ý | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 13-3895178 |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification Number) |
Title of Each Class | Name of Each Exchange on which Registered | |
Common Stock, par value $0.01 per share | New York Stock Exchange |
Large Accelerated Filer o | Accelerated Filer x |
Non-Accelerated Filer o (Do not check if a smaller reporting company) | Smaller Reporting Company o |
Emerging growth company o |
Page | |
• | Focus on our customers' individual planning experiences: Our 20 year history of serving couples has positioned us well to understand the needs of a large variety of users. From that, we have created a platform that can provide a unique planning experience for every user. By focusing on each couple's special journey, we will continue to increase engagement between our couples and business partners, providing both with increasing value. |
• | Deliver the world's best local wedding marketplace: Our marketplace products provide our local wedding professionals with marketing services that help them build and grow their businesses. We plan to launch more features that unlock more sales inventory, increase quality leads, and provide our pros with improved marketing opportunities. |
• | Increase transaction revenue: We will continue the growth of our transaction revenue by offering industry-leading wedding websites and registry creation and aggregation tools for couples, while making it easy for guests to purchase gifts for the couple. We will also continue to integrate revenue-generating third-party products and services to facilitate our couples' wedding planning, including invitations, reception decor, hotel room blocks, and more. |
• | Manage national online advertising and publishing for profit: We will profitably manage our national online and print businesses through the challenges of industry declines while continuing to look for creative new products to offer our advertising partners. |
• | Invest for the future while pursuing a measured capital allocation strategy: We operate in an ever-evolving industry. In order to ensure we are even more relevant and competitive, we will continue to invest in initiatives that complement our existing business and enhance the experience of our couples, guests, local professionals and partners, which we believe will drive significant results in future years. Our capital allocation strategy is to balance internal investments, strategic investments, mergers and acquisitions, and stock repurchases. |
• | Live our values: Our values define how we manage our business and make decisions. Our core values are Loving our Users, Doing the Right Thing, Debating It, Owning Our Outcomes, Making Fast Decisions, and Getting Better. We believe these values are essential to our ability to build a high-performing company that makes us proud and creates shareholder value. |
• | Field the best team in the game: We are as good as our people, and we have some of the best in the world. We will continue to hire, coach, develop, and support the most talented and effective team in the industry. |
• | the level of online usage and traffic on our digital properties; |
• | the addition or loss of advertisers; |
• | the advertising budgeting cycles of specific advertisers; |
• | the willingness and ability of our consumers and vendors to transact on our properties; |
• | the regional and national magazines’ publishing cycles; |
• | the amount and timing of capital expenditures and other costs relating to the expansion of our operations, including those related to acquisitions; |
• | the introduction of new sites and services by us or our competitors; |
• | changes in our pricing policies or the pricing policies of our competitors; and |
• | general economic conditions, as well as economic conditions specific to the Internet, online and offline media and transactions. |
• | stand-alone online services, websites, mobile apps or blogs targeted at brides and grooms, such as those offered by WeddingWire, Weddingbee, Honeybook, Zola, Thumbtack, and MyWedding.com, and at new parents, such as Johnson & Johnson’s BabyCenter and others; |
• | online and brick and mortar retail stores, manufacturers and regional directories; |
• | wedding sub-domains, channels or niche sites of major online destinations or portals, such as Pinterest, Amazon, Google and AOL’s Huffington Post and Style Me Pretty; |
• | bridal magazines and their online destinations, such as Condé Nast’s Brides, and Sequential Brands Group's Martha Stewart Weddings; |
• | parenting magazines and their online destinations; and |
• | online and retail stores offering gift registries, especially from retailers offering specific gift registries. |
• | ability to attract, retain and engage consumers and vendors, as well as maintain user engagement; |
• | volume of transactions and price and selection of products and services; |
• | trust in the vendor and the transaction; |
• | customer service (both that provided by us and that provided by the vendors in our marketplace); |
• | brand recognition; |
• | website, mobile platform and application ease-of-use and accessibility; |
• | system reliability; |
• | level of service fees; and |
• | ease of use and quality of search tools. |
• | difficulties in staffing and managing our current and future foreign operations; |
• | challenges caused by language, cultural differences and by doing business with foreign agencies and governments; |
• | changes in regulatory requirements and uncertainty regarding liability for services and content, including data privacy and cybersecurity issues; |
• | tariffs and other trade barriers; |
• | fluctuations in currency exchange rates and foreign exchange controls |
• | adverse tax consequences; |
• | stringent local labor laws and regulations; and |
• | political or social unrest or economic instability. |
Location | Use | Approximate Square Footage | Lease Expiration | ||||
New York, New York | Principal executive office | 64,000 | August 2022 | ||||
Austin, Texas | Information technology | 17,300 | March 2024 | ||||
Omaha, Nebraska | Local sales and operations | 16,400 | January 2021 | ||||
Guangzhou, China | Technology development | 13,400 | April 2021 | ||||
South Norwalk, Connecticut (occupancy to commence early 2018) | Local sales and operations | 7,200 | May 2025 | ||||
South Norwalk, Connecticut (vacating in early 2018) | Local sales and operations | 4,300 | February 2018 | ||||
Los Angeles, California | National sales | 800 | January 2018 | ||||
Wanchai, Hong Kong | Technology management | 300 | January 2019 | ||||
Chicago, Illinois | National sales | 200 | February 2019 |
High | Low | |||||||
2016: | ||||||||
First quarter | $ | 16.36 | $ | 13.64 | ||||
Second quarter | 18.18 | 15.31 | ||||||
Third quarter | 19.57 | 17.00 | ||||||
Fourth quarter | 20.89 | 15.76 | ||||||
2017: | ||||||||
First quarter | 20.99 | 14.99 | ||||||
Second quarter | 18.10 | 16.06 | ||||||
Third quarter | 19.94 | 17.29 | ||||||
Fourth quarter | 20.96 | 18.21 |
Period | Total Number of Shares Purchased(a) | Average Price Paid per Share(b) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (c) | Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (d) | ||||||||||
October 1 to October 31, 2017 | 2,164 | $ | 19.96 | — | $ | 12,312,078 | ||||||||
November 1 to November 30, 2017 | 19,922 | $ | 19.41 | — | $ | 12,312,078 | ||||||||
December 1 to December 31, 2017 | 7,636 | $ | 18.80 | — | $ | 12,312,078 | ||||||||
Total | 29,722 | — |
(a) | The terms of some awards granted under certain of our stock incentive plans allow participants to surrender or deliver shares of XO Group's common stock to us to satisfy statutory income tax withholding obligations related to the vesting of those awards. The shares listed in the table above represent the surrender or delivery of shares to us in connection with such exercise price payments or tax withholding obligations. |
(b) | For purposes of this table, the "price paid per share" is determined by reference to the closing sales price per share of XO Group's common stock on the New York Stock Exchange on the date of surrender, delivery or repurchase (or on the last date preceding such surrender, delivery or repurchase for which such reported price exists) of shares withheld to satisfy tax withholding obligations and shares repurchased, as described below. |
(c), (d) | On April 10, 2013, we announced that our Board of Directors had authorized the repurchase of up to $20.0 million of our common stock. On May 23, 2016, our Board of Directors authorized an additional $20.0 million repurchase of our common stock from time to time on the open market or in privately negotiated transactions. The repurchase program may be suspended or discontinued at any time, but it does not have an expiration date. As of December 31, 2017, we have repurchased a total of 1,640,012 shares of our common stock under this program for $27.7 million. |
Year Ended December 31, | ||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
(in thousands, except for per share data) | ||||||||||||||||||||
Consolidated Statements of Operations Data: | ||||||||||||||||||||
Net revenue: | ||||||||||||||||||||
Local online advertising | $ | 78,358 | $ | 70,239 | $ | 65,941 | $ | 59,093 | $ | 54,445 | ||||||||||
National online advertising | 37,429 | 38,945 | 35,764 | 30,456 | 27,216 | |||||||||||||||
Total online advertising | 115,787 | 109,184 | 101,705 | 89,549 | 81,661 | |||||||||||||||
Transactions | 27,106 | 22,819 | 14,700 | 10,370 | 7,926 | |||||||||||||||
Publishing and other | 17,663 | 20,113 | 24,361 | 27,837 | 25,821 | |||||||||||||||
Merchandise(a) | — | — | 878 | 15,908 | 18,406 | |||||||||||||||
Total net revenues(a) | 160,556 | 152,116 | 141,644 | 143,664 | 133,814 | |||||||||||||||
Gross profit | 150,032 | 142,362 | 131,257 | 122,469 | 111,413 | |||||||||||||||
Operating expenses(b) | 135,842 | 124,496 | 114,021 | 113,572 | 98,906 | |||||||||||||||
Income from operations(b) | 14,190 | 17,866 | 17,236 | 8,897 | 12,507 | |||||||||||||||
Net income (a),(b),(c),(d),(f) | 5,534 | 12,120 | 5,464 | 462 | 5,794 | |||||||||||||||
Net income per share attributable to XO Group Inc. common stockholders: | ||||||||||||||||||||
Basic | $ | 0.22 | $ | 0.48 | $ | 0.22 | $ | 0.02 | $ | 0.24 | ||||||||||
Diluted | $ | 0.22 | $ | 0.47 | $ | 0.21 | $ | 0.02 | $ | 0.23 | ||||||||||
Weighted average number of shares used in calculating earnings per share | ||||||||||||||||||||
Basic(e) | 25,018 | 25,314 | 25,164 | 25,210 | 24,620 | |||||||||||||||
Diluted(e) | 25,322 | 25,640 | 25,530 | 25,589 | 25,596 | |||||||||||||||
Consolidated Percentage of Total Net Revenue Data: | ||||||||||||||||||||
Net revenue: | ||||||||||||||||||||
Local online advertising | 48.8 | % | 46.2 | % | 46.6 | % | 41.1 | % | 40.7 | % | ||||||||||
National online advertising | 23.3 | % | 25.6 | % | 25.2 | % | 21.2 | % | 20.3 | % | ||||||||||
Total online advertising | 72.1 | % | 71.8 | % | 71.8 | % | 62.3 | % | 61.0 | % | ||||||||||
Transactions | 16.9 | % | 15.0 | % | 10.4 | % | 7.2 | % | 5.9 | % | ||||||||||
Publishing and other | 11.0 | % | 13.2 | % | 17.2 | % | 19.4 | % | 19.3 | % | ||||||||||
Merchandise | — | % | — | % | 0.6 | % | 11.1 | % | 13.8 | % | ||||||||||
Gross margin | 93.4 | % | 93.6 | % | 92.7 | % | 85.2 | % | 83.3 | % | ||||||||||
Operating expenses | 84.6 | % | 81.8 | % | 80.5 | % | 79.1 | % | 73.9 | % | ||||||||||
Operating margin | 8.8 | % | 11.7 | % | 12.2 | % | 6.2 | % | 9.3 | % | ||||||||||
Net income | 3.4 | % | 8.0 | % | 3.9 | % | 0.3 | % | 4.3 | % |
As of December 31, | ||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Balance Sheet Data: | ||||||||||||||||||||
Cash, cash equivalents and investments | $ | 107,324 | $ | 106,947 | $ | 91,107 | $ | 92,555 | $ | 93,296 | ||||||||||
Working capital | 101,719 | 100,701 | 83,522 | 84,789 | 86,875 | |||||||||||||||
Total assets | 204,120 | 210,186 | 196,741 | 193,582 | 193,242 | |||||||||||||||
Total stockholders' equity(e) | 173,089 | 174,550 | 159,467 | 157,926 | 155,890 |
(a) | Merchandise revenue represents revenue generated from our merchandising operations in Redding, California, which were exited in the first quarter of 2015. |
(b) | Asset impairment charges of $0.6 million, $0.3 million, $0.8 million, and $1.4 million were recorded during the years ended December 31, 2017, 2015, 2014, and 2013 respectively for certain assets. An immaterial asset impairment was recorded in 2016. |
(c) | Amounts include impairment charges of $1 million related to an equity investment (Jetaport, Inc.) in 2017 presented in "(Loss) gain in equity interests", impairment charges of $4.0 million of a cost method investment (Touch Media) in 2015 presented in "Interest and other income (expense)", charges related to the exit of our merchandise operations in 2014, and in 2014 and 2013, amounts include executive separation and other severance charges. |
(d) | Includes $3.2 million of a loss on disposition of our Ijie operations during 2014, including $1.4 million of tax expense. |
(e) | Reference is made to Note 9: Capital Stock in the Notes to the Consolidated Financial Statements on this Form 10-K, for further details addressing the stock repurchases made during the years ended December 31, 2017, 2016, and 2015. |
(f) | In 2017, income tax expense includes approximately $3.0 million related to the revaluation of certain deferred tax assets in conjunction with U.S. corporate income tax reform. |
• | Local online advertising programs include, but are not limited to, (i) online listings, (ii) digital advertisements, and (iii) direct e-mail marketing. |
• | National online advertising programs include, but are not limited to, (i) display advertisements, (ii) custom and brand-integrated content, and (iii) lead generation marketing, including direct e-mail marketing. |
• | Our transaction offerings include a registry service that enables users to create, manage, and share multiple retail store registries from a single source, and retailer and other vendor offerings such as invitations, stationery, reception decor, and personalized gifts. Through our GigMasters.com website, our audience has the opportunity to find, research, and book the right entertainment vendor for them. We earn fixed fees, a percentage of sales, per-unit activity fees, or some combination thereof with respect to these transactions. |
• | Publishing and other revenue is derived from the publication of traditional magazines for our flagship brand, The Knot. The magazines provide original, expert-driven content in our signature voice, driving readers back to our digital assets for an interactive experience and additional connections and services. The Knot is published as a national magazine four times a year, and a regional magazine semi-annually in 16 U.S. markets. |
• | Product and content development expenses primarily consist of salaries, benefits and stock-based compensation for our engineers, product managers, developers and editors. In addition, product and content development expenses include outside services and consulting costs to support new features within the website, as well as costs associated with the maintenance of our website, apps, and data servers. |
• | Sales and marketing expenses primarily consist of salaries, benefits, stock-based compensation, travel expense and incentive compensation for our sales and marketing employees. Sales and marketing expenses also include branding, consumer and business-to-business marketing, and public relations costs. |
• | Our general and administrative expenses primarily consist of salaries, benefits, and stock-based compensation for our chief executive officer, finance, legal, human resources, and other administrative employees. In addition, general and administrative expenses include outside consulting, legal and accounting services, facilities, and other supporting overhead costs. |
• | Depreciation and amortization expenses primarily consist of depreciation on computer equipment, software, capitalized software development costs and amortization of leasehold improvements and purchased intangible assets. |
Years Ended December 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
(in thousands, except for employee data) | ||||||||||||
Total net revenue | $ | 160,556 | $ | 152,116 | $ | 141,644 | ||||||
Year-over-year revenue growth(b) | 5.5 | % | 7.4 | % | (1.4 | )% | ||||||
Total gross margin(b) | 93.4 | % | 93.6 | % | 92.7 | % | ||||||
Net income | $ | 5,534 | $ | 12,120 | $ | 5,464 | ||||||
Adjusted EBITDA(a) | $ | 29,005 | $ | 32,615 | $ | 29,472 | ||||||
Adjusted EBITDA margin(a) | 18.1 | % | 21.4 | % | 20.8 | % | ||||||
Adjusted net income(a) | $ | 9,796 | $ | 12,120 | $ | 9,399 | ||||||
Free cash flow(a) | $ | 19,230 | $ | 23,093 | $ | 16,999 | ||||||
Cash and cash equivalents at December 31 | $ | 106,092 | $ | 105,703 | $ | 88,509 | ||||||
Total full-time employees at December 31 | 741 | 727 | 660 |
Year Ended December 31, | |||||||||||||||||||||
2017 | 2016 | Increase/(Decrease) | |||||||||||||||||||
Amount | % of Net Revenue | Amount | % of Net Revenue | Amount | % | ||||||||||||||||
(amounts in thousands, except for per share data) | |||||||||||||||||||||
Net revenue | $ | 160,556 | 100.0 | % | $ | 152,116 | 100.0 | % | $ | 8,440 | 5.5 | % | |||||||||
Cost of revenue | 10,524 | 6.6 | 9,754 | 6.4 | 770 | 7.9 | |||||||||||||||
Gross profit | 150,032 | 93.4 | 142,362 | 93.6 | 7,670 | 5.4 | |||||||||||||||
Operating expenses | 135,842 | 84.6 | 124,496 | 81.8 | 11,346 | 9.1 | |||||||||||||||
Income (loss) from operations | 14,190 | 8.8 | 17,866 | 11.7 | (3,676 | ) | (20.6 | ) | |||||||||||||
Loss in equity interests | (1,243 | ) | (0.8 | ) | (328 | ) | (0.2 | ) | (915 | ) | 279.0 | ||||||||||
Interest and other expense, net | 612 | 0.4 | 146 | 0.1 | 466 | 319.2 | |||||||||||||||
Income (loss) before income taxes | 13,559 | 8.4 | 17,684 | 11.6 | (4,125 | ) | (23.3 | ) | |||||||||||||
Income tax expense | 8,025 | 5.0 | 5,564 | 3.7 | 2,461 | 44.2 | |||||||||||||||
Net income | $ | 5,534 | 3.4 | % | $ | 12,120 | 8.0 | % | $ | (6,586 | ) | (54.3 | )% | ||||||||
Net income per share: | |||||||||||||||||||||
Basic | $ | 0.22 | $ | 0.48 | $ | (0.26 | ) | (54.2 | )% | ||||||||||||
Diluted | $ | 0.22 | $ | 0.47 | $ | (0.25 | ) | (53.2 | )% |
Year Ended December 31, | |||||||||||||||||
Net Revenue | Percentage Increase/ (Decrease) | Percentage of Total Net Revenue | |||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||
(amounts in thousands) | |||||||||||||||||
Local online advertising | $ | 78,358 | $ | 70,239 | 11.6 | % | 48.8 | % | 46.2 | % | |||||||
National online advertising | 37,429 | 38,945 | (3.9 | ) | 23.3 | 25.6 | |||||||||||
Total online advertising | 115,787 | 109,184 | 6.0 | 72.1 | 71.8 | ||||||||||||
Transactions | 27,106 | 22,819 | 18.8 | 16.9 | 15.0 | ||||||||||||
Publishing and other | 17,663 | 20,113 | (12.2 | ) | 11.0 | 13.2 | |||||||||||
Total net revenue | $ | 160,556 | $ | 152,116 | 5.5 | % | 100.0 | % | 100.0 | % |
Year Ended December 31, | |||||||||||||||||||||
2017 | 2016 | Increase/(Decrease) | |||||||||||||||||||
Gross Profit | Gross Margin % | Gross Profit | Gross Margin % | Gross Profit | % | ||||||||||||||||
(amounts in thousands) | |||||||||||||||||||||
Online advertising | $ | 111,223 | 96.1 | % | $ | 105,519 | 96.6 | % | $ | 5,704 | 5.4 | % | |||||||||
Transactions | 27,106 | 100.0 | 22,819 | 100.0 | 4,287 | 18.8 | |||||||||||||||
Publishing and other | 11,703 | 66.3 | 14,024 | 69.7 | (2,321 | ) | (16.6 | ) | |||||||||||||
Total gross profit | $ | 150,032 | 93.4 | % | $ | 142,362 | 93.6 | % | $ | 7,670 | 5.4 | % |
Year Ended December 31, | |||||||||||||||||
Operating Expenses | Percentage Increase/ (Decrease) | Percentage of Total Net Revenue | |||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||
(amounts in thousands) | |||||||||||||||||
Product and content development | $ | 45,180 | $ | 43,874 | 3.0 | % | 28.1 | % | 28.8 | % | |||||||
Sales and marketing | 53,093 | 49,738 | 6.7 | 33.1 | 32.7 | ||||||||||||
General and administrative | 30,797 | 24,494 | 25.7 | 19.2 | 16.1 | ||||||||||||
Depreciation and amortization | 6,772 | 6,390 | 6.0 | 4.1 | 4.2 | ||||||||||||
Total operating expenses | $ | 135,842 | $ | 124,496 | 9.1 | % | 84.6 | % | 81.8 | % |
Year Ended December 31, | |||||||||||||||||||||
2016 | 2015 | Increase/(Decrease) | |||||||||||||||||||
Amount | % of Net Revenue | Amount | % of Net Revenue | Amount | % | ||||||||||||||||
(amounts in thousands, except for per share data) | |||||||||||||||||||||
Net revenue | $ | 152,116 | 100.0 | % | $ | 141,644 | 100.0 | % | $ | 10,472 | 7.4 | % | |||||||||
Cost of revenue | 9,754 | 6.4 | 10,387 | 7.3 | (633 | ) | (6.1 | ) | |||||||||||||
Gross profit | 142,362 | 93.6 | 131,257 | 92.7 | 11,105 | 8.5 | |||||||||||||||
Operating expenses | 124,496 | 81.8 | 114,021 | 80.5 | 10,475 | 9.2 | |||||||||||||||
Income from operations | 17,866 | 11.7 | 17,236 | 12.2 | 630 | 3.7 | |||||||||||||||
(Loss) gain in equity interest | (328 | ) | (0.2 | ) | 520 | 0.3 | (848 | ) | (163.1 | ) | |||||||||||
Interest and other expense, net | 146 | 0.1 | (4,023 | ) | (2.8 | ) | 4,169 | (103.6 | ) | ||||||||||||
Income before income taxes | 17,684 | 11.6 | 13,733 | 9.7 | 3,951 | 28.8 | |||||||||||||||
Income tax expense (benefit) | 5,564 | 3.7 | 8,269 | 5.8 | (2,705 | ) | (32.7 | ) | |||||||||||||
Net income | $ | 12,120 | 8.0 | $ | 5,464 | 3.9 | $ | 6,656 | 121.8 | % | |||||||||||
Net income per share: | |||||||||||||||||||||
Basic | $ | 0.48 | $ | 0.22 | $ | 0.26 | 118.2 | % | |||||||||||||
Diluted | $ | 0.47 | $ | 0.21 | $ | 0.26 | 123.8 | % |
Year Ended December 31, | |||||||||||||||||
Net Revenue | Percentage Increase/ (Decrease) | Percentage of Total Net Revenue | |||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||
(amounts in thousands) | |||||||||||||||||
Local online advertising | $ | 70,239 | $ | 65,941 | 6.5 | % | 46.2 | % | 46.6 | % | |||||||
National online advertising | 38,945 | 35,764 | 8.9 | 25.6 | 25.2 | ||||||||||||
Total online advertising | 109,184 | 101,705 | 7.4 | 71.8 | 71.8 | ||||||||||||
Transactions | 22,819 | 14,700 | 55.2 | 15.0 | 10.4 | ||||||||||||
Publishing and other | 20,113 | 24,361 | (17.4 | ) | 13.2 | 17.2 | |||||||||||
Merchandising | — | 878 | (100.0 | ) | — | 0.6 | |||||||||||
Total net revenue | $ | 152,116 | $ | 141,644 | 7.4 | % | 100.0 | % | 100.0 | % |
Year Ended December 31, | |||||||||||||||||||||
2016 | 2015 | Increase/(Decrease) | |||||||||||||||||||
Gross Profit | Gross Margin % | Gross Profit | Gross Margin % | Gross Profit | % | ||||||||||||||||
(amounts in thousands) | |||||||||||||||||||||
Online advertising | $ | 105,519 | 96.6 | % | $ | 99,470 | 97.8 | % | $ | 6,049 | 6.1 | % | |||||||||
Transactions | 22,819 | 100.0 | 14,700 | 100.0 | 8,119 | 55.2 | |||||||||||||||
Merchandise | — | — | (3 | ) | (0.3 | ) | 3 | (100.0 | ) | ||||||||||||
Publishing and other | 14,024 | 69.7 | 17,090 | 70.2 | (3,066 | ) | (17.9 | ) | |||||||||||||
Total gross profit | $ | 142,362 | 93.6 | % | $ | 131,257 | 92.7 | % | $ | 11,105 | 8.5 | % |
Year Ended December 31, | |||||||||||||||||
Operating Expenses | Percentage Increase/ (Decrease) | Percentage of Total Net Revenue | |||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||
(amounts in thousands) | |||||||||||||||||
Product and content development | $ | 43,874 | $ | 39,505 | 11.1 | % | 28.8 | % | 27.9 | % | |||||||
Sales and marketing | 49,738 | 43,385 | 14.6 | 32.7 | 30.6 | ||||||||||||
General and administrative | 24,494 | 25,321 | (3.3 | ) | 16.1 | 17.9 | |||||||||||
Depreciation and amortization | 6,390 | 5,810 | 10.0 | 4.2 | 4.1 | ||||||||||||
Total operating expenses | $ | 124,496 | $ | 114,021 | 9.2 | % | 81.8 | % | 80.5 | % |
For the Year Ended December 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
(In Thousands) | ||||||||||||
Net cash provided by operating activities | $ | 24,799 | $ | 27,390 | $ | 20,548 | ||||||
Net cash used in investing activities | (8,816 | ) | (4,801 | ) | (11,577 | ) | ||||||
Net cash used in financing activities | (15,594 | ) | (5,395 | ) | (10,417 | ) | ||||||
Increase (decrease) in cash and cash equivalents | $ | 389 | $ | 17,194 | $ | (1,446 | ) |
Payments Due by Period | ||||||||||||||||||||
Total | Less Than 1 Year | 1 – 3 Years | 3 – 5 Years | More Than 5 Years | ||||||||||||||||
(In Thousands) | ||||||||||||||||||||
Operating leases | $ | 18,409 | $ | 3,790 | $ | 7,716 | $ | 5,645 | $ | 1,258 | ||||||||||
Purchase commitments | 1,090 | 777 | 313 | — | — | |||||||||||||||
Total | $ | 19,499 | $ | 4,567 | $ | 8,029 | $ | 5,645 | $ | 1,258 |
• | Adjusted EBITDA represents GAAP income from operations adjusted for items that impact comparability, which may include: (1) depreciation and amortization, (2) stock-based compensation expense, (3) asset impairment charges, and (4) other items affecting comparability during the period. |
• | Adjusted net income represents GAAP net income, adjusted for items that impact comparability, which may include: (1) asset impairment charges, (2) executive separation and other severance charges, (3) impact of U.S. tax reform and non-recurring foreign taxes, interest and penalties, (4) costs related to exit activities, and (5) other items affecting comparability during the period. |
• | Adjusted net income per diluted share represents adjusted net income (as defined above), divided by the diluted weighted-average number of shares outstanding for the period. |
• | Adjusted EBITDA margin represents adjusted EBITDA (as defined above), divided by total GAAP revenue. |
• | Free cash flow represents GAAP net cash provided by operations, less capital expenditures. |
• | National online advertising programs include display advertisements. Revenue from display advertisements is largely generated by sold impressions (the number of views or displays of a customer’s advertisement, banner, link or other form of content on our online properties for which we earn revenue). Display advertising revenue per one thousand sold impressions derives our effective CPM (“eCPM”). |
• | Through our transactions business, we earn fixed fees, a percentage of sales, per-unit activity fees, or some combination thereof with respect to these transactions, which we refer to collectively as our “take rate.” |
Year Ended | |||||||||||||||||||||||||||||||||||
2017 | 2016 | 2015 | |||||||||||||||||||||||||||||||||
GAAP Actual | Adjustments | Non GAAP Results | GAAP Actual | Adjustments | Non GAAP Results | GAAP Actual | Adjustments | Non GAAP Results | |||||||||||||||||||||||||||
Adjusted Net Income and EPS Reconciliation | |||||||||||||||||||||||||||||||||||
Revenue | $ | 160,556 | $ | — | $ | 160,556 | $ | 152,116 | $ | — | $ | 152,116 | $ | 141,644 | $ | — | $ | 141,644 | |||||||||||||||||
Cost of revenues | 10,524 | — | 10,524 | 9,754 | — | 9,754 | 10,387 | — | 10,387 | ||||||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||||||||
Product and content development | 45,180 | — | 45,180 | 43,874 | — | 43,874 | 39,505 | (11 | ) | c | 39,494 | ||||||||||||||||||||||||
Sales and marketing | 53,093 | — | 53,093 | 49,738 | — | 49,738 | 43,385 | (265 | ) | c | 43,120 | ||||||||||||||||||||||||
General and administrative | 30,797 | (200 | ) | a | 30,597 | 24,494 | — | 24,494 | 25,321 | (158 | ) | c | 25,163 | ||||||||||||||||||||||
Depreciation and amortization | 6,772 | — | 6,772 | 6,390 | — | 6,390 | 5,810 | (266 | ) | d | 5,544 | ||||||||||||||||||||||||
Total operating expenses | 135,842 | (200 | ) | 135,642 | 124,496 | — | 124,496 | 114,021 | (700 | ) | 113,321 | ||||||||||||||||||||||||
Income from operations | 14,190 | 200 | 14,390 | 17,866 | — | 17,866 | 17,236 | 700 | 17,936 | ||||||||||||||||||||||||||
Interest and other income (expense), net | 612 | — | 612 | 146 | — | 146 | (4,023 | ) | 4,000 | e | (23 | ) | |||||||||||||||||||||||
(Loss)/gain in equity interest | (1,243 | ) | 1,032 | a | (211 | ) | (328 | ) | — | (328 | ) | 520 | (765 | ) | f | (245 | ) | ||||||||||||||||||
Income tax expense/(benefit) | 8,025 | (3,030 | ) | b | 4,995 | 5,564 | — | 5,564 | 8,269 | — | 8,269 | ||||||||||||||||||||||||
Net income | $ | 5,534 | $ | 4,262 | $ | 9,796 | $ | 12,120 | $ | — | $ | 12,120 | $ | 5,464 | $ | 3,935 | $ | 9,399 | |||||||||||||||||
Amounts per share - diluted | 0.22 | 0.17 | 0.39 | 0.47 | — | 0.47 | 0.21 | 0.15 | 0.36 | ||||||||||||||||||||||||||
Weighted average number of shares outstanding - diluted | 25,322 | 25,322 | 25,640 | 25,640 | 25,530 | 25,530 | |||||||||||||||||||||||||||||
Adjusted EBITDA Reconciliation | |||||||||||||||||||||||||||||||||||
Operating income | $ | 14,190 | $ | 200 | $ | 14,390 | $ | 17,866 | $ | — | $ | 17,866 | $ | 17,236 | $ | 700 | $ | 17,936 | |||||||||||||||||
Depreciation and amortization | 6,772 | — | 6,772 | 6,390 | — | 6,390 | 5,810 | (266 | ) | 5,544 | |||||||||||||||||||||||||
Stock-based compensation expense | 7,843 | — | 7,843 | 8,359 | — | 8,359 | 5,992 | — | 5,992 | ||||||||||||||||||||||||||
Adjusted EBITDA | $ | 28,805 | $ | 200 | $ | 29,005 | $ | 32,615 | $ | — | $ | 32,615 | $ | 29,038 | $ | 434 | $ | 29,472 |
Year Ended | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
Net cash provided by operating activities | $ | 24,799 | $ | 27,390 | $ | 20,548 | ||||||
Less: capital expenditures | (5,569 | ) | (4,297 | ) | (3,549 | ) | ||||||
Free cash flow | $ | 19,230 | $ | 23,093 | $ | 16,999 |
a. | Loss in equity interests excludes the other-than-temporary impairment that reduced the carrying value of our equity investment in Jetaport, Inc. to zero. In addition, general and administrative operating expenses excludes bad debt expense associated with a loan previously made to Jetaport, Inc. |
b. | In 2017, income tax expense includes approximately $3.0 million related primarily to the revaluation of certain deferred tax assets in conjunction with the U.S. Tax Cuts and Job Acts of 2017. |
c. | To eliminate costs associated with the exit of our merchandising operations, including (i) severance of approximately $0.2 million recorded in general and administrative and (ii) rent acceleration and other closure costs of $0.2 million recorded in sales and marketing. |
d. | To eliminate asset impairment charges included in Depreciation and Amortization. |
e. | To eliminate the impairment expense of a cost method investment included in Interest and other income (expense), net for the year ended December 31, 2015. |
f. | To eliminate a gain on our existing equity method investment in GigMasters, included in Gain (Loss) in Equity Interests for the year ended December 31, 2015. |
Page | |
December 31, | ||||||||
2017 | 2016 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 106,092 | $ | 105,703 | ||||
Accounts receivable, net of allowance of $2,354 and $1,386 at December 31, 2017 and December 31, 2016, respectively | 16,399 | 20,182 | ||||||
Prepaid expenses and other current assets | 5,102 | 5,247 | ||||||
Total current assets | 127,593 | 131,132 | ||||||
Long-term restricted cash | 1,181 | 1,181 | ||||||
Property and equipment, net | 11,829 | 12,130 | ||||||
Intangible assets, net | 4,019 | 4,154 | ||||||
Goodwill | 51,438 | 48,678 | ||||||
Deferred tax assets, net | 6,500 | 9,918 | ||||||
Investments | 1,442 | 2,685 | ||||||
Other assets | 118 | 308 | ||||||
Total assets | $ | 204,120 | $ | 210,186 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accrued compensation and employee benefits | $ | 6,100 | $ | 6,164 | ||||
Accounts payable and accrued expenses | 5,661 | 7,515 | ||||||
Deferred revenue | 14,113 | 16,752 | ||||||
Total current liabilities | 25,874 | 30,431 | ||||||
Deferred rent | 3,365 | 3,720 | ||||||
Other liabilities | 1,792 | 1,485 | ||||||
Total liabilities | 31,031 | 35,636 | ||||||
Commitments and contingencies (Note 11) | ||||||||
Stockholders’ equity: | ||||||||
Preferred stock, $0.001 par value; 5,000,000 shares authorized and 0 shares issued and outstanding as of December 31, 2017 and 2016, respectively | — | — | ||||||
Common stock, $0.01 par value; 100,000,000 shares authorized and 25,696,796 and 26,304,925 shares issued and outstanding at December 31, 2017 and 2016, respectively | 258 | 264 | ||||||
Additional paid-in-capital | 180,695 | 178,959 | ||||||
Accumulated deficit | (7,864 | ) | (4,673 | ) | ||||
Total stockholders’ equity | 173,089 | 174,550 | ||||||
Total liabilities and stockholders’ equity | $ | 204,120 | $ | 210,186 |
Year Ended December 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
Net revenue: | ||||||||||||
Local online advertising | $ | 78,358 | $ | 70,239 | $ | 65,941 | ||||||
National online advertising | 37,429 | 38,945 | 35,764 | |||||||||
Total online advertising | 115,787 | 109,184 | 101,705 | |||||||||
Transactions | 27,106 | 22,819 | 14,700 | |||||||||
Publishing and other | 17,663 | 20,113 | 24,361 | |||||||||
Merchandise | — | — | 878 | |||||||||
Total net revenue | 160,556 | 152,116 | 141,644 | |||||||||
Cost of revenue: | ||||||||||||
Online advertising | 4,564 | 3,665 | 2,235 | |||||||||
Publishing and other | 5,960 | 6,089 | 7,271 | |||||||||
Merchandise | — | — | 881 | |||||||||
Total cost of revenue | 10,524 | 9,754 | 10,387 | |||||||||
Gross profit | 150,032 | 142,362 | 131,257 | |||||||||
Operating expenses: | ||||||||||||
Product and content development | 45,180 | 43,874 | 39,505 | |||||||||
Sales and marketing | 53,093 | 49,738 | 43,385 | |||||||||
General and administrative | 30,797 | 24,494 | 25,321 | |||||||||
Depreciation and amortization | 6,772 | 6,390 | 5,810 | |||||||||
Total operating expenses | 135,842 | 124,496 | 114,021 | |||||||||
Income from operations | 14,190 | 17,866 | 17,236 | |||||||||
(Loss) gain in equity interests | (1,243 | ) | (328 | ) | 520 | |||||||
Interest and other income (expense), net | 612 | 146 | (4,023 | ) | ||||||||
Income before income taxes | 13,559 | 17,684 | 13,733 | |||||||||
Income tax expense | 8,025 | 5,564 | 8,269 | |||||||||
Net income | $ | 5,534 | $ | 12,120 | $ | 5,464 | ||||||
Net income per share: | ||||||||||||
Basic | $ | 0.22 | $ | 0.48 | $ | 0.22 | ||||||
Diluted | $ | 0.22 | $ | 0.47 | $ | 0.21 | ||||||
Weighted average number of shares used in calculating net earnings per share: | ||||||||||||
Basic | 25,018 | 25,314 | 25,164 | |||||||||
Dilutive effect of: | ||||||||||||
Restricted stock | 264 | 306 | 352 | |||||||||
Employee Stock Purchase Program | 2 | — | 1 | |||||||||
Options | 38 | 20 | 13 | |||||||||
Diluted | 25,322 | 25,640 | 25,530 |
Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Equity | |||||||||||||
Shares | Par Value | ||||||||||||||||
Balance at December 31, 2014 | 26,631 | $ | 267 | $ | 171,951 | $ | 35 | $ | (14,327 | ) | $ | 157,926 | |||||
Issuance of common stock pursuant to the employee stock purchase plan | 44 | — | 494 | — | — | 494 | |||||||||||
Issuance of restricted common stock, net of cancellations | 268 | 3 | — | — | — | 3 | |||||||||||
Realization of foreign currency translation adjustments | — | — | — | (35 | ) | — | (35 | ) | |||||||||
Surrender of restricted common stock for income tax purposes | (193 | ) | (1 | ) | (3,054 | ) | — | — | (3,055 | ) | |||||||
Repurchase of common stock and extinguishment | (514 | ) | (5 | ) | (3,304 | ) | — | (5,498 | ) | (8,807 | ) | ||||||
Stock-based compensation | — | — | 6,529 | — | — | 6,529 | |||||||||||
Excess tax benefits from stock-based awards | — | — | 948 | — | — | 948 | |||||||||||
Net income | — | — | — | — | 5,464 | 5,464 | |||||||||||
Balance at December 31, 2015 | 26,236 | $ | 264 | $ | 173,564 | $ | — | $ | (14,361 | ) | $ | 159,467 | |||||
Issuance of common stock pursuant to the employee stock purchase plan | 54 | 1 | 684 | — | — | 685 | |||||||||||
Issuance of restricted common stock, net of cancellations | 402 | 4 | — | — | — | 4 | |||||||||||
Surrender of restricted common stock for income tax purposes | (175 | ) | (3 | ) | (2,901 | ) | — | — | (2,904 | ) | |||||||
Issuance of common stock in connection with the exercise of vested stock options | 18 | — | 241 | — | — | 242 | |||||||||||
Repurchase of common stock and extinguishment | (230 | ) | (2 | ) | (1,527 | ) | — | (2,432 | ) | (3,961 | ) | ||||||
Stock-based compensation | — | — | 8,359 | — | — | 8,359 | |||||||||||
Excess tax benefits from stock-based awards | — | — | 539 | — | — | 539 | |||||||||||
Net income | — | — | — | — | 12,120 | 12,120 | |||||||||||
Balance at December 31, 2016 | 26,305 | $ | 264 | $ | 178,959 | $ | — | $ | (4,673 | ) | $ | 174,550 | |||||
Issuance of common stock pursuant to the employee stock purchase plan | 50 | — | 795 | — | — | 795 | |||||||||||
Issuance of restricted common stock, net of cancellations | 260 | 3 | (3 | ) | — | — | — | ||||||||||
Surrender of restricted common stock for income tax purposes | (210 | ) | (2 | ) | (3,775 | ) | — | — | (3,777 | ) | |||||||
Issuance of common stock in connection with the exercise of vested stock options | 67 | — | 1,026 | — | — | 1,026 | |||||||||||
Repurchase of common stock and extinguishment | (775 | ) | (7 | ) | (5,289 | ) | — | (8,026 | ) | (13,322 | ) | ||||||
Stock-based compensation | — | — | 7,843 | — | — | 7,843 | |||||||||||
ASU 2016-09 adoption adjustment | — | — | 1,139 | — | (699 | ) | 440 | ||||||||||
Net income | — | — | — | — | 5,534 | 5,534 | |||||||||||
Balance at December 31, 2017 | 25,697 | $ | 258 | $ | 180,695 | $ | — | $ | (7,864 | ) | $ | 173,089 |
Year Ended December 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||
Net income | $ | 5,534 | $ | 12,120 | $ | 5,464 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization | 6,772 | 6,390 | 5,810 | |||||||||
Stock-based compensation expense | 7,843 | 8,359 | 5,992 | |||||||||
Deferred income taxes | 3,724 | 1,561 | 4,145 | |||||||||
Loss on disposal or sale of assets | — | — | 254 | |||||||||
Allowance for doubtful accounts | 1,143 | (136 | ) | 1,764 | ||||||||
Excess tax benefits from stock-based awards | — | (539 | ) | (948 | ) | |||||||
Impairment of investments | 1,032 | — | 4,000 | |||||||||
Other non-cash income (charges) | 211 | 328 | (555 | ) | ||||||||
Changes in operating assets and liabilities: | ||||||||||||
Decrease (increase) in accounts receivable | 2,640 | 429 | (6,454 | ) | ||||||||
Decrease in inventories | — | — | 386 | |||||||||
Decrease (increase) in other assets | 635 | 108 | (1,502 | ) | ||||||||
(Decrease) increase in accrued compensation and benefits | (64 | ) | 128 | (212 | ) | |||||||
(Decrease) increase in accounts payable and accrued expenses | (1,634 | ) | 1,796 | 613 | ||||||||
(Decrease) increase in deferred revenue | (2,639 | ) | (1,888 | ) | 1,740 | |||||||
Decrease in deferred rent | (355 | ) | (766 | ) | (681 | ) | ||||||
(Decrease) increase in other liabilities, net | (43 | ) | (500 | ) | 732 | |||||||
Net cash provided by operating activities | 24,799 | 27,390 | 20,548 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||
Acquisitions, net of cash acquired | (3,150 | ) | (1,359 | ) | (5,647 | ) | ||||||
Additions to capitalized software | (4,689 | ) | (4,142 | ) | (3,096 | ) | ||||||
Payment to acquire investments | — | (295 | ) | (2,500 | ) | |||||||
Maturity of U.S. Treasury Bills | 1,248 | 3,842 | 2,600 | |||||||||
Purchases of U.S. Treasury Bills | (1,232 | ) | (2,490 | ) | (2,595 | ) | ||||||
Purchases of property and equipment | (880 | ) | (155 | ) | (453 | ) | ||||||
Other investing activities, net | (113 | ) | (202 | ) | 114 | |||||||
Net cash used in investing activities | (8,816 | ) | (4,801 | ) | (11,577 | ) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||
Surrender of restricted common stock for income tax purposes | (3,777 | ) | (2,904 | ) | (3,055 | ) | ||||||
Repurchase of common stock | (13,322 | ) | (3,961 | ) | (8,807 | ) | ||||||
Excess tax benefits from stock-based awards | — | 539 | 948 | |||||||||
Proceeds pursuant to employee stock-based compensation plans | 1,505 | 931 | 497 | |||||||||
Net cash used in financing activities | (15,594 | ) | (5,395 | ) | (10,417 | ) | ||||||
Increase (decrease) in cash and cash equivalents | 389 | 17,194 | (1,446 | ) | ||||||||
Cash and cash equivalents at beginning of year | 105,703 | 88,509 | 89,955 | |||||||||
Cash and cash equivalents at end of year | $ | 106,092 | $ | 105,703 | $ | 88,509 | ||||||
Supplemental information: | ||||||||||||
Cash paid for income taxes, net of refunds | $ | 2,826 | $ | 3,519 | $ | 4,305 |
Customer and advertiser relationships | 5 to 7 years |
Patents and developed technology | 2 to 20 years |
Media content | 5 years |
Trademarks and trade names | 5 to 13 years |
Service contracts and other | 10 years |
2017 | 2016 | 2015 | ||||
Stock options | 174,829 | 624,479 | 184,142 | |||
Restricted stock | 301 | 15,431 | 1,467 | |||
ESPP shares | 427 | 1,055 | — |
• | Using the modified retrospective approach, the cumulative effect recognized upon adoption was an adjustment to increase the Company's accumulated deficit by $0.7 million and increase its deferred tax assets by $0.4 million, with a corresponding increase to additional paid-in capital of $1.1 million, all within the Consolidated Balance sheet. |
• | The Company recorded a $1.3 million benefit to its provision for income taxes, within the Consolidated Statement of operations, which impacted the Company’s effective tax rate for the twelve months ended December 31, 2017, due to the recognition of excess tax benefits for options exercised and the vesting of equity awards. |
• | Using the prospective approach for the presentation on the Consolidated Statements of cash flows, the $1.3 million of excess tax benefits during the twelve months ended December 31, 2017 was a component of operating activity, while $0.5 million of excess tax benefits from stock-based compensation during the twelve months ended December 31, 2016 was presented as financing activity. |
• | The Company elected to change from estimating forfeiture rates to accounting for forfeitures in each period they occur. |
• | The presentation requirements for cash flows related to taxes paid to satisfy statutory income tax withholding obligations had no impact on our consolidated statements of cash flows for any of the periods presented because such cash flows have historically been presented as a financing activity. |
December 31, | ||||||||
2017 | 2016 | |||||||
(amounts in thousands) | ||||||||
Cash and cash equivalents | ||||||||
Cash | $ | 49,452 | $ | 49,495 | ||||
Money market funds | 56,640 | 56,208 | ||||||
Total cash and cash equivalents | 106,092 | 105,703 | ||||||
Investments | ||||||||
Short-term investments | 51 | 63 | ||||||
Long-term restricted cash | 1,181 | 1,181 | ||||||
Total cash and cash equivalents and investments | $ | 107,324 | $ | 106,947 |
Year Ended December 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
(amounts in thousands) | ||||||||||||
Product and content development | $ | 2,509 | $ | 2,324 | $ | 1,817 | ||||||
Sales and marketing | 1,528 | 2,057 | 1,384 | |||||||||
General and administrative | 3,806 | 3,978 | 2,791 | |||||||||
Total stock-based compensation | $ | 7,843 | $ | 8,359 | $ | 5,992 |
Shares | Weighted Average Exercise Price | ||||||
(in thousands) | |||||||
Options outstanding at December 31, 2015 | 403 | $ | 15.07 | ||||
Options granted | 472 | 16.20 | |||||
Options exercised | (18 | ) | 13.33 | ||||
Options forfeited | (47 | ) | 15.79 | ||||
Options outstanding at December 31, 2016 | 810 | 15.72 | |||||
Options granted | 419 | 17.55 | |||||
Options exercised | (67 | ) | 15.28 | ||||
Options forfeited | (56 | ) | 16.65 | ||||
Options outstanding at December 31, 2017 | 1,106 | $ | 16.40 |
Year Ended December 31, | ||||||
2017 | 2016 | 2015 | ||||
Expected term | 6.25 years | 6.25 years | 6.25 - 7.00 years | |||
Risk-free rate | 2.49% | 1.54% - 1.91% | 2.1% - 2.3% | |||
Expected volatility | 34.6% | 35.0% - 36.3% | 38.3% - 47.3% | |||
Dividend yield | —% | —% | —% |
Options Outstanding | Options Exercisable | |||||||||||||||
Number Outstanding as of December 31, 2017 | Weighted Average Remaining Contractual Life (in Years) | Weighted Average Exercise Price | Number Exercisable as of December 31, 2017 | Weighted Average Remaining Contractual Life (in Years) | Weighted Average Exercise Price | |||||||||||
(in thousands) | (in thousands) | |||||||||||||||
1,106 | 7.56 | $ | 16.40 | 410 | 5.64 | $ | 15.37 |
Restricted Stock | Weighted Average Grant Date Fair Value (per share) | ||||||
(In Thousands) | |||||||
Unvested as of December 31, 2015 | 1,014 | $ | 13.11 | ||||
Granted | 559 | 16.49 | |||||
Vested | (429 | ) | 12.76 | ||||
Forfeited | (164 | ) | 14.06 | ||||
Unvested as of December 31, 2016 | 980 | 15.05 | |||||
Granted | 422 | 17.77 | |||||
Vested | (509 | ) | 14.13 | ||||
Forfeited | (157 | ) | 15.99 | ||||
Unvested as of December 31, 2017 | 736 | $ | 17.04 |
Offering Period Purchase Date | Number of Shares | Purchase Price |
(In Thousands) | ||
January 31, 2016 | 29 | $12.61 |
July 31, 2016 | 25 | 12.77 |
Total 2016 | 54 | |
January 31, 2017 | 24 | 16.01 |
July 31, 2017 | 26 | $15.54 |
Total 2017 | 50 |
Year Ended December 31, | ||||||
2017 | 2016 | 2015 | ||||
ESPP Rights | ESPP Rights | ESPP Rights | ||||
Expected term | 6 months | 6 months | 6 months | |||
Risk-free rate | .65% -1.15% | 0.40% - 0.47% | 0.05% | |||
Expected volatility | 10.3% - 12.6% | 14.0% - 19.2% | 17.4% - 23.8% | |||
Dividend yield | —% | —% | —% |
Assets and Liabilities Acquired | Amount | |||
(amounts in thousands) | ||||
Cash and other assets | $ | 449 | ||
Property and equipment | 37 | |||
Software development | 310 | |||
Trade name | 480 | |||
Vendor relationships | 2,900 | |||
Goodwill | 5,525 | |||
Deferred revenue and other liabilities | (1,002 | ) | ||
Deferred taxes, net | (831 | ) | ||
Total purchase price | $ | 7,868 |
December 31, | ||||||||
2017 | 2016 | |||||||
(amounts in thousands) | ||||||||
Property and equipment | ||||||||
Leasehold improvements | $ | 10,257 | $ | 9,623 | ||||
Furniture and fixtures | 678 | 638 | ||||||
Computer and office equipment | 3,326 | 4,046 | ||||||
Capitalized software | 17,465 | 22,454 | ||||||
Less: accumulated amortization and depreciation | (19,897 | ) | (24,631 | ) | ||||
Total property and equipment, net | $ | 11,829 | $ | 12,130 |
Amount | |||
(amounts in thousands) | |||
Balance at December 31, 2015 | $ | 47,396 | |
Acquisition of the assets of How He Asked LLC | 1,282 | ||
Balance at December 31, 2016 | $ | 48,678 | |
Acquisition of the assets of Veri, Inc. | 2,760 | ||
Balance at December 31, 2017 | $ | 51,438 |
December 31, 2017 | December 31, 2016 | |||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Cost | Gross Carrying Amount | Accumulated Amortization | Net Cost | |||||||||||||||||||
(amounts in thousands) | ||||||||||||||||||||||||
Indefinite-lived intangible assets: | ||||||||||||||||||||||||
Trade names | $ | 480 | $ | — | $ | 480 | $ | 480 | $ | — | $ | 480 | ||||||||||||
URLs | 17 | — | 17 | 17 | — | 17 | ||||||||||||||||||
Subtotal indefinite-lived intangible assets | 497 | — | 497 | 497 | — | 497 | ||||||||||||||||||
Definite-lived intangible assets: | ||||||||||||||||||||||||
Customer and advertiser relationships | 3,473 | (1,354 | ) | 2,119 | 3,743 | (1,095 | ) | 2,648 | ||||||||||||||||
Media content | 325 | (244 | ) | 81 | 325 | (179 | ) | 146 | ||||||||||||||||
Patents and developed technology | 1,170 | (412 | ) | 758 | 430 | (217 | ) | 213 | ||||||||||||||||
Service contracts and other | 94 | (94 | ) | — | 94 | (75 | ) | 19 | ||||||||||||||||
Trademarks and trade names | 705 | (141 | ) | 564 | 705 | (74 | ) | 631 | ||||||||||||||||
Subtotal definite-lived intangible assets | 5,767 | (2,245 | ) | 3,522 | 5,297 | (1,640 | ) | 3,657 | ||||||||||||||||
Total intangible assets | $ | 6,264 | $ | (2,245 | ) | $ | 4,019 | $ | 5,794 | $ | (1,640 | ) | $ | 4,154 |
Company | Approximate % Ownership |
A Vendor Services Company | 34.1% |
Catchafire, Inc. | 3.6% |
Amount | ||
(in thousands) | ||
Shares under the 2017 Stock Incentive Plan | 4,967 | |
Shares under the Amended and Restated 2009 Employee Stock Purchase Plan | 244 | |
Total common stock reserved for future issuance under the Plans | 5,211 |
Year Ended December 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
(amounts in thousands) | ||||||||||||
Current: | ||||||||||||
U.S. federal | $ | 3,244 | $ | 3,382 | $ | 3,351 | ||||||
State | 907 | 639 | 720 | |||||||||
Foreign | 150 | (18 | ) | 53 | ||||||||
Total current | 4,301 | 4,003 | 4,124 | |||||||||
Deferred: | ||||||||||||
U.S. federal | 3,845 | 1,694 | 3,299 | |||||||||
State | (192 | ) | (62 | ) | 846 | |||||||
Foreign | 71 | (71 | ) | — | ||||||||
Total deferred | 3,724 | 1,561 | 4,145 | |||||||||
Provision for income taxes | $ | 8,025 | $ | 5,564 | $ | 8,269 |
Year Ended December 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
(amounts in thousands) | ||||||||||||
Income taxes at federal statutory rate | $ | 4,610 | $ | 6,190 | $ | 4,806 | ||||||
State income taxes, net of federal benefit | 480 | 425 | 1,078 | |||||||||
Foreign taxes | (85 | ) | (45 | ) | (65 | ) | ||||||
Income tax reserve and other assessments | (479 | ) | (1,281 | ) | 286 | |||||||
Nondeductible expenses | 282 | 264 | 236 | |||||||||
Excess tax benefits related to share-based compensation | (442 | ) | — | — | ||||||||
Provision for foreign unremitted earnings | 74 | 103 | 46 | |||||||||
Valuation allowance | 423 | 115 | 2,190 | |||||||||
Impact of Tax Act | 3,030 | — | — | |||||||||
Other | 132 | (207 | ) | (308 | ) | |||||||
Provision for income taxes | $ | 8,025 | $ | 5,564 | $ | 8,269 |
Year Ended December 31, | ||||||||
2017 | 2016 | |||||||
(amounts in thousands) | ||||||||
Deferred tax assets: | ||||||||
Net operating loss and tax credit carryforwards | $ | 6,109 | $ | 10,367 | ||||
Allowance for doubtful accounts and other reserves | 1,681 | 2,218 | ||||||
Deferred rent | 1,102 | 1,726 | ||||||
Stock-based compensation | 1,791 | 2,112 | ||||||
Equity method investments | 2,060 | 2,529 | ||||||
Other | 199 | 84 | ||||||
Valuation allowance | (2,500 | ) | (2,734 | ) | ||||
Total deferred tax assets | $ | 10,442 | $ | 16,302 | ||||
Deferred tax liabilities: | ||||||||
Unremitted earnings | $ | — | $ | (371 | ) | |||
Intangible assets | (1,304 | ) | (1,855 | ) | ||||
Property and equipment | (750 | ) | (1,518 | ) | ||||
Capitalized software costs | (1,888 | ) | (2,640 | ) | ||||
Total deferred tax liabilities | (3,942 | ) | (6,384 | ) | ||||
Total net deferred tax assets | $ | 6,500 | $ | 9,918 |
2017 | 2016 | |||||||
(amounts in thousands) | ||||||||
Balances of unrecognized tax benefits as of January 1 | $ | 2,105 | $ | 3,630 | ||||
Decreases for positions taken in prior years | (199 | ) | (1,330 | ) | ||||
Increases for positions related to the current year | — | 69 | ||||||
Expiration of the statute of limitations | (261 | ) | (264 | ) | ||||
Balance of unrecognized tax benefits as of December 31 | $ | 1,645 | $ | 2,105 |
Years ending December 31, | |||
2018 | $ | 3,790 | |
2019 | 3,856 | ||
2020 | 3,860 | ||
2021 | 3,406 | ||
Thereafter | 3,497 | ||
Total | $ | 18,409 |
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||||
(amounts in thousands, except for per share data) | ||||||||||||||||
2017 | ||||||||||||||||
Net revenue: | ||||||||||||||||
Local online advertising | $ | 18,435 | $ | 18,991 | $ | 20,130 | $ | 20,802 | ||||||||
National online advertising | 8,928 | 9,746 | 8,842 | 9,913 | ||||||||||||
Total online advertising | 27,363 | 28,737 | 28,972 | 30,715 | ||||||||||||
Transactions | 4,962 | 8,190 | 7,950 | 6,004 | ||||||||||||
Publishing and other | 3,435 | 5,299 | 3,315 | 5,614 | ||||||||||||
Total net revenue | 35,760 | 42,226 | 40,237 | 42,333 | ||||||||||||
Gross profit | 33,851 | 39,440 | 37,923 | 38,818 | ||||||||||||
Net income | $ | 312 | $ | 1,441 | $ | 3,341 | $ | 440 | ||||||||
Net income per share(1) | ||||||||||||||||
Basic and diluted | $ | 0.01 | $ | 0.06 | $ | 0.13 | $ | 0.02 | ||||||||
2016 | ||||||||||||||||
Net revenue: | ||||||||||||||||
Local online advertising | $ | 18,179 | $ | 16,652 | $ | 17,040 | $ | 18,368 | ||||||||
National online advertising | 8,658 | 9,566 | 8,932 | 11,789 | ||||||||||||
Total online advertising | 26,837 | 26,218 | 25,972 | 30,157 | ||||||||||||
Transactions | 4,204 | 6,431 | 7,105 | 5,079 | ||||||||||||
Publishing and other | 4,628 | 6,059 | 3,654 | 5,772 | ||||||||||||
Total net revenue | 35,669 | 38,708 | 36,731 | 41,008 | ||||||||||||
Gross profit | 33,943 | 35,952 | 34,943 | 37,524 | ||||||||||||
Net income | $ | 3,025 | $ | 3,765 | $ | 1,908 | $ | 3,422 | ||||||||
Net income per share(1);: | ||||||||||||||||
Basic | $ | 0.12 | $ | 0.15 | $ | 0.08 | $ | 0.14 | ||||||||
Diluted | $ | 0.12 | $ | 0.15 | $ | 0.07 | $ | 0.13 |
(1) | The sum of the quarterly earnings per share may not equal the full year amount, as the computations of the weighted-average number of common basic and diluted shares outstanding for each quarter and the full year are performed independently. |
Balance Beginning of Year | Charged to Costs and Expenses | Write-offs, Net of Recoveries and Actual Returns | Balance at End of Year | |||||||||||||
2017 | ||||||||||||||||
Allowance for doubtful accounts | $ | 582 | $ | 1,143 | $ | (277 | ) | $ | 1,448 | |||||||
Allowance for returns | 804 | 4,171 | (4,069 | ) | 906 | |||||||||||
Total | $ | 1,386 | $ | 5,314 | $ | (4,346 | ) | $ | 2,354 | |||||||
2016 | ||||||||||||||||
Allowance for doubtful accounts | $ | 1,644 | $ | (136 | ) | $ | (926 | ) | $ | 582 | ||||||
Allowance for returns | 1,024 | 4,714 | (4,934 | ) | 804 | |||||||||||
Total | $ | 2,668 | $ | 4,578 | $ | (5,860 | ) | $ | 1,386 | |||||||
2015 | ||||||||||||||||
Allowance for doubtful accounts | $ | 1,821 | $ | 1,764 | $ | (1,941 | ) | $ | 1,644 | |||||||
Allowance for returns | 935 | 5,501 | (5,412 | ) | 1,024 | |||||||||||
Total | $ | 2,756 | $ | 7,265 | $ | (7,353 | ) | $ | 2,668 |
• | Implementing specific review procedures designed to ensure inventory is being accurately matched to customer orders |
• | Strengthening our user access to the systems that execute our national online advertising. |
Plan Category | Number of Securities to Be Issued Upon Exercise of Outstanding Options, Warrants and Rights | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Second Column) | |||||||
Equity compensation plans approved by security holders | 1,106,023 | $ | 16.40 | 5,211,000 | ||||||
Equity compensation plans not approved by security holders | — | — | — | |||||||
Total | 1,106,023 | 5,211,000 |
1 | Financial Statements. |
2 | Financial Statement Schedules. |
3 | Exhibits. |
XO GROUP INC. |
By: /s/ Michael Steib Michael Steib Chief Executive Officer & President |
Signature | Title(s) | |
/s/ Michael Steib Michael Steib | Chief Executive Officer, President and Director (Principal Executive Officer) | |
/s/ Gillian Munson Gillian Munson | Chief Financial Officer (Principal Financial and Accounting Officer) | |
/s/ David Liu David Liu | Chairman of the Board of Directors | |
/s/ Charles Baker Charles Baker | Director | |
/s/ Diane Irvine Diane Irvine | Director | |
/s/ Barbara Messing Barbara Messing | Director | |
/s/ Peter Sachse Peter Sachse | Director | |
/s/ Elizabeth Schimel Elizabeth Schimel | Director | |
/s/ Michael Zeisser Michael Zeisser | Director |
Number | Description | |
3.1 | Amended and Restated Certificate of Incorporation (Incorporated by reference to Registrant’s Registration Statement on Form S-1 (Registration number 333-87345) (the “Form S-1”)) | |
Amended and Restated Bylaws (Incorporated by reference to Exhibit 3.1 to Registrant's Current Report on Form 8-K filed February 28, 2017) | ||
Certificate of Amendment to Amended and Restated Certificate of Incorporation (incorporated by reference to the identically numbered exhibit to Registrant's Quarterly Report on Form 10-Q filed August 5, 2011 (the “Q2 2011 10-Q”) | ||
Specimen Common Stock certificate (Incorporated by reference to the identically numbered exhibit to the Q2 2011 10-Q) | ||
4.2 | See Exhibits 3.1 and 3.2 for provisions defining the rights of holders of common stock of Registrant | |
2000 Non-Officer Stock Incentive Plan (Incorporated by reference to Exhibit 99.1 to Registrant’s Registration Statement on Form S-8 filed July 21, 2000 (Registration number 333-41960)) | ||
Amended and Restated 1999 Stock Incentive Plan (Incorporated by reference to Exhibit 99.1 to the Registrant’s Registration Statement on Form S-8 filed December 3, 2001 (Registration number 333-74398)) | ||
10.3* | 1999 Employee Stock Purchase Plan (Incorporated by reference to the Form S-1) | |
10.4* | Form of Indemnification Agreement (Incorporated by reference to the Form S-1) | |
Letter Agreement between The Knot, Inc. and Nic Di Iorio dated January 11, 2008 (Incorporated by reference to Exhibit 10.18 to Registrant’s Quarterly Report on Form 10-Q filed May 8, 2008) | ||
Letter Agreement between The Knot, Inc. and David Liu dated November 5, 2008 (Incorporated by reference to Exhibit 10.20 to Registrant’s Quarterly Report on Form 10-Q filed November 7, 2008 (the “Q3 2008 10-Q”)) | ||
Name And Likeness Licensing Agreement between The Knot, Inc. and Carley Roney dated November 5, 2008 (Incorporated by reference to Exhibit 10.22 to the Q3 2008 10-Q) | ||
2009 Stock Incentive Plan (Incorporated by reference to Exhibit 99.1 of Registrant's Registration Statement on Form S-8, filed May 22, 2009 (Registration number 333-159455)) | ||
2009 Employee Stock Purchase Plan (Incorporated by reference to Exhibit 99.2 of Registrant's Registration Statement on Form S-8, filed May 22, 2009 (Registration number 333-159455)) | ||
Amendment to Name And Likeness Licensing Agreement between The Knot, Inc. and Carley Roney dated as of February 18, 2010 (Incorporated by reference to Exhibit 10.29 to Registrant’s Quarterly Report on Form 10-Q filed May 10, 2010) | ||
Form of Restricted Stock Award Agreement under the 2009 Stock Incentive Plan (incorporated by reference to Exhibit 10.31 to Registrant’s Quarterly Report on Form 10-Q filed May 10, 2011) | ||
2011 Long-Term Incentive Plan (Incorporated by reference to Exhibit 10.32 to the Q2 2011 10-Q) | ||
Form of Participation Letter Agreement under the 2011 Long-Term Incentive Plan (Incorporated by reference to Exhibit 10.34 to the Registrant's Annual Report on Form 10-K filed March 18, 2013 (the "2013 Annual Report") | ||
Form of Restricted Stock Award Agreement for 2012 long-term incentive awards under the 2011 Long-Term Incentive Plan (Incorporated by reference to Exhibit 10.35 to the 2012 Annual Report) | ||
Form of Restricted Stock Award Agreement for 2013 awards under 2011 Long-Term Incentive Plan (Incorporated by reference to Exhibit 10.36 to the 2012 Annual Report) |
Form of Vested Stock Award Agreement for 2014 awards under 2011 Long-Term Incentive Plan (Incorporated by reference to the identically numbered exhibit to the 2013 Annual Report) | ||
Employment Agreement between XO Group Inc. and Michael Steib dated as of June 28, 2013 (Incorporated by reference to Exhibit 10.1 to Registrant's Current Report on Form 8-K filed July 3, 2013) | ||
Employment Agreement between XO Group Inc. and Gillian Munson dated as of November 12, 2013 (Incorporated by reference to Exhibit 10.1 to Registrant's Current Report on Form 8-K filed November 18, 2013) | ||
Letter Agreement between XO Group Inc. and David Liu dated April 7, 2014 (Incorporated by reference to Exhibit 10.1 to Registrant's Current Report on Form 8-K filed April 11, 2014) | ||
Amendment to Name and Likeness Licensing Agreement between XO Group Inc. and Carley Roney dated April 7, 2014 (Incorporated by reference to Exhibit 10.2 to Registrant's Current Report on Form 8-K filed April 11, 2014) | ||
Amended and Restated Letter Agreement between XO Group Inc. and David Liu dated April 16, 2014 (Incorporated by reference to Exhibit 10.1 to Registrant's Current Report on Form 8-K filed April 17, 2014) | ||
Amendment to the Employment Agreement between XO Group and Michael Steib dated April 17, 2014 (Incorporated by reference to Exhibit 10.2 to Registrant's Current Report on Form 8-K filed April 17, 2014) | ||
Amendment to the Employment Agreement between XO Group and Gillian Munson dated April 17, 2014 (Incorporated by reference to Exhibit 10.3 to Registrant's Current Report on Form 8-K filed April 17, 2014) | ||
2009 Stock Incentive Plan (Incorporated by reference to Exhibit 99.1 to Registrant's Registration Statement on Form S-8 filed August 15, 2014 (Registration number 333-198192)) | ||
Letter Agreement between XO Group Inc. and David Liu dated December 16, 2014 (Incorporated by reference to Exhibit 10.1 to Registrant's Current Report on Form 8-K filed December 16, 2014) | ||
Letter Agreement between XO Group Inc. and Carley Roney dated December 16, 2014 (Incorporated by reference to Exhibit 10.2 to Registrant's Current Report on Form 8-K filed December 16, 2014) | ||
Amended and Restated 2009 Employee Stock Purchase Plan (Incorporated by reference to Exhibit 99.1 of the Company's Registration Statement on Form S-8 filed July 28, 2016 (Registration number 333-212732)) | ||
Form of Option Award Agreement under the 2009 Stock Incentive Plan (Incorporated by reference to the identically numbered exhibit to Registrant's Annual Report on Form 10-K filed March 13, 2017) | ||
Letter Agreement between XO Group Inc. and Paul Bascobert effective September 7, 2016 (Incorporated by reference to Exhibit 10.52 to Registrant's Quarterly Report on Form 10-Q filed on November 3, 2016) | ||
Transition, Separation and General Release Agreement between XO Group Inc. and Kristin Savilia dated September 14, 2016 (Incorporated by reference to Exhibit 10.1 to Registrant's Current Report on Form 8-K filed September 14, 2016). | ||
2017 Stock Incentive Plan (Incorporated by reference to Exhibit 99.1 to Registrant's Registration Statement on Form S-8 filed August 8, 2017 (Registration number 333-219771)) | ||
Form of Restricted Stock Award Agreement under the 2017 Stock Incentive Plan (Incorporated by reference to Exhibit 10.1 to Registrant's Quarterly Report on Form 10-Q filed October 31, 2017) | ||
Form of Stock Option Award Agreement under the 2017 Stock Incentive Plan (Incorporated by reference to Exhibit 10.2 to Registrant's Quarterly Report on Form 10-Q filed October 31, 2017) | ||
Subsidiaries | ||
Consent of Ernst & Young LLP | ||
Certification of Chief Executive Officer and President Pursuant to Exchange Act Rule 13a-14(a), As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||
Certification of Chief Financial Officer Pursuant to Exchange Act Rule 13a-14(a), As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||
Certification of Chief Executive Officer and President Pursuant to 18 U.S.C Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||
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 | ||
101.INS** | XBRL Instance Document | |
101.SCH** | XBRL Taxonomy Extension Schema Document | |
101.CAL** | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.LAB** | XBRL Taxonomy Extension Labels Linkbase Document | |
101.PRE** | XBRL Taxonomy Extension Presentation Linkbase Document | |
101.DEF** | XBRL Taxonomy Extension Definition Linkbase Document |
* | Management contract or compensatory plan or arrangement |
† | The certifications attached as Exhibit 32.1 and Exhibit 32.2 accompany the Annual Report on Form 10-K pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed “filed” by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. |
** | Pursuant to applicable securities laws and regulations, the Registrant is deemed to have complied with the reporting obligation relating to the submission of interactive data files in such exhibits and is not subject to liability under any anti-fraud provisions of the federal securities laws as long as the Registrant has made a good faith attempt to comply with the submission requirements and promptly amends the interactive data files after becoming aware that the interactive data files fail to comply with the submission requirements. These interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under these sections. |
March 2, 2018 | By: | /s/ Michael Steib |
Name: Michael Steib | ||
Title: Chief Executive Officer | ||
(principal executive officer) |
March 2, 2018 | By: | /s/ Gillian Munson |
Name: Gillian Munson | ||
Title: Chief Financial Officer | ||
(principal financial and accounting officer) |
(1) | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
March 2, 2018 | By: | /s/ Michael Steib |
Michael Steib | ||
Chief Executive Officer |
(1) | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
March 2, 2018 | By: | /s/ Gillian Munson |
Gillian Munson | ||
Chief Financial Officer |
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Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Feb. 28, 2018 |
Jun. 30, 2017 |
|
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2017 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | XOXO | ||
Entity Registrant Name | XO GROUP INC. | ||
Entity Central Index Key | 0001062292 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 25,706,590 | ||
Entity Public Float | $ 370,141,472 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Accounts Receivable, allowances | $ 2,354 | $ 1,386 |
Preferred stock, par value (usd per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 25,696,796 | 26,304,925 |
Common stock, shares outstanding | 25,696,796 | 26,304,925 |
Nature of Operations |
12 Months Ended |
---|---|
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | Nature of Operations XO Group Inc.’s ("the Company") mission is to help people navigate and truly enjoy life’s biggest moments together. The Company’s multi-platform brands guide couples through transformative life stages - from getting married, to having a baby - and include The Knot, The Bump, and GigMasters. The Company offers content and marketing solutions, targeted advertising programs, transactions and merchandise. |
Significant Accounting Policies |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Accounting Policies | Significant Accounting Policies Principles of Consolidation The Consolidated Financial Statements include the accounts of XO Group Inc. and all 100% and majority owned subsidiaries, prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). All intercompany transactions and balances are eliminated in consolidation. Investments in which the Company has at least a 20%, but not more than a 50% interest are generally accounted for under the equity method. Investment interests below 20% are generally accounted for under the cost method, except if the Company could exercise significant influence, the investment would be accounted for under the equity method. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions made by management include the determination of fair value of equity awards issued, fair value of the Company’s reporting unit, valuation of assets and liabilities acquired in purchase accounting, including intangible assets (and their related useful lives), certain components of the income tax provisions, including valuation allowances on the Company’s deferred tax assets, compensation accruals, allowances for bad debts, reserves for future returns, estimates used in software capitalization, and the determination of best estimated selling prices in multiple element arrangements. The Company bases its estimates and assumptions on historical experience and on various other factors that it believes to be reasonable under the circumstances. The Company evaluates its estimates and assumptions on an ongoing basis. The level of uncertainty in estimates and assumptions increases with the length of time until the underlying transactions are completed. Actual results could differ from estimates in amounts that may be material to the financial statements. Comparative Data Certain prior year financial statement line items have been reclassified to conform to the current year's presentation. For the years ended December 31, 2016 and 2015, rent expense was reclassed from "Product and content development" and from "Sales and marketing" to "General and administrative" within "Operating expenses" on the Consolidated Statements of Operations. For the years ended December 31, 2016 and 2015, "Asset impairment charges" have been reclassified into "Depreciation and amortization". Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents. Cash and cash equivalents consist of cash on deposit with banks and money market funds. The market value of the Company’s cash equivalents approximates their cost plus accrued interest. Fair Value of Financial Instruments The carrying amounts of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, approximate fair value as of December 31, 2017 and 2016 due to the short-term nature of these instruments. Property and Equipment Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets, which range from three to seven years. Leasehold improvements are depreciated over the shorter of their estimated useful lives or the remaining term of the related lease agreement. The Company capitalizes qualifying computer software costs incurred during the application development stage and amortizes these costs over the estimated useful life of the software, ranging from one to three years, on a straight-line basis, beginning when the software is ready for its intended use. Maintenance and repair costs are expensed as incurred while expenditures for major renewals and improvements are capitalized. Upon the disposition of property and equipment, the cost and related accumulated depreciation are removed from the accounts. Goodwill and Other Intangible Assets Goodwill is the excess purchase price remaining from an acquisition after an allocation of purchase price has been made to identifiable assets acquired and liabilities assumed based on estimated fair values. Goodwill and intangible assets deemed to have indefinite lives are not amortized but are subject to annual impairment tests. The Company tests goodwill for impairment annually as of October 1 and more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The goodwill impairment analysis is a two-step test that is performed at the reporting unit level. The first step, used to identify potential impairment, involves comparing the reporting unit’s fair value to its carrying value including goodwill. If the fair value of a reporting unit exceeds its carrying value, the applicable goodwill is considered not to be impaired. If the carrying value exceeds fair value, there is an indication of a potential impairment and the second step of the test is performed to measure the amount of impairment. Should the carrying amount for a reporting unit exceed its fair value, then the first step of the quantitative impairment test is failed and the magnitude of any goodwill impairment is determined under the second step, which is a comparison of the implied fair value of a reporting unit’s goodwill to its carrying value. The implied fair value of goodwill is the excess of the fair value of the reporting unit over its carrying value, excluding goodwill. Impaired goodwill is written down to its implied fair value with a charge to expense in the period the impairment is identified. An impairment loss recognized cannot exceed the amount of goodwill assigned to a reporting unit, and the loss establishes a new basis in the goodwill. Subsequent reversal of goodwill impairment losses is not permitted. In accordance with accounting guidance, the Company may first perform a qualitative goodwill assessment to determine whether events or circumstances lead to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Factors such as macroeconomic conditions, industry and market considerations, cost and other factors are used to assess the validity of goodwill. If, after assessing the totality of events or circumstances, the Company determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step goodwill impairment test, as described above, is not necessary. If, however, the Company concludes otherwise, then the Company must perform the first step of the two-step impairment test by comparing the reporting unit’s fair value with its carrying value including goodwill. If the carrying value exceeds fair value, then the Company must perform the second step of the goodwill impairment test to measure the impairment loss, if any. The Company’s intangible assets deemed to have definite lives are amortized over their estimated useful lives, on a straight-line basis as follows:
The Company’s long-lived assets include software, computer and office equipment, and furniture and fixtures, which are subject to depreciation over the useful life of the asset and leasehold improvements, which are subject to amortization over the shorter of the useful life of the asset or the lease term. Long-lived assets, including definite-lived intangible assets, are evaluated for recoverability whenever events or changes in circumstances indicate that the carrying value of the asset may be impaired. In evaluating an asset for recoverability, the Company estimates the future cash flow expected to result from the use of the asset and eventual disposition. If the expected future undiscounted cash flow is less than the carrying amount of the asset, an impairment loss, equal to the excess of the carrying amount over the fair value of the asset, is recognized. The Company performs impairment evaluations annually as of October 1, or more often if events or changes in circumstances indicate that the carrying value may not be recoverable. See Note 7 for additional details on the impairments of certain intangible assets recorded during the year. Revenue Recognition The Company recognizes revenue primarily from the sale of online advertising programs, commissions earned in connection with the successful completion of a transaction, the publication of magazines and the sale of merchandise, provided that there is persuasive evidence of an arrangement, the product has been shipped or the service has been provided, selling price is fixed or determinable, collection is reasonably assured and the Company has no significant remaining obligation. Online programs include (i) online listings, including preferred placement, (ii) digital and native banner advertising, (iii) direct e-mail marketing, (iv) sponsored and brand-integrated content, and (v) placement in our online search tools. Certain elements of online advertising contracts provide for the delivery of a minimum number of impressions. Impressions are the featuring of a customer’s advertisement, banner, link or other form of content on the Company’s sites. Performance is measured for advertising contracts that contain minimum guaranteed impressions or other performance criteria primarily through tracking delivery of impressions. Revenue is recognized as performance criteria are met, which is typically on a straight-line basis. To the extent that minimum guaranteed impressions are not met, the Company is often obligated to extend the period of the contract until the guaranteed impressions are achieved. If this occurs, the Company defers and recognizes the corresponding revenue over the extended period based on impressions delivered. The Company does not have any material open-ended subscriptions with its advertisers. The Company’s transaction offerings provide opportunities for its audience to purchase products and services. The Company offers programs that enable vendors to sell through its online properties and their own branded websites and properties. The Company earns fixed fees, a percentage of sales, per-unit activity fees, or some combination thereof with respect to these transactions. Transactions revenue primarily represents commissions from retailers who participate in the Company’s registry aggregation service, which offers couples and their guests the opportunity to view multiple registries in one location and for guests to order gifts off of these registries. After the retail partners take a sales order or ship the sales order, depending on our contractual agreement with the registry partner, the related commissions are contractually earned by us and recognized as revenue. Product returns or exchanges do not materially impact the commissions earned by us. The Company only records net commissions, and not gross revenue and cost of revenue associated with these products, since the Company is not the primary obligor in these transactions, it is not subject to inventory risk and amounts earned are determined using a fixed percentage. Also included in Transactions revenue are commissions earned from marketplace bookings between party planners/hosts (customers) and providers of entertainment and event services (vendors) on our Gigmasters site. These commissions are generally recognized by the Company at a point in time when an event takes place and services are rendered by the vendor to the customer. Publishing revenue primarily includes print advertising revenue derived from the publication of national and regional magazines and guides. Publishing revenue is recognized upon the publication of the related magazines, at which time all material services related to the magazine have been performed. Additionally, publishing revenue is derived from the sale of magazines on newsstands and in bookstores. Title and risk of loss passes to our customer at the time they are received by the retailers. Revenue from the sale of magazines is reduced by an allowance for estimated sales returns. Merchandise revenue generally includes the selling price of wedding supplies through the Company’s websites, as well as related outbound shipping and handling charges since the Company is the primary party obligated in a transaction, is subject to inventory risk and establishes its own pricing and selection of suppliers. Title and risk of loss related to the Company’s merchandise operations passed to buyers generally upon shipment. The Company typically refunded customers or shipped replacement products in the event that there were damaged or lost products prior to delivery to the customer. Merchandise revenue is recognized when products are shipped, reduced by discounts as well as an allowance for estimated sales returns. Merchandise revenue excludes related sales taxes collected. There was no merchandise revenue for the years ended December 31, 2017 or 2016 as the Company exited its warehouse operations in Redding, California in the first quarter of 2015. The Company’s advertising arrangements often include multiple-element deliverables, primarily online and print advertising. The Company evaluates each element in a multiple-element arrangement to determine whether it represents a separate unit of accounting with standalone value. Each of the Company’s deliverables typically represents separate units of accounting and the arrangement consideration is allocated to the identified separate units of accounting based on their relative selling prices. The Company uses its best estimated selling price to determine the relative selling price as vendor specific objective evidence and third party objective evidence do not currently exist for any of the Company’s separate units of accounting. The Company evaluates its best estimated selling price by reviewing historical data related to sales of its deliverables. The Company's best estimate of selling price is intended to represent the price at which it would sell the item regularly on a stand-alone basis. The arrangement consideration allocated to online products and services is recognized as revenue based on delivery from the start date to the end date of the arrangement, which is typically on a straight-line basis, except for direct e-mails and social media posts which are recognized on the date of delivery. The arrangement consideration allocated to print products is recognized as revenue upon the publication of the related magazines. During the years ended December 31, 2017, 2016, and 2015, there were no material changes to the methods or assumptions used to determine the best estimated selling price for separate units of accounting that would have a material effect on the allocation of arrangement consideration. The Company evaluates multiple contracts entered into with the same advertiser as these contracts may need to be combined and accounted for as a single arrangement when the economics of the individual contracts cannot be understood without reference to the arrangement as a whole. Incremental costs incurred related to the acquisition of customer contracts is expensed as the related revenue is recognized. The Company limits the amount that is allocable to delivered items in its multiple-deliverable arrangements to the amount that is not contingent upon the delivery of other items in the arrangement. The Company has concluded that its right to receive consideration from the customer for delivered items is not linked to the successful delivery of the remaining performance obligations in the multiple-deliverable arrangement; however, revenue recognized for the value of each deliverable is limited to the amount contracted. Cost of Revenue Cost of revenue consists of costs related to internet and hosting services, payroll and direct expenses for Company personnel and external vendors who are responsible for the production of online media, the production of national and regional magazines, and the cost of merchandise sold, which includes outbound shipping and personalization costs. Deferred Revenue Deferred revenue represents payments received or billings in excess of revenue recognized, which are primarily related to online and print advertising contracts. Advertising Costs Advertising costs are expensed as incurred. Advertising expense was consistent each year at $3.8 million for the years ended December 31, 2017, 2016, and $1.3 million in 2015. Shipping and Handling Charges There were no shipping and handling charges in 2017 or 2016 as a result of exiting our merchandise business in the first quarter of 2015. Merchandise revenues included outbound shipping and handling charges of $0.1 million for the year ended December 31, 2015. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents and investments, and accounts receivable. Although the Company deposits its cash with more than one major financial institution, its deposits, at times, may exceed federally insured limits. The Company has not experienced any losses on cash and cash equivalent accounts to date and the Company believes it is not exposed to any significant credit risk related to cash. For the years ended December 31, 2017, 2016 and 2015, no individual customer represented more than 10% of net revenue. At December 31, 2017 and 2016, no individual customer accounted for more than 10% of accounts receivable. The Company’s customers are concentrated in the United States. The Company performs ongoing credit evaluations, generally does not require collateral, and establishes an allowance for doubtful accounts based upon factors surrounding the credit risk of customers, historical trends and other information. Stock-Based Compensation The Company measures the cost of employee services received in exchange for an award of equity instruments based on the measurement-date fair value of the award. The fair value of restricted stock awarded under the 2017 Stock Incentive Plan is determined using the intrinsic value of the stock at the time of grant. The fair value of the stock options granted in 2017, 2016, and 2015 from the 2017 Stock Incentive Plan was determined using the Black-Scholes option pricing model (see Note 4 for further details). Using this model, fair value was calculated based on assumptions with respect to (i) expected volatility of the Company's stock price, (ii) the expected term of the award, (iii) expected dividend yield on the Company's stock, and (iv) a risk-free interest rate, which is based on quoted U.S. Treasury rates for securities with maturities approximating the expected term. Specifically, the expected term of the options granted during 2017, 2016, and 2015 was determined using the "simplified method" as prescribed by Staff Accounting Bulletin ("SAB") Topic 14D.2, which is presumed to be the midpoint between the vesting date and the end of the contractual term. The simplified method was used to determine the expected term of the options, due to the infrequency in which the Company grants options, as well as differences in the contractual terms of the option awards compared to options granted in prior periods, such that the Company's historical share option experience does not provide a reasonable basis to estimate the expected term. The Company intends to continue to consistently apply the simplified method until a sufficient amount of historical information regarding exercise data becomes available. Expected volatility is calculated using historical prices for the Company's stock. The expected dividend yield is zero, as the Company has never paid dividends and currently intends to retain future earnings, if any, to finance the expansion of the business. The fair value of the Employee Stock Purchase Plan (“ESPP”) rights granted from the amended and restated 2009 Employee Stock Purchase Plan is estimated on the date of grant using the Black-Scholes option-pricing model (see Note 4 for further details). Using this model, fair value is calculated based on assumptions with respect to (i) expected volatility of the Company's stock price, (ii) the expected life of the award, which for ESPP rights is the period of time between the offering date and the exercise date (as defined in Note 4), (iii) expected dividend yield on the Company's stock, and (iv) a risk-free interest rate, which is based on quoted U.S. Treasury rates for securities with maturities approximating the expected term. For grants of restricted stock and stock options, the Company records compensation expense based on the fair value of the shares on the grant date over the requisite service period, less estimated forfeitures. Compensation expense for ESPP rights is recorded in line with each respective offering period. In 2017, forfeitures of equity awards have been recorded as they occur based on the adoption of ASU 2016-09 rather than estimated at the grant date. Refer to "Recently Issued Accounting Pronouncements" in Note 2 for further detail. Income Taxes The Company accounts for income taxes using the asset and liability method, as required by the accounting standard for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as net operating loss and tax credit carryforwards. Deferred taxes are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred taxes of a change in tax rates is recognized in results of operations in the period that includes the enactment date. The effects of any future changes in tax laws or rates have not been considered. The Company regularly reviews deferred tax assets to assess their potential realization and establish a valuation allowance for portions of such assets to reduce the carrying value if the Company does not consider it to be more likely than not that the deferred tax assets will be realized. The review includes evaluating both positive (e.g., sources of taxable income) and negative (e.g., recent historical losses) evidence that could impact the realizability of our deferred tax assets. The Company records interest and penalties related to income taxes as a component of income tax expense. The Company recognizes the impact of an uncertain tax position in its financial statements if, in management's judgment, the position is more-likely-than-not sustainable upon audit based on the position's technical merits. This involves the identification of potential uncertain tax positions, the evaluation of applicable tax laws and an assessment of whether a liability for an uncertain tax position is necessary. We operate and are subject to audit in multiple taxing jurisdictions. A 1% change to our effective tax rate would have changed our annual net income by approximately $0.1 million during each of the years ended December 31, 2017, and 2015, and for 2016, $0.2 million. Earnings per Share Basic earnings per share is computed by dividing the net income for the period by the weighted average number of common shares outstanding during the period. Diluted earnings per share adjusts basic earnings per share for the effects of stock options, restricted stock, and the “ESPP”, only in the periods in which the effects are dilutive. The accounting standard pertaining to earnings per share precludes the calculation of diluted earnings per share when a net loss is presented. Common equivalent shares are excluded from the diluted computation if their effect is antidilutive. The following table sets forth the number of weighted average stock options, restricted stock, and ESPP shares excluded from the calculation of diluted earnings per share for the years ended December 31, 2017, 2016, and 2015 because to include them in the calculation would be antidilutive.
Segments and Geographical Areas The Company operates in one reportable segment, as it is organized around its online and offline media service lines. The Company has defined its Chief Operating Decision Maker ("CODM") to be its Chief Executive Officer. The Company's CODM receives monthly financial results, which contain revenues, cost of revenues, and gross margin of the three components of the Company's business: (i) Local (ii) National and (iii) Transactions. In addition, there is a substantial amount of costs that benefit all service lines, but are not allocated to individual cost of revenue categories. Revenue information at the product or service level is not captured in the Company’s financial reporting systems and is not included in internal management reporting. The Company does not currently disclose revenue from products and services as it is currently impractical to obtain the necessary data. No individual foreign country accounted for more than 10% of the Company's revenue during the years ended December 31, 2017, 2016, or 2015. No individual foreign country accounted for more than 10% of the Company's accounts receivable during the years ended December 31, 2017 or 2016. The Company holds fixed assets in the United States and China. The Company does not hold greater than 10% of the Company's fixed assets outside of the United States. Recently Issued Accounting Pronouncements In May 2014, FASB and the International Accounting Standards Board jointly issued a new revenue recognition standard that is designed to improve financial reporting by creating common recognition guidance for U.S. GAAP and International Financial Reporting Standards. The new guidance issued under ASU 2014-09, Revenue from Contracts with Customers (“Topic 606”) provides a more robust framework for addressing revenue issues, improves the comparability of revenue recognition practices across industries, provides more useful information to users of financial statements through improved disclosure requirements and simplifies the presentation of financial statements. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance permits the use of either of the following transition methods: (i) a full retrospective method reflecting the application of the standard in each prior reporting period with the option to elect certain practical expediencies, or (ii) a modified retrospective approach with the cumulative effect of initially adopting the standard recognized at the date of adoption (which includes additional footnote disclosures). The original effective date of the new standard was for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. In August 2015, the FASB issued an ASU that defers by one year the effective date of this new revenue recognition standard. As a result, the new standard will be effective for annual reporting periods beginning after December 15, 2017, although companies may adopt the standard as early as the original effective date. Early application prior to the original effective date is not permitted. The Company will adopt the standard as of January 1, 2018 utilizing the full retrospective adoption method in order to provide for comparative results in all periods presented. Using the full retrospective method, the Company will recast its 2017 and 2016 consolidated financial statements beginning in the first quarter of 2018. The Company has completed the majority of its assessment of the impact of adopting this new standard and expects that the overall impact will be immaterial. The Company is in the process of completing its analysis of accounting for modifications, however, also expects that the impact of accounting for modifications will be immaterial to its consolidated financial statements. The Company does not believe there are any remaining significant implementation topics associated with the adoption of ASC 606 that have not yet been addressed. Under ASC 606, entities are required to disaggregate revenue into categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. The Company expects to disaggregate our revenues consistently with the disaggregation presented in these consolidated financial statements. The Company is evaluating the disclosure requirements beyond the requirement to disaggregate revenue as well as assessing the impact of ASC 606 on its internal controls over financial reporting. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities guidance requiring equity securities to be measured at fair value with changes in fair value recognized through net income and will eliminate the cost method for equity securities without readily determinable fair values. The guidance is effective for annual reporting periods beginning after December 15, 2017, and interim periods within those annual periods. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases, an accounting standards update that replaces existing lease accounting standards. The new standard requires lessees to recognize on the balance sheet a right-of use asset, representing its right to use the underlying asset for the lease term, and a lease liability for all leases with terms greater than 12 months. The guidance also requires qualitative and quantitative disclosures designed to assess the amount, timing, and uncertainty of cash flows arising from leases. Treatment of lease payments in the statement of earnings and statement of cash flows is relatively unchanged from previous guidance. The new standard is required to be applied with a modified retrospective approach to each prior reporting period presented with various optional practical expedients. The standard is effective for annual reporting periods beginning after December 15, 2018, with early adoption permitted. The Company is currently in the process of evaluating its existing leases. As such, the Company is currently evaluating the effect the guidance will have on its consolidated financial statements. In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”) intended to simplify several areas of accounting for share-based compensation arrangements. ASU 2016-09 requires all tax effects related to share-based payments at settlement or expiration to be recorded through the statement of operations and be reported as operating activities on the statement of cash flows. Further, under the new guidance, entities are permitted to make an accounting policy election for the impact of forfeitures on the recognition of expense for share-based payment awards; forfeitures can either be estimated (as required under the previous guidance) or recognized when they occur. The guidance also provides that cash paid to a tax authority when shares are withheld from employees to satisfy a company's statutory income tax withholding obligation be classified as financing activities on the statement of cash flows. The Company adopted ASU 2016-09 as of January 1, 2017, which had the following impact during the twelve months ended December 31, 2017:
In March 2016, FASB issued ASU 2016-07, Investments - Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting (“ASU 2016-07”), which eliminated the requirement to restate historical financial statements, as if the equity method had been used during all previous periods, when an existing cost method investment qualifies for use of the equity method. Under the new guidance, at the point an investment qualifies for the equity method, any unrealized gain or loss in accumulated other comprehensive loss may be recognized through earnings. The Company adopted ASU 2016-07 as of January 1, 2017 with no impact on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments guidance for the accounting for credit losses on instruments within its scope. Given the breadth of that scope, this guidance will impact both financial services and non-financial services entities. The standard is effective for fiscal years beginning after December 15, 2020. The Company is currently evaluating the effect the guidance will have on its consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, guidance on statement of cash flows presentation for eight specific cash flow issues where diversity in practice exists. This guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company is currently evaluating the effect the guidance will have on its consolidated financial statements. In October 2016, FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory, guidance intended to reduce the complexity of U.S. GAAP and diversity in practice related to the tax consequences of certain types of intra-entity asset transfers, particularly those involving intellectual property. This guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company is currently evaluating the effect the guidance will have on its consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash guidance amending the presentation of restricted cash within the statement of cash flows. The new guidance requires that restricted cash be included within cash and cash equivalents on the statement of cash flows. The guidance is effective retrospectively for reporting periods beginning after December 15, 2017, with early adoption permitted. The Company is currently evaluating the effect the guidance will have on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-01, Clarifying the Definition of a Business (“ASU 2017-01”). ASU 2017-01 clarifies the definition of a business in ASC 805, Business Combinations. The amendments in ASU 2017-01 are intended to make application of the guidance more consistent and cost-efficient. ASU 2017-01 is effective for annual and interim periods beginning after December 15, 2017, with early adoption permitted for transactions that occurred before the issuance date or effective date of the standard if the transactions were not reported in financial statements that have been issued or made available for issuance. The Company adopted ASU 2017-01 as of September 30, 2017. The adoption did not have a material impact on the Company’s consolidated financial statements. In May 2017, the FASB issued ASU No. 2017-09, Compensation – Stock Compensation: Scope of Modification Accounting (“ASU 2017-09”). ASU 2017-09 provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718, Compensation – Stock Compensation. Specifically, an entity would not apply modification accounting if the fair value, vesting conditions, and classification of the awards are the same immediately before and after the modification. ASU 2017-09 is effective for annual and interim periods beginning after December 15, 2017, and early adoption is permitted. The Company does not expect the adoption of ASU 2017-09 to have a material impact on the Company’s consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment guidance that would eliminate Step 2 from the goodwill impairment test. This guidance is effective for the fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company adopted this guidance effective with its October 1, 2017 annual goodwill impairment analysis. The adoption did not have a material impact on the Company's consolidated financial statements. Other Product and content development, sales and marketing expenses, and general and administrative expenses are all presented exclusive of depreciation and amortization, which are shown separately within "Operating expenses." |
Fair Value Measurements |
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Fair Value Measurements | Fair Value Measurements Cash and cash equivalents and investments consist of the following:
The inputs to the valuation techniques used to measure fair value are classified into the following categories: Level 1 — Quoted prices in active markets for identical assets or liabilities Level 2 — Quoted prices for similar assets and liabilities in active markets or inputs that are observable Level 3 — Inputs that are unobservable (for example, cash flow modeling inputs based on assumptions) As of December 31, 2017, the Company’s investment in cash and cash equivalents of $106.1 million, short-term investments of $0.1 million and long-term restricted cash of $1.2 million were measured at fair value using Level 1 inputs. The short-term investments amount is included in “Prepaid expenses and other current assets” on the Consolidated Balance Sheet as of December 31, 2017. Long-term restricted cash consists of a letter of credit collateralized by U.S. Treasury bills that are restricted as to withdrawal or use under terms of the Company’s New York office lease. During the year ended December 31, 2017, there were no transfers in or out of the Company’s Level 1 assets. |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation The Company maintains several stock-based compensation plans, which are more fully described below. The Company includes total stock-based compensation expense related to all its stock awards in various operating expense categories for the years ended December 31, 2017, 2016 and 2015, as shown in the table below.
XO Group Stock-Based Incentive Plans The Company’s 2017 Stock Incentive Plan (formerly referred to as the Amended and Restated 2009 Stock Incentive Plan, as amended, and referred to herein as the “Incentive Plan”) was originally adopted by the Board of Directors, and became effective in May 2009 following approval by the Company's stockholders, as a successor plan to the Company’s 1999 Stock Incentive Plan (the “1999 Plan”). All incentive stock options, nonqualified stock options (incentive and nonqualified stock options are collectively referred to as “options”), stock appreciation rights, stock issuances which may be subject to the attainment of designated performance goals or service requirements (“restricted stock”), or any combination thereof outstanding under the 1999 Plan have been incorporated into the Incentive Plan. Initially, 1,000,000 shares of common stock of the Company were reserved for issuance in addition to the 4,829,344 shares that were incorporated from the 1999 Plan. Following approval by the stockholders, effective May 2014, an additional 2,700,000 shares were added to the shares reserved for the Incentive Plan. Thereafter, following approval by the stockholders, effective May 2017, the Amended and Restated 2009 Stock Incentive Plan was renamed the 2017 Stock Incentive Plan, an additional 3,700,000 shares were added to the shares reserved for the Incentive Plan, and the term remaining under the Incentive Plan was extended from May 20, 2019 to March 31, 2027. The Incentive Plan provides that awards may be granted to such non-employee directors, officers, employees and consultants of the Company as the Compensation Committee of the Board of Directors shall select in its discretion. Only employees of the Company are eligible to receive grants of incentive stock options. Options are granted at the fair market value of the stock on the date of grant. Options vest over periods up to four years and have terms not to exceed ten years. Restricted stock awards vest over periods ranging from one year to four years. As of December 31, 2017, there were 4,966,712 shares available for future grants under the Incentive Plan. Increases to the number of shares available for future grants under the Incentive Plan require approval by the Board of Directors and the Company's stockholders. Options The following table represents a summary of the Company’s stock option activity under the 2009 Plan and related information, without regard for estimated forfeitures, for the years ended December 31, 2017 and December 31, 2016:
The fair value of the options granted during the year ended December 31, 2017 have been estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:
The expected term of the options granted during the year ended December 31, 2017 was generally determined using the "simplified method" as prescribed by SAB Topic 14D.2, which is presumed to be the midpoint between the vesting date and the end of the contractual term. The simplified method was used to determine the expected term of the options granted during the years ended December 31, 2017, 2016 and 2015, due to the extended period of time that has lapsed since the Company's last granted options, as well as differences in the contractual terms of the option awards compared to options granted in prior periods, such that our historical share option experience does not provide a reasonable basis to estimate the expected term. The risk-free interest rates are based on quoted U.S. Treasury rates for securities with maturities approximating the expected term of the options. Expected volatility is based on the historical volatility of the market price of the Company’s stock. During the years ended December 31, 2017, 2016, and 2015 the Company recorded $1.7 million, $1.2 million, and $0.5 million of compensation expense related to options, respectively. The weighted average grant-date fair value of options granted during the years ended December 31, 2017, 2016, and 2015, was $6.79, $6.04, and $8.09, respectively. The intrinsic value of the options exercised during the years ended December 31, 2017 and December 31 2016, was $0.3 million and $0.1 million, respectively. No options were exercised during the year ended December 31, 2015. The following table summarizes information about options outstanding and exercisable at December 31, 2017:
The aggregate intrinsic value of stock options outstanding at December 31, 2017 was $2.3 million. The aggregate intrinsic value of exercisable options outstanding at December 31, 2017 was $1.3 million. The intrinsic value for stock options is calculated based on the exercise price of the underlying awards and the quoted closing price of the Company’s common stock as of December 31, 2017. Service-Based Restricted Stock Awards The following table summarizes the activity for awards of restricted stock with service-based vesting terms for the years ended December 31, 2017 and December 31, 2016:
For the years ended December 31, 2017, 2016 and 2015, the weighted average grant date fair value for service-based restricted stock granted was $17.77, $16.49 and $16.30, respectively. The fair value of service-based restricted stock that vested during these periods was $9.1 million, $5.5 million and $5.2 million, respectively. During the years ended December 31, 2017, 2016 and 2015, 198,043, 162,101 and 193,088 shares of service-based restricted stock, respectively, were repurchased by the Company in connection with the surrender of these shares by employees to satisfy tax withholding obligations related to the vesting of the service-based stock awards. The aggregate intrinsic value of unvested service-based restricted shares as of December 31, 2017 was $13.6 million. The intrinsic value for service-based restricted shares is calculated based on the par value of the underlying shares and the quoted price of the Company’s common stock as of December 31, 2017. As of December 31, 2017, there was $9.1 million of total unrecognized compensation cost related to non-vested service-based restricted shares, which is expected to be recognized over a weighted average period of 2.27 years. During the years ended December 31, 2017, 2016 and 2015, the Company recorded $5.9 million, $6.4 million and $5.1 million, respectively, of compensation expense related to service-based restricted shares. Performance-Based Restricted Stock Awards During each of the years ended December 31, 2016, and 2015, the Company granted 31,250 performance based restricted shares of common stock to its CEO, pursuant to his employment agreement. Vesting of these awards was based upon (1) the achievement of performance goals established by the Compensation Committee of the Board and (2) continued employment with the Company through the vesting date. The performance period for these awards ended on December 31 of each year with 2016 being the final year. During the years ended 2016, and 2015, the Company incurred stock-based compensation expense related to these performance-based restricted stock awards of $0.6 million and $0.4 million, respectively. An immaterial amount of expense was recorded in 2017 in connection with marking the award to market. As of December 31, 2017, the award has fully vested and there is no remaining expense on non-vested shares outstanding. During the years ended December 31, 2017, 2016 and 2015, 11,803, 12,954, and 12,882 shares of performance-based restricted stock, respectively, were repurchased by the Company in connection with the surrender of these shares by employees to satisfy tax withholding obligations related to the vesting of the performance-based stock awards. For the year ended December 31, 2017 no additional performance-based awards were granted. Employee Stock Purchase Plan ("ESPP") The 2009 Employee Stock Purchase Plan (the “2009 ESPP”) was adopted by the Board of Directors, and was approved by the stockholders in May 2009, as a successor plan to the Company’s 1999 Employee Stock Purchase Plan (the “1999 ESPP”). The first offering period under the 2009 ESPP began August 1, 2009 and shares were first purchased under this plan on January 31, 2010. The 2009 ESPP was amended and restated in May 2016 (the "Amended 2009 ESPP") following the approval by the Company's stockholders. The Compensation Committee of the Board of Directors administers the ESPP. The 2009 ESPP permits a participating employee to make contributions to purchase shares of common stock by having withheld from his or her salary an amount between 1% and 15% of compensation. Under the Amended 2009 ESPP, eligible employees of the Company may elect to participate before the start date of a semi-annual offering period. On each purchase date during an offering period, a participating employee’s contributions will be used to purchase up to 1,000 shares of the Company’s common stock for such participating employee at a 15% discount from the fair market value, as defined in the 2009 ESPP, of such stock. In addition to the 1,000 share purchase limit, the cost of shares purchased under the plan by a participating employee cannot exceed $25,000 in any plan year. Under the terms of the Amended 2009 ESPP, 600,000 shares of common stock of the Company were reserved for issuance. As of December 31, 2017, there were 243,656 shares available for future grants under the 2009 Amended ESPP. Increases to the number of shares available for future grants under the Amended 2009 ESPP require approval by the Board of Directors and the Company's stockholders. During the years ended December 31, 2017 and 2016, the Company issued shares of common stock under the 2009 ESPP and Amended 2009 ESPP, as follows:
The fair value of 2009 ESPP rights have been estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:
Expected volatility is based on the historical volatility of the market price of the Company’s stock. The expected lives of ESPP rights granted are based on the period of time between the offering date and the exercise date. The risk-free interest rates are based on the quoted U.S. Treasury rates for securities with maturities approximating the expected term. The fair value for 2009 ESPP rights includes the option exercise price discount from market value provided for under the 2009 ESPP. During each of the years ended December 31, 2017, 2016 and 2015, the Company recorded $0.2 million of compensation expense related to 2009 ESPP rights. The weighted average grant-date fair value of 2009 ESPP rights arising from elections made by ESPP participants was $3.48, $3.01 and $3.13 during the years ended December 31, 2017, 2016 and 2015, respectively. The fair value of 2009 ESPP rights that vested during the years ended December 31, 2017 and 2016 was $0.2 million, and $0.1 million, in 2015 respectively. The intrinsic value of shares purchased through the 2009 ESPP during the year ended December 31, 2017 was $0.2 million. The intrinsic value of outstanding 2009 ESPP rights as of December 31, 2017 was $0.1 million. The intrinsic value of the shares of 2009 ESPP rights is calculated as the discount from the quoted price of the Company’s common stock, as defined in the 2009 ESPP, which was available to employees as of the respective dates. As of December 31, 2017, there was approximately $14.9 thousand of unrecognized compensation cost for the 2009 ESPP rights related to a 2017 offering period, which is expected to be recognized over a period of one month. The Company received cash from the exercise of options and 2009 ESPP rights of $1.8 million, $0.9 million and $0.5 million for the years ended December 31, 2017, 2016 and 2015, respectively, for which the Company issued new shares of common stock. The tax benefit attributable to all recorded stock-based compensation was $3.1 million, $2.6 million and $2.4 million for the years ended December 31, 2017, 2016 and 2015, respectively. |
Acquisitions and Exit Activities |
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Acquisitions and Exit Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions and Exit Activities | Acquisitions and Exit Activities Acquisitions On September 15, 2017 the Company acquired the assets of Veri, Inc., a photo-sharing app focused on weddings and events, in exchange for consideration of $3.5 million, of which approximately $3.2 million was paid in cash during the quarter. The remaining approximately $0.3 million was retained by the Company as a holdback and accrued as a liability to settle indemnification claims made by the Company and its affiliates, should such claims arise. The holdback is included in “Other liabilities” on the Consolidated Balance Sheets as of December 31, 2017. The holdback period is 18 months, and the balance of the accrual will either be used to settle indemnification claims or be released to the seller in March 2019. An allocation of purchase price has been completed as of December 31, 2017 which resulted in a technology value in the amount of $0.7 million based upon its fair value assessed as of the acquisition date. The technology value is included in “Intangible assets, net” on the Consolidated Balance Sheet as of December 31, 2017. The excess of the purchase price over the fair value of the assets acquired, of approximately $2.8 million, was allocated to goodwill and is expected to be deductible for tax purposes. The goodwill is primarily attributable to the synergies expected to arise after the acquisition. On September 7, 2016 the Company acquired the assets of How He Asked LLC, a digital and social media brand for pre-engaged couples, in exchange for consideration of $1.5 million, of which approximately $1.4 million was paid in cash during the third quarter. The remaining approximate $0.1 million was retained by the Company as a holdback and accrued as a liability to settle indemnification claims made by the Company and its affiliates, should such claims arise. The holdback period was 12 months, and the balance of the accrual was released to the seller in September 2017. A portion of the purchase price was allocated to a trade name in the amount of $0.2 million based upon its fair value assessed as of the acquisition date. The trade name value is included in “Intangible assets, net” on the Consolidated Balance Sheets. The excess of the purchase price over the fair value of the assets acquired, of approximately $1.3 million was allocated to goodwill and is expected to be deductible for tax purposes. The goodwill is primarily attributable to the synergies expected to arise after the acquisition. On October 1, 2015, the Company acquired GigMasters.com Incorporated ("GigMasters"), a marketplace for party planners and hosts to find entertainment and event services. The Company previously owned 28.7% of GigMasters and paid $6.1 million in cash for the remaining 71.3% representing a total enterprise value of $7.9 million. In connection with the acquisition, the Company recorded a gain of $0.8 million related to the fair market value of its noncontrolling interest in GigMasters. A portion of the purchase price was allocated to the net tangible and intangible assets, in the amounts of $0.5 million and $3.7 million, respectively, based upon their fair values assessed as of the acquisition date. The excess of the purchase price over these fair values was allocated to goodwill, all of which is deductible for tax purposes. The goodwill is primarily attributable to the synergies expected to arise after the acquisition. The allocation of the purchase price is as follows:
Exit Activities The Company's merchandise operations included the fulfillment of customer orders from its warehouse facility in Redding, California. After reviewing the past and expected financial performance of the operations, in October 2014, the Company committed to a plan to cease operations at its warehouse in Redding, California. The process was completed in the first quarter of 2015. The Company continues to serve the transactional needs of its users through a registry and partner-based model for providing users with desired products and services. |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment | Property and equipment The components of Property and equipment are as follows:
For the years ended December 31, 2017, 2016 and 2015, the Company recorded amortization of capitalized software of $4.2 million, $4.0 million, and $3.3 million, and depreciation expense of $1.1 million, $1.4 million, and $1.8 million respectively. For the year ended December 31, 2017, the Company recorded impairments of capitalized software of $0.6 million. For the years ended, December 31, 2016 and 2015, no impairments of property and equipment were made. |
Goodwill and Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The changes in the carrying amount of goodwill for the years ended December 31, 2017 and 2016 are as follows:
Other intangible assets consisted of the following:
The Company evaluates intangible assets annually as of October 1 for impairment, or more often if indicators of impairment exist. In its assessment of impairment of intangible assets, the Company considers whether events or changes in circumstances such as significant declines in revenues, earnings or material adverse changes in the business climate indicate that the carrying value of assets may be impaired. For the year ended December 31, 2017, no impairment charges were recorded. The Company recorded an immaterial amount of impairment of its intangibles, related to URLs, during the year ended December 31, 2016, which is recorded within the "Depreciation and Amortization" line within the Consolidated Statement of Operations. The annual impairment analysis as of October 1, 2015 resulted in the Company concluding that definite-lived assets, related to patents, were impaired, resulting in an impairment charge of $0.3 million. Amortization expense for definite-lived intangible assets was $2.2 million, $0.8 million and $0.4 million for the years ended December 31, 2017, 2016 and 2015, respectively. Estimated annual amortization expense is $0.9 million in 2018, $0.8 million in 2019, $0.7 million in 2020, $0.5 million in 2021, and $0.7 million thereafter. |
Investments |
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||
Investments | Investments As of December 31, 2017, the Company's investments of $1.4 million include equity ownership in the following entities:
On July 17, 2015, the Company made an investment of $1.0 million in cash in exchange for a 21.1% equity interest (based on common and preferred shares outstanding) in A Vendor Services Company. During the twelve months ended December 31, 2016, the Company purchased additional equity interests in exchange for cash, increasing it's ownership to 34.1%. The Company uses the equity method of accounting for this investment since the ownership percentage is greater than 20% and the Company exercises significant influence. As of December 31, 2017, the Company has an investment of $0.4 million in Catchafire, Inc., an entity that matches professionally skilled volunteers with non-profits and social enterprises, that is accounted for using the cost method. In January, 2017, Catchafire, Inc. raised additional funding in a round in which the Company did not participate resulting in a decrease in its equity interest to 3.6%. On July 2, 2015, the Company contributed $1.5 million in cash in exchange for a 17.6% equity interest (based on common and preferred shares outstanding) in Jetaport, a hotel room block marketplace technology company. During the three months ended June 30, 2017, the Company determined that impairment indicators existed in its investment. As of June 30, 2017, Jetaport, Inc. had not yet raised additional capital, and based upon Jetaport, Inc.'s financial condition, an other-than-temporary impairment of $1.0 million was recorded to reduce its carrying value of Jetaport, Inc. to zero. The impairment is included in “Loss in equity interests” within the 2017 Consolidated Statement of Operations. On January 16, 2014 the Company entered into an agreement to contribute $4 million in cash in exchange for a minority equity interest of approximately 3% in Touch Media International Holdings ("Touch Media"), During the year ended December 31, 2015, the Company determined that impairment indicators existed based upon consistent material underperformance to Touch Media's financial projections and a weak financial condition. As a result, the Company recorded an impairment charge of $4.0 million to reduce it's investment to $0. The Company's proportionate shares of the operating results of its equity method investments, including GigMasters through September 30, 2015, are recorded in gain (loss) in equity interests in the Company's Consolidated Statements of Operations. (Loss) gain in equity interests for the years ended December 31, 2017, 2016 and 2015 were $(1.2) million, $(0.3) million, and $0.5 million, respectively. |
Capital Stock |
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Stockholders' Equity Note [Abstract] | ||||||||||||||||||||||
Capital Stock | Capital Stock The Company’s Amended and Restated Certificate of Incorporation provides for 105,000,000 authorized shares of capital stock consisting of 100,000,000 shares of common stock, each having a par value of $0.01 per share and 5,000,000 shares of preferred stock, each having a par value of $0.001. The Board of Directors is authorized, without further stockholder approval, to issue from time to time up to an aggregate of 5,000,000 shares of preferred stock, in one or more series and to fix or alter the designations, preferences, rights, and any qualifications, limitations or restrictions, of the shares of each series thereof, including the dividend rights, dividend rates, conversion rights, voting rights, terms of redemption, including sinking fund provisions, redemption price or prices, liquidation preferences and the number of shares constituting any series or designation of series. At December 31, 2017, the Company had reserved the following shares of common stock for future issuance under the Company’s 2017 Stock Incentive Plan (formerly referred to as the Amended and Restated 2009 Stock Incentive Plan, as amended, and referred to herein as the “Incentive Plan”) and the Amended and Restated 2009 Employee Stock Purchase Plan (collectively, the “Plans”):
On April 10, 2013, the Company announced that its Board of Directors authorized the repurchase of up to $20.0 million of the Company’s common stock (the “April 2013 Repurchase Program”). On May 23, 2016, our Board of Directors authorized an additional $20.0 million repurchase of our common stock from time to time on the open market or in privately negotiated transactions, together with the April 2013 Repurchase Program (collectively, the “Repurchase Programs”). During the twelve months ended December 31, 2017, the Company repurchased and retired 775,370 shares of its common stock pursuant to the Repurchase Programs. The Company used $13.3 million of cash for such repurchases at an average price paid per share of $17.16. During the twelve months ended December 31, 2016, the Company repurchased and retired 230,163 shares of its common stock using $4.0 million of cash for such repurchases at an average price paid per share of $17.19. As of December 31, 2017, the Company has repurchased a total of 1,640,012 shares of its common stock for an aggregate of $27.7 million with approximately $12.3 million remaining under the Repurchase Programs. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes The components of the provision for income taxes are as follows:
On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act made broad and significant changes to the U.S. tax code that affects the year ended December 31, 2017, including, but not limited to, a change in the federal rate from 35% to 21%, as well as the requirement to pay a one-time transition tax (“deemed repatriation tax”) on all undistributed earnings of foreign subsidiaries. As of December 31, 2017, the Company had not completed its accounting for the tax effects of the Tax Act; however, the Company made a reasonable estimate of the effects on its existing deferred tax balances and the one-time transition tax. In accordance with Staff Accounting Bulletin 118 (“SAB 118”), income tax effects of the Tax Act may be refined upon obtaining, preparing, or analyzing additional information during the measurement period and such changes could be material. During the measurement period, provisional amounts may be adjusted for the effects, if any, of interpretative guidance issued after December 31, 2017, by U.S. regulatory and standard-setting bodies. The reconciliation of income tax expense computed at the U.S. federal statutory rate to the income tax provision for the years ended December 31, 2017, 2016 and 2015 is as follows:
The Company adopted ASU 2016-09 as of January 1, 2017, which resulted in the Company recording excess tax benefits from share-based award activity as a reduction of the provision for income taxes, whereas they were previously recognized in equity. Refer to "Recently Issued Accounting Pronouncements" in Note 2 for further detail. The Tax Act reduces the U.S. corporate income tax rate from 35% to 21% effective January 1, 2018. The Company recorded a provisional expense of $3.0 million with a corresponding decrease to its net deferred tax assets. Included in the $3.0 million amount is the Company's estimate of the deemed repatriation tax in the amount of $0.3 million. The deemed repatriation tax is a tax on previously untaxed earnings and profits of certain foreign subsidiaries. To determine the amount of the tax, the Company must determine, in addition to other factors, the amount of earnings and profits subject to U.S. tax for the relevant subsidiaries, as well as the amount of non-U.S. income taxes paid on such earnings. The Company continues to gather additional information to more precisely compute the amount of deemed repatriation tax, which may be impacted by further legislative technical corrections, amendments and/or revised earnings and profits computations. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities consist of the following:
As of December 31, 2017, the Company had net operating loss carryforwards of approximately $23.4 million for federal tax purposes, which are set to expire in years 2018 through 2028. The majority of this amount represents acquired tax loss carryforwards of WeddingChannel.com, which are subject to limitation on future utilization under Section 382 of the Internal Revenue Code of 1986. Section 382 imposes limitations on the availability of a company’s net operating losses after a more than 50 percentage point ownership change occurs over a 3 year period. It is estimated that the effect of Section 382 will generally limit the amount of the net operating loss carryforwards of WeddingChannel.com that is available to offset future taxable income to approximately $3.6 million annually. The overall determination of the annual loss limitation is subject to interpretation, and, therefore, the annual loss limitation could be subject to change. The following is a reconciliation of the Company’s unrecognized tax benefits for 2017 and 2016:
As of December 31, 2017, $0.7 million of unrecognized tax benefits is presented within other long-term liabilities in the Consolidated Balance Sheets. These unrecognized tax benefits would affect the Company's effective income tax rate, if and when recognized in future years. The remainder of the unrecognized tax benefits has been netted against the related deferred and current tax assets and, if recognized, would also be reported as a reduction of income tax expense. The Company does not presently anticipate such uncertain tax positions will significantly increase or decrease in the next twelve months; however, actual developments could differ from those currently expected. The Company is subject to income tax in the United States and various foreign state and local jurisdictions. During 2017, the IRS completed an audit on the 2015 tax year and concluded there were no adjustments necessary to the filed tax return. The Company currently has no state and foreign audits pending. During 2017, the Company received a “Notice of Proposed Deficiency” from the state of Illinois in the amount of $9,000, including interest and penalties. The Company agreed with the auditor’s assessment. State income tax returns are generally subject to examination for a period of three to five years after filing of the return. However, the state impact of any federal changes remains subject to examination by various states for a period generally up to one year after formal notification to the states of the federal changes. The Company records interest and penalties as a component of income tax expense. The total interest and penalties included in the Company's tax provision for the years ended December 31, 2017 and 2016 was immaterial. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies Long-Term Restricted Cash Long-term restricted cash consists of a $1.2 million letter of credit collateralized by U.S. Treasury bills that are restricted as to withdrawal or use under terms of the Company's New York office lease. Operating Leases The Company leases office facilities under non-cancelable operating lease agreements which expire at various dates through 2025. Rent-free periods and scheduled rent increases are recorded as components of rent expense on a straight-line basis over the related terms of such leases. Certain leases contain incentive allowances which are recorded as reductions to rent expense on a straight-line basis over the remaining lease terms from such time that the allowances were authorized. Rent expense for each of the years ended December 31, 2017, 2016 and 2015 amounted to $2.9 million, $2.4 million and $3.0 million, respectively. Future minimum lease payments under non-cancelable operating leases are as follows (amounts in thousands):
Legal Proceedings As of December 31, 2017, the Company was engaged in certain legal actions arising in the ordinary course of business and believes that the ultimate outcome of these actions will not have a material effect on its results of operations, financial position or cash flows. Other Commitments and Contingencies The Company has additional purchase commitments in connection with information technology contracts which extend into 2019. In connection with the sale of our Ijie operations in December 2014, the Company agreed to indemnify the buyers for certain liabilities that may arise related to events prior to the sale transaction or breach of our covenants under the sale agreement. We do not believe this will have a material effect on the Consolidated Financial Statements. |
401(k) Plan |
12 Months Ended |
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Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
401(k) Plan | 401(k) Plan The Company maintains a 401(k) plan covering all eligible employees and provides for a Company match on a portion of eligible compensation. Employees may contribute up to 92% of their eligible compensation, subject to IRS maximums. The Company matches 25% of the first 4% of eligible compensation. The Company’s matching contributions are made in cash and amounted to $0.6 million, $0.5 million and $0.4 million for the years ended December 31, 2017, 2016 and 2015, respectively. |
Quarterly Financial Data (Unaudited) |
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Quarterly Financial Data [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information | Quarterly Financial Data (Unaudited) The following tables set forth certain unaudited Condensed Consolidated quarterly Statement of Operations data for the eight quarters ended December 31, 2017. This information is unaudited, but in the opinion of management, it has been prepared substantially on the same basis as the audited Consolidated Financial Statements and all necessary adjustments, consisting only of normal recurring adjustments, have been included in the amounts stated below to present fairly the unaudited Consolidated quarterly Results of Operations. The Condensed Consolidated Quarterly Data should be read in conjunction with our audited Consolidated Financial Statements and the notes to such statements. The results of operations for any quarter are not necessarily indicative of the results of operations for any future period.
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Schedule II - Valuation and Qualifying Accounts |
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Valuation and Qualifying Accounts [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Valuation and Qualifying Accounts | Schedule II — Valuation and Qualifying Accounts For the Years Ended December 31, 2017, 2016 and 2015 (amounts in thousands)
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Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||
Principles of Consolidation | Principles of Consolidation The Consolidated Financial Statements include the accounts of XO Group Inc. and all 100% and majority owned subsidiaries, prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). All intercompany transactions and balances are eliminated in consolidation. Investments in which the Company has at least a 20%, but not more than a 50% interest are generally accounted for under the equity method. Investment interests below 20% are generally accounted for under the cost method, except if the Company could exercise significant influence, the investment would be accounted for under the equity method. |
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Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions made by management include the determination of fair value of equity awards issued, fair value of the Company’s reporting unit, valuation of assets and liabilities acquired in purchase accounting, including intangible assets (and their related useful lives), certain components of the income tax provisions, including valuation allowances on the Company’s deferred tax assets, compensation accruals, allowances for bad debts, reserves for future returns, estimates used in software capitalization, and the determination of best estimated selling prices in multiple element arrangements. The Company bases its estimates and assumptions on historical experience and on various other factors that it believes to be reasonable under the circumstances. The Company evaluates its estimates and assumptions on an ongoing basis. The level of uncertainty in estimates and assumptions increases with the length of time until the underlying transactions are completed. Actual results could differ from estimates in amounts that may be material to the financial statements. |
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Comparative Data | Comparative Data Certain prior year financial statement line items have been reclassified to conform to the current year's presentation. For the years ended December 31, 2016 and 2015, rent expense was reclassed from "Product and content development" and from "Sales and marketing" to "General and administrative" within "Operating expenses" on the Consolidated Statements of Operations. For the years ended December 31, 2016 and 2015, "Asset impairment charges" have been reclassified into "Depreciation and amortization". |
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Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents. Cash and cash equivalents consist of cash on deposit with banks and money market funds. The market value of the Company’s cash equivalents approximates their cost plus accrued interest. |
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Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, approximate fair value as of December 31, 2017 and 2016 due to the short-term nature of these instruments. |
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Property and Equipment | Property and Equipment Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets, which range from three to seven years. Leasehold improvements are depreciated over the shorter of their estimated useful lives or the remaining term of the related lease agreement. The Company capitalizes qualifying computer software costs incurred during the application development stage and amortizes these costs over the estimated useful life of the software, ranging from one to three years, on a straight-line basis, beginning when the software is ready for its intended use. Maintenance and repair costs are expensed as incurred while expenditures for major renewals and improvements are capitalized. Upon the disposition of property and equipment, the cost and related accumulated depreciation are removed from the accounts. |
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Goodwill and Other Intangibles | Goodwill and Other Intangible Assets Goodwill is the excess purchase price remaining from an acquisition after an allocation of purchase price has been made to identifiable assets acquired and liabilities assumed based on estimated fair values. Goodwill and intangible assets deemed to have indefinite lives are not amortized but are subject to annual impairment tests. The Company tests goodwill for impairment annually as of October 1 and more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The goodwill impairment analysis is a two-step test that is performed at the reporting unit level. The first step, used to identify potential impairment, involves comparing the reporting unit’s fair value to its carrying value including goodwill. If the fair value of a reporting unit exceeds its carrying value, the applicable goodwill is considered not to be impaired. If the carrying value exceeds fair value, there is an indication of a potential impairment and the second step of the test is performed to measure the amount of impairment. Should the carrying amount for a reporting unit exceed its fair value, then the first step of the quantitative impairment test is failed and the magnitude of any goodwill impairment is determined under the second step, which is a comparison of the implied fair value of a reporting unit’s goodwill to its carrying value. The implied fair value of goodwill is the excess of the fair value of the reporting unit over its carrying value, excluding goodwill. Impaired goodwill is written down to its implied fair value with a charge to expense in the period the impairment is identified. An impairment loss recognized cannot exceed the amount of goodwill assigned to a reporting unit, and the loss establishes a new basis in the goodwill. Subsequent reversal of goodwill impairment losses is not permitted. In accordance with accounting guidance, the Company may first perform a qualitative goodwill assessment to determine whether events or circumstances lead to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Factors such as macroeconomic conditions, industry and market considerations, cost and other factors are used to assess the validity of goodwill. If, after assessing the totality of events or circumstances, the Company determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step goodwill impairment test, as described above, is not necessary. If, however, the Company concludes otherwise, then the Company must perform the first step of the two-step impairment test by comparing the reporting unit’s fair value with its carrying value including goodwill. If the carrying value exceeds fair value, then the Company must perform the second step of the goodwill impairment test to measure the impairment loss, if any. The Company’s intangible assets deemed to have definite lives are amortized over their estimated useful lives, on a straight-line basis as follows:
The Company’s long-lived assets include software, computer and office equipment, and furniture and fixtures, which are subject to depreciation over the useful life of the asset and leasehold improvements, which are subject to amortization over the shorter of the useful life of the asset or the lease term. Long-lived assets, including definite-lived intangible assets, are evaluated for recoverability whenever events or changes in circumstances indicate that the carrying value of the asset may be impaired. In evaluating an asset for recoverability, the Company estimates the future cash flow expected to result from the use of the asset and eventual disposition. If the expected future undiscounted cash flow is less than the carrying amount of the asset, an impairment loss, equal to the excess of the carrying amount over the fair value of the asset, is recognized. The Company performs impairment evaluations annually as of October 1, or more often if events or changes in circumstances indicate that the carrying value may not be recoverable. See Note 7 for additional details on the impairments of certain intangible assets recorded during the year. |
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Revenue Recognition | Revenue Recognition The Company recognizes revenue primarily from the sale of online advertising programs, commissions earned in connection with the successful completion of a transaction, the publication of magazines and the sale of merchandise, provided that there is persuasive evidence of an arrangement, the product has been shipped or the service has been provided, selling price is fixed or determinable, collection is reasonably assured and the Company has no significant remaining obligation. Online programs include (i) online listings, including preferred placement, (ii) digital and native banner advertising, (iii) direct e-mail marketing, (iv) sponsored and brand-integrated content, and (v) placement in our online search tools. Certain elements of online advertising contracts provide for the delivery of a minimum number of impressions. Impressions are the featuring of a customer’s advertisement, banner, link or other form of content on the Company’s sites. Performance is measured for advertising contracts that contain minimum guaranteed impressions or other performance criteria primarily through tracking delivery of impressions. Revenue is recognized as performance criteria are met, which is typically on a straight-line basis. To the extent that minimum guaranteed impressions are not met, the Company is often obligated to extend the period of the contract until the guaranteed impressions are achieved. If this occurs, the Company defers and recognizes the corresponding revenue over the extended period based on impressions delivered. The Company does not have any material open-ended subscriptions with its advertisers. The Company’s transaction offerings provide opportunities for its audience to purchase products and services. The Company offers programs that enable vendors to sell through its online properties and their own branded websites and properties. The Company earns fixed fees, a percentage of sales, per-unit activity fees, or some combination thereof with respect to these transactions. Transactions revenue primarily represents commissions from retailers who participate in the Company’s registry aggregation service, which offers couples and their guests the opportunity to view multiple registries in one location and for guests to order gifts off of these registries. After the retail partners take a sales order or ship the sales order, depending on our contractual agreement with the registry partner, the related commissions are contractually earned by us and recognized as revenue. Product returns or exchanges do not materially impact the commissions earned by us. The Company only records net commissions, and not gross revenue and cost of revenue associated with these products, since the Company is not the primary obligor in these transactions, it is not subject to inventory risk and amounts earned are determined using a fixed percentage. Also included in Transactions revenue are commissions earned from marketplace bookings between party planners/hosts (customers) and providers of entertainment and event services (vendors) on our Gigmasters site. These commissions are generally recognized by the Company at a point in time when an event takes place and services are rendered by the vendor to the customer. Publishing revenue primarily includes print advertising revenue derived from the publication of national and regional magazines and guides. Publishing revenue is recognized upon the publication of the related magazines, at which time all material services related to the magazine have been performed. Additionally, publishing revenue is derived from the sale of magazines on newsstands and in bookstores. Title and risk of loss passes to our customer at the time they are received by the retailers. Revenue from the sale of magazines is reduced by an allowance for estimated sales returns. Merchandise revenue generally includes the selling price of wedding supplies through the Company’s websites, as well as related outbound shipping and handling charges since the Company is the primary party obligated in a transaction, is subject to inventory risk and establishes its own pricing and selection of suppliers. Title and risk of loss related to the Company’s merchandise operations passed to buyers generally upon shipment. The Company typically refunded customers or shipped replacement products in the event that there were damaged or lost products prior to delivery to the customer. Merchandise revenue is recognized when products are shipped, reduced by discounts as well as an allowance for estimated sales returns. Merchandise revenue excludes related sales taxes collected. There was no merchandise revenue for the years ended December 31, 2017 or 2016 as the Company exited its warehouse operations in Redding, California in the first quarter of 2015. The Company’s advertising arrangements often include multiple-element deliverables, primarily online and print advertising. The Company evaluates each element in a multiple-element arrangement to determine whether it represents a separate unit of accounting with standalone value. Each of the Company’s deliverables typically represents separate units of accounting and the arrangement consideration is allocated to the identified separate units of accounting based on their relative selling prices. The Company uses its best estimated selling price to determine the relative selling price as vendor specific objective evidence and third party objective evidence do not currently exist for any of the Company’s separate units of accounting. The Company evaluates its best estimated selling price by reviewing historical data related to sales of its deliverables. The Company's best estimate of selling price is intended to represent the price at which it would sell the item regularly on a stand-alone basis. The arrangement consideration allocated to online products and services is recognized as revenue based on delivery from the start date to the end date of the arrangement, which is typically on a straight-line basis, except for direct e-mails and social media posts which are recognized on the date of delivery. The arrangement consideration allocated to print products is recognized as revenue upon the publication of the related magazines. During the years ended December 31, 2017, 2016, and 2015, there were no material changes to the methods or assumptions used to determine the best estimated selling price for separate units of accounting that would have a material effect on the allocation of arrangement consideration. The Company evaluates multiple contracts entered into with the same advertiser as these contracts may need to be combined and accounted for as a single arrangement when the economics of the individual contracts cannot be understood without reference to the arrangement as a whole. Incremental costs incurred related to the acquisition of customer contracts is expensed as the related revenue is recognized. The Company limits the amount that is allocable to delivered items in its multiple-deliverable arrangements to the amount that is not contingent upon the delivery of other items in the arrangement. The Company has concluded that its right to receive consideration from the customer for delivered items is not linked to the successful delivery of the remaining performance obligations in the multiple-deliverable arrangement; however, revenue recognized for the value of each deliverable is limited to the amount contracted. |
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Cost of Revenue | Cost of Revenue Cost of revenue consists of costs related to internet and hosting services, payroll and direct expenses for Company personnel and external vendors who are responsible for the production of online media, the production of national and regional magazines, and the cost of merchandise sold, which includes outbound shipping and personalization costs. |
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Deferred Revenue | Deferred Revenue Deferred revenue represents payments received or billings in excess of revenue recognized, which are primarily related to online and print advertising contracts. |
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Advertising Costs | Advertising Costs Advertising costs are expensed as incurred. Advertising expense was consistent each year at $3.8 million for the years ended December 31, 2017, 2016, and $1.3 million in 2015. |
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Shipping and Handling Charges | Shipping and Handling Charges There were no shipping and handling charges in 2017 or 2016 as a result of exiting our merchandise business in the first quarter of 2015. Merchandise revenues included outbound shipping and handling charges of $0.1 million for the year ended December 31, 2015. |
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Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents and investments, and accounts receivable. Although the Company deposits its cash with more than one major financial institution, its deposits, at times, may exceed federally insured limits. The Company has not experienced any losses on cash and cash equivalent accounts to date and the Company believes it is not exposed to any significant credit risk related to cash. For the years ended December 31, 2017, 2016 and 2015, no individual customer represented more than 10% of net revenue. At December 31, 2017 and 2016, no individual customer accounted for more than 10% of accounts receivable. The Company’s customers are concentrated in the United States. The Company performs ongoing credit evaluations, generally does not require collateral, and establishes an allowance for doubtful accounts based upon factors surrounding the credit risk of customers, historical trends and other information. |
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Stock-Based Compensation | Stock-Based Compensation The Company measures the cost of employee services received in exchange for an award of equity instruments based on the measurement-date fair value of the award. The fair value of restricted stock awarded under the 2017 Stock Incentive Plan is determined using the intrinsic value of the stock at the time of grant. The fair value of the stock options granted in 2017, 2016, and 2015 from the 2017 Stock Incentive Plan was determined using the Black-Scholes option pricing model (see Note 4 for further details). Using this model, fair value was calculated based on assumptions with respect to (i) expected volatility of the Company's stock price, (ii) the expected term of the award, (iii) expected dividend yield on the Company's stock, and (iv) a risk-free interest rate, which is based on quoted U.S. Treasury rates for securities with maturities approximating the expected term. Specifically, the expected term of the options granted during 2017, 2016, and 2015 was determined using the "simplified method" as prescribed by Staff Accounting Bulletin ("SAB") Topic 14D.2, which is presumed to be the midpoint between the vesting date and the end of the contractual term. The simplified method was used to determine the expected term of the options, due to the infrequency in which the Company grants options, as well as differences in the contractual terms of the option awards compared to options granted in prior periods, such that the Company's historical share option experience does not provide a reasonable basis to estimate the expected term. The Company intends to continue to consistently apply the simplified method until a sufficient amount of historical information regarding exercise data becomes available. Expected volatility is calculated using historical prices for the Company's stock. The expected dividend yield is zero, as the Company has never paid dividends and currently intends to retain future earnings, if any, to finance the expansion of the business. The fair value of the Employee Stock Purchase Plan (“ESPP”) rights granted from the amended and restated 2009 Employee Stock Purchase Plan is estimated on the date of grant using the Black-Scholes option-pricing model (see Note 4 for further details). Using this model, fair value is calculated based on assumptions with respect to (i) expected volatility of the Company's stock price, (ii) the expected life of the award, which for ESPP rights is the period of time between the offering date and the exercise date (as defined in Note 4), (iii) expected dividend yield on the Company's stock, and (iv) a risk-free interest rate, which is based on quoted U.S. Treasury rates for securities with maturities approximating the expected term. For grants of restricted stock and stock options, the Company records compensation expense based on the fair value of the shares on the grant date over the requisite service period, less estimated forfeitures. Compensation expense for ESPP rights is recorded in line with each respective offering period. In 2017, forfeitures of equity awards have been recorded as they occur based on the adoption of ASU 2016-09 rather than estimated at the grant date. Refer to "Recently Issued Accounting Pronouncements" in Note 2 for further detail. |
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Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability method, as required by the accounting standard for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as net operating loss and tax credit carryforwards. Deferred taxes are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred taxes of a change in tax rates is recognized in results of operations in the period that includes the enactment date. The effects of any future changes in tax laws or rates have not been considered. The Company regularly reviews deferred tax assets to assess their potential realization and establish a valuation allowance for portions of such assets to reduce the carrying value if the Company does not consider it to be more likely than not that the deferred tax assets will be realized. The review includes evaluating both positive (e.g., sources of taxable income) and negative (e.g., recent historical losses) evidence that could impact the realizability of our deferred tax assets. The Company records interest and penalties related to income taxes as a component of income tax expense. The Company recognizes the impact of an uncertain tax position in its financial statements if, in management's judgment, the position is more-likely-than-not sustainable upon audit based on the position's technical merits. This involves the identification of potential uncertain tax positions, the evaluation of applicable tax laws and an assessment of whether a liability for an uncertain tax position is necessary. We operate and are subject to audit in multiple taxing jurisdictions. A 1% change to our effective tax rate would have changed our annual net income by approximately $0.1 million during each of the years ended December 31, 2017, and 2015, and for 2016, $0.2 million. |
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Earnings per Share | Earnings per Share Basic earnings per share is computed by dividing the net income for the period by the weighted average number of common shares outstanding during the period. Diluted earnings per share adjusts basic earnings per share for the effects of stock options, restricted stock, and the “ESPP”, only in the periods in which the effects are dilutive. The accounting standard pertaining to earnings per share precludes the calculation of diluted earnings per share when a net loss is presented. Common equivalent shares are excluded from the diluted computation if their effect is antidilutive. The following table sets forth the number of weighted average stock options, restricted stock, and ESPP shares excluded from the calculation of diluted earnings per share for the years ended December 31, 2017, 2016, and 2015 because to include them in the calculation would be antidilutive.
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Segments and Geographic Areas | Segments and Geographical Areas The Company operates in one reportable segment, as it is organized around its online and offline media service lines. The Company has defined its Chief Operating Decision Maker ("CODM") to be its Chief Executive Officer. The Company's CODM receives monthly financial results, which contain revenues, cost of revenues, and gross margin of the three components of the Company's business: (i) Local (ii) National and (iii) Transactions. In addition, there is a substantial amount of costs that benefit all service lines, but are not allocated to individual cost of revenue categories. Revenue information at the product or service level is not captured in the Company’s financial reporting systems and is not included in internal management reporting. The Company does not currently disclose revenue from products and services as it is currently impractical to obtain the necessary data. No individual foreign country accounted for more than 10% of the Company's revenue during the years ended December 31, 2017, 2016, or 2015. No individual foreign country accounted for more than 10% of the Company's accounts receivable during the years ended December 31, 2017 or 2016. The Company holds fixed assets in the United States and China. The Company does not hold greater than 10% of the Company's fixed assets outside of the United States. |
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Recently Adopted Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, FASB and the International Accounting Standards Board jointly issued a new revenue recognition standard that is designed to improve financial reporting by creating common recognition guidance for U.S. GAAP and International Financial Reporting Standards. The new guidance issued under ASU 2014-09, Revenue from Contracts with Customers (“Topic 606”) provides a more robust framework for addressing revenue issues, improves the comparability of revenue recognition practices across industries, provides more useful information to users of financial statements through improved disclosure requirements and simplifies the presentation of financial statements. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance permits the use of either of the following transition methods: (i) a full retrospective method reflecting the application of the standard in each prior reporting period with the option to elect certain practical expediencies, or (ii) a modified retrospective approach with the cumulative effect of initially adopting the standard recognized at the date of adoption (which includes additional footnote disclosures). The original effective date of the new standard was for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. In August 2015, the FASB issued an ASU that defers by one year the effective date of this new revenue recognition standard. As a result, the new standard will be effective for annual reporting periods beginning after December 15, 2017, although companies may adopt the standard as early as the original effective date. Early application prior to the original effective date is not permitted. The Company will adopt the standard as of January 1, 2018 utilizing the full retrospective adoption method in order to provide for comparative results in all periods presented. Using the full retrospective method, the Company will recast its 2017 and 2016 consolidated financial statements beginning in the first quarter of 2018. The Company has completed the majority of its assessment of the impact of adopting this new standard and expects that the overall impact will be immaterial. The Company is in the process of completing its analysis of accounting for modifications, however, also expects that the impact of accounting for modifications will be immaterial to its consolidated financial statements. The Company does not believe there are any remaining significant implementation topics associated with the adoption of ASC 606 that have not yet been addressed. Under ASC 606, entities are required to disaggregate revenue into categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. The Company expects to disaggregate our revenues consistently with the disaggregation presented in these consolidated financial statements. The Company is evaluating the disclosure requirements beyond the requirement to disaggregate revenue as well as assessing the impact of ASC 606 on its internal controls over financial reporting. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities guidance requiring equity securities to be measured at fair value with changes in fair value recognized through net income and will eliminate the cost method for equity securities without readily determinable fair values. The guidance is effective for annual reporting periods beginning after December 15, 2017, and interim periods within those annual periods. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases, an accounting standards update that replaces existing lease accounting standards. The new standard requires lessees to recognize on the balance sheet a right-of use asset, representing its right to use the underlying asset for the lease term, and a lease liability for all leases with terms greater than 12 months. The guidance also requires qualitative and quantitative disclosures designed to assess the amount, timing, and uncertainty of cash flows arising from leases. Treatment of lease payments in the statement of earnings and statement of cash flows is relatively unchanged from previous guidance. The new standard is required to be applied with a modified retrospective approach to each prior reporting period presented with various optional practical expedients. The standard is effective for annual reporting periods beginning after December 15, 2018, with early adoption permitted. The Company is currently in the process of evaluating its existing leases. As such, the Company is currently evaluating the effect the guidance will have on its consolidated financial statements. In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”) intended to simplify several areas of accounting for share-based compensation arrangements. ASU 2016-09 requires all tax effects related to share-based payments at settlement or expiration to be recorded through the statement of operations and be reported as operating activities on the statement of cash flows. Further, under the new guidance, entities are permitted to make an accounting policy election for the impact of forfeitures on the recognition of expense for share-based payment awards; forfeitures can either be estimated (as required under the previous guidance) or recognized when they occur. The guidance also provides that cash paid to a tax authority when shares are withheld from employees to satisfy a company's statutory income tax withholding obligation be classified as financing activities on the statement of cash flows. The Company adopted ASU 2016-09 as of January 1, 2017, which had the following impact during the twelve months ended December 31, 2017:
In March 2016, FASB issued ASU 2016-07, Investments - Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting (“ASU 2016-07”), which eliminated the requirement to restate historical financial statements, as if the equity method had been used during all previous periods, when an existing cost method investment qualifies for use of the equity method. Under the new guidance, at the point an investment qualifies for the equity method, any unrealized gain or loss in accumulated other comprehensive loss may be recognized through earnings. The Company adopted ASU 2016-07 as of January 1, 2017 with no impact on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments guidance for the accounting for credit losses on instruments within its scope. Given the breadth of that scope, this guidance will impact both financial services and non-financial services entities. The standard is effective for fiscal years beginning after December 15, 2020. The Company is currently evaluating the effect the guidance will have on its consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, guidance on statement of cash flows presentation for eight specific cash flow issues where diversity in practice exists. This guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company is currently evaluating the effect the guidance will have on its consolidated financial statements. In October 2016, FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory, guidance intended to reduce the complexity of U.S. GAAP and diversity in practice related to the tax consequences of certain types of intra-entity asset transfers, particularly those involving intellectual property. This guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company is currently evaluating the effect the guidance will have on its consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash guidance amending the presentation of restricted cash within the statement of cash flows. The new guidance requires that restricted cash be included within cash and cash equivalents on the statement of cash flows. The guidance is effective retrospectively for reporting periods beginning after December 15, 2017, with early adoption permitted. The Company is currently evaluating the effect the guidance will have on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-01, Clarifying the Definition of a Business (“ASU 2017-01”). ASU 2017-01 clarifies the definition of a business in ASC 805, Business Combinations. The amendments in ASU 2017-01 are intended to make application of the guidance more consistent and cost-efficient. ASU 2017-01 is effective for annual and interim periods beginning after December 15, 2017, with early adoption permitted for transactions that occurred before the issuance date or effective date of the standard if the transactions were not reported in financial statements that have been issued or made available for issuance. The Company adopted ASU 2017-01 as of September 30, 2017. The adoption did not have a material impact on the Company’s consolidated financial statements. In May 2017, the FASB issued ASU No. 2017-09, Compensation – Stock Compensation: Scope of Modification Accounting (“ASU 2017-09”). ASU 2017-09 provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718, Compensation – Stock Compensation. Specifically, an entity would not apply modification accounting if the fair value, vesting conditions, and classification of the awards are the same immediately before and after the modification. ASU 2017-09 is effective for annual and interim periods beginning after December 15, 2017, and early adoption is permitted. The Company does not expect the adoption of ASU 2017-09 to have a material impact on the Company’s consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment guidance that would eliminate Step 2 from the goodwill impairment test. This guidance is effective for the fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company adopted this guidance effective with its October 1, 2017 annual goodwill impairment analysis. The adoption did not have a material impact on the Company's consolidated financial statements. |
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Depreciation, Depletion, and Amortization [Policy Text Block] | Other Product and content development, sales and marketing expenses, and general and administrative expenses are all presented exclusive of depreciation and amortization, which are shown separately within "Operating expenses. |
Significant Accounting Policies (Tables) |
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Schedule of Intangible Assets Deemed to have Definite Lives | The Company’s intangible assets deemed to have definite lives are amortized over their estimated useful lives, on a straight-line basis as follows:
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Schedule of Antidilutive Securities Excluded from Computation of EPS | The following table sets forth the number of weighted average stock options, restricted stock, and ESPP shares excluded from the calculation of diluted earnings per share for the years ended December 31, 2017, 2016, and 2015 because to include them in the calculation would be antidilutive.
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Fair Value Measurements (Tables) |
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Cash and Cash Equivalents and Investments | Cash and cash equivalents and investments consist of the following:
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Stock-Based Compensation (Tables) |
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Stock-Based Compensation Expense | The Company maintains several stock-based compensation plans, which are more fully described below. The Company includes total stock-based compensation expense related to all its stock awards in various operating expense categories for the years ended December 31, 2017, 2016 and 2015, as shown in the table below.
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Summary of Stock Option Activity and Related Information, without Regard for Estimated Forfeitures | The following table represents a summary of the Company’s stock option activity under the 2009 Plan and related information, without regard for estimated forfeitures, for the years ended December 31, 2017 and December 31, 2016:
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Fair Value of Options Estimated using Black-Scholes Option Pricing Model | The fair value of the options granted during the year ended December 31, 2017 have been estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:
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Information about Options Outstanding | The following table summarizes information about options outstanding and exercisable at December 31, 2017:
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Restricted Stock Activity | The following table summarizes the activity for awards of restricted stock with service-based vesting terms for the years ended December 31, 2017 and December 31, 2016:
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Shares Issued Under the Employee Stock Purchase Plan | During the years ended December 31, 2017 and 2016, the Company issued shares of common stock under the 2009 ESPP and Amended 2009 ESPP, as follows:
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Fair Value of Employee Stock Purchase Plan Estimated using Black-Scholes Option Pricing Model | The fair value of 2009 ESPP rights have been estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:
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Schedule of Business Acquisitions, by Acquisition | The allocation of the purchase price is as follows:
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Property and Equipment (Tables) |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment | The components of Property and equipment are as follows:
|
Goodwill and Other Intangible Assets (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Change in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill for the years ended December 31, 2017 and 2016 are as follows:
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Other Intangible Assets | Other intangible assets consisted of the following:
|
Investments (Tables) |
12 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017 | |||||||||||
Equity Method Investments and Joint Ventures [Abstract] | |||||||||||
Schedule of Equity Method Investments | As of December 31, 2017, the Company's investments of $1.4 million include equity ownership in the following entities:
|
Capital Stock Capital Stock (Tables) |
12 Months Ended | |||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017 | ||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | ||||||||||||||||||||||
Schedule of Shares of Common Stock Reserved for Future Issuance | At December 31, 2017, the Company had reserved the following shares of common stock for future issuance under the Company’s 2017 Stock Incentive Plan (formerly referred to as the Amended and Restated 2009 Stock Incentive Plan, as amended, and referred to herein as the “Incentive Plan”) and the Amended and Restated 2009 Employee Stock Purchase Plan (collectively, the “Plans”):
|
Income Taxes Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Provision (Benefit) for Income Taxes | The components of the provision for income taxes are as follows:
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Reconciliation of Income Tax Expense (Benefit) | The reconciliation of income tax expense computed at the U.S. federal statutory rate to the income tax provision for the years ended December 31, 2017, 2016 and 2015 is as follows:
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Schedule of Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred tax assets and liabilities consist of the following:
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Reconciliation of Unrecognized Tax Benefits | The following is a reconciliation of the Company’s unrecognized tax benefits for 2017 and 2016:
|
Commitments and Contingencies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Lease Payments | Future minimum lease payments under non-cancelable operating leases are as follows (amounts in thousands):
|
Quarterly Financial Data (Unaudited) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Data [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Quarterly Financial Information | The following tables set forth certain unaudited Condensed Consolidated quarterly Statement of Operations data for the eight quarters ended December 31, 2017. This information is unaudited, but in the opinion of management, it has been prepared substantially on the same basis as the audited Consolidated Financial Statements and all necessary adjustments, consisting only of normal recurring adjustments, have been included in the amounts stated below to present fairly the unaudited Consolidated quarterly Results of Operations. The Condensed Consolidated Quarterly Data should be read in conjunction with our audited Consolidated Financial Statements and the notes to such statements. The results of operations for any quarter are not necessarily indicative of the results of operations for any future period.
|
Significant Accounting Policies - Comparative Data and Property and Equipment (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Accounting Policies [Abstract] | |||
Accrued compensation and employee benefits | $ 6,100 | $ 6,164 | |
Property, Plant and Equipment [Line Items] | |||
Amortization of Capitalized Software | $ 4,200 | $ 4,000 | $ 3,300 |
Property and equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, estimated useful lives | 3 years | ||
Property and equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, estimated useful lives | 7 years | ||
Capitalized software | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, estimated useful lives | 1 year | ||
Capitalized software | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, estimated useful lives | 3 years |
Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Accounting Policies [Abstract] | |||
Merchandise | $ 0 | $ 0 | $ 878 |
Significant Accounting Policies - Advertising Costs (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Accounting Policies [Abstract] | ||
Advertising expense | $ 3,800,000 | $ 1,300,000 |
Shipping, Handling and Transportation Costs | $ 0 | $ 100,000 |
Significant Accounting Policies - Concentration of Credit Risk (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017
Financial_Institution
|
Dec. 31, 2016
Customer
|
Dec. 31, 2015
Customer
|
|
Concentration Risk [Line Items] | |||
Number of financial institutions | Financial_Institution | 1 | ||
Sales Revenue, Net | |||
Concentration Risk [Line Items] | |||
Customer Concentration | 0 | 0 | |
Concentration risk (less than 1%) | 10.00% | 10.00% | 10.00% |
Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Customer Concentration | 0 | ||
Concentration risk (less than 1%) | 10.00% | 10.00% |
Significant Accounting Policies - Earnings Per Share (Details) - shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 174,829,000 | 624,479,000 | 184,142,000 |
Restricted stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 301,000 | 15,431,000 | 1,467,000 |
Employee stock purchase plan | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 427,000 | 1,055,000 | 0 |
Significant Accounting Policies - Segment Information (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017
segment
Country
|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Segment Reporting Information [Line Items] | |||
Number of reportable segments | segment | 1 | ||
Accounts Receivable | |||
Segment Reporting Information [Line Items] | |||
Number of individual foreign countries | 0 | ||
Concentration Risk, Percentage | 10.00% | 10.00% | |
Sales Revenue, Net | |||
Segment Reporting Information [Line Items] | |||
Number of individual foreign countries | 0 | ||
Concentration Risk, Percentage | 10.00% | 10.00% | 10.00% |
Fixed Assets | |||
Segment Reporting Information [Line Items] | |||
Concentration Risk, Percentage | 10.00% |
Significant Accounting Policies Significant Accounting Policies - Recently Issued Accounting Pronouncements (Details) $ in Thousands |
Dec. 31, 2016
USD ($)
|
---|---|
Accumulated Deficit | |
Item Effected [Line Items] | |
ASU 2016-09 adoption adjustment | $ (699) |
Parent [Member] | |
Item Effected [Line Items] | |
ASU 2016-09 adoption adjustment | 440 |
Additional Paid-in- Capital | |
Item Effected [Line Items] | |
ASU 2016-09 adoption adjustment | 1,139 |
Other Noncurrent Assets [Member] | Parent [Member] | |
Item Effected [Line Items] | |
ASU 2016-09 adoption adjustment | $ 440 |
Fair Value Measurements - Additional Information (Detail) - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Fair Value, Measurement Inputs, Disclosure [Line Items] | ||||
Total cash and cash equivalents | $ 106,092 | $ 105,703 | $ 88,509 | $ 89,955 |
Long-term restricted cash | 1,181 | 1,181 | ||
Fair Value, Inputs, Level 1 | ||||
Fair Value, Measurement Inputs, Disclosure [Line Items] | ||||
Cash | 49,452 | 49,495 | ||
Money market funds | 56,640 | 56,208 | ||
Total cash and cash equivalents | 106,092 | 105,703 | ||
Short-term investments | 51 | 63 | ||
Long-term restricted cash | 1,181 | 1,181 | ||
Total cash and cash equivalents and investments | $ 107,324 | $ 106,947 | ||
Performance based restricted stock | ||||
Fair Value, Measurement Inputs, Disclosure [Line Items] | ||||
Granted (shares) | 0 | |||
Chief Executive Officer | Performance based restricted stock | ||||
Fair Value, Measurement Inputs, Disclosure [Line Items] | ||||
Granted (shares) | 31,250 | 31,250 |
Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 7,843 | $ 8,359 | $ 5,992 |
Product and content development | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | 2,509 | 2,324 | 1,817 |
Sales and marketing | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | 1,528 | 2,057 | 1,384 |
General and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 3,806 | $ 3,978 | $ 2,791 |
Business Acquisitions Purchase Price Allocation (Details) - USD ($) $ in Thousands |
Sep. 15, 2017 |
Oct. 01, 2015 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|---|---|---|
Business Acquisition [Line Items] | |||||
Goodwill | $ 51,438 | $ 48,678 | $ 47,396 | ||
Veri | |||||
Business Acquisition [Line Items] | |||||
Goodwill | 2,800 | ||||
Total purchase price | $ 3,500 | ||||
GigMasters.com | |||||
Business Acquisition [Line Items] | |||||
Current assets | $ 449 | ||||
Property and equipment | 37 | ||||
Finite-lived intangible assets | 3,700 | ||||
Goodwill | 5,525 | ||||
Deferred revenue and other liabilities | (1,002) | ||||
Deferred taxes, net | (831) | ||||
Total purchase price | 7,868 | ||||
Capitalized software | GigMasters.com | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets | 310 | ||||
Trade names | Veri | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets | $ 700 | ||||
Vendor relationships | GigMasters.com | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets | $ 2,900 |
Property and Equipment (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Property, Plant and Equipment [Line Items] | |||
Capitalized software | $ 17,465,000 | $ 22,454,000 | |
Less: accumulated amortization and depreciation | (19,897,000) | (24,631,000) | |
Total property and equipment, net | 11,829,000 | 12,130,000 | |
Amortization of capitalized software | 4,200,000 | 4,000,000 | $ 3,300,000 |
Depreciation expense | 1,100,000 | 1,400,000 | 1,800,000 |
Impairment of capitalized software | 600,000 | ||
Impairment of property and equipment | 0 | $ 0 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 10,257,000 | 9,623,000 | |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 678,000 | 638,000 | |
Computer and office equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 3,326,000 | $ 4,046,000 |
Goodwill and Other Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Goodwill [Roll Forward] | ||
Beginning Balance | $ 48,678 | $ 47,396 |
Ending Balance | 51,438 | 48,678 |
How He Asked | ||
Goodwill [Roll Forward] | ||
Acquisitions | $ 1,282 | |
Veri, Inc. | ||
Goodwill [Roll Forward] | ||
Acquisitions | $ 2,760 |
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Commitments and Contingencies Disclosure [Abstract] | |||
Long-term restricted cash | $ 1,181 | $ 1,181 | |
Rent expense | 2,900 | $ 2,400 | $ 3,000 |
Future minimum lease payments under non-cancelable operating leases | |||
2018 | 3,790 | ||
2019 | 3,856 | ||
2020 | 3,860 | ||
2021 | 3,406 | ||
Thereafter | 3,497 | ||
Total | $ 18,409 |
401(k) Plan (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Retirement Benefits [Abstract] | |||
Employee contribution limit | 92.00% | ||
Percent of eligibile compensation maximum company match | 25.00% | ||
Company match | 4.00% | ||
Company matching contributions | $ 0.6 | $ 0.5 | $ 0.4 |
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Net revenue: | |||||||||||
Local online advertising | $ 20,802 | $ 20,130 | $ 18,991 | $ 18,435 | $ 18,368 | $ 17,040 | $ 16,652 | $ 18,179 | $ 78,358 | $ 70,239 | $ 65,941 |
National online advertising | 9,913 | 8,842 | 9,746 | 8,928 | 11,789 | 8,932 | 9,566 | 8,658 | 37,429 | 38,945 | 35,764 |
Total online advertising | 30,715 | 28,972 | 28,737 | 27,363 | 30,157 | 25,972 | 26,218 | 26,837 | 115,787 | 109,184 | 101,705 |
Transactions | 6,004 | 7,950 | 8,190 | 4,962 | 5,079 | 7,105 | 6,431 | 4,204 | 27,106 | 22,819 | 14,700 |
Publishing and other | 5,614 | 3,315 | 5,299 | 3,435 | 5,772 | 3,654 | 6,059 | 4,628 | 17,663 | 20,113 | 24,361 |
Total net revenue | 42,333 | 40,237 | 42,226 | 35,760 | 41,008 | 36,731 | 38,708 | 35,669 | 160,556 | 152,116 | 141,644 |
Gross profit | 38,818 | 37,923 | 39,440 | 33,851 | 37,524 | 34,943 | 35,952 | 33,943 | 150,032 | 142,362 | 131,257 |
Net income | $ 440 | $ 3,341 | $ 1,441 | $ 312 | $ 3,422 | $ 1,908 | $ 3,765 | $ 3,025 | $ 5,534 | $ 12,120 | $ 5,464 |
Net income per share | |||||||||||
Basic (usd per share) | $ 0.02 | $ 0.13 | $ 0.06 | $ 0.01 | $ 0.14 | $ 0.08 | $ 0.15 | $ 0.12 | $ 0.22 | $ 0.48 | $ 0.22 |
Diluted (usd per share) | $ 0.13 | $ 0.07 | $ 0.15 | $ 0.12 | $ 0.22 | $ 0.47 | $ 0.21 |
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Valuation and Qualifying Accounts [Roll Forward] | |||
Balance Beginning of Year | $ 1,386 | $ 2,668 | $ 2,756 |
Charged to Costs and Expenses | 5,314 | 4,578 | 7,265 |
Write-offs, Net of Recoveries and Actual Returns | (4,346) | (5,860) | (7,353) |
Balance at End of Year | 2,354 | 1,386 | 2,668 |
Allowance for doubtful accounts | |||
Valuation and Qualifying Accounts [Roll Forward] | |||
Balance Beginning of Year | 582 | 1,644 | 1,821 |
Charged to Costs and Expenses | 1,143 | (136) | 1,764 |
Write-offs, Net of Recoveries and Actual Returns | (277) | (926) | (1,941) |
Balance at End of Year | 1,448 | 582 | 1,644 |
Allowance for returns | |||
Valuation and Qualifying Accounts [Roll Forward] | |||
Balance Beginning of Year | 804 | 1,024 | 935 |
Charged to Costs and Expenses | 4,171 | 4,714 | 5,501 |
Write-offs, Net of Recoveries and Actual Returns | (4,069) | (4,934) | (5,412) |
Balance at End of Year | $ 906 | $ 804 | $ 1,024 |
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