

Class						Outstanding as of ~~October 30, 2017~~August 2, 2021
Common Stock, $0.0003 par value per share						~~29,216,913~~34,714,806

VOCERA COMMUNICATIONS, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED ~~SEPTEMBER~~JUNE 30, ~~2017~~2021

INDEX

PART I: FINANCIAL INFORMATION


					Page No.
Item 1.			Financial Statements (Unaudited)		3

				~~Page No.~~
~~Item 1.~~	~~Financial Statements (Unaudited)~~			3

	Condensed Consolidated Balance Sheets	3

			Condensed Consolidated Statements of Operations		4

			Condensed Consolidated Statements of Comprehensive Loss		5

			Condensed Consolidated Statements of Stockholders’ Equity		6

			Condensed Consolidated Statements of Cash Flows		67

			Notes to Unaudited Condensed Consolidated Financial Statements		79

Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations		1827

Item 3.			Quantitative and Qualitative Disclosures About Market Risk		2434

Item 4.			Controls and Procedures		2535

			PART II: OTHER INFORMATION
Item 1.			Legal Proceedings		2636

Item 1A.			Risk Factors		2636

Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds		4162

Item 3.			Defaults Upon Senior Securities		4162

Item 4.			Mine Safety Disclosures		4162

Item 5.			Other Information		4162

Item 6.			Exhibits		4364

Signatures

Table of Contents

PART I: FINANCIAL INFORMATION


~~Item 1.~~	~~Financial Statements (Unaudited)~~

Item 1.Financial Statements (Unaudited)

Vocera Communications, Inc.

Condensed Consolidated Balance Sheets

(In Thousands, Except Share and Par Amounts)

(Unaudited)


	June 30, 2021		December 31, 2020

Assets
Current assets
Cash and cash equivalents	$	40,480	$	34,976
Short-term investments	251,428		195,227
Accounts receivable, net of allowance	36,596		45,653
Other receivables	6,473		6,170
Inventories	8,602		10,159
Prepaid expenses and other current assets	7,208		6,317
Total current assets	350,787		298,502
Property and equipment, net	6,848		8,103

Intangible assets, net	22,906		12,788
Goodwill	94,846		69,168
Deferred commissions	14,854		12,293
Other long-term assets	7,876		5,967
Total assets	$	498,117	$	406,821
Liabilities and stockholders' equity
Current liabilities
Accounts payable	$	3,219	$	3,127
Accrued payroll and other current liabilities	24,757		23,195
Deferred revenue, current	52,065		54,785
Total current liabilities	80,041		81,107
Deferred revenue, long-term	10,490		9,948
Convertible senior notes, net	258,285		124,376

Other long-term liabilities	7,396		10,374
Total liabilities	356,212		225,805

Stockholders' equity
Preferred stock, $0.0003 par value - 5,000,000 shares authorized as of June 30, 2021 and December 31, 2020; 0 shares issued and outstanding	0		0
Common stock, $0.0003 par value - 100,000,000 shares authorized as of June 30, 2021 and December 31, 2020; 34,692,364 and 32,692,561 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively	10		10
Additional paid-in capital	296,467		340,515
Accumulated other comprehensive income	107		473
Accumulated deficit	(154,679)		(159,982)
Total stockholders’ equity	141,905		181,016
Total liabilities and stockholders’ equity	$	498,117	$	406,821

September 30,
2017 December 31,
2016
Assets
Current assets
Cash and cash equivalents $ 14,840
$ 35,033
Short-term investments 52,652
39,033
Accounts receivable, net of allowance 35,453
24,142
Other receivables 1,115
1,211
Inventories 3,115
4,556
Prepaid expenses and other current assets 4,758
3,364
Total current assets 111,933
107,339
Property and equipment, net 6,073
5,894
Intangible assets, net 14,658
18,200
Goodwill 49,246
49,246
Other long-term assets 1,537
1,394
Total assets $ 183,447
$ 182,073
Liabilities and stockholders' equity
Current liabilities
Accounts payable $ 2,790
$ 3,231
Accrued payroll and other current liabilities 16,050
15,896
Deferred revenue, current 41,559
43,845
Total current liabilities 60,399
62,972
Deferred revenue, long-term 17,577
11,155
Other long-term liabilities 5,084
4,505
Total liabilities 83,060
78,632
Commitments and contingencies (Note 7)

Stockholders' equity
Preferred stock, $0.0003 par value - 5,000,000 shares authorized as of September 30, 2017 and December 31, 2016; zero shares issued and outstanding —
—
Common stock, $0.0003 par value - 100,000,000 shares authorized as of September 30, 2017 and December 31, 2016; 29,208,322 and 27,568,103 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively 9
8
Additional paid-in capital 244,827
230,605
Accumulated other comprehensive loss (93 ) (69 )
Accumulated deficit (144,356 ) (127,103 )
Total stockholders’ equity 100,387
103,441
Total liabilities and stockholders’ equity $ 183,447
$ 182,073

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

Vocera Communications, Inc.

Condensed Consolidated Statements of Operations

(In Thousands, Except Per Share Amounts)

(Unaudited)


	Three months ended June 30,				Six months ended June 30,
	2021		2020		2021		2020

Revenue
Product	$	28,344	$	23,951	$	50,952	$	41,801
Service	27,836		23,396		53,896		46,219
Total revenue	56,180		47,347		104,848		88,020
Cost of revenue
Product	7,541		7,710		14,497		14,074
Service	12,383		9,694		23,210		20,217
Total cost of revenue	19,924		17,404		37,707		34,291
Gross profit	36,256		29,943		67,141		53,729
Operating expenses
Research and development	12,006		9,349		22,356		18,381
Sales and marketing	18,425		15,998		36,095		32,961
General and administrative	9,064		6,923		16,339		13,314
Total operating expenses	39,495		32,270		74,790		64,656
Loss from operations	(3,239)		(2,327)		(7,649)		(10,927)
Interest income	295		913		641		2,033
Interest expense	(794)		(2,308)		(1,571)		(4,582)
Other income (expense), net	1,544		210		(1,002)		(381)
Loss before income taxes	(2,194)		(3,512)		(9,581)		(13,857)
(Provision for) benefit from income taxes	(88)		44		(334)		(81)
Net loss	$	(2,282)	$	(3,468)	$	(9,915)	$	(13,938)




Loss per share

Basic	$	(0.07)	$	(0.11)	$	(0.29)	$	(0.44)
Diluted	$	(0.07)	$	(0.11)	$	(0.29)	$	(0.44)
Weighted average shares used to compute net loss per share

Basic	34,485		32,152		33,790		31,945
Diluted	34,485		32,152		33,790		31,945

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Revenue
Product $ 23,249
$ 19,303
$ 63,940
$ 50,807
Service 19,051
14,452
53,105
40,877
Total revenue 42,300
33,755
117,045
91,684
Cost of revenue
Product 7,208
6,042
20,424
16,435
Service 9,241
6,253
28,358
18,037
Total cost of revenue 16,449
12,295
48,782
34,472
Gross profit 25,851
21,460
68,263
57,212
Operating expenses
Research and development 6,644
4,286
20,944
12,686
Sales and marketing 15,831
13,305
45,789
38,078
General and administrative 6,088
5,138
17,767
14,099
Total operating expenses 28,563
22,729
84,500
64,863
Loss from operations (2,712 ) (1,269 ) (16,237 ) (7,651 )
Interest income 177
196
410
573
Other income (expense), net (41 ) (75 ) 1
(226 )
Loss before income taxes (2,576 ) (1,148 ) (15,826 ) (7,304 )
Provision for income taxes (309 ) (49 ) (1,050 ) (183 )
Net loss $ (2,885 ) $ (1,197 ) $ (16,876 ) $ (7,487 )

Net loss per share
Basic and diluted $ (0.10 ) $ (0.04 ) $ (0.59 ) $ (0.28 )
Weighted average shares used to compute net loss per share
Basic and diluted 29,130
27,024
28,439
26,675

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

Vocera Communications, Inc.

Condensed Consolidated Statements of Comprehensive Loss

(In Thousands)

(Unaudited)


	Three months ended June 30,				Six months ended June 30,
	2021		2020		2021		2020
Net loss	$	(2,282)	$	(3,468)	$	(9,915)	$	(13,938)
Other comprehensive loss, net:
Change in unrealized gain (loss) on investments, net of tax	(132)		1,806		(366)		850
Comprehensive loss	$	(2,414)	$	(1,662)	$	(10,281)	$	(13,088)

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Net loss $ (2,885 ) $ (1,197 ) $ (16,876 ) $ (7,487 )
Other comprehensive loss, net:
Change in unrealized gain (loss) on investments, net of tax (15 ) (106 ) (24 ) 104
Comprehensive loss $ (2,900 ) $ (1,303 ) $ (16,900 ) $ (7,383 )

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

Vocera Communications, Inc.

Condensed Consolidated Statements of Stockholders' Equity

(In Thousands, Except Share Amounts)

(Unaudited)



	Common stock			Additional paid-in capital		Accum. other comprehensive income (loss)		Accumulated deficit		Total stockholders’ equity
	Shares	Amount
Balance at January 1, 2020	31,660,709	$	9	$	313,963	$	179	$	(150,326)	$	163,825
Exercise of stock options	77,909	—		731		—		—		731
RSUs released net of shares withheld for tax settlement	64,161	—		(864)		—		—		(864)

Employee stock-based compensation expense	—	—		5,841		—		—		5,841
Net loss	—	—		—		—		(10,470)		(10,470)
Other comprehensive loss	—	—		—		(956)		—		(956)
Balance at March 31, 2020	31,802,779	9		319,671		(777)		(160,796)		158,107


Exercise of stock options	46,508	—		594		—				594
RSUs released net of shares withheld for tax settlement	372,639	—		(4,716)		—				(4,716)
Common stock issued under employee stock purchase plan	126,046	—		1,966		—				1,966
Employee stock-based compensation expense	—	—		6,366		—				6,366
Net loss	—	—		—		—		(3,468)		(3,468)
Other comprehensive gain	—	—		—		1,806				1,806

Balance at June 30, 2020	32,347,972	$	9	$	323,881	$	1,029	$	(164,264)	$	160,655





Balance at January 1, 2021	32,692,561	$	10	$	340,515	$	473	$	(159,982)	$	181,016
Cumulative effect of the adoption of ASU 2020-06	—	—		(32,214)		—		15,218		(16,996)
Exercise of stock options	69,360	—		1,181		—		—		1,181
RSUs released net of shares withheld for tax settlement	97,766	—		(2,185)		—		—		(2,185)
Induced conversion of convertible senior notes	1,277,731	—		477		—		—		477
Issuance of capped calls	—	—		(15,460)		—		—		(15,460)
Employee stock-based compensation expense	—	—		6,862		—		—		6,862
Net loss	—	—		—		—		(7,633)		(7,633)
Other comprehensive loss	—	—		—		(234)		—		(234)
Balance at March 31, 2021	34,137,418	$	10	$	299,176	$	239	$	(152,397)	$	147,028
Exercise of stock options	29,807	—		425		—		—		425
RSUs released net of shares withheld for tax settlement	447,601	—		(10,509)		—		—		(10,509)
Common stock issued under employee stock purchase plan	77,538	—		2,146		—		—		2,146
Issuance of capped calls	—	—		(1,894)		—		—		(1,894)
Employee stock-based compensation expense	—	—		7,123		—		—		7,123
Net loss	—	—		—		—		(2,282)		(2,282)
Other comprehensive loss	—	—		—		(132)		—		(132)
Balance at June 30, 2021	34,692,364	$	10	$	296,467	$	107	$	(154,679)	$	141,905

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

Vocera Communications, Inc.

Condensed Consolidated Statements of Cash Flows

(In Thousands)

(Unaudited)


	Six months ended June 30,
	2021		2020
Cash flows from operating activities
Net loss	$	(9,915)	$	(13,938)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	4,587		2,801
Stock-based compensation expense	13,985		12,207
Amortization of debt discount and issuance costs	617		3,504

Non-cash lease expense	1,203		1,183
Non-cash impact of induced premium	2,059		0
Other	1,588		142
Changes in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable	9,963		14,293
Other receivables	(89)		(275)
Inventories	1,436		(3,866)
Prepaid expenses and other assets	(1,060)		(607)
Deferred commissions	(2,561)		(640)
Accounts payable	(535)		(1,035)
Accrued payroll and other liabilities	(5,298)		1,176
Change in lease-related performance obligations	(580)		(623)
Deferred revenue	(3,952)		(7,461)

Net cash provided by operating activities	11,448		6,861
Cash flows from investing activities
Payment for property and equipment	(853)		(1,427)
Business acquisitions, net of cash and restricted cash acquired	(35,397)		0
Purchase of short-term investments	(127,240)		(86,300)
Maturities of short-term investments	69,430		72,137
Sales of short-term investments	0		14,393

Net cash used in investing activities	(94,060)		(1,197)
Cash flows from financing activities
Cash from lease-related performance obligations	198		306
Repayment of borrowings	(102,946)		0
Proceeds from issuance of convertible senior notes, net of issuance costs	217,758		0
Payment for purchase of capped calls	(17,354)		0
Proceeds from issuance of common stock from the employee stock purchase plan	2,146		1,966
Proceeds from exercise of stock options	1,606		1,325
Tax withholdings paid on behalf of employees for net share settlement	(12,694)		(5,579)


Net cash provided by (used in) financing activities	88,714		(1,982)
Net increase in cash, cash equivalents and restricted cash	6,102		3,682
Cash, cash equivalents and restricted cash at beginning of period	34,976		25,704
Cash, cash equivalents and restricted cash at end of period	$	41,078	$	29,386

Table of Contents

Nine months ended September 30,
2017 2016
Cash flows from operating activities
Net loss $ (16,876 ) $ (7,487 )
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization 5,755
2,271
Inventory provision 179
125
Change in lease-related performance obligations (598 ) (631 )
Stock-based compensation expense 13,204
8,591
Other 28
(57 )
Changes in operating assets and liabilities:
Accounts receivable (11,310 ) 4,833
Other receivables 96
140
Inventories 1,262
(1,496 )
Prepaid expenses and other assets (1,539 ) (690 )
Accounts payable (436 ) (414 )
Accrued payroll and other liabilities 925
239
Deferred revenue 4,137
2,225
Net cash provided by (used in) operating activities (5,173 ) 7,649
Cash flows from investing activities
Purchase of property and equipment (2,420 ) (3,888 )
Purchase of short-term investments (59,608 ) (82,941 )
Maturities of short-term investments 45,963
93,925
Sales of short-term investments —
4,876
Net cash provided by (used in) investing activities (16,065 ) 11,972
Cash flows from financing activities
Cash from lease-related performance obligations 347
1,457
Proceeds from issuance of common stock from the employee stock purchase plan 1,246
786
Proceeds from exercise of stock options 7,145
1,117
Tax withholdings paid on behalf of employees for net share settlement (7,693 ) (2,453 )
Net cash provided by financing activities 1,045
907
Net increase (decrease) in cash and cash equivalents (20,193 ) 20,528
Cash and cash equivalents at beginning of period 35,033
20,572
Cash and cash equivalents at end of period $ 14,840
$ 41,100

Supplemental disclosure of non-cash investing and financing activities:
Property and equipment in accounts payable and accrued liabilities $ 40
$ 390


	Six months ended June 30,
(in thousands)	2021		2020
Supplemental disclosure of non-cash investing and financing activities:
Costs related to the convertible senior notes in accounts payable and accrued liabilities	$	98	$	0
Operating lease right-of-use assets exchanged for lease obligations, net of acquired leases	$	731	122
Convertible senior notes converted to equity	$	477	$	0
Property and equipment in accounts payable and accrued liabilities	$	259	$	222

Reconciliation of cash, cash equivalents and restricted cash as shown in the consolidated statement of cash flows
Cash and cash equivalents	$	40,480	$	29,386
Restricted cash included in other long-term assets	598		0
Total cash, cash equivalents and restricted cash	$	41,078	$	29,386

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

Notes to Unaudited Condensed Consolidated Financial Statements


1.	~~The Company and Summary of Significant Accounting Policies~~

1. The Company and Summary of Significant Accounting Policies

Organization and Business

Vocera Communications, Inc. and its subsidiaries ~~(the “Company”~~(collectively, the "Company" or ~~“Vocera”~~"Vocera") is a provider of secure, integrated, intelligent communication and clinical workflow solutions, focused on empowering mobile workers in healthcare, hospitality, retail, energy, education and other mission-critical mobile work environments, in the United States and internationally. The significant majority of the ~~Company’s~~Company's business is generated from sales of its solutions in the healthcare market to help its customers improve quality of care, safety, patient and staff experience and increase operational efficiency.

The Vocera ~~Communication System, which includes~~communication and collaboration solution includes: an intelligent enterprise software ~~platform,~~platform; a lightweight, wearable, voice-controlled communication ~~badge~~Badge and Smartbadge; and smartphone ~~applications,~~applications. The solution enables users to simply connect instantly with other staff ~~simply~~ by ~~saying the~~ name, function or group name of the desired recipient. It also ~~securely~~ delivers HIPAA-compliant secure text messages, alerts and ~~alerts~~alarms directly to a range of smartphones or the Smartbadge both inside and ~~from smartphones,~~outside the hospital, replacing legacy ~~pagers.~~ pagers and in-building wireless phones.

The ~~Company’s new Engage software is an event-driven, communication~~Company was incorporated in Delaware on February 16, 2000. The Company formed wholly-owned subsidiaries Vocera Communications UK Ltd and ~~workflow collaboration solution for the hospital environment. It features an advanced clinical rules engine~~Vocera Communications Australia Pty Ltd. in 2005, Vocera Canada, Ltd. in 2010, Vocera Communications India Private Ltd. in 2013, Vocera Communications Middle East FZ LLC in 2014, acquired Extension, LLC in 2016, EASE Applications, LLC ("EASE") in 2020, and interoperates with data from multiple clinical systems. This enables the prioritization of notifications, including patient context, and sends messages to the right care team members on their mobile devices. The Company’s software applications help improve care coordination, patient safety and patient satisfaction.PatientSafe Solutions, Inc. (“PatientSafe”) in 2021.

Basis of Presentation

The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) ~~and~~, pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X of the U.S. Securities and Exchange Commission, and include the accounts of Vocera and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated. Certain information and disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the annual audited consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2020. The year-end condensed consolidated balance sheet data was derived from the Company’s audited financial statements but does not include all disclosures required by GAAP.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s interim consolidated financial information. The results for the quarter presented are not necessarily indicative of the results to be expected for the year ending December 31, ~~2017~~2021 or for any other interim period or any other future year.

~~The~~Except for the change in certain accounting policies ~~followed in~~upon adoption of the ~~preparation of these financial statements are consistent in all~~accounting standards described below, there have been no material ~~respects with those~~changes to the Company’s significant accounting policies compared to the accounting policies presented in Note 1 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2020.

Use of Estimates

The preparation of ~~the accompanying unaudited condensed consolidated~~ financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting periods. The estimates include, but are not limited to, revenue recognition, warranty reserves, accounts receivable reserves, inventory reserves, bonuses, goodwill and intangible assets, stock-based compensation expense, provisions for income taxes, contingent consideration and contingencies. Actual results could differ from these estimates, and such differences could be material to the Company’s financial position and results of operations.

~~Revenue Recognition~~

~~The Company derives revenue from the sales of communication badges, perpetual software licenses for software that is essential~~Certain reclassifications have been made to the functionality of the communication badges, smartphones, software maintenance, extended product warranty and professional services. The Company also derives revenue from the sale of licenses for software that is not essentialprior year financial statements to conform to the functionality of the communication badges, which may include Clinical Integration and Vocera smartphone applications as well as certain subscription-based revenues including Vocera Care Experience. The Company’s revenue recognition policy has not changed from that described in its Annual Report on Form 10-K for thecurrent year ~~ended December 31, 2016.~~

~~Transfer of sales-type leases to third-parties~~

Proceeds from transfers of sales-type leases to third-party financial companies are allocated between the net investment in sales-type leases and the executory cost component for remaining service obligations based on relative present value. The difference between the amount of proceeds allocated to the net investment in lease and the carrying value of the net investment in lease is included in product revenue. Proceeds allocated to the executory cost component are accounted for as financing liabilities.

For the nine months ended September 30, 2017 and 2016, the Company transferred $0.6 million and $3.3 million, respectively, of lease receivables in non-recourse sales to third-party financial companies, with immaterial net losses. For the nine months ended September 30, 2017 and 2016, the Company recorded $0.5 million and $1.5 million, respectively, of financing liabilities for future performance of executory service obligations. For lease receivables retained as of September 30, 2017 and December 31, 2016, the Company recorded $1.5 million and $1.9 million of net investment in sales-type leases, respectively, equivalent to the minimum lease payments less the unearned interest portion.

~~Recently Adopted Accounting Pronouncement~~

In March 2016, the Financial Accounting Standards Board (FASB) issued new guidance related to accounting for stock-based payment award transactions. The guidance is designed to simplify several aspects of accounting for share-based payment award transactions, including the income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows and forfeiture rate calculations. The guidance eliminates the requirement to delay the recognition of excess tax benefits until they reduce current taxes payable. Under this standard, previously unrecognized excess tax benefits shall be recognized on a modified retrospective basis. However, as of January 1, 2017, the previously unrecognized excess tax benefits of $10.4 millionpresentation. These reclassifications had no impact on the ~~Company’s~~previously reported net loss or accumulated deficit balance as the related U.S. deferred tax assets were fully offset by a valuation allowance. The guidance also requires excess tax benefits and deficiencies to be recognized prospectively in the provision for income taxes rather than additional paid-in capital. The Company therefore determined that adoption of the new guidance had no material impact on the condensed consolidated statement of operations and the condensed consolidated statement of cash flows. Further, the new guidance eliminates the requirement to estimate forfeitures and reduce stock compensation expense during the vesting period. Instead, companies can elect to account for actual forfeitures as they occur and record any previously unrecognized compensation expense for estimated forfeitures up to the period of adoption as a retrospective adjustment to beginning retained earnings. The Company has made the election to account for actual forfeitures as they occur starting in fiscal year 2017. During the nine months ended September 30, 2017, the Company recorded a retrospective adjustment to accumulated deficit of $0.4 million.deficit.

~~Recent~~Recently Adopted Accounting Pronouncements

In May 2014, the FASB together with the International Accounting Standards Board issued converged guidance for revenue recognition that will replace most existing guidance, eliminate industry-specific guidance and provide a unified model for determining how and when revenue from contracts with customers should be recognized. Under the new guidance, an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

The new guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application(modified retrospective method). The Company currently plans to adopt using the full retrospective method, however, such determination could change depending on a number of factors including system readiness, the magnitude of the potential impact on the financial results, and its ability to gather sufficient data to assess the impact on prior period financial statements timely.

Public entities are required to adopt the new guidance for annual reporting periods beginning December 15, 2017, including interim periods. The Company will adopt the new guidance on January 1, 2018.

The Company anticipates the new guidance to have a material impact on its consolidated financial statements. While the Company is continuing to assess all potential impacts of the standard, the Company currently believes the most significant impact relates to the timing of revenue recognition for software licenses sold with professional services as it did not have vendor specific objective evidence (“VSOE”) for professional services under current guidance. Under the new standard, the requirement to have VSOE for undelivered elements is eliminated and the Company will recognize revenue for software licenses upon transfer of control to its customers. Additionally, the new standard requires the capitalization and amortization of costs related to obtaining a contract which are currently expensed at the time of sale. The Company is continuing to assess the impact of this guidance on its consolidated financial statements, as well as the determination of the method of adoption.

In February 2016, the FASB amended lease accounting requirements to begin recording assets and liabilities arising from leases on the balance sheet. The new guidance will also require significant additional disclosures about the amount, timing and uncertainty of cash flows from leases. This new guidance will be effective beginning on January 1, 2019 using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply. The Company has not yet determined the future effect of the standard on its financial position or results of operations.

~~In June 2016,~~August 2020, the FASB issued ~~new guidance~~ASU 2020-06 related to the accounting for ~~credit losses on instruments for both financial services and non-financial services entities.~~debt with conversion features. The new guidance introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments. It also modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. The guidance will be effective beginning January 1, 2020. Early adoption is permitted. The Company is currently evaluating the impact ofamendments in this ~~new guidance on its consolidated financial statements.~~

~~In October 2016, the FASB issued amended guidance on~~update simplify the accounting for ~~income taxes. The new~~convertible instruments by reducing the number of accounting models available for convertible debt instruments and convertible preferred stock. This update also amends the guidance for the derivatives scope

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exception for contracts in an entity's own equity to reduce form-over-substance-based accounting conclusions and requires the ~~recognition~~application of the ~~income tax consequences~~if-converted method for calculating diluted earnings per share. The update also requires entities to provide expanded disclosures about the terms and features of convertible instruments, how the instruments have been reported in the entity's financial statements and information about events, conditions and circumstances that can affect how to assess the amount or timing of an ~~intercompany asset transfer, other than transfers of inventory, when the transfer occurs.~~entity's future cash flows related to those instruments. The guidance ~~will be~~is effective for ~~reporting~~interim and annual periods beginning after December 15, ~~2017,~~2021 with early adoption permitted. The Company is currently evaluating the impact of this new guidance on its consolidated financial statements, but does not expect that it will have a material impact on its consolidated financial statements.

In January 2017, the FASB issued new guidance which clarifies the definition of a business to assist companies with evaluating whether transactions should be accounted for as acquisitions of assets or businesses. The new guidance requires a company to evaluate if substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of assets and activities is not a business. The guidance also requires a business to include at least one substantive process and narrows the definition of outputs by more closely aligning it with how outputs are described in the guidance for revenue from contracts with customers. The new guidance will be effective for the Company in the first quarter of 2018. Early adoption is permitted. The guidance should be applied prospectively to any transactions occurring within the period of adoption. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements.

In January 2017, the FASB issued new guidance to simplify the accounting for goodwill impairment. The guidance simplifies the measurement of goodwill impairment by removing step 2 of the goodwill impairment test, which requires the determination of the fair value of individual assets and liabilities of a reporting unit. The new guidance requires goodwill impairment to be measured as the amount by which a reporting unit’s carrying value exceeds its fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The amendments should be applied on a prospective basis. The new standard is effectivepermitted for fiscal years beginning after December 15, ~~2019 with early adoption permitted for~~2020, including interim ~~or annual goodwill impairment tests performed after~~periods within those fiscal years. The Company adopted the guidance beginning January 1, ~~2017.~~ 2021. The adoption of this guidance resulted in an increase of $17.0 million and $15.2 million to convertible senior notes, net and accumulated deficit, respectively, and a reduction to additional paid-in capital of $32.2 million.

2.Revenue, Deferred Revenue and Deferred Commissions

Disaggregation of Revenue

A typical sales arrangement involves multiple arrangements, such as sales of the Company’s proprietary communication device ("Vocera Badge"), perpetual software licenses, professional services, cloud-based subscription software, and support services which entitles customers to unspecified upgrades, patch releases and telephone-based support. The following table depicts the disaggregation of revenue according to revenue type and is consistent with how the Company evaluates its financial performance:


	Three months ended June 30,				Six months ended June 30,
(in thousands)	2021		2020		2021		2020
Product revenue
Device	$	16,256	$	17,100	$	31,529	$	31,003
Software	12,088		6,851		19,423		10,798
Total product	28,344		23,951		50,952		41,801

Service revenue
Subscription and support	22,641		18,994		43,600		37,063
Professional services and training	5,195		4,402		10,296		9,156
Total service	27,836		23,396		53,896		46,219
Total revenue	$	56,180	$	47,347	$	104,848	$	88,020

Contract balances

The timing of revenue recognition may differ from the timing of invoicing to customers. Accounts receivable are recorded at the invoiced amount and in the period the Company delivers goods or provides services or when the Company’s right to consideration is unconditional. Payment terms on invoiced amounts are typically 30 days. The balance of accounts receivable, net of allowance for doubtful accounts, as of June 30, 2021 and December 31, 2020 is presented in the accompanying condensed consolidated balance sheets. In situations where revenue recognition occurs before invoicing, an unbilled receivable is created, which represents a contract asset. As of June 30, 2021 and December 31, 2020, contract assets totaling $4.6 million and $4.2 million, respectively, were included in other receivables in the condensed consolidated balance sheets.

Costs to obtain and fulfill a contract

The Company capitalizes certain incremental contract acquisition costs consisting primarily of commissions paid and the related payroll taxes when customer contracts are signed. The Company determines whether costs should be deferred based on its sales compensation plans, if the commissions are incremental and would not have been incurred absent the execution of the customer contract. Sales commissions for renewals of customer contracts are not commensurate with the commissions paid for the acquisition of the initial contract given the substantive difference in commission rates in proportion to their respective contract values. Commissions paid upon the initial acquisition of a contract are amortized over the estimated period of benefit, which may exceed the term of the initial contract. Accordingly, amortization of deferred costs is recognized on a systematic basis that is consistent with the pattern of revenue recognition allocated to each performance obligation and is included in sales and marketing expense in the consolidated statements of operations. The Company determines its estimated period of benefit, up to five years, by evaluating the ~~impact~~expected renewals of ~~this new accounting guidance on~~ its ~~consolidated financial statements.~~

customer contracts, the duration of its relationships with its customers and other factors. Deferred costs are periodically reviewed for impairment. In May 2017, the FASB amended the scope of modification accounting for share-based payment arrangements. The guidance clarifies the type of changes to terms or conditions of share-based payment awards to whichaccordance with Topic 340, an entity ~~would be required~~

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may elect a practical expedient that allows the entity to ~~apply modification accounting. Specifically, under this guidance,~~recognize the incremental costs of obtaining a contract as an ~~entity would not apply modification accounting~~expense when incurred if the ~~fair value, vesting conditions, and classification~~amortization period of the ~~awards~~asset that the entity otherwise would have recognized is one year or less. The Company has elected this practical expedient and recognizes costs paid to obtain contracts as expense when incurred. Changes in the balance of total deferred commissions (contract asset) during the three and six months ended June 30, 2021 are as follows:


(in thousands)	March 31, 2021		Additions		Commissions Recognized		June 30, 2021
Deferred commissions	$	12,713	$	4,452	$	(2,311)	$	14,854


(in thousands)	December 31, 2020		Additions		Commissions Recognized		June 30, 2021
Deferred commissions	$	12,293	$	6,787	$	(4,226)	$	14,854

Of the ~~same immediately before and after the modification. The new standard is effective for~~$14.9 million total deferred commissions balance as of June 30, 2021, the Company expects to recognize approximately 39% as commission expense over the next 12 months and the remainder thereafter.

Deferred revenue

The Company records deferred revenue when cash payments are received in advance of the performance under the contract. The current portion of deferred revenue represents the amounts that are expected to be recognized as revenue within one year of the consolidated balance sheet date. Changes in the ~~first quarter~~balance of ~~2018. Early adoption is permitted.~~ total deferred revenue (contract liability) during the three and six months ended June 30, 2021 are as follows:


(in thousands)	March 31, 2021		Additions		Revenue Recognized		June 30, 2021
Deferred revenue	$	60,136	$	27,433	$	(25,014)	$	62,555


(in thousands)	December 31, 2020		Additions		Revenue Recognized		June 30, 2021
Deferred revenue	$	64,733	$	45,350	$	(47,528)	$	62,555

Revenue recognized during the three and six months ended June 30, 2021 from deferred revenue balances at the beginning of the period was $22.6 million and $43.7 million, respectively. Revenue recognized during the three and six months ended June 30, 2020 from deferred revenue balances at the beginning of the period was $19.5 million and $34.2 million, respectively.

The ~~guidance will be applied prospectively~~“contracted but not recognized” performance obligations represent the Company’s deferred revenue and non-cancelable backlog amounts. This balance as of June 30, 2021 was $179.0 million, of which the Company expects to ~~awards modified on or after~~recognize approximately 66% as revenue over the ~~adoption date. The Company does not expect~~next 12 months and the ~~guidance to have a material impact on the Company's consolidated financial statements.~~remainder thereafter.


2.	~~Fair Value of Financial Instruments~~

3.Fair Value of Financial Instruments

The Company’s cash, cash equivalents and short-term investments are carried at their fair values with any differences from their amortized cost recorded in equity as unrealized gains (losses) on marketable securities. As a basis for determining the fair value of its assets and liabilities, the Company follows a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs other than the quoted prices in active markets that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data which requires the Company to develop its own assumptions. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. ~~For~~During the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2021, there have been no transfers between Level 1 and Level 2 fair value instruments and no transfers ~~in or~~ out of Level 3.

The Company’s money market funds are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. The fair value of the Company’s Level 2 fixed income securities ~~are~~is obtained from independent pricing

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services, which may use quoted market prices for identical or comparable instruments or model-driven valuations using observable market data or other inputs, corroborated by observable market data.

In addition to its cash, cash equivalents and short-term investments, the Company measures the fair value of its Convertible Senior Notes on a quarterly basis for disclosure purposes. The Company ~~does not have any~~considers the fair value of the Convertible Senior Notes at June 30, 2021 to be a Level 2 measurement due to limited trading activity of the Convertible Senior Notes. Refer to Note 8 to the condensed consolidated financial ~~instruments~~statements for further information.

The agreement for the acquisition of EASE includes contingent payments to the owners of EASE, payable based on achievement of post-acquisition financial metrics. This contingent consideration is a Level 3 fair value measurement and the valuation of the Company’s contingent consideration obligation was estimated as the present value of total expected contingent consideration payments which are ~~valued~~determined using ~~Level 3 inputs.~~

a Monte Carlo simulation. This analysis reflects the contractual terms of the purchase agreements and utilizes assumptions with regard to future sales, probabilities of achieving such future sales, the likelihood and timing of expected payments and a discount rate. Significant increases with respect to assumptions as to future sales and probabilities of achieving such future sales would result in a higher fair value measurement, while an increase in the discount rate would result in a lower fair value measurement. The unobservable inputs in the valuation include revenue volatility of 11%, a risk-free rate of 2.50%, and the amounts are expected to be paid in the second quarters of 2022 and 2023. The fair value adjustment for the contingent consideration of$(1.7) million and $(1.3) millionfor the three and six months ended June 30, 2021, respectively, was recorded as other income in the condensed consolidated statements of operations.

The Company’s assets that are measured at fair value on a recurring basis, by level, within the fair value hierarchy as of ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016,~~2020, are summarized as follows (in thousands):


	June 30, 2021								December 31, 2020
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	15,471	$	0	$	0	$	15,471	$	363	$	0	$	0	$	363

Commercial paper	0		62,960		0		62,960		0		21,950		0		21,950

U.S. Treasury securities	0		0		0		0		0		6,000		0		6,000

Corporate debt securities	0		188,468		0		188,468		0		173,277		0		173,277
Total assets measured at fair value	$	15,471	$	251,428	$	0	$	266,899	$	363	$	201,227	$	0	$	201,590
Liabilities
Contingent consideration	$	0	$	0	$	1,661	1,661		$	0	$	0	$	2,959	$	2,959
Total liabilities measured at fair value	$	0	$	0	$	1,661	$	1,661	$	0	$	0	$	2,959	$	2,959

September 30, 2017 December 31, 2016
Level 1
Level 2
Total
Level 1
Level 2
Total
Assets
Money market funds $ 1,685
$ —
$ 1,685
$ 4,996
$ —
$ 4,996
Commercial paper —
962
962
—
1,322
1,322
U.S. government agency securities —
9,948
9,948
—
4,177
4,177
U.S. Treasury securities —
4,481
4,481
—
2,045
2,045
Corporate debt securities —
39,003
39,003
—
33,166
33,166
Total assets measured at fair value
$ 1,685
$ 54,394
$ 56,079
$ 4,996
$ 40,710
$ 45,706

The ~~Company had no liabilities as of September 30, 2017 and December 31, 2016~~financial accounts that ~~were measured at~~are not subject to recurring fair value onmeasurement include trade and other receivables, prepaid expenses and other current assets, total current liabilities and deferred revenues, both current and long-term. Due to their short maturities, the carrying amounts of these accounts approximate their fair values.

The table below provides a ~~recurring basis.~~roll-forward of the fair value of the Company's liabilities that use significant unobservable inputs (Level 3) (in thousands).


3.	~~Cash, Cash Equivalents and Short-Term Investments~~Six months ended June 30,
	2021
Beginning balance	$	2,959



Fair value adjustment for contingent consideration included in earnings	$	(1,298)
Ending balance	$	1,661

	~~94-3354663~~
Delaware		94-3354663
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)


Securities registered pursuant to Section 12(b) of the Act:
(Title of each class)	(Trading Symbol)	(Name of each exchange on which registered)
Common Stock, $0.0003 par value	VCRA	New York Stock Exchange



Large accelerated filer	¨☐	Accelerated filer	x☒
Non-accelerated filer	¨☐	Smaller reporting company	¨☐
Emerging growth company	x☐


	As of June 30, 2021
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair value
Cash and cash equivalents:
Cash	$	25,009	$	0	$	0	$	25,009
Money market funds	15,471		0		0		15,471




Total cash and cash equivalents	40,480		0		0		40,480

Short-term investments:
Commercial papers	62,956		6		(2)		62,960




Corporate debt securities	188,365		182		(79)		188,468
Total short-term investments	251,321		188		(81)		251,428
Total cash, cash equivalents and short-term investments	$	291,801	$	188	$	(81)	$	291,908


	As of December 31, 2020
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair value
Cash and cash equivalents:
Cash	$	28,613	$	0	$	0	$	28,613
Money market funds	363		0		0		363


U.S. government agency securities	6,000		0		0		6,000

Total cash and cash equivalents	34,976		0		0		34,976
Short-term investments:
Commercial papers	21,961		0		(11)		21,950




Corporate debt securities	172,768		543		(34)		173,277
Total short-term investments	194,729		543		(45)		195,227
Total cash, cash equivalents and short-term investments	$	229,705	$	543	$	(45)	$	230,203


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



¨☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



	September 30, 2017			December 31, 2016
Assets
Current assets
Cash and cash equivalents	$	14,840		$	35,033
Short-term investments	52,652			39,033
Accounts receivable, net of allowance	35,453			24,142
Other receivables	1,115			1,211
Inventories	3,115			4,556
Prepaid expenses and other current assets	4,758			3,364
Total current assets	111,933			107,339
Property and equipment, net	6,073			5,894
Intangible assets, net	14,658			18,200
Goodwill	49,246			49,246
Other long-term assets	1,537			1,394
Total assets	$	183,447		$	182,073
Liabilities and stockholders' equity
Current liabilities
Accounts payable	$	2,790		$	3,231
Accrued payroll and other current liabilities	16,050			15,896
Deferred revenue, current	41,559			43,845
Total current liabilities	60,399			62,972
Deferred revenue, long-term	17,577			11,155
Other long-term liabilities	5,084			4,505
Total liabilities	83,060			78,632
Commitments and contingencies (Note 7)
Stockholders' equity
Preferred stock, $0.0003 par value - 5,000,000 shares authorized as of September 30, 2017 and December 31, 2016; zero shares issued and outstanding	—			—
Common stock, $0.0003 par value - 100,000,000 shares authorized as of September 30, 2017 and December 31, 2016; 29,208,322 and 27,568,103 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively	9			8
Additional paid-in capital	244,827			230,605
Accumulated other comprehensive loss	(93		)	(69		)
Accumulated deficit	(144,356		)	(127,103		)
Total stockholders’ equity	100,387			103,441
Total liabilities and stockholders’ equity	$	183,447		$	182,073



	Three months ended September 30,						Nine months ended September 30,
	2017			2016			2017			2016
Revenue
Product	$	23,249		$	19,303		$	63,940		$	50,807
Service	19,051			14,452			53,105			40,877
Total revenue	42,300			33,755			117,045			91,684
Cost of revenue
Product	7,208			6,042			20,424			16,435
Service	9,241			6,253			28,358			18,037
Total cost of revenue	16,449			12,295			48,782			34,472
Gross profit	25,851			21,460			68,263			57,212
Operating expenses
Research and development	6,644			4,286			20,944			12,686
Sales and marketing	15,831			13,305			45,789			38,078
General and administrative	6,088			5,138			17,767			14,099
Total operating expenses	28,563			22,729			84,500			64,863
Loss from operations	(2,712		)	(1,269		)	(16,237		)	(7,651		)
Interest income	177			196			410			573
Other income (expense), net	(41		)	(75		)	1			(226		)
Loss before income taxes	(2,576		)	(1,148		)	(15,826		)	(7,304		)
Provision for income taxes	(309		)	(49		)	(1,050		)	(183		)
Net loss	$	(2,885	)	$	(1,197	)	$	(16,876	)	$	(7,487	)

Net loss per share
Basic and diluted	$	(0.10	)	$	(0.04	)	$	(0.59	)	$	(0.28	)
Weighted average shares used to compute net loss per share
Basic and diluted	29,130			27,024			28,439			26,675



	September 30, 2017						December 31, 2016
	Level 1		Level 2		Total		Level 1		Level 2		Total
Assets
Money market funds	$	1,685	$	—	$	1,685	$	4,996	$	—	$	4,996
Commercial paper	—		962		962		—		1,322		1,322
U.S. government agency securities	—		9,948		9,948		—		4,177		4,177
U.S. Treasury securities	—		4,481		4,481		—		2,045		2,045
Corporate debt securities	—		39,003		39,003		—		33,166		33,166
Total assets measured at fair value	$	1,685	$	54,394	$	56,079	$	4,996	$	40,710	$	45,706



	As of September 30, 2017
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair value
Cash and cash equivalents:
Demand deposits and other cash	$	11,413	$	—	$	—		$	11,413
Money market funds	1,685		—		—			1,685
Commercial paper	400		—		—			400
U.S. government agency securities	1,040		—		—			1,040
Corporate debt securities	302		—					302
Total cash and cash equivalents	14,840		—		—			14,840

Short-Term Investments:
Commercial paper	562		—		—			562
U.S. government agency securities	8,916		1		(9		)	8,908
U.S. Treasury securities	4,487		—		(6		)	4,481
Corporate debt securities	38,724		3		(26		)	38,701
Total short-term investments	52,689		4		(41		)	52,652
Total cash, cash equivalents and short-term investments	$	67,529	$	4	$	(41	)	$	67,492



	As of December 31, 2016
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair value
Cash and cash equivalents:
Demand deposits and other cash	$	28,360	$	—	$	—		$	28,360
Money market funds	4,996		—		—			4,996
Commercial paper	549		—		—			549
Corporate debt securities	1,128		—		—			1,128
Total cash and cash equivalents	35,033		—		—			35,033
Short-Term Investments:
Commercial paper	773		—		—			773
U.S. government agency securities	4,176		1		—			4,177
U.S. Treasury securities	2,045		—		—			2,045
Corporate debt securities	32,052		1		(15		)	32,038
Total short-term investments	39,046		2		(15		)	39,033
Total cash, cash equivalents and short-term investments	$	74,079	$	2	$	(15	)	$	74,066


(in thousands)	One year or shorter		Between 1 and 2 years		Total
Balances as of June 30, 2021
Cash and cash equivalents (1)	$	40,480	$	0	$	40,480
Short-term investments	201,890		49,538		251,428
Cash, cash equivalents and short-term investments	$	242,370	$	49,538	$	291,908

Balances as of December 31, 2020
Cash and cash equivalents (1)	$	34,976	$	0	$	34,976
Short-term investments	141,582		53,645		195,227
Cash, cash equivalents and short-term investments	$	176,558	$	53,645	$	230,203

(1) Includes demand deposits and other cash, money market funds and other cash equivalent securities, all with 0-90 day maturity at purchase.


Balance at December 31, 2020			$69,168
Acquired in acquisition (Note 12)			25,678
Balance at June 30, 2021			$94,846


(in thousands)	Future amortization
2021 (remaining six months)	$	3,235
2022	6,057
2023	5,537
2024	3,506
2025	1,409
2026	1,090
Thereafter	2,072


Future amortization expense	$	22,906



~~Delaware~~



(in thousands)	Future amortization
2017 (remaining three months)	$	1,001
2018	4,424
2019	3,880
2020	1,251
2021	1,127
2022	1,050
Thereafter	1,925
Future amortization expense	$	14,658


(in thousands)	June 30, 2021		December 31, 2020
Raw materials	$	356	$	462
Finished goods	8,246		9,697
Total inventories	$	8,602	$	10,159



(in thousands)	Future lease payments
2017 (remaining three months)	$	423
2018	1,513
2019	828
2020	446
2021	11
Total	$	3,221


(in thousands)	Operating leases
2021 (remaining six months)	$	2,073
2022	3,096
2023	908
2024	523
2025	175
2026	74

Total maturities of lease liabilities	6,849
Less imputed interest	(530)
Total	$	6,319


(in thousands)	June 30, 2021
Liability:
Principal	$	224,500
Unamortized issuance costs	(6,480)
Net carrying amount	$	218,020


(in thousands)	December 31, 2020
Conversion option	$	33,350
Purchase of capped calls	(8,907)
Issuance costs	(1,136)

7.Total	~~Commitments and Contingencies~~$	23,307



	Options outstanding
	Number of Options		Weighted Average Exercise Price		Weighted average remaining contractual term	Aggregate intrinsic value
	Number of Options		Weighted Average Exercise Price		(in years)	(in thousands)
Outstanding at December 31, 2016	2,436,845		$	10.71	5.09	$	20,643
Options granted	—		—
Options exercised	(1,034,525	)	6.91
Options canceled	(19,604	)	12.14
Outstanding at September 30, 2017	1,382,716		$	13.55	5.64	$	24,641


	Restricted Stock Units and Performance Stock Units
	Number of shares	Weighted Average Grant Date Fair Value per Share
Outstanding at December 31, 2020	2,140,763	$	25.16
Granted	708,213	38.94
Vested	(879,615)	24.50
Forfeited	(138,662)	27.82
Outstanding at June 30, 2021	1,830,699	$	30.61



	Restricted Stock Units
	Number of shares		Weighted Average Grant Date Fair Value per Share
Outstanding at December 31, 2016	2,128,735		$	13.17
Granted	956,477		24.97
Vested	(815,466	)	12.06
Forfeited	(104,107	)	16.86
Outstanding at September 30, 2017	2,165,639		$	18.62


	Grant Date June 1, 2020
Grant date fair value per share	$	30.70
Expected term (in years)	3
Volatility	42.68		%
Risk-free interest rate	0.20		%
Dividend yield	0		%



(in thousands, except useful lives)	Estimated Fair Value		Estimated Useful life (in years)
Assets




Current assets	$	1,527
Restricted cash	598
Fixed assets, net	208
Operating lease right-of-use asset	2,089
Other assets	74
Intangibles assets
Customer relationships	3,290		8
Developed technology	5,260		3

Backlog	3,710		4
Goodwill	25,678
Total assets	$	42,434
Liabilities







Current liabilities	3,642
Deferred revenue	1,774
Operating lease liabilities, long term	906

Other long-term liabilities	112
Total liabilities	6,434
Net assets acquired	$	36,000


~~Item 2.~~	~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~


~~Item 3.~~	~~Quantitative and Qualitative Disclosures About Market Risk~~


~~Item 2.~~	~~Unregistered Sales of Equity Securities and Use of Proceeds~~

Exhibit title

~~Exhibit~~ ~~Number~~ 10.01		~~Exhibit title~~ Sublease Agreement, dated May 25, 2021, by and between Arlo Technologies, Inc. and the Registrant.

~~31.01~~10.02		2021 Equity Incentive Plan (incorporated by reference to Exhibit 99.1 in our registration statement on Form S-8 fil ed with t he SEC on June 7, 2021 (File No. 001-256867)).

10.03		Form of Performance Restricted Stock Unit Agreement under the 2021 Equity Incentive Plan.

10.04		Form of Restricted Stock Unit Agreement under the 2021 Equity Incentive Plan.

10.05		Form of Stock Option Agreement under the 2021 Equity Incentive Plan.

10.06		Form of Performance Stock Option Agreement under the 2021 Equity Incentive Plan.

10.07		Form of Change and Control and Severance Agreement

31.01		Certification of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.02		Certification of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.01+		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		Inline XBRL Instance Document

~~101.SCH~~	- The instance document does not appear in the Interactive Data File because its XBRL ~~Taxonomy Schema Linkbase Document~~

~~101.CAL~~	tags are embedded within the Inline XBRL ~~Taxonomy Calculation Linkbase Document~~

~~101.DEF~~	~~XBRL Taxonomy Definition Linkbase Document~~

~~101.LAB~~	~~XBRL Taxonomy Labels Linkbase Document~~

~~101.PRE~~	~~XBRL Taxonomy Presentation Linkbase Document~~

document.

+101.SCH						Inline XBRL Taxonomy Schema Linkbase Document

101.CAL						Inline XBRL Taxonomy Calculation Linkbase Document

101.DEF						Inline XBRL Taxonomy Definition Linkbase Document

101.LAB						Inline XBRL Taxonomy Labels Linkbase Document

101.PRE						Inline XBRL Taxonomy Presentation Linkbase Document

104						Cover Page Interactive Data File - (formatted in Inline XBRL and contained in Exhibit 101).


+			This certification shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.



	VOCERA COMMUNICATIONS, INC.
Date: ~~November 1, 2017~~August 4, 2021		By:	/S/ Brent D. Lang
			Brent D. Lang Chief Executive Officer

Date: ~~November 1, 2017~~August 4, 2021		By:	/S/ ~~Justin R. Spencer~~Steven J. Anheier
			~~Justin R. Spencer~~Steven J. Anheier Chief Financial Officer
			(Principal Financial Officer)



~~Exhibit~~ ~~Number~~	~~Exhibit title~~

~~31.01~~	~~Certification of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.~~

~~31.02~~	~~Certification of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.~~

~~32.01+~~	~~Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.~~

~~101.INS~~	~~XBRL Instance Document~~

~~101.SCH~~	~~XBRL Taxonomy Schema Linkbase Document~~

~~101.CAL~~	~~XBRL Taxonomy Calculation Linkbase Document~~

~~101.DEF~~	~~XBRL Taxonomy Definition Linkbase Document~~

~~101.LAB~~	~~XBRL Taxonomy Labels Linkbase Document~~

~~101.PRE~~	~~XBRL Taxonomy Presentation Linkbase Document~~

+	This certification shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.