Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 13, 2014

LogMeIn, Inc.
(Exact Name of Registrant as Specified in Charter)

 
					
Delaware	 	001-34391	 	20-1515952	
(State or Other Jurisdiction of
Incorporation or Organization)	 	(Commission
File Number)	 	(IRS Employer
Identification No.)	

	
320 Summer Street
Boston, Massachusetts	 	02210	
(Address of principal executive offices)	 	(Zip Code)	
Registrant’s telephone number, including area code: (781)-638-9050
 
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
 
¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
 
¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
 
¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	

 

Table of Contents
 TABLE OF CONTENTS

Item 2.02. Results of Operations and Financial Condition	  		
Item 9.01. Financial Statements and Exhibits	  		
SIGNATURE	  		
EXHIBIT INDEX	  		
EX-99.1	  		

Table of Contents

 Item 2.02.	Results of Operations and Financial Condition	
On February 13, 2014, LogMeIn, Inc. (the “Company”) announced its financial results for the fourth quarter and fiscal year of 2013. The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information in this Current Report on Form 8-K (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
 
 Item 9.01.	Financial Statements and Exhibits	
 
 	(d)	Exhibits	
The following exhibit relating to Item 2.02 shall be deemed to be furnished, and not filed:

99.1	  	Press release entitled “LogMeIn Announces Fourth Quarter and Fiscal Year 2013 Results,” issued by the Company on February 13, 2014.	

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 SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	 		 	LOGMEIN, INC	
				
Date: February 13, 2014	 		 	By:	 	/s/ Michael K. Simon	
	 		 		 	Michael K. Simon	
	 		 		 	President and Chief Executive Officer	

Table of Contents
 EXHIBIT INDEX

Exhibit
No.	  	Description	
		
99.1	  	Press release entitled “LogMeIn Announces Fourth Quarter and Fiscal Year 2013 Results,” issued by the Company on February 13, 2014.	
.

Exhibit 99.1
LogMeIn Announces Fourth Quarter and Fiscal Year 2013 Results
Reports Annual Revenue of $166.3 Million; Q4 Revenue of $45.2 Million;
Total Deferred Revenue of $85.2 Million, 22 percent increase from prior year
Boston, February 13, 2014 – LogMeIn, Inc. (NASDAQ: LOGM), a leading provider of cloud based connectivity and collaboration services, today announced its results for the fourth quarter and fiscal year ended December 31, 2013.
For the fourth quarter of 2013, total revenue increased 22 percent to $45.2 million from $37.0 million reported in the fourth quarter of 2012.
Non-GAAP net income for the fourth quarter of 2013 was $3.9 million, or $0.16 per diluted share. Non-GAAP net income excludes $4.8 million in stock compensation expense, $738,000 in patent litigation related expense and $613,000 in acquisition related costs and amortization. This compares to non-GAAP net income of $6.0 million, or $0.24 per diluted share, reported in the fourth quarter of 2012.
GAAP net loss for the fourth quarter of 2013 was $459,000, or $0.02 per diluted share, as compared to GAAP net income of $2.2 million, or $0.09 per diluted share, reported in the fourth quarter of 2012.
For fiscal year 2013, revenue increased 20 percent to $166.3 million from $138.8 million in 2012.
Non-GAAP net income for fiscal year 2013 was $13.9 million, or $0.55 per diluted share, as compared to $18.4 million, or $0.72 per diluted share, reported in fiscal year 2012. Non-GAAP net income excludes $19.7 million in stock compensation expense, $7.5 million in patent litigation related expense and $3.5 million in acquisition related costs and amortization.
GAAP net loss for fiscal year 2013 was $7.7 million, or $0.32 per diluted share, as compared to GAAP net income of $3.6 million, or $0.14 per diluted share, reported in fiscal year 2012.
Non-GAAP cash flow from operations for the fourth quarter of 2013 was $12.8 million, or 28 percent of revenue. The Company closed the quarter with cash, cash equivalents and short-term investments of $189.6 million. During the quarter, the Company spent $10.2 million to repurchase approximately 320,000 shares under its share repurchase program. Additionally, the Company reported total deferred revenue of $85.2 million, an increase of 22 percent from the $69.6 million reported in the fourth quarter of 2012.
A reconciliation of the comparable GAAP financial measures to non-GAAP measures used above is included in the attached tables.

“We’re happy to report another very good quarter and a very strong year with results that exceeded the high-end of our guidance, and helped us to deliver 20 percent year-over-year revenue growth,” said Michael Simon, CEO of LogMeIn. “Growth in our collaboration business was especially strong, as join.me, in particular, delivered another quarter of triple digit year-over-year revenue growth.”
“We know that the demand for universal connectivity is growing exponentially as more and more business and IT professionals want to collaborate and connect with an ever growing array of Internet enabled products around them. During the year, we invested to expand the capabilities of our proven Gravity platform in order to position LogMeIn to address the needs of our customers today, and help them take advantage of tomorrow’s next wave of connectivity opportunities.”
Simon continued, “As we look ahead to 2014, we believe sustained growth will be driven by a continued focus on helping people connect to each other across multiple devices and locations, helping IT departments manage and secure the growing numbers and types of devices and applications in the workplace, and enabling companies to transform the ways they are able to directly connect and interact with both their customers and the products they sell.”
Business Outlook
Based on information available as of February 13, 2014, LogMeIn is issuing guidance for the first quarter 2014 and fiscal year 2014.
First Quarter 2014 : The Company expects first quarter revenue to be in the range of $46.8 million to $47.3 million.
Adjusted EBITDA is expected to be in the range of $9.5 million to $10.0 million representing an adjusted EBITDA margin of 21 percent, at the midpoint.
Non-GAAP net income is expected to be in the range of $5.0 million to $5.3 million, or $0.20 to $0.21 per diluted share. Non-GAAP net income excludes an estimated $5.8 million of stock compensation expense, $400,000 in patent litigation related expense, and $1.1 million in acquisition related costs and amortization.
Non-GAAP net income for the first quarter assumes an effective tax rate of approximately 36 percent. Non-GAAP net income per diluted share for the first quarter of 2014 is based on an estimated 25.0 million fully-diluted weighted average shares outstanding.
Including stock compensation expense, patent litigation related expense, and acquisition related costs and amortization, we expect to report a GAAP net income in the range of $300,000 to $600,000, or $0.01 to $0.02 per share.

The GAAP net income for the first quarter assumes an effective tax rate of approximately 43 percent. GAAP net income per share for the first quarter of 2014 is based on an estimated 25.0 million weighted average shares outstanding.
Fiscal year 2014 : The Company expects full year 2014 revenue to be in the range of $198.0 million to $202.0 million.
Adjusted EBITDA is expected to be in the range of $41.0 million to $45.0 million, representing an adjusted EBITDA margin of 22 percent, at the midpoint.
Non-GAAP net income is expected to be in the range of $21.5 million to $24.0 million, or $0.86 to $0.96 per diluted share. Non-GAAP net income excludes an estimated $23.3 million in stock compensation expense, $2.2 million in patent litigation related expense, and $5.1 million in acquisition related costs and amortization.
Non-GAAP net income for the full fiscal year 2014 assumes an effective tax rate of approximately 36 percent. Non-GAAP net income per diluted share for 2014 is based on an estimated 25.0 million fully-diluted weighted average shares outstanding.
Including stock compensation expense, patent litigation related expense, and acquisition related costs and amortization, we expect to report a GAAP net income in the range of $1.7 million to $3.9 million, or $0.07 to $0.16 per share.
The GAAP net income for the full year assumes an effective tax rate of 43 percent. GAAP net income per share for 2014 is based on an estimated 25.0 million weighted average shares outstanding.
Conference Call Information for Today, Thursday, February 13, 2014
The Company will host a corresponding conference call and live webcast at 5:00 p.m. Eastern Time today. To access the conference call, dial 877-941-9205 (for the U.S. and Canada) or 480-629-9771 (for international callers). A live webcast will be available on the Investor Relations section of the Company’s corporate website at www.LogMeIn.com and via replay beginning approximately two hours after the completion of the call until the Company’s announcement of its financial results for the next quarter. An audio replay of the call will also be available to investors beginning at approximately 7:00 p.m. Eastern Time on February 13, 2014 until 11:59 p.m. Eastern Time on February 27, 2014, by dialing 800-406-7325 (for the U.S. and Canada) or 303-590-3030 (for international callers) and entering passcode 4664143#.
Non-GAAP Financial Measures
This press release contains non-GAAP financial measures including adjusted EBITDA, adjusted EBITDA margin, non-GAAP operating income, non-GAAP income before provision for income taxes, non-GAAP provision for income taxes, non-GAAP net income, non-GAAP net income per diluted share and non-GAAP cash flow from operations.

Adjusted EBITDA is GAAP net income (loss) excluding benefit from (provision for) income taxes, interest income, net, other expense, depreciation and amortization, acquisition related costs, stock-based compensation, and patent litigation related expense. Adjusted EBITDA margin is calculated by dividing adjusted EBITDA by revenue. Non-GAAP operating income excludes acquisition related costs and amortization, stock compensation expense, and patent litigation related expense. Non-GAAP provision for income taxes excludes the tax impact of acquisition related costs and amortization, stock compensation expense, and patent litigation related expense. Non-GAAP net income and non-GAAP net income per diluted share exclude acquisition related costs and amortization, stock compensation expense, and patent litigation related expense. Non-GAAP cash flow from operations excludes payments and receipts related to patent litigation related costs, and acquisition related payments.
The exclusion of certain expenses in the calculation of non-GAAP financial measures should not be construed as an inference that these costs are unusual or infrequent. We anticipate excluding these expenses in the future presentation of our non-GAAP financial measures. The Company believes that these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to the Company’s financial condition and results of operations. The Company’s management uses these non-GAAP measures to compare the Company’s performance to that of prior periods and uses these measures in financial reports prepared for management and the Company’s board of directors. The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company’s financial measures with other software-as-a-service companies, many of which present similar non-GAAP financial measures to investors. The Company does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant elements that are required by GAAP to be recorded in the Company’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by management in determining these non-GAAP financial measures. In order to compensate for these limitations, management of the Company presents its non-GAAP financial measures in connection with its GAAP results. The Company urges investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures, which it includes in press releases announcing quarterly financial results, including this press release, and not to rely on any single financial measure to evaluate the Company’s business.
Reconciliation tables of the most comparable GAAP financial measures to the non-GAAP measures used in this press release are included in this release.
About LogMeIn, Inc.
LogMeIn (Nasdaq:LOGM) transforms the way people work and live through secure connections to the computers, devices, data, and people that make up their digital world. The Company’s cloud services free millions of people to work from anywhere, empower IT professionals to securely embrace the modern cloud-centric workplace, give companies new ways to reach and support today’s connected customer, and help businesses bring the next generation of connected products to market.

LogMeIn is headquartered in Boston’s Innovation District with offices in Australia, Hungary, India, Ireland, and the UK.
Cautionary Language Concerning Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding the popularity, value and effectiveness of the Company’s products and services, continued investment in the Company’s technology, the success of and demand for the Company’s new and existing products and services, the Company’s investment in new products and markets, potential market sizes, potential market growth, and the Company’s financial guidance for fiscal year 2014 and the first quarter of 2014. These forward-looking statements are made as of the date they were first issued and were based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management. Words such as “expect,” “anticipate,” “should,” “believe,” “hope,” “target,” “project,” “goals,” “estimate,” “potential,” “predict,” “may,” “will,” “might,” “could,” “intend,” variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond the Company’s control. The Company’s actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, dependence on the remote support and software market, customer adoption of the Company’s solutions, the Company’s ability to attract new customers and retain existing customers, adverse economic conditions in general and adverse economic conditions specifically affecting the markets in which the Company operates, intellectual property litigation, the Company’s ability to continue to promote and maintain its brand in a cost-effective manner, the Company’s ability to compete effectively, the Company’s ability to develop and introduce new products and add-ons or enhancements to existing products, the Company’s ability to manage growth, the Company’s ability to attract and retain key personnel, the Company’s ability to protect its intellectual property and other proprietary rights, the result of any pending litigation, and other risks detailed in the Company’s other publicly available filings with the Securities and Exchange Commission. Past performance is not necessarily indicative of future results. The forward-looking statements included in this press release represent the Company’s views as of the date of this press release. The Company anticipates that subsequent events and developments will cause its views to change. The Company undertakes no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing the Company’s views as of any date subsequent to the date of this press release.

LogMeIn, LogMeIn Central, LogMeIn Pro, LogMeIn Rescue, join.me, Cubby, AppGuru, Xively and BoldChat are trademarks or registered trademarks of LogMeIn in the US and other countries around the world.
Contact Information:
Investors
Rob Bradley
LogMeIn, Inc.
781-897-1301
rbradley@LogMeIn.com
Press
Craig VerColen
LogMeIn, Inc.
781-897-0696
Press@LogMeIn.com

LogMeIn, Inc.
Condensed Consolidated Balance Sheets (unaudited)
(In thousands)

  	  	December 31,
2012	 	 	December 31,
2013	 	
ASSETS	  	
Current assets:	  				 				
Cash and cash equivalents	  	$	111,932	  	 	$	89,257	  	
Marketable securities	  	 	100,161	  	 	 	100,299	  	
Accounts receivable, net	  	 	13,231	  	 	 	12,957	  	
Prepaid expenses and other current assets	  	 	3,620	  	 	 	6,531	  	
Deferred income taxes	  	 	3,214	  	 	 	3,053	  	
	  	 	 	 	 	 	 	 	
Total current assets	  	 	232,158	  	 	 	212,097	  	
Property and equipment, net	  	 	6,576	  	 	 	13,198	  	
Restricted cash	  	 	3,807	  	 	 	3,902	  	
Intangibles, net	  	 	6,368	  	 	 	16,886	  	
Goodwill	  	 	18,883	  	 	 	18,712	  	
Other assets	  	 	1,550	  	 	 	5,348	  	
Deferred income taxes	  	 	10,196	  	 	 	9,470	  	
	  	 	 	 	 	 	 	 	
Total assets	  	$	279,538	  	 	$	279,613	  	

LIABILITIES AND EQUITY	  	
Current liabilities:	  				 				
Accounts payable	  	$	7,773	  	 	$	6,390	  	
Accrued liabilities	  	 	16,657	  	 	 	20,110	  	
Deferred revenue, current portion	  	 	65,875	  	 	 	82,496	  	
	  	 	 	 	 	 	 	 	
Total current liabilities	  	 	90,305	  	 	 	108,996	  	
Deferred revenue, net of current portion	  	 	3,774	  	 	 	2,667	  	
Other long-term liabilities	  	 	822	  	 	 	611	  	
	  	 	 	 	 	 	 	 	
Total liabilities	  	 	94,901	  	 	 	112,274	  	
	  	 	 	 	 	 	 	 	
Commitments and contingencies	  				 				
Preferred stock	  	 	—  	  	 	 	—  	  	
Equity:	  				 				
Common stock	  	 	248	  	 	 	254	  	
Additional paid-in capital	  	 	178,546	  	 	 	200,235	  	
Retained earnings (accumulated deficit)	  	 	6,243	  	 	 	(1,439	) 	
Accumulated other comprehensive loss	  	 	(400	) 	 	 	(1,186	) 	
Treasury stock	  	 	—  	  	 	 	(30,525	) 	
	  	 	 	 	 	 	 	 	
Total equity	  	 	184,637	  	 	 	167,339	  	
	  	 	 	 	 	 	 	 	
Total liabilities and equity	  	$	279,538	  	 	$	279,613	  	

LogMeIn, Inc.
Condensed Consolidated Statements of Operations (unaudited)
(In thousands, except share and per share data)

 	  	Three Months Ended
December 31,	 	 	Twelve Months Ended
December 31,	 	
 	  	2012	 	 	2013	 	 	2012	 	 	2013	 	
Revenue	  	$	36,984	  	 	$	45,181	  	 	$	138,837	  	 	$	166,258	  	
Cost of revenue	  	 	3,975	  	 	 	4,946	  	 	 	14,504	  	 	 	18,816	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross profit	  	 	33,009	  	 	 	40,235	  	 	 	124,333	  	 	 	147,442	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating expenses	  				 				 				 				
Research and development	  	 	6,657	  	 	 	7,021	  	 	 	26,361	  	 	 	29,023	  	
Sales and marketing	  	 	18,523	  	 	 	23,332	  	 	 	70,058	  	 	 	88,794	  	
General and administrative	  	 	6,649	  	 	 	6,584	  	 	 	21,338	  	 	 	29,181	  	
Legal settlements	  	 	—  	  	 	 	500	  	 	 	—  	  	 	 	1,688	  	
Amortization of acquired intangibles	  	 	146	  	 	 	162	  	 	 	565	  	 	 	682	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses	  	 	31,975	  	 	 	37,599	  	 	 	118,322	  	 	 	149,368	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income (loss) from operations	  	 	1,034	  	 	 	2,636	  	 	 	6,011	  	 	 	(1,926	) 	
Interest income, net	  	 	210	  	 	 	110	  	 	 	887	  	 	 	547	  	
Other expense	  	 	(131	) 	 	 	(402	) 	 	 	(641	) 	 	 	(89	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income (loss) before income taxes	  	 	1,113	  	 	 	2,344	  	 	 	6,257	  	 	 	(1,468	) 	
Benefit from (provision for) income taxes	  	 	1,083	  	 	 	(2,803	) 	 	 	(2,691	) 	 	 	(6,214	) 	

Net income (loss)	  	$	2,196	  	 	$	(459	) 	 	$	3,566	  	 	$	(7,682	) 	

Net income (loss) per share:	  				 				 				 				
basic	  	$	0.09	  	 	$	(0.02	) 	 	$	0.14	  	 	$	(0.32	) 	
diluted	  	$	0.09	  	 	$	(0.02	) 	 	$	0.14	  	 	$	(0.32	) 	
Weighted average shares outstanding:	  				 				 				 				
basic	  	 	24,806,471	  	 	 	24,194,719	  	 	 	24,711,242	  	 	 	24,350,913	  	
diluted	  	 	25,292,822	  	 	 	24,194,719	  	 	 	25,356,305	  	 	 	24,350,913	  	
	
Calculation of Non-GAAP Operating Income, Non-GAAP Net Income and Non-GAAP Net Income per share (unaudited)
(In thousands, except share and per share data)	 	
			
 	  	Three Months Ended
December 31,	 	 	Twelve Months Ended
December 31,	 	
 	  	2012	 	 	2013	 	 	2012	 	 	2013	 	
GAAP Income (loss) from operations	  	$	1,034	  	 	$	2,636	  	 	$	6,011	  	 	$	(1,926	) 	
					
Add Back:	  				 				 				 				
Stock-based compensation expense	  	 	4,385	  	 	 	4,819	  	 	 	14,792	  	 	 	19,714	  	
Patent litigation related expenses	  	 	1,114	  	 	 	738	  	 	 	1,470	  	 	 	7,476	  	
Acquisition related costs and amortization	  	 	1,133	  	 	 	613	  	 	 	5,450	  	 	 	3,537	  	
					
Non-GAAP Operating income	  	 	7,666	  	 	 	8,806	  	 	 	27,723	  	 	 	28,801	  	

Other income (expense), net	  	 	79	  	 	 	(292	) 	 	 	246	  	 	 	458	  	

Non-GAAP Income before provision for income taxes	  	 	7,745	  	 	 	8,514	  	 	 	27,969	  	 	 	29,259	  	
					
Non-GAAP Provision for income taxes	  	 	(1,756	) 	 	 	(4,567	) 	 	 	(9,613	) 	 	 	(15,408	) 	

Non-GAAP Net income	  	$	5,989	  	 	$	3,947	  	 	$	18,356	  	 	$	13,851	  	

Non-GAAP Diluted net income per share:	  	$	0.24	  	 	$	0.16	  	 	$	0.72	  	 	$	0.55	  	
Diluted weighted average shares outstanding used in computing per share amounts:	  	 	25,292,822	  	 	 	25,018,600	  	 	 	25,356,305	  	 	 	25,018,758	  	

Stock-Based Compensation Expense
(In thousands)	 	
			
 	  	Three Months Ended
December 31,	 	 	Twelve Months Ended
December 31,	 	
 	  	2012	 	 	2013	 	 	2012	 	 	2013	 	
Stock-based compensation expense:	  				 				 				 				
Cost of revenue	  	$	135	  	 	$	164	  	 	$	484	  	 	$	706	  	
Research and development	  	 	825	  	 	 	864	  	 	 	2,826	  	 	 	3,761	  	
Sales and marketing	  	 	1,592	  	 	 	1,421	  	 	 	4,962	  	 	 	7,242	  	
General and administrative	  	 	1,833	  	 	 	2,370	  	 	 	6,520	  	 	 	8,005	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total stock based-compensation	  	$	4,385	  	 	$	4,819	  	 	$	14,792	  	 	$	19,714	  	

LogMeIn, Inc.
Condensed Consolidated Statements of Cash Flows (unaudited)
(In thousands)

 	  	Three Months Ended
December 31,	 	 	Twelve Months Ended
December 31,	 	
 	  	2012	 	 	2013	 	 	2012	 	 	2013	 	
Cash flows from operating activities	  				 				 				 				
Net income (loss)	  	$	2,196	  	 	$	(459	) 	 	$	3,566	  	 	$	(7,682	) 	
Adjustments to reconcile net income (loss) to net cash provided by operating activities:	  				 				 				 				
Depreciation and amortization	  	 	1,665	  	 	 	2,052	  	 	 	6,112	  	 	 	7,704	  	
Amortization of premiums on investments	  	 	22	  	 	 	59	  	 	 	54	  	 	 	198	  	
Provision for bad debts	  	 	22	  	 	 	44	  	 	 	100	  	 	 	116	  	
(Benefit from) provision for deferred income taxes	  	 	(5,682	) 	 	 	705	  	 	 	(7,465	) 	 	 	909	  	
Stock-based compensation	  	 	4,385	  	 	 	4,819	  	 	 	14,792	  	 	 	19,714	  	
Changes in assets and liabilities:	  				 				 				 				
Accounts receivable	  	 	(2,666	) 	 	 	(1,539	) 	 	 	(4,471	) 	 	 	302	  	
Prepaid expenses and other current assets	  	 	(179	) 	 	 	2,021	  	 	 	(1,070	) 	 	 	(2,986	) 	
Other assets	  	 	(1,307	) 	 	 	(1,694	) 	 	 	(1,308	) 	 	 	(3,764	) 	
Accounts payable	  	 	1,550	  	 	 	(52	) 	 	 	1,552	  	 	 	(2,233	) 	
Accrued liabilities	  	 	1,529	  	 	 	2,365	  	 	 	5,853	  	 	 	3,457	  	
Deferred revenue	  	 	4,355	  	 	 	3,870	  	 	 	10,960	  	 	 	14,493	  	
Other long-term liabilities	  	 	180	  	 	 	18	  	 	 	(418	) 	 	 	(208	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash provided by operating activities	  	 	6,070	  	 	 	12,209	  	 	 	28,257	  	 	 	30,020	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash flows from investing activities	  				 				 				 				
Purchases of marketable securities	  	 	(14,986	) 	 	 	(24,996	) 	 	 	(135,085	) 	 	 	(90,376	) 	
Proceeds from sale or disposal of marketable securities	  	 	15,000	  	 	 	25,000	  	 	 	130,000	  	 	 	90,000	  	
Purchases of property and equipment	  	 	(1,090	) 	 	 	(1,279	) 	 	 	(5,277	) 	 	 	(10,938	) 	
Intangible asset additions	  	 	(260	) 	 	 	(11,942	) 	 	 	(1,049	) 	 	 	(13,061	) 	
Cash paid for acquisition, net of cash acquired	  	 	—  	  	 	 	—  	  	 	 	(14,831	) 	 	 	—  	  	
(Increase) decrease in restricted cash and deposits	  	 	—  	  	 	 	(118	) 	 	 	(3,558	) 	 	 	7	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash used in investing activities	  	 	(1,336	) 	 	 	(13,335	) 	 	 	(29,800	) 	 	 	(24,368	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash flows from financing activities	  				 				 				 				
Proceeds from issuance of common stock upon option exercises	  	 	87	  	 	 	1,268	  	 	 	2,682	  	 	 	3,798	  	
Income tax benefit from the exercise of stock options	  	 	1,991	  	 	 	(626	) 	 	 	6,635	  	 	 	17	  	
Payment of contingent consideration	  	 	—  	  	 	 	—  	  	 	 	(89	) 	 	 	(104	) 	
Common stock withheld to satisfy income tax withholdings for restricted stock unit vesting	  	 	—  	  	 	 	(288	) 	 	 	—  	  	 	 	(1,834	) 	
Purchase of treasury stock	  	 	—  	  	 	 	(10,233	) 	 	 	—  	  	 	 	(30,525	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash provided by (used in) financing activities	  	 	2,078	  	 	 	(9,879	) 	 	 	9,228	  	 	 	(28,648	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Effect of exchange rate changes on cash and cash equivalents and restricted cash	  	 	117	  	 	 	1,278	  	 	 	643	  	 	 	321	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net increase (decrease) in cash and cash equivalents	  	 	6,929	  	 	 	(9,727	) 	 	 	8,328	  	 	 	(22,675	) 	
Cash and cash equivalents, beginning of period	  	 	105,003	  	 	 	98,984	  	 	 	103,604	  	 	 	111,932	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents, end of period	  	$	111,932	  	 	$	89,257	  	 	$	111,932	  	 	$	89,257	  	

Calculation of Non-GAAP Cash Flows from Operating Activities (unaudited)
(In thousands)	 	
			
 	  	Three Months Ended
December 31,	 	 	Twelve Months Ended
December 31,	 	
 	  	2012	 	 	2013	 	 	2012	 	 	2013	 	
GAAP Cash flows from operating activities	  	$	6,070	  	 	$	12,209	  	 	$	28,257	  	 	$	30,020	  	
					
Add Back:	  				 				 				 				
Patent litigation related payments	  	 	89	  	 	 	568	  	 	 	399	  	 	 	8,390	  	
Acquisition related payments	  	 	28	  	 	 	61	  	 	 	1,969	  	 	 	3,934	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Non-GAAP Cash flows from operating activities	  	$	6,187	  	 	$	12,838	  	 	$	30,625	  	 	$	42,344