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Financial Instruments | 12 Months Ended
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Dec. 31, 2018
Disclosure Text Block Supplement [Abstract] |
Financial Instruments | NOTE E – Financial Instruments We invest primarily in money market funds, certificates of deposit, highly liquid debt instruments of the U.S. government and U.S. corporate debt securities. All highly liquid investments with original maturities of 90 days or less are classified as cash equivalents. All investments with original maturities greater than 90 days and remaining maturities less than one year from the balance sheet date are classified as short-term investments. Investments with remaining maturities of more than one year from the balance sheet date are classified as long-term investments. Our short- and long-term marketable securities are classified as available-for-sale. We intend to hold marketable securities until maturity; however, we may sell these securities at any time for use in current operations or for other purposes. Consequently, we may or may not keep securities with stated holding periods to maturity. Our marketable securities are carried at fair value and unrealized gains and losses on these investments, net of taxes, are included in accumulated other comprehensive loss in the consolidated balance sheets. Realized gains or losses are included in other income (expense), net in the consolidated statements of comprehensive income. When a determination has been made that an other-than-temporary decline in fair value has occurred, the amount of the decline that is related to a credit loss is realized and is included in other income (expense), net in the consolidated statements of comprehensive income. Cash equivalents and short- and long-term investments consisted of the following (in thousands):
|  | December 31, |
|  | 2018 |  |  | 2017 |
|  | Amortized |  |  | Unrealized |  |  | Fair |  |  | Amortized |  |  | Unrealized |  |  | Fair |
|  | Cost |  |  | Gains (Losses) |  |  | Value |  |  | Cost |  |  | Gains (Losses) |  |  | Value |
Cash equivalents: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Money market funds |  | $ | 109,265 |  |  | $ | — |  |  | $ | 109,265 |  |  | $ | 104,544 |  |  | $ | — |  |  | $ | 104,544 |
Certificate of deposit |  |  | 7,000 |  |  |  | — |  |  |  | 7,000 |  |  |  | 7,814 |  |  |  | — |  |  |  | 7,814 |
Marketable securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate bonds |  |  | 15,194 |  |  |  | 40 |  |  |  | 15,234 |  |  |  | 17,758 |  |  |  | (57 | ) |  |  | 17,701 |
Commercial paper |  |  | 9,889 |  |  |  | 76 |  |  |  | 9,965 |  |  |  | 7,456 |  |  |  | 20 |  |  |  | 7,476 |
U.S. treasury securities |  |  | 12,300 |  |  |  | 38 |  |  |  | 12,338 |  |  |  | 12,381 |  |  |  | 26 |  |  |  | 12,407 |
|  | $ | 153,648 |  |  | $ | 154 |  |  | $ | 153,802 |  |  | $ | 149,953 |  |  | $ | (11 | ) |  | $ | 149,942 |
Due within one year |  |  |  |  |  |  |  |  |  | $ | 153,802 |  |  |  |  |  |  |  |  |  |  | $ | 144,736 |
Due within two years |  |  |  |  |  |  |  |  |  |  | — |  |  |  |  |  |  |  |  |  |  |  | 5,206 |
Total |  |  |  |  |  |  |  |  |  | $ | 153,802 |  |  |  |  |  |  |  |  |  |  | $ | 149,942 |
We do not believe any of the unrealized losses represent an other-than-temporary impairment based on our assessment of available evidence as of December 31, 2018. We expect to receive the full principal and interest on all of these cash equivalents and investments. Fair Value Measurements We measure certain financial assets at fair value on a recurring basis based on a fair value hierarchy that requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of inputs that may be used to measure fair value are:
| • | Level 1 – quoted prices in active markets for identical assets or liabilities.
| • | Level 2 – observable inputs other than Level 1 prices, such as (a) quoted prices for similar assets or liabilities, (b) quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or (c) model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. We obtain the fair values of our level 2 available-for-sale securities from a professional pricing service.
| • | Level 3 – unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.
For the earn-out liability related to the EDIAdmin acquisition, the Company utilized the Monte Carlo simulation method to estimate the fair value of this contingent liability as of the reporting date. Thousands of iterations of the simulation were performed using forecasted revenues to develop a distribution of future values of recurring revenue which, in turn, provide indicated earn-out payments. The total estimated fair value equals the sum of the average present values of the indicated earn-out payments. Changes in assumptions described above could have an impact on the payout of contingent consideration with a maximum payout being $1.7 million. The earn-out liability has been measured as Level 3 given the unobservable inputs that are significant to the measurement of the liability. The following table presents information about our financial assets that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value (in thousands):
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Assets at December 31, 2018: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash equivalents: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Money market funds |  | $ | 109,265 |  |  | $ | — |  |  | $ | — |  |  | $ | 109,265 |
Certificate of deposit |  |  | 7,000 |  |  |  | — |  |  |  | — |  |  |  | 7,000 |
Marketable securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate bonds |  |  | — |  |  |  | 15,234 |  |  |  | — |  |  |  | 15,234 |
Commercial paper |  |  | — |  |  |  | 9,965 |  |  |  | — |  |  |  | 9,965 |
U.S. treasury securities |  |  | — |  |  |  | 12,338 |  |  |  | — |  |  |  | 12,338 |
|  | $ | 116,265 |  |  | $ | 37,537 |  |  | $ | — |  |  | $ | 153,802 |
Liabilities at December 31, 2018: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Earn-out liability |  | $ | — |  |  | $ | — |  |  | $ | 1,368 |  |  | $ | 1,368 |
|  | $ | — |  |  | $ | — |  |  | $ | 1,368 |  |  | $ | 1,368 |
Assets at December 31, 2017: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash equivalents: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Money market funds |  | $ | 104,544 |  |  | $ | — |  |  | $ | — |  |  | $ | 104,544 |
Certificate of deposit |  |  | 7,814 |  |  |  | — |  |  |  | — |  |  |  | 7,814 |
Marketable securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate bonds |  |  | — |  |  |  | 17,701 |  |  |  | — |  |  |  | 17,701 |
Commercial paper |  |  | — |  |  |  | 7,476 |  |  |  | — |  |  |  | 7,476 |
U.S. treasury securities |  |  | — |  |  |  | 12,407 |  |  |  | — |  |  |  | 12,407 |
|  | $ | 112,358 |  |  | $ | 37,584 |  |  | $ | — |  |  | $ | 149,942 |

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- Definition The entire disclosure for financial instruments. This disclosure includes, but is not limited to, fair value measurements of short and long term marketable securities, international currencies forward contracts, and auction rate securities. Financial instruments may include hedging and non-hedging currency exchange instruments, derivatives, securitizations and securities available for sale at fair value. Also included are investment results, realized and unrealized gains and losses as well as impairments and risk management disclosures. + References No definition available. + Details
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