strategic alliances or agreements by us or by our competitors;
|
•
|
announcements by competitors regarding their entry into new markets, and new product, service and pricing strategies;
|
•
|
marketing, advertising or other initiatives by us or our competitors;
|
•
|
increases or decreases in our sales of products and services for use in the management of units by clients and increases or decreases in the number of units managed by our clients;
|
•
|
threatened or actual litigation;
|
•
|
major changes in our board of directors or management;
|
•
|
recruitment or departure of key personnel;
|
•
|
market conditions in our industry and the economy as a whole;
|
•
|
the overall performance of the equity markets;
|
•
|
sales of our shares of common stock by existing stockholders;
|
•
|
volatility in our stock price, which may lead to higher stock-based expense under applicable accounting standards; and
|
•
|
adoption or modification of regulations, policies, procedures or programs applicable to our business.
|
•
|
a classified board of directors whose members serve staggered three-year terms;
|
•
|
not providing for cumulative voting in the election of directors;
|
•
|
authorizing our board of directors to issue, without stockholder approval, preferred stock with rights senior to those of our common stock;
|
•
|
prohibiting stockholder action by written consent; and
|
•
|
requiring advance notification of stockholder nominations and proposals.
|
By:
|
|
/s/ W. Bryan Hill
|
|
|
W. Bryan Hill
|
|
|
Executive Vice President, Chief Financial Officer and Treasurer
|
Exhibit
|
|
|
|
Incorporated by Reference
|
|
Included
|
||||
Number
|
|
Exhibit Description
|
|
Form
|
|
Date
|
|
Number
|
|
Herewith
|
|
Underwriting Agreement dated May 23, 2018, by and among the Registrant, Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC, Wells Fargo Securities, LLC and RBC Capital Markets, LLC, as representatives of the underwriters
|
|
8-K
|
|
5/25/2018
|
|
1.1
|
|
|
|
|
Acquisition Agreement dated April 19, 2018 by and among Registrant and each of the holders of outstanding membership units of NovelPay LLC, a Delaware limited liability company, other than those owned by ClickPay Services, Inc., a Delaware corporation, and NP Representative, LLC, a Delaware limited liability company, solely in its capacity as the Sellers’ Representative*
|
|
10-Q
|
|
5/10/2018
|
|
2.1
|
|
|
|
|
Agreement and Plan of Merger by and among Registrant, RP Newco XXIII Inc., a Delaware corporation and wholly-owned subsidiary of Registrant, RP Newco XXIV Inc., a Delaware corporation and wholly-owned subsidiary of Registrant, ClickPay Services, Inc., a Delaware corporation and NP Representative, LLC, a Delaware limited liability company, solely in its capacity as the Sellers’ Representative*
|
|
10-Q
|
|
5/10/2018
|
|
2.2
|
|
|
|
|
Amended and Restated Certificate of Incorporation of the Registrant, as amended
|
|
|
|
|
|
|
|
X
|
|
|
Amended and Restated Bylaws of the Registrant
|
|
S-1/A
|
|
7/26/2010
|
|
3.4
|
|
|
|
|
Form of Common Stock certificate of the Registrant
|
|
S-1/A
|
|
7/26/2010
|
|
4.1
|
|
|
|
|
Shareholders’ Agreement among the Registrant and certain stockholders, dated December 1, 1998, as amended July 16, 1999 and November 3, 2000
|
|
S-1
|
|
4/29/2010
|
|
4.2
|
|
|
|
|
Second Amended and Restated Registration Rights Agreement among the Registrant and certain stockholders, dated February 22, 2008
|
|
S-1
|
|
4/29/2010
|
|
4.3
|
|
|
|
|
Indenture between the Registrant and Wells Fargo Bank, National Association, dated May 23, 2017
|
|
10-Q
|
|
8/4/2017
|
|
4.4
|
|
|
|
|
Form of Global Note to represent the 1.50% Convertible Senior Notes due 2022, of the Registrant
|
|
10-Q
|
|
8/4/2017
|
|
4.5
|
|
|
|
|
Form of Warrant Confirmation in connection with 1.50% Convertible Senior Notes due 2022, of the Registrant
|
|
10-Q
|
|
8/4/2017
|
|
4.6
|
|
|
|
|
Form of Call Option Confirmation in connection with 1.50% Convertible Senior Notes due 2022, of the Registrant
|
|
10-Q
|
|
8/4/2017
|
|
4.7
|
|
|
|
|
Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
X
|
|
|
Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
X
|
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**
|
|
|
|
|
|
|
|
X
|
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**
|
|
|
|
|
|
|
|
X
|
|
101.INS
|
|
Instance
|
|
|
|
|
|
|
|
X
|
101.SCH
|
|
Taxonomy Extension Schema
|
|
|
|
|
|
|
|
X
|
101.CAL
|
|
Taxonomy Extension Calculation
|
|
|
|
|
|
|
|
X
|
101.LAB
|
|
Taxonomy Extension Labels
|
|
|
|
|
|
|
|
X
|
101.PRE
|
|
Taxonomy Extension Presentation
|
|
|
|
|
|
|
|
X
|
101.DEF
|
|
Taxonomy Extension Definition
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
||
|
By:
|
/s/ STEPHEN T. WINN
|
|
|
|
Stephen T. Winn
|
|
|
|
Chief Executive Officer
|
4.1
|
Authorized Capital Stock.
The total number of shares of all classes of capital stock that the corporation is authorized to issue is 260,000,000 shares, consisting of 250,000,000 shares of Common Stock, par value $0.001 per share (the “Common Stock”), and 10,000,000 shares of Preferred Stock, par value $0.001 per share (the “Preferred Stock”).
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the period ending
June 30, 2018
of RealPage, 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.
|
/s/ Stephen T. Winn
|
Stephen T. Winn
|
Chairman of the Board of Directors, Chief Executive Officer, President and Director
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the period ending
June 30, 2018
of RealPage, 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
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(d)
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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
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5.
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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):
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(a)
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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
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(b)
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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.
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/s/ W. Bryan Hill
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W. Bryan Hill
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Executive Vice President, Chief Financial Officer and Treasurer
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/s/ Stephen T. Winn
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Stephen T. Winn
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Chairman of the Board of Directors, Chief Executive Officer, President and Director
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/s/ W. Bryan Hill
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W. Bryan Hill
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Executive Vice President, Chief Financial Officer and Treasurer
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