View Filing Data

^[1],[2],[3]

70,310

52,703

42,555

General and administrative

^[1],[2],[3]

94,728

83,253

62,488

^[1],[2],[3]

37,171

40,192

39,968

Product development

^[1],[2],[3]

38,974

37,329

36,397

Restructuring costs

3,384

4,873

1,621

871

Total costs and expenses

249,440

215,098

182,279

Other (expense) income, net

(10,428)

(5,167)

(4,474)

(202)

(322)

337

Loss before provision for (benefit from) income taxes

(10,630)

(5,489)

(4,137)

Provision for (benefit from) income taxes

15,814

1,859

(638)

Net loss

$ (26,444)

$ (7,348)

$ (3,499)

Basic net income per common share (in dollars per share)

$ (0.47)

$ (0.13)

$ (0.06)

Diluted net income per common share (in dollars per share)

$ (0.47)

$ (0.13)

$ (0.06)

Weighted average shares outstanding used in basic net income per common share calculation (in shares)

56,452,408

54,478,754

54,725,236

Weighted average shares outstanding used in diluted net income per common share calculation (in shares)

56,452,408

54,478,754

54,725,236

$ 11,814

$ 12,306

$ 12,508

Cost Of Revenue [Member]

3,167

3,469

1,772

1,396

1,492

1,954

Sales and Marketing Expense [Member]

9,091

6,658

5,894

3,088

3,399

2,851

General and Administrative Expense [Member]

1,232

871

3,692

3,809

4,148

Product Development Expense [Member]

893

820

1,421

3,638

3,606

3,555

$ 898

$ 722

$ 684

[1]	Amounts include amortization of purchased intangibles, as follows: Cost of revenue $3,167, $3,469, and $1,772 years ended December 31, 2015, 2014, and 2013, respectively.
[2]	Amounts include depreciation expense as follows: Cost of revenue $9,091, $6,658, and $5,894 years ended December 31, 2015, 2014 and 2013, respectively. Sales and marketing $1,232, $871 and $91 for the years ended December 31, 2015, 2014 and 2013, respectively. General and administrative $893, $820 and $1,421 for the years ended December 31, 2015, 2014 and 2013, respectively. and Product development $898, $722 and $684 for the years ended December 31, 2015, 2014 and 2013, respectively.
[3]	Amounts include stock compensation expense as follows: Cost of revenue $1,396, $1,492, and $1,954 years ended December 31, 2015, 2014 and 2013, respectively. Sales and marketing $3,088, $3,399 and $2,851 for the years ended December 31, 2015, 2014 and 2013, respectively. General and administrative $3,692, $3,809 and $4,148 for the years ended December 31, 2015, 2014 and 2013, respectively. and Product development $3,638, $3,606 and $3,555 for the years ended December 31, 2015, 2014 and 2013, respectively.

Consolidated Statements Of Comprehensive (Loss) Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Statement of Comprehensive Income [Abstract]
Net loss	$ (26,444)	$ (7,348)	$ (3,499)
Foreign currency translation adjustment	(1,398)	(795)	10
Comprehensive loss	$ (27,842)	$ (8,143)	$ (3,489)

Description of Business and Summary of Significant Accounting Policies

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Consolidated Statements Of Stockholders' Equity - USD ($) $ in Thousands	Total	Common Stock [Member]	Treasury Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Deficit [Member]	Accumulated Other Comprehensive Loss [Member]
Balance (in shares) at Dec. 31, 2012		55,948,924	0
Balance at Dec. 31, 2012	$ 170,243	$ 56	$ 0	$ 252,320	$ (81,780)	$ (353)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issued upon exercise of stock options (in shares)	771,810	771,810
Common stock issued upon exercise of stock options	$ 4,870	$ 0		4,870
Stock-based compensation	12,508			12,508
Common stock issued under Employee Stock Purchase Plan (in shares)		155,388
Common stock issued under Employee Stock Purchase Plan	1,443	$ 0		1,443
Common stock repurchase (in shares)		(2,391,362)
Common stock repurchase	(26,715)	$ (2)		(26,713)
Tax benefit from exercise of employee stock options	193			193
Net loss	(3,499)				(3,499)
Other comprehensive loss	10					10
Balance (in shares) at Dec. 31, 2013		54,484,760	0
Balance at Dec. 31, 2013	159,053	$ 54	$ 0	244,621	(85,279)	(343)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock in connection with acquisition, (in shares)		1,627,753
Issuance of common stock in connection with acquisition	$ 20,123	$ 2		20,121
Common stock issued upon exercise of stock options (in shares)	1,097,543	1,097,543
Common stock issued upon exercise of stock options	$ 7,883	$ 1		7,882
Stock-based compensation	12,306			12,306
Common stock issued under Employee Stock Purchase Plan (in shares)		142,064
Common stock issued under Employee Stock Purchase Plan	1,431	$ 1		1,430
Common stock repurchase (in shares)		(650,789)	544,396
Common stock repurchase	(12,980)	$ (1)	$ (1)	(12,978)
Tax benefit from exercise of employee stock options	664			664
Net loss	(7,348)				(7,348)
Other comprehensive loss	(795)					(795)
Balance (in shares) at Dec. 31, 2014		56,701,331	(544,396)
Balance at Dec. 31, 2014	$ 180,337	$ 57	$ (1)	274,046	(92,627)	(1,138)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issued upon exercise of stock options (in shares)	645,521	645,531
Common stock issued upon exercise of stock options	$ 2,904	$ 0		2,904
Stock-based compensation	11,814			11,814
Common stock issued under Employee Stock Purchase Plan (in shares)		170,857
Common stock issued under Employee Stock Purchase Plan	1,497	$ 0		1,497
Common stock repurchase (in shares)		(142,812)	277,360
Common stock repurchase	(4,202)	$ 0	$ 0	(4,202)
Tax benefit from exercise of employee stock options	797			797
Net loss	(26,444)				(26,444)
Other comprehensive loss	(1,398)					(1,398)
Balance (in shares) at Dec. 31, 2015		57,374,907	(821,756)
Balance at Dec. 31, 2015	$ 165,305	$ 57	$ (1)	$ 286,856	$ (119,071)	$ (2,536)

Consolidated Statements Of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
OPERATING ACTIVITIES:
Net loss	$ (26,444)	$ (7,348)	$ (3,499)
Adjustments to reconcile net loss to net cash provided by operating activities:
Stock-based compensation expense	11,814	12,306	12,508
Depreciation	12,114	9,071	8,090
Amortization of purchased intangibles	8,040	5,090	2,643
Change in fair value of contingent consideration	(3,680)	0	0
Provision for doubtful accounts, net	2,361	1,843	457
Deferred income taxes	14,456	(1,736)	(4,877)
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	(1,368)	(1,354)	(4,630)
Prepaid expenses and other current assets	724	(4,056)	768
Other assets	130	614	167
Accounts payable	(1,916)	(1,528)	(2,660)
Accrued expenses	1,193	576	6,822
Deferred revenue	1,869	2,710	1,413
Other liabilities	2,538	(515)	(244)
Net cash provided by operating activities	21,831	15,673	16,958
INVESTING ACTIVITIES:
Purchases of property and equipment, including capitalized software	(12,980)	(10,589)	(8,044)
Payments for acquisitions and intangible assets, net of cash acquired	(150)	(40,871)	(130)
Cash held as collateral	(5,409)	0	0
Investment in technology licenses	0	(3,451)	0
Net cash used in investing activities	(18,539)	(54,911)	(8,174)
FINANCING ACTIVITIES:
Repurchase of common stock	(4,202)	(12,980)	(26,715)
Excess tax benefit from the exercise of employee stock options	797	664	193
Payments related to contingent consideration	(2,883)	0	0
Proceeds from issuance of common stock in connection with the exercise of options	4,401	9,314	6,313
Net cash used in financing activities	(1,887)	(3,002)	(20,209)
EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	(1,974)	(294)	(8)
CHANGE IN CASH AND CASH EQUIVALENTS	(569)	(42,534)	(11,433)
CASH AND CASH EQUIVALENTS - Beginning of the year	49,372	91,906	103,339
CASH AND CASH EQUIVALENTS - End of the year	48,803	49,372	91,906
SUPPLEMENTAL DISCLOSURE OF OTHER CASH FLOW INFORMATION:
Cash paid for income taxes	1,882	4,386	1,163
SUPPLEMENTAL DISCLOSURE OF NON CASH INVESTING AND FINANCING ACTIVITIES:
Purchase of property and equipment recorded in accounts payable	1,926	964	800
Leasehold improvements funded by landlord	326	0	0
Contact At Once! [Member]
Adjustments to reconcile net loss to net cash provided by operating activities:
Change in fair value of contingent consideration	3,200
SUPPLEMENTAL DISCLOSURE OF NON CASH INVESTING AND FINANCING ACTIVITIES:
Issuance of 1,627,753 shares of common stock in connection with the acquisition of CAO! on November 7, 2014	0	20,121	0
Contingent earn-out in connection with the acquisition of Engage paid in common stock recorded in accrued expenses	0	4,220	0
Synchronite, LLC [Member]
FINANCING ACTIVITIES:
Payments related to contingent consideration	(1,600)
SUPPLEMENTAL DISCLOSURE OF NON CASH INVESTING AND FINANCING ACTIVITIES:
Contingent earn-out in connection with the acquisition of Engage paid in common stock recorded in accrued expenses	$ 0	$ 1,810	$ 0

Consolidated Statements Of Cash Flows (Parenthetical)	Nov. 07, 2014 shares
Contact At Once! [Member]
SUPPLEMENTAL DISCLOSURE OF NON CASH INVESTING AND FINANCING ACTIVITIES:
Issuance of shares of common stock in connection with acquisitions	1,627,753

Description of Business and Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2015

Accounting Policies [Abstract]

LivePerson, Inc. (the “Company” or “LivePerson”) was incorporated in the State of Delaware in November 1995 and the LivePerson service was introduced in November 1998. In April 2000, the Company completed an initial public offering and is currently traded on the NASDAQ Global Select Market and the Tel Aviv Stock Exchange. LivePerson is headquartered in New York City with U.S. offices in Alpharetta (Georgia) and San Francisco, and international offices in Amsterdam, Atlanta, Berlin, London, Mannheim, Melbourne, Milan, Paris, Ra'anana (Israel), Redding (UK), and Tokyo.

LivePerson provides mobile and online messaging technologies that power digital communication between brands and consumers. LiveEngage, the Company’s enterprise-class, cloud-based platform, enables businesses to create a meaningful connection with consumers by offering messaging as a preferred channel of communication. Messaging diminishes the need to rely on email systems or call a 1-800 number. Brands leverage LivePerson’s sophisticated intelligence engine and suite of text and mobile messaging, real-time chat messaging, content delivery, and cobrowsing offerings to proactively engage with consumers through m-dot sites, mobile apps, the desktop, social media and third-party consumer messaging platforms. The Company’s campaign-based messaging enables the brand to target the right consumer at the right time on a brand’s site by leveraging proprietary analysis and data-driven intelligence.

The data the Company gathers and analyzes from visitor sessions, on behalf of its customers, spans the breadth of an online or mobile visitor session, starting from an initial keyword search or application login, through actions on the website or mobile application of the Company’s customer, and even into a shopping cart and an executed sale. The Company combines this session data with other historical, behavioral and operational information to develop insights into each step of a consumer’s journey for sales and service transactions. These unique, industry- and use-case specific insights are then mapped to each brand’s business goals in order to deliver successful campaign outcomes. LivePerson’s products, coupled with its domain knowledge, industry expertise and consulting services, have been proven to maximize the effectiveness of consumer engagement.

The Company’s primary revenue source is from the sale of LivePerson services to businesses of all sizes. The Company also offers an online marketplace that connects independent service providers (“Experts”) who provide information and knowledge for a fee via real-time chat with individual consumers (“Users”).

Principles of Consolidation

The consolidated financial statements reflect the operations of LivePerson and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

Reclassification

For comparability, certain 2014 and 2013 amounts have been reclassified where appropriate, to conform to the financial presentation in 2015.

Use of Estimates

The preparation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires the Company’s management to make a number of estimates and assumptions relating to the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the period. Significant items subject to such estimates and assumptions include revenue recognition, stock-based compensation, accounts receivable, the valuation of goodwill and intangible assets, income taxes and legal contingencies. Actual results could differ from those estimates.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable which approximate fair value at December 31, 2015 because of the short-term nature of these instruments. The Company invests its cash and cash equivalents with financial institutions that it believes are of high quality, and the Company performs periodic evaluations of these instruments and the relative credit standings of the institutions with which it invests. At certain times, the Company’s cash balances with any one financial institution may exceed Federal Deposit Insurance Corporation insurance limits. The Company believes it mitigates its risk by depositing its cash balances with high credit, quality financial institutions.

The Company’s customers are located primarily in the United States. The Company performs ongoing credit evaluations of its customers’ financial condition (except for customers who purchase the LivePerson services by credit card via Internet download) and has established an allowance for doubtful accounts based upon factors surrounding the credit risk of customers, historical trends and other information. Concentration of credit risk is limited due to the Company’s large number of customers. No single customer accounted for or exceeded 10% of revenue in 2015, 2014 or 2013. No single customer accounted for or exceeded 10% of the Company's total accounts receivable in 2015. One customer accounted for approximately 22% and 12% of total accounts receivable at Decembers 31, 2014 and 2013, respectively.

Foreign Currency Translation

The Company's operations are conducted in various countries around the world and the financial statements of its foreign subsidiaries are reported in the applicable foreign currencies (functional currencies). Financial information is translated from the applicable functional currency to the U.S. dollar (the reporting currency) for inclusion in the Company's consolidated financial statements. Income, expenses and cash flows are translated at weighted average exchange rates prevailing during the fiscal period, and assets and liabilities are translated at fiscal period-end exchange rates. Resulting translation adjustments are included as a component of accumulated other comprehensive income (loss) in stockholders' equity. Foreign exchange transaction gain or losses are included in Other Income, net in the accompanying consolidated statements of operations.

Cash and Cash Equivalents

The Company considers all highly liquid securities with original maturities of 3 months or less when acquired to be cash equivalents. Cash equivalents, which primarily consist of money market funds, are recorded at cost, which approximates fair value.

Accounts Receivable

Accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company determines the allowance based on historical write-off experience. The Company reviews its allowance for doubtful accounts monthly. Past due balances over 90 days and over a specified amount are reviewed individually for collectability. All other balances are reviewed on a pooled basis. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance sheet credit exposure related to its customers. The activity in the allowance for for doubtful accounts is as follows (amounts in thousands):



Year Ended December 31,	Beginning Balance		Additions Charged to Costs and Expenses		Deductions / Write-Offs			Ending Balance
2013	$	708	$	457	$	—		$	1,165
2014	$	1,165	$	1,337	$	(1,227	)	$	1,275
2015	$	1,275	$	2,361	$	(2,452	)	$	1,184

Property and Equipment

Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets, generally three to five years for equipment and software. Leasehold improvements are depreciated using the straight-line method over the shorter of the lease term or the estimated useful life of the asset. Depreciation expense totaled $12.1 million, $9.1 million, and $8.1 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Internal-Use Software Development Costs

In accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350-40, Internal-Use Software, the Company capitalizes its costs to develop its internal use software when preliminary development efforts are successfully completed, management has authorized and committed project funding, and it is probable that the project will be completed and the software will be used as intended. These costs are included in property and equipment in the Company's consolidated balance sheets and are amortized on a straight-line basis over the estimated useful life of the related asset, which approximates three years. Costs incurred prior to meeting these criteria, together with costs incurred for training and maintenance, are expensed as incurred.

The Company capitalized internal-use software costs of $2.4 million, $2.5 million, and $2.6 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Goodwill and Intangible Assets

In accordance with ASC 350, Goodwill and Other Intangible Assets, goodwill and indefinite-lived intangible assets are not amortized, but reviewed for impairment upon the occurrence of events or changes in circumstances that would reduce the fair value below its carrying amount. Goodwill is required to be tested for impairment at least annually. In September 2011, the FASB issued ASU No. 2011-8, “Intangibles — Goodwill and Other (Topic 350).” ASU 2011-8 permits an entity to first assess qualitative factors to determine whether it is “more likely than not” that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in Topic 350. The more-likely-than-not threshold is defined as having a likelihood of more than 50%. If it is determined that the fair value of a reporting unit is more likely than not to be less than its carrying value (including unrecognized intangible assets) then it is necessary to perform the second step of the goodwill impairment test. The second step of the goodwill impairment test is judgmental in nature and often involves the use of significant estimates and assumptions. Similarly, estimates and assumptions are used in determining the fair value of other intangible assets. These estimates and assumptions could have a significant impact on whether or not an impairment charge is recognized and also the magnitude of any such charge. The Company performs internal valuation analyses and considers other market information that is publicly available. Estimates of fair value are primarily determined using discounted cash flows and market comparisons. These approaches use significant estimates and assumptions including projected future cash flows (including timing), discount rates reflecting the risk inherent in future cash flows, perpetual growth rates, determination of appropriate market comparables and the determination of whether a premium or discount should be applied to comparables.

ASC 350-10 also requires that intangible assets with estimable useful lives be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with ASC 360-10-35, “Accounting for Impairment or Disposal of Long-Lived Assets.”

The Company evaluates for goodwill impairment annually at September 30^th and at the end of the third quarter of 2015, the Company determined that it was not more-likely that the fair value of the reporting units is less than their carrying amount. Accordingly, the Company did not perform the two-step goodwill impairment test on both the Company's Business and Consumer segments. The Company assessed qualitative facts while summarizing the totality of events and circumstances and considered the extent to which adverse events or circumstances could affect the reporting unit's fair value as well as the consideration of positive and mitigating events and circumstances that would affect the determination of whether it was more likely than not that the fair value of a reporting unit is less than its carrying amount.

Impairment of Long-Lived Assets

In accordance with ASC 360-10, “Accounting for the Impairment or Disposal of Long-lived Assets,” long-lived assets, such as property, plant and equipment and purchased intangibles subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. The Company does not have any long-lived assets, including intangible assets, which it considered to be impaired.

Fair Value of Financial Instruments

The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties. Cash and cash equivalents, accounts receivable, security deposits and accounts payable carrying amounts approximate fair value because of the short maturity of these instruments.

Revenue Recognition

The majority of the Company’s revenue is generated from monthly service revenues and related professional services from the sale of the LivePerson services. Because the Company provides its application as a service, the Company follows the provisions of FASB Accounting Standards Codification (“ASC”) 605-10-S99, “Revenue Recognition” and ASC 605-25, “Revenue Recognition with Multiple-Element Arrangements.” The Company charges a monthly fee, which varies by type of service, the level of customer usage and website traffic, and in some cases, the number of orders placed via the Company’s online engagement solutions.

For certain of the Company’s larger customers, the Company may provide call center labor through an arrangement with one or more of several qualified vendors. For most of these customers, the Company passes the fee it incurs with the labor provider and its fee for the hosted services through to its customers in the form of a fixed fee for each order placed via the Company’s online engagement solutions. For these Pay for Performance (“PFP”) arrangements, in accordance with ASC 605-45, “Principal Agent Considerations,” the Company records revenue for transactions in which it acts as an agent on a net basis, and revenue for transactions in which it acts as a principal on a gross basis.

The Company also sells certain of the LivePerson services directly via Internet download. These services are marketed as LiveEngage for small to medium-sized businesses (“SMBs”), and are paid for almost exclusively by credit card. Credit card payments accelerate cash flow and reduce the Company’s collection risk, subject to the merchant bank's right to hold back cash pending settlement of the transactions. Sales of LiveEngage may occur with or without the assistance of an online sales representative, rather than through face-to-face or telephone contact that is typically required for traditional direct sales.

The Company recognizes monthly service revenue based upon the fee charged for the LivePerson services, provided that there is persuasive evidence of an arrangement, no significant Company obligations remain, collection of the resulting receivable is probable and the amount of fees to be paid is fixed or determinable. The Company’s service agreements typically have 12 month terms and, in some cases, are terminable or may terminate upon 30 to 90 days’ notice without penalty. When professional service fees add value to the customer on a standalone basis, the Company recognizes professional service fees upon completion of services. This guidance establishes a selling price hierarchy for determining the selling price of a deliverable, which is based on: (a) vendor-specific objective evidence; (b) third-party evidence; or (c) best estimated selling price. If a professional services arrangement does not qualify for separate accounting, the Company recognizes the fees, and the related labor costs, ratably over the contracted period.

For revenue from our Consumer segment generated from online transactions between Experts and Users, the Company recognizes revenue net of the Expert fees in accordance with ASC 605-45, “Principal Agent Considerations,” due primarily to the fact that the Expert is the primary obligor. Additionally, the Company performs as an agent without any risk of loss for collection, and is not involved in selecting the Expert or establishing the Expert’s fee. The Company collects a fee from the User and retains a portion of the fee, and then remits the balance to the Expert. Revenue from these transactions is recognized when there is persuasive evidence of an arrangement, no significant Company obligations remain, collection of the resulting receivable is probable and the amount of fees to be paid is fixed and determinable.

Advertising Costs

The Company expenses the cost of advertising and promoting its services as incurred. Such costs totaled approximately $10.7 million, $9.7 million, and $7.4 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Stock-based Compensation

In accordance with ASC Topic 718 -10, "Stock Compensation", the Company measures stock based awards at fair value and recognizes compensation expense for all share-based payment awards made to its employees and directors, including employee stock options.

The Company estimates the fair value of stock options granted using the Black-Scholes valuation model. This model requires the Company to make estimates and assumptions including, among other things, estimates regarding the length of time an employee will retain vested stock options before exercising them, the estimated volatility of its common stock price and the number of options that will be forfeited prior to vesting. The fair value is then recognized on a straight line basis over the requisite service period of the award, which is generally four years. Changes in these estimates and assumptions can materially affect the determination of the fair value of the stock-based compensation and consequently, the related amount recognized in the consolidated statement of operations.

Deferred Rent

The Company records rent expense on a straight-line basis over the term of the related lease. The difference between the rent expense recognized for financial reporting purposes and the actual payments made in accordance with the lease agreement is recognized as deferred rent liability included in other liabilities on the Company’s consolidated balance sheets.

Income Taxes

Comprehensive Loss

In accordance with ASC 220 Comprehensive Income, the Company reports by major components and as a single total, the change in its net assets during the period from non-owner sources. Comprehensive income consists of net income (loss), accumulated other comprehensive income (loss), which includes certain changes in equity that are excluded from net income (loss). The Company’s comprehensive loss for all periods presented is related to the effect of foreign currency translation.

Recently Issued Accounting Standards

On February 25, 2016, the FASB issued Accounting Standards Update No. 2016-02, "Leases" ("ASU 2016-02"). ASU 2016-02 requires lessees to recognize the following for all leases (with the exception of short-term leases) at the commencement date: a lease liability, which is a lessee‘s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. Certain targeted improvements were made to align, where necessary, lessor accounting with the lessee accounting model and Topic 606, Revenue from Contracts with Customers. The new lease guidance also simplified the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. Lessees will no longer be provided with a source of off-balance sheet financing. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. ASU 2016-02 is effective for financial statements issued for annual periods beginning after December 15, 2018. The Company is currently in the process of evaluating the impact of adoption of ASU 2016-02 on its financial statements.

On January 5, 2016, the FASB issued Accounting Standards Update No. 2016-01, “Financial Instruments- Overall: Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”). ASU 2016-01 requires all equity investments to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under equity method of accounting or those that result in consolidation of the investee). Additionally, it requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. Lastly, the standard eliminates the requirement to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. ASU 2016-01 is effective for financial statements issued for annual periods beginning after December 15, 2017, and interim periods within those annual periods. The Company does not expect the standard to have a material impact on its consolidated financial statements.

On November 20, 2015, the FASB issued Accounting Standards Update No. 2015-17, “Income taxes: Balance Sheet Classification of Deferred Taxes Business” (“ASU 2015-17”). Topic 740, Income Taxes, requires an entity to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified statement of financial position. Deferred tax liabilities and assets are classified as current or noncurrent based on the classification of the related asset or liability for financial reporting. Deferred tax liabilities and assets that are not related to an asset or liability for financial reporting are classified according to the expected reversal date of the temporary difference. To simplify the presentation of deferred income taxes, ASU 2015-17 requires that deferred income tax liabilities and assets be classified as noncurrent in a classified statement of financial position. ASU 2015-17 is effective for for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company is currently in the process of evaluating the impact of adoption of ASU 2015-17 on its financial statements.

On September 25, 2015, the FASB issued Accounting Standards Update No. 2015-16, “Business Combinations: Simplifying the Accounting for Measurement-Period Adjustments” (“ASU 2015-16”). ASU 2015-16 requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments in ASU 2015-16 require that the acquirer record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. ASU 2015-16 is effective for annual reporting periods beginning after December 15, 2015. The Company does not expect the standard to have a material impact on its consolidated financial statements.

On February 18, 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-02, Consolidation: Amendments to the Consolidation Analysis (“ASU 2015-02”), which affects reporting entities that are required to evaluate whether they should consolidate certain legal entities. All legal entities are subject to reevaluation under the revised consolidation model. The standard amends the consolidation requirements in ASC 810. ASU 2015-02 is effective for fiscal periods beginning after December 15, 2015 for public companies, and early adoption is permitted. The Company does not expect to early adopt ASU 2015-02, which will be effective for its fiscal year ending December 31, 2016. The Company does not believe the standard will have a material impact on its consolidated financial statements.

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which supersedes most existing revenue recognition guidance under GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP. The standard is effective for annual periods beginning after December 15, 2017, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). The Company will adopt this guidance at the beginning of its first quarter of fiscal year 2018. Adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements or disclosures.

Net Loss per Share

12 Months Ended

Dec. 31, 2015

Earnings Per Share [Abstract]

Net Loss Per Share

Net Loss per Share

The Company calculates earnings per share (“EPS”) in accordance with the provisions of ASC 260-10 and the guidance of SEC Staff Accounting Bulletin (“SAB”) No. 98. Under ASC 260-10, basic EPS excludes dilution for common stock equivalents and is computed by dividing net income or loss attributable to common shareholders by the weighted average number of common shares outstanding for the period. All options, warrants or other potentially dilutive instruments issued for nominal consideration are required to be included in the calculation of basic and diluted net income attributable to common stockholders. Diluted EPS is calculated using the treasury stock method and reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock and resulted in the issuance of common stock.

Diluted net loss per common share for the year ended December 31, 2015 does not include the effect of options to purchase 9,143,856 shares of common stock as the effect of their inclusion is anti-dilutive. Diluted net income per common share for the year ended December 31, 2014 does not include the effect of options to purchase 10,769,149 shares of common stock as the effect of their inclusion is anti-dilutive. Diluted net income per common share for the year ended December 31, 2013 does not include the effect of options to purchase 9,724,193 shares of common stock as the effect of their inclusion is anti-dilutive.

A reconciliation of shares used in calculating basic and diluted earnings per share follows:



	Year Ended December 31,
	2015	2014	2013
Basic	56,452,408	54,478,754	54,725,236
Effect of assumed exercised options	—	—	—
Diluted	56,452,408	54,478,754	54,725,236

Segment Information

12 Months Ended

Dec. 31, 2015

Segment Reporting [Abstract]

Segment Information

The Company accounts for its segment information in accordance with the provisions of ASC 280-10, “Segment Reporting.” ASC 280-10 establishes annual and interim reporting standards for operating segments of a company. ASC 280-10 requires disclosures of selected segment-related financial information about products, major customers, and geographic areas based on the Company’s internal accounting methods. The Company is organized into two operating segments for purposes of making operating decisions and assessing performance. The Business segment facilitates real-time online interactions — chat, voice and content delivery across multiple channels and screens for global corporations of all sizes. The Consumer segment facilitates online transactions between Experts and Users and sells its services to consumers. Both segments currently generate their revenue primarily in the U.S. The chief operating decision-maker evaluates performance, makes operating decisions, and allocates resources based on the operating income of each segment. The reporting segments follow the same accounting polices used in the preparation of the Company’s consolidated financial statements which are described in the summary of significant accounting policies. The Company allocates cost of revenue, sales and marketing and amortization of purchased intangibles to the segments, but it does not allocate product development expenses, general and administrative expenses and income tax expense because management does not use this information to measure performance of the operating segments. There are currently no intersegment sales. Additionally, assets are not available for review by segment and therefore no segment asset disclosure is presented.

Summarized financial information by segment for the year ended December 31, 2015, based on the Company’s internal financial reporting system utilized by the Company’s chief operating decision maker, follows (amounts in thousands):



	Business		Consumer		Corporate			Consolidated
Revenue:
Hosted services – Business	$	200,576	$	—	$	—		$	200,576
Hosted services – Consumer	—		15,209		—			15,209
Professional services	23,227		—		—			23,227
Total revenue	223,803		15,209		—			239,012
Cost of revenue	67,901		2,409		—			70,310
Sales and marketing	87,975		6,753		—			94,728
Amortization of purchased intangibles	4,873		—		—			4,873
Unallocated corporate expenses	—				79,529			79,529
Operating income (loss)	$	63,054	$	6,047	$	(79,529	)	$	(10,428	)

Summarized financial information by segment for the year ended December 31, 2014, based on the Company’s internal financial reporting system utilized by the Company’s chief operating decision maker, follows (amounts in thousands):



	Business		Consumer		Corporate			Consolidated
Revenue:
Hosted services – Business	$	172,783	$	—	$	—		$	172,783
Hosted services – Consumer	—		16,629		—			16,629
Professional services	20,519		—		—			20,519
Total revenue	193,302		16,629		—			209,931
Cost of revenue	50,192		2,511		—			52,703
Sales and marketing	77,118		6,135		—			83,253
Amortization of purchased intangibles	1,621		—		—			1,621
Unallocated corporate expenses	—		—		77,521			77,521
Operating income (loss)	$	64,371	$	7,983	$	(77,521	)	$	(5,167	)

Summarized financial information by segment for the year ended December 31, 2013, based on the Company’s internal financial reporting system utilized by the Company’s chief operating decision maker, follows (amounts in thousands):



	Business		Consumer		Corporate			Consolidated
Revenue:
Hosted services – Business	$	150,004	$	—	$	—		$	150,004
Hosted services – Consumer	—		15,091		—			15,091
Professional services	12,710		—		—			12,710
Total revenue	162,714		15,091		—			177,805
Cost of revenue	40,132		2,423		—			42,555
Sales and marketing	57,011		5,477		—			62,488
Amortization of purchased intangibles	871		—		—			871
Unallocated corporate expenses	—		—		76,365			76,365
Operating income (loss)	$	64,700	$	7,191	$	(76,365	)	$	(4,474	)

Geographic Information

The Company is domiciled in the United States and has international operations in the United Kingdom, Asia-Pacific, Latin America and Western Europe, particularly France and Germany. The following table presents the Company's revenues attributable to domestic and foreign operations for the years ended (amounts in thousands):



	December 31,
	2015		2014		2013
United States	$	159,539	$	138,533	$	116,819
Other Americas ⁽¹⁾	12,296		10,508		8,444
Total Americas	171,835		149,041		125,263
EMEA ⁽²⁾	51,548		44,506		35,665
APAC ⁽³⁾	15,629		16,384		16,877
Total revenue	$	239,012	$	209,931	$	177,805

⁽¹⁾ Canada, Latin America and South America

⁽²⁾ Europe, the Middle East and Africa (“EMEA”)

⁽³⁾ Asia-Pacific (“APAC”)

The following table presents the Company's long-lived assets by geographic region for the years ended (amounts in thousands):



	December 31,
	2015		2014
United States	$	96,362	$	101,068
Israel	16,393		18,982
Australia	8,290		16,438
Netherlands	8,285		7,686
Other ⁽¹⁾	2,482		1,940
Total long-lived assets	$	131,812	$	146,114

⁽¹⁾ United Kingdom, Germany, Japan, and Italy

Property, Plant and Equipment [Abstract]

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8981-108599

Reference 2: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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Reference 5: http://www.xbrl.org/2003/role/presentationRef
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Reference 6: http://www.xbrl.org/2003/role/presentationRef
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Reference 7: http://www.xbrl.org/2003/role/presentationRef
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Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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+ Details

Property and Equipment

12 Months Ended

Dec. 31, 2015

Property and Equipment

The following table presents the detail of property and equipment for the periods presented (amounts in thousands):



	December 31,
	2015			2014
Computer equipment and software	$	67,631		$	55,293
Furniture, equipment and building improvements	13,761			9,439
	81,392			64,732
Less: accumulated depreciation	(57,263		)	(45,149		)
Total	$	24,129		$	19,583

Depreciation expense is calculated over the estimated useful life of the asset. Aggregate depreciation expense for property and equipment was $12.1 million, $9.1 million and $8.1 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Goodwill

The changes in the carrying amount of goodwill for the year ended December 31, 2015 are as follows (amounts in thousands):



	Business			Consumer		Total
Balance as of December 31, 2014	$	72,824		$	8,024	$	80,848
Adjustments to goodwill:
Foreign exchange adjustments	(526		)	—		(526		)
Balance as of December 31, 2015	$	72,298		$	8,024	$	80,322

The changes in the carrying amount of goodwill for the year ended December 31, 2014 are as follows (amounts in thousands):



	Business		Consumer		Total
Balance as of December 31, 2013	$	24,700	$	8,024	$	32,724
Adjustments to goodwill:
Acquisitions	48,124		—		48,124
Balance as of December 31, 2014	$	72,824	$	8,024	$	80,848

The total accumulated goodwill impairment charges are $23.5 million through December 31, 2015. No impairment was recognized for the years ended December 31, 2015 and 2014.

Intangible Assets

Intangible assets are summarized as follows (see Note 7) (amounts in thousands):



	December 31, 2015
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Weighted Average Amortization Period
Amortizing intangible assets:
Technology	$	28,005	$	(15,723	)	$	12,282	4.7 years
Customer relationships	16,008		(6,873		)	9,135		5.8 years
Trade names	1,287		(1,250		)	37		2.6 years
Non-compete agreements	1,446		(936		)	510		1.7 years
Patents	3,440		(848		)	2,592		9.3 years
Other	312		(249		)	63		3.0 years
Total	$	50,498	$	(25,879	)	$	24,619



	December 31, 2014
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Weighted Average Amortization Period
Amortizing intangible assets:
Technology	$	27,844	$	(11,303	)	$	16,541	5.3 years
Customer relationships	16,008		(4,055		)	11,953		7.9 years
Trade names	1,287		(817		)	470		2.8 years
Non-compete agreements	1,446		(625		)	821		2.3 years
Patents	3,290		(500		)	2,790		9.9 years
Other	312		(267		)	45		3.0 years
Total	$	50,187	$	(17,567	)	$	32,620

Amortization expense is calculated over the estimated useful life of the asset. Aggregate amortization expense for intangible assets was $8.0 million, $5.1 million and $2.6 million for the years ended December 31, 2015, 2014 and 2013, respectively. For the years ended December 31, 2015, 2014 and 2013, a portion of this amortization is included in cost of revenue. Estimated amortization expense for the next five years are as follows (amounts in thousands):



	Estimated Amortization Expense
2015	$	6,614
2016	4,885
2017	2,782
2018	2,554
2019	2,363
Thereafter	5,421
Total	$	24,619

Accrued Liabilities and Other Current Liabilities

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details

Accrued Liabilities and Other Current Liabilities

12 Months Ended

Dec. 31, 2015

Payables and Accruals [Abstract]

The following table presents the detail of accrued liabilities and other current liabilities for the periods presented (amounts in thousands):



	December 31,
	2015		2014
Payroll and other employee related costs	$	14,107	$	15,373
Professional services, consulting and other vendor fees	12,372		9,258
Sales commissions	4,522		3,268
Contingent earn-out (Note 7)	377		6,940
Other	2,918		2,933
Total	$	34,296	$	37,772

Acquisitions

12 Months Ended

Dec. 31, 2015

Business Combinations [Abstract]

Acquisitions

Engage Pty Ltd.

On November 9, 2012, the Company acquired all outstanding shares of Engage Pty Ltd. (“Engage”), an Australian provider of cloud-based customer contact solutions. The transaction was accounted for under the purchase method of accounting and, accordingly, the operating results of Engage were included in the Company’s consolidated results of operations from the date of acquisition.

The purchase price was approximately $10.6 million. The total acquisition costs incurred in the year ended December 31, 2012 were approximately $0.5 million and are included in general and administrative expenses in the Company’s Consolidated Statements of Income for the same period. The acquisition enhances the Company’s ability to offer intelligent engagement solutions to businesses in the Asia Pacific region. Of the total purchase price, $0.8 million was allocated to the net book values of the acquired assets and assumed liabilities. The historical carrying amounts of such assets and liabilities approximated their fair values. All receivables acquired are expected to be collectible. The purchase price in excess of the fair value of the net book values of the assets acquired and liabilities assumed was allocated to intangible assets based on management’s best estimate of fair values, taking into account all relevant information available at the time of acquisition, and the excess was allocated to goodwill. The goodwill is not deductible for tax purposes. The intangible assets are being amortized over their expected period of benefit. The purchase price includes approximately $1.7 million of potential earn-out consideration for the shareholders if certain revenue targets are achieved. The earn-out is payable in shares of LivePerson common stock and cash. The Company recorded the contingent earn-out as part of the purchase price. At June 30, 2015, the Company assessed this earn-out and recorded a $0.7 million fair value re-measurement adjustment, which was recorded in loss from operations as a decrease to general and administrative expenses. As of December 31, 2015, there was no remaining liability included in accrued expenses relating to this earn-out.

NexGraph LLC

On March 11, 2014, the Company acquired all the outstanding shares of NexGraph LLC (“NexGraph”), a company focused on analytic solutions, in exchange for aggregate cash consideration of $0.5 million. Of the purchase price, $0.1 million was allocated to intangibles, net and $0.4 million was allocated to goodwill.

Synchronite LLC

On June 2, 2014, the Company acquired Synchronite LLC (“Synchronite”), a German based start-up that provides co-browsing technology. The transaction was accounted for under the purchase method of accounting and, accordingly, the operating results of Synchronite were included in the Company’s consolidated results of operations from the date of acquisition.

The allocation of the total purchase price of approximately $4.1 million was based upon the estimated fair value of Synchronite's net tangible and identifiable intangible assets as of the date of acquisition. The total acquisition costs incurred were approximately $0.4 million and are included in general and administrative expenses in the Company’s consolidated statements of operations. Of the total purchase price, $45,000 was allocated to the net book values of the acquired assets and assumed liabilities. The historical carrying amounts of such assets and liabilities approximated their fair values. All receivables acquired are expected to be collectible. The purchase price includes approximately $2.7 million of goodwill and approximately $1.5 million of intangible assets. The goodwill will be deductible for tax purposes. The intangible assets are being amortized over their expected period of benefit. The purchase price includes $1.8 million of potential earn-out consideration for the shareholders if complete product integration is achieved. The earn-out is payable in shares of LivePerson common stock and cash. The Company recorded the contingent earn-out as part of the purchase price. In accordance with ASC 480, the Company has classified this amount as a liability and the amount is included in accrued expenses in the December 31, 2015 consolidated balance sheet, due to the variable number of shares that will be issued if and when the targets are achieved. During the year ended December 31, 2015, the Company made $1.6 million of payments. The ending balance at December 31, 2015 is $0.2 million. The Company will continue to assess the earn-out calculation in future periods and any future adjustments will affect operating income.

The components of the intangible assets are as follows (amounts in thousands):



	Weighted Average Useful Life (Months)	Amount
Technology	120	$	1,082
Trade-name	48	62
Customer relationships	84	247
Non-compete agreements	36	60
		$	1,451

Contact At Once!, LLC

On November 7, 2014, the Company acquired Contact At Once!, LLC (“CAO!”), a software company with a cloud-based platform that instantly connects consumers with businesses through instant messaging, text messaging, chat, social media and video over the internet for consumer-to-business sales conversions. The transaction was accounted for under the purchase method of accounting and, accordingly, the operating results of CAO! were included in the Company’s consolidated results of operations from the date of acquisition.

The allocation of the total purchase price of approximately $67.0 million, which includes approximately $42.8 million in cash, approximately $20.0 million in shares of common stock and approximately $4.2 million of potential earn-out consideration in cash, was based upon the estimated fair value of CAO!'s net tangible and identifiable intangible assets as of the date of acquisition. The historical carrying amounts of such assets and liabilities approximated their fair values. All receivables acquired are expected to be collectible. The purchase price included approximately $45.1 million of goodwill and approximately $20.4 million of intangible assets. The goodwill will be deductible for tax purposes. The intangible assets are being amortized over their expected period of benefit. The purchase price includes $4.2 million of potential earn-out consideration for the shareholders if certain targeted financial, strategic and integration objectives is achieved. The earn-out is payable in cash. The Company recorded the contingent earn-out as part of the purchase price. In accordance with ASC 480, the Company has classified this amount as a liability and is included in accrued expenses in the December 31, 2015 consolidated balance sheet. During the year ended December 31, 2015, the Company assessed this earn-out and recorded a $3.2 million fair value re-measurement adjustment, which was recorded in loss from operations as a decrease in general and administrative expenses. As of December 31, 2015, there is a remaining liability of $0.2 million included in accrued expenses relating to this contingent earn-out.

Management’s allocation of the purchase price in connection with the CAO! acquisition is as follows (amounts in thousands):



Cash	$	480
Accounts receivable	2,694
Other currents assets	289
Property and equipment	231
Other assets	43
Intangible assets	20,400
Goodwill	45,064
	69,201
Liabilities assumed	(2,203		)
Total purchase price consideration	$	66,998

The components of the intangible assets are as follows (amounts in thousands):



	Weighted Average Useful Life (Months)	Amount
Technology	96	$	8,400
Trade-name	12	500
Customer relationships	120	10,700
Non-compete agreements	36	800
		$	20,400

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1497-128463

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+ Details

Fair Value Measurements

12 Months Ended

Dec. 31, 2015

Fair Value Disclosures [Abstract]

Fair Value Measurements

The Company measures its cash equivalents at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. The following are the hierarchical levels of inputs to measure fair value:


•	Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.


•	Level 2: Inputs reflect: quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means.


•	Level 3: Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available.

Financial Assets and Liabilities

The Company's assets and liabilities that are measured at fair value on a recurring basis, by level, within the fair value hierarchy as of December 31, 2015 and December 31, 2014, are summarized as follows (amounts in thousands). The Company’s cash held as collateral balance of $5.4 million at December 31, 2015 is not held in a money market account and is not included in the following table.



	December 31, 2015								December 31, 2014
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	4,059	$	—	$	—	$	4,059	$	3,987	$	—	$	—	$	3,987
Foreign currency derivative contracts	—		102		—		102		—		—		—		—
Total assets	$	4,059	$	102	$	—	$	4,161	$	3,987	$	—	$	—	$	3,987

Accrued liabilities:
Contingent earn-out	$	—	$	—	$	377	$	377	$	—	$	—	$	6,940	$	6,940
Foreign currency derivative contracts	—		310		—		310		—		—		—		—
Total liabilities	$	—	$	310	$	377	$	687	$	—	$	—	$	6,940	$	6,940

In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value. Observable or market inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company's assumptions based on the best information available.

The Company's money market funds are measured at fair value on a recurring basis based on quoted market prices in active markets and are classified as level 1 within the fair value hierarchy. The Company's contingent earn-out liability and foreign currency derivative contracts are measured at fair value on a recurring basis and are classified as level 3 and level 2, respectively, within the fair value hierarchy. On a nonrecurring basis, the Company uses fair value measures when analyzing asset impairment. Long-lived tangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If it is determined such indicators are present and the review indicates that the assets will not be fully recoverable, based on undiscounted estimated cash flows over the remaining amortization periods, their carrying values are reduced to estimated fair value. The Company uses an income approach and inputs that constitute level 3. During the third quarter of each year, the Company evaluates goodwill for impairment at the reporting unit level. The Company uses qualitative factors in accordance with ASU No. 2011-08 to determine whether it is "more likely than not" that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. This measurement is classified based on level 3 input.

The contingent earn-out balance in connection with the acquisition of Engage was $0.9 million as of December 31, 2014. This earn-out is based on the potential earn-out consideration if certain revenue targets are achieved. The contingent earn-out balance was increased by $1.8 million in June 2014 in connection with the acquisition of Synchronite and $4.2 million in November 2014 in connection with the acquisition of CAO!. During the twelve months ended December 31, 2015, the contingent earn-out decreased by $4.1 million in connection with the acquisition of CAO! due to both re-measurement to fair value of $3.2 million and cash payments of $0.9 million. The contingent earnout was also decreased by $0.9 million in connection with the Engage acquisition and by $1.6 million in connection with the acquisition of Synchronite due to both re-measurement to fair value and cash payments. The contingent earn-out amounts are recorded in accrued expense on the condensed consolidated balance sheets as they are payable in 2016. The contingent earn-out relating to Engage was based on the potential earn-out consideration if certain revenue targets are achieved. There was no remaining contingent earn-out in connection with the acquisition of Engage as of December 31, 2015. The contingent earn-out relating to Synchronite is based on the fulfillment of a complete product integration and a minimum number of “Co-Browse” interactions per month. The contingent earn-out relating to CAO! is based on achieving certain target strategic and integration objectives and milestones.

The changes in fair value of the Level 3 liabilities are as follows (amounts in thousands):



	Contingent Earn-Out
	December 31,
	2015			2014
Balance, Beginning of year	$	6,940		$	1,660
Synchronite addition (see Note 7)	—			1,810
CAO! addition (see Note 7)	—			4,220
Cash payment	(2,883		)	(750		)
Changes in fair value	(3,680		)	—
Balance, End of year	$	377		$	6,940

Derivative Financial Instruments

The Company is exposed to foreign exchange risks that are managed in part by using derivative financial instruments. Beginning in January 2015, the Company entered into foreign currency forward contracts related to risks associated with foreign operations. The Company does not use derivatives for trading purposes and at December 31, 2015 has no derivatives that are designated as fair value hedges. Derivatives are recorded at their estimated fair values based upon Level 2 inputs. Derivatives designated and effective as cash flow hedges are reported as a component of other comprehensive income and reclassified to earnings in the same periods in which the hedged transactions impact earnings. Gains and losses related to derivatives not meeting the requirements of hedge accounting and the portion of derivatives related to hedge ineffectiveness are recognized in current earnings.

In accordance with the foreign currency forward contracts, the Company was required to pledge cash as collateral security to be maintained at the bank. The collateral shall remain in control of the lender, and these funds can be used to satisfy the outstanding obligation. Accordingly, the Company had cash at the bank of approximately $5.4 million at December 31, 2015 and is recorded as cash held as collateral in current assets.

The following summarizes certain information regarding the Company’s outstanding foreign currency derivative contracts related primarily to intercompany receivables and payables for the periods presented (in thousands):



	As of December 31, 2015			As of December 31, 2014
Notional amount of foreign currency derivative contracts	$	43,431		$	—
Fair value of foreign currency derivatives contracts	(208		)	—

The fair value of the Company’s derivative instruments is summarized below (in thousands):



	Fair Value of Derivative Instruments
	Balance Sheet Location	As of December 31, 2015		As of December 31, 2014
Derivative Assets
Derivatives not designated as hedging instruments:
Foreign currency derivatives contracts	Prepaid expenses and other current assets	$	102	—

Derivative Liabilities
Derivatives not designated as hedging instruments:
Foreign currency derivatives contracts	Accrued expenses and other liabilities	$	310	—

The following summarizes certain information regarding the Company’s derivatives that are not designated or are not effective as hedges (in thousands):



	Gain (losses) on Derivative Instruments Recognized in Income Statement
	Income Statement Location	December 31, 2015		December 31, 2014
Foreign currency derivatives contracts	Other Income	$	54	—

Commitments and Contingencies Disclosure [Abstract]

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Commitments and Contingencies

12 Months Ended

Dec. 31, 2015

Commitments and Contingencies

Contractual Obligations

The Company leases facilities and certain equipment under agreements accounted for as operating leases. These leases generally require the Company to pay all executory costs such as maintenance and insurance. Rental expense for operating leases for the years ended December 31, 2015, 2014 and 2013 was approximately $9.9 million, $9.5 million and $9.3 million, respectively.

Future minimum lease payments under non-cancellable operating leases (with an initial or remaining lease terms in excess of one year) are as follows (amounts in thousands):



Year Ending December 31,	Operating Leases
2016	$	9,782
2017	8,368
2018	7,588
2019	3,514
2020	1,429
Thereafter	3,779
Total minimum lease payments	$	34,460

Employee Benefit Plans

The Company has a 401(k) defined contribution plan covering all eligible employees. The Company provides for employer matching contributions equal to 50% of employee contributions, up to the lesser of 5% of eligible compensation or $6,000. Matching contributions are deposited in to the employees 401(k) account and are subject to 5 year graded vesting. Salaries and related expenses include $1.3 million, $0.9 million and $0.8 million of employer matching contributions for the years ended December 31, 2015, 2014 and 2013, respectively.

Indemnifications

The Company enters into service and license agreements in its ordinary course of business. Pursuant to some of these agreements, the Company agrees to indemnify certain customers from and against certain types of claims and losses suffered or incurred by them as a result of using the Company’s products.

The Company also has agreements whereby its executive officers and directors are indemnified for certain events or occurrences while the officer or director is, or was serving, at the Company’s request in such capacity. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited; however, the Company has a directors and officers insurance policy that reduces its exposure and enables the Company to recover a portion of any future amounts paid. As a result of its insurance policy coverage, the Company believes the estimated fair value of these indemnification agreements is minimal. Currently, the Company has no liabilities recorded for these agreements as of December 31, 2015.

Investments	12 Months Ended
Investments	Dec. 31, 2015
Investments, All Other Investments [Abstract]
Investments	Investments In February 2014, the Company purchased technology licenses and consulting services at fair value from a company in the amount of $3.5 million. The Company received access to this company's patents as well as certain consulting services. During the year ended December 31, 2014, the Company allocated approximately $2.8 million to intangible assets, which is being amortized over the life of the patents. The remaining amount was allocated to other assets.

Stockholders' Equity

12 Months Ended

Dec. 31, 2015

Equity [Abstract]

Stockholders' Equity

Common Stock

At December 31, 2015, there were 100,000,000 shares of common stock authorized, and 57,374,907 shares issued and outstanding. As of December 31, 2014, there were 100,000,000 shares of common stock authorized, and 56,701,331 shares issued and outstanding. The par value for common shares is $0.001.

Preferred Stock

As of December 31, 2015 and 2014, there were 5,000,000 shares of preferred stock authorized, and zero shares issued and outstanding. The par value for preferred shares is $0.001.

Stock Repurchase Program

On December 10, 2012, the Company’s Board of Directors approved a stock repurchase program through June 30, 2014. Under the stock repurchase program, the Company is authorized to repurchase shares of its common stock, in the open market or privately negotiated transactions, at times and prices considered appropriate by the Board of Directors depending upon prevailing market conditions and other corporate considerations. On March 13, 2014, the Company's Board of Directors increased the aggregate purchase price of the stock repurchase program from $30.0 million to $40.0 million. On July 23, 2014, the Company's Board of Directors increased the aggregate purchase price of the stock repurchase program from $40.0 million to $50.0 million. On March 5, 2015, the Company's Board of Directors extended the expiration date of the program out to December 31, 2016. There were 420,172 shares repurchased under this program during 2015, of which 277,360 shares were recorded in treasury stock at par on the consolidated balance sheets as of December 31, 2015. As of December 31, 2015, approximately $6.1 million remained available for purchase under the program. On February 16, 2016, the Company's Board of Directors increased the aggregate purchase price of the stock repurchase program by an additional $14.0 million.

Stock-Based Compensation

The Company follows FASB ASC 718-10, “Stock Compensation,” which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions. ASC 718-10 requires measurement of the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). Incremental compensation costs arising from subsequent modifications of awards after the grant date must be recognized.

The following table summarizes stock-based compensation expense related to employee stock options under ASC 718-10 included in Company’s statement of operations for the years ended (amounts in thousands):



	December 31,
	2015		2014		2013
Cost of revenue	$	1,396	$	1,492	$	1,954
Sales and marketing	3,088		3,399		2,851
General and administrative expense	3,692		3,809		4,148
Product development expense	3,638		3,606		3,555
Total stock based compensation included in costs and expenses	$	11,814	$	12,306	$	12,508

The per share weighted average fair value of stock options granted during the years ended December 31, 2015, 2014 and 2013 was $4.45, $5.15, and $5.12, respectively. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions for the years ended December 31, 2015, 2014 and 2013:



	December 31,
	2015	2014	2013
Dividend yield	—%	—%	—%
Risk-free interest rate	1.3% – 1.7%	1.5% – 1.7%	0.7% – 1.4%
Expected life (in years)	5.0	5.0	5.0
Historical volatility	47.4% – 49.7%	49.6% – 53.7%	55.6% – 60.1%

A description of the methods used in the significant assumptions used to estimate the fair value of stock-based-based compensation awards follows:

Dividend yield – The Company uses 0% as it has never issued dividends and does not anticipate issuing dividends in the near term.

Risk-free interest rate – The Company uses the market yield on U.S. Treasury securities at five years with constant maturity, representing the current expected life of stock options in years.

Expected life – The Company uses historical data to estimate the expected life of a stock option.

Historical volatility – The Company uses a trailing five year from grant date to determine volatility.

Stock Option Plans

During 1998, the Company established the Stock Option and Restricted Stock Purchase Plan (the “1998 Plan”). Under the 1998 Plan, the Board of Directors could issue incentive stock options or nonqualified stock options to purchase up to 5,850,000 shares of common stock. The 2000 Stock Incentive Plan (the “2000 Plan”) succeeded the 1998 Plan. Under the 2000 Plan, the options which had been outstanding under the 1998 Plan were incorporated in the 2000 Plan increasing the number of shares available for issuance under the plan by approximately 4,150,000, thereby reserving for issuance 10,000,000 shares of common stock in the aggregate.

The Company established the 2009 Stock Incentive Plan (as amended and restated, the “2009 Plan”) as a successor to the 2000 Plan. Under the 2009 Plan, the options which had been outstanding under the 2000 Plan were incorporated into the 2009 Plan and the Company increased the number of shares available for issuance under the plan by 6,000,000. The Company amended the 2009 Stock Incentive Plan (the “Amended 2009 Plan”) effective June 7, 2012. The Amended 2009 Plan increased the number of shares authorized for issuance under the plan by an additional 4,250,000, thereby reserving for issuance 23,817,744 shares of common stock in the aggregate. Options to acquire common stock granted thereunder have 10-year terms. As of December 31, 2015, approximately 3.8 million shares of common stock were reserved for issuance under the 2009 Plan (taking into account all option exercises through December 31, 2015).

Employee Stock Purchase Plan

In June 2010, our stockholders approved the 2010 Employee Stock Purchase Plan with 1,000,000 shares of common stock initially reserved for issuance. As of December 31, 2015, approximately 381,000 shares of common stock were reserved for issuance under the Employee Stock Purchase Plan (taking into account all share purchases through December 31, 2015).

Stock Option Activity

A summary of the Company’s stock option activity and weighted average exercise prices follows:



	Stock Option Activity				Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
	Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Balance outstanding at December 31, 2012	9,841,479		$	11.06
Granted	2,573,700		10.20
Exercised	(771,810	)	6.48
Cancelled or expired	(1,919,176	)	13.11
Balance outstanding at December 31, 2013	9,724,193		$	10.86	5.52	$	43,172
Options vested and expected to vest at December 31, 2013	8,282,223		$	10.62	5.38	$	38,320
Options exercisable at December 31, 2013	4,090,492		$	8.71	4.62	$	26,163

Balance outstanding at December 31, 2013	9,724,193		$	10.86
Granted	3,826,500		11.04
Exercised	(1,097,543	)	7.10
Cancelled or expired	(1,684,001	)	12.70
Balance outstanding at December 31, 2014	10,769,149		$	10.95	7.01	$	38,752
Options vested and expected to vest at December 31, 2014	9,043,449		$	10.89	6.69	$	33,566
Options exercisable at December 31, 2014	4,736,834		$	10.01	5.28	$	22,083

Balance outstanding at December 31, 2014	10,769,149		$	10.95
Granted	857,260		10.06
Exercised	(645,521	)	4.41
Cancelled or expired	(1,837,032	)	12.22
Balance outstanding at December 31, 2015	9,143,856		$	11.05	6.66	$	2,117
Options vested and expected to vest	8,355,976		$	11.08	6.49	$	2,117
Options exercisable at December 31, 2015	5,400,744		$	10.95	5.60	$	2,117

The total fair value of stock options exercised during the years ended December 31, 2015 and 2014 was approximately $1.7 million and $4.0 million, respectively. As of December 31, 2015, there was approximately $15.4 million of total unrecognized compensation cost related to nonvested share-based compensation arrangements. That cost is expected to be recognized over a weighted average period of approximately 2.2 years.

The following table summarizes information about outstanding and vested stock options as of December 31, 2015:



	Options Outstanding				Options Exercisable
Range of Exercise Prices	Number of Shares Outstanding	Weighted-Average Remaining Contractual Life (Years)	Weighted-Average Exercise Price		Number of Shares	Weighted-Average Exercise Price
$1.79 - $7.02	1,201,564	2.95	$	5.07	1,201,564	$	5.07
$7.04 - $9.24	954,904	6.93	8.93		573,904	8.87
$9.34 - $10.05	1,054,775	8.19	9.76		353,325	9.62
$10.09 - $10.09	3,500	5.14	10.09		3,500	10.09
$10.13 - $10.13	1,623,175	8.28	10.13		410,125	10.13
$10.31 - $12.32	1,019,825	6.78	11.20		641,525	11.61
$12.46 - $13.28	1,413,025	6.13	13.06		1,075,400	13.08
$13.34 - $16.00	919,913	7.56	14.24		406,851	14.76
$16.98 - $18.09	948,175	6.39	17.45		730,800	17.46
$18.24 - $18.24	5,000	6.58	18.24		3,750	18.24

	9,143,856	6.66	$	11.05	5,400,744	$	10.95

Restricted Stock Unit Activity

A summary of the Company’s restricted stock units (“RSUs”) activity and weighted average exercise prices follows:



	Restricted Stock Unit Activity
	Number of Shares		Weighted Average Grant Date Fair Value (Per Share)		Aggregate Fair Value (in thousands)
Balance outstanding at December 31, 2014	—		$	—	$	—
Granted	1,256,500		10.31		—
Exercised	—		—		—
Forfeited	(55,000	)	10.31		—
Non-vested and outstanding at December 31, 2015	1,201,500		$	10.31	$	8,110
Expected to vest	921,500		$	10.31	$	6,220

RSUs granted to employees generally vest over a four-year period. As of December 31, 2015, total unrecognized compensation cost, adjusted for estimated forfeitures, related to nonvested RSUs was approximately $10.3 million and the weighted-average remaining vesting period was 3.2 years.

Income Taxes

12 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

Income Taxes

Income taxes are accounted for under the asset and liability method. 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 and operating loss and tax credit carryforwards. Deferred tax assets and liabilities 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. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences are expected to become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. The Company includes interest accrued on the underpayment of income taxes in interest expense and penalties, if any, related to unrecognized tax benefits in general and administrative expenses. The Company recorded a valuation allowance against its U.S. deferred tax asset as it considered its cumulative loss in recent years as a significant piece of negative evidence. Since valuation allowances are evaluated on a jurisdiction by jurisdiction basis, we believe that the deferred tax assets related to LivePerson UK, Engage Australia, Kasamba Israel and LivePerson LTD Israel are “more likely than not” to be realized as these jurisdictions have positive cumulative pre-tax book income after adjusting for permanent and onetime items. During the year ended December 31, 2015, the valuation recorded was $15.8 million.

Under Section 382 of the Internal Revenue Code of 1986, as amended, the Company’s use of its federal net operating loss (“NOL”) carryforwards may be limited if the Company experiences an ownership change, as defined in Section 382. Such an annual limitation could result in the expiration of the net operating loss carryforwards before utilization. As of December 31, 2015, the Company had approximately $5.4 million of federal NOL carryforwards available to offset future taxable income. Included in this amount is $4.6 million of federal NOL carryovers from the Company’s acquisition of Proficient. These carryforwards expire in various years through 2027.

The domestic and foreign components of (loss) income before provision for (benefit from) income taxes consist of the following (amounts in thousands):



	Year Ended December 31,
	2015			2014			2013
United States	$	(16,362	)	$	(12,933	)	$	(10,117	)
Israel	2,257			4,614			3,549
United Kingdom	1,564			1,612			1,688
Netherlands	1,919			1,462			1,044
Australia	(565		)	(513		)	(301		)
Germany	327			172			—
Other ⁽¹⁾	230			97			—
	$	(10,630	)	$	(5,489	)	$	(4,137	)
⁽¹⁾ Includes Japan, Italy, and France

No additional provision has been made for U.S. income taxes on the undistributed earnings of its Israeli subsidiary, LivePerson Ltd. (formerly HumanClick Ltd.), as such earnings have been taxed in the U.S. and accumulated earnings of the Company’s other foreign subsidiaries are immaterial through December 31, 2015.

The provision for (benefit from) income taxes consists of the following (amounts in thousands):



	Year Ended December 31,
	2015			2014			2013
Current income taxes:
U.S. Federal	$	(524	)	$	155		$	1,499
State and local	309			186			232
Foreign	1,573			3,254			2,508
Total current income taxes	1,358			3,595			4,239

Deferred income taxes:
U.S. Federal	13,791			(1,194		)	(4,280		)
State and local	876			41			331
Foreign	(211		)	(583		)	(928		)
Total deferred income taxes	14,456			(1,736		)	(4,877		)
Total income taxes	$	15,814		$	1,859		$	(638	)

The difference between the total income taxes computed at the federal statutory rate and the benefit from income taxes consists of the following:



	Year Ended December 31,
	2015		2014		2013
Federal Statutory Rate	34.00	%	34.00	%	35.00	%
State taxes, net of federal benefit	0.35	%	(2.74	)%	2.66	%
Non-deductible expenses – ISO	(8.57	)%	(14.68	)%	(18.19	)%
Non-deductible expenses – Other	(2.20	)%	(4.17	)%	(8.15	)%
Foreign tax rate differential	(12.41	)%	(46.50	)%	5.10	%
Valuation allowance	(148.24	)%	—	%	—	%
Other	(11.15	)%	0.23	%	(1.00	)%
Total provision	(148.22	)%	(33.86	)%	15.42	%

The effects of temporary differences and tax loss carryforwards that give rise to significant portions of federal deferred tax assets and deferred tax liabilities at December 31, 2015 and 2014 are presented below (amounts in thousands):



	Year Ended December 31,
	2015			2014
Deferred tax assets:
Net operating loss carryforwards	$	2,243		$	1,908
Accounts payable and accrued expenses	5,017			3,171
Non-cash compensation	10,034			7,691
Intangibles amortization	3,826			3,083
Allowance for doubtful accounts	274			310
Total deferred tax assets	21,394			16,163
Less valuation allowance	(15,820		)	—
Deferred tax assets, net of valuation allowance	5,574			16,163
Deferred tax liabilities:
Plant and equipment	(2,973		)	(1,852		)
Intangibles related to acquisitions	(1,361		)	(974		)
Goodwill amortization and contingent earn-out adjustments	(2,359		)	—
Total deferred tax liabilities	(6,693		)	(2,826		)
Net deferred (liabilities)/assets	$	(1,119	)	$	13,337

ASC Topic 740-10 clarifies the accounting for uncertainty in income taxes recognized in the financial statements in accordance with other provisions contained within this guidance. This topic prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by the taxing authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate audit settlement. The Company had unrecognized tax benefits of $2.2 million and $1.5 million as of December 31, 2015 and 2014, respectively.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):



	Year Ended December 31,
	2015		2014
Unrecognized tax benefits balance at January 1	$	1,501	$	749
Gross increase for tax positions of prior years	—		—
Gross increase for tax positions of current years	737		752
Gross unrecognized tax benefits at December 31	$	2,238	$	1,501

The tax years subject to examination by major tax jurisdictions include the years 2010 and forward for U.S states and New York City, the years 2011 and forward for U.S. Federal, and the years 2011 and forward for certain foreign jurisdictions.

Legal Matters	12 Months Ended
Legal Matters	Dec. 31, 2015
Loss Contingency, Information about Litigation Matters [Abstract]
Legal Matters	Legal Matters The Company previously filed an intellectual property suit against [24]7 Customer, Inc. in the Southern District of New York on March 6, 2014 seeking damages on the grounds that [24]7 reverse engineered and misappropriated the Company's technology to develop competing products and misused the Company's business information. Discovery in the New York case is in process. On June 22, 2015, [24]7 Customer, Inc. filed suit against the Company in the Northern District of California alleging patent infringement. On December 7, 2015, [24]7 Customer Inc. filed a second patent infringement suit against the Company, also in the Northern District of California. On January 5, 2016, the two California cases were consolidated for all pre-trial purposes. The Company believes the claims filed by [24]7 Customer Inc. are entirely without merit and intends to defend them vigorously. The Company routinely assesses all of its litigation and threatened litigation as to the probability of ultimately incurring a liability, and records its best estimate of the ultimate loss in situations where the Company assesses the likelihood of loss as probable. From time to time, the Company is involved in or subject to legal, administrative and regulatory proceedings, claims, demands and investigations arising in the ordinary course of business, including direct claims brought by or against the Company with respect to intellectual property, contracts, employment and other matters, as well as claims brought against the Company’s customers for whom the Company has a contractual indemnification obligation. The Company accrues for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Significant judgment is required in both the determination of probability and the determination as to whether a loss is reasonably estimable. In addition, in the event the Company determines that a loss is not probable, but is reasonably possible, and it becomes possible to develop what the Company believes to be a reasonable range of possible loss, then the Company will include disclosure related to such matter as appropriate and in compliance with ASC 450. The accruals or estimates, if any, resulting from the foregoing analysis, are reviewed at least quarterly and adjusted to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular matter. To the extent there is a reasonable possibility that the losses could exceed the amounts already accrued, the Company will, as applicable, adjust the accrual in the period the determination is made, disclose an estimate of the additional loss or range of loss, indicate that the estimate is immaterial with respect to its financial statements as a whole or, if the amount of such adjustment cannot be reasonably estimated, disclose that an estimate cannot be made. From time to time, third parties assert claims against the Company regarding intellectual property rights, privacy issues and other matters arising in the ordinary course of business. Although the Company cannot be certain of the outcome of any litigation or the disposition of any claims, nor the amount of damages and exposure, if any, that the Company could incur, the Company currently believes that the final disposition of all existing matters will not have a material adverse effect on our business, results of operations, financial condition or cash flows. In addition, in the ordinary course of business, the Company is also subject to periodic threats of lawsuits, investigations and claims. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors.

Restructuring Costs

12 Months Ended

Dec. 31, 2015

Restructuring and Related Activities [Abstract]

Restructuring Costs

The Company’s restructuring costs relate to the termination and severance costs associated with a large customer contract, as well as re-prioritizing and reallocating resources to focus on areas showing high growth potential. The expense associated with this restructuring was approximately $3.4 million during the twelve months ended December 31, 2015 and is classified in the condensed consolidated statements of operations as restructuring costs. The restructuring liability was approximately $1.3 million as of December 31, 2015 and is classified as accrued expenses and other current liabilities on the condensed consolidated balance sheets. During December 31, 2015, the Company paid out approximately $1.0 million of severance. The following table presents the detail of expenses and liability for the Company’s restructuring charges for the periods presented (amounts in thousands):



	Expense incurred during the Twelve Months Ended December 31, 2015		Liability as of December 31, 2015
Contract termination costs	$	1,745	$	427
Severance and other associated costs	1,639		901
Total restructuring costs	$	3,384	$	1,328

Description of Business and Summary of Significant Accounting Policies (Policy)	12 Months Ended
	Dec. 31, 2015
Accounting Policies [Abstract]
Summary Of Operations	LivePerson, Inc. (the “Company” or “LivePerson”) was incorporated in the State of Delaware in November 1995 and the LivePerson service was introduced in November 1998. In April 2000, the Company completed an initial public offering and is currently traded on the NASDAQ Global Select Market and the Tel Aviv Stock Exchange. LivePerson is headquartered in New York City with U.S. offices in Alpharetta (Georgia) and San Francisco, and international offices in Amsterdam, Atlanta, Berlin, London, Mannheim, Melbourne, Milan, Paris, Ra'anana (Israel), Redding (UK), and Tokyo. LivePerson provides mobile and online messaging technologies that power digital communication between brands and consumers. LiveEngage, the Company’s enterprise-class, cloud-based platform, enables businesses to create a meaningful connection with consumers by offering messaging as a preferred channel of communication. Messaging diminishes the need to rely on email systems or call a 1-800 number. Brands leverage LivePerson’s sophisticated intelligence engine and suite of text and mobile messaging, real-time chat messaging, content delivery, and cobrowsing offerings to proactively engage with consumers through m-dot sites, mobile apps, the desktop, social media and third-party consumer messaging platforms. The Company’s campaign-based messaging enables the brand to target the right consumer at the right time on a brand’s site by leveraging proprietary analysis and data-driven intelligence. The data the Company gathers and analyzes from visitor sessions, on behalf of its customers, spans the breadth of an online or mobile visitor session, starting from an initial keyword search or application login, through actions on the website or mobile application of the Company’s customer, and even into a shopping cart and an executed sale. The Company combines this session data with other historical, behavioral and operational information to develop insights into each step of a consumer’s journey for sales and service transactions. These unique, industry- and use-case specific insights are then mapped to each brand’s business goals in order to deliver successful campaign outcomes. LivePerson’s products, coupled with its domain knowledge, industry expertise and consulting services, have been proven to maximize the effectiveness of consumer engagement. The Company’s primary revenue source is from the sale of LivePerson services to businesses of all sizes. The Company also offers an online marketplace that connects independent service providers (“Experts”) who provide information and knowledge for a fee via real-time chat with individual consumers (“Users”).
Principles Of Consolidation	Principles of Consolidation The consolidated financial statements reflect the operations of LivePerson and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.
Use Of Estimates	Use of Estimates The preparation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires the Company’s management to make a number of estimates and assumptions relating to the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the period. Significant items subject to such estimates and assumptions include revenue recognition, stock-based compensation, accounts receivable, the valuation of goodwill and intangible assets, income taxes and legal contingencies. Actual results could differ from those estimates.
Financial Instruments And Concentration Of Credit Risk	Concentration of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable which approximate fair value at December 31, 2015 because of the short-term nature of these instruments. The Company invests its cash and cash equivalents with financial institutions that it believes are of high quality, and the Company performs periodic evaluations of these instruments and the relative credit standings of the institutions with which it invests. At certain times, the Company’s cash balances with any one financial institution may exceed Federal Deposit Insurance Corporation insurance limits. The Company believes it mitigates its risk by depositing its cash balances with high credit, quality financial institutions. The Company’s customers are located primarily in the United States. The Company performs ongoing credit evaluations of its customers’ financial condition (except for customers who purchase the LivePerson services by credit card via Internet download) and has established an allowance for doubtful accounts based upon factors surrounding the credit risk of customers, historical trends and other information. Concentration of credit risk is limited due to the Company’s large number of customers.
Foreign Currency Translation	Foreign Currency Translation The Company's operations are conducted in various countries around the world and the financial statements of its foreign subsidiaries are reported in the applicable foreign currencies (functional currencies). Financial information is translated from the applicable functional currency to the U.S. dollar (the reporting currency) for inclusion in the Company's consolidated financial statements. Income, expenses and cash flows are translated at weighted average exchange rates prevailing during the fiscal period, and assets and liabilities are translated at fiscal period-end exchange rates. Resulting translation adjustments are included as a component of accumulated other comprehensive income (loss) in stockholders' equity. Foreign exchange transaction gain or losses are included in Other Income, net in the accompanying consolidated statements of operations.
Cash And Cash Equivalents	Cash and Cash Equivalents The Company considers all highly liquid securities with original maturities of 3 months or less when acquired to be cash equivalents. Cash equivalents, which primarily consist of money market funds, are recorded at cost, which approximates fair value.
Accounts Receivable	Accounts Receivable Accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company determines the allowance based on historical write-off experience. The Company reviews its allowance for doubtful accounts monthly. Past due balances over 90 days and over a specified amount are reviewed individually for collectability. All other balances are reviewed on a pooled basis. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance sheet credit exposure related to its customers.
Property And Equipment	Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets, generally three to five years for equipment and software. Leasehold improvements are depreciated using the straight-line method over the shorter of the lease term or the estimated useful life of the asset.
Internal-Use Software Development Costs	Internal-Use Software Development Costs In accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350-40, Internal-Use Software, the Company capitalizes its costs to develop its internal use software when preliminary development efforts are successfully completed, management has authorized and committed project funding, and it is probable that the project will be completed and the software will be used as intended. These costs are included in property and equipment in the Company's consolidated balance sheets and are amortized on a straight-line basis over the estimated useful life of the related asset, which approximates three years. Costs incurred prior to meeting these criteria, together with costs incurred for training and maintenance, are expensed as incurred.
Goodwill And Intangible Assets	Goodwill and Intangible Assets In accordance with ASC 350, Goodwill and Other Intangible Assets, goodwill and indefinite-lived intangible assets are not amortized, but reviewed for impairment upon the occurrence of events or changes in circumstances that would reduce the fair value below its carrying amount. Goodwill is required to be tested for impairment at least annually. In September 2011, the FASB issued ASU No. 2011-8, “Intangibles — Goodwill and Other (Topic 350).” ASU 2011-8 permits an entity to first assess qualitative factors to determine whether it is “more likely than not” that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in Topic 350. The more-likely-than-not threshold is defined as having a likelihood of more than 50%. If it is determined that the fair value of a reporting unit is more likely than not to be less than its carrying value (including unrecognized intangible assets) then it is necessary to perform the second step of the goodwill impairment test. The second step of the goodwill impairment test is judgmental in nature and often involves the use of significant estimates and assumptions. Similarly, estimates and assumptions are used in determining the fair value of other intangible assets. These estimates and assumptions could have a significant impact on whether or not an impairment charge is recognized and also the magnitude of any such charge. The Company performs internal valuation analyses and considers other market information that is publicly available. Estimates of fair value are primarily determined using discounted cash flows and market comparisons. These approaches use significant estimates and assumptions including projected future cash flows (including timing), discount rates reflecting the risk inherent in future cash flows, perpetual growth rates, determination of appropriate market comparables and the determination of whether a premium or discount should be applied to comparables. ASC 350-10 also requires that intangible assets with estimable useful lives be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with ASC 360-10-35, “Accounting for Impairment or Disposal of Long-Lived Assets.”
Impairment Of Long-Lived Assets	Impairment of Long-Lived Assets In accordance with ASC 360-10, “Accounting for the Impairment or Disposal of Long-lived Assets,” long-lived assets, such as property, plant and equipment and purchased intangibles subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset.
Fair Value of Financial Instruments	Fair Value of Financial Instruments The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties. Cash and cash equivalents, accounts receivable, security deposits and accounts payable carrying amounts approximate fair value because of the short maturity of these instruments.
Revenue Recognition	Revenue Recognition The majority of the Company’s revenue is generated from monthly service revenues and related professional services from the sale of the LivePerson services. Because the Company provides its application as a service, the Company follows the provisions of FASB Accounting Standards Codification (“ASC”) 605-10-S99, “Revenue Recognition” and ASC 605-25, “Revenue Recognition with Multiple-Element Arrangements.” The Company charges a monthly fee, which varies by type of service, the level of customer usage and website traffic, and in some cases, the number of orders placed via the Company’s online engagement solutions. For certain of the Company’s larger customers, the Company may provide call center labor through an arrangement with one or more of several qualified vendors. For most of these customers, the Company passes the fee it incurs with the labor provider and its fee for the hosted services through to its customers in the form of a fixed fee for each order placed via the Company’s online engagement solutions. For these Pay for Performance (“PFP”) arrangements, in accordance with ASC 605-45, “Principal Agent Considerations,” the Company records revenue for transactions in which it acts as an agent on a net basis, and revenue for transactions in which it acts as a principal on a gross basis. The Company also sells certain of the LivePerson services directly via Internet download. These services are marketed as LiveEngage for small to medium-sized businesses (“SMBs”), and are paid for almost exclusively by credit card. Credit card payments accelerate cash flow and reduce the Company’s collection risk, subject to the merchant bank's right to hold back cash pending settlement of the transactions. Sales of LiveEngage may occur with or without the assistance of an online sales representative, rather than through face-to-face or telephone contact that is typically required for traditional direct sales. The Company recognizes monthly service revenue based upon the fee charged for the LivePerson services, provided that there is persuasive evidence of an arrangement, no significant Company obligations remain, collection of the resulting receivable is probable and the amount of fees to be paid is fixed or determinable. The Company’s service agreements typically have 12 month terms and, in some cases, are terminable or may terminate upon 30 to 90 days’ notice without penalty. When professional service fees add value to the customer on a standalone basis, the Company recognizes professional service fees upon completion of services. This guidance establishes a selling price hierarchy for determining the selling price of a deliverable, which is based on: (a) vendor-specific objective evidence; (b) third-party evidence; or (c) best estimated selling price. If a professional services arrangement does not qualify for separate accounting, the Company recognizes the fees, and the related labor costs, ratably over the contracted period. For revenue from our Consumer segment generated from online transactions between Experts and Users, the Company recognizes revenue net of the Expert fees in accordance with ASC 605-45, “Principal Agent Considerations,” due primarily to the fact that the Expert is the primary obligor. Additionally, the Company performs as an agent without any risk of loss for collection, and is not involved in selecting the Expert or establishing the Expert’s fee. The Company collects a fee from the User and retains a portion of the fee, and then remits the balance to the Expert. Revenue from these transactions is recognized when there is persuasive evidence of an arrangement, no significant Company obligations remain, collection of the resulting receivable is probable and the amount of fees to be paid is fixed and determinable.
Advertising Costs	Advertising Costs The Company expenses the cost of advertising and promoting its services as incurred.
Stock-Based Compensation	Stock-based Compensation In accordance with ASC Topic 718 -10, "Stock Compensation", the Company measures stock based awards at fair value and recognizes compensation expense for all share-based payment awards made to its employees and directors, including employee stock options. The Company estimates the fair value of stock options granted using the Black-Scholes valuation model. This model requires the Company to make estimates and assumptions including, among other things, estimates regarding the length of time an employee will retain vested stock options before exercising them, the estimated volatility of its common stock price and the number of options that will be forfeited prior to vesting. The fair value is then recognized on a straight line basis over the requisite service period of the award, which is generally four years. Changes in these estimates and assumptions can materially affect the determination of the fair value of the stock-based compensation and consequently, the related amount recognized in the consolidated statement of operations.
Deferred Rent	Deferred Rent The Company records rent expense on a straight-line basis over the term of the related lease. The difference between the rent expense recognized for financial reporting purposes and the actual payments made in accordance with the lease agreement is recognized as deferred rent liability included in other liabilities on the Company’s consolidated balance sheets.
Income Taxes	Income Taxes Income taxes are accounted for under the asset and liability method. 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 and operating loss and tax credit carryforwards. Deferred tax assets and liabilities 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 tax assets and liabilities of a change in tax rates is recognized in results of operations in the period that the tax change occurs. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
Comprehensive Income (Loss)	Comprehensive Loss In accordance with ASC 220 Comprehensive Income, the Company reports by major components and as a single total, the change in its net assets during the period from non-owner sources. Comprehensive income consists of net income (loss), accumulated other comprehensive income (loss), which includes certain changes in equity that are excluded from net income (loss). The Company’s comprehensive loss for all periods presented is related to the effect of foreign currency translation.

Description of Business and Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2015

Accounting Policies [Abstract]

Schedule of Activity in the Allowance for Doubtful Accounts

The activity in the allowance for for doubtful accounts is as follows (amounts in thousands):



Year Ended December 31,	Beginning Balance		Additions Charged to Costs and Expenses		Deductions / Write-Offs			Ending Balance
2013	$	708	$	457	$	—		$	1,165
2014	$	1,165	$	1,337	$	(1,227	)	$	1,275
2015	$	1,275	$	2,361	$	(2,452	)	$	1,184

Net Loss per Share (Tables)

12 Months Ended

Dec. 31, 2015

Earnings Per Share [Abstract]

Reconciliation Of Shares Used In Calculating Basic And Diluted Earnings Per Share

A reconciliation of shares used in calculating basic and diluted earnings per share follows:



	Year Ended December 31,
	2015	2014	2013
Basic	56,452,408	54,478,754	54,725,236
Effect of assumed exercised options	—	—	—
Diluted	56,452,408	54,478,754	54,725,236

Segment Information (Tables)

12 Months Ended

Dec. 31, 2015

Segment Reporting [Abstract]

Summary Of Financial Information By Segment



	Business		Consumer		Corporate			Consolidated
Revenue:
Hosted services – Business	$	200,576	$	—	$	—		$	200,576
Hosted services – Consumer	—		15,209		—			15,209
Professional services	23,227		—		—			23,227
Total revenue	223,803		15,209		—			239,012
Cost of revenue	67,901		2,409		—			70,310
Sales and marketing	87,975		6,753		—			94,728
Amortization of purchased intangibles	4,873		—		—			4,873
Unallocated corporate expenses	—				79,529			79,529
Operating income (loss)	$	63,054	$	6,047	$	(79,529	)	$	(10,428	)



	Business		Consumer		Corporate			Consolidated
Revenue:
Hosted services – Business	$	172,783	$	—	$	—		$	172,783
Hosted services – Consumer	—		16,629		—			16,629
Professional services	20,519		—		—			20,519
Total revenue	193,302		16,629		—			209,931
Cost of revenue	50,192		2,511		—			52,703
Sales and marketing	77,118		6,135		—			83,253
Amortization of purchased intangibles	1,621		—		—			1,621
Unallocated corporate expenses	—		—		77,521			77,521
Operating income (loss)	$	64,371	$	7,983	$	(77,521	)	$	(5,167	)



	Business		Consumer		Corporate			Consolidated
Revenue:
Hosted services – Business	$	150,004	$	—	$	—		$	150,004
Hosted services – Consumer	—		15,091		—			15,091
Professional services	12,710		—		—			12,710
Total revenue	162,714		15,091		—			177,805
Cost of revenue	40,132		2,423		—			42,555
Sales and marketing	57,011		5,477		—			62,488
Amortization of purchased intangibles	871		—		—			871
Unallocated corporate expenses	—		—		76,365			76,365
Operating income (loss)	$	64,700	$	7,191	$	(76,365	)	$	(4,474	)

Revenues Attributable To Domestic And Foreign Operations

The following table presents the Company's revenues attributable to domestic and foreign operations for the years ended (amounts in thousands):



	December 31,
	2015		2014		2013
United States	$	159,539	$	138,533	$	116,819
Other Americas ⁽¹⁾	12,296		10,508		8,444
Total Americas	171,835		149,041		125,263
EMEA ⁽²⁾	51,548		44,506		35,665
APAC ⁽³⁾	15,629		16,384		16,877
Total revenue	$	239,012	$	209,931	$	177,805

Long-Lived Assets By Geographic Region

The following table presents the Company's long-lived assets by geographic region for the years ended (amounts in thousands):



	December 31,
	2015		2014
United States	$	96,362	$	101,068
Israel	16,393		18,982
Australia	8,290		16,438
Netherlands	8,285		7,686
Other ⁽¹⁾	2,482		1,940
Total long-lived assets	$	131,812	$	146,114

⁽¹⁾ United Kingdom, Germany, Japan, and Italy

Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2015

Property, Plant and Equipment [Abstract]

Summary of Property And Equipment



	December 31,
	2015			2014
Computer equipment and software	$	67,631		$	55,293
Furniture, equipment and building improvements	13,761			9,439
	81,392			64,732
Less: accumulated depreciation	(57,263		)	(45,149		)
Total	$	24,129		$	19,583

Goodwill and Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Changes In Carrying Amount Of Goodwill

The changes in the carrying amount of goodwill for the year ended December 31, 2015 are as follows (amounts in thousands):



	Business			Consumer		Total
Balance as of December 31, 2014	$	72,824		$	8,024	$	80,848
Adjustments to goodwill:
Foreign exchange adjustments	(526		)	—		(526		)
Balance as of December 31, 2015	$	72,298		$	8,024	$	80,322

The changes in the carrying amount of goodwill for the year ended December 31, 2014 are as follows (amounts in thousands):



	Business		Consumer		Total
Balance as of December 31, 2013	$	24,700	$	8,024	$	32,724
Adjustments to goodwill:
Acquisitions	48,124		—		48,124
Balance as of December 31, 2014	$	72,824	$	8,024	$	80,848

Summary Of Intangible Assets

Intangible assets are summarized as follows (see Note 7) (amounts in thousands):



	December 31, 2015
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Weighted Average Amortization Period
Amortizing intangible assets:
Technology	$	28,005	$	(15,723	)	$	12,282	4.7 years
Customer relationships	16,008		(6,873		)	9,135		5.8 years
Trade names	1,287		(1,250		)	37		2.6 years
Non-compete agreements	1,446		(936		)	510		1.7 years
Patents	3,440		(848		)	2,592		9.3 years
Other	312		(249		)	63		3.0 years
Total	$	50,498	$	(25,879	)	$	24,619



	December 31, 2014
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Weighted Average Amortization Period
Amortizing intangible assets:
Technology	$	27,844	$	(11,303	)	$	16,541	5.3 years
Customer relationships	16,008		(4,055		)	11,953		7.9 years
Trade names	1,287		(817		)	470		2.8 years
Non-compete agreements	1,446		(625		)	821		2.3 years
Patents	3,290		(500		)	2,790		9.9 years
Other	312		(267		)	45		3.0 years
Total	$	50,187	$	(17,567	)	$	32,620

Schedule Of Future Amortization Expense

Estimated amortization expense for the next five years are as follows (amounts in thousands):



	Estimated Amortization Expense
2015	$	6,614
2016	4,885
2017	2,782
2018	2,554
2019	2,363
Thereafter	5,421
Total	$	24,619

Accrued Liabilities and Other Current Liabilities (Tables)

12 Months Ended

Dec. 31, 2015

Payables and Accruals [Abstract]

Schedule of Accrued Liabilities

The following table presents the detail of accrued liabilities and other current liabilities for the periods presented (amounts in thousands):



	December 31,
	2015		2014
Payroll and other employee related costs	$	14,107	$	15,373
Professional services, consulting and other vendor fees	12,372		9,258
Sales commissions	4,522		3,268
Contingent earn-out (Note 7)	377		6,940
Other	2,918		2,933
Total	$	34,296	$	37,772

Acquisitions (Tables)

12 Months Ended

Dec. 31, 2015

Synchronite, LLC [Member]

Business Acquisition [Line Items]

Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination

The components of the intangible assets are as follows (amounts in thousands):



	Weighted Average Useful Life (Months)	Amount
Technology	120	$	1,082
Trade-name	48	62
Customer relationships	84	247
Non-compete agreements	36	60
		$	1,451

Contact At Once! [Member]

Business Acquisition [Line Items]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

Management’s allocation of the purchase price in connection with the CAO! acquisition is as follows (amounts in thousands):



Cash	$	480
Accounts receivable	2,694
Other currents assets	289
Property and equipment	231
Other assets	43
Intangible assets	20,400
Goodwill	45,064
	69,201
Liabilities assumed	(2,203		)
Total purchase price consideration	$	66,998

Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination

The components of the intangible assets are as follows (amounts in thousands):



	Weighted Average Useful Life (Months)	Amount
Technology	96	$	8,400
Trade-name	12	500
Customer relationships	120	10,700
Non-compete agreements	36	800
		$	20,400

Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2015

Fair Value Disclosures [Abstract]

Fair Value, Assets Measured on Recurring Basis



	December 31, 2015								December 31, 2014
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	4,059	$	—	$	—	$	4,059	$	3,987	$	—	$	—	$	3,987
Foreign currency derivative contracts	—		102		—		102		—		—		—		—
Total assets	$	4,059	$	102	$	—	$	4,161	$	3,987	$	—	$	—	$	3,987

Accrued liabilities:
Contingent earn-out	$	—	$	—	$	377	$	377	$	—	$	—	$	6,940	$	6,940
Foreign currency derivative contracts	—		310		—		310		—		—		—		—
Total liabilities	$	—	$	310	$	377	$	687	$	—	$	—	$	6,940	$	6,940

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2015

Commitments and Contingencies Disclosure [Abstract]

Future Minimum Lease Payments Under Non-Cancelable Operating Leases

Future minimum lease payments under non-cancellable operating leases (with an initial or remaining lease terms in excess of one year) are as follows (amounts in thousands):



Year Ending December 31,	Operating Leases
2016	$	9,782
2017	8,368
2018	7,588
2019	3,514
2020	1,429
Thereafter	3,779
Total minimum lease payments	$	34,460

Stockholders' Equity (Tables)

12 Months Ended

Dec. 31, 2015

Equity [Abstract]

Summary Of Stock-Based Compensation Expense Related To Employee Stock Options



	December 31,
	2015		2014		2013
Cost of revenue	$	1,396	$	1,492	$	1,954
Sales and marketing	3,088		3,399		2,851
General and administrative expense	3,692		3,809		4,148
Product development expense	3,638		3,606		3,555
Total stock based compensation included in costs and expenses	$	11,814	$	12,306	$	12,508

Weighted Average Assumptions Of Fair Value Options Using Black-Scholes Option-Pricing Model

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions for the years ended December 31, 2015, 2014 and 2013:



	December 31,
	2015	2014	2013
Dividend yield	—%	—%	—%
Risk-free interest rate	1.3% – 1.7%	1.5% – 1.7%	0.7% – 1.4%
Expected life (in years)	5.0	5.0	5.0
Historical volatility	47.4% – 49.7%	49.6% – 53.7%	55.6% – 60.1%

Summary Of Stock Option Activity And Weighted Average Exercise Prices

A summary of the Company’s stock option activity and weighted average exercise prices follows:



	Stock Option Activity				Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
	Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Balance outstanding at December 31, 2012	9,841,479		$	11.06
Granted	2,573,700		10.20
Exercised	(771,810	)	6.48
Cancelled or expired	(1,919,176	)	13.11
Balance outstanding at December 31, 2013	9,724,193		$	10.86	5.52	$	43,172
Options vested and expected to vest at December 31, 2013	8,282,223		$	10.62	5.38	$	38,320
Options exercisable at December 31, 2013	4,090,492		$	8.71	4.62	$	26,163

Balance outstanding at December 31, 2013	9,724,193		$	10.86
Granted	3,826,500		11.04
Exercised	(1,097,543	)	7.10
Cancelled or expired	(1,684,001	)	12.70
Balance outstanding at December 31, 2014	10,769,149		$	10.95	7.01	$	38,752
Options vested and expected to vest at December 31, 2014	9,043,449		$	10.89	6.69	$	33,566
Options exercisable at December 31, 2014	4,736,834		$	10.01	5.28	$	22,083

Balance outstanding at December 31, 2014	10,769,149		$	10.95
Granted	857,260		10.06
Exercised	(645,521	)	4.41
Cancelled or expired	(1,837,032	)	12.22
Balance outstanding at December 31, 2015	9,143,856		$	11.05	6.66	$	2,117
Options vested and expected to vest	8,355,976		$	11.08	6.49	$	2,117
Options exercisable at December 31, 2015	5,400,744		$	10.95	5.60	$	2,117

Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range

The following table summarizes information about outstanding and vested stock options as of December 31, 2015:



	Options Outstanding				Options Exercisable
Range of Exercise Prices	Number of Shares Outstanding	Weighted-Average Remaining Contractual Life (Years)	Weighted-Average Exercise Price		Number of Shares	Weighted-Average Exercise Price
$1.79 - $7.02	1,201,564	2.95	$	5.07	1,201,564	$	5.07
$7.04 - $9.24	954,904	6.93	8.93		573,904	8.87
$9.34 - $10.05	1,054,775	8.19	9.76		353,325	9.62
$10.09 - $10.09	3,500	5.14	10.09		3,500	10.09
$10.13 - $10.13	1,623,175	8.28	10.13		410,125	10.13
$10.31 - $12.32	1,019,825	6.78	11.20		641,525	11.61
$12.46 - $13.28	1,413,025	6.13	13.06		1,075,400	13.08
$13.34 - $16.00	919,913	7.56	14.24		406,851	14.76
$16.98 - $18.09	948,175	6.39	17.45		730,800	17.46
$18.24 - $18.24	5,000	6.58	18.24		3,750	18.24

	9,143,856	6.66	$	11.05	5,400,744	$	10.95

Schedule of Share-based Compensation, Restricted Stock Units Award Activity

Restricted Stock Unit Activity

A summary of the Company’s restricted stock units (“RSUs”) activity and weighted average exercise prices follows:



	Restricted Stock Unit Activity
	Number of Shares		Weighted Average Grant Date Fair Value (Per Share)		Aggregate Fair Value (in thousands)
Balance outstanding at December 31, 2014	—		$	—	$	—
Granted	1,256,500		10.31		—
Exercised	—		—		—
Forfeited	(55,000	)	10.31		—
Non-vested and outstanding at December 31, 2015	1,201,500		$	10.31	$	8,110
Expected to vest	921,500		$	10.31	$	6,220

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

Domestic And Foreign Components Of Income Before Provision For Income Taxes

The domestic and foreign components of (loss) income before provision for (benefit from) income taxes consist of the following (amounts in thousands):



	Year Ended December 31,
	2015			2014			2013
United States	$	(16,362	)	$	(12,933	)	$	(10,117	)
Israel	2,257			4,614			3,549
United Kingdom	1,564			1,612			1,688
Netherlands	1,919			1,462			1,044
Australia	(565		)	(513		)	(301		)
Germany	327			172			—
Other ⁽¹⁾	230			97			—
	$	(10,630	)	$	(5,489	)	$	(4,137	)
⁽¹⁾ Includes Japan, Italy, and France

Schedule Of Provision For Income Taxes

The provision for (benefit from) income taxes consists of the following (amounts in thousands):



	Year Ended December 31,
	2015			2014			2013
Current income taxes:
U.S. Federal	$	(524	)	$	155		$	1,499
State and local	309			186			232
Foreign	1,573			3,254			2,508
Total current income taxes	1,358			3,595			4,239

Deferred income taxes:
U.S. Federal	13,791			(1,194		)	(4,280		)
State and local	876			41			331
Foreign	(211		)	(583		)	(928		)
Total deferred income taxes	14,456			(1,736		)	(4,877		)
Total income taxes	$	15,814		$	1,859		$	(638	)

Schedule Of Reconciliations Of Federal Statutory Tax Rate To Effective Income Tax Rate

The difference between the total income taxes computed at the federal statutory rate and the benefit from income taxes consists of the following:



	Year Ended December 31,
	2015		2014		2013
Federal Statutory Rate	34.00	%	34.00	%	35.00	%
State taxes, net of federal benefit	0.35	%	(2.74	)%	2.66	%
Non-deductible expenses – ISO	(8.57	)%	(14.68	)%	(18.19	)%
Non-deductible expenses – Other	(2.20	)%	(4.17	)%	(8.15	)%
Foreign tax rate differential	(12.41	)%	(46.50	)%	5.10	%
Valuation allowance	(148.24	)%	—	%	—	%
Other	(11.15	)%	0.23	%	(1.00	)%
Total provision	(148.22	)%	(33.86	)%	15.42	%

Schedule Of Federal Deferred Tax Assets And Deferred Tax Liabilities



	Year Ended December 31,
	2015			2014
Deferred tax assets:
Net operating loss carryforwards	$	2,243		$	1,908
Accounts payable and accrued expenses	5,017			3,171
Non-cash compensation	10,034			7,691
Intangibles amortization	3,826			3,083
Allowance for doubtful accounts	274			310
Total deferred tax assets	21,394			16,163
Less valuation allowance	(15,820		)	—
Deferred tax assets, net of valuation allowance	5,574			16,163
Deferred tax liabilities:
Plant and equipment	(2,973		)	(1,852		)
Intangibles related to acquisitions	(1,361		)	(974		)
Goodwill amortization and contingent earn-out adjustments	(2,359		)	—
Total deferred tax liabilities	(6,693		)	(2,826		)
Net deferred (liabilities)/assets	$	(1,119	)	$	13,337

Schedule of Unrecognized Tax Benefits Roll Forward

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):



	Year Ended December 31,
	2015		2014
Unrecognized tax benefits balance at January 1	$	1,501	$	749
Gross increase for tax positions of prior years	—		—
Gross increase for tax positions of current years	737		752
Gross unrecognized tax benefits at December 31	$	2,238	$	1,501

Restructuring Costs (Tables)

12 Months Ended

Dec. 31, 2015

Restructuring and Related Activities [Abstract]

Restructuring and Related Costs

The following table presents the detail of expenses and liability for the Company’s restructuring charges for the periods presented (amounts in thousands):



	Expense incurred during the Twelve Months Ended December 31, 2015		Liability as of December 31, 2015
Contract termination costs	$	1,745	$	427
Severance and other associated costs	1,639		901
Total restructuring costs	$	3,384	$	1,328

Description of Business and Summary of Significant Accounting Policies (Narrative) (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2015 USD ($) customer	Dec. 31, 2014 USD ($) customer	Dec. 31, 2013 USD ($) customer
Organization Consolidation And Summary Of Significant Accounting Policies [Line Items]
Property and equipment, useful life	3 months
Allowance for Doubtful Accounts Receivable [Roll Forward]
Allowance for Doubtful Accounts Beginning Balance	$ 1,275	$ 1,165	$ 708
Additions Charged to Costs and Expenses	2,361	1,337	457
Deductions/Write-offs	(2,452)	(1,227)	0
Allowance for Doubtful Accounts Ending Balance	1,184	1,275	1,165
Depreciation	12,114	9,071	8,090
Capitalized computer software	$ 2,400	2,500	2,600
Typical service agreements	12 months
Advertising costs	$ 10,700	$ 9,700	$ 7,400
Requisite service period	4 years
Minimum [Member]
Organization Consolidation And Summary Of Significant Accounting Policies [Line Items]
Property and equipment, useful life	3 years
Allowance for Doubtful Accounts Receivable [Roll Forward]
Termination Notice Period1	30 days
Maximum [Member]
Organization Consolidation And Summary Of Significant Accounting Policies [Line Items]
Property and equipment, useful life	5 years
Allowance for Doubtful Accounts Receivable [Roll Forward]
Termination Notice Period1	90 days
Customer Concentration Risk [Member] \| Revenues [Member]
Organization Consolidation And Summary Of Significant Accounting Policies [Line Items]
Concentration risk, number of customers exceeding 10% \| customer	0	0	0
Customer Concentration Risk [Member] \| Accounts Receivable [Member]
Organization Consolidation And Summary Of Significant Accounting Policies [Line Items]
Concentration risk, number of customers exceeding 10% \| customer	0	1	1
Concentration risk percentage		22.00%	12.00%

Net Loss per Share (Details) - shares	12 Months Ended
Net Loss per Share (Details) - shares	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Earnings Per Share [Abstract]
Shares excluded from computation of earnings per share	9,143,856	10,769,149	9,724,193

Net Loss per Share (Reconciliation Of Shares Used In Calculating Basic and Diluted Earnings Per Share) (Details) - shares	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Accounting Policies [Abstract]
Basic	56,452,408	54,478,754	54,725,236
Effect of assumed exercised options	0	0	0
Diluted	56,452,408	54,478,754	54,725,236

Segment Information (Details)	12 Months Ended
Segment Information (Details)	Dec. 31, 2015 segment
Segment Reporting [Abstract]
Number of operating segments	2

Segment Information (Summary Of Financial Information By Segment) (Details) - USD ($)
$ in Thousands

12 Months Ended

Dec. 31, 2015

Dec. 31, 2014

Dec. 31, 2013

Hosted services – Business

$ 200,576

$ 172,783

$ 150,004

Hosted services – Consumer

15,209

16,629

15,091

Professional services

23,227

20,519

12,710

Total revenue

239,012

209,931

177,805

^[1],[2],[3]

70,310

52,703

42,555

^[1],[2],[3]

94,728

83,253

62,488

Unallocated corporate expenses

4,873

1,621

871

79,529

77,521

76,365

(10,428)

(5,167)

(4,474)

Corporate [Member]

Unallocated corporate expenses

79,529

77,521

76,365

(79,529)

(77,521)

(76,365)

Business [Member]

Hosted services – Business

200,576

172,783

150,004

Professional services

23,227

20,519

12,710

Total revenue

223,803

193,302

162,714

67,901

50,192

40,132

87,975

77,118

57,011

4,873

1,621

871

63,054

64,371

64,700

Consumer [Member]

Hosted services – Consumer

15,209

16,629

15,091

Total revenue

15,209

16,629

15,091

2,409

2,511

2,423

6,753

6,135

5,477