ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables)
 12 Months Ended
Dec. 31, 2016
Accounting Policies [Abstract]  
Annual Depreciation Rates of Property, Plant and Equipment

Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, at the following annual rates:

 

     %

Computers, software and equipment

    10-33

Office furniture and equipment

    7-33

Leasehold improvements

    10-25
   (the shorter of the expected
lease term or useful
economic life)
Assumptions Used to Estimate Fair Value of Stock Options Granted

The fair value for the Company’s stock options and SARs (other than share issuances in connection with the employee stock purchase plan, as detailed below) granted to employees and non-employees directors was estimated using the following assumptions:

 

     2014    2015    2016 (*

Expected dividend yield

    0%    0%    0%

Expected volatility

    33%-52%    33%-49%    38%-49%

Risk-free interest rate

    0.1%-2.5%    0.2%-2.4%    0.5%-2.4%

Expected forfeiture (employees)

    10%    10%    —  

Expected forfeiture (executives)

    5%    5%    5%

Contractual term of up to

    10 years    10 years    10 years

Suboptimal exercise multiple (employees)

    2.1    2.1    —  

Suboptimal exercise multiple (executives)

    2.4    2.4    2.4

 

(* During 2016, the Company did not grant stock options nor SARs to its employees.
Assumptions Used to Estimate Fair Value of Employee Stock Purchase Plan

The fair value for rights to purchase shares of common stock under the Company’s employee stock purchase plan was estimated on the date of grant using the following assumptions:

 

     2014    2015    2016

Expected dividend yield

    0%    0%    0%

Expected volatility

    29%-52%    35%-36%    29%-57%

Risk-free interest rate

    0.1%-0.2%    0.1%-0.3%    0.3%-0.5%

Expected forfeiture

    0%    0%    0%

Contractual term of up to

    24 months    24 months    24 months
Equity-Based Compensation Expenses Related to Stock Options, SARs, RSUs and Employee Stock Purchase Plan

During the years ended December 31, 2014, 2015 and 2016, the Company recognized equity-based compensation expense related to stock options, SARs, RSUs and employee stock purchase plan as follows:

 

     Year ended December 31,  
     2014      2015      2016  

Cost of revenue

    $ 193      $ 155      $ 246  

Research and development, net

      2,027        1,838        2,860  

Sales and marketing

      909        568        922  

General and administrative

      1,882        1,454        2,208  
  

 

 

     

 

 

     

 

 

  

Total equity-based compensation expense

    $ 5,011      $ 4,015      $ 6,236  
  

 

 

     

 

 

     

 

 

  
Calculation of Basic and Diluted Net Income (Loss) Per Share

Basic net income (loss) per share is computed based on the weighted average number of shares of common stock outstanding during each year. Diluted net income (loss) per share is computed based on the weighted average number of shares of common stock outstanding during each year, plus dilutive potential shares of common stock considered outstanding during the year, in accordance with FASB ASC No. 260, “Earnings Per Share.”

 

     Year ended December 31,  
     2014      2015      2016  

Numerator:

         

Net income (loss)

    $ (819 )     $ 6,267      $ 13,100  

Denominator (in thousands):

         

Basic weighted-average common stock outstanding

      20,622        20,480        20,850  

Effect of stock options, stock appreciation rights and restricted stock units

      —          509        715  
  

 

 

     

 

 

     

 

 

  

Diluted weighted-average common stock outstanding

      20,622        20,989        21,565  
  

 

 

     

 

 

     

 

 

  

Basic net income (loss) per share

    $ (0.04 )     $ 0.31      $ 0.63  
  

 

 

     

 

 

     

 

 

  

Diluted net income (loss) per share

    $ (0.04 )     $ 0.30      $ 0.61