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Table of Contents
45
Provision for Income Taxes
Provision for income taxes consists primarily of federal and state income taxes in the United States and income taxes in
foreign jurisdictions in which we conduct business. Due to the uncertainty as to the realization of the benefits of our domestic
deferred tax assets, we have recorded a full valuation allowance against such assets. We intend to continue to maintain a full
valuation allowance on our domestic deferred tax assets until there is sufficient evidence to support the reversal of all or some
portion of these allowances.
Results of Operations
The following table summarizes our historical consolidated statements of operations (in thousands, except percentage of
revenues):
Year Ended December 31,
2015 2014 2013
Net revenues:
Rental. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 120,365 40 % $ 181,570 60 % $ 189,004 74 %
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131,996 44 87,460 29 51,958 20
Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49,012 16 35,804 11 14,613 6
Total net revenues . . . . . . . . . . . . . . . . . . . . . . . . . . 301,373 100 304,834 100 255,575 100
Cost of revenues(1):
Rental. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98,162 33 145,760 48 140,033 55
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43,794 15 31,158 10 18,522 7
Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47,893 16 34,067 11 16,505 6
Total cost of revenues. . . . . . . . . . . . . . . . . . . . . . . . 189,849 63 210,985 69 175,060 68
Gross profit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111,524 37 93,849 31 80,515 32
Operating expenses(1):
Technology and development . . . . . . . . . . . . . . . . . 59,391 20 49,386 16 41,944 16
Sales and marketing. . . . . . . . . . . . . . . . . . . . . . . . . 64,082 21 72,315 24 50,302 20
General and administrative . . . . . . . . . . . . . . . . . . . 45,209 15 41,837 14 40,486 16
Restructuring charges . . . . . . . . . . . . . . . . . . . . . . . 4,868 2 — — — —
Gain on liquidation of textbooks. . . . . . . . . . . . . . . (4,326) (1) (4,555) (2) (1,186) —
Total operating expenses . . . . . . . . . . . . . . . . . 169,224 56 158,983 52 131,546 52
Loss from operations . . . . . . . . . . . . . . . . . . . . . . . . . . (57,700) (19) (65,134) (21) (51,031) (20)
Total interest expense and other income (expense),
net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (31) — 562 — (4,177) (2)
Loss before provision for income taxes. . . . . . . . . . (57,731) (19) (64,572) (21) (55,208) (22)
Provision for income taxes 1,479 1 186 — 642 —
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(59,210) (20)% $ (64,758) (21)% $ (55,850) (22)%
(1) Includes share-based compensation expense as follows:
Cost of revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 262 $ 617 $ 1,185
Technology and development. . . . . . . . . . . . . . . . . . . . . . 11,992 10,451 9,414
Sales and marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,901 11,300 7,107
General and administrative. . . . . . . . . . . . . . . . . . . . . . . . 18,620 14,520 19,252
Total share-based compensation expense . . . . . . . . . . $ 38,775 $ 36,888 $ 36,958