|
|
Delaware
(State or Other Jurisdiction of
Incorporation or Organization)
|
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001-36350
(Commission File Number)
|
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20-2706637
(IRS Employer
Identification No.)
|
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|
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PAGE
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 1.
|
||
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|
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Item 1A.
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||
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Item 2.
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||
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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|
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June 30, 2016
|
|
December 31, 2015
|
||||
|
|
(unaudited)
|
|
|
||||
Assets
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
52,526
|
|
|
$
|
67,049
|
|
Restricted cash
|
|
2,203
|
|
|
2,123
|
|
||
Investments
|
|
43,114
|
|
|
43,571
|
|
||
Accounts receivable, net
|
|
10,576
|
|
|
9,009
|
|
||
Prepaid expenses and other current assets
|
|
6,858
|
|
|
3,058
|
|
||
Deferred solution and other costs, current portion
|
|
6,061
|
|
|
5,968
|
|
||
Deferred implementation costs, current portion
|
|
2,747
|
|
|
2,440
|
|
||
Total current assets
|
|
124,085
|
|
|
133,218
|
|
||
Property and equipment, net
|
|
27,802
|
|
|
24,440
|
|
||
Deferred solution and other costs, net of current portion
|
|
11,828
|
|
|
10,146
|
|
||
Deferred implementation costs, net of current portion
|
|
7,061
|
|
|
6,045
|
|
||
Intangible assets, net
|
|
16,054
|
|
|
17,192
|
|
||
Goodwill
|
|
12,876
|
|
|
12,876
|
|
||
Other long-term assets
|
|
539
|
|
|
551
|
|
||
Total assets
|
|
$
|
200,245
|
|
|
$
|
204,468
|
|
Liabilities and stockholders' equity
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
5,513
|
|
|
$
|
3,450
|
|
Accrued liabilities
|
|
10,754
|
|
|
11,319
|
|
||
Accrued compensation
|
|
10,392
|
|
|
7,712
|
|
||
Deferred revenues, current portion
|
|
25,759
|
|
|
23,051
|
|
||
Capital lease obligations, current portion
|
|
—
|
|
|
161
|
|
||
Total current liabilities
|
|
52,418
|
|
|
45,693
|
|
||
Deferred revenues, net of current portion
|
|
30,988
|
|
|
29,188
|
|
||
Deferred rent, net of current portion
|
|
9,766
|
|
|
7,359
|
|
||
Other long-term liabilities
|
|
222
|
|
|
4,254
|
|
||
Total liabilities
|
|
93,394
|
|
|
86,494
|
|
||
Commitments and contingencies (Note 8)
|
|
|
|
|
||||
Stockholders' equity:
|
|
|
|
|
||||
Preferred stock: $0.0001 par value; 5,000 shares authorized; no shares issued or outstanding as of June 30, 2016 and December 31, 2015
|
|
—
|
|
|
—
|
|
||
Common stock: $0.0001 par value; 150,000 shares authorized; 39,722 issued and 39,713 shares outstanding as of June 30, 2016 and 38,891 shares issued and 38,889 shares outstanding as of December 31, 2015
|
|
4
|
|
|
4
|
|
||
Treasury stock at cost: 9 shares at June 30, 2016 and 2 shares at December 31, 2015
|
|
(200
|
)
|
|
(41
|
)
|
||
Additional paid-in capital
|
|
215,832
|
|
|
207,541
|
|
||
Accumulated other comprehensive income (loss)
|
|
4
|
|
|
(101
|
)
|
||
Accumulated deficit
|
|
(108,789
|
)
|
|
(89,429
|
)
|
||
Total stockholders' equity
|
|
106,851
|
|
|
117,974
|
|
||
Total liabilities and stockholders' equity
|
|
$
|
200,245
|
|
|
$
|
204,468
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenues
|
|
$
|
36,005
|
|
|
$
|
26,284
|
|
|
$
|
69,764
|
|
|
$
|
50,441
|
|
Cost of revenues
(1)
|
|
18,870
|
|
|
14,138
|
|
|
36,684
|
|
|
27,410
|
|
||||
Gross profit
|
|
17,135
|
|
|
12,146
|
|
|
33,080
|
|
|
23,031
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
||||||||
Sales and marketing
(1)
|
|
9,611
|
|
|
6,987
|
|
|
17,818
|
|
|
13,181
|
|
||||
Research and development
(1)
|
|
7,830
|
|
|
4,797
|
|
|
15,733
|
|
|
8,948
|
|
||||
General and administrative
(1)
|
|
7,437
|
|
|
5,344
|
|
|
14,858
|
|
|
10,469
|
|
||||
Acquisition related costs
|
|
1,476
|
|
|
—
|
|
|
2,958
|
|
|
—
|
|
||||
Amortization of acquired intangibles
|
|
368
|
|
|
—
|
|
|
736
|
|
|
—
|
|
||||
Unoccupied lease charges
|
|
33
|
|
|
—
|
|
|
33
|
|
|
—
|
|
||||
Total operating expenses
|
|
26,755
|
|
|
17,128
|
|
|
52,136
|
|
|
32,598
|
|
||||
Loss from operations
|
|
(9,620
|
)
|
|
(4,982
|
)
|
|
(19,056
|
)
|
|
(9,567
|
)
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
|
||||||||
Interest and other income
|
|
87
|
|
|
77
|
|
|
170
|
|
|
121
|
|
||||
Interest and other expense
|
|
(172
|
)
|
|
(65
|
)
|
|
(241
|
)
|
|
(137
|
)
|
||||
Total other income (expense), net
|
|
(85
|
)
|
|
12
|
|
|
(71
|
)
|
|
(16
|
)
|
||||
Loss before income taxes
|
|
(9,705
|
)
|
|
(4,970
|
)
|
|
(19,127
|
)
|
|
(9,583
|
)
|
||||
Provision for income taxes
|
|
(3
|
)
|
|
(12
|
)
|
|
(233
|
)
|
|
(44
|
)
|
||||
Net loss
|
|
$
|
(9,708
|
)
|
|
$
|
(4,982
|
)
|
|
$
|
(19,360
|
)
|
|
$
|
(9,627
|
)
|
Other comprehensive loss:
|
|
|
|
|
|
|
|
|
||||||||
Unrealized gain (loss) on available-for-sale investments
|
|
16
|
|
|
(45
|
)
|
|
105
|
|
|
(36
|
)
|
||||
Comprehensive loss
|
|
$
|
(9,692
|
)
|
|
$
|
(5,027
|
)
|
|
$
|
(19,255
|
)
|
|
$
|
(9,663
|
)
|
Net loss per common share, basic and diluted
|
|
$
|
(0.25
|
)
|
|
$
|
(0.13
|
)
|
|
$
|
(0.49
|
)
|
|
$
|
(0.26
|
)
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted
|
|
39,434
|
|
|
37,232
|
|
|
39,229
|
|
|
36,437
|
|
(1)
|
Includes stock-based compensation expenses as follows:
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Cost of revenues
|
|
$
|
455
|
|
|
$
|
238
|
|
|
$
|
861
|
|
|
$
|
416
|
|
Sales and marketing
|
|
492
|
|
|
344
|
|
|
927
|
|
|
636
|
|
||||
Research and development
|
|
652
|
|
|
217
|
|
|
1,284
|
|
|
379
|
|
||||
General and administrative
|
|
1,258
|
|
|
840
|
|
|
2,390
|
|
|
1,530
|
|
||||
Total stock-based compensation expenses
|
|
$
|
2,857
|
|
|
$
|
1,639
|
|
|
$
|
5,462
|
|
|
$
|
2,961
|
|
|
|
Six Months Ended June 30,
|
||||||
|
|
2016
|
|
2015
|
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net loss
|
|
$
|
(19,360
|
)
|
|
$
|
(9,627
|
)
|
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
|
|
|
|
|
||||
Amortization of deferred implementation, solution and other costs
|
|
3,192
|
|
|
2,117
|
|
||
Depreciation and amortization
|
|
5,871
|
|
|
2,556
|
|
||
Amortization of debt issuance costs
|
|
48
|
|
|
48
|
|
||
Amortization of premiums on investments
|
|
221
|
|
|
108
|
|
||
Stock-based compensation expenses
|
|
5,462
|
|
|
2,961
|
|
||
Deferred income taxes
|
|
139
|
|
|
—
|
|
||
Allowance for sales credits
|
|
43
|
|
|
(7
|
)
|
||
Loss on disposal of long-lived assets
|
|
102
|
|
|
—
|
|
||
Unoccupied lease charges
|
|
33
|
|
|
—
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
||||
Accounts receivable, net
|
|
(1,608
|
)
|
|
(1,972
|
)
|
||
Prepaid expenses and other current assets
|
|
(3,884
|
)
|
|
90
|
|
||
Deferred solution and other costs
|
|
(3,229
|
)
|
|
(1,806
|
)
|
||
Deferred implementation costs
|
|
(3,062
|
)
|
|
(1,676
|
)
|
||
Other long-term assets
|
|
(20
|
)
|
|
(50
|
)
|
||
Accounts payable
|
|
967
|
|
|
1,488
|
|
||
Accrued liabilities
|
|
5,030
|
|
|
(174
|
)
|
||
Deferred revenues
|
|
4,509
|
|
|
6,662
|
|
||
Deferred rent and other long-term liabilities
|
|
3,157
|
|
|
(387
|
)
|
||
Net cash (used in) provided by operating activities
|
|
(2,389
|
)
|
|
331
|
|
||
Cash flows from investing activities:
|
|
|
|
|
||||
Purchases of investments
|
|
(20,618
|
)
|
|
(39,173
|
)
|
||
Maturities of investments
|
|
20,959
|
|
|
10,833
|
|
||
Purchases of property and equipment
|
|
(8,745
|
)
|
|
(2,321
|
)
|
||
Business combinations, net of cash acquired
|
|
(95
|
)
|
|
—
|
|
||
Capitalized software development costs
|
|
(1,190
|
)
|
|
—
|
|
||
Purchases of other intangible assets
|
|
(138
|
)
|
|
—
|
|
||
Decrease in restricted cash
|
|
—
|
|
|
116
|
|
||
Net cash used in investing activities
|
|
(9,827
|
)
|
|
(30,545
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
||||
Payments on financing obligations
|
|
(4,890
|
)
|
|
(2,205
|
)
|
||
Payments on capital lease obligations
|
|
(161
|
)
|
|
(230
|
)
|
||
Proceeds from the issuance of common stock, net of issuance costs
|
|
(8
|
)
|
|
32,333
|
|
||
Proceeds from exercise of stock options to purchase common stock
|
|
2,911
|
|
|
1,713
|
|
||
Shares acquired to settle the exercise of stock options
|
|
(159
|
)
|
|
(7
|
)
|
||
Net cash (used in) provided by financing activities
|
|
(2,307
|
)
|
|
31,604
|
|
||
Net (decrease) increase in cash and cash equivalents
|
|
(14,523
|
)
|
|
1,390
|
|
||
Cash and cash equivalents, beginning of period
|
|
67,049
|
|
|
67,979
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
52,526
|
|
|
$
|
69,369
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
|
||||
Cash paid for taxes
|
|
$
|
72
|
|
|
$
|
60
|
|
Cash paid for interest
|
|
$
|
120
|
|
|
$
|
105
|
|
Computer hardware and equipment
|
|
3 - 5 years
|
Purchased software and licenses
|
|
3 - 5 years
|
Furniture and fixtures
|
|
7 years
|
Leasehold improvements
|
|
Lesser of estimated useful life or lease term
|
•
|
there is persuasive evidence of an arrangement;
|
•
|
the service has been or is being provided to the customer;
|
•
|
the collection of the fees is reasonably assured; and
|
•
|
the amount of fees to be paid by the customer is fixed or determinable.
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Numerators:
|
|
|
|
|
|
|
|
|
||||||||
Net loss
|
|
$
|
(9,708
|
)
|
|
$
|
(4,982
|
)
|
|
$
|
(19,360
|
)
|
|
$
|
(9,627
|
)
|
Denominator:
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding, basic and diluted
|
|
39,434
|
|
|
37,232
|
|
|
39,229
|
|
|
36,437
|
|
||||
Net loss per common share, basic and diluted
|
|
$
|
(0.25
|
)
|
|
$
|
(0.13
|
)
|
|
$
|
(0.49
|
)
|
|
$
|
(0.26
|
)
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
Stock options and restricted stock units
|
|
5,752
|
|
|
5,861
|
|
|
5,752
|
|
|
5,861
|
|
•
|
Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities;
|
•
|
Level 2—Inputs other than quoted prices included within Level 1 that are observable, unadjusted quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data; and
|
•
|
Level 3—Unobservable inputs that are supported by little or no market activity, which requires the Company to develop its own assumptions.
|
|
|
|
|
Fair Value Measurements Using:
|
||||||||||||
Cash Equivalents:
|
|
Fair Value
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1) |
|
Significant Other Observable Inputs
(Level 2) |
|
Significant Unobservable Inputs
(Level 3) |
||||||||
Money market funds
|
|
$
|
6,860
|
|
|
$
|
6,860
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Investments:
|
|
Fair Value
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1) |
|
Significant Other Observable Inputs
(Level 2) |
|
Significant Unobservable Inputs
(Level 3) |
||||||||
U.S. treasuries and agency bonds
|
|
$
|
13,006
|
|
|
$
|
—
|
|
|
$
|
13,006
|
|
|
$
|
—
|
|
Corporate bonds and commercial paper
|
|
17,845
|
|
|
—
|
|
|
17,845
|
|
|
—
|
|
||||
Certificates of deposit
|
|
12,720
|
|
|
—
|
|
|
12,720
|
|
|
—
|
|
||||
|
|
$
|
43,571
|
|
|
$
|
—
|
|
|
$
|
43,571
|
|
|
$
|
—
|
|
Cash Equivalents:
|
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
||||||||
Money market funds
|
|
$
|
7,577
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,577
|
|
|
|
|
|
|
|
|
|
|
||||||||
Investments:
|
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
||||||||
U.S. government agency bonds
|
|
$
|
14,054
|
|
|
$
|
3
|
|
|
$
|
(1
|
)
|
|
$
|
14,056
|
|
Corporate bonds and commercial paper
|
|
15,676
|
|
|
6
|
|
|
(4
|
)
|
|
15,678
|
|
||||
Certificates of deposit
|
|
13,380
|
|
|
—
|
|
|
—
|
|
|
13,380
|
|
||||
|
|
$
|
43,110
|
|
|
$
|
9
|
|
|
$
|
(5
|
)
|
|
$
|
43,114
|
|
Cash Equivalents:
|
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
||||||||
Money market funds
|
|
$
|
6,860
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,860
|
|
|
|
|
|
|
|
|
|
|
||||||||
Investments:
|
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
||||||||
U.S. government agency bonds
|
|
$
|
13,044
|
|
|
$
|
—
|
|
|
$
|
(38
|
)
|
|
$
|
13,006
|
|
Corporate bonds and commercial paper
|
|
17,908
|
|
|
—
|
|
|
(63
|
)
|
|
17,845
|
|
||||
Certificates of deposit
|
|
12,720
|
|
|
—
|
|
|
—
|
|
|
12,720
|
|
||||
|
|
$
|
43,672
|
|
|
$
|
—
|
|
|
$
|
(101
|
)
|
|
$
|
43,571
|
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
Due within one year or less
|
|
$
|
28,035
|
|
|
$
|
22,737
|
|
Due after one year through five years
|
|
15,079
|
|
|
20,834
|
|
||
|
|
$
|
43,114
|
|
|
$
|
43,571
|
|
|
|
Adjusted Cost
|
|
Gross Unrealized Loss
|
|
Fair Value
|
||||||
U.S. government agency bonds
|
|
$
|
2,503
|
|
|
$
|
(1
|
)
|
|
$
|
2,502
|
|
Corporate bonds and commercial paper
|
|
10,053
|
|
|
(4
|
)
|
|
10,049
|
|
|||
|
|
$
|
12,556
|
|
|
$
|
(5
|
)
|
|
$
|
12,551
|
|
|
|
Adjusted Cost
|
|
Gross Unrealized Loss
|
|
Fair Value
|
||||||
U.S. government agency bonds
|
|
$
|
13,044
|
|
|
$
|
(38
|
)
|
|
$
|
13,006
|
|
Corporate bonds and commercial paper
|
|
16,907
|
|
|
(63
|
)
|
|
16,844
|
|
|||
|
|
$
|
29,951
|
|
|
$
|
(101
|
)
|
|
$
|
29,850
|
|
|
|
Operating Leases
|
||
Year Ended December 31,
|
|
|
||
2016 (from July 1 to December 31)
|
|
$
|
2,439
|
|
2017
|
|
5,545
|
|
|
2018
|
|
5,538
|
|
|
2019
|
|
5,540
|
|
|
2020
|
|
5,564
|
|
|
Thereafter
|
|
29,371
|
|
|
Total minimum lease payments
|
|
$
|
53,997
|
|
|
|
Contractual Commitments
|
||
Year Ended December 31,
|
|
|
||
2016 (from July 1 to December 31)
|
|
$
|
3,954
|
|
2017
|
|
7,785
|
|
|
2018
|
|
7,211
|
|
|
2019
|
|
6,061
|
|
|
2020
|
|
5,437
|
|
|
Thereafter
|
|
—
|
|
|
Total commitments
|
|
$
|
30,448
|
|
|
|
Number of Options
|
|
Weighted Average Exercise Price
|
|||
Balance as of January 1, 2016
|
|
5,044
|
|
|
$
|
8.84
|
|
Granted
|
|
550
|
|
|
20.75
|
|
|
Exercised
|
|
(776
|
)
|
|
3.64
|
|
|
Forfeited
|
|
(24
|
)
|
|
11.97
|
|
|
Balance as of June 30, 2016
|
|
4,794
|
|
|
$
|
11.03
|
|
|
|
Number of Shares
|
|
Weighted Average Grant Date Fair Value
|
|||
Nonvested as of January 1, 2016
|
|
716
|
|
|
$
|
26.19
|
|
Granted
|
|
333
|
|
|
22.06
|
|
|
Vested
|
|
(54
|
)
|
|
20.91
|
|
|
Forfeited
|
|
(37
|
)
|
|
27.17
|
|
|
Nonvested as of June 30, 2016
|
|
958
|
|
|
$
|
25.01
|
|
•
|
adjusted EBITDA is widely used by investors and securities analysts to measure a company's operating performance without regard to items that can vary substantially from company to company depending upon their financing, capital structures and the method by which assets were acquired;
|
•
|
our management uses adjusted EBITDA in conjunction with GAAP financial measures for planning purposes, in the preparation of our annual operating budget, as a measure of our operating performance, to assess the effectiveness of our business strategies and to communicate with our board of directors concerning our financial performance;
|
•
|
adjusted EBITDA provides more consistency and comparability with our past financial performance, facilitates period-to-period comparisons of our operations and also facilitates comparisons with other companies, many of which use similar non-GAAP financial measures to supplement their GAAP results; and
|
•
|
our investor and analyst presentations include adjusted EBITDA as a supplemental measure of our overall operating performance.
|
•
|
depreciation and amortization are non-cash charges, and the assets being depreciated or amortized will often have to be replaced in the future and adjusted EBITDA does not reflect cash requirements for such replacements;
|
•
|
adjusted EBITDA may not reflect changes in, or cash requirements for, our working capital needs or contractual commitments;
|
•
|
adjusted EBITDA does not reflect the potentially dilutive impact of stock-based compensation;
|
•
|
adjusted EBITDA does not reflect interest or tax payments that could reduce cash available for use; and
|
•
|
other companies, including companies in our industry, might calculate adjusted EBITDA or similarly titled measures differently, which reduces their usefulness as comparative measures.
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Reconciliation of net loss to adjusted EBITDA:
|
|
|
|
|
|
|
|
|
||||||||
Net loss
|
|
$
|
(9,708
|
)
|
|
$
|
(4,982
|
)
|
|
$
|
(19,360
|
)
|
|
$
|
(9,627
|
)
|
Depreciation and amortization
|
|
2,944
|
|
|
1,353
|
|
|
5,871
|
|
|
2,556
|
|
||||
Stock-based compensation expense
|
|
2,857
|
|
|
1,639
|
|
|
5,462
|
|
|
2,961
|
|
||||
Provision for income taxes
|
|
3
|
|
|
12
|
|
|
233
|
|
|
44
|
|
||||
Interest and other (income) expense, net
|
|
85
|
|
|
(12
|
)
|
|
71
|
|
|
16
|
|
||||
Acquisition related costs
|
|
1,476
|
|
|
—
|
|
|
2,958
|
|
|
—
|
|
||||
Unoccupied lease charges
|
|
33
|
|
|
—
|
|
|
33
|
|
|
—
|
|
||||
Adjusted EBITDA
|
|
$
|
(2,310
|
)
|
|
$
|
(1,990
|
)
|
|
$
|
(4,732
|
)
|
|
$
|
(4,050
|
)
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenues
|
|
$
|
36,005
|
|
|
$
|
26,284
|
|
|
$
|
69,764
|
|
|
$
|
50,441
|
|
Cost of revenues
(1)(2)
|
|
18,870
|
|
|
14,138
|
|
|
36,684
|
|
|
27,410
|
|
||||
Gross profit
|
|
17,135
|
|
|
12,146
|
|
|
33,080
|
|
|
23,031
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
||||||||
Sales and marketing
(2)
|
|
9,611
|
|
|
6,987
|
|
|
17,818
|
|
|
13,181
|
|
||||
Research and development
(2)
|
|
7,830
|
|
|
4,797
|
|
|
15,733
|
|
|
8,948
|
|
||||
General and administrative
(2)
|
|
7,437
|
|
|
5,344
|
|
|
14,858
|
|
|
10,469
|
|
||||
Acquisition related costs
|
|
1,476
|
|
|
—
|
|
|
2,958
|
|
|
—
|
|
||||
Amortization of acquired intangibles
|
|
368
|
|
|
—
|
|
|
736
|
|
|
—
|
|
||||
Unoccupied lease charges
|
|
33
|
|
|
—
|
|
|
33
|
|
|
—
|
|
||||
Total operating expenses
|
|
26,755
|
|
|
17,128
|
|
|
52,136
|
|
|
32,598
|
|
||||
Loss from operations
|
|
(9,620
|
)
|
|
(4,982
|
)
|
|
(19,056
|
)
|
|
(9,567
|
)
|
||||
Total other income (expense), net
|
|
(85
|
)
|
|
12
|
|
|
(71
|
)
|
|
(16
|
)
|
||||
Loss before income taxes
|
|
(9,705
|
)
|
|
(4,970
|
)
|
|
(19,127
|
)
|
|
(9,583
|
)
|
||||
Provision for income taxes
|
|
(3
|
)
|
|
(12
|
)
|
|
(233
|
)
|
|
(44
|
)
|
||||
Net loss
|
|
$
|
(9,708
|
)
|
|
$
|
(4,982
|
)
|
|
$
|
(19,360
|
)
|
|
$
|
(9,627
|
)
|
(1)
|
Includes amortization of acquired technology of
$0.8 million
and zero for the
three months ended June 30, 2016
and
2015
, respectively, and
$1.6 million
and zero for the
six months ended June 30, 2016
and 2015, respectively.
|
(2)
|
Includes stock-based compensation expenses as follows (in thousands):
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Cost of revenues
|
|
$
|
455
|
|
|
$
|
238
|
|
|
$
|
861
|
|
|
$
|
416
|
|
Sales and marketing
|
|
492
|
|
|
344
|
|
|
927
|
|
|
636
|
|
||||
Research and development
|
|
652
|
|
|
217
|
|
|
1,284
|
|
|
379
|
|
||||
General and administrative
|
|
1,258
|
|
|
840
|
|
|
2,390
|
|
|
1,530
|
|
||||
Total stock-based compensation expenses
|
|
$
|
2,857
|
|
|
$
|
1,639
|
|
|
$
|
5,462
|
|
|
$
|
2,961
|
|
(1)
|
Includes amortization of acquired technology of
2.2%
and zero for the
three months ended June 30, 2016
and
2015
, respectively, and
2.3%
and zero for the
six months ended June 30, 2016
and 2015, respectively.
|
(2)
|
Includes stock-based compensation expenses as follows:
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
Cost of revenues
|
|
1.3
|
%
|
|
0.9
|
%
|
|
1.2
|
%
|
|
0.8
|
%
|
Sales and marketing
|
|
1.4
|
|
|
1.3
|
|
|
1.3
|
|
|
1.3
|
|
Research and development
|
|
1.8
|
|
|
0.8
|
|
|
1.8
|
|
|
0.8
|
|
General and administrative
|
|
3.5
|
|
|
3.2
|
|
|
3.4
|
|
|
3.0
|
|
Total stock-based compensation expenses
|
|
8.0
|
%
|
|
6.2
|
%
|
|
7.7
|
%
|
|
5.9
|
%
|
|
|
Three Months Ended June 30,
|
|
Change
|
|
Six Months Ended June 30,
|
|
Change
|
||||||||||||||||||||||
|
|
2016
|
|
2015
|
|
$
|
|
(%)
|
|
2016
|
|
2015
|
|
$
|
|
(%)
|
||||||||||||||
Revenues
|
|
$
|
36,005
|
|
|
$
|
26,284
|
|
|
$
|
9,721
|
|
|
37.0
|
%
|
|
$
|
69,764
|
|
|
$
|
50,441
|
|
|
$
|
19,323
|
|
|
38.3
|
%
|
|
|
Three Months Ended June 30,
|
|
Change
|
|
Six Months Ended June 30,
|
|
Change
|
||||||||||||||||||||||
|
|
2016
|
|
2015
|
|
$
|
|
(%)
|
|
2016
|
|
2015
|
|
$
|
|
(%)
|
||||||||||||||
Cost of revenues
|
|
$
|
18,870
|
|
|
$
|
14,138
|
|
|
$
|
4,732
|
|
|
33.5
|
%
|
|
$
|
36,684
|
|
|
$
|
27,410
|
|
|
$
|
9,274
|
|
|
33.8
|
%
|
Percentage of revenues
|
|
52.4
|
%
|
|
53.8
|
%
|
|
|
|
|
|
52.6
|
%
|
|
54.3
|
%
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Change
|
|
Six Months Ended June 30,
|
|
Change
|
||||||||||||||||||||||
|
|
2016
|
|
2015
|
|
$
|
|
(%)
|
|
2016
|
|
2015
|
|
$
|
|
(%)
|
||||||||||||||
Sales and marketing
|
|
$
|
9,611
|
|
|
$
|
6,987
|
|
|
$
|
2,624
|
|
|
37.6
|
%
|
|
$
|
17,818
|
|
|
$
|
13,181
|
|
|
$
|
4,637
|
|
|
35.2
|
%
|
Percentage of revenues
|
|
26.7
|
%
|
|
26.6
|
%
|
|
|
|
|
|
25.5
|
%
|
|
26.1
|
%
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Change
|
|
Six Months Ended June 30,
|
|
Change
|
||||||||||||||||||||||
|
|
2016
|
|
2015
|
|
$
|
|
(%)
|
|
2016
|
|
2015
|
|
$
|
|
(%)
|
||||||||||||||
Research and development
|
|
$
|
7,830
|
|
|
$
|
4,797
|
|
|
$
|
3,033
|
|
|
63.2
|
%
|
|
$
|
15,733
|
|
|
$
|
8,948
|
|
|
$
|
6,785
|
|
|
75.8
|
%
|
Percentage of revenues
|
|
21.7
|
%
|
|
18.3
|
%
|
|
|
|
|
|
22.6
|
%
|
|
17.7
|
%
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Change
|
|
Six Months Ended June 30,
|
|
Change
|
||||||||||||||||||||||
|
|
2016
|
|
2015
|
|
$
|
|
(%)
|
|
2016
|
|
2015
|
|
$
|
|
(%)
|
||||||||||||||
General and administrative
|
|
$
|
7,437
|
|
|
$
|
5,344
|
|
|
$
|
2,093
|
|
|
39.2
|
%
|
|
$
|
14,858
|
|
|
$
|
10,469
|
|
|
$
|
4,389
|
|
|
41.9
|
%
|
Percentage of revenues
|
|
20.7
|
%
|
|
20.3
|
%
|
|
|
|
|
|
21.3
|
%
|
|
20.8
|
%
|
|
|
|
|
|
|
Three months ended June 30,
|
|
Change
|
|
Six Months Ended June 30,
|
|
Change
|
||||||||||||||||||||||
|
|
2016
|
|
2015
|
|
$
|
|
(%)
|
|
2016
|
|
2015
|
|
$
|
|
(%)
|
||||||||||||||
Acquisition related costs
|
|
$
|
1,476
|
|
|
$
|
—
|
|
|
$
|
1,476
|
|
|
100.0
|
%
|
|
$
|
2,958
|
|
|
$
|
—
|
|
|
$
|
2,958
|
|
|
100.0
|
%
|
Percentage of revenues
|
|
4.1
|
%
|
|
—
|
%
|
|
|
|
|
|
4.2
|
%
|
|
—
|
%
|
|
|
|
|
|
|
Three months ended June 30,
|
|
Change
|
|
Six Months Ended June 30,
|
|
Change
|
||||||||||||||||||||||
|
|
2016
|
|
2015
|
|
$
|
|
(%)
|
|
2016
|
|
2015
|
|
$
|
|
(%)
|
||||||||||||||
Amortization of acquired intangibles
|
|
$
|
368
|
|
|
$
|
—
|
|
|
$
|
368
|
|
|
100.0
|
%
|
|
$
|
736
|
|
|
$
|
—
|
|
|
$
|
736
|
|
|
100.0
|
%
|
Percentage of revenues
|
|
1.0
|
%
|
|
—
|
%
|
|
|
|
|
|
1.1
|
%
|
|
—
|
%
|
|
|
|
|
|
|
Six Months Ended June 30,
|
||||||
|
|
2016
|
|
2015
|
||||
Net cash (used in) provided by:
|
|
|
|
|
||||
Operating activities
|
|
$
|
(2,389
|
)
|
|
$
|
331
|
|
Investing activities
|
|
(9,827
|
)
|
|
(30,545
|
)
|
||
Financing activities
|
|
(2,307
|
)
|
|
31,604
|
|
||
Net (decrease) increase in cash and cash equivalents
|
|
$
|
(14,523
|
)
|
|
$
|
1,390
|
|
|
|
Payment due by period
|
||||||||||||||||||
|
|
Less Than 1 Year
|
|
1 to 3 Years
|
|
3 to 5 Years
|
|
More Than 5 Years
|
|
Total
|
||||||||||
Interest payments - line of credit
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13
|
|
Operating lease obligations
|
|
5,206
|
|
|
11,067
|
|
|
10,927
|
|
|
26,797
|
|
|
53,997
|
|
|||||
Purchase commitments
|
|
7,756
|
|
|
14,538
|
|
|
8,154
|
|
|
—
|
|
|
30,448
|
|
|||||
Acquisition hold back
|
|
2,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,500
|
|
|||||
|
|
$
|
15,475
|
|
|
$
|
25,605
|
|
|
$
|
19,081
|
|
|
$
|
26,797
|
|
|
$
|
86,958
|
|
•
|
Revenue recognition;
|
•
|
Deferred revenues;
|
•
|
Deferred implementation costs;
|
•
|
Deferred solution and other costs;
|
•
|
Accounts receivable, net;
|
•
|
Stock-based compensation;
|
•
|
Purchase price allocation, intangible assets and goodwill;
|
•
|
Capitalization of software development costs; and
|
•
|
Income taxes.
|
•
|
the last day of its fiscal year following the fifth anniversary of the date of its initial public offering of common equity securities;
|
•
|
the last day of its fiscal year in which it has annual gross revenue of $1.0 billion or more;
|
•
|
the date on which it has, during the previous three-year period, issued more than $1.0 billion in non-convertible debt; and
|
•
|
the date on which it is deemed to be a "large accelerated filer," which will occur at such time as the company (a) has an aggregate worldwide market value of common equity securities held by non-affiliates of $700 million or more as of the last business day of its most recently completed second fiscal quarter, (b) has been required to file annual and quarterly reports under the Exchange Act for a period of at least 12 months and (c) has filed at least one annual report pursuant to the Exchange Act.
|
•
|
compliance with the auditor attestation requirements in the assessment of our internal control over financial reporting;
|
•
|
compliance with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements;
|
•
|
full disclosure obligations regarding executive compensation; and
|
•
|
compliance with the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
|
|
|
Total Number of Shares Purchased
(1)
|
|
Average Price Paid Per Share
(2)
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Approximate Dollar Value of Shares That May Be Purchased Under the Plans or Programs
|
|||||||
April 1 - 30, 2016
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
May 1 - 31, 2016
|
|
6,710
|
|
|
22.73
|
|
|
—
|
|
|
—
|
|
|||
June 1 - 30, 2016
|
|
112
|
|
|
27.88
|
|
|
—
|
|
|
—
|
|
|||
Total
|
|
6,822
|
|
|
$
|
22.81
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
Total shares purchased are attributable to shares of common stock tendered to us by one or more holders of common stock options to cover the exercise price of options exercised.
|
(2)
|
Reflects the closing price of Q2 shares as reported on the New York Stock Exchange on the date of exercise.
|
|
|
Q2 HOLDINGS, INC.
|
||
August 4, 2016
|
|
By:
|
|
/s/ MATTHEW P. FLAKE
Matthew P. Flake
President and Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
|
|
August 4, 2016
|
|
By:
|
|
/s/ JENNIFER N. HARRIS
Jennifer N. Harris
Chief Financial Officer
(Principal Financial and Accounting Officer)
|
Exhibit Number
|
|
Description of Document
|
|
|
|
3.1
|
*
|
Fourth Amended and Restated Certificate of Incorporation of the Registrant (filed as Exhibit 3.2 of the Registrant’s Form S-1 Registration Statement (Registration No. 333-193911)).
|
|
|
|
3.2
|
*
|
Amended and Restated Bylaws of the Registrant (filed as Exhibit 3.4 of the Registrant’s Form S-1 Registration Statement (Registration No. 333-193911)).
|
|
|
|
10.1
|
**
|
Amendment Number Four to Credit Agreement, dated effective March 31, 2016, by and among Wells Fargo Bank, National Association, as administrative agent for the lenders named therein, Q2 Holdings, Inc., and Q2 Software, Inc.
|
|
|
|
31.1
|
**
|
Certification of Chief Executive Officer pursuant to Exchange Act Rule, 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2
|
**
|
Certification of Chief Financial Officer pursuant to Exchange Act Rule, 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1
|
#
|
Certification pursuant to 18 U.S.C. 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by Chief Executive Officer.
|
|
|
|
32.2
|
#
|
Certification pursuant to 18 U.S.C. 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by Chief Financial Officer.
|
|
|
|
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.
|
PARENT:
|
Q2 HOLDINGS, INC.
,
a Delaware corporation
By:
/s/ Jennifer Harris
Name: Jennifer Harris
Title: Chief Financial Officer
|
BORROWER:
|
Q2 SOFTWARE, INC.
,
a Delaware corporation
By:
/s/ Jennifer Harris
Name: Jennifer Harris
Title: Chief Financial Officer
|
|
|
GUARANTORS:
|
CENTRIX SOLUTIONS, LLC,
a Nebraska limited liability company
By:
/s/ Jennifer Harris
Name: Jennifer Harris
Title: Chief Financial Officer
|
|
SMARTYPIG, L.L.C.,
an Iowa limited liability company
By:
/s/ Jennifer Harris
Name: Jennifer Harris
Title: Chief Financial Officer
|
|
WELLS FARGO BANK,
NATIONAL ASSOCIATION,
as Agent and a Lender
By:
/s/ Nichol Shuart
Name: Nichol Shuart
Title: Director
|
Date: August 4, 2016
|
|
/s/ MATTHEW P. FLAKE
|
|
|
Matthew P. Flake
|
|
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
Date: August 4, 2016
|
|
/s/ JENNIFER N. HARRIS
|
|
|
Jennifer N. Harris
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial and Accounting Officer)
|
Date: August 4, 2016
|
|
/s/ MATTHEW P. FLAKE
|
|
|
Matthew P. Flake
|
|
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
Date: August 4, 2016
|
|
/s/ JENNIFER N. HARRIS
|
|
|
Jennifer N. Harris
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial and Accounting Officer)
|