Business Combinations

3 Months Ended

Mar. 31, 2016

Business Combinations [Abstract]

Business Combinations

Note 6. Business Combinations

On June 4, 2015, the Company acquired Glip, Inc. (Glip), a cloud messaging and collaboration company based in Boca Raton, Florida. Glip is a provider of team messaging services, integrated with project management, group calendars, notes, annotations, and file sharing. The consideration for this acquisition, net of cash acquired and including the fair value of contingent consideration payable in cash upon achievement of certain earn out milestones and the fair value of common stock issuable to the sellers was $11.9 million. The initial fair value of the milestone based earn out liability was determined to be $2.3 million using various estimates, including probabilities of success and discount rates. Based on the completion of milestones for the quarter ended March 31, 2016 and the estimated probability of completing of the remaining milestones, the estimated fair value of the milestones based earn out liability was $2.4 million at March 31, 2016, of which $2.0 million and $0.4 million is classified as a current and non-current liability, respectively, in the condensed consolidated balance sheets. Under the terms of the acquisition, the Company may also pay up to $2.0 million in payments at the end of a two-year period to certain Glip employees, who continue to be employees of the Company, which are accounted for as a post-combination expense. At March 31, 2016, the contingent payment liability was $0.8 million and classified as a non-current liability in the consolidated balance sheets.

Acquired intangible assets as of March 31, 2016 were as follows (in thousands):

	Gross Carrying Amount		Accumulated Amortization		Acquired Intangibles, Net
Customer relationships	$	840	$	345	$	495
Developed technology		3,010		494		2,516
Total acquired intangible assets	$	3,850	$	839	$	3,011

Amortization expense from acquired intangible assets for the three months ended March 31, 2016 was $0.3 million.  Amortization of developed technology is included in cost of revenues and amortization of customer relationships is included in sales and marketing expenses in the condensed consolidated statements of operations.

Estimated amortization expense for acquired intangible assets for the following five fiscal years and thereafter is as follows (in thousands):

2016 (remaining)	$	767
2017		782
2018		602
2019		602
2020		258
Total estimated amortization expense	$	3,011