Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share amounts) | |||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenue | $ | 103,618 | $ | 86,918 | $ | 388,665 | $ | 333,067 | |||||||
Cost of revenue | 47,107 | 40,001 | 177,792 | 152,898 | |||||||||||
Gross profit | 56,511 | 46,917 | 210,873 | 180,169 | |||||||||||
Operating expenses: | |||||||||||||||
Research and development | 17,974 | 16,734 | 73,643 | 65,787 | |||||||||||
Selling, general and administrative | 21,316 | 18,107 | 83,012 | 72,312 | |||||||||||
Litigation expense (benefit), net | (321 | ) | 283 | (229 | ) | 1,000 | |||||||||
Total operating expenses | 38,969 | 35,124 | 156,426 | 139,099 | |||||||||||
Income from operations | 17,542 | 11,793 | 54,447 | 41,070 | |||||||||||
Interest and other income, net | 897 | 550 | 2,817 | 1,421 | |||||||||||
Income before income taxes | 18,439 | 12,343 | 57,264 | 42,491 | |||||||||||
Income tax provision | 1,866 | 2,233 | 4,544 | 7,319 | |||||||||||
Net income | $ | 16,573 | $ | 10,110 | $ | 52,720 | $ | 35,172 | |||||||
Net income per share: | |||||||||||||||
Basic | $ | 0.41 | $ | 0.26 | $ | 1.30 | $ | 0.89 | |||||||
Diluted | $ | 0.39 | $ | 0.24 | $ | 1.26 | $ | 0.86 | |||||||
Weighted-average shares outstanding: | |||||||||||||||
Basic | 40,739 | 39,615 | 40,436 | 39,470 | |||||||||||
Diluted | 42,404 | 41,445 | 41,915 | 40,869 | |||||||||||
Cash dividends declared per common share | $ | 0.20 | $ | 0.20 | $ | 0.80 | $ | 0.80 | |||||||
SUPPLEMENTAL FINANCIAL INFORMATION | |||||||||||||||
STOCK-BASED COMPENSATION EXPENSE | |||||||||||||||
(Unaudited, in thousands) | |||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Cost of revenue | $ | 358 | $ | 336 | $ | 1,575 | $ | 1,166 | |||||||
Research and development | 3,039 | 3,102 | 14,041 | 11,156 | |||||||||||
Selling, general and administrative | 7,350 | 8,934 | 29,373 | 29,241 | |||||||||||
Total stock-based compensation expense | $ | 10,747 | $ | 12,372 | $ | 44,989 | $ | 41,563 | |||||||
RECONCILIATION OF NET INCOME TO NON-GAAP NET INCOME | |||||||||||||||
(Unaudited, in thousands, except per share amounts) | |||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net income | $ | 16,573 | $ | 10,110 | $ | 52,720 | $ | 35,172 | |||||||
Net income as a percentage of revenue | 16.0 | % | 11.6 | % | 13.6 | % | 10.6 | % | |||||||
Adjustments to reconcile net income to non-GAAP net income: | |||||||||||||||
Stock-based compensation expense | 10,747 | 12,372 | 44,989 | 41,563 | |||||||||||
Change in fair value of contingent consideration | - | (2,507 | ) | - | (2,507 | ) | |||||||||
Amortization of acquisition-related intangible assets | 512 | 512 | 2,051 | 1,759 | |||||||||||
Deferred compensation plan expense (income) | 29 | 98 | (188 | ) | 175 | ||||||||||
Tax effect | (364 | ) | 522 | (3,265 | ) | 1,058 | |||||||||
Non-GAAP net income | $ | 27,497 | $ | 21,107 | $ | 96,307 | $ | 77,220 | |||||||
Non-GAAP net income as a percentage of revenue | 26.5 | % | 24.3 | % | 24.8 | % | 23.2 | % | |||||||
Non-GAAP net income per share: | |||||||||||||||
Basic | $ | 0.67 | $ | 0.53 | $ | 2.38 | $ | 1.96 | |||||||
Diluted | $ | 0.65 | $ | 0.51 | $ | 2.30 | $ | 1.89 | |||||||
Shares used in the calculation of non-GAAP net income per share: | |||||||||||||||
Basic | 40,739 | 39,615 | 40,436 | 39,470 | |||||||||||
Diluted | 42,404 | 41,445 | 41,915 | 40,869 | |||||||||||
RECONCILIATION OF GROSS MARGIN TO NON-GAAP GROSS MARGIN | |||||||||||||||
(Unaudited, in thousands) | |||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Gross profit | $ | 56,511 | $ | 46,917 | $ | 210,873 | $ | 180,169 | |||||||
Gross margin | 54.5 | % | 54.0 | % | 54.3 | % | 54.1 | % | |||||||
Adjustments to reconcile gross profit to non-GAAP gross profit: | |||||||||||||||
Stock-based compensation expense | 358 | 336 | 1,575 | 1,166 | |||||||||||
Amortization of acquisition-related intangible assets | 512 | 512 | 2,051 | 1,759 | |||||||||||
Non-GAAP gross profit | $ | 57,381 | $ | 47,765 | $ | 214,499 | $ | 183,094 | |||||||
Non-GAAP gross margin | 55.4 | % | 55.0 | % | 55.2 | % | 55.0 | % | |||||||
RECONCILIATION OF OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES | |||||||||||||||
(Unaudited, in thousands) | |||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Total operating expenses | $ | 38,969 | $ | 35,124 | $ | 156,426 | $ | 139,099 | |||||||
Adjustments to reconcile total operating expenses to non-GAAP total operating expenses: | |||||||||||||||
Stock-based compensation expense | (10,389 | ) | (12,036 | ) | (43,414 | ) | (40,397 | ) | |||||||
Change in fair value of contingent consideration | - | 2,507 | - | 2,507 | |||||||||||
Deferred compensation plan income (expense) | (189 | ) | (290 | ) | (1,069 | ) | 200 | ||||||||
Non-GAAP operating expenses | $ | 28,391 | $ | 25,305 | $ | 111,943 | $ | 101,409 | |||||||
RECONCILIATION OF OPERATING INCOME TO NON-GAAP OPERATING INCOME | |||||||||||||||
(Unaudited, in thousands) | |||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Total operating income | $ | 17,542 | $ | 11,793 | $ | 54,447 | $ | 41,070 | |||||||
Operating income as a percentage of revenue | 16.9 | % | 13.6 | % | 14.0 | % | 12.3 | % | |||||||
Adjustments to reconcile total operating income to non-GAAP total operating income: | |||||||||||||||
Stock-based compensation expense | 10,747 | 12,372 | 44,989 | 41,563 | |||||||||||
Change in fair value of contingent consideration | - | (2,507 | ) | - | (2,507 | ) | |||||||||
Amortization of acquisition-related intangible assets | 512 | 512 | 2,051 | 1,759 | |||||||||||
Deferred compensation plan expense (income) | 189 | 290 | 1,069 | (200 | ) | ||||||||||
Non-GAAP operating income | $ | 28,990 | $ | 22,460 | $ | 102,556 | $ | 81,685 | |||||||
Non-GAAP operating income as a percentage of revenue | 28.0 | % | 25.8 | % | 26.4 | % | 24.5 | % | |||||||
RECONCILIATION OF OTHER INCOME TO NON-GAAP OTHER INCOME | |||||||||||||||
(Unaudited, in thousands) | |||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Total interest and other income, net | $ | 897 | $ | 550 | $ | 2,817 | $ | 1,421 | |||||||
Adjustments to reconcile interest and other income to non-GAAP interest and other income: | |||||||||||||||
Deferred compensation plan expense (income) | (160 | ) | (192 | ) | (1,257 | ) | 375 | ||||||||
Non-GAAP interest and other income, net | $ | 737 | $ | 358 | $ | 1,560 | $ | 1,796 | |||||||