Stockholders' Equity

12 Months Ended

Dec. 31, 2016

Equity [Abstract]

Stockholders' Equity

STOCKHOLDERS’ EQUITY

Common Stock

Upon closing of our IPO in March 2014, we issued 15,000,000 shares of common stock at a public offering price $16 per share, for an aggregate offering price of $240.0 million, resulting in net proceeds to us of $216.8 million, after deducting underwriting discounts and commissions of approximately $16.8 million and offering expenses of approximately $5.6 million.

Equity-Based Incentive Plans

In December 2009, the board of directors approved the 2009 Equity Incentive Plan (the 2009 Plan) which provides for the grant of various equity awards to eligible employees, directors, and consultants including stock options, restricted stock unit (time-based and performance-based) and other stock awards. Shares available for grant as of December 31, 2016 were 6.7 million.

Stock Options

Stock options are granted to employees under the 2009 Plan at exercise prices equal to the fair market value of our common stock on the dates of grant. Options generally have a maximum contractual term of 10 years. Options are generally vested over four years, based on continued service. Stock options are forfeited if the employee ceases to be employed by us prior to vesting.

The following table summarizes stock option activity under our equity-based plans for the year ended December 31, 2016:

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value (in thousands)
Balance at December 31, 2015	4,446,149		$	8.96	7.56	$	52,108
Granted	—		—
Exercised	(1,297,812	)	4.06
Forfeited	(261,029	)	17.53
Expired	(72,084	)	27.01
Balance at December 31, 2016	2,815,224		$	9.96	6.66	$	46,231
Exercisable at December 31, 2016	2,014,443		$	8.00	6.42	$	36,459
Vested and expected to vest at December 31, 2016	2,775,326		$	9.83	6.65	$	45,865

	Year Ended December 31,
Additional Disclosures for Stock Options	2016		2015		2014
Weighted-average grant date fair value of stock options	N/A		$	12.73	$	7.18
Total fair value of options vested (in millions)	$	6.8	$	12.2	$	7.5
Total intrinsic value of options exercised (in millions)	$	20.5	$	53.3	$	35.1
Cash received from options exercised (in millions)	$	5.3	$	7.3	$	2.2

Restricted Stock Units

Restricted stock units are subject to time-based or performance-based vesting conditions:

• The time-based restricted stock units (RSUs) granted to non-employee directors generally fully vest on the first anniversary of the grant date;

• The RSU granted to employees are generally subject to vesting ratably on a quarterly basis over four years;

• The performance-based restricted stock units (PSUs) are subject to vesting based on our achievement of the financial performance metrics and other goals that are established at the grant date. The financial performance metric established represents cumulative annual growth rate in our Net Service Revenues as defined in the incentive plan over three-year performance periods. Depending on the results achieved, the actual number of shares to be granted may range from 0% to 200% of the target shares. Compensation expense is recognized ratably over the vesting period based on the probability of the number of awards expected to vest at each reporting date.

Unvested restricted stock units are forfeited if the employee ceases to be employed by us prior to vesting.

The following table summarizes RSU and PSU activity under our equity-based plans for the year ended December 31, 2016:

	RSUs				PSUs
	Number of Units		Weighted-Average Grant Date Fair Value		Number of Units		Weighted-Average Grant Date Fair Value
Nonvested at December 31, 2015	956,687		$	28.03	173,286		$	33.51
Granted	2,281,998		18.25		—		—
Vested	(695,253	)	23.52		—		—
Forfeited	(220,381	)	22.29		(23,874	)	33.51
Nonvested at December 31, 2016	2,323,051		$	20.32	149,412		$	33.51

	Year Ended December 31,
Additional Disclosures for RSUs	2016		2015		2014
Total grant date fair value of RSUs granted (in millions)	$	41.7	$	31.2	N/A
Total grant date fair value of RSUs vested (in millions)	$	16.4	$	3.5	$	0.1
Shares withheld to settle payroll tax liabilities related to vesting of RSUs held by employees	217,769		35,379		80,599

Employee Stock Purchase Plan

Our 2014 Employee Stock Purchase plan (ESPP) offers eligible employees an option to purchase shares of our common stock through a payroll deduction. The purchase price is equal to the lesser of 85% of the fair market value of our common stock on the offering date or 85% of the fair market value of our common stock on the applicable purchase date. Offering periods are approximately six months in duration and will end on or about May 15 and November 15 of each year. Employees may contribute a minimum of 1% and a maximum of 15% of their earnings. The plan is considered to be a compensatory plan. We issued 283,644, 272,836, and 249,494 shares under the ESPP during 2016, 2015 and 2014, respectively. As of December 31, 2016, 1.7 million shares were reserved for future issuances under the ESPP.

Stock-Based Compensation

The fair value of our RSUs and PSUs is equal to the fair value of our common stock on the grant date. The fair value of stock options and the ESPP is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:

	Stock Option Assumptions							ESPP Assumptions
Year Ended December 31,	Expected Term (in Years)	Expected Volatility		Risk-Free Interest Rate		Expected Dividend Yield		Expected Term (in Years)	Expected Volatility	Risk-Free Interest Rate	Expected Dividend Yield
2016	N/A	N/A		N/A		N/A		0.50	32-76%	0.33-0.62%	0	%
2015	6.08	39	%	1.73	%	0	%	0.50	34-76%	0.07-0.33%	0	%
2014	6.05	58	%	1.80	%	0	%	0.50	33-58%	0.06-0.07%	0	%

Compensation expense is measured based on the fair value of the stock option on the grant date and recognized over the requisite service period for each separately vesting portion of the stock option award. Stock-based compensation expense and other disclosures for stock-based awards made to our employees pursuant to the equity plans was as follows: 

	Year Ended December 31,
(In thousands)	2016		2015		2014
Cost of providing services	$	6,607	$	4,244	$	2,658
Sales and marketing	6,573		4,490		2,755
General and administrative	10,831		7,501		4,517
Systems development and programming costs	2,486		1,688		1,030
Total stock-based compensation expense	$	26,497	$	17,923	$	10,960
Income tax benefit related to stock-based compensation expense	$	9,142	$	5,678	$	2,040
Actual tax benefit realized from stock options exercise	$	7,076	$	19,609	$	13,514

The table below summarizes unrecognized compensation expense, net of forfeitures for the year ended December 31, 2016 associated with the following:

	Amount (in thousands)		Weighted-Average Period (in Years)
Nonvested stock options	$	5,739	1.41
Nonvested RSUs	$	42,198	2.70
Nonvested PSUs	$	374	1.00

Stock Repurchases

During 2016, 2015, and 2014, the board of directors authorized $100 million, $50 million and $45 million, respectively of outstanding common stock to be repurchased with no expiration from the date of authorization. As of December 31, 2016, approximately $60.0 million remained available for repurchase pursuant to our stock repurchase program. During 2016, 2015 and 2014, we repurchased 3,414,675 shares, 1,895,625 shares and 490,419 shares, respectively.