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Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2014	Nov. 05, 2014
Document and Entity Information
Entity Registrant Name	Shutterstock, Inc.
Entity Central Index Key	0001549346
Document Type	10-Q
Document Period End Date	Sep. 30, 2014
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		35,436,148
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2014	Dec. 31, 2013
Current assets:
Cash and cash equivalents	$ 210,760	$ 155,355
Short-term investments	49,720	54,429
Credit card receivables	3,758	2,083
Accounts receivable, net	12,938	6,081
Prepaid expenses and other current assets	14,462	19,809
Deferred tax assets, net	4,951	5,431
Total current assets	296,589	243,188
Property and equipment, net	26,422	20,256
Intangible assets, net	4,710	853
Goodwill	10,186	1,423
Deferred tax assets, net	16,193	10,720
Other assets	1,903	2,048
Total assets	356,003	278,488
Current liabilities:
Accounts payable	5,686	4,164
Accrued expenses	22,394	23,638
Contributor royalties payable	12,239	9,180
Deferred revenue	71,850	52,100
Other liabilities	1,901	2,846
Total current liabilities	114,070	91,928
Other non-current liabilities	11,700	3,961
Total liabilities	125,770	95,889
Commitments and contingencies (Note 9)
Stockholders' equity:
Common stock, $0.01 par value; 200,000 shares authorized; 35,430 and 35,071 shares outstanding as of September 30, 2014 and December 31, 2013, respectively	354	351
Additional paid-in capital	160,099	127,443
Accumulated comprehensive (loss) income	(72)	9
Retained earnings	69,852	54,796
Total stockholders' equity	230,233	182,599
Total liabilities and stockholders' equity	$ 356,003	$ 278,488

Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands	Sep. 30, 2014	Dec. 31, 2013
Consolidated Balance Sheets
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	200,000	200,000
Common stock, shares outstanding	35,430	35,071

Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Consolidated Statements of Operations
Revenue	$ 83,730	$ 59,558	$ 236,745	$ 167,484
Operating expenses:
Cost of revenue	33,260	22,936	94,419	64,525
Sales and marketing	21,122	14,947	60,890	40,240
Product development	9,870	5,685	26,922	15,300
General and administrative	10,588	6,076	28,095	16,590
Total operating expenses	74,840	49,644	210,326	136,655
Income from operations	8,890	9,914	26,419	30,829
Other (expense) income, net	(50)	20	(48)	29
Income before income taxes	8,840	9,934	26,371	30,858
Provision for income taxes	3,562	3,740	11,315	12,238
Net income	5,278	6,194	15,056	18,620
Less:
Undistributed earnings to participating stockholder	9	18	31	59
Net income available to common stockholders	$ 5,269	$ 6,176	$ 15,025	$ 18,561
Net income per basic share available to common stockholders:
Undistributed (in dollars per share)	$ 0.15	$ 0.18	$ 0.43	$ 0.55
Basic (in dollars per share)	0.15	0.18	0.43	0.55
Net income per diluted share available to common stockholders:
Undistributed (in dollars per share)	0.15	0.18	0.42	0.55
Diluted (in dollars per share)	$ 0.15	$ 0.18	$ 0.42	$ 0.55
Weighted average shares outstanding:
Basic (in shares)	35,304,066	33,692,876	35,161,644	33,522,289
Diluted (in shares)	35,931,454	34,280,656	35,883,202	34,043,573

Consolidated Statements of Comprehensive (Loss)/Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Consolidated Statements of Comprehensive (Loss)/Income
Net income	$ 5,278	$ 6,194	$ 15,056	$ 18,620
Foreign currency translation loss	(121)		(105)
Unrealized gain on investments	14		24
Other comprehensive loss	(107)		(81)
Comprehensive income	$ 5,171	$ 6,194	$ 14,975	$ 18,620

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 15,056	$ 18,620
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	5,757	2,738
Write-off of property and equipment	367
Deferred taxes	(4,181)	15,086
Non-cash equity-based compensation	15,728	4,422
Change in fair value of contingent consideration	110
Excess tax benefit from the exercise of stock options	(10,224)	(3,226)
Bad debt reserve	516	464
Chargeback and sales refund reserves	170	85
Amortization of deferred financing fees		125
Changes in operating assets and liabilities:
Credit card receivables	(1,704)	(1,153)
Accounts receivable	(7,374)	(4,176)
Prepaid expenses and other current and non-current assets	15,574	(20,508)
Accounts payable and other current and non-current liabilities	7,978	5,971
Contributor royalties payable	3,059	2,018
Deferred revenue	18,667	11,995
Net cash provided by operating activities	59,499	32,461
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(16,334)	(4,788)
Purchase of investments	(214,506)
Sale and maturities of investments	219,239
Acquisition of business	(10,056)
Acquisition of digital content	(331)
Security deposit receipt/(payment)	145	(1,821)
Net cash used in investing activities	(21,843)	(6,609)
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from issuance of common stock in follow-on offering		65,895
Proceeds from exercise of stock options	6,673	4,003
Proceeds from issuance of common stock under Employee Stock Purchase Plan	945	1,065
Excess tax benefit from the exercise of stock options	10,224	3,226
Payment of term loan		(6,000)
Payment of offering fees		(618)
Net cash provided by financing activities	17,842	67,571
Effect of foreign exchange rates changes on cash	(93)
Net increase in cash and cash equivalents	55,405	93,423
Cash and cash equivalents-Beginning	155,355	102,096
Cash and cash equivalents-Ending	210,760	195,519
Cash paid for:
Income taxes	235	14,194
Interest		34
Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Capital expenditures in accounts payable and other liabilities	$ 4,436	$ 1,160

Summary of Operations and Significant Accounting Policies

9 Months Ended

Sep. 30, 2014

Summary of Operations and Significant Accounting Policies

Summary of Operations and Significant Accounting Policies

(1) Summary of Operations and Significant Accounting Policies

Summary of Operations

Shutterstock, Inc. (the “Company” or “Shutterstock”) operates an industry-leading global marketplace for commercial digital imagery and music. Commercial digital imagery consists of licensed photographs, illustrations and videos that companies use in their visual communications, such as websites, digital and print marketing materials, corporate communications, books, publications and video content while music consists of high-quality music tracks often used to complement the digital imagery. The Company licenses commercial digital imagery and music to its customers. Contributors upload their digital imagery and music tracks to the Company’s website in exchange for a royalty payment based on customer download activity. The Company is headquartered in New York City with offices in Amsterdam, Berlin, Chicago, Denver, London, Paris, and San Francisco.

Principles of Consolidation

The consolidated financial statements reflect the operations of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

Reorganization

In May 2012, in connection with the filing of a registration statement for the Company’s initial public offering (the “IPO”), Shutterstock Images LLC, a New York limited liability company (the “LLC”) formed Shutterstock, Inc., a Delaware corporation, as a wholly-owned subsidiary of the LLC. On October 5, 2012, the LLC reorganized, by way of a merger of the LLC with and into Shutterstock, Inc. with Shutterstock, Inc. surviving in the merger (the “Reorganization”). In connection with the Reorganization, the preferred and common membership interests in the LLC, including any interests that vested upon the Reorganization, were exchanged for an aggregate of 28,338,281 shares of Shutterstock, Inc. common stock.

Follow-On Offering

On September 25, 2013, the Company completed a follow-on offering of 5,290,000 shares of its common stock, which included 690,000 shares of common stock sold by the Company and certain stockholders as a result of the underwriters’ exercise of their option to purchase additional shares, at a price of $60.00 per share. The Company sold 1,150,000 shares of common stock in the offering and the selling stockholders sold 4,140,000 shares of common stock in the offering. The aggregate offering price for shares sold by the Company in the offering resulted in net proceeds to the Company of $65,895 after deducting underwriting discounts and commissions, and before deducting total expenses incurred in connection with the offering of approximately $945.

Unaudited Interim Financial Statements

The interim consolidated balance sheet as of September 30, 2014, the consolidated statements of operations, comprehensive income and cash flows for the three and nine months ended September 30, 2014 and 2013 are unaudited. The unaudited interim financial statements have been prepared on a basis consistent with the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to state fairly the Company’s financial position as of September 30, 2014 and its results of consolidated operations, comprehensive income and cash flows for the three and nine months ended September 30, 2014 and 2013. The financial data and the other financial information disclosed in these notes to the financial statements related to these periods are also unaudited. The results of operations for the three and nine months ended September 30, 2014 are not necessarily indicative of the results to be expected for the year ending December 31, 2014 or for any other future annual or interim period.

There have been no material changes in the significant accounting policies from those that were disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013 filed on February 28, 2014. These financial statements should also be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2013. Certain information and note disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted pursuant to such rules and regulations. The consolidated balance sheet as of December 31, 2013 included herein was derived from the audited financial statements as of that date, but does not include all disclosures required by GAAP.

Acquisition of Virtual Moment, LLC

On March 14, 2014, the Company acquired certain assets and certain liabilities of Virtual Moment, LLC (dba WebDAM) (“WebDAM”) pursuant to an asset purchase arrangement. The transaction was accounted for using the acquisition method, and accordingly, the results of the acquired business have been included in the Company’s results of operations from the acquisition date.

WebDAM sells digital asset management software services through its cloud-based platform to marketing and creative enterprise organizations. WebDAM’s products help organizations manage, search, distribute and collaborate on creative digital files in order to grow its brands and reach new audiences. WebDAM’s offerings are particularly attractive to large enterprises, which make up a significant portion of their client base. The Company believes that this acquisition will strengthen its strategic position with its enterprise customers as well as broaden its product offerings to larger companies.

The fair value of consideration transferred in this business combination was allocated to the intangible assets acquired and liabilities assumed at the acquisition date, with the remaining unallocated amount recorded as goodwill. The allocation of the purchase price for this acquisition has been prepared on a preliminary basis, and changes to those allocations may occur as additional information becomes available.

The total purchase price of $12,416 consists of an initial cash payment of $10,056 and $2,360 in contingent consideration based on certain performance criteria of post-acquisition revenue. The fair value of the contingent consideration was determined using a Monte-Carlo simulation approach. The aggregate purchase price was allocated to the assets acquired and liabilities assumed as follows:

Intangible assets:
Trade name	$	500
Customer relationships	2,800
Developed technology	600
Goodwill	8,763
Total assets acquired	836
Total liabilities assumed	(1,083		)
Total	$	12,416

The identifiable intangible assets have a weighted average life of approximately seven years and are being amortized on a straight-line basis. The fair value of the customer relationships was determined using a variation of the income approach known as excess earnings method. The fair values of the trade name and developed technology were both determined using the relief-from-royalty method. The goodwill arising from the transaction is primarily attributable to expected operational synergies and is deductible for income tax purposes. As a result of the acquisition, the Company recorded approximately $400 of professional fees for the nine months ended September 30, 2014 which is included in general and administrative expense. There were no professional fees as a result of the acquisition recorded during the three months ended September 30, 2014.

Pro forma results of operations have not been presented because the effect of this business combination was not material to the Company’s consolidated results of operations.

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires the Company’s management to make a number of estimates and assumptions relating to the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the period. The Company evaluates its significant estimates on an ongoing basis, including, but not limited to allowance for doubtful accounts, contingent consideration, sales refund reserve, goodwill, intangibles, non-cash equity-based compensation, income tax provision and for certain non-income tax accruals. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.

Restricted Cash

The Company’s restricted cash relates to security deposits for leased office locations. As of September 30, 2014, the Company had $188 of restricted cash recorded in prepaid expenses and other current assets that related to a leased office location that expires in the next twelve months and had $1,829 of restricted cash recorded in other assets that related to a leased office location that expires in 2024. As of December 31, 2013, the Company had $243 of restricted cash recorded in prepaid expenses and other current assets and had $2,017 of restricted cash recorded in other assets. The carrying value of restricted cash approximates fair value.

Deferred Rent

The Company records rent expense on a straight-line basis over the term of the related lease. The difference between the rent expense recognized and the actual payments made in accordance with the lease agreement is recognized as a deferred rent liability on the Company’s balance sheet. As of September 30, 2014, the Company has recorded a deferred rent balance of $7,951, of which $673 is included in other liabilities and $7,278 is included in other non-current liabilities. As of December 31, 2013, the Company had recorded a deferred rent balance of $4,783, of which $2,406 is included in other liabilities and $2,377 is included in other non-current liabilities.

Revenue Recognition

The vast majority of the Company’s revenue, net of chargebacks and refunds, is generated from the license of digital content through subscription or usage based plans. The Company’s three primary plans are: subscription plans, On Demand plans, and credit pack plans. The Company recognizes revenue when all of the following basic criteria are met: there is persuasive evidence of an arrangement, performance or delivery of services has occurred, the sales price is fixed or determinable, and collectability is reasonably assured. The Company considers persuasive evidence of an arrangement to be an electronic order form, or a signed contract, which contains the fixed pricing terms. Performance or delivery is considered to have occurred upon the ratable passage of time for subscription plans, the download of digital content or the expiration of a contract period for which there are unused downloads or credits. Collectability is reasonably assured since most of the Company’s customers purchase products by making electronic payments at the time of a transaction with a credit card. The Company establishes a chargeback allowance and sales refund reserve allowance based on factors surrounding historical credit card chargeback trends, historical sales refund trends and other information. As of September 30, 2014 and December 31, 2013, the Company has recorded a combined chargeback allowance and sales refund allowance of $595 and $425, respectively, which is included in other liabilities. Collectability is assessed for customers who pay on credit based on a credit evaluation for new customers, when necessary, and transaction history with existing customers. Any cash received in advance of revenue recognition is recorded as deferred revenue.

Subscription plans range in length from thirty days to one year. Subscription plan revenues are recognized on a straight-line basis using a daily convention method over the plan term. On Demand plans are typically for a one-year term and permit the customer to download up to a fixed amount of digital content. On Demand revenues are recognized at the time the customer downloads the digital content on a per unit basis. Revenue related to unused digital content, if any, is recognized in full at the end of the plan term assuming no further Company obligation remains. Credit pack plans are generally for a one-year term and enable the customer to purchase a fixed number of credits which can then be utilized to pay for downloaded digital content. The number of credits utilized for each download depends on the digital content size and format. Credit pack revenue is recognized based on customer usage on a per credit basis as digital content is downloaded. Revenue related to unused credits, if any, is recognized in full at the end of the plan term assuming no further Company obligation remains. Most plans automatically renew at the end of the plan term unless the customer elects not to renew. The Company recognizes revenue from its three types of plans on a gross basis in accordance with the authoritative guidance on principal-agent considerations as the Company is the primary obligor in the arrangement, has control in establishing the product’s price, performs a detailed review of the digital content before accepting it to its collection to ensure it is of high quality before it may be purchased by the customers, can reject contributor’s images in its sole discretion, and has credit risk.

Customers typically pay in advance (or upon commencement of the term) via credit card, wire or check. Fees paid or invoiced in advance are deferred and recognized as described above. Customers that do not pay in advance are invoiced and are required to make payment under standard credit terms. The Company does not generally offer refunds or the right of return to customers. There are situations in which a customer may receive a refund but the determination is made on a case-by-case basis.

The Company licenses digital content to customers through third party resellers. The Company contracts with third party resellers around the world to access markets where the Company does not have a significant presence. Third party resellers sell the Company’s products directly to end-user customers and remit a fixed amount to the Company based on the type of plan sold. The terms of the reseller program indicate that the third party reseller is the primary obligor to the end-user customer and bears the risks and rewards as principal in the transaction. In assessing whether the Company’s revenue should be reported on a gross or net basis with respect to our reseller program, the Company follows the authoritative guidance in ASC 605-45, “Principal Agent Considerations.” The Company recognizes revenue net of reseller commission in accordance with the type of plan sold, consistent with the plan descriptions above. The Company generally does not offer refunds or the right of return to resellers.

The Company also generates revenue related to WebDAM from licensing its hosted software services through its cloud-based platform and related implementation and professional services. The Company enters into multiple element revenue arrangements in which a customer purchases a combination of hosted software, implementation and optional value added professional services. The Company recognizes revenue for the hosted services monthly provided that there is persuasive evidence of an arrangement, the service has been delivered, the fees are fixed and determinable, and collection is reasonably assured. ASC 605-25 establishes a selling price hierarchy for determining the selling price of a deliverable in multiple-element arrangements, which is based on: (a) vendor-specific objective evidence; (b) third-party evidence; or (c) best estimated selling price. The hosted software services are recognized ratably over the contractual period as this service is on-going over the hosting period which is generally a one-year term. The Company defers revenue for the delivered elements until the undelivered element is delivered and then recognizes the delivered element revenue ratably over the longer of the contractual term or the estimated customer relationship period which is currently three years.

Equity-Based Compensation

The Company measures and recognizes non-cash equity-based compensation expense for all equity-based awardsgranted to employees based on estimated fair values. The value portion of the award that is ultimately expected to vest is recognized as expense over the requisite service period. For awards with a change of control condition, an evaluation is made at the grant date and future periods as to the likelihood of the condition being met. Compensation expense is adjusted in future periods for subsequent changes in the expected outcome of the change of control conditions until the vesting date. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Compensation expense related to awards with a market condition is recognized ratably over the requisite service period regardless of the achievement of the market condition.

The Company uses the Black Scholes option pricing model, the closing price of the Company’s common stock on the date of grant, and the Monte Carlo simulation model, if the award has a market condition, to determine the fair value of stock options and restricted stock units (“RSUs”), respectively, granted pursuant to the Value Appreciation Rights Plan (“VAR Plan”), 2012 Omnibus Equity Incentive Plan (the “2012 Plan”) and stock purchased pursuant to the Employee Stock Purchase Plan (“2012 ESPP”), which are discussed further in Note 11, Equity-Based Compensation.

The determination of the grant date fair value using an option-pricing model and simulation model requires judgment as well as assumptions regarding a number of other complex and subjective variables. These variables include the Company’s fair value of the common ownership interest pre-IPO, the Company’s closing market price at the grant date post-IPO, the expected unit price volatility over the expected term of the awards, awards’ exercise and cancellation behaviors, risk-free interest rates, and expected dividends, which are estimated as follows:

Fair Value of Common Membership Unit. Prior to completion of the IPO, the Company’s fair value of common ownership interest was estimated internally and approved by the Board of Managers (“BOM”) because the Company was not publicly traded. The Company’s intention upon granting VAR Plan awards was for the granted award to have exercisable price per unit that was not less than the per unit fair value of the Company’s common equity on the date of grant. The valuations of the Company’s common equity unit were prepared in accordance with the American Institute of Certified Public Accountants Statement on Standards for Valuation Services 1: Valuation of a Business, Business Ownership Interest, Security, or Intangible Asset . The assumptions used in the valuation model were based on future expectations combined with the Company’s judgment. In the absence of a public trading market, the Company exercised significant judgment and considered numerous objective and subjective factors to determine the fair value of the common equity unit as of the date of each VAR Plan award grant. Some but not all of these factors included operating and financial performance, current business conditions and projections, the hiring of key personnel, the Company’s history and introduction of new functionality and services, the Company’s stage of development, the likelihood of achieving a liquidity event for the common ownership interests, any adjustment necessary to recognize a lack of marketability for the common ownership interests, the market performance of comparable publicly traded companies, and U.S. and global capital market conditions. The Company also obtained independent third party valuations on a periodic basis. After October 11, 2012, the date the Company’s common stock began trading on the NYSE, the grant date fair value for stock-based awards is based on the closing price of the Company’s common stock on the NYSE on the date of grant and fair value for all other purposes related to stock-based awards shall be the closing price of the Company’s common stock on the NYSE on the relevant date.

Expected Term. The expected term is estimated using the simplified method allowed under Securities and Exchange Commission (“SEC”) guidance.

Volatility. As the Company does not have a trading history for its common ownership interest pre-IPO or a significant range of its common stock post-IPO, the expected price volatility for the common ownership interest and common stock was estimated by taking the average historic price volatility for industry peers based on daily price observations over a period equivalent to the expected term of the VAR Plan awards and stock options granted post-IPO. Industry peers consist of several public companies similar in size, stage of life cycle and financial leverage. The Company did not rely on implied volatilities of traded options in the industry peers’ common stock because the volume of activity was relatively low. The Company intends to continue to consistently apply this process using the same or similar public companies until a sufficient amount of historical information regarding the volatility of the Company’s own common stock becomes available, or unless circumstances change such that the identified companies are no longer similar to the Company, in which case, more suitable companies whose share prices are publicly available would be utilized in the calculation.

Risk-free Interest Rate. The risk-free interest rate is based on the yields of U.S. Treasury securities with maturities similar to the expected term of each award group.

Dividend Yield. Prior to the Reorganization, the Company has historically paid cash dividends or distributions to its members. Following the Reorganization, the Company has not paid cash distributions to its stockholders and it does not intend to do so for the foreseeable future. As a result, the Company used an expected dividend yield of zero.

If any of the assumptions used in the Black-Scholes pricing model or Monte Carlo simulation model changes significantly, the fair value for future awards may differ materially compared with the awards granted previously. The awards granted pursuant to the VAR Plan, the 2012 Plan, and the 2012 ESPP are subject to a time-based vesting requirement and for certain award grants are also based on a market condition. The majority of stock option awards granted under the 2012 Plan vest over four years while the majority of the restricted stock units granted under the 2012 Plan vest over three years. The 2012 ESPP provides for purchase periods approximately every six months and a participant must be employed on the purchase date to participate. The VAR Plan awards had a condition that a change of control (as defined in the VAR Plan) must occur for a payment to trigger with respect to the VAR Plan awards. In connection with the Company’s Reorganization, all of the VAR Plan awards were exchanged for options to purchase shares of common stock of Shutterstock, Inc. As of December 31, 2011, no equity-based compensation expense had been recognized with respect to the VAR Plan awards because the qualifying event had not occurred. As a result of the completion of the initial public offering (“IPO”) in October 2012, the Company began recording stock-based compensation expense using the accelerated attribution method, net of forfeitures, based on the grant date fair value of the VAR Plan awards that were exchanged for options to purchase shares of common stock of Shutterstock, Inc. as part of the Company’s Reorganization.

For pre-IPO equity based awards that qualified for liability classification, the Company has elected to use the intrinsic value method to value the common membership interest in accordance with authoritative guidance on stock compensation. See Note 11, Equity-Based Compensation, for further information.

Income Taxes

The Company is a Delaware corporation and is therefore subject to federal and state income tax. Significant management judgment is required in projecting ordinary income/(loss) in order to determine the Company’s estimated effective tax rate.

The Company accounts for unrecognized tax benefits using a more-likely-than-not threshold for financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. The Company establishes reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes may be due. The Company records an income tax liability, if any, for the difference between the benefit recognized and measured and the tax position taken or expected to be taken on the Company’s tax returns. To the extent that the assessment of such tax positions changes, the change in estimate is recorded in the period in which the determination is made. The reserves are adjusted in light of changing facts and circumstances, such as the outcome of a tax audit or lapses in statutes of limitations. Any reserve for uncertain tax provisions, if any, and related penalties and interest, if any, are included in the income tax provision.

The Company assessed the realizability of deferred tax assets and determined that based on the available evidence, including a history of taxable income and estimates of future taxable income, it is more likely than not that the deferred tax assets will be realized. The Company will continue to evaluate its ability to realize deferred tax assets on a quarterly basis. Significant management judgment is required in determining the provision for income taxes and deferred tax assets and liabilities. In the event that actual results differ from these estimates, the Company will adjust these estimates in future periods which may result in a change in the effective tax rate in a future period.

The Company is subject to compliance requirements for certain non income taxes, including value added taxes, sales taxes and royalty withholding taxes. Where appropriate, the Company has made accruals for these taxes, which are reflected in the Company’s consolidated financial statements.

Net Income Per Share

Basic net income per share is computed by dividing the net income attributable to common stockholders by the weighted average number of common shares outstanding during the period. The Company applies the two class method for calculating and presenting income per share. Under the two-class method, net income is allocated between shares of common stock and other participating securities based on their contractual participating rights to share in the earnings as if all of the earnings for the period have been distributed. Participating securities are defined as securities that participate in dividends with common stock according to a pre-determined formula or a contractual obligation to share in the income of the entity. Any potential issuance of common shares, including those that are contingent and do not participate in dividends, are excluded from weighted average number of common shares outstanding. Undistributed net income (loss) for a given period is apportioned to participating stockholders based on the weighted average number of shares for each class of securities outstanding during the applicable period as a percentage of the combined weighted average number of these securities outstanding during the period. Income available to common stockholders is computed by deducting dividends paid to preferred stockholders, accretion to redemption value on preferred members shares, less income allocated to participating securities including unvested shares for the restricted award holder since these unvested shares have participating rights. See Note 11, Equity-Based Compensation, for further discussion.

Diluted net income per share is computed by dividing the net income available to common stockholders adjusted for any changes in income that would result from the assumed conversion of the potential common shares by the weighted average common shares outstanding and all potential common shares, if they are dilutive. Diluted net income available to common stockholders for the three and nine months ended September 30, 2014 includes the effect of 2,136,637 and 2,161,146 shares, respectively, while 617,250 and 472,977 shares, respectively, were excluded since they were anti-dilutive. Diluted net income available to common stockholders for the three and nine months ended September 30, 2013 includes the effect of 1,589,748 and 1,717,767 shares, respectively, while 376,550 and 229,367 shares, respectively, were excluded since they were anti-dilutive.

A reconciliation of assumed exercised shares used in calculating basic and diluted net income per share available to common stockholders follows:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2014	2013	2014	2013
Basic	35,304,066	33,692,876	35,161,644	33,522,289
Stock options and employee stock purchase plan shares	552,282	536,741	627,845	444,556
Unvested restricted stock awards	75,106	51,039	93,713	76,728
Diluted	35,931,454	34,280,656	35,883,202	34,043,573

Recently Issued Accounting Standard Updates

In May 2014, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance related to revenue recognition. This new standard will replace all current GAAP guidance on this topic and will eliminate all industry-specific guidance. The new revenue recognition standard provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. This guidance will be effective beginning January 1, 2017 and can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The Company is evaluating the impact, if any, of adopting this new accounting standard on its financial statements.

In June 2014, the FASB issued new guidance related to stock compensation. The new standard requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award. This update further clarifies that compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the periods for which the requisite service has already been rendered. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015 and can be applied either prospectively or retrospectively to all awards outstanding as of the beginning of the earliest annual period presented as an adjustment to opening retained earnings. Early adoption is permitted. The Company is evaluating the impact, if any, of adopting this new accounting standard on its financial statements.

Short-Term Investments and Fair Value Measurements

9 Months Ended

Sep. 30, 2014

Short-Term Investments and Fair Value Measurements

Short-Term Investments and Fair Value Measurements

(2) Short Term Investments and Fair Value Measurements

Short term investments are summarized as follows:

	As of September 30, 2014
	Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Market Value
Commercial paper	$	49,722	$	—	$	(2	)	$	49,720
Total	$	49,722	$	—	$	(2	)	$	49,720

	As of December 31, 2013
	Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Market Value
Commercial paper	$	54,431	$	—	$	(2	)	$	54,429
Total	$	54,431	$	—	$	(2	)	$	54,429

The following tables present the Company’s fair value hierarchy for its assets and liabilities:

	As of September 30, 2014
	Aggregate Fair Value		Level 1		Level 2		Level 3
Assets:
Money market accounts	$	86,342	$	86,342	$	—	$	—
Commercial paper	49,720		—		49,720		—
Total assets measured at fair value	$	136,062	$	86,342	$	49,720	$	—
Liabilities:
Acquisition related contingent consideration	$	2,470	$	—	$	—	$	2,470
Total liabilities measured at fair value	$	2,470	$	—	$	—	$	2,470

	As of December 31, 2013
	Aggregate Fair Value		Level 1		Level 2		Level 3
Assets:
Money market accounts	$	81,548	$	81,548	$	—	$	—
Commercial paper	54,429		—		54,429		—
Total assets measured at fair value	$	135,977	$	81,548	$	54,429	$	—

The Company’s investments classified as level 2 are priced using quoted market prices for identical assets which are subject to infrequent transactions. Cash equivalents consist of balances in money market accounts which are classified as a level 1 measurement based on bank reporting. The Company reassesses the fair value of contingent consideration to be settled in cash related to the WebDAM acquisition on a quarterly basis using the Monte-Carlo simulation approach. This contingency is considered a level 3 measurement. Significant assumptions used in the measurement include probabilities of achieving certain milestones and discount rates which are based on unobservable inputs that are supported by little or no market activity and reflect the Company’s own assumptions in measuring fair value. As a result of a shorter discounting period, the Company recorded a change in the fair value of the contingent consideration in the amount of $70 and $110 during the three and nine months ended September 30, 2014, respectively, which is included in other (expense) income, net. As of September 30, 2014, the fair value of the contingent consideration increased to $2,470 based on its current fair value and is included in other non-current liabilities.

Cash, accounts receivable, restricted cash, accounts payable, accrued expenses and deferred revenue carrying amounts approximate fair value because of the short-term maturity of these instruments. The Company’s non-financial assets, which include property and equipment, intangible assets and goodwill, are not required to be measured at fair value on a recurring basis. However, if certain triggering events occur, or if an annual impairment test is required and the Company is required to evaluate the non-financial asset for impairment, a resulting asset impairment would require that the non-financial asset be recorded at the fair value.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Information About Revenue By Geographic Areas

9 Months Ended

Sep. 30, 2014

Segment Reporting

Information About Revenue By Geographic Areas

(3) Information About Revenue By Geographic Area

The following table presents the Company’s revenue based on customer location:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
North America	$	31,569	$	21,556	$	87,896	$	60,762
Europe	28,519		20,746		83,452		59,927
Rest of the world	23,642		17,256		65,397		46,795
Total revenue	$	83,730	$	59,558	$	236,745	$	167,484

Included in North America is the United States which comprises 32% and 32% of total revenue for the three months ended September 30, 2014 and 2013, respectively, and 32% and 32% of total revenue for the nine months ended September 30, 2014 and 2013, respectively. No other country accounts for more than 10% of the Company’s revenue in any period. All long-lived assets are located in the United States.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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+ Details

Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2014

Goodwill and Intangible Assets

Goodwill and Intangible Assets

(4) Goodwill and Intangible Assets

The Company’s goodwill balance is attributable to its Bigstockphoto, Inc. (“Bigstock”) and WebDAM reporting units and is tested for impairment at least annually on October 1 or upon a triggering event. The following table summarizes the changes in the Company’s goodwill balance through September 30, 2014:

	Bigstock		WebDAM		Consolidated
Balance as of December 31, 2013	$	1,423	$	—	$	1,423
Goodwill related to acquisition	—		8,763		8,763
Balance as of September 30, 2014	$	1,423	$	8,763	$	10,186

Intangible assets consist of the following as of September 30, 2014 and December 31, 2013:

	As of September 30, 2014
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Weighted Average Life (Years)

Amortizing intangible assets:
Customer relationship	$	3,400	$	(821	)	$	2,579	6
Trade name	900		(198		)	702		9
Developed technology	600		(47		)	553		7
Contributor content	450		(151		)	299		15
Patents	193		(27		)	166		17
Domain name	97		(17		)	80		14
Total(1)	$	5,640	$	(1,261	)	$	4,379

(1): During the three months ended September 30, 2014, the Company acquired the non-exclusive licensing rights to distribute digital content in perpetuity in the amount of $331. The Company has not yet placed the digital content into service and therefore is excluded from the table.

	As of December 31, 2013
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Weighted Average Life (Years)
Amortizing intangible assets:
Customer relationship	$	600	$	(600	)	$	—	4
Trade name	400		(119		)	281		14
Contributor content	450		(127		)	323		15
Patents	193		(21		)	172		17
Domain name	86		(9		)	77		15
Total	$	1,729	$	(876	)	$	853

Amortization expense was $167 and $57 for the three months ended September 30, 2014 and 2013, respectively, and $384 and $169 for the nine months ended September 30, 2014 and 2013, respectively. The Company also determined that there was no indication of impairment for the intangible assets for all periods presented. Estimated amortization expense for the next five years is: $166 for the remaining three months of 2014, $665 in 2015, $665 in 2016, $665 in 2017, $634 in 2018 and $1,584 thereafter.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details

Property and Equipment

9 Months Ended

Sep. 30, 2014

Property and Equipment

Property and Equipment

(5) Property and Equipment

Property and equipment is summarized as follows:

	September 30, 2014			December 31, 2013
Computer equipment and software	$	22,075		$	14,108
Furniture and fixtures	2,149			2,588
Leasehold improvements	13,932			10,669
Property and equipment	38,156			27,365
Less accumulated depreciation	(11,734		)	(7,109		)
Property and equipment, net	$	26,422		$	20,256

Depreciation expense amounted to $1,958 and $956 for the three months ended September 30, 2014 and 2013, respectively, and $5,373 and $2,569 for the nine months ended September 30, 2014 and 2013, respectively. Depreciation expense is included in cost of revenue and general and administrative expense based on the nature of the asset. In connection with its move to its new headquarters, the Company recorded a loss on disposal of certain fixed assets in the amount of $367 for the nine months ended September 30, 2014. There was no loss on disposal for the three months ended September 30, 2014 and 2013 and for the nine months ended 2013.

Accrued Expenses

9 Months Ended

Sep. 30, 2014

Accrued Expenses

Accrued Expenses

(6) Accrued Expenses

Accrued expenses consist of the following:

	September 30,		December 31,
	2014		2013
Royalty tax withholdings	$	6,085	$	5,305
Compensation	6,527		6,379
Non-income taxes	4,287		3,994
Professional fees	681		605
Marketing	212		475
Construction costs	98		4,501
Other expenses	4,504		2,379
Total accrued expenses	$	22,394	$	23,638

Income Taxes	9 Months Ended
Income Taxes	Sep. 30, 2014
Income Taxes
Income Taxes	(7) Income Taxes The Company’s effective tax rates for the three months ended September 30, 2014 and 2013 are 40.3% and 37.7%, respectively. The Company’s effective tax rates for the nine months ended September 30, 2014 and 2013 are 42.9% and 39.7%, respectively. The Company incurred a discrete tax expense relating to a change in its state apportionment percentage during the three and nine months ended September 30, 2014, which increased the effective tax rate by 0.1% and 2.3%, respectively. Excluding this discrete expense, the effective rate would have been 40.2% and 40.6%, respectively, for the three and nine months ended September 30, 2014. The Company has computed the provision for income taxes based on the estimated annual effective tax rates and the application of discrete items, if any, in the applicable period. The effective tax rate differs from the statutory tax rate due primarily to non-deductible expenses related to non-cash equity-based compensation, and meals and entertainment. During the three and nine months ended September 30, 2014, the Company did not record additional unrecognized tax benefits. During the three and nine months ended 2013, the Company recorded an unrecognized tax benefit in the amount of $2 and $986, respectively, for uncertain tax positions taken in prior years. To the extent these unrecognized tax benefits are ultimately recognized, the Company’s effective tax rate may be impacted in future periods. The Company recognizes interest expense and tax penalties related to unrecognized tax benefits in income tax expense in the consolidated statements of operations. The Company accrued interest and penalties in the amount of $25 and $2 related to unrecognized tax benefits for the three months ended September 30, 2014 and 2013, respectively, and during the nine months ended September 30, 2014 and 2013, the Company accrued interest and penalties in the amount of $72 and $13 related to unrecognized tax benefits. It is the Company’s practice and intention to indefinitely reinvest the earnings of its foreign subsidiaries in those operations. As of September 30, 2014, the excess of the amount for financial reporting over the tax basis of investment in these foreign subsidiaries is insignificant and the unrecognized deferred tax liability is not material.

Term Loan Facility	9 Months Ended
Term Loan Facility	Sep. 30, 2014
Term Loan Facility
Term Loan Facility	(8) Term Loan Facility On September 21, 2012, the Company entered into a Loan and Security Agreement with Silicon Valley Bank providing for a $12,000 term loan facility, which the Company refers to as the term loan facility. On December 24, 2012, the Company paid down $6,000 of the term loan facility. On March 25, 2013, the Company paid off the remaining $6,000 of the loan facility. The Company capitalizes costs directly associated with acquiring third party financing. During the three months ended March 31, 2013, the Company accelerated and recognized $125 as a result of paying off the term loan facility. The Company was in compliance with the financial covenants and other covenants applicable to it under the term loan facility during the three months ended March 31, 2013 prior to paying off the term loan facility on March 25, 2013.

Commitments and Contingencies	9 Months Ended
Commitments and Contingencies	Sep. 30, 2014
Commitments and Contingencies.
Commitments and Contingencies	(9) Commitments and Contingencies The Company leases facilities under agreements accounted for as operating leases. Rental expense, inclusive of operating leases, for the three months ended September 30, 2014 and 2013 was $999 and $801, respectively, and for the nine months ended September 30, 2014 and 2013 was $3,167 and $1,830, respectively. Some leases have defined escalating rent provisions, which are expensed over the term of the related lease on a straight-line basis commencing with the date of possession. Any rent allowance or abatement is netted in this calculation. All leases require payment of real estate taxes and operating expense increases. On March 21, 2013, the Company entered into an operating lease agreement to lease its new office facility in New York, New York. The Company took possession of the premises during the third quarter of 2013, and as a result, the lease commenced. The Company also entered into a letter of credit in the amount of $1,829 as a security deposit for the leased facilities. The letter of credit was collateralized by $1,829 of cash as of September 30, 2014 and December 31, 2013, and as such, is considered to be restricted cash and is included in other assets on the consolidated balance sheet. The lease term is eleven years from the commencement date and aggregate future minimum lease payments are approximately $38,200. Capital Expenditures As of September 30, 2014, the Company had no significant purchase commitments related to capital expenditures. As of December 31, 2013, the Company had committed to purchase approximately $2,500 of data server equipment and $3,700 related to completion of its new office facility. Unconditional Purchase Obligations As of September 30, 2014 and December 31, 2013, the Company had unconditional purchase obligations in the amount of $8,453 and $5,864, respectively, which consisted primarily of contracts related to infrastructure services. As of September 30, 2014, the Company’s unconditional purchase obligations for the remainder of 2014 and for the years ending December 31, 2015, 2016 and 2017 are $1,790, $5,021, $1,578 and $64, respectively. As of December 31, 2013, the Company’s unconditional purchase obligations for the years ending December 31, 2014, 2015 and 2016 are $3,454, $1,845 and $565, respectively. Legal Matters From time to time, the Company may become party to litigation in the ordinary course of business, including direct claims brought by or against the Company with respect to intellectual property, contracts, employment and other matters, as well as claims brought against the Company’s customers for whom the Company has a contractual indemnification obligation. The Company assesses the likelihood of any adverse judgments or outcomes with respect to these matters and determines loss contingency assessments on a gross basis after assessing the probability of incurrence of a loss and whether a loss is reasonably estimable. In addition, the Company considers other relevant factors that could impact its ability to reasonably estimate a loss. A determination of the amount of reserves required, if any, for these contingencies is made after analyzing each matter. The Company reviews reserves, if any, at least quarterly and may change the amount of any such reserve in the future due to new developments or changes in strategy in handling these matters. Although the results of litigation and threats of litigation, investigations and claims cannot be predicted with certainty, the Company currently believes that the final outcome of these matters will not have a material adverse effect on its business, consolidated financial position, results of operations, or cash flows. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors. The Company currently has no material active litigation matters and, as such, no material reserves related to litigation. Indemnifications In the ordinary course of business, the Company enters into contractual arrangements under which it agrees to provide indemnification of varying scope and terms to customers with respect to certain matters, including, but not limited to, losses arising out of the breach of Company’s intellectual property warranties for damages to the customer directly attributable to the Company’s breach. The Company is not responsible for any damages, costs, or losses to the extent such damages, costs or losses arise as a result of the modifications made by the customer, or the context in which an image is used. The standard maximum aggregate obligation and liability to any one customer for all claims is generally limited to $10. The Company offers certain of its customers greater levels of indemnification, including unlimited indemnification. As of September 30, 2014 and as of December 31, 2013, the Company has recorded no liabilities related to indemnification obligations in accordance with the authoritative guidance for loss contingencies. Additionally, the Company believes that it has the appropriate insurance coverage in place to adequately cover such indemnification obligations, if necessary. Employment Agreements The Company has entered into employment and change of control arrangements with certain executive officers and with certain employees. The agreements specify various employment-related matters, including annual compensation, performance incentive bonuses, and severance benefits in the event of termination with or without cause.

Employee Benefit Plans	9 Months Ended
Employee Benefit Plans	Sep. 30, 2014
Employee Benefit Plans
Employee Benefit Plans	(10) Employee Benefit Plans The Company has a 401(k) defined contribution plan (“401(k) Plan”) and provides for annual discretionary employer matching contributions not to exceed 3% of employees’ compensation per year. Matching contributions are fully vested and non-forfeitable at all times. The Company recorded employer matching contributions of $264 and $186 for the three months ended September 30, 2014 and 2013, respectively, and $710 and $503 for the nine months ended September 30, 2014 and 2013, respectively.

Equity-Based Compensation

9 Months Ended

Sep. 30, 2014

Equity-Based Compensation

Equity-Based Compensation

(11) Equity-Based Compensation

Stock Option Awards

The following table presents a summary of the Company’s stock option awards activity for the nine months ended September 30, 2014:

	Plan Options		Weighted Average Exercise Price
Options outstanding at December 31, 2013	1,861,761		$	26.09
Options granted	542,750		74.52
Options exercised	(338,549	)	19.72
Options cancelled or forfeited	(108,204	)	44.57
Options outstanding at September 30, 2014	1,957,758		$	39.62
Vested and exercisable at September 30, 2014	632,994		$	20.56

The intrinsic value of the total stock options outstanding at September 30, 2014 and at December 31, 2013 was approximately $62,200 and $107,100, respectively. The intrinsic value of the total stock options vested and exercisable at September 30, 2014 and at December 31, 2013 was approximately $32,200 and $38,900, respectively.

There were no stock options granted during the three months ended September 30, 2014. The following weighted average assumptions were used in the fair value calculation of stock options granted during the three and nine months ended September 30, 2014 and 2013:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Expected term (in years)	—		6.3		6.3-10		6.3
Volatility	—	%	49	%	49	%	49	%
Risk-free interest rate	—	%	1.0-1.5	%	2.1-2.8	%	1.0-1.5	%
Dividend yield	—	%	0	%	0	%	0	%

On April 24, 2014, the Company granted 500,000 stock options with a market-based condition to its Chief Executive Officer (“CEO”). The stock options have an exercise price of $80.94 per share and will not vest or become exercisable unless (i) the CEO remains continuously employed by the Company until the fifth anniversary of the date of grant and (ii) the average 90-day closing price of the Company’s common stock equals or exceeds $161.88 for any 90 consecutive calendar days during the period commencing on the fifth anniversary of the date of grant and ending on the tenth anniversary of the date of grant, inclusive provided that the CEO remains continuously employed by the Company until the date of satisfaction of such condition. The derived requisite service period was determined to be six years based on a valuation technique. The total fair value of the grant is $21,630 and is being recognized over the derived requisite service period. In the event that the market condition remains unsatisfied upon completion of the requisite service period, no charge will be reversed.

The Company recognized non-cash equity-based compensation expense of $2,197 and $1,425, net of forfeitures, in connection with the vesting of stock options during the three months ended September 30, 2014 and 2013, respectively. The Company recognized non-cash equity-based compensation expense of $5,925 and $3,169, net of forfeitures, in connection with the vesting of stock options during the nine months ended September 30, 2014 and 2013, respectively. As of September 30, 2014, the total unrecognized compensation charge related to 2012 Plan non-vested options is approximately $31,700, which is expected to be recognized through fiscal year 2020.

Restricted Stock Unit and Restricted Stock Awards

The following table presents a summary of the Company’s RSUs activity for the nine months ended September 30, 2014:

	Plan Options		Weighted Average Fair Value
Non-vested balance at December 31, 2013	10,000		$	47.17
Units granted	640,975		83.19
Units vested	(3,125	)	47.17
Units cancelled or forfeited	(18,850	)	81.36
Non-vested balance at September 30, 2014	629,000		$	82.85

The Company recognized non-cash stock-based compensation expense of $3,234 and $30, net of estimated forfeitures, in connection with the vesting of RSUs during the three months ended September 30, 2014 and 2013, respectively. The Company recognized non-cash stock-based compensation expense of $7,518 and $48, net of estimated forfeitures, in connection with the vesting of RSUs during the nine months ended September 30, 2014 and 2013, respectively.

In connection with the Reorganization, membership interest in the LLC was exchanged for restricted and unrestricted shares of the Company’s stock. The Amended and Restated Restricted Stock Agreement entered into by the Company with an executive governs the terms of the restricted stock inclusive of service vesting terms. As the restricted shares vest, the award’s restrictions will be removed. The Company recognized non-cash equity-based compensation expense of $259, which is included in general and administrative expense, during the three months ended September 30, 2014 and 2013, in connection with the normal vesting of restricted stock. The Company recognized non-cash equity-based compensation expense of $777, which is included in general and administrative expense, during the nine months ended September 30, 2014 and 2013, in connection with the normal vesting of restricted stock.

In connection with the WebDAM acquisition, in order to retain the services of certain former WebDAM employees, the Company granted non-vested RSUs that will vest over two years from the date of acquisition. As these equity awards are subject to post-acquisition employment, the Company accounts for them as compensation expense. A portion of these equity awards are accounted for as liability-classified awards, because the obligations are based on fixed monetary amounts that are known at the inception of the obligation, to be settled with a variable number of shares of the Company’s common stock when the equity awards vest. The Company recognized non-cash stock-based compensation expense of $419 and $910, respectively, in connection with the vesting of these obligations during the three and nine months ended September 30, 2014, respectively. There was no non-cash stock-based compensation expense related to these obligations during the three and nine months ended September 30, 2013.

On April 24, 2014, the Company granted 100,000 RSUs with a market-based condition to its Chief Executive Officer (“CEO”). The RSUs will not vest or become exercisable unless (i) the CEO remains continuously employed by the Company until the fifth anniversary of the date of grant and (ii) the average 90-day closing price of the Company’s common stock equals or exceeds $161.88 for any 90 consecutive calendar days during the period commencing on the fifth anniversary of the date of grant and ending on the tenth anniversary of the date of grant, inclusive provided that the CEO remains continuously employed by the Company until the date of satisfaction of such condition. The derived requisite service period was determined to be six years based on a valuation technique. The total fair value of the grant is $5,870 and is being recognized over the derived requisite service period. In the event that the market condition remains unsatisfied upon completion of the requisite service period, no charge will be reversed.

As of September 30, 2014, the total unrecognized non-cash stock-based compensation charge related to the 2012 Plan non-vested restricted stock and RSUs is approximately $47,300, which is expected to be recognized through fiscal year 2020.

Employee Stock Purchase Plan

On October 10, 2012, the Company’s 2012 ESPP became effective. The Company recognized non-cash stock-based compensation expense of $225 and $138, net of estimated forfeitures, for the three months ended September 30, 2014 and 2013, respectively. The Company recognized non-cash stock-based compensation expense of $598 and $428, net of estimated forfeitures, for the nine months ended September 30, 2014 and 2013. As of September 30, 2014, 112,030 shares of the Company’s common stock have been issued under the 2012 ESPP.

The following table summarizes non-cash equity-based compensation expense included in the Company’s statement of operations for the three and nine months ended September 30, 2014 and 2013:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Cost of revenue	$	336	$	126	$	953	$	291
Sales and marketing	819		358		2,689		865
Product development	1,805		406		4,529		990
General and administrative	3,374		962		7,557		2,276
Total	$	6,334	$	1,852	$	15,728	$	4,422

Summary of Operations and Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2014

Summary of Operations and Significant Accounting Policies

Principles of Consolidation

Reorganization

Follow-On Offering

Unaudited Interim Financial Statements

Acquisition of Virtual Moment, LLC

Intangible assets:
Trade name	$	500
Customer relationships	2,800
Developed technology	600
Goodwill	8,763
Total assets acquired	836
Total liabilities assumed	(1,083		)
Total	$	12,416

Pro forma results of operations have not been presented because the effect of this business combination was not material to the Company’s consolidated results of operations.

Equity-Based Compensation

Expected Term. The expected term is estimated using the simplified method allowed under Securities and Exchange Commission (“SEC”) guidance.

Risk-free Interest Rate. The risk-free interest rate is based on the yields of U.S. Treasury securities with maturities similar to the expected term of each award group.

Income Taxes

Net Income Per Share

A reconciliation of assumed exercised shares used in calculating basic and diluted net income per share available to common stockholders follows:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2014	2013	2014	2013
Basic	35,304,066	33,692,876	35,161,644	33,522,289
Stock options and employee stock purchase plan shares	552,282	536,741	627,845	444,556
Unvested restricted stock awards	75,106	51,039	93,713	76,728
Diluted	35,931,454	34,280,656	35,883,202	34,043,573

Recently Issued Accounting Standard Updates

Summary of Operations and Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2014

Summary of Operations and Significant Accounting Policies

Schedule of preliminary aggregate purchase price allocated to assets acquired and liabilities assumed

Intangible assets:
Trade name	$	500
Customer relationships	2,800
Developed technology	600
Goodwill	8,763
Total assets acquired	836
Total liabilities assumed	(1,083		)
Total	$	12,416

Schedule of reconciliation of assumed exercised shares used in calculating basic and diluted net income (loss) share available to common stockholders

	Three Months Ended September 30,		Nine Months Ended September 30,
	2014	2013	2014	2013
Basic	35,304,066	33,692,876	35,161,644	33,522,289
Stock options and employee stock purchase plan shares	552,282	536,741	627,845	444,556
Unvested restricted stock awards	75,106	51,039	93,713	76,728
Diluted	35,931,454	34,280,656	35,883,202	34,043,573

Short-Term Investments and Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2014

Short-Term Investments and Fair Value Measurements

Schedule of short-term investments

	As of September 30, 2014
	Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Market Value
Commercial paper	$	49,722	$	—	$	(2	)	$	49,720
Total	$	49,722	$	—	$	(2	)	$	49,720

	As of December 31, 2013
	Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Market Value
Commercial paper	$	54,431	$	—	$	(2	)	$	54,429
Total	$	54,431	$	—	$	(2	)	$	54,429

Schedule of fair value measurements

	As of September 30, 2014
	Aggregate Fair Value		Level 1		Level 2		Level 3
Assets:
Money market accounts	$	86,342	$	86,342	$	—	$	—
Commercial paper	49,720		—		49,720		—
Total assets measured at fair value	$	136,062	$	86,342	$	49,720	$	—
Liabilities:
Acquisition related contingent consideration	$	2,470	$	—	$	—	$	2,470
Total liabilities measured at fair value	$	2,470	$	—	$	—	$	2,470

	As of December 31, 2013
	Aggregate Fair Value		Level 1		Level 2		Level 3
Assets:
Money market accounts	$	81,548	$	81,548	$	—	$	—
Commercial paper	54,429		—		54,429		—
Total assets measured at fair value	$	135,977	$	81,548	$	54,429	$	—

- Definition

Tabular disclosure of available-for-sale securities which includes, but is not limited to, changes in the cost basis and fair value, fair value and gross unrealized gain (loss), fair values by type of security, contractual maturity and classification, amortized cost basis, contracts to acquire securities to be accounted for as available-for-sale, debt maturities, transfers to trading, change in net unrealized holding gain (loss) net of tax, continuous unrealized loss position fair value, aggregate losses qualitative disclosures, other than temporary impairment (OTTI) losses or other disclosures related to available for sale securities.

+ References + Details

Information About Revenue By Geographic Areas (Tables)

9 Months Ended

Sep. 30, 2014

Segment Reporting

Schedule of revenue based on customer location

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
North America	$	31,569	$	21,556	$	87,896	$	60,762
Europe	28,519		20,746		83,452		59,927
Rest of the world	23,642		17,256		65,397		46,795
Total revenue	$	83,730	$	59,558	$	236,745	$	167,484

Goodwill and Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2014

Goodwill and Intangible Assets

Schedule of changes in goodwill

	Bigstock		WebDAM		Consolidated
Balance as of December 31, 2013	$	1,423	$	—	$	1,423
Goodwill related to acquisition	—		8,763		8,763
Balance as of September 30, 2014	$	1,423	$	8,763	$	10,186

Schedule of intangible assets

	As of September 30, 2014
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Weighted Average Life (Years)

Amortizing intangible assets:
Customer relationship	$	3,400	$	(821	)	$	2,579	6
Trade name	900		(198		)	702		9
Developed technology	600		(47		)	553		7
Contributor content	450		(151		)	299		15
Patents	193		(27		)	166		17
Domain name	97		(17		)	80		14
Total(1)	$	5,640	$	(1,261	)	$	4,379

	As of December 31, 2013
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Weighted Average Life (Years)
Amortizing intangible assets:
Customer relationship	$	600	$	(600	)	$	—	4
Trade name	400		(119		)	281		14
Contributor content	450		(127		)	323		15
Patents	193		(21		)	172		17
Domain name	86		(9		)	77		15
Total	$	1,729	$	(876	)	$	853

Property and Equipment (Tables)

9 Months Ended

Sep. 30, 2014

Property and Equipment

Summary of property and equipment

	September 30, 2014			December 31, 2013
Computer equipment and software	$	22,075		$	14,108
Furniture and fixtures	2,149			2,588
Leasehold improvements	13,932			10,669
Property and equipment	38,156			27,365
Less accumulated depreciation	(11,734		)	(7,109		)
Property and equipment, net	$	26,422		$	20,256

Accrued Expenses (Tables)

9 Months Ended

Sep. 30, 2014

Accrued Expenses

Schedule of accrued expenses

	September 30,		December 31,
	2014		2013
Royalty tax withholdings	$	6,085	$	5,305
Compensation	6,527		6,379
Non-income taxes	4,287		3,994
Professional fees	681		605
Marketing	212		475
Construction costs	98		4,501
Other expenses	4,504		2,379
Total accrued expenses	$	22,394	$	23,638

Equity-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2014

Equity-Based Compensation

Schedule of stock options awards activity

	Plan Options		Weighted Average Exercise Price
Options outstanding at December 31, 2013	1,861,761		$	26.09
Options granted	542,750		74.52
Options exercised	(338,549	)	19.72
Options cancelled or forfeited	(108,204	)	44.57
Options outstanding at September 30, 2014	1,957,758		$	39.62
Vested and exercisable at September 30, 2014	632,994		$	20.56

Schedule of weighted average assumptions used in the fair value calculation

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Expected term (in years)	—		6.3		6.3-10		6.3
Volatility	—	%	49	%	49	%	49	%
Risk-free interest rate	—	%	1.0-1.5	%	2.1-2.8	%	1.0-1.5	%
Dividend yield	—	%	0	%	0	%	0	%

Schedule of restricted stock units ("RSUs") activity

	Plan Options		Weighted Average Fair Value
Non-vested balance at December 31, 2013	10,000		$	47.17
Units granted	640,975		83.19
Units vested	(3,125	)	47.17
Units cancelled or forfeited	(18,850	)	81.36
Non-vested balance at September 30, 2014	629,000		$	82.85

Summary of non-cash equity-based compensation expense included in the Company's statement of operations

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Cost of revenue	$	336	$	126	$	953	$	291
Sales and marketing	819		358		2,689		865
Product development	1,805		406		4,529		990
General and administrative	3,374		962		7,557		2,276
Total	$	6,334	$	1,852	$	15,728	$	4,422

Summary of Operations and Significant Accounting Policies (Details)	Oct. 05, 2012 shares
Reorganization
Shares of common stock exchanged with preferred and common membership interests in connection with Reorganization	28,338,281

Summary of Operations and Significant Accounting Policies (Details 2) - USD ($) $ in Thousands		9 Months Ended
	Mar. 14, 2014	Sep. 30, 2014	Dec. 31, 2013
Acquisition of Virtual Moment, LLC
Initial cash payment		$ 10,056
Allocation of preliminary aggregate purchase price to assets acquired and liabilities assumed
Goodwill		10,186	$ 1,423
Virtual Moment, LLC
Acquisition of Virtual Moment, LLC
Initial cash payment	$ 10,056
Contingent consideration	2,360
Allocation of preliminary aggregate purchase price to assets acquired and liabilities assumed
Goodwill	8,763
Total assets acquired	836
Total liabilities assumed	(1,083)
Total	$ 12,416
Weighted average life of identifiable intangible assets	7 years
Professional fees		$ 400
Virtual Moment, LLC \| Trade name
Allocation of preliminary aggregate purchase price to assets acquired and liabilities assumed
Intangible assets:	$ 500
Virtual Moment, LLC \| Customer relationships
Allocation of preliminary aggregate purchase price to assets acquired and liabilities assumed
Intangible assets:	2,800
Virtual Moment, LLC \| Developed technology
Allocation of preliminary aggregate purchase price to assets acquired and liabilities assumed
Intangible assets:	$ 600

Summary of Operations and Significant Accounting Policies (Details 3) - USD ($) $ / shares in Units, $ in Thousands		9 Months Ended
	Sep. 25, 2013	Sep. 30, 2013
Follow-On Offering
Total shares in follow-on offering	5,290,000
Shares issued upon exercise of underwriters' option to purchase additional share	690,000
Common stock, issue price (in dollars per share)	$ 60.00
Common stock sold by the entity (in shares)	1,150,000
Common stock sold by shareholders (in shares)	4,140,000
Net proceeds from issuance of common stock		$ 65,895
Offering expenses	$ 945

Summary of Operations and Significant Accounting Policies (Details 4) - USD ($) $ in Thousands	Sep. 30, 2014	Dec. 31, 2013
Prepaid expenses and other current assets
Restricted Cash
Restricted cash related to security deposits for leased office locations that expires in the next twelve months	$ 188	$ 243
Other assets
Restricted Cash
Restricted cash related to security deposits for leased office location that expire in 2024	$ 1,829	$ 2,017

Summary of Operations and Significant Accounting Policies (Details 5) $ in Thousands	9 Months Ended
	Sep. 30, 2014 USD ($) item	Dec. 31, 2013 USD ($)
Revenue recognition
Number of subscription or usage based plans \| item	3
Chargeback and sales refund allowances \| $	$ 595	$ 425
Period of revenue recognition for undelivered elements	1 year
Estimated customer relationship period	3 years
Subscription plans \| Minimum
Revenue recognition
Plan term	30 days
Subscription plans \| Maximum
Revenue recognition
Plan term	1 year
On Demand plans
Revenue recognition
Plan term	1 year
Credit-pack plans
Revenue recognition
Plan term	1 year

Summary of Operations and Significant Accounting Policies (Details 6) - USD ($) $ in Thousands	Sep. 30, 2014	Dec. 31, 2013
Deferred Rent
Deferred rent current balance	$ 673	$ 2,406
Deferred rent non-current balance	7,278	2,377
Deferred rent balance	$ 7,951	$ 4,783

Summary of Operations and Significant Accounting Policies (Details 7)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
VAR Plan
Equity-Based Compensation
Expected dividend yield (as a percent)			0.00%
Stock Option
Equity-Based Compensation
Expected dividend yield (as a percent)	0.00%	0.00%	0.00%	0.00%
Stock Option \| 2012 Plan
Equity-Based Compensation
Vesting period			4 years
Restricted stock units \| 2012 Plan
Equity-Based Compensation
Vesting period			3 years
Employee stock purchase plan \| 2012 ESPP
Equity-Based Compensation
Vesting period			6 months

Summary of Operations and Significant Accounting Policies (Details 8) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Net Income Per Share
Number of shares to purchase, the effect of which is included in diluted net income available to common stockholders/members	2,136,637	1,589,748	2,161,146	1,717,767
Anti-dilutive shares excluded from diluted net income available to common stockholders/members	617,250	376,550	472,977	229,367
Reconciliation of assumed exercised shares used in calculating basic and diluted net income (loss) share available to common shareholders/members
Basic (in shares)	35,304,066	33,692,876	35,161,644	33,522,289
Stock options and employee stock purchase plan shares	552,282	536,741	627,845	444,556
Unvested restricted stock awards	75,106	51,039	93,713	76,728
Diluted (in shares)	35,931,454	34,280,656	35,883,202	34,043,573

Short-Term Investments and Fair Value Measurements (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2014	Dec. 31, 2013
Short term investments and fair value measurements
Amortized Cost	$ 49,722	$ 54,431
Unrealized Losses	(2)	(2)
Estimated Fair Market Value	49,720	54,429
Commercial Paper
Short term investments and fair value measurements
Amortized Cost	49,722	54,431
Unrealized Losses	(2)	(2)
Estimated Fair Market Value	$ 49,720	$ 54,429

Short-Term Investments and Fair Value Measurements (Details 2) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2014	Dec. 31, 2013
Contingent consideration
Change in fair value of contingent consideration		$ 110
Recurring Basis \| Aggregate Fair Value
Assets:
Total assets measured at fair value	$ 136,062	136,062	$ 135,977
Liabilities:
Total liabilities measured at fair value	2,470	2,470
Recurring Basis \| Aggregate Fair Value \| WebDAM \| Other Nonoperating Income (Expense)
Contingent consideration
Change in fair value of contingent consideration	70	110
Recurring Basis \| Aggregate Fair Value \| Acquisition Related Contingent Consideration
Liabilities:
Total liabilities measured at fair value	2,470	2,470
Recurring Basis \| Aggregate Fair Value \| Money Market Funds
Assets:
Total assets measured at fair value	86,342	86,342	81,548
Recurring Basis \| Aggregate Fair Value \| Commercial Paper
Assets:
Total assets measured at fair value	49,720	49,720	54,429
Recurring Basis \| Level 1 \| Aggregate Fair Value
Assets:
Total assets measured at fair value	86,342	86,342	81,548
Recurring Basis \| Level 1 \| Aggregate Fair Value \| Money Market Funds
Assets:
Total assets measured at fair value	86,342	86,342	81,548
Recurring Basis \| Level 2 \| Aggregate Fair Value
Assets:
Total assets measured at fair value	49,720	49,720	54,429
Recurring Basis \| Level 2 \| Aggregate Fair Value \| Commercial Paper
Assets:
Total assets measured at fair value	49,720	49,720	$ 54,429
Recurring Basis \| Level 3 \| Aggregate Fair Value
Liabilities:
Total liabilities measured at fair value	2,470	2,470
Recurring Basis \| Level 3 \| Aggregate Fair Value \| Acquisition Related Contingent Consideration
Liabilities:
Total liabilities measured at fair value	2,470	2,470
Recurring Basis \| Level 3 \| Aggregate Fair Value \| Acquisition Related Contingent Consideration \| WebDAM \| Other Noncurrent Liabilities
Contingent consideration
Fair value of contingent consideration	$ 2,470	$ 2,470

Information About Revenue By Geographic Areas (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Geographic revenue based on customer location
Revenue	$ 83,730	$ 59,558	$ 236,745	$ 167,484
North America
Geographic revenue based on customer location
Revenue	$ 31,569	$ 21,556	$ 87,896	$ 60,762
United States \| Total revenue \| Geographic concentration
Geographic revenue based on customer location
Concentration risk percentage	32.00%	32.00%	32.00%	32.00%
Europe
Geographic revenue based on customer location
Revenue	$ 28,519	$ 20,746	$ 83,452	$ 59,927
Rest of the world
Geographic revenue based on customer location
Revenue	$ 23,642	$ 17,256	$ 65,397	$ 46,795

Goodwill and Intangible Assets (Details) $ in Thousands	9 Months Ended
Goodwill and Intangible Assets (Details) $ in Thousands	Sep. 30, 2014 USD ($)
Changes in goodwill
Balance at the beginning of the period	$ 1,423
Goodwill related to acquisition	8,763
Balance at the end of the period	10,186
Bigstockphoto Inc
Changes in goodwill
Balance at the beginning of the period	1,423
Balance at the end of the period	1,423
WebDAM
Changes in goodwill
Goodwill related to acquisition	8,763
Balance at the end of the period	$ 8,763

Goodwill and Intangible Assets (Details 2) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Amortizing intangible assets:
Gross Carrying Amount	$ 5,640		$ 5,640		$ 1,729
Accumulated Amortization	(1,261)		(1,261)		(876)
Net Carrying Amount	4,379		4,379		853
Amortization expense	167	$ 57	384	$ 169
Estimated amortization expense
Remaining three months of 2014	166		166
2015	665		665
2016	665		665
2017	665		665
2018	634		634
Thereafter	1,584		1,584
Customer relationships
Amortizing intangible assets:
Gross Carrying Amount	3,400		3,400		600
Accumulated Amortization	(821)		(821)		$ (600)
Net Carrying Amount	$ 2,579		2,579
Weighted Average Life	6 years				4 years
Trade name
Amortizing intangible assets:
Gross Carrying Amount	$ 900		900		$ 400
Accumulated Amortization	(198)		(198)		(119)
Net Carrying Amount	$ 702		702		$ 281
Weighted Average Life	9 years				14 years
Developed technology
Amortizing intangible assets:
Gross Carrying Amount	$ 600		600
Accumulated Amortization	(47)		(47)
Net Carrying Amount	$ 553		553
Weighted Average Life	7 years
Contributor content
Amortizing intangible assets:
Gross Carrying Amount	$ 450		450		$ 450
Accumulated Amortization	(151)		(151)		(127)
Net Carrying Amount	$ 299		299		$ 323
Weighted Average Life	15 years				15 years
Patents
Amortizing intangible assets:
Gross Carrying Amount	$ 193		193		$ 193
Accumulated Amortization	(27)		(27)		(21)
Net Carrying Amount	$ 166		166		$ 172
Weighted Average Life	17 years				17 years
Domain name
Amortizing intangible assets:
Gross Carrying Amount	$ 97		97		$ 86
Accumulated Amortization	(17)		(17)		(9)
Net Carrying Amount	$ 80		$ 80		$ 77
Weighted Average Life	14 years				15 years
Digital Content
Amortizing intangible assets:
Acquisition of intangible assets	$ 331

Property and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Property and Equipment (Details) - USD ($) $ in Thousands	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Property and Equipment
Property and equipment	$ 38,156		$ 38,156		$ 27,365
Less accumulated depreciation	(11,734)		(11,734)		(7,109)
Property and equipment, net	26,422		26,422		20,256
Depreciation	1,958	$ 956	5,373	$ 2,569
Loss on disposal	0	$ 0	367	$ 0
Computer equipment and software
Property and Equipment
Property and equipment	22,075		22,075		14,108
Furniture and fixtures
Property and Equipment
Property and equipment	2,149		2,149		2,588
Leasehold improvements
Property and Equipment
Property and equipment	$ 13,932		$ 13,932		$ 10,669

Accrued Expenses (Details) - USD ($) $ in Thousands	Sep. 30, 2014	Dec. 31, 2013
Accrued Expenses
Royalty tax withholdings	$ 6,085	$ 5,305
Compensation	6,527	6,379
Non-income taxes	4,287	3,994
Professional fees	681	605
Marketing	212	475
Construction costs	98	4,501
Other expenses	4,504	2,379
Total accrued expenses	$ 22,394	$ 23,638

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Income Taxes
Effective tax rate (as a percent)	40.30%	37.70%	42.90%	39.70%
State and local taxes, net of federal benefit (as a percent)	0.10%		2.30%
Effective tax rate before discrete tax expense relating to a change in state apportionment (as a percent)	40.20%		40.60%
Gross additions for tax positions for prior years		$ 2		$ 986
Unrecognized tax benefits, interest and penalties accrued	$ 25	$ 2	$ 72	$ 13

Term Loan Facility (Details) - USD ($) $ in Thousands			3 Months Ended	9 Months Ended
Term Loan Facility (Details) - USD ($) $ in Thousands	Mar. 25, 2013	Dec. 24, 2012	Mar. 31, 2013	Sep. 30, 2013	Sep. 21, 2012
Term Loan Facility
Payment of term loan facility				$ 6,000
Amortization of financing costs				$ 125
Term Loan
Term Loan Facility
Amount borrowed					$ 12,000
Payment of term loan facility	$ 6,000	$ 6,000
Amortization of financing costs			$ 125

Commitments and Contingencies (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Commitments and Contingencies.
Rental expense inclusive of operating leases	$ 999	$ 801	$ 3,167	$ 1,830
Letter of credit as a security deposit for the leased facilities	1,829		1,829
Letter of credit collateralized as restricted cash	1,829		$ 1,829		$ 1,829
Term of lease			11 years
Total minimum lease payments	$ 38,200		$ 38,200

Commitments and Contingencies (Details 2) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Sep. 30, 2014	Dec. 31, 2013
Commitments and Contingencies.
Purchase commitments	$ 0
Commitment to purchase data server equipment		$ 2,500
Commitment related to completion of its new office facility		3,700
Unconditional Purchase Obligations
Unconditional purchase obligations for contracts related to infrastructure services and contractual commitments for marketing services	8,453	5,864
Maturity of unconditional purchase obligations
Remainder of 2014	1,790
2014		3,454
2015	5,021	1,845
2016	1,578	565
2017	64
Indemnifications
Standard maximum aggregate obligation and liability to any one customer for all claims	10
Indemnification obligation	$ 0	$ 0

Employee Benefit Plans (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Employee Benefit Plans (Details) - USD ($) $ in Thousands	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Employee Benefit Plans
Annual discretionary employer matching contributions (as a percent)			3.00%
Employer matching contributions	$ 264	$ 186	$ 710	$ 503

Equity-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended		9 Months Ended
	Apr. 24, 2014	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Additional disclosures
Non-cash stock-based compensation expense, net of estimated forfeitures		$ 6,334	$ 1,852	$ 15,728	$ 4,422
Stock Option
Plan Options
Options/Units outstanding at the beginning of the period (in shares)				1,861,761
Options/Units granted (in shares)		0		542,750
Options/Units exercised (in shares)				(338,549)
Options/Units cancelled or forfeited (in shares)				(108,204)
Options outstanding at the end of the period (in shares)		1,957,758		1,957,758
Vested and exercisable at the end of the period (in shares)		632,994		632,994
Weighted Average Exercise Price
Options outstanding at the beginning of the period (in dollars per unit)				$ 26.09
Options granted (in dollars per share)				74.52
Options exercised (in dollars per share)				19.72
Options cancelled or forfeited (in dollars per share)				44.57
Options outstanding at the end of the period (in dollars per unit)		$ 39.62		39.62
Vested and exercisable at the end of the period (in dollars per share)		$ 20.56		$ 20.56
Intrinsic values
Intrinsic value of total stock options and notional units outstanding		$ 62,200		$ 62,200		$ 107,100
Intrinsic value of total stock options vested and exercisable		$ 32,200		$ 32,200		$ 38,900
Weighted average assumptions used in fair value calculation
Expected term			6 years 3 months 18 days		6 years 3 months 18 days
Volatility (as a percent)			49.00%	49.00%	49.00%
Dividend yield		0.00%	0.00%	0.00%	0.00%
Additional disclosures
Non-cash stock-based compensation expense, net of estimated forfeitures		$ 2,197	$ 1,425	$ 5,925	$ 3,169
Stock Option \| Chief Executive Officer
Plan Options
Options/Units granted (in shares)	500,000
Weighted Average Exercise Price
Options granted (in dollars per share)	$ 80.94
Consideration period for awards granted	90 days
Closing price of the common stock equals or exceeds for 90 consecutive calendar days	$ 161.88
Service period for amortization of awards	6 years
Total fair value of the grant	$ 21,630
Reversal of charge upon the completion of service period	$ 0
Stock Option \| Minimum
Weighted average assumptions used in fair value calculation
Expected term				6 years 3 months 18 days
Risk-free interest rate (as a percent)			1.00%	2.10%	1.00%
Stock Option \| Maximum
Weighted average assumptions used in fair value calculation
Expected term				10 years
Risk-free interest rate (as a percent)			1.50%	2.80%	1.50%
Stock Option \| 2012 Plan
Additional disclosures
Total unrecognized compensation charge related non-vested options		$ 31,700		$ 31,700

Equity-Based Compensation (Details 2) - USD ($) $ / shares in Units, $ in Thousands			3 Months Ended		9 Months Ended
	Apr. 24, 2014	Mar. 14, 2014	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Weighted Average Fair Value
Recognized compensation charge			$ 6,334	$ 1,852	$ 15,728	$ 4,422
Restricted Stock Units and Restricted Stock Awards \| 2012 Plan
Weighted Average Fair Value
Unrecognized compensation charge			47,300		47,300
Restricted stock
Weighted Average Fair Value
Recognized compensation charge			$ 259	259	$ 777
Restricted stock units
Plan Options
Non-vested balance at the beginning of the period (in shares)					10,000
Units granted (in shares)					640,975
Units vested (in shares)					(3,125)
Units cancelled or forfeited (in shares)					(18,850)
Non-vested balance at the end of the period (in shares)			629,000		629,000
Weighted Average Fair Value
Non-vested balance at the beginning of the period (in dollars per share)					$ 47.17
Units granted (in dollars per share)					83.19
Units vested (in dollars per share)					47.17
Units cancelled or forfeited (in dollars per share)					81.36
Non-vested balance at the end of the period (in dollars per share)			$ 82.85		$ 82.85
Recognized compensation charge			$ 3,234	30	$ 7,518	48
Restricted stock units \| Virtual Moment, LLC
Weighted Average Fair Value
Recognized compensation charge			419	0	$ 910	0
Vesting period of granted award		2 years
Restricted stock units \| 2012 Plan
Weighted Average Fair Value
Vesting period of granted award					3 years
Employee stock purchase plan \| 2012 ESPP
Weighted Average Fair Value
Non-cash stock-based compensation expense net of estimated forfeitures recognized in connection with one-time acceleration charge			$ 225	$ 138	$ 598	$ 428
Vesting period of granted award					6 months
Number of shares issued under ESPP			112,030
Chief Executive Officer \| Restricted stock units
Plan Options
Units granted (in shares)	100,000
Weighted Average Fair Value
Consideration period for awards granted	90 days
Closing price of the common stock equals or exceeds for 90 consecutive calendar days	$ 161.88
Service period for amortization of awards	6 years
Total fair value of the grant	$ 5,870
Reversal of charge upon the completion of service period	$ 0

Equity-Based Compensation (Details 3) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Non-cash equity-based compensation expense related to the 2012 Plan and 2012 ESPP
Total	$ 6,334	$ 1,852	$ 15,728	$ 4,422
Cost of revenue
Non-cash equity-based compensation expense related to the 2012 Plan and 2012 ESPP
Total	336	126	953	291
Sales and marketing
Non-cash equity-based compensation expense related to the 2012 Plan and 2012 ESPP
Total	819	358	2,689	865
Product development
Non-cash equity-based compensation expense related to the 2012 Plan and 2012 ESPP
Total	1,805	406	4,529	990
General and administrative
Non-cash equity-based compensation expense related to the 2012 Plan and 2012 ESPP
Total	$ 3,374	$ 962	$ 7,557	$ 2,276