UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period Ended:
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Transition Period from to
Commission file number
(Exact Name of Registrant as Specified in its Charter)
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(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices, including Zip Code)
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(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol |
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Name of exchange on which registered |
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The Nasdaq Stock Market LLC ( |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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☒ |
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Accelerated filer |
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☐ |
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Non-accelerated filer |
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☐ |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
The number of shares of the registrant’s common stock, par value $0.001 per share, outstanding at October 23, 2020 was
SPS COMMERCE, INC.
QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
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Page |
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Item 1. |
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3 |
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3 |
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6 |
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7 |
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Item 2. |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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20 |
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Item 3. |
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28 |
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Item 4. |
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28 |
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Item 1. |
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29 |
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Item 1A. |
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Item 2. |
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29 |
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Item 3. |
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29 |
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Item 4. |
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29 |
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Item 5. |
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29 |
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Item 6. |
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30 |
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31 |
Unless the context otherwise requires, for purposes of the Quarterly Report on Form 10-Q, the words “we,” “us,” “our,” the “Company,” “SPS,” and “SPS Commerce” refer to SPS Commerce, Inc.
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Form 10-Q for the quarterly period ended September 30, 2020 |
PART I. – FINANCIAL INFORMATION
Item 1.Financial Statements
SPS COMMERCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
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September 30, |
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December 31, |
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(In thousands, except shares) |
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2020 |
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2019 |
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ASSETS |
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(unaudited) |
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CURRENT ASSETS |
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Cash and cash equivalents |
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$ |
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$ |
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Short-term investments |
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Accounts receivable |
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Allowance for credit losses |
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( |
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( |
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Accounts receivable, net |
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Deferred costs |
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Other assets |
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Total current assets |
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PROPERTY AND EQUIPMENT, less accumulated depreciation of $ respectively |
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OPERATING LEASE RIGHT-OF-USE ASSETS |
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GOODWILL |
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INTANGIBLE ASSETS, net |
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INVESTMENTS |
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— |
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OTHER ASSETS |
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Deferred costs, non-current |
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Deferred income tax assets |
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Other assets, non-current |
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Total assets |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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CURRENT LIABILITIES |
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Accounts payable |
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$ |
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$ |
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Accrued compensation |
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Accrued expenses |
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Deferred revenue |
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Operating lease liabilities |
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Total current liabilities |
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OTHER LIABILITIES |
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Deferred revenue, non-current |
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Operating lease liabilities, non-current |
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Deferred income tax liabilities |
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Other liabilities, non-current |
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— |
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Total liabilities |
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COMMITMENTS and CONTINGENCIES |
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STOCKHOLDERS’ EQUITY |
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Preferred stock, $ |
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Common stock, $ |
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Treasury stock, at cost; |
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( |
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( |
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Additional paid-in capital |
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Retained earnings |
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Accumulated other comprehensive loss |
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( |
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( |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
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$ |
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$ |
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See accompanying notes to these condensed consolidated financial statements.
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3 |
Form 10-Q for the quarterly period ended September 30, 2020 |
SPS COMMERCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
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Three Months Ended |
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Nine Months Ended |
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September 30, |
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September 30, |
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(In thousands, except per share amounts) (Unaudited) |
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2020 |
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2019 |
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2020 |
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2019 |
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Revenues |
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$ |
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$ |
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$ |
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$ |
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Cost of revenues |
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Gross profit |
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Operating expenses |
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Sales and marketing |
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Research and development |
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General and administrative |
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Amortization of intangible assets |
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Total operating expenses |
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Income from operations |
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Other income (expense) |
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Interest income, net |
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Other income (expense), net |
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( |
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Change in earn-out liability |
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— |
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( |
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Total other income, net |
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Income before income taxes |
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Income tax expense |
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Net income |
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$ |
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$ |
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$ |
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$ |
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Other comprehensive income (expense) |
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Foreign currency translation adjustments |
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( |
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( |
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Unrealized gain (loss) on investments, net of tax of ($ |
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( |
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Reclassification of (gain) loss on investments into earnings, net of tax of $ |
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( |
) |
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( |
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( |
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Total other comprehensive income (expense) |
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( |
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( |
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Comprehensive income |
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$ |
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$ |
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$ |
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$ |
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Net income per share |
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Basic |
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$ |
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$ |
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$ |
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$ |
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Diluted |
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$ |
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$ |
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$ |
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$ |
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Weighted average common shares used to compute net income per share |
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Basic |
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Diluted |
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See accompanying notes to these condensed consolidated financial statements.
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4 |
Form 10-Q for the quarterly period ended September 30, 2020 |
SPS COMMERCE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
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Accumulated |
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Additional |
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Other |
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Total |
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Common Stock |
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Treasury Stock |
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Paid-in |
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Retained |
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Comprehensive |
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Stockholders' |
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(In thousands, except shares) (Unaudited) |
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Shares |
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Amount |
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Shares |
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Amount |
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Capital |
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Earnings |
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Loss |
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Equity |
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Balances, June 30, 2019 |
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$ |
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$ |
( |
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$ |
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$ |
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$ |
( |
) |
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$ |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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— |
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Exercise of stock options and issuance of restricted stock |
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— |
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— |
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— |
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— |
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— |
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Employee stock purchase plan |
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— |
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— |
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— |
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— |
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— |
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Repurchases of common stock |
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( |
) |
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— |
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( |
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— |
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— |
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— |
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( |
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Net income |
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— |
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— |
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— |
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— |
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— |
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— |
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Foreign currency translation adjustments |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
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Unrealized gain on investments, net of tax |
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— |
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— |
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— |
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— |
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— |
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— |
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Reclassification of gain on investments into earnings, net of tax |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
) |
Balances, September 30, 2019 |
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$ |
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$ |
( |
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$ |
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$ |
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$ |
( |
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$ |
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Balances, June 30, 2020 |
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$ |
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$ |
( |
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$ |
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$ |
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$ |
( |
) |
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$ |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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— |
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Exercise of stock options and issuance of restricted stock |
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— |
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— |
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— |
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— |
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— |
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Employee stock purchase plan |
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— |
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— |
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— |
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— |
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— |
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Net income |
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— |
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— |
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— |
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— |
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— |
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— |
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Foreign currency translation adjustments |
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— |
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— |
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— |
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— |
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— |
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— |
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Unrealized loss on investments, net of tax |
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— |
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— |
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|
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— |
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— |
|
|
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— |
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|
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— |
|
|
|
( |
) |
|
|
( |
) |
Reclassification of loss on investments into earnings, net of tax |
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|
— |
|
|
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— |
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— |
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— |
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— |
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— |
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Balances, September 30, 2020 |
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$ |
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$ |
( |
) |
|
$ |
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$ |
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|
$ |
( |
) |
|
$ |
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Accumulated |
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Additional |
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Other |
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Total |
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|||
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Common Stock |
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Treasury Stock |
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Paid-in |
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Retained |
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Comprehensive |
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Stockholders' |
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||||||||||||||
(In thousands, except shares) (Unaudited) |
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Shares |
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Amount |
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Shares |
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Amount |
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Capital |
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Earnings |
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Loss |
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Equity |
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||||||||
Balances, December 31, 2018 |
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|
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$ |
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|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
Stock-based compensation |