2018 Q2 Form 10-Q Financial Statement

#000089110318000013 Filed on August 09, 2018

View on sec.gov

Income Statement

Concept 2018 Q2 2017 Q2
Revenue $1.059B $767.4M
YoY Change 38.02% 2.94%
Cost Of Revenue $218.2M $139.0M
YoY Change 56.96% -18.41%
Gross Profit $840.9M $628.4M
YoY Change 33.83% 9.27%
Gross Profit Margin 79.4% 81.88%
Selling, General & Admin $558.0M $470.3M
YoY Change 18.65% 5.93%
% of Gross Profit 66.36% 74.85%
Research & Development $75.45M $55.43M
YoY Change 36.11% 3.48%
% of Gross Profit 8.97% 8.82%
Depreciation & Amortization $18.81M $18.34M
YoY Change 2.54% 4.35%
% of Gross Profit 2.24% 2.92%
Operating Expenses $633.5M $525.8M
YoY Change 20.49% 5.66%
Operating Profit $168.4M $75.64M
YoY Change 122.7% -129.96%
Interest Expense $27.36M $24.73M
YoY Change 10.63% -10.55%
% of Operating Profit 16.24% 32.69%
Other Income/Expense, Net $171.1M $10.23M
YoY Change 1572.93% -242.24%
Pretax Income $312.2M $61.14M
YoY Change 410.69% -121.28%
Income Tax $31.37M -$19.42M
% Of Pretax Income 10.05% -31.76%
Net Earnings $218.4M $66.27M
YoY Change 229.5% -134.02%
Net Earnings / Revenue 20.62% 8.64%
Basic Earnings Per Share $2.61 $0.84
Diluted Earnings Per Share $2.32 $0.70
COMMON SHARES
Basic Shares Outstanding 83.60M shares 79.07M shares
Diluted Shares Outstanding 90.93M shares 83.78M shares

Balance Sheet

Concept 2018 Q2 2017 Q2
SHORT-TERM ASSETS
Cash & Short-Term Investments $1.765B $492.7M
YoY Change 258.28% -62.69%
Cash & Equivalents $1.645B $1.522B
Short-Term Investments $120.4M
Other Short-Term Assets $238.0M $256.0M
YoY Change -7.03% -7.99%
Inventory
Prepaid Expenses
Receivables $343.6M $219.9M
Other Receivables $0.00 $0.00
Total Short-Term Assets $2.347B $2.013B
YoY Change 16.57% 12.29%
LONG-TERM ASSETS
Property, Plant & Equipment $306.6M $306.1M
YoY Change 0.15% -0.28%
Goodwill $2.578B $1.924B
YoY Change 33.99% -0.69%
Intangibles $636.4M $339.0M
YoY Change 87.7% -14.23%
Long-Term Investments $0.00 $0.00
YoY Change
Other Assets $87.66M $81.42M
YoY Change 7.67% -18.5%
Total Long-Term Assets $3.889B $2.773B
YoY Change 40.23% -3.29%
TOTAL ASSETS
Total Short-Term Assets $2.347B $2.013B
Total Long-Term Assets $3.889B $2.773B
Total Assets $6.235B $4.786B
YoY Change 30.28% 2.7%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $11.60M $11.30M
YoY Change 2.65% 26.97%
Accrued Expenses $377.7M $338.5M
YoY Change 11.57% 14.86%
Deferred Revenue $375.1M
YoY Change
Short-Term Debt $0.00 $0.00
YoY Change
Long-Term Debt Due $13.75M $0.00
YoY Change -100.0%
Total Short-Term Liabilities $845.7M $683.8M
YoY Change 23.67% -1.21%
LONG-TERM LIABILITIES
Long-Term Debt $1.982B $1.573B
YoY Change 26.02% -4.97%
Other Long-Term Liabilities $35.17M $34.09M
YoY Change 3.19% -58.62%
Total Long-Term Liabilities $2.017B $1.607B
YoY Change 25.53% -7.51%
TOTAL LIABILITIES
Total Short-Term Liabilities $845.7M $683.8M
Total Long-Term Liabilities $2.017B $1.607B
Total Liabilities $2.863B $2.291B
YoY Change 24.98% -5.72%
SHAREHOLDERS EQUITY
Retained Earnings $921.3M $382.6M
YoY Change 140.8% 164.04%
Common Stock $12.01B $11.95B
YoY Change 0.53% 0.7%
Preferred Stock
YoY Change
Treasury Stock (at cost) $10.24B $10.23B
YoY Change 0.14% 1.5%
Treasury Stock Shares 194.3M shares 194.2M shares
Shareholders Equity $2.576B $1.965B
YoY Change
Total Liabilities & Shareholders Equity $6.235B $4.786B
YoY Change 30.28% 2.7%

Cashflow Statement

Concept 2018 Q2 2017 Q2
OPERATING ACTIVITIES
Net Income $218.4M $66.27M
YoY Change 229.5% -134.02%
Depreciation, Depletion And Amortization $18.81M $18.34M
YoY Change 2.54% 4.35%
Cash From Operating Activities $121.2M $63.30M
YoY Change 91.47% 57.86%
INVESTING ACTIVITIES
Capital Expenditures -$9.800M -$9.100M
YoY Change 7.69% -31.58%
Acquisitions
YoY Change
Other Investing Activities -$1.800M -$5.300M
YoY Change -66.04% -145.3%
Cash From Investing Activities -$11.60M -$14.30M
YoY Change -18.88% 793.75%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -85.10M 6.000M
YoY Change -1518.33% 500.0%
NET CHANGE
Cash From Operating Activities 121.2M 63.30M
Cash From Investing Activities -11.60M -14.30M
Cash From Financing Activities -85.10M 6.000M
Net Change In Cash 24.50M 55.00M
YoY Change -55.45% 39.24%
FREE CASH FLOW
Cash From Operating Activities $121.2M $63.30M
Capital Expenditures -$9.800M -$9.100M
Free Cash Flow $131.0M $72.40M
YoY Change 80.94% 35.58%

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us-gaap Dilutive Securities
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us-gaap Dilutive Securities
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5474000 USD
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us-gaap Effective Income Tax Rate Continuing Operations
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CY2018Q2 us-gaap Equity Method Investments
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us-gaap Equity Securities Fv Ni Gain Loss
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us-gaap Equity Securities Fv Ni Realized Gain
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27200000 USD
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us-gaap Equity Securities Fv Ni Realized Gain Loss
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27172000 USD
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8000000 USD
us-gaap Equity Securities Fv Ni Unrealized Gain Loss
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10600000 USD
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126414000 USD
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126400000 USD
us-gaap Equity Securities Fv Ni Unrealized Gain Loss
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126559000 USD
us-gaap Equity Securities Fv Ni Unrealized Gain Loss
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126600000 USD
CY2017Q4 us-gaap Equity Securities Without Readily Determinable Fair Value Amount
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CY2018Q2 us-gaap Equity Securities Without Readily Determinable Fair Value Amount
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us-gaap Foreign Earnings Repatriated
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us-gaap General And Administrative Expense
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us-gaap Impairment Of Investments
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4800000 USD
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312222000 USD
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us-gaap Increase Decrease In Accounts Payable And Accrued Liabilities
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us-gaap Increase Decrease In Accrued Income Taxes Payable
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us-gaap Increase Decrease In Accrued Income Taxes Payable
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45646000 USD
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18482000 USD
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38195000 USD
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us-gaap Net Income Loss
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66268000 USD
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218353000 USD
us-gaap Net Income Loss Available To Common Stockholders Basic
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us-gaap Net Income Loss Available To Common Stockholders Diluted
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82122000 USD
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us-gaap Net Income Loss Available To Common Stockholders Diluted
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276866000 USD
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333937000 USD
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us-gaap Nonoperating Income Expense
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us-gaap Operating Income Loss
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us-gaap Other Comprehensive Income Foreign Currency Transaction And Translation Adjustment Net Of Tax Portion Attributable To Noncontrolling Interest
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us-gaap Other Comprehensive Income Loss Available For Sale Securities Adjustment Net Of Tax
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13000 USD
us-gaap Other Comprehensive Income Loss Available For Sale Securities Adjustment Net Of Tax
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13000 USD
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us-gaap Other Comprehensive Income Loss Available For Sale Securities Tax
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OtherComprehensiveIncomeLossAvailableForSaleSecuritiesTax
4000 USD
us-gaap Other Comprehensive Income Loss Available For Sale Securities Tax
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4000 USD
CY2017Q2 us-gaap Other Comprehensive Income Loss Before Reclassifications Net Of Tax
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us-gaap Other Comprehensive Income Loss Before Reclassifications Net Of Tax
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us-gaap Other Comprehensive Income Loss Before Reclassifications Net Of Tax
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18788000 USD
us-gaap Other Comprehensive Income Loss Foreign Currency Transaction And Translation Adjustment Net Of Tax
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us-gaap Other Comprehensive Income Loss Foreign Currency Transaction And Translation Adjustment Net Of Tax
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us-gaap Other Comprehensive Income Loss Net Of Tax Portion Attributable To Parent
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29385000 USD
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us-gaap Payments To Acquire Available For Sale Securities Debt
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us-gaap Payments To Acquire Available For Sale Securities Debt
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us-gaap Payments To Acquire Businesses Net Of Cash Acquired
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31180000 USD
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us-gaap Payments To Acquire Property Plant And Equipment
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39696000 USD
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us-gaap Payments To Minority Shareholders
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us-gaap Proceeds From Sale And Maturity Of Available For Sale Securities
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5000000 USD
us-gaap Proceeds From Sale And Maturity Of Available For Sale Securities
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10000000 USD
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119697000 USD
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27540000 USD
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us-gaap Profit Loss
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us-gaap Profit Loss
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us-gaap Provision For Doubtful Accounts
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21200000 USD
us-gaap Realized Investment Gains Losses
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21300000 USD
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3348000 USD
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us-gaap Reclassification From Accumulated Other Comprehensive Income Current Period Net Of Tax
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52000 USD
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us-gaap Research And Development Expense
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331000 USD
CY2017Q4 us-gaap Restricted Cash And Cash Equivalents At Carrying Value
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2873000 USD
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10548000 USD
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0 USD
CY2017Q4 us-gaap Restricted Cash And Cash Equivalents Noncurrent
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0 USD
CY2018Q2 us-gaap Restricted Cash And Cash Equivalents Noncurrent
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0 USD
CY2017Q4 us-gaap Retained Earnings Accumulated Deficit
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CY2017Q2 us-gaap Revenue From Contract With Customer Excluding Assessed Tax
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us-gaap Revenue From Contract With Customer Excluding Assessed Tax
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us-gaap Revenue From Contract With Customer Excluding Assessed Tax
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2054197000 USD
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us-gaap Selling And Marketing Expense
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670515000 USD
CY2018Q2 us-gaap Selling And Marketing Expense
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369660000 USD
us-gaap Selling And Marketing Expense
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3236948000 USD
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10241434000 USD
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14713000 USD
us-gaap Unrealized Gain Loss On Investments
UnrealizedGainLossOnInvestments
0 USD
us-gaap Unrealized Gain Loss On Investments
UnrealizedGainLossOnInvestments
126559000 USD
CY2018Q2 us-gaap Unrecognized Tax Benefits That Would Impact Effective Tax Rate
UnrecognizedTaxBenefitsThatWouldImpactEffectiveTaxRate
125000000 USD
CY2017Q2 us-gaap Weighted Average Number Diluted Shares Outstanding Adjustment
WeightedAverageNumberDilutedSharesOutstandingAdjustment
4711000 shares
us-gaap Weighted Average Number Diluted Shares Outstanding Adjustment
WeightedAverageNumberDilutedSharesOutstandingAdjustment
4510000 shares
CY2018Q2 us-gaap Weighted Average Number Diluted Shares Outstanding Adjustment
WeightedAverageNumberDilutedSharesOutstandingAdjustment
7330000 shares
us-gaap Weighted Average Number Diluted Shares Outstanding Adjustment
WeightedAverageNumberDilutedSharesOutstandingAdjustment
7438000 shares
CY2017Q2 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
83778000 shares
us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
83143000 shares
CY2018Q2 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
90934000 shares
us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
90734000 shares
CY2017Q2 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
79067000 shares
us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
78633000 shares
CY2018Q2 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
83604000 shares
us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
83296000 shares
us-gaap Concentration Risk Credit Risk
ConcentrationRiskCreditRisk
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:16px;text-indent:32px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">A meaningful portion of the Company's revenue is derived from online advertising, the market for which is highly competitive and rapidly changing. Significant changes in this industry or changes in advertising spending behavior or in customer buying behavior could adversely affect our operating results. Most of the Company's online advertising revenue is attributable to a services agreement with Google&#160;Inc. ("Google"). </font></div><div style="line-height:120%;padding-bottom:16px;text-indent:32px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The services agreement became effective on April&#160;1, 2016, following the expiration of the previous services agreement, and expires on March 31, 2020; however, the Company may choose to terminate the agreement effective March 31, 2019. The services agreement requires that the Company comply with certain guidelines promulgated by Google. Google may generally unilaterally update its policies and guidelines without advance notice, which could in turn require modifications to, or prohibit and/or render obsolete certain of our products, services and/or business practices, which could be costly to address or otherwise have an adverse effect on our business, financial condition and results of operations. Google recently announced policy changes related to its Chrome browser, effective in September 2018, which could hurt the distribution of our desktop products through the Chrome Web Store and could impact revenue and profits of some of the businesses within our Applications segment.</font></div></div>
us-gaap Loss Contingency Disclosures
LossContingencyDisclosures
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:16px;padding-top:16px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">CONTINGENCIES</font></div><div style="line-height:120%;padding-bottom:16px;text-indent:32px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In the ordinary course of business, the Company is a party to various lawsuits. The Company establishes reserves for specific legal matters when it determines that the likelihood of an unfavorable outcome is probable and the loss is reasonably estimable. Management has also identified certain other legal matters where we believe an unfavorable outcome is not probable and, therefore, no reserve is established. Although management currently believes that resolving claims against us, including claims where an unfavorable outcome is reasonably possible, will not have a material impact on the liquidity, results of operations, or financial condition of the Company, these matters are subject to inherent uncertainties and management's view of these matters may change in the future. The Company also evaluates other contingent matters, including income and non-income tax contingencies, to assess the likelihood of an unfavorable outcome and estimated extent of potential loss. It is possible that an unfavorable outcome of </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">one</font><font style="font-family:inherit;font-size:10pt;"> or more of these lawsuits or other contingencies could have a material impact on the liquidity, results of operations, or financial condition of the Company. See "</font><a style="font-family:inherit;font-size:10pt;" href="#s7CC665618834DF811DD56A2832985F35"><font style="font-family:inherit;font-size:10pt;">Note 3&#8212;Income Taxes</font></a><font style="font-family:inherit;font-size:10pt;">" for additional information related to income tax contingencies.</font></div></div>
us-gaap Prior Period Reclassification Adjustment Description
PriorPeriodReclassificationAdjustmentDescription
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:16px;text-align:left;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Certain prior year amounts have been reclassified to conform to the current year presentation.</font></div></div>
us-gaap Use Of Estimates
UseOfEstimates
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:16px;text-indent:32px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Management of the Company is required to make certain estimates, judgments and assumptions during the preparation of its consolidated financial statements in accordance with GAAP. These estimates, judgments and assumptions impact the reported amounts of assets, liabilities, revenue and expenses and the related disclosure of contingent assets and liabilities. Actual results could differ from these estimates.</font></div><div style="line-height:120%;padding-bottom:16px;text-indent:32px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">On an ongoing basis, the Company evaluates its estimates and judgments including those related to: the recoverability of goodwill and indefinite-lived intangible assets; the useful lives and recoverability of definite-lived intangible assets and property and equipment; the fair values of marketable debt securities and equity securities without readily determinable fair values; the carrying value of accounts receivable, including the determination of the allowance for doubtful accounts; the determination of revenue reserves; the fair value of acquisition-related contingent consideration arrangements; unrecognized tax benefits; the valuation allowance for deferred income tax assets; and the fair value of and forfeiture rates for stock-based awards, among others. The Company bases its estimates and judgments on historical experience, its forecasts and budgets and other factors that the Company considers relevant.</font></div><div style="line-height:120%;padding-bottom:16px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;"></font></div></div>

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