CARE.COM INC, 10-Q filed on 8/5/2014
Quarterly Report
Document and Entity Information Document
6 Months Ended
Jun. 28, 2014
Jul. 29, 2014
Document and Entity Information [Abstract]
 
 
Document Type
10-Q 
 
Amendment Flag
false 
 
Document Period End Date
Jun. 28, 2014 
 
Document Fiscal Year Focus
2014 
 
Document Fiscal Period Focus
Q2 
 
Entity Registrant Name
Care.com Inc 
 
Entity Central Index Key
0001412270 
 
Current Fiscal Year End Date
--12-27 
 
Entity Filer Category
Non-accelerated Filer 
 
Entity Common Stock, Shares Outstanding
 
31,363,326 
Condensed Consolidated Balance Sheets Statement (USD $)
In Thousands, unless otherwise specified
Jun. 28, 2014
Dec. 28, 2013
Current assets:
 
 
Cash and cash equivalents
$ 113,398 
$ 29,959 
Restricted cash
538 
246 
Accounts receivable (net of allowance of $0 and $56, respectively)
2,218 
1,609 
Unbilled accounts receivable
3,098 
2,477 
Prepaid expenses and other current assets
2,993 
1,731 
Total current assets
122,245 
36,022 
Property and equipment, net
1,606 
1,553 
Intangible assets, net
9,279 
11,418 
Goodwill
62,957 
62,686 
Other non-current assets
145 
2,150 
Total assets
196,232 
113,829 
Current liabilities:
 
 
Accounts payable
3,427 
2,031 
Accrued expenses and other current liabilities
13,301 
7,023 
Current contingent acquisition consideration
2,690 
5,463 
Deferred revenue
10,913 
8,304 
Total current liabilities
30,331 
22,821 
Contingent acquisition consideration
5,166 
Deferred tax liability
1,795 
1,112 
Other non-current liabilities
374 
785 
Total liabilities
32,500 
29,884 
Commitment and contingencies (see note 6)
   
   
Redeemable convertible preferred stock, $0.01 par value; 22,632 shares authorized at December 28, 2013; 21,299 shares issued and outstanding at December 28, 2013; aggregate liquidation value of $161,666 as of December 28, 2013
152,251 
Stockholders' equity (deficit)
 
 
Preferred stock, $0.001 par value; 5,000 shares authorized; no shares issued and outstanding
Common stock, $0.001 par value; 300,000 shares authorized; 30,985 and 3,197 shares issued and outstanding as of June 28, 2014 and December 28, 2013, respectively
31 
Additional paid-in capital
267,147 
9,311 
Accumulated deficit
(104,986)
(79,563)
Accumulated other comprehensive income
1,540 
1,943 
Total stockholders' equity (deficit)
163,732 
(68,306)
Total liabilities, redeemable convertible preferred stock and stockholders' equity (deficit)
$ 196,232 
$ 113,829 
Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
Jun. 28, 2014
Dec. 28, 2013
Allowance for accounts receivables
$ 0 
$ 56,000 
Preferred stock, par value, dollars per share
$ 0.001 
$ 0.001 
Preferred stock, shares authorized
5,000,000 
5,000,000 
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value, in dollars per share
$ 0.001 
$ 0.001 
Common stock, shares authorized
300,000,000 
300,000,000 
Common stock, shares issued
30,985,000 
3,197,000 
Common stock, shares outstanding
30,985,000 
3,197,000 
Redeemable Convertible Preferred Stock
 
 
Redeemable convertible preferred stock, par value
$ 0.01 
$ 0.01 
Redeemable convertible preferred stock, shares authorized
22,632,000 
Redeemable convertible preferred stock, shares issued
21,299,000 
Redeemable convertible preferred stock, shares outstanding
21,299,000 
Redeemable convertible preferred stock, liquidation preference
$ 0 
$ 161,666,000 
Condensed Consolidated Statements of Operations (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 28, 2014
Jun. 30, 2013
Jun. 28, 2014
Jun. 30, 2013
Income Statement [Abstract]
 
 
 
 
Revenue
$ 25,836 
$ 19,133 
$ 51,107 
$ 37,295 
Cost of revenue
5,713 
4,607 
11,484 
8,834 
Operating expenses:
 
 
 
 
Selling and marketing
18,022 
12,329 
38,471 
25,262 
Research and development
4,078 
2,890 
8,142 
5,557 
General and administrative
6,588 
4,156 
12,820 
7,857 
Depreciation and amortization
1,068 
1,057 
2,136 
2,076 
Total operating expenses
29,756 
20,432 
61,569 
40,752 
Operating loss
(9,633)
(5,906)
(21,946)
(12,291)
Other income (expense), net
67 
10 
(2,679)
(117)
Loss before income taxes
(9,566)
(5,896)
(24,625)
(12,408)
Provision for income taxes
309 
218 
794 
525 
Net loss
(9,875)
(6,114)
(25,419)
(12,933)
Accretion of preferred stock
(14)
(4)
(28)
Net loss attributable to common stockholders
$ (9,875)
$ (6,128)
$ (25,423)
$ (12,961)
Net loss per share attributable to common stockholders:
 
 
 
 
Basic and diluted (in dollars per share)
$ (0.32)
$ (2.08)
$ (0.96)
$ (4.45)
Weighted-average shares used to compute net loss per share attributable to common stockholders:
 
 
 
 
Basic and diluted (in shares)
30,980 
2,941 
26,439 
2,915 
Condensed Consolidated Statements of Comprehensive Loss (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 28, 2014
Jun. 30, 2013
Jun. 28, 2014
Jun. 30, 2013
Statement of Comprehensive Income [Abstract]
 
 
 
 
Net loss
$ (9,875)
$ (6,114)
$ (25,419)
$ (12,933)
Other comprehensive income:
 
 
 
 
Foreign currency translation adjustments
(255)
309 
(403)
(255)
Comprehensive loss
$ (10,130)
$ (5,805)
$ (25,822)
$ (13,188)
Condensed Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 28, 2014
Jun. 30, 2013
Cash flows from operating activities
 
 
Net loss
$ (25,419)
$ (12,933)
Adjustments to reconcile net loss to net cash used in operating activities:
 
 
Stock-based compensation
2,082 
718 
Depreciation and amortization
2,520 
3,366 
Deferred taxes
672 
496 
Contingent consideration expense
147 
276 
Change in fair value of contingent consideration payable in preferred stock
2,258 
Change in fair value of stock warrants
606 
(6)
Changes in operating assets and liabilities, net of effects from acquisitions:
 
 
Restricted cash
(449)
26 
Accounts receivable
(611)
(515)
Unbilled accounts receivable
(622)
(277)
Prepaid expenses and other current assets
(808)
(36)
Other non-current assets
(5)
Accounts payable
1,540 
2,210 
Accrued expenses and other current liabilities
6,671 
2,165 
Deferred revenue
2,613 
1,363 
Other non-current liabilities
(36)
(18)
Net cash used in operating activities
(8,841)
(3,160)
Cash flows from investing activities
 
 
Purchases of property and equipment
(400)
(935)
Payments for acquisitions, net of cash acquired
(489)
(398)
Cash withheld for purchase consideration
(73)
Net cash used in investing activities
(962)
(1,333)
Cash flows from financing activities
 
 
Net proceeds from issuance of common stock upon initial public offering
96,011 
Proceeds from the issuance of common stock
245 
196 
Payments of contingent consideration previously established in purchase accounting
(2,845)
Net cash provided by financing activities
93,411 
196 
Effect of exchange rate changes on cash and cash equivalents
(169)
103 
Net increase (decrease) in cash and cash equivalents
83,439 
(4,194)
Cash and cash equivalents, beginning of the period
29,959 
44,776 
Cash and cash equivalents, end of the period
113,398 
40,582 
Supplemental disclosure of cash flow activities
 
 
Cash paid for taxes
94 
12 
Supplemental disclosure of non-cash investing and financing activities
 
 
Issuance of preferred and common stock in connection with acquisitions
2,622 
Accretion of preferred stock to redemption value
28 
Conversion of preferred stock to common stock
154,856 
Reclassification of warrant liability to additional paid-in capital
968 
Reclassification of contingent consideration payable in common shares
4,878 
Unpaid deferred offering costs
$ 123 
$ 0 
Description of Business and Summary of Significant Accounting Policies
Description of Business and Summary of Significant Accounting Policies
Description of Business and Summary of Significant Accounting Policies
Care.com, Inc. (the “Company”, “we”, “us”, and “our”), a Delaware corporation, was incorporated on October 27, 2006. We are the world’s largest online marketplace for finding and managing family care. Our consumer matching solutions enable families to connect to caregivers and caregiving services in a reliable and easy way and our payment solutions enable families to pay caregivers electronically online or via their mobile device and to manage their household payroll and tax matters with Care.com HomePay. We also serve employers by providing access to our platform to employer-sponsored families and care-related businesses-such as day care centers, nanny agencies and home care agencies-who wish to market their services to our care-seeking families and recruit our caregiver members.
Certain Significant Risks and Uncertainties
We operate in a dynamic industry and, accordingly, can be affected by a variety of factors. For example, we believe that changes in any of the following areas could have a significant negative effect on us in terms of our future financial position, results of operations or cash flows: rates of revenue growth; engagement and usage of our products; scaling and adaptation of existing technology and network infrastructure; competition in our market; management of our growth; acquisitions and investments; qualified employees and key personnel; protection of our brand and intellectual property; protection of customers’ information and privacy concerns; and security measures related to our website, among other things.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in our Annual Report on Form 10-K for the fiscal year ended December 28, 2013, filed on March 6, 2014.
The condensed consolidated balance sheet as of December 28, 2013, included herein was derived from the audited financial statements as of that date, but does not include all disclosures including notes required by GAAP on an annual reporting basis.
In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods, and are not necessarily indicative of the results of operations to be anticipated for Fiscal 2014 or any future period.
Principles of Consolidation
The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and our wholly owned subsidiaries, after elimination of all intercompany balances and transactions.
Fiscal Year-End
For periods prior to Fiscal 2013, we operated and reported on a calendar basis fiscal year. Beginning in the third quarter of Fiscal 2013, we operate and report using a 52 or 53 week fiscal year ending on the Saturday in December closest and prior to December 31. Accordingly, our fiscal quarters end on the Saturday that falls closest to the last day of the third month of each quarter.
Use of Estimates
The preparation of our unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of income and expenses during the reporting period. On an ongoing basis, we evaluate our estimates, including those related to accounts receivable and revenue allowances, the useful lives of long-lived assets including property and equipment, intangible assets, valuation of common and preferred stock and warrants to purchase preferred stock, fair value of stock-based awards, goodwill, income taxes, contingent consideration, and contingencies. We base our estimates of the carrying value of certain assets and liabilities on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, when these carrying values are not readily available from other sources. These estimates are based on information available as of the date of the condensed consolidated financial statements; therefore, actual results could differ from the estimates.
Subsequent Events Consideration
The Company considers events or transactions that occur after the balance sheet date but prior to the issuance of the financial statements to provide additional evidence for certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated as required. There were no material recognized subsequent events recorded in the unaudited condensed consolidated financial statements as of and for the six months ended June 28, 2014.
Recently Issued and Adopted Accounting Pronouncements
In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-11, "Income Taxes (Topic740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carry forward, a Similar Tax Loss, or a Tax Credit Carry forward Exists (a consensus of the FASB Emerging Issues Task Force)." This ASU states that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carry forward, a similar tax loss, or a tax credit carry forward, except in certain situations. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. Early adoption and retrospective application are permitted. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date. The adoption of this amendment did not have a material impact on our condensed consolidated financial statements.
In April 2014, the FASB issued ASU No. 2014-08, “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity” to reduce diversity in practice for reporting discontinued operations. Under the previous guidance, any component of an entity that was a reportable segment, an operating segment, a reporting unit, a subsidiary, or an asset group was eligible for discontinued operations presentation. The revised guidance only allows disposals of components of an entity that represent a strategic shift (e.g., disposal of a major geographical area, a major line of business, a major equity method investment, or other major parts of an entity) and that have a major effect on a reporting entity’s operations and financial results to be reported as discontinued operations. The revised guidance also requires expanded disclosure in the financial statements for discontinued operations as well as for disposals of significant components of an entity that do not qualify for discontinued operations presentation. The updated guidance is effective for periods beginning after December 15, 2014. We currently do not have operations that are reported as discontinued operations and do not expect the adoption of this guidance to have a material effect on our financial position, results of operations, or cash flows.
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers”, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for us in our fiscal year 2018. Early application is not permitted. We are evaluating the effect that ASU 2014-09 will have on our consolidated financial statements and related disclosures. The standard permits the use of either the retrospective or cumulative effect transition method. We have not yet selected a transition method nor have we determined the effect of the standard on its ongoing financial reporting.
Fair Value Measurements
Fair Value Measurements
Fair Value Measurements
Accounting Standards Codification (ASC) 820, Fair Value Measurements and Disclosures, establishes a three-level valuation hierarchy for disclosure of fair value measurements. The categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the measurement of fair value. The three levels of the hierarchy are defined as follows:
Level 1 inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.
Level 2 inputs - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.), or inputs that are derived principally from or corroborated by market data by correlation or other means.
Level 3 inputs - Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.
Recurring Fair Value Measurements
Assets
Cash equivalents - Cash equivalents include money market mutual funds with original maturities of three months or less. The fair value measurement of these assets is based on quoted market prices in active markets for identical assets and, therefore, these assets are recorded at fair value on a recurring basis and classified as Level 1 in the fair value hierarchy.
Liabilities
Contingent Acquisition Consideration - Contingent acquisition consideration includes the fair value of the contingent consideration, based on the likelihood of issuing preferred stock and paying cash related to certain revenue milestones, as part of the consideration transferred. During the year ended December 28, 2013 we reassessed the probability of achievement on the PIAP contingent acquisition cash payment based on their meeting certain revenue milestones and the probability of reaching both the 2013 and 2014 milestones which resulted in $0.6 million of incremental expense. No incremental expense was recorded in the year-to-date period ended June 28, 2014. For contingent consideration payable in preferred stock, we used a valuation of the company based on both an income and market approach to determine the fair value of the preferred shares as of the acquisition date and on an-ongoing basis. We recorded our estimate of the fair value of this contingent consideration based on the evaluation of the likelihood of the achievement of the contractual conditions that would result in the payment of the contingent consideration and weighted probability assumptions of these outcomes. The fair value of the liability was estimated using a discounted cash flow technique with significant inputs that are not observable in the market and thus represents a Level 3 fair value measurement as defined in ASC 820, Fair Value Measurements and Disclosures. The significant inputs in the Level 3 measurement not supported by market activity included our probability assessments of expected future cash flows related to our acquisition of Breedlove during the earn-out period, appropriately discounted considering the uncertainties associated with the obligation, and calculated in accordance with the terms of the equity purchase agreement. There have been no changes in the probability of the earn-out payment through June 28, 2014. The cash portion of the contingent consideration liability has been discounted to reflect the time value of money, and therefore, as the milestone date approaches, the fair value of this liability will increase. This increase in fair value was recorded in general and administrative expenses in the accompanying consolidated statements of operations. The preferred stock portion of the contingent consideration represented a liability in accordance with ASC 480-10, Distinguishing Liabilities from Equity, and was marked to market each reporting period with changes in market value recognized in other expense, net in the accompanying consolidated statements of operations. Upon the closing of our initial public offering (“IPO”) in January 2014 the contingent consideration payable in preferred shares was automatically converted to the right to receive common shares. Contingent consideration payable in preferred shares was written up to fair value as of the closing date of the IPO and was reclassified to permanent equity and will no longer be marked to market.
Preferred Stock Warrants - Preferred stock warrants consist of warrants issued in connection with debt financings. The fair value of the warrants was determined using the Black-Scholes option-pricing model. In conjunction with the closing of the IPO, the warrant exercisable for shares of our Series A-1 Preferred Stock was automatically converted into a warrant exercisable for shares of our common stock, resulting in the reclassification of the related convertible preferred stock warrant liability to additional paid-in capital as the warrant met the criteria for equity classification upon its conversion to a warrant for the purchase of common stock. The warrant liability was re-measured to fair value prior to reclassification to additional paid-in capital. As of June 28, 2014, we had no outstanding warrant liability. Refer to Note 7 - Stockholders’ Equity (Deficit) for a discussion of the methodology used and changes in the fair value of our preferred stock warrants.
The following table presents information about our assets and liabilities measured at fair value on a recurring basis as of June 28, 2014 and December 28, 2013 and indicates the fair value hierarchy of the valuation techniques we utilized to determine such fair value (in thousands):
 
June 28, 2014
 
December 28, 2013
 
Fair Value Measurements Using Input Types
 

 
Fair Value Measurements Using Input Types
 

 
Level 1
 
Level 2
 
Level 3
 
Total
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets:

 

 

 

 

 

 

 

Money market mutual funds
$
96,812

 
$

 
$

 
$
96,812

 
$
15,085

 
$

 
$

 
$
15,085

Total assets
$
96,812

 
$

 
$

 
$
96,812

 
$
15,085

 
$

 
$

 
$
15,085

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities:


 


 


 


 


 


 


 


Contingent acquisition consideration
$

 
$

 
$
2,690

 
$
2,690

 
$

 
$

 
$
10,630

 
$
10,630

Preferred stock warrants

 

 

 

 

 

 
362

 
362

Total liabilities
$

 
$

 
$
2,690

 
$
2,690

 
$

 
$

 
$
10,992

 
$
10,992


The following table sets forth a summary of changes in the fair value of our contingent acquisition consideration and preferred stock warrants which represent recurring measurements that are classified within Level 3 of the fair value hierarchy wherein fair value is estimated using significant unobservable inputs (in thousands):
 
June 28, 2014
 
December 28, 2013
 
Contingent Acquisition
Consideration
 
Preferred Stock Warrants
 
Contingent Acquisition
Consideration
 
Preferred Stock Warrants
Beginning balance
$
10,630

 
$
362

 
$
9,288

 
$
247

Increase in fair value included in earnings
2,406

 
606

 
1,342

 
115

Reclassification to permanent equity
(4,878
)
 
(968
)
 

 

Contingent acquisition consideration payments
(5,468
)
 

 

 

Ending balance
$
2,690

 
$

 
$
10,630

 
$
362


Non-Recurring Fair Value Measurements
We remeasure the fair value of certain assets and liabilities upon the occurrence of certain events. Such assets are comprised of long-lived assets, including property and equipment, intangible assets and goodwill. No remeasurement of such assets occurred at June 28, 2014 and December 28, 2013. Other financial instruments not measured or recorded at fair value in the accompanying unaudited condensed consolidated balance sheets principally consist of accounts receivable, accounts payable, and accrued liabilities. The estimated fair values of these instruments approximate their carrying values due to their short-term nature.
Business Acquisitions
Business Acquisitions
Business Acquisitions
Consmr
On March 3, 2014, we entered into an agreement with Consmr, Inc. (“Consmr”), the developer of a mobile application for ratings and reviews of consumer products, pursuant to which we acquired the right to hire all employees of Consmr for total consideration of $0.6 million. Approximately $0.1 million of the purchase price was held back and is payable in one year subject to the continuing employment of the employees. Such amount is being recognized as compensation expense over the required employment period. The transaction is presented as an acquisition of a business and the consideration transferred, except for the amount held back, was recorded as goodwill.
As a result of this transaction, on March 4, 2014 all former employees of Consmr became employees of Care.com.
Supplemental Balance Sheet Information
Supplemental Balance Sheet Information
Supplemental Balance Sheet Information
The following table presents the detail of property and equipment, net for the periods presented (in thousands):
 
June 28,
2014
 
December 28,
2013
Computer equipment
$
1,619

 
$
1,444

Furniture and fixtures
1,340

 
1,154

Software
250

 
199

Leasehold improvements
247

 
183

Total
3,456

 
2,980

Less accumulated depreciation
(1,850
)
 
(1,427
)
Property and equipment, net
$
1,606

 
$
1,553


Depreciation expense for the three months ended June 28, 2014 and June 30, 2013 was $0.2 million and $0.1 million, respectively, and for the six months ended June 28, 2014 and June 30, 2013 $0.4 million and $0.3 million, respectively.
The following table presents the detail of accrued expenses and other current liabilities for the periods presented (in thousands):
 
June 28,
2014
 
December 28,
2013
Payroll and compensation
$
2,266

 
$
3,134

Tax-related expense
682

 
372

Marketing expenses
6,559

 
1,028

Other accrued expenses
3,794

 
2,489

Total accrued expenses and other current liabilities
$
13,301

 
$
7,023

Goodwill and Intangible Assets
Goodwill and Intangible Assets
Goodwill and Intangible Assets
The following table presents the change in goodwill for the periods presented (in thousands):
Balance as of December 28, 2013
$
62,686

Acquisition
489

Effect of currency translation
(218
)
Balance as of June 28, 2014
$
62,957




The following table presents the detail of intangible assets for the periods presented (dollars in thousands):
 
Gross Carrying Value
 
Accumulated Amortization
 
Net Carrying Value
 
Weighted-Average Remaining Life (Years)
June 28, 2014:
 
 
 
 
 
 
 
Indefinite lived intangibles
$
242

 
$

 
$
242

 
N/A
Trademarks and trade names
4,554

 
(2,749
)
 
1,805

 
2.2
Proprietary software
5,164

 
(3,252
)
 
1,912

 
3.0
Website
50

 
(27
)
 
23

 
1.9
Training materials
30

 
(15
)
 
15

 
1.5
Non-compete agreements
147

 
(81
)
 
66

 
2.2
Leasehold interests
170

 
(49
)
 
121

 
4.9
Caregiver relationships
343

 
(220
)
 
123

 
1.1
Customer relationships
8,945

 
(3,973
)
 
4,972

 
3.2
Total
$
19,645

 
$
(10,366
)
 
$
9,279

 

 
 
 
 
 
 
 
 
December 28, 2013:
 
 
 
 
 
 
 
Indefinite lived intangibles
$
242

 
$

 
$
242

 
N/A
Trademarks and trade names
4,561

 
(2,096
)
 
2,465

 
2.5
Proprietary software
5,184

 
(2,952
)
 
2,232

 
3.5
Website
50

 
(19
)
 
31

 
2.3
Training materials
30

 
(10
)
 
20

 
2.0
Non-compete agreements
148

 
(61
)
 
87

 
2.6
Leasehold interests
170

 
(36
)
 
134

 
5.4
Caregiver relationships
346

 
(164
)
 
182

 
1.6
Customer relationships
8,953

 
(2,928
)
 
6,025

 
3.5
Total
$
19,684

 
$
(8,266
)
 
$
11,418

 
 

Amortization expense was $2.1 million and $3.0 million for the six months ended June 28, 2014 and June 30, 2013, respectively. Of these amounts $1.7 million and $1.7 million was classified as a component of depreciation and amortization, and $0.4 million and $1.3 million was classified as a component of cost of revenue in the unaudited condensed consolidated statements of operations for the quarters ended June 28, 2014 and June 30, 2013, respectively. As of June 28, 2014, the estimated future amortization expense related to current intangible assets for future fiscal years was as follows (in thousands):
2014 (remaining)
$
2,127

2015
3,674

2016
1,993

2017
566

2018
221

Thereafter
456

Total
$
9,037

Commitments and Contingencies
Commitments and Contingencies
Commitments and Contingencies
Legal matters
From time to time, we have or may become party to litigation incident to the ordinary course of business. We assess the likelihood of any adverse judgments or outcomes with respect to these matters and determine loss contingency assessments on a gross basis after assessing the probability of incurrence of a loss and whether a loss is reasonably estimable. In addition, we consider other relevant factors that could impact our ability to reasonably estimate a loss. A determination of the amount of reserves required, if any, for these contingencies is made after analyzing each matter. Our reserve may change in the future due to new developments or changes in strategy in handling these matters. Although the results of litigation and claims cannot be predicted with certainty, we currently believe that the final outcome of all pending matters will not have a material adverse effect on our business, consolidated financial position, results of operations, or cash flows. Regardless of the outcome, litigation can adversely impact us due to defense and settlement costs, diversion of management resources, and other factors.
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit)
Stockholders’ Equity (Deficit)
Initial Public Offering
On January 29, 2014, we closed our IPO in which we sold and issued 6,152,500 shares of common stock, including 802,500 shares of common stock pursuant to the exercise of the underwriters’ option to purchase additional shares, which were sold to the public at a price of $17.00 per share. We received net proceeds of approximately $95.2 million from the IPO, including the exercise of the underwriters’ over-allotment option, net of underwriters’ discounts and commissions, and after deducting offering expenses of approximately $2.1 million.
Upon the closing of the IPO, all shares of our outstanding redeemable convertible preferred stock automatically converted into 21,490,656 shares of common stock and our outstanding warrant to purchase redeemable convertible preferred stock automatically converted into a warrant to purchase 40,697 shares of common stock at $1.72 per share.
Common Stock
As of June 28, 2014 and December 28, 2013, we had reserved the following shares of common stock for future issuance in connection with the following (in thousands):
 
June 28, 2014
 
December 28, 2013
Conversion of preferred stock

 
21,299

Contingent consideration payable in Series E convertible preferred stock

 
383

Contingent consideration payable in common stock
191

 

Options issued and outstanding
4,053

 
3,632

Options available for grant under stock option plans
3,418

 
193

Convertible preferred stock warrants

 
41

Common stock warrants

 
40

Total
7,662

 
25,588


Preferred Stock Warrants
In connection with a debt financing in 2007, we issued Lighthouse Capital Partners a warrant to purchase 40,697 shares of our Series A-1 convertible preferred stock at an exercise price of $1.72 per share, expiring October 2014, which were fully exercisable upon issuance. In conjunction with the closing of our IPO in January 2014, the warrant was automatically converted into a warrant exercisable for 40,697 shares of common stock at a purchase price of $1.72 per share, which resulted in the reclassification of the related convertible preferred stock warrant liability to additional paid-in capital as the warrant met the criteria for equity classification upon conversion to a warrant to purchase common stock. In accordance with ASC 480-10 (Distinguishing Liabilities from Equity) the freestanding warrant for our preferred stock was recognized as a liability and recorded at fair value in all periods prior to its conversion into a warrant to purchase common stock. The warrant liability was re-measured to fair value prior to reclassification to additional paid-in capital. As of June 28, 2014, we had no outstanding warrant liability. The warrant was exercised during the six months ended June 28, 2014 using a net exercise method which resulted in the issuance of 38,142 shares of common stock. There were no proceeds received by us related to this transaction.
Common Stock Warrants
In connection with a 2010 Loan and Security Agreement, we issued a warrant to purchase a maximum of 40,000 shares of our common stock at an exercise price of $1.65 per share. The warrant was exercised during the six months ended June 28, 2014 using a net exercise method which resulted in the issuance of 37,591 shares of common stock. There were no proceeds received by us related to this transaction.
Stock Option Plans
On November 15, 2006, we adopted our 2006 Stock Incentive Plan (‘‘the 2006 Plan’’), which provides for the issuance of incentive and non-qualified stock options, restricted stock and other stock-based awards to employees and non-employees of the Company. We reserved 4,567,500 shares of common stock for issuance under the 2006 Plan. Options generally vest over four years, with 25% vesting upon the one-year anniversary of the date of hire, and the remaining 75% vesting quarterly over the next three years. Options granted to consultants or other non-employees generally vest over the expected service period to the Company. The options expire ten years from the date of grant. We issue new shares to satisfy stock option exercises. Only stock options have been issued under the 2006 Plan. No grants have been made under the 2006 Plan since our IPO, and no further awards will be granted under the 2006 Plan. However, the 2006 Plan will continue to govern outstanding awards granted under the 2006 Plan.
During 2010, we granted our Chief Executive Officer a performance-based option to purchase 150,000 shares, which vests in tranches if defined corporate goals are achieved during fiscal years 2011 through 2014. We recorded a share-based compensation expense related to this award of $0.1 million and $0.2 million during the six months ended June 28, 2014, and June 30, 2013, respectively.
On January 23, 2014, we adopted our 2014 Incentive Award Plan (‘‘the 2014 Plan’’), which provides for the issuance of incentive and non-qualified stock options, restricted stock and other stock-based awards to employees, directors and non-employees of the Company and our subsidiaries. We initially reserved 4,112,048 shares of common stock for issuance under the 2014 Plan. The number of shares initially available for issuance will be increased by (i) the number of shares represented by awards outstanding under the 2006 Plan that are forfeited, lapse unexercised or are settled in cash and which following the effective date of the 2014 Plan are not issued under the 2006 Plan and (ii) an annual increase on January 1 of each calendar year beginning in 2015 and ending in 2019, equal to the lesser of (A) 4% of the shares of common stock outstanding (on an as-converted basis) on the final day of the immediately preceding calendar year and (B) an amount as determined by our board of directors. No more than 5,002,935 shares of common stock may be issued upon the exercise of incentive stock options. Options generally vest over four years, with 25% vesting upon the one-year anniversary of the date of hire, and the remaining 75% vesting quarterly over the next three years. Options granted to consultants or other non-employees generally vest over the expected service period to the Company. The options expire ten years from the date of grant. To date only stock options have been issued under the 2014 Plan.
Stock-Based Compensation
A summary of stock option activity for the quarter ended June 28, 2014 is as follows (in thousands for shares and intrinsic value):
 
Number of Shares
 
Weighted-Average Remaining Contractual Term (Years)
 
Weighted-Average Exercise Price
 
Aggregate Intrinsic Value
 
 
 
 
 
 
 
 
Outstanding as of December 28, 2013
3,439

 
8.0
 
$
4.28

 
$
27,148

Granted
742

 
 
 
17.63

 
 
Canceled and forfeited
(59
)
 
 
 
11.10

 
 
Exercised
(69
)
 
 
 
3.59

 
 
Outstanding as of June 28, 2014
4,053

 
7.9
 
6.64

 
29,605

Options vested and exercisable as of June 28, 2014
1,911

 
7.0
 
3.79

 
17,815

Options vested and expected to vest as of June 28, 2014 (1)
3,885

 
7.9
 
$
6.56

 
$
28,604

(1) Options expected to vest reflect an estimated forfeiture rate
 
 
 
 
 
 
 

Aggregate intrinsic value represents the difference between the closing stock price of our common stock and the exercise price of outstanding, in-the-money options. Our closing stock price as reported on the NYSE as of June 28, 2014 was $13.01. The total intrinsic value of options exercised was approximately $0.2 million and $1.1 million for the three and six months ended June 28, 2014, respectively. The weighted-average grant-date fair value of options granted was $5.38 and $8.54 for the three and six months ended June 28, 2014, respectively. The aggregate fair value of the options that vested during the three and six months ended June 28, 2014 was $1.0 million, and $1.6 million respectively.
As of June 28, 2014, total unrecognized compensation cost, adjusted for estimated forfeitures, related to non-vested stock options was approximately $9.4 million, which is expected to be recognized over the next 3.0 years. As of June 28, 2014, we had 3,417,848, shares available for grant under the 2014 Plan.
The following table presents the weighted-average assumptions used to estimate the fair value of options granted during the periods presented:
 
Six Months Ended
 
June 28,
2014
 
June 30,
2013
Risk-free interest rate
1.54 - 2.88 %
 
1.23 - 2.52 %
Expected term (years)
4.88 - 10
 
6.25 - 9.55
Volatility
47.1 - 55.3 %
 
44.6%
Expected dividend yield
 

The following table summarizes stock-based compensation in our accompanying unaudited condensed consolidated statements of operations (in thousands):
 
Three Months Ended
 
Six Months Ended
 
June 28,
2014
 
June 30,
2013
 
June 28,
2014
 
June 30,
2013
Cost of revenue
47

 
$
53

 
94

 
$
91

Selling and marketing
163

 
98

 
309

 
173

Research and development
115

 
70

 
204

 
119

General and administrative
658

 
200

 
1,475

 
335

Total stock-based compensation
$
983

 
$
421

 
$
2,082

 
$
718

Net Loss per Share
Net Loss Per Share
Net Loss Per Share
Basic net loss per share is computed by dividing net loss attributable to common shareholders by the weighted-average number of common shares outstanding during the period. In the period ended June 30, 2013, the holders of our Series A, A-1, B, C, D, D-1and E redeemable convertible preferred stock did not have contractual obligations to share in or fund our losses. Diluted net loss per share attributable to common shareholders is computed by dividing net loss by the weighted-average number of common shares outstanding during the period and potentially dilutive common stock equivalents, except in cases where the effect of common stock equivalent would be anti-dilutive. Potential common stock equivalents consist of common stock issuable upon exercise of stock options and common stock issuable upon conversion of our redeemable convertible preferred stock and warrants to purchase our redeemable convertible preferred stock.
The following table presents the calculation of basic and diluted net loss per share (in thousands, except per share data):
 
Three Months Ended
 
Six Months Ended
 
June 28,
2014
 
June 30,
2013
 
June 28,
2014
 
June 30,
2013
Net Loss
$
(9,875
)
 
$
(6,114
)
 
$
(25,419
)
 
$
(12,933
)
Accretion of preferred stock

 
(14
)
 
(4
)
 
(28
)
Net loss attributable to common stockholders
$
(9,875
)
 
$
(6,128
)
 
$
(25,423
)
 
$
(12,961
)
Net loss per share attributable to common stockholders:
 
 
 
 
 
 
 
Basic and diluted
$
(0.32
)
 
$
(2.08
)
 
$
(0.96
)
 
$
(4.45
)
Weighted-average shares used to compute net loss per share attributable to common stockholders:
 
 
 
 
 
 
 
Basic and diluted
30,980

 
2,941

 
26,439

 
2,915


The following equity shares were excluded from the calculation of diluted net loss per share attributable to common stockholders because their effect would have been anti-dilutive for the periods presented (in thousands):
 
Three Months Ended
 
Six Months Ended
 
June 28,
2014
 
June 30,
2013
 
June 28,
2014
 
June 30,
2013
Redeemable convertible preferred stock

 
21,299

 

 
21,299

Stock options
4,053

 
3,696

 
4,053

 
3,696

Preferred stock warrants

 
41

 

 
41

Common stock warrants

 
40

 

 
40

Income Taxes
Income Taxes
Income Taxes
We recorded income tax expense of $0.3 million and $0.2 million for the three months ended June 28, 2014 and June 30, 2013, respectively. We recorded income tax expense of $0.8 million and $0.5 million for the six months ended June 28, 2014 and June 30, 2013, respectively. The tax provision increased in both the three and the six months ended June 28, 2014 compared to the corresponding periods of the prior fiscal year, primarily due to the income tax expense related to the amortization of Breedlove goodwill for tax purposes for which there is no corresponding book deduction and certain state taxes based on operating income that are payable without regard to our tax loss carry forwards.
Segment and Geographical Information
Segment and Geographical Information
Segment and Geographical Information
We consider operating segments to be components of the Company in which separate financial information is available that is evaluated regularly by our chief operating decision maker in deciding how to allocate resources and in assessing performance. Our chief operating decision maker is the Chief Executive Officer (‘‘CEO’’). The CEO reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. Accordingly, we have determined that we have a single operating and reportable segment. No country outside of the United States provided greater than 10% of our total revenue. Revenue is classified by the major geographic areas in which our customers are located. The following table summarizes total revenue generated by our geographic locations (dollars in thousands):
 
Three Months Ended
 
Six Months Ended
 
June 28,
2014
 
June 30,
2013
 
June 28,
2014
 
June 30,
2013
United States
$
23,559

 
$
17,573

 
$
46,773

 
$
34,146

International
2,277

 
1,560

 
4,334

 
3,149

Total revenue
$
25,836

 
$
19,133

 
$
51,107

 
$
37,295


 
Three Months Ended
 
Six Months Ended
 
June 28,
2014
 
June 30,
2013
 
June 28,
2014
 
June 30,
2013
 
(As a percentage of revenue)
 
(As a percentage of revenue)
United States
91
%
 
92
%
 
92
%
 
92
%
International
9
%
 
8
%
 
8
%
 
8
%
Total revenue
100
%
 
100
%
 
100
%
 
100
%

Our long-lived assets are primarily located in the United States and not allocated to any specific region. Therefore, geographic information is presented only for total revenue.
Other Expense, Net
Other Expense, Net
Other Income (Expense), Net
Other income (expense), net consisted of the following (in thousands):
 
Three Months Ended
 
Six Months Ended
 
June 28,
2014
 
June 30,
2013
 
June 28,
2014
 
June 30,
2013
Interest income
$
26

 
$
19

 
$
46

 
$
31

Interest expense
(10
)
 

 
(17
)
 
(2
)
Other income (expense), net
51

 
(9
)
 
(2,708
)
 
(146
)
Total other income (expense), net
$
67

 
$
10

 
$
(2,679
)
 
$
(117
)
Subsequent Event
Subsequent Event
Subsequent Event
We evaluated subsequent events after the audited balance sheet date of June 28, 2014, but prior to the issuance of the financial statements to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure.
On July 17, 2014, we acquired Citrus Lane, Inc. (“Citrus Lane”), the leading social commerce platform designed for moms, pursuant to an Agreement and Plan of Merger, dated as of July 14, 2014, by and among Care.com, Citrus Lane, and the other parties thereto.  The consideration paid at the closing consisted of $22.9 million in cash and $8.1 million in equity.  In addition, up to $16.4 million in cash and $1.2 million in equity will be payable in the event Citrus Lane achieves certain milestones in 2015 and 2016. Given that the acquisition closed on July 17, 2014, the Company determined it was impracticable to provide all the disclosures required for a business combination pursuant to ASC 805, Business Combinations, and will do so in connection with a future filing.
Description of Business and Summary of Significant Accounting Policies (Policies)
Certain Significant Risks and Uncertainties
We operate in a dynamic industry and, accordingly, can be affected by a variety of factors. For example, we believe that changes in any of the following areas could have a significant negative effect on us in terms of our future financial position, results of operations or cash flows: rates of revenue growth; engagement and usage of our products; scaling and adaptation of existing technology and network infrastructure; competition in our market; management of our growth; acquisitions and investments; qualified employees and key personnel; protection of our brand and intellectual property; protection of customers’ information and privacy concerns; and security measures related to our website, among other things.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in our Annual Report on Form 10-K for the fiscal year ended December 28, 2013, filed on March 6, 2014.
The condensed consolidated balance sheet as of December 28, 2013, included herein was derived from the audited financial statements as of that date, but does not include all disclosures including notes required by GAAP on an annual reporting basis.
In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods, and are not necessarily indicative of the results of operations to be anticipated for Fiscal 2014 or any future period.
Principles of Consolidation
The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and our wholly owned subsidiaries, after elimination of all intercompany balances and transactions.
Fiscal Year-End
For periods prior to Fiscal 2013, we operated and reported on a calendar basis fiscal year. Beginning in the third quarter of Fiscal 2013, we operate and report using a 52 or 53 week fiscal year ending on the Saturday in December closest and prior to December 31. Accordingly, our fiscal quarters end on the Saturday that falls closest to the last day of the third month of each quarter.
Use of Estimates
The preparation of our unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of income and expenses during the reporting period. On an ongoing basis, we evaluate our estimates, including those related to accounts receivable and revenue allowances, the useful lives of long-lived assets including property and equipment, intangible assets, valuation of common and preferred stock and warrants to purchase preferred stock, fair value of stock-based awards, goodwill, income taxes, contingent consideration, and contingencies. We base our estimates of the carrying value of certain assets and liabilities on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, when these carrying values are not readily available from other sources. These estimates are based on information available as of the date of the condensed consolidated financial statements; therefore, actual results could differ from the estimates.
Subsequent Events Consideration
The Company considers events or transactions that occur after the balance sheet date but prior to the issuance of the financial statements to provide additional evidence for certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated as required. There were no material recognized subsequent events recorded in the unaudited condensed consolidated financial statements as of and for the six months ended June 28, 2014
Recently Issued and Adopted Accounting Pronouncements
In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-11, "Income Taxes (Topic740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carry forward, a Similar Tax Loss, or a Tax Credit Carry forward Exists (a consensus of the FASB Emerging Issues Task Force)." This ASU states that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carry forward, a similar tax loss, or a tax credit carry forward, except in certain situations. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. Early adoption and retrospective application are permitted. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date. The adoption of this amendment did not have a material impact on our condensed consolidated financial statements.
In April 2014, the FASB issued ASU No. 2014-08, “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity” to reduce diversity in practice for reporting discontinued operations. Under the previous guidance, any component of an entity that was a reportable segment, an operating segment, a reporting unit, a subsidiary, or an asset group was eligible for discontinued operations presentation. The revised guidance only allows disposals of components of an entity that represent a strategic shift (e.g., disposal of a major geographical area, a major line of business, a major equity method investment, or other major parts of an entity) and that have a major effect on a reporting entity’s operations and financial results to be reported as discontinued operations. The revised guidance also requires expanded disclosure in the financial statements for discontinued operations as well as for disposals of significant components of an entity that do not qualify for discontinued operations presentation. The updated guidance is effective for periods beginning after December 15, 2014. We currently do not have operations that are reported as discontinued operations and do not expect the adoption of this guidance to have a material effect on our financial position, results of operations, or cash flows.
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers”, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for us in our fiscal year 2018. Early application is not permitted. We are evaluating the effect that ASU 2014-09 will have on our consolidated financial statements and related disclosures. The standard permits the use of either the retrospective or cumulative effect transition method. We have not yet selected a transition method nor have we determined the effect of the standard on its ongoing financial reporting.
Fair Value Measurements (Tables)
The following table presents information about our assets and liabilities measured at fair value on a recurring basis as of June 28, 2014 and December 28, 2013 and indicates the fair value hierarchy of the valuation techniques we utilized to determine such fair value (in thousands):
 
June 28, 2014
 
December 28, 2013
 
Fair Value Measurements Using Input Types
 

 
Fair Value Measurements Using Input Types
 

 
Level 1
 
Level 2
 
Level 3
 
Total
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets:

 

 

 

 

 

 

 

Money market mutual funds
$
96,812

 
$

 
$

 
$
96,812

 
$
15,085

 
$

 
$

 
$
15,085

Total assets
$
96,812

 
$

 
$

 
$
96,812

 
$
15,085

 
$

 
$

 
$
15,085

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities:


 


 


 


 


 


 


 


Contingent acquisition consideration
$

 
$

 
$
2,690

 
$
2,690

 
$

 
$

 
$
10,630

 
$
10,630

Preferred stock warrants

 

 

 

 

 

 
362

 
362

Total liabilities
$

 
$

 
$
2,690

 
$
2,690

 
$

 
$

 
$
10,992

 
$
10,992

The following table sets forth a summary of changes in the fair value of our contingent acquisition consideration and preferred stock warrants which represent recurring measurements that are classified within Level 3 of the fair value hierarchy wherein fair value is estimated using significant unobservable inputs (in thousands):
 
June 28, 2014
 
December 28, 2013
 
Contingent Acquisition
Consideration
 
Preferred Stock Warrants
 
Contingent Acquisition
Consideration
 
Preferred Stock Warrants
Beginning balance
$
10,630

 
$
362

 
$
9,288

 
$
247

Increase in fair value included in earnings
2,406

 
606

 
1,342

 
115

Reclassification to permanent equity
(4,878
)
 
(968
)
 

 

Contingent acquisition consideration payments
(5,468
)
 

 

 

Ending balance
$
2,690

 
$

 
$
10,630

 
$
362

Supplemental Balance Sheet Information (Tables)
The following table presents the detail of property and equipment, net for the periods presented (in thousands):
 
June 28,
2014
 
December 28,
2013
Computer equipment
$
1,619

 
$
1,444

Furniture and fixtures
1,340

 
1,154

Software
250

 
199

Leasehold improvements
247

 
183

Total
3,456

 
2,980

Less accumulated depreciation
(1,850
)
 
(1,427
)
Property and equipment, net
$
1,606

 
$
1,553

The following table presents the detail of accrued expenses and other current liabilities for the periods presented (in thousands):
 
June 28,
2014
 
December 28,
2013
Payroll and compensation
$
2,266

 
$
3,134

Tax-related expense
682

 
372

Marketing expenses
6,559

 
1,028

Other accrued expenses
3,794

 
2,489

Total accrued expenses and other current liabilities
$
13,301

 
$
7,023

Goodwill and Intangible Assets (Tables)
The following table presents the change in goodwill for the periods presented (in thousands):
Balance as of December 28, 2013
$
62,686

Acquisition
489

Effect of currency translation
(218
)
Balance as of June 28, 2014
$
62,957

The following table presents the detail of intangible assets for the periods presented (dollars in thousands):
 
Gross Carrying Value
 
Accumulated Amortization
 
Net Carrying Value
 
Weighted-Average Remaining Life (Years)
June 28, 2014:
 
 
 
 
 
 
 
Indefinite lived intangibles
$
242

 
$

 
$
242

 
N/A
Trademarks and trade names
4,554

 
(2,749
)
 
1,805

 
2.2
Proprietary software
5,164

 
(3,252
)
 
1,912

 
3.0
Website
50

 
(27
)
 
23

 
1.9
Training materials
30

 
(15
)
 
15

 
1.5
Non-compete agreements
147

 
(81
)
 
66

 
2.2
Leasehold interests
170

 
(49
)
 
121

 
4.9
Caregiver relationships
343

 
(220
)
 
123

 
1.1
Customer relationships
8,945

 
(3,973
)
 
4,972

 
3.2
Total
$
19,645

 
$
(10,366
)
 
$
9,279

 

 
 
 
 
 
 
 
 
December 28, 2013:
 
 
 
 
 
 
 
Indefinite lived intangibles
$
242

 
$

 
$
242

 
N/A
Trademarks and trade names
4,561

 
(2,096
)
 
2,465

 
2.5
Proprietary software
5,184

 
(2,952
)
 
2,232

 
3.5
Website
50

 
(19
)
 
31

 
2.3
Training materials
30

 
(10
)
 
20

 
2.0
Non-compete agreements
148

 
(61
)
 
87

 
2.6
Leasehold interests
170

 
(36
)
 
134

 
5.4
Caregiver relationships
346

 
(164
)
 
182

 
1.6
Customer relationships
8,953

 
(2,928
)
 
6,025

 
3.5
Total
$
19,684

 
$
(8,266
)
 
$
11,418

 
 
The following table presents the detail of intangible assets for the periods presented (dollars in thousands):
 
Gross Carrying Value
 
Accumulated Amortization
 
Net Carrying Value
 
Weighted-Average Remaining Life (Years)
June 28, 2014:
 
 
 
 
 
 
 
Indefinite lived intangibles
$
242

 
$

 
$
242

 
N/A
Trademarks and trade names
4,554

 
(2,749
)
 
1,805

 
2.2
Proprietary software
5,164

 
(3,252
)
 
1,912

 
3.0
Website
50

 
(27
)
 
23

 
1.9
Training materials
30

 
(15
)
 
15

 
1.5
Non-compete agreements
147

 
(81
)
 
66

 
2.2
Leasehold interests
170

 
(49
)
 
121

 
4.9
Caregiver relationships
343

 
(220
)
 
123

 
1.1
Customer relationships
8,945

 
(3,973
)
 
4,972

 
3.2
Total
$
19,645

 
$
(10,366
)
 
$
9,279

 

 
 
 
 
 
 
 
 
December 28, 2013:
 
 
 
 
 
 
 
Indefinite lived intangibles
$
242

 
$

 
$
242

 
N/A
Trademarks and trade names
4,561

 
(2,096
)
 
2,465

 
2.5
Proprietary software
5,184

 
(2,952
)
 
2,232

 
3.5
Website
50

 
(19
)
 
31

 
2.3
Training materials
30

 
(10
)
 
20

 
2.0
Non-compete agreements
148

 
(61
)
 
87

 
2.6
Leasehold interests
170

 
(36
)
 
134

 
5.4
Caregiver relationships
346

 
(164
)
 
182

 
1.6
Customer relationships
8,953

 
(2,928
)
 
6,025

 
3.5
Total
$
19,684

 
$
(8,266
)
 
$
11,418

 
 
As of June 28, 2014, the estimated future amortization expense related to current intangible assets for future fiscal years was as follows (in thousands):
2014 (remaining)
$
2,127

2015
3,674

2016
1,993

2017
566

2018
221

Thereafter
456

Total
$
9,037

Stockholders' Equity (Deficit) (Tables)
As of June 28, 2014 and December 28, 2013, we had reserved the following shares of common stock for future issuance in connection with the following (in thousands):
 
June 28, 2014
 
December 28, 2013
Conversion of preferred stock

 
21,299

Contingent consideration payable in Series E convertible preferred stock

 
383

Contingent consideration payable in common stock
191

 

Options issued and outstanding
4,053

 
3,632

Options available for grant under stock option plans
3,418

 
193

Convertible preferred stock warrants

 
41

Common stock warrants

 
40

Total
7,662

 
25,588

A summary of stock option activity for the quarter ended June 28, 2014 is as follows (in thousands for shares and intrinsic value):
 
Number of Shares
 
Weighted-Average Remaining Contractual Term (Years)
 
Weighted-Average Exercise Price
 
Aggregate Intrinsic Value
 
 
 
 
 
 
 
 
Outstanding as of December 28, 2013
3,439

 
8.0
 
$
4.28

 
$
27,148

Granted
742

 
 
 
17.63

 
 
Canceled and forfeited
(59
)
 
 
 
11.10

 
 
Exercised
(69
)
 
 
 
3.59

 
 
Outstanding as of June 28, 2014
4,053

 
7.9
 
6.64

 
29,605

Options vested and exercisable as of June 28, 2014
1,911

 
7.0
 
3.79

 
17,815

Options vested and expected to vest as of June 28, 2014 (1)
3,885

 
7.9
 
$
6.56

 
$
28,604

(1) Options expected to vest reflect an estimated forfeiture rate
 
 
 
 
 
 
 
The following table presents the weighted-average assumptions used to estimate the fair value of options granted during the periods presented:
 
Six Months Ended
 
June 28,
2014
 
June 30,
2013
Risk-free interest rate
1.54 - 2.88 %
 
1.23 - 2.52 %
Expected term (years)
4.88 - 10
 
6.25 - 9.55
Volatility
47.1 - 55.3 %
 
44.6%
Expected dividend yield
 
The following table summarizes stock-based compensation in our accompanying unaudited condensed consolidated statements of operations (in thousands):
 
Three Months Ended
 
Six Months Ended
 
June 28,
2014
 
June 30,
2013
 
June 28,
2014
 
June 30,
2013
Cost of revenue
47

 
$
53

 
94

 
$
91

Selling and marketing
163

 
98

 
309

 
173

Research and development
115

 
70

 
204

 
119

General and administrative
658

 
200

 
1,475

 
335

Total stock-based compensation
$
983

 
$
421

 
$
2,082

 
$
718

Net Loss per Share (Tables)
The following table presents the calculation of basic and diluted net loss per share (in thousands, except per share data):
 
Three Months Ended
 
Six Months Ended
 
June 28,
2014
 
June 30,
2013
 
June 28,
2014
 
June 30,
2013
Net Loss
$
(9,875
)
 
$
(6,114
)
 
$
(25,419
)
 
$
(12,933
)
Accretion of preferred stock

 
(14
)
 
(4
)
 
(28
)
Net loss attributable to common stockholders
$
(9,875
)
 
$
(6,128
)
 
$
(25,423
)
 
$
(12,961
)
Net loss per share attributable to common stockholders:
 
 
 
 
 
 
 
Basic and diluted
$
(0.32
)
 
$
(2.08
)
 
$
(0.96
)
 
$
(4.45
)
Weighted-average shares used to compute net loss per share attributable to common stockholders:
 
 
 
 
 
 
 
Basic and diluted
30,980

 
2,941

 
26,439

 
2,915

The following equity shares were excluded from the calculation of diluted net loss per share attributable to common stockholders because their effect would have been anti-dilutive for the periods presented (in thousands):
 
Three Months Ended
 
Six Months Ended
 
June 28,
2014
 
June 30,
2013
 
June 28,
2014
 
June 30,
2013
Redeemable convertible preferred stock

 
21,299

 

 
21,299

Stock options
4,053

 
3,696

 
4,053

 
3,696

Preferred stock warrants

 
41

 

 
41

Common stock warrants

 
40

 

 
40

Segment and Geographical Information (Tables)
Schedule of Revenue by Geographic Location
The following table summarizes total revenue generated by our geographic locations (dollars in thousands):
 
Three Months Ended
 
Six Months Ended
 
June 28,
2014
 
June 30,
2013
 
June 28,
2014
 
June 30,
2013
United States
$
23,559

 
$
17,573

 
$
46,773

 
$
34,146

International
2,277

 
1,560

 
4,334

 
3,149

Total revenue
$
25,836

 
$
19,133

 
$
51,107

 
$
37,295


 
Three Months Ended
 
Six Months Ended
 
June 28,
2014
 
June 30,
2013
 
June 28,
2014
 
June 30,
2013
 
(As a percentage of revenue)
 
(As a percentage of revenue)
United States
91
%
 
92
%
 
92
%
 
92
%
International
9
%
 
8
%
 
8
%
 
8
%
Total revenue
100
%
 
100
%
 
100
%
 
100
%
Other Expense, Net (Tables)
Schedule of Other Expense, Net
Other income (expense), net consisted of the following (in thousands):
 
Three Months Ended
 
Six Months Ended
 
June 28,
2014
 
June 30,
2013
 
June 28,
2014
 
June 30,
2013
Interest income
$
26

 
$
19

 
$
46

 
$
31

Interest expense
(10
)
 

 
(17
)
 
(2
)
Other income (expense), net
51

 
(9
)
 
(2,708
)
 
(146
)
Total other income (expense), net
$
67

 
$
10

 
$
(2,679
)
 
$
(117
)
Description of Business and Summary of Significant Accounting Policies (Details)
6 Months Ended
Jun. 28, 2014
Minimum
 
Entity Information [Line Items]
 
Document Fiscal Period
364 days 
Maximum
 
Entity Information [Line Items]
 
Document Fiscal Period
371 days 
Fair Value Measurements - Additional Information (Details) (USD $)
6 Months Ended 12 Months Ended
Jun. 28, 2014
Jun. 30, 2013
Jun. 28, 2014
PIAP
Dec. 28, 2013
PIAP
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
 
Incremental expense
$ 147,000 
$ 276,000 
$ 0 
$ 600,000 
Fair Value Measurements - Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 28, 2014
Dec. 28, 2013
Level 1
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
 
 
Total assets
$ 96,812 
$ 15,085 
Total liabilities
Level 1 |
Contingent acquisition consideration
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
 
 
Contingent acquisition consideration
Level 1 |
Preferred stock warrants
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
 
 
Preferred stock warrants
Level 1 |
Money market mutual funds
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
 
 
Money market mutual funds
96,812 
15,085 
Level 2
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
 
 
Total assets
Total liabilities
Level 2 |
Contingent acquisition consideration
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
 
 
Contingent acquisition consideration
Level 2 |
Preferred stock warrants
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
 
 
Preferred stock warrants
Level 2 |
Money market mutual funds
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
 
 
Money market mutual funds
Level 3
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
 
 
Total assets
Total liabilities
2,690 
10,992 
Level 3 |
Contingent acquisition consideration
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
 
 
Contingent acquisition consideration
2,690 
10,630 
Level 3 |
Preferred stock warrants
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
 
 
Preferred stock warrants
362 
Level 3 |
Money market mutual funds
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
 
 
Money market mutual funds
Total
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
 
 
Total assets
96,812 
15,085 
Total liabilities
2,690 
10,992 
Total |
Contingent acquisition consideration
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
 
 
Contingent acquisition consideration
2,690 
10,630 
Total |
Preferred stock warrants
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
 
 
Preferred stock warrants
362 
Total |
Money market mutual funds
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
 
 
Money market mutual funds
$ 96,812 
$ 15,085 
Fair Value Measurements - Schedule of Changes in Fair Value of Plan Assets (Details) (USD $)
In Thousands, unless otherwise specified
6 Months Ended 12 Months Ended
Jun. 28, 2014
Dec. 31, 2012
Contingent acquisition consideration
 
 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
Beginning balance
$ 10,630 
 
Increase in fair value included in earnings
2,406 
1,342 
Reclassification to permanent equity
(4,878)
Contingent acquisition consideration payments
(5,468)
 
Ending balance
2,690 
9,288 
Preferred stock warrants
 
 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
Beginning balance
362 
 
Increase in fair value included in earnings
606 
115 
Reclassification to permanent equity
(968)
Ending balance
$ 0 
$ 247 
Business Acquisitions (Details) (Consumr, USD $)
In Millions, unless otherwise specified
0 Months Ended
Mar. 3, 2014
Consumr
 
Business Acquisition [Line Items]
 
Consideration transferred
$ 0.6 
Purchase Price held back
$ 0.1 
Period for Recognition
1 year 
Supplemental Balance Sheet Information (Property, Plant and Equipment) (Details) (USD $)
3 Months Ended 6 Months Ended
Jun. 28, 2014
Jun. 30, 2013
Jun. 28, 2014
Jun. 30, 2013
Dec. 28, 2013
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Total
$ 3,456,000 
 
$ 3,456,000 
 
$ 2,980,000 
Less accumulated depreciation
(1,850,000)
 
(1,850,000)
 
(1,427,000)
Property and equipment, net
1,606,000 
 
1,606,000 
 
1,553,000 
Depreciation expense
200,000 
100,000 
400,000 
300,000 
 
Computer equipment
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Total
1,619,000 
 
1,619,000 
 
1,444,000 
Furniture and fixtures
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Total
1,340,000 
 
1,340,000 
 
1,154,000 
Software
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Total
250,000 
 
250,000 
 
199,000 
Leasehold improvements
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Total
$ 247,000 
 
$ 247,000 
 
$ 183,000 
Supplemental Balance Sheet Information (Accrued Liabilities) (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 28, 2014
Dec. 28, 2013
Statement of Financial Position [Abstract]
 
 
Payroll and compensation
$ 2,266 
$ 3,134 
Tax-related expense
682 
372 
Marketing expenses
6,559 
1,028 
Other accrued expenses
3,794 
2,489 
Accrued expenses and other current liabilities
$ 13,301 
$ 7,023 
Goodwill and Intangible Assets (Change in Goodwill) (Details) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 28, 2014
Goodwill [Roll Forward]
 
Balance as of December 28, 2013
$ 62,686 
Acquisition
489 
Effect of currency translation
(218)
Balance as of June 28, 2014
$ 62,957 
Goodwill and Intangible Assets (Intangible Assets) (Details) (USD $)
6 Months Ended 6 Months Ended 3 Months Ended 6 Months Ended 12 Months Ended 6 Months Ended 12 Months Ended 6 Months Ended 12 Months Ended 6 Months Ended 12 Months Ended 6 Months Ended 12 Months Ended 6 Months Ended 12 Months Ended 6 Months Ended 12 Months Ended 6 Months Ended 12 Months Ended
Jun. 28, 2014
Jun. 30, 2013
Dec. 28, 2013
Jun. 28, 2014
Depreciation and Amortization
Jun. 30, 2013
Depreciation and Amortization
Jun. 28, 2014
Cost of Sales
Jun. 30, 2013
Cost of Sales
Jun. 28, 2014
Trademarks and trade names
Dec. 28, 2013
Trademarks and trade names
Jun. 28, 2014
Proprietary software
Dec. 28, 2013
Proprietary software
Jun. 28, 2014
Website
Dec. 28, 2013
Website
Jun. 28, 2014
Training materials
Dec. 28, 2013
Training materials
Jun. 28, 2014
Non-compete agreements
Dec. 28, 2013
Non-compete agreements
Jun. 28, 2014
Leasehold interests
Dec. 28, 2013
Leasehold interests
Jun. 28, 2014
Caregiver relationships
Dec. 28, 2013
Caregiver relationships
Jun. 28, 2014
Customer relationships
Dec. 28, 2013
Customer relationships
Goodwill and Intangible Assets Disclosure [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Indefinite lived intangibles
$ 242,000 
 
$ 242,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross Carrying Value
 
 
 
 
 
 
 
4,554,000 
4,561,000 
5,164,000 
5,184,000 
50,000 
50,000 
30,000 
30,000 
147,000 
148,000 
170,000 
170,000 
343,000 
346,000 
8,945,000 
8,953,000 
Accumulated Amortization
(10,366,000)
 
(8,266,000)
 
 
 
 
(2,749,000)
(2,096,000)
(3,252,000)
(2,952,000)
(27,000)
(19,000)
(15,000)
(10,000)
(81,000)
(61,000)
(49,000)
(36,000)
(220,000)
(164,000)
(3,973,000)
(2,928,000)
Net Carrying Value
9,037,000 
 
 
 
 
 
 
1,805,000 
2,465,000 
1,912,000 
2,232,000 
23,000 
31,000 
15,000 
20,000 
66,000 
87,000 
121,000 
134,000 
123,000 
182,000 
4,972,000 
6,025,000 
Total Gross Carrying Value
19,645,000 
 
19,684,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Accumulated Amortization
(10,366,000)
 
(8,266,000)
 
 
 
 
(2,749,000)
(2,096,000)
(3,252,000)
(2,952,000)
(27,000)
(19,000)
(15,000)
(10,000)
(81,000)
(61,000)
(49,000)
(36,000)
(220,000)
(164,000)
(3,973,000)
(2,928,000)
Total Net Carrying Value
9,279,000 
 
11,418,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-Average Remaining Life
 
 
 
 
 
 
 
2 years 2 months 12 days 
2 years 6 months 
3 years 
3 years 6 months 
1 year 10 months 24 days 
2 years 3 months 18 days 
1 year 6 months 
2 years 
2 years 2 months 12 days 
2 years 7 months 6 days 
4 years 10 months 24 days 
5 years 4 months 24 days 
1 year 1 month 6 days 
1 year 7 months 6 days 
3 years 2 months 12 days 
3 years 6 months 
Amortization of Intangible Assets
$ 2,100,000 
$ 3,000,000 
 
$ 1,700,000 
$ 1,700,000 
$ 400,000 
$ 1,300,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill and Intangible Assets (Intangible Assets - Future Amortization) (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 28, 2014
Goodwill and Intangible Assets Disclosure [Abstract]
 
2014 (remaining)
$ 2,127 
2015
3,674 
2016
1,993 
2017
566 
2018
221 
Thereafter
456 
Net Carrying Value
$ 9,037 
Stockholders' Equity (Deficit) Stockholders' Equity Narrative (Details) (USD $)
0 Months Ended 3 Months Ended 6 Months Ended 0 Months Ended 6 Months Ended 0 Months Ended 0 Months Ended 6 Months Ended 0 Months Ended 6 Months Ended
Jan. 29, 2014
Jun. 28, 2014
Jun. 28, 2014
Jun. 30, 2013
Jan. 29, 2014
Common Stock
Jan. 29, 2014
Preferred Stock
Jan. 29, 2014
Common Stock
Jun. 28, 2014
2014 Plan
Jan. 23, 2014
2014 Plan
Jun. 28, 2014
Employee Stock Option
Nov. 15, 2006
Employee Stock Option
2006 plan
Jan. 23, 2014
Employee Stock Option
2014 Plan
Jun. 28, 2014
Employee Stock Option
2014 Plan
Maximum
Nov. 15, 2006
Share-based Compensation Award, Tranche One
Employee Stock Option
2006 plan
Jan. 23, 2014
Share-based Compensation Award, Tranche One
Employee Stock Option
2014 Plan
Nov. 15, 2006
Share-based Compensation Award, Tranche Two
Employee Stock Option
2006 plan
Jan. 23, 2014
Share-based Compensation Award, Tranche Two
Employee Stock Option
2014 Plan
Jun. 28, 2014
Lighthouse Capital Partners
Convertible Preferred stock series A-1
Jan. 29, 2014
Chief Executive Officer
Employee Stock Option
2006 plan
Jun. 28, 2014
Chief Executive Officer
Employee Stock Option
2006 plan
Jun. 30, 2013
Chief Executive Officer
Employee Stock Option
2006 plan
Jun. 28, 2014
Loan and Security Agreement, 2010
Lighthouse Capital Partners
Common Stock
Jun. 28, 2014
Loan and Security Agreement, 2010
Lighthouse Capital Partners
Maximum
Common Stock
Class of Stock [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares of Common Stock
 
 
 
 
6,152,500 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares of common stock sold, underwriters Issued
 
 
 
 
802,500 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Share Price
 
$ 13.01 
$ 13.01 
 
$ 17.00 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net proceeds from issuance of common stock from IPO
$ 95,200,000 
 
$ 96,011,000 
$ 0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Offering Expenses
2,100,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Convertible preferred stock warrants
 
 
 
 
 
21,490,656 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Series A-1 Convertible preferred stock
 
 
 
 
 
 
40,697 
 
 
 
 
 
 
 
 
 
 
40,697 
 
 
 
 
40,000 
Common Stock, Exercise Price
 
 
 
 
 
 
1.72 
 
 
 
 
 
 
 
 
 
 
1.72 
 
 
 
1.65 
 
Stock Issued During Period, Shares, Warrant Exercises
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
38,142 
 
 
 
37,591 
 
Reserved, Common Stock
 
 
 
 
 
 
 
 
4,112,048 
 
4,567,500 
 
5,002,935 
 
 
 
 
 
 
 
 
 
 
Annual Increase, percent
 
 
 
 
 
 
 
 
 
 
 
4.00% 
 
 
 
 
 
 
 
 
 
 
 
Vesting Rights, Percentage
 
 
 
 
 
 
 
 
 
 
 
 
 
25.00% 
25.00% 
75.00% 
75.00% 
 
 
 
 
 
 
Award Requisite Service Period
 
 
 
 
 
 
 
 
 
 
 
 
 
1 year 
 
3 years 
 
 
 
 
 
 
 
Expiration Period
 
 
 
 
 
 
 
 
 
 
10 years 
10 years 
 
 
 
 
 
 
 
 
 
 
 
Options available for grant under stock options plans
 
 
742,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
150,000 
 
 
 
 
Stock-based compensation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
100,000 
200,000 
 
 
Award Vesting Period
 
 
 
 
 
 
 
 
 
 
4 years 
4 years 
 
 
1 year 
 
3 years 
 
 
 
 
 
 
Intrinsic Value
 
200,000 
1,100,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted Average Grant Date Fair Value
 
$ 5.38 
$ 8.54 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Aggregate Fair Value
 
1,000,000 
1,600,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrecognized Compensation Cost
 
 
 
 
 
 
 
 
 
$ 9,400,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrecognized Compensation Cost, Period for Recognition
 
 
 
 
 
 
 
 
 
2 years 11 months 13 days 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Shares Available for Grant
 
 
 
 
 
 
 
3,417,848 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stockholders' Equity (Deficit) - Shares Reserved for Issuance (Details)
0 Months Ended 6 Months Ended 12 Months Ended
Jan. 29, 2014
Jun. 28, 2014
Dec. 28, 2013
Class of Stock [Line Items]
 
 
 
Conversion of Series, Convertible Preferred Stock
 
7,662,000 
25,588,000 
Options Issued and Outstanding
 
4,053,000 
3,439,000 
Options available for grant under stock options plans
 
742,000 
 
Preferred Stock
 
 
 
Class of Stock [Line Items]
 
 
 
Conversion of Stock, Shares Converted
 
21,299,000 
Convertible Securities
21,490,656 
 
 
Contingent acquisition consideration |
Convertible Preferred Stock, Series E
 
 
 
Class of Stock [Line Items]
 
 
 
Conversion of Series, Convertible Preferred Stock
 
383,000 
Contingent acquisition consideration |
Convertible Common Stock, Series E
 
 
 
Class of Stock [Line Items]
 
 
 
Conversion of Series, Convertible Preferred Stock
 
191,000 
Employee Stock Options, Available for Issuance
 
 
 
Class of Stock [Line Items]
 
 
 
Conversion of Series, Convertible Preferred Stock
 
3,418,000 
193,000 
Employee Stock Option
 
 
 
Class of Stock [Line Items]
 
 
 
Conversion of Series, Convertible Preferred Stock
 
4,053,000 
3,632,000 
Preferred Stock Warrants
 
 
 
Class of Stock [Line Items]
 
 
 
Conversion of Series, Convertible Preferred Stock
 
41,000 
Common Stock
 
 
 
Class of Stock [Line Items]
 
 
 
Conversion of Series, Convertible Preferred Stock
 
40,000 
Stockholders' Equity (Deficit) - Option Activity (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
6 Months Ended 12 Months Ended
Jun. 28, 2014
Dec. 28, 2013
Equity [Abstract]
 
 
Options Issued and Outstanding
4,053 
3,439 
Options, Outstanding, Weighted Average Remaining Contractual Term
7 years 10 months 24 days 
7 years 11 months 23 days 
Options, Outstanding, Weighted Average Exercise Price
$ 6.64 
$ 4.28 
Options, Outstanding, Intrinsic Value
$ 29,605 
$ 27,148 
Options available for grant under stock options plans
742 
 
Options granted, Weighted Average Exercise Price
$ 17.63 
 
Options Canceled and Forfeited
(59)
 
Options canceled and forfeited, Weighted Average Exercise Price
$ 11.10 
 
Options Exercised
(69)
 
Options Exercised, Weighted Average Exercise Price
$ 3.59 
 
Options vested and exercisable as of March 29, 2014
1,911 
 
Options Exercised, Weighted Average Remaining Contractual Term
7 years 
 
Options Vested and Expected to Vest, Aggregate Intrinsic Value
28,604 
 
Options vested and expected to vest as of March 29, 2014 (1)
3,885 
 
Options, Vested and Expected to Vest, Outstanding, Weighted Average Remaining Contractual Term
7 years 10 months 24 days 
 
Options vested and expected to vest as March 29th, 2014, Weighted Average Exercise Price
$ 3.79 
 
Options vested and Expected to vest as of March 29th, 2014, Exercisable, Aggregate Intrinsic Value
$ 17,815 
 
Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price
$ 6.56 
 
Stockholders' Equity (Deficit) - Fair Value Assumptions (Details) (Employee Stock Option)
6 Months Ended
Jun. 28, 2014
Jun. 30, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Volatility
55.30% 
 
Expected Dividend Rate
0.00% 
0.00% 
Minimum
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Risk-free interest rate
1.54% 
1.23% 
Expected Term (years)
4 years 10 months 17 days 
6 years 
Volatility
47.10% 
44.60% 
Maximum
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Risk-free interest rate
2.88% 
2.52% 
Expected Term (years)
10 years 
9 years 6 months 18 days 
Stockholders' Equity (Deficit) - Allocated Share-based Compensation Expense (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 28, 2014
Jun. 30, 2013
Jun. 28, 2014
Jun. 30, 2013
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
 
Stock-based compensation
$ 983 
$ 421 
$ 2,082 
$ 718 
Cost of Sales
 
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
 
Stock-based compensation
47 
53 
94 
91 
Selling and Marketing Expense
 
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
 
Stock-based compensation
163 
98 
309 
173 
Research and Development Expense
 
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
 
Stock-based compensation
115 
70 
204 
119 
General and Administrative Expense
 
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
 
Stock-based compensation
$ 658 
$ 200 
$ 1,475 
$ 335 
Net Loss per Share - Reconciliation (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 28, 2014
Jun. 30, 2013
Jun. 28, 2014
Jun. 30, 2013
Earnings Per Share [Abstract]
 
 
 
 
Net loss
$ (9,875)
$ (6,114)
$ (25,419)
$ (12,933)
Accretion of preferred stock
14 
28 
Net loss attributable to common stockholders
$ (9,875)
$ (6,128)
$ (25,423)
$ (12,961)
Net loss per share attributable to common stockholders:
 
 
 
 
Basic and diluted (in dollars per share)
$ (0.32)
$ (2.08)
$ (0.96)
$ (4.45)
Weighted-average shares used to compute net loss per share attributable to common stockholders:
 
 
 
 
Basic and diluted (in shares)
30,980 
2,941 
26,439 
2,915 
Net Loss per Share - Antidilutive Securities (Details)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 28, 2014
Jun. 30, 2013
Jun. 28, 2014
Jun. 30, 2013
Redeemable Convertible Preferred Stock
 
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
 
Antidilutive securities
21,299 
21,299 
Stock Options
 
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
 
Antidilutive securities
4,053 
3,696 
4,053 
3,696 
Warrant |
Preferred Stock
 
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
 
Antidilutive securities
41 
41 
Warrant |
Common Stock
 
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
 
Antidilutive securities
40 
40 
Income Taxes (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 28, 2014
Jun. 30, 2013
Jun. 28, 2014
Jun. 30, 2013
Income Tax Disclosure [Abstract]
 
 
 
 
Provision for income taxes
$ 309 
$ 218 
$ 794 
$ 525 
Segment and Geographical Information (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 28, 2014
Jun. 30, 2013
Jun. 28, 2014
Jun. 30, 2013
Segment Reporting Information [Line Items]
 
 
 
 
Revenue
$ 25,836 
$ 19,133 
$ 51,107 
$ 37,295 
Geographic Concentration |
Revenue
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Percentage of total revenue
100.00% 
100.00% 
100.00% 
100.00% 
United States
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenue
23,559 
17,573 
46,773 
34,146 
United States |
Geographic Concentration |
Revenue
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Percentage of total revenue
91.00% 
92.00% 
92.00% 
92.00% 
International
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenue
$ 2,277 
$ 1,560 
$ 4,334 
$ 3,149 
International |
Geographic Concentration |
Revenue
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Percentage of total revenue
9.00% 
8.00% 
8.00% 
8.00% 
Other Expense, Net (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 28, 2014
Jun. 30, 2013
Jun. 28, 2014
Jun. 30, 2013
Other Income and Expenses [Abstract]
 
 
 
 
Interest income
$ 26 
$ 19 
$ 46 
$ 31 
Interest expense
(10)
(17)
(2)
Other expense, net
51 
(9)
(2,708)
(146)
Total other expense, net
$ 67 
$ 10 
$ (2,679)
$ (117)
Subsequent Event Subsequent Event (Details) (Subsequent Event, Citrus Lane Inc, USD $)
0 Months Ended
Jul. 17, 2014
Subsequent Event [Line Items]
 
Consideration, Payment in Cash
$ 22,900,000 
Consideration, Payment in Equity
8,100,000 
Cash
 
Subsequent Event [Line Items]
 
Contingent acquisition Consideration
16,400,000 
Equity
 
Subsequent Event [Line Items]
 
Contingent acquisition Consideration
$ 1,200,000