Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Mar. 31, 2018 | May 04, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | EXTREME NETWORKS INC | |
Entity Central Index Key | 1,078,271 | |
Current Fiscal Year End Date | --06-30 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | EXTR | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 115,892,565 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2018 | Jun. 30, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 103,177 | $ 130,450 |
Accounts receivable, net of allowance for doubtful accounts of $1,796 at March 31, 2018 and $1,190 at June 30, 2017 | 188,408 | 93,115 |
Inventories | 77,756 | 47,410 |
Prepaid expenses and other current assets | 26,659 | 27,867 |
Total current assets | 396,000 | 298,842 |
Property and equipment, net | 86,487 | 30,240 |
Intangible assets, net | 85,406 | 25,337 |
Goodwill | 129,244 | 80,216 |
Other assets | 43,348 | 25,065 |
Total assets | 740,485 | 459,700 |
Current liabilities: | ||
Current portion of long-term debt | 24,720 | 12,280 |
Accounts payable | 90,800 | 31,587 |
Accrued compensation and benefits | 40,591 | 42,662 |
Accrued warranty | 12,812 | 10,584 |
Deferred revenue | 117,741 | 79,048 |
Other accrued liabilities | 77,042 | 37,044 |
Total current liabilities | 363,706 | 213,205 |
Deferred revenue, less current portion | 38,828 | 25,293 |
Long-term debt, less current portion | 153,958 | 80,422 |
Deferred income taxes | 5,628 | 6,576 |
Other long-term liabilities | 65,440 | 8,526 |
Commitments and contingencies (Note 9) | ||
Stockholders’ equity: | ||
Convertible preferred stock, $.001 par value, issuable in series, 2,000,000 shares authorized; none issued | ||
Common stock, $.001 par value, 750,000,000 shares authorized; 115,752,827 shares issued and outstanding at March 31, 2018 and 110,924,508 shares issued and outstanding at June 30, 2017 | 116 | 111 |
Additional paid-in-capital | 935,726 | 909,155 |
Accumulated other comprehensive loss | (471) | (2,302) |
Accumulated deficit | (822,446) | (781,286) |
Total stockholders’ equity | 112,925 | 125,678 |
Total liabilities and stockholders’ equity | $ 740,485 | $ 459,700 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2018 | Jun. 30, 2017 |
Current assets: | ||
Allowance for doubtful accounts | $ 1,796 | $ 1,190 |
Stockholders’ equity: | ||
Convertible preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Convertible preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Convertible preferred stock, shares issued | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 750,000,000 | 750,000,000 |
Common stock, shares issued | 115,752,827 | 110,924,508 |
Common stock, shares outstanding | 115,752,827 | 110,924,508 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Net revenues: | ||||
Product | $ 203,527 | $ 111,321 | $ 543,151 | $ 319,469 |
Service | 58,477 | 37,875 | 161,691 | 108,708 |
Total net revenues | 262,004 | 149,196 | 704,842 | 428,177 |
Cost of revenues: | ||||
Product | 94,485 | 52,275 | 253,002 | 159,151 |
Service | 24,536 | 14,117 | 67,490 | 40,684 |
Total cost of revenues | 119,021 | 66,392 | 320,492 | 199,835 |
Gross profit: | ||||
Product | 109,042 | 59,046 | 290,149 | 160,318 |
Service | 33,941 | 23,758 | 94,201 | 68,024 |
Total gross profit | 142,983 | 82,804 | 384,350 | 228,342 |
Operating expenses: | ||||
Research and development | 50,920 | 24,691 | 131,112 | 67,003 |
Sales and marketing | 72,240 | 38,790 | 193,460 | 116,674 |
General and administrative | 11,707 | 9,612 | 35,561 | 27,296 |
Acquisition and integration costs, net of bargain purchase gain | 9,316 | 3,418 | 47,675 | 9,908 |
Restructuring and related charges, net of reversals | 4,920 | 7,719 | 4,920 | 9,572 |
Amortization of intangibles | 2,101 | 1,193 | 6,461 | 7,510 |
Total operating expenses | 151,204 | 85,423 | 419,189 | 237,963 |
Operating loss | (8,221) | (2,619) | (34,839) | (9,621) |
Interest income | 740 | 236 | 2,104 | 374 |
Interest expense | (4,044) | (1,177) | (8,763) | (3,000) |
Other income (expense), net | (359) | (251) | 2,125 | 551 |
Loss before income taxes | (11,884) | (3,811) | (39,373) | (11,696) |
Provision for income taxes | 1,729 | 1,166 | 1,787 | 3,252 |
Net loss | $ (13,613) | $ (4,977) | $ (41,160) | $ (14,948) |
Basic and diluted net loss per share: | ||||
Net loss per share - basic | $ (0.12) | $ (0.05) | $ (0.36) | $ (0.14) |
Net loss per share - diluted | $ (0.12) | $ (0.05) | $ (0.36) | $ (0.14) |
Shares used in per share calculation - basic | 115,059 | 109,213 | 113,641 | 107,531 |
Shares used in per share calculation - diluted | 115,059 | 109,213 | 113,641 | 107,531 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net loss: | $ (13,613) | $ (4,977) | $ (41,160) | $ (14,948) |
Available for sale securities: | ||||
Change in unrealized gains on available for sale securities | 503 | 740 | ||
Net change in foreign currency translation adjustments | 304 | 749 | 1,091 | (225) |
Other comprehensive income (loss), net of tax: | 807 | 749 | 1,831 | (225) |
Total comprehensive loss | $ (12,806) | $ (4,228) | $ (39,329) | $ (15,173) |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (41,160) | $ (14,948) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation | 15,417 | 7,716 |
Amortization of intangible assets | 17,771 | 13,781 |
Provision for doubtful accounts | 1,566 | 21 |
Stock-based compensation | 19,646 | 9,328 |
Deferred income taxes | (1,900) | 1,507 |
Non-cash restructuring and related charges | 2,578 | |
Realized gain on sale of non-marketable equity investment | (3,757) | |
Realized gain on bargain purchase | (5,030) | |
Other non-cash items | 2,441 | 457 |
Changes in operating assets and liabilities, net of acquisitions | ||
Accounts receivable | (45,376) | 7,232 |
Inventories | 5,122 | 4,724 |
Prepaid expenses and other assets | (3,711) | 8,031 |
Accounts payable | 28,912 | 4,907 |
Accrued compensation and benefits | (4,779) | (1,322) |
Deferred revenue | 10,365 | (6,245) |
Other current and long-term liabilities | 2,743 | 6,194 |
Net cash (used in) provided by operating activities | (1,730) | 43,961 |
Cash flows from investing activities: | ||
Capital expenditures | (21,999) | (7,832) |
Business acquisitions | (97,581) | (51,088) |
Proceeds from sale of non-marketable equity investment | 4,922 | |
Deposit related to an acquisition | (10,239) | |
Net cash used in investing activities | (114,658) | (69,159) |
Cash flows from financing activities: | ||
Borrowings under Term Loan | 100,000 | 48,250 |
Repayments of debt | (13,278) | (7,775) |
Loan fees on borrowings | (1,494) | (1,327) |
Proceeds from issuance of common stock, net of tax withholding | 4,657 | 9,180 |
Payments of contingent consideration | (671) | |
Net cash provided by financing activities | 89,214 | 48,328 |
Foreign currency effect on cash | (99) | 28 |
Net (decrease) increase in cash and cash equivalents | (27,273) | 23,158 |
Cash and cash equivalents at beginning of period | 130,450 | 94,122 |
Cash and cash equivalents at end of period | 103,177 | 117,280 |
Non-cash investing activities: | ||
Unpaid capital expenditures | $ 12,608 | $ 963 |
Description of Business and Bas
Description of Business and Basis of Presentation | 9 Months Ended |
Mar. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Description of Business and Basis of Presentation | 1. Description of Business and Basis of Presentation Extreme Networks, Inc., together with its subsidiaries (collectively referred to as “Extreme” or the “Company”), is a leader in providing software-driven networking solutions for enterprise customers. The Company conducts its sales and marketing activities on a worldwide basis through distributors, resellers and the Company’s field sales organization. Extreme was incorporated in California in 1996 and reincorporated in Delaware in 1999. The unaudited condensed consolidated financial statements of Extreme included herein have been prepared under the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted under such rules and regulations. The condensed consolidated balance sheet at June 30, 2017 was derived from audited financial statements as of that date but does not include all disclosures required by generally accepted accounting principles for complete financial statements. These interim financial statements and notes should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2017. The unaudited condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments that, in the opinion of management, are necessary for a fair presentation of the results of operations and cash flows for the interim periods presented and the financial condition of Extreme at March 31, 2018. The results of operations for the three and nine months ended March 31, 2018 are not necessarily indicative of the results that may be expected for fiscal 2018 or any future periods. Effective July 1, 2017, the Company adopted the requirements of Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). All amounts and disclosures set forth in this Form 10-Q have been updated to comply with the new standards, as indicated by the “as adjusted” footnote. Fiscal Year The Company uses a fiscal calendar year ending on June 30. All references herein to “fiscal 2018” or “2018” represent the fiscal year ending June 30, 2018. All references herein to “fiscal 2017” or “2017” represent the fiscal year ended June 30, 2017. Principles of Consolidation The consolidated financial statements include the accounts of Extreme and its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated. The Company predominantly uses the United States Dollar as its functional currency. The functional currency for certain of its foreign subsidiaries is the local currency. For those subsidiaries that operate in a local currency functional environment, all assets and liabilities are translated to United States Dollars at current month end rates of exchange; and revenue and expenses are translated using the monthly average rate. Accounting Estimates The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Estimates are used for, but are not limited to, the accounting for the allowances for doubtful accounts and sales returns, determining the fair value of acquired assets and assumed liabilities, estimated selling prices, inventory valuation and purchase commitments, depreciation and amortization, impairment of long-lived assets including goodwill, warranty accruals, restructuring liabilities, measurement of share-based compensation costs, measurements of contingent consideration and income taxes. Actual results could differ from these estimates. |
Business Combinations
Business Combinations | 9 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Business Combinations | 2. Business Combinations The Company completed three acquisitions during the nine months ended March 31, 2018. The acquisitions have been accounted for using the acquisition method of accounting. The purchase price has been allocated on a preliminary basis to tangible and identifiable intangible assets acquired and liabilities assumed. The fair value of working capital related items, such as other current assets and accrued liabilities, approximated their book values at the date of acquisition. Inventories were valued at fair value using the net realizable value approach. The fair value of property and equipment was determined using a cost approach. The fair value of the acquired deferred revenue was estimated using the cost build-up approach. The cost build-up approach determines fair value using estimates of the costs required to provide the contracted deliverables plus an assumed profit. The total costs including the assumed profit were adjusted to present value using a discount rate considered appropriate. The resulting fair value approximates the amount that the Company would be required to pay to a third party to assume the obligation. Valuations of the intangible assets were valued using income approaches based on management projections, which we consider to be Level 3 inputs. The Company also continues to analyze the tax implications of the acquisition of the intangible assets which may ultimately impact the overall level of goodwill associated with the acquisition. The final purchase price allocation for all assets acquired and liabilities assumed is pending the finalization of valuations as additional information is gathered surrounding events that existed as of the acquisition date, which may result in an adjustment to the preliminary purchase price allocation. Also, additional information which existed as of the acquisition dates, but was unknown to the Company at that time, may become known to the Company during the remainder of the measurement period (up to one year from the acquisition dates), and may result in a change in the purchase price allocation. While management believes that its preliminary estimates and assumptions underlying the valuations are reasonable, different estimates and assumptions could result in different valuations assigned to the individual assets acquired and liabilities assumed, and the resulting amount of goodwill. Results of operations of the acquired entities are included in the Company’s operations beginning with the closing date of each acquisition. Fiscal 2018 Acquisitions Data Center Business The Company completed its acquisition of the data center business (the “Data Center Business”) of Brocade Communication Systems, Inc.’s (“Brocade”) on October 27, 2017 (the “Data Center Closing Date”), pursuant to an Asset Purchase Agreement (the “Data Center Business APA”) dated as of October 3, 2017, by and between the Company and Brocade. Under the terms and conditions of the Data Center Business APA, the Company acquired customers, employees, technology and other assets of the Data Center Business as well as assumed certain contracts and other liabilities of the Data Center Business. The fair value of consideration transferred on the Data Center Business Closing Date includes: • upfront cash closing payment equal to $23.0 million, • deferred payments of $1.0 million per quarter for the next twenty full fiscal quarters of the Company following the acquisition date discounted to their present value, • contingent consideration in the form of quarterly earnout payments equal to 50% of the profits of the Data Center Business for the five-year period commencing at the end of the first full fiscal quarter of the Company following the acquisition of the Data Center Business discounted to their present value, • an amount payable due to the excess working capital acquired over the target working capital agreed upon in the Data Center Business APA, and, • portion of the fair value of replacement stock awards granted to employees assumed from Brocade for which their services were provided prior to the Data Center Business Closing Date. The components of aggregate estimated purchase consideration are as follows (in thousands): Estimated purchase consideration October 27, 2017 Cash paid to sellers at closing $ 23,000 Deferred payments 18,430 Contingent consideration 34,100 Working capital adjustment 6,534 Replacement of stock-based awards 2,273 Aggregate estimated purchase consideration $ 84,337 The following table below summarizes the preliminary allocation as of March 31, 2018 of the tangible and identifiable intangible assets acquired and liabilities assumed (in thousands): Preliminary Allocation as of December 31, 2017 Change during three months ended March 31, 2018 Preliminary Allocation as of March 31, 2018 Accounts receivables $ 33,488 $ — $ 33,488 Inventories 19,973 (39 ) (a) 19,934 Prepaid expenses and other current assets 988 — 988 Property and equipment 29,160 — 29,160 Other assets 4,734 — 4,734 Accounts payable and accrued expenses (15,850 ) 113 (b) (15,737 ) Deferred revenue (33,519 ) 494 (c) (33,025 ) Net tangible assets acquired 38,974 568 39,542 Identifiable intangible assets 28,600 3,600 (d) 32,200 Goodwill 16,763 (4,168 ) 12,595 Total intangible assets acquired 45,363 (568 ) 44,795 Total net assets acquired $ 84,337 $ — $ 84,337 The changes during the period in the table above include: a) additional information regarding the existence of inventories and unpaid invoices as of the acquisition date, b) additional information on unpaid invoices as of the acquisition date, c) an adjustment of the fair value of deferred maintenance revenue and d) revised fair value based on adjustments to discount rate used in the models for usefulness of identifiable intangible assets. The following table presents details of the identifiable intangible assets acquired as part of the acquisition (dollars in thousands): Intangible Assets Estimated Useful Life (in years) Amount Developed technology 2 - 5 $ 25,400 Customer relationships 5 5,400 Trade names 4 1,400 Total identifiable intangible assets $ 32,200 The amortization for the developed technology is recorded in “Cost of revenues” for product and the amortization for the remaining intangibles is recorded in “Amortization of intangibles” in the accompanying condensed consolidated statements of operations. The goodwill recognized is attributable primarily to expected synergies and the assembled workforce of the Data Center Business. The Company anticipates both the goodwill and intangible assets to be fully deductible for income tax purposes. The results of operations of the Data Center Business Data Center The associated expenses of the Data Center Business have been incorporated with the results of operations of the Company as a product line and, therefore, stand-alone operating results are not available. including a $25.0 million consent fee paid to terminate a previous asset purchase agreement entered into by the Company to purchase the Data Center Business from Broadcom Corporation, in anticipation of Broadcom’s proposed acquisition of Brocade. The fee was paid to allow the Company to buy the Data Center Business directly from Brocade. net of bargain purchase gain Campus Fabric Business The Company completed its acquisition of Avaya Inc.’s. (“Avaya”) fabric-based secure networking solutions and network security solutions business (the “Campus Fabric Business”) on July 14, 2017, (the “Campus Fabric Business Closing Date”) pursuant to an Asset Purchase Agreement (the “Campus Fabric Business APA”) dated March 7, 2017. Under the terms and conditions of the Campus Fabric Business APA, the Company acquired the customers, employees, technology and other assets of the Campus Fabric Business, as well as assumed certain contracts and other liabilities of the Campus Fabric Business, for total provisional consideration of $79.8 The following table below summarizes the preliminary allocation as of March 31, 2018 of the tangible and identifiable intangible assets acquired and liabilities assumed (in thousands): Preliminary Allocation as of December 31, 2017 Change during three months ended March 31, 2018 Preliminary Allocation as of March 31, 2018 Accounts receivables $ 18,295 $ 417 (a) $ 18,712 Inventories 15,545 — 15,545 Prepaid expenses and other current assets 673 (24 ) (b) 649 Property and equipment 3,768 1,638 (c) 5,406 Other assets 5,311 (517 ) (d) 4,794 Accounts payable and accrued expenses (31,919 ) (395 ) (c) (32,314 ) Deferred revenue (10,051 ) 1,057 (e) (8,994 ) Other long-term liabilities (5,205 ) — (5,205 ) Net tangible assets acquired (3,583 ) 2,176 (1,407 ) Identifiable intangible assets 46,900 (4,700 ) (f) 42,200 In-process research and development 2,500 100 (f) 2,600 Goodwill 34,009 2,424 36,433 Total intangible assets acquired 83,409 (2,176 ) 81,233 Total net assets acquired $ 79,826 $ — $ 79,826 The changes during the period in the table above include: a) additional information on accounts receivable as of the acquisition date, b) additional information on prepaid expenses as of the acquisition date, c) update on preliminary estimate of the fair value of property and equipment which led to an increase, d) an adjustment of the fair value of deferred maintenance revenue and associated deferred cost of revenue, e) additional information on unpaid invoices as of the acquisition date, and f) revised fair value based on revisions to estimated useful life of identifiable intangible assets and in-process research and development acquired. The following table presents details of the identifiable intangible assets acquired as part of the acquisition (dollars in thousands): Intangible Assets Estimated Useful Life (in years) Amount Developed technology 2 - 4 $ 32,700 Customer relationships 4 5,100 Trade names 4 - 5 2,600 Backlog 1 1,800 Total identifiable intangible assets $ 42,200 The amortization for the developed technology is recorded in “Cost of revenues” for product and the amortization for the remaining intangibles is recorded in “Amortization of intangibles” in the accompanying condensed consolidated statement of operations. The goodwill recognized is attributable primarily to expected synergies and the assembled workforce of the Campus Fabric Business. The Company anticipates both the goodwill and intangible assets to be fully deductible for income tax purposes. The Company also acquired an indefinite lived asset of $2.6 million which represents the fair value of in-process research and development activities. During the three months ended March 31, 2018, the related research and development efforts were completed and the Company reclassified the in-process research and development of $2.6 million to developed technology and began recognizing amortization expense over its estimated useful life. The results of operations of the Campus Fabric The associated expenses of the Campus Fabric Business have been incorporated with the results of operations of the Company as a product line and, therefore, stand-alone operating results are not available. , net of bargain purchase gain Capital Financing Business On December 1, 2017, Company completed its acquisition of a capital financing business (the “CF Business”), pursuant to a Bill of Sale and Assignment and Assumption Agreement (the “Assumption Agreement”) between the Company and Broadcom. Under the terms and conditions of the Assumption Agreement, the Company acquired customers, employees, contracts and lease equipment of the CF Business equal to the earn out payments to Broadcom of 90% of acquired financing receivables to be collected commencing at the closing date. Net assets acquired included financing receivables of $13.7 million, lease equipment of $3.5 million and identifiable intangible assets of $0.8 million, and the fair value of the contingent consideration was $13.0 million. As the preliminary fair value of the net assets acquired exceeded the fair value of the purchase consideration, the Company recorded a bargain purchase gain of $5.0 million which is included in “Acquisition and integration costs, net of bargain purchase gain” in the accompanying condensed consolidated statements of operations. Acquisition and integration related expenses associated with the acquisition of the CF Business were immaterial. Fiscal 2017 Acquisition On October 28, 2016, the Company completed its acquisition of the wireless local area network business (“WLAN Business”) from Zebra Technologies Corporation. Under the terms of the WLAN Asset Purchase Agreement, the Company acquired customers, employees, technology and other assets as well as assumed certain contracts and other liabilities of the WLAN Business, for a net cash consideration to $49.5 million The following table below summarizes the final allocation of the tangible and identifiable intangible assets acquired and liabilities assumed (in thousands): Final Allocation as of October 28, 2016 Accounts receivables, net $ 14,636 Inventories 13,593 Other current assets 808 Property and equipment 3,159 Other assets 7,634 Deferred revenue (14,159 ) Other liabilities (7,201 ) Total tangible assets acquired and liabilities assumed 18,470 Identifiable intangible assets 20,300 In-process research and development 1,400 Goodwill 9,339 Total intangible assets acquired 31,039 Total net assets acquired $ 49,509 Pro forma financial information The following unaudited pro forma results of operations are presented as though the acquisitions of the Data Center Business, CF Business, Campus Fabric Business and WLAN Businesses had occurred as of the beginning of the earliest period presented after giving effect to purchase accounting adjustments relating to inventories, deferred revenue, depreciation and amortization on acquired property and equipment and intangibles, acquisition costs, interest income and expense and related tax effects. The pro forma results of operations are not necessarily indicative of the combined results that would have occurred had the acquisition been consummated as of the earliest period presented, nor are they necessarily indicative of future operating results. The unaudited pro forma results do not include the impact of synergies, nor any potential impacts on current or future market conditions which could alter the unaudited pro forma results. The unaudited pro forma financial information for the three and nine months ended March 31, 2018, combines the results for Extreme for the three and nine months ended March 31, 2018, which include the results of the Data Center Business, CF Business and Campus Fabric Business subsequent to their acquisition dates and their historical results up to the acquisition date. The unaudited pro forma financial information for the three and nine months ended March 31, 2017, combines the historical results for Extreme for those periods, as adjusted for the adoption of Topic 606, with the historical results of the Data Center Business, CF Business and Campus Fabric Business for the three and nine months ended March 31, 2017, as well as the historical results of the WLAN Business prior to the WLAN Business acquisition date. Pro forma results of operations from the Data Center Business, CF Business, Campus Fabric Business and WLAN Business acquisitions included in the pro forma results of operations for the three and nine months ended March 31, 2017 have not been adjusted for the adoption of Topic 606 because the Company determined that it is impractical to estimate the impact of the adoption. The following table summarizes the unaudited pro forma financial information (in thousands, except per share amounts): Three Months Ended Nine Months Ended March 31, 2018 March 31, 2017 March 31, 2018 March 31, 2017 (As adjusted) (As adjusted) Net revenues $ 262,004 $ 267,176 $ 799,044 $ 911,611 Net loss $ (13,613 ) $ (40,235 ) $ (21,235 ) $ (136,207 ) Net loss per share - basic $ (0.12 ) $ (0.37 ) $ (0.19 ) $ (1.27 ) Net loss per share - diluted $ (0.12 ) $ (0.37 ) $ (0.19 ) $ (1.27 ) Shares used in per share calculation - basic 115,059 109,213 113,641 107,531 Shares used in per share calculation - diluted 115,059 109,213 113,641 107,531 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 3. Summary of Significant Accounting Policies For a description of significant accounting policies, see Note 3, Summary of Significant Accounting Policies, to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2017. Except for the following policies, there have been no material changes to the Company’s significant accounting policies since the filing of the Annual Report on Form 10-K. Revenue Recognition The Company accounts for revenue in accordance with Topic 606, Revenue from Contracts with Customers, which the Company adopted on July 1, 2017, using the retrospective method. The Company derives the majority of its revenue from sales of its networking equipment, with the remaining revenue generated from service fees relating to maintenance contracts, professional services, and training for its products. The Company sells its products and maintenance contracts direct to customers and to partners in two distribution channels, or tiers. The first tier consists of a limited number of independent distributors that stock its products and sell primarily to resellers. The second tier of the distribution channel consists of a non-stocking distributors and value-added resellers that sell directly to end-users. Products and services may be sold separately or in bundled packages. The Company considers customer purchase orders, which in some cases are governed by master sales agreements, to be the contracts with a customer. For each contract, the Company considers the promise to transfer products and services, each of which are distinct, to be the identified performance obligations. In determining the transaction price the Company evaluates whether the price is subject to refund or adjustment to determine the net consideration to which the Company expects to be entitled. For all of the Company’s sales and distribution channels, revenue is recognized when control of the product is transferred to the customer (i.e., when the Company’s performance obligation is satisfied), which typically occurs at shipment for product sales. Revenue from maintenance contracts is recognized over time as the Company’s performance obligations are satisfied. This is typically the contractual service period, which ranges from one to three years. For product sales to value-added resellers of the Company, non-stocking distributors and end-user customers, the Company generally does not grant return privileges, except for defective products during the warranty period, nor does the Company grant pricing credits. Sales incentives and other programs that the Company may make available to these customers are considered to be a form of variable consideration and the Company maintains estimated accruals and allowances using the expected value method. There were no material changes in the current period to the estimated transaction price for performance obligations which were satisfied or partially satisfied during previous periods. Sales to stocking distributors are made under terms allowing certain price adjustments and limited rights of return (known as “stock rotation”) of the Company’s products held in their inventory. Revenue from sales to distributors is recognized upon the transfer of control to the distributor. Frequently, distributors need to sell at a price lower than the contractual distribution price in order to win business, and submit rebate requests for Company pre-approval prior to selling the product through at the discounted price. At the time the distributor invoices its customer or soon thereafter, the distributor submits a rebate claim to the Company to adjust the distributor’s cost from the contractual price to the pre-approved lower price. After the Company verifies that the claim was pre-approved, a credit memo is issued to the distributor for the rebate claim. In determining the transaction price, the Company considers these rebate adjustments to be variable consideration. Such price adjustments are estimated using the expected value method based on an analysis of actual claims, at the distributor level over a period of time considered adequate to account for current pricing and business trends. Stock rotation rights grant the distributor the ability to return certain specified amounts of inventory. Stock rotation adjustments are an additional form of variable consideration and are also estimated using the expected value method based on historical return rates. There were no material changes in the current period to the estimated variable consideration for performance obligations which were satisfied or partially satisfied during previous periods. Performance Obligations. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in Topic 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Certain of the Company’s contracts have multiple performance obligations, as the promise to transfer individual goods or services is separately identifiable from other promises in the contracts and, therefore, is distinct. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation based on its relative standalone selling price. The stand-alone selling prices are determined based on the prices at which the Company separately sells these products. For items that are not sold separately, the Company estimates the stand-alone selling prices using the best estimated selling price approach. The Company’s performance obligations are satisfied at a point in time or over time as work progresses. Substantially all of the Company’s product sales revenues as reflected on the condensed consolidated statements of operations for the three and nine months ended March 31, 2018 and 2017 are recognized at a point in time. Substantially all of the Company’s service revenue is recognized over time. For revenue recognized over time, the Company uses an input measure, days elapsed, to measure progress. On March 31, 2018, the Company had $156.6 million of remaining performance obligations, which is comprised of deferred maintenance revenue and services not yet delivered. The Company expects to recognize approximately 33 percent of its remaining performance obligations as revenue in fiscal 2018, an additional 48 percent in fiscal 2019 and 19 percent of the balance thereafter. Contract Balances. The timing of revenue recognition, billings and cash collections results in billed accounts receivable and deferred revenue in the consolidated balance sheet. Services provided under renewable support arrangements of the Company are billed in accordance with agreed-upon contractual terms, which are typically at periodic intervals (e.g., quarterly or annually). The Company sometimes receives payments from its customers in advance of services being provided, resulting in deferred revenues. These liabilities are reported on the consolidated balance sheet on a contract-by-contract basis at the end of each reporting period. Revenue recognized for the nine months ended March 31, 2018 and 2017, that was included in the deferred revenue balance at the beginning of each period was $66.7 million and $61.4 million, respectively. Revenue recognized for the three months ended March 31, 2018 and 2017 that was included in the deferred revenue balance at the beginning of each period was $50.6 million and $31.3 million, respectively. Contract Costs . The Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. Management expects that commission fees paid to sales representative as a result of obtaining service contracts and contract renewals are recoverable and therefore the Company capitalized them as contract costs in the amount of $3.1 million and $2.5 million at March 31, 2018 and June 30, 2017, respectively. Capitalized commission fees are amortized on a straight-line basis over the average period of service contracts of approximately three years, and are included in “Sales and marketing” in the accompanying condensed consolidated statements of operations. Amortization recognized during the three months ended March 31, 2018 and 2017, was $0.5 million and $0.4 million, respectively. Amortization recognized during the nine months ended March 31, 2018 and 2017 was $1.4 million and $1.1 million, respectively. There was no impairment loss in relation to the costs capitalized. Revenue by Category: The following table sets forth the Company’s revenue disaggregated by sales channel and geographic region based on the customer’s ship-to locations (in thousands, unaudited): Three Months Ended March 31, 2018 March 31, 2017 (As adjusted) Distributor Direct Total Distributor Direct Total Americas: United States $ 76,392 $ 56,929 $ 133,321 $ 31,972 $ 47,367 $ 79,339 Other 4,288 6,165 10,453 1,559 1,901 3,460 Total Americas 80,680 63,094 143,774 33,531 49,268 82,799 EMEA: 58,668 36,120 94,788 32,090 20,136 52,226 APAC: 3,085 20,357 23,442 2,399 11,772 14,171 Total net revenues $ 142,433 $ 119,571 $ 262,004 $ 68,020 $ 81,176 $ 149,196 Nine Months Ended March 31, 2018 March 31, 2017 (As adjusted) Distributor Direct Total Distributor Direct Total Americas: United States $ 181,415 $ 160,484 $ 341,899 $ 98,026 $ 112,592 $ 210,618 Other 13,417 20,252 33,669 5,779 14,772 20,551 Total Americas 194,832 180,736 375,568 103,805 127,364 231,169 EMEA: 165,856 97,647 263,503 99,459 61,026 160,485 APAC: 11,480 54,291 65,771 5,464 31,059 36,523 Total net revenues $ 372,168 $ 332,674 $ 704,842 $ 208,728 $ 219,449 $ 428,177 Business Combinations The Company applies the acquisition method of accounting for business combinations. Under this method of accounting, all assets acquired and liabilities assumed are recorded at their respective fair values at the date of the completion of the transaction. Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, discount rates, intangibles and other asset lives, among other items. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). Market participants are assumed to be buyers and sellers in the principal (most advantageous) market for the asset or liability. Additionally, fair value measurements for an asset assume the highest and best use of that asset by market participants. As a result, we may have been required to value the acquired assets at fair value measures that do not reflect its intended use of those assets. Use of different estimates and judgments could yield different results. Any excess of the purchase price over the fair value of the net assets acquired is recognized as goodwill. If the fair value of net assets acquired exceeds the fair value of purchase price, a gain on bargain purchase is recognized in the statements of operations. Although we believe the assumptions and estimates we have made are reasonable and appropriate, they are based in part on historical experience and information that may be obtained from the management of the acquired company and are inherently uncertain. Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates or actual results. As a result, during the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our consolidated statements of operations. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Mar. 31, 2018 | |
Accounting Changes And Error Corrections [Abstract] | |
Recent Accounting Pronouncements | 4. Recent Accounting Pronouncements Recently Issued Accounting Pronouncements In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments and interim periods within that reporting period In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities In August 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) Recently Adopted Accounting Pronouncements Revenues Recognition In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) The Company adopted Topic 606 on July 1, 2017, using the full retrospective method. This adoption primarily affected the Company’s accounting for distributor and resellers revenues from a primarily “sell-through” model, where revenue is recognized upon the sale from the distribution channel to the end customer, to the “sell-in” method where revenue is recognized upon transfer of control to its customers, including distributors. Under the sell-in method, the Company is required to make estimates at the time of shipment to its distributors of variable consideration as well as estimated returns under stock rotation rights granted to the distributors. Additionally, the Company capitalizes contract acquisition costs such as commissions paid for maintenance services contracts in excess of one year. Following the adoption of Topic 606, the revenue recognition for the Company’s other sales arrangements remained materially consistent with our historical practice. Upon adoption of Topic 606, we applied the standard’s practical expedients that allows a) an entity to use the transaction price at the date the contract was completed rather than estimating variable consideration amounts in the comparative reporting periods, b) that permits the omission of prior-period information about our performance obligations, and c) that allows the Company to reflect the aggregate effect of all modifications that occur before the beginning of the earliest period presented when identifying the satisfied and unsatisfied performance obligations, determining the transaction price and allocating the transaction price to the satisfied and unsatisfied performance obligations. See the tables at the end of this note for the effects of the adoption of Topic 606 on our condensed consolidated financial statements as of June 30, 2017, and for the three and nine months ended March 31, 2018 and 2017. See Note 3. “Summary of Significant Accounting Policies” to our condensed consolidated financial statements for further discussion of the effects of the adoption of Topic 606 on our significant accounting policies. Adjustments to Previously Reported Financial Statements from the Adoption of Accounting Pronouncements The following table presents the effect of the adoption of Topic 606 on our condensed consolidated balance sheet (unaudited) as of June 30, 2017, (in thousands): As of June 30, 2017 As Reported Adjustment As Adjusted Accounts receivable, net $ 120,770 $ (27,655 ) $ 93,115 Inventories 45,880 1,530 47,410 Total current assets 324,967 (26,125 ) 298,842 Other assets 22,586 2,479 25,065 Total assets 483,346 (23,646 ) 459,700 Accrued warranty 10,007 577 10,584 Other accrued liabilities 36,713 331 37,044 Deferred distributors revenue, net of cost of sales to distributors 43,525 (43,525 ) — Total current liabilities 255,822 (42,617 ) 213,205 Accumulated deficit (800,257 ) 18,971 (781,286 ) Total stockholders’ equity 106,707 18,971 125,678 Total liabilities and stockholders’ equity $ 483,346 $ (23,646 ) $ 459,700 The following tables present the effect of the adoption of Topic 606 on our condensed consolidated statements of operations (unaudited) for the three and nine months ended March 31, 2017 (in thousands, except per share amounts): Three Months Ended March 31, 2017 As Reported Adjustment As Adjusted Net revenues Product $ 110,789 $ 532 $ 111,321 Service 37,875 — 37,875 Total net revenues 148,664 532 149,196 Cost of revenues Product 52,401 (126 ) 52,275 Service 14,117 — 14,117 Total cost of revenues 66,518 (126 ) 66,392 Gross profit Product 58,388 658 59,046 Service 23,758 — 23,758 Total Gross profit 82,146 658 82,804 Sales and marketing expenses 38,759 31 38,790 Operating loss (3,246 ) 627 (2,619 ) Net loss before tax (4,438 ) 627 (3,811 ) Net loss $ (5,604 ) $ 627 $ (4,977 ) Basic and diluted net loss per share Net loss per share - basic $ (0.05 ) $ (0.05 ) Net loss per share - diluted $ (0.05 ) $ (0.05 ) Shares used in per share calculation - basic 109,213 109,213 Shares used in per share calculation - diluted 109,213 109,213 Nine Months Ended March 31, 2017 As Reported Adjustment As Adjusted Net revenues Product $ 310,709 $ 8,760 $ 319,469 Service 108,708 — 108,708 Total net revenues 419,417 8,760 428,177 Cost of revenues Product 155,987 3,164 159,151 Service 40,684 — 40,684 Total cost of revenues 196,671 3,164 199,835 Gross profit Product 154,722 5,596 160,318 Service 68,024 — 68,024 Total Gross profit 222,746 5,596 228,342 Sales and marketing expenses 116,824 (150 ) 116,674 Operating loss (15,367 ) 5,746 (9,621 ) Net loss before tax (17,442 ) 5,746 (11,696 ) Net loss $ (20,694 ) $ 5,746 $ (14,948 ) Basic and diluted net loss per share Net loss per share - basic $ (0.19 ) $ (0.14 ) Net loss per share - diluted $ (0.19 ) $ (0.14 ) Shares used in per share calculation - basic 107,531 107,531 Shares used in per share calculation - diluted 107,531 107,531 The following tables present the effect of the adoption of Topic 606 on our condensed consolidated statement of cash flows (unaudited) for the nine months ended March 31, 2017 (in thousands): Nine Months Ended March 31, 2017 As Reported Adjustment As Adjusted Cash flows from operating activities Net loss $ (20,694 ) $ 5,746 $ (14,948 ) Changes in operating assets and liabilities, net Accounts receivable (5,926 ) 13,158 7,232 Inventories 6,344 (1,620 ) 4,724 Prepaid expenses and other assets 8,181 (150 ) 8,031 Deferred distributors revenue, net of cost of sales to distributors 17,441 (17,441 ) — Other current and long-term liabilities 5,887 307 6,194 Net cash provided by operating activities 43,961 — 43,961 Cash flows from investing activities (69,159 ) — (69,159 ) Cash flows from financing activities 48,328 — 48,328 Foreign currency effect on cash 28 — 28 Net increase in cash and cash equivalents $ 23,158 $ — $ 23,158 |
Balance Sheet Accounts
Balance Sheet Accounts | 9 Months Ended |
Mar. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Balance Sheet Accounts | 5. Balance Sheet Accounts Cash, Cash Equivalents and Marketable Securities The following is a summary of cash, cash equivalents and marketable securities (in thousands): March 31, 2018 June 30, 2017 Cash $ 98,677 $ 126,159 Cash equivalents 4,500 4,291 Total cash and cash equivalents 103,177 130,450 Marketable securities (consisting of available-for-sale securities) 2,091 — Total cash, cash equivalents and marketable securities $ 105,268 $ 130,450 The Company considers highly liquid investments with maturities of three months or less at the date of purchase to be cash equivalents. Marketable securities are recorded in “Prepaid expense and other current assets” in the accompanying condensed consolidated balance sheet as these are publicly-traded equity securities. Marketable securities are classified as available-for-sale and reported at fair value with unrealized gains and losses included in “Accumulated other comprehensive loss” in the accompanying condensed consolidated balance sheets. Inventories The Company values its inventory at lower of cost or net realizable value. Cost is computed using standard cost, which approximates actual cost, on a first-in, first-out basis. The Company has established inventory allowances primarily determined by the demand of inventory or when conditions exist that suggest that inventory may be in excess of anticipated demand or is obsolete based upon assumptions about future demand. At the point of the loss recognition, a new, lower-cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis. Any written down or obsolete inventory subsequently sold has not had a material impact on gross margin for any of the periods disclosed. Inventories consist of the following (in thousands): March 31, 2018 June 30, 2017 (As Adjusted) Finished goods $ 63,306 $ 46,620 Raw materials 14,450 790 Total Inventories $ 77,756 $ 47,410 Property and Equipment, Net Property and equipment consist of the following (in thousands): March 31, 2018 June 30, 2017 Computers and equipment $ 69,712 $ 34,716 Purchased software 16,908 11,785 Office equipment, furniture and fixtures 18,143 10,852 Leasehold improvements 47,039 23,046 Total property and equipment 151,802 80,399 Less: accumulated depreciation and amortization (65,315 ) (50,159 ) Property and equipment, net $ 86,487 $ 30,240 Intangibles The following tables summarize the components of gross and net intangible asset balances (dollars in thousands) Weighted Average Remaining Amortization Gross Carrying Accumulated Net Carrying Period Amount Amortization Amount March 31, 2018 Developed technology 3.8 years $ 117,500 $ 52,860 $ 64,640 Customer relationships 3.7 years 51,639 39,577 12,062 Maintenance contracts 0.6 years 17,000 15,016 1,984 Trade names 3.7 years 9,100 3,776 5,324 Backlogs — years 1,800 1,800 — License agreements 5.9 years 2,445 1,323 1,122 Other intangibles 1.9 years 1,382 1,108 274 Total intangibles, net $ 200,866 $ 115,460 $ 85,406 Weighted Average Remaining Amortization Gross Accumulated Net Carrying Period Amount Amortization Amount June 30, 2017 Developed technology 5.3 years $ 55,400 $ 42,689 $ 12,711 Customer relationships 3.3 years 40,300 37,567 2,733 Maintenance contracts 1.3 years 17,000 12,467 4,533 Trade names 4.3 years 5,100 2,846 2,254 License agreements 6.4 years 2,445 1,120 1,325 Other intangibles 2.7 years 1,382 1,001 381 Total intangibles, net with finite lives 121,627 97,690 23,937 In-process research and development, with indefinite life 1,400 — 1,400 Total intangibles, net $ 123,027 $ 97,690 $ 25,337 During the three months ended September 30, 2017, in-process research and development of $1.4 million included in the above table was reclassified to developed technology upon completion of the project and is being amortized over its estimated useful life. The amortization expense of intangibles for the periods presented is summarized below (in thousands): Three Months Ended Nine Months Ended March 31, 2018 March 31, 2017 March 31, 2018 March 31, 2017 Amortization in “Cost of revenues: Product” $ 4,647 $ 995 $ 11,310 $ 6,271 Amortization of intangibles 2,101 1,193 6,461 7,510 Total amortization $ 6,748 $ 2,188 $ 17,771 $ 13,781 The amortization expense that is recognized in “Cost of revenues: Product” is comprised of amortization for developed technology, license agreements and other intangibles. Goodwill The following table summarizes goodwill for the periods presented (in thousands): March 31, 2018 Balance as of June 30, 2017 $ 80,216 Additions due to acquisitions 49,028 Balance at end of period $ 129,244 During the nine months ended March 31, 2018, the Company completed acquisitions of the Campus Fabric Business and the Data Center Business, resulting in an additional goodwill of $36.4 million and $12.6 million, respectively. See Note 2 for additional information related to the acquisitions. Deferred Revenue The Company offers for sale to its customers, renewable support arrangements that range from one to five years as well as professional and training services, which results in deferred revenue. Debt The Company’s debt is comprised of the following (in thousands): March 31, 2018 June 30, 2017 Current portion of long-term debt: Term Loan $ 25,260 $ 12,444 Less: unamortized debt issuance costs (540 ) (164 ) Current portion of long-term debt $ 24,720 $ 12,280 Long-term debt, less current portion: Term Loan $ 145,173 $ 71,268 Revolver 10,000 10,000 Less: unamortized debt issuance costs (1,215 ) (846 ) Total long-term debt, less current portion 153,958 80,422 Total debt $ 178,678 $ 92,702 In connection with the closing of Campus Fabric Business discussed in Note 2, the Company entered into the Second Amendment to the Amended and Restated Credit Agreement (“Second Amendment”), which amended the Amended and Restated Credit Agreement, dated as of October 28, 2016 (the “Credit Facility”), by and among the Company, as borrower, Silicon Valley Bank, as administrative agent and collateral agent, and lenders. Among other things, the Second Amendment (i) increased the amount of the available borrowing under the Credit Facility from $140.5 million to $243.7 million, composed of (a) the five-year term loan (“Term Loan”) in a principal amount of up to $183.7 million and (b) the five-year revolving credit facility (“Revolver”) in a principal amount of up to $60.0 million, (ii) extends the maturity date under the existing Term Loan and the termination date under the existing Revolver, (iii) provides for an uncommitted additional incremental loan facility in the principal amount of up to $50.0 million (“Incremental Facility”), and (iv) joins certain additional banks, financial institutions and institutional lenders as lenders pursuant to the terms of the Credit Facility. On July 14, 2017, the Company borrowed $80.0 million under the Term Loan which was used to fund the purchase of Campus Fabric Business. In connection with the closing of the acquisition of the Data Center Business discussed in Note 2, the Company entered into the Third Amendment to the Credit Facility (the “Third Amendment”) n October 26, 2017. Among other things, the Third Amendment (i) amends the negative covenant governing dispositions to increase the general dispositions basket for the fiscal year of the Company ending June 30, 2018, and (ii) amends certain definitions and provisions to update certain references to the Data Center Business Purchase Agreement (as defined above). On the Data Center Business Closing Date, the Company borrowed $20.0 million on the Term Loan to partially fund the acquisition of the Data Center Business. Borrowings under the Term Loan bear interest, at our option, at a rate equal to either the LIBOR rate (subject to a 0.0 3.25 1.25 0.0 3.25 1.25 0.375 0.50 The Company had $1.2 million of outstanding letters of credit and $48.8 million of availability under the Revolver as of March 31, 2018. On May 1, 2018, the Company terminated the Credit Facility. On May 1, 2018, the Company entered into a Credit Agreement (the “New Credit Agreement”), by and among the Company, as borrower, BMO Harris Bank N.A., as an issuing lender and swingline lender, Bank of Montreal, as administrative and collateral agent, and the financial institutions or entities that are a party thereto as lenders. The New Credit Agreement provides for a $40 million five-year revolving credit facility (the “New Revolver”) and a $190 million five-year term loan (the “New Term Loan” and together with the New Revolver, the “New Senior Secured Credit Facilities”). On May 1, 2018, the Company borrowed $200 million under the New Senior Secured Credit Facilities in order to pay off existing debt and for general corporate purposes. See Note 14 (Subsequent Events) to the condensed consolidated financial statements for more information on the New Credit Agreement. Guarantees and Product Warranties Networking products may contain undetected hardware or software errors when new products or new versions or updates of existing products are released to the marketplace. The Company’s standard hardware warranty period is typically 12 months from the date of shipment to end-users and 90 days for software. For certain access products, the Company offers a limited lifetime hardware warranty commencing on the date of shipment from the Company and ending five (5) years following the Company’s announcement of the end of sale of such product. Upon shipment of products to its customers, the Company estimates expenses for the cost to repair or replace products that may be returned under warranty and accrue a liability in cost of product revenue for this amount. The determination of the Company’s warranty requirements is based on actual historical experience with the product or product family, estimates of repair and replacement costs and any product warranty problems that are identified after shipment. The Company estimates and adjusts these accruals at each balance sheet date in accordance with changes in these factors. Upon issuance of a standard product warranty, the Company discloses and recognizes a liability for the obligations it assumes under the product warranty. The following table summarizes the activity related to the Company’s product warranty liability during the three and nine months ended March 31, 2018 and 2017 (in thousands): Three Months Ended Nine Months Ended March 31, 2018 March 31, 2017 March 31, 2018 March 31, 2017 (As adjusted) (As adjusted) Balance beginning of period $ 13,010 $ 10,790 $ 10,584 $ 9,998 Warranties assumed due to acquisitions — — 3,682 2,034 New warranties issued 2,872 1,893 6,801 3,997 Warranty expenditures (3,070 ) (2,080 ) (8,255 ) (5,426 ) Balance end of period $ 12,812 $ 10,603 $ 12,812 $ 10,603 To facilitate sales of its products in the normal course of business, the Company indemnifies its resellers and end-user customers with respect to certain matters. The Company has agreed to hold the customer harmless against losses arising from a breach of intellectual property infringement or other. These agreements may limit the time within which an indemnification claim can be made and the amount of the claim. It is not possible to estimate the maximum potential amount under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. Historically, payments made by the Company under these agreements have not had a material impact on its operating results or financial position. Other long-term liabilities The following is a summary of long-term liabilities (in thousands): March 31, 2018 June 30, 2017 Acquisition related deferred payments, less current portion $ 14,147 $ — Acquisition-related contingent consideration obligations, less current portion 33,256 — Other 18,037 8,526 Total other long-term liabilities $ 65,440 $ 8,526 Advertising All advertising costs are expensed as incurred. Advertising expenses for three and nine months ended March 31, 2018 and 2017, were immaterial. Concentrations The Company may be subject to concentration of credit risk as a result of certain financial instruments consisting of accounts receivable and marketable securities. The Company does not invest an amount exceeding 10% of its combined cash or cash equivalents in the securities of any one obligor or maker, except for obligations of the United States government, obligations of United States government agencies and money market accounts. The Company performs ongoing credit evaluations of its customers and generally does not require collateral in exchange for credit. The following table sets forth major customers accounting for 10% or more of our net revenues: Three Months Ended Nine Months Ended March 31, 2018 March 31, 2017 March 31, 2018 March 31, 2017 (As adjusted) (As adjusted) Westcon Group Inc. 14% 10% 14% 11% Tech Data Corporation 14% 13% 13% 15% Jenne Corporation 13% 14% 11% 14% The following customers account for more than 10% of the Company’s accounts receivable outstanding as of March 31, 2018, Tech Data 18% and Westcon Group 14% |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 6. Fair Value Measurements A three-tier fair value hierarchy is utilized to prioritize the inputs used in measuring fair value. The hierarchy gives the highest priority to quoted prices in active markets (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels are defined as follows: • Level 1 Inputs - unadjusted quoted prices in active markets for identical assets or liabilities; • Level 2 Inputs - quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument; and • Level 3 Inputs - unobservable inputs reflecting the Company’s own assumptions in measuring the asset or liability at fair value. The following table presents the Company’s fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis (in thousands): March 31, 2018 Level 1 Level 2 Level 3 Total Assets Investments: Money market funds $ 4,500 $ — $ — $ 4,500 Marketable securities 2,091 — — 2,091 Total assets measured at fair value $ 6,591 $ — $ — $ 6,591 Liabilities Acquisition-related contingent consideration obligations $ — $ — $ 46,526 $ 46,526 Total liabilities measured at fair value $ — $ — $ 46,526 $ 46,526 June 30, 2017 Level 1 Level 2 Level 3 Total Assets Investments: Money market funds $ 4,291 $ — $ — $ 4,291 Investment in non-marketable equity — — 3,000 3,000 Total assets measured at fair value $ 4,291 $ — $ 3,000 $ 7,291 Level 1 investments : The Company holds investments in equity securities acquired from the sale of an investment in non-marketable equity securities during the first quarter of fiscal 2018, which is classified as available-for-sale marketable securities at Level 1 as the investments have readily determinable fair value (see below, Level 3 investments). An unrealized holding gain on the investments was $0.7 million as of March 31, 2018. Level 2 assets and liabilities : The Company includes U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, and state, municipal and provincial obligations for which quoted prices are available as Level 2. There were no transfers of assets or liabilities between Level 1 and Level 2 for the periods presented. The fair value of the borrowings under the Credit Facility is estimated based on valuations provided by alternative pricing sources supported by observable inputs which is considered Level 2. Due to the short duration until maturity of the credit facility, the fair value approximates the face amount of the Company’s indebtedness of $178.7 million and $93.7 million as of March 31, 2018 and June 30, 2017, respectively. Such differences are immaterial for all periods presented. Level 3 assets and liabilities: Certain of the Company’s assets, including intangible assets and goodwill are measured at fair value on a non-recurring basis if impairment is indicated. As of June 30, 2017, the Company reflected its non-marketable equity investment as Level 3 in the fair value hierarchy as it is based on unobservable inputs that market participants would use in pricing this asset due to the absence of recent comparable market transactions and inherent lack of liquidity. During fiscal 2015, the Company purchased a $3.0 million equity interest in a company that operated in the enterprise software platform industry. The Company did not enter into any other transactions with the investee during fiscal 2017 or the first quarter of fiscal 2018. During the three months ended September 30, 2017, the investee was acquired by a third party. The Company received $6.8 million as consideration for its equity interest in the investee, including $5.4 million in cash and 65,937 shares of the third party’s publicly-traded common stock with a market value of $1.4 million. During the first quarter of fiscal 2018, the Company received $5.8 million of the consideration, consisting of $4.9 million in cash and 41,685 shares with a market value of $0.9 million. The remainder have readily determinable fair value and During the quarter ended December 31, 2017, the Company recorded a liability for contingent consideration related to its acquisitions of the Data Center Business and the CF Business (see Note 2 for additional information related to the acquisitions). The fair value measurement of the contingent consideration obligations is determined using Level 3 inputs. The fair value of contingent consideration obligations is based on a discounted cash flow model. These fair value measurements represent Level 3 measurements as they are based on significant inputs not observable in the market. Significant judgment is employed in determining the appropriateness of these assumptions as of the acquisition date and for each subsequent period. Accordingly, changes in assumptions could have a material impact on the amount of contingent consideration expense the Company records in any given period. Changes in the value of the contingent consideration obligations would be recorded in general and administrative expenses in the accompanying condensed consolidated statements of operations. The change in the acquisition-related contingent consideration obligations is as follows (in thousands): Three Months Ended Nine Months Ended March 31, 2018 March 31, 2018 Beginning balance $ 47,030 $ — Initial fair value measurements — 47,030 Payments (671 ) (671 ) Accretion on discount 1,401 1,401 Change in fair value (1,234 ) (1,234 ) Ending balance $ 46,526 $ 46,526 There were no transfers of assets or liabilities between Level 2 and Level 3 during the first nine months of fiscal year 2018 or 2017. There were no impairments recorded for the first nine months of fiscal 2018 or 2017. |
Share-based Compensation
Share-based Compensation | 9 Months Ended |
Mar. 31, 2018 | |
Share Based Compensation [Abstract] | |
Share-based Compensation | 7. Shares reserved for issuance The Company had reserved for issuance for the periods noted (in thousands): March 31, 2018 June 30, 2017 2014 Employee Stock Purchase Plan 5,365 7,785 Employee stock options and awards outstanding 10,405 9,726 2013 Equity Incentive Plan shares available for grant 11,944 7,629 Total shares reserved for issuance 27,714 25,140 Share-based compensation expense recognized in the condensed consolidated financial statements by line item caption is as follows (in thousands): Three Months Ended Nine Months Ended March 31, 2018 March 31, 2017 March 31, 2018 March 31, 2017 Cost of product revenue $ 163 $ 73 $ 389 $ 262 Cost of service revenue 354 56 783 475 Research and development 2,367 625 5,247 2,593 Sales and marketing 2,735 809 7,077 3,129 General and administrative 2,199 911 6,150 2,869 Total share-based compensation expense $ 7,818 $ 2,474 $ 19,646 $ 9,328 During the nine months ended March 31, 2018 or 2017, the Company did not capitalize any share-based compensation expense in inventory, as the amounts were immaterial. Stock Awards Stock awards may be granted under the 2013 Equity Incentive Plan (the “2013 Plan”) on terms approved by the Compensation Committee of the Board of Directors. Stock awards generally provide for the issuance of restricted stock units (“RSUs”) including performance or market-based RSUs which vest over a fixed period of time or based upon the satisfaction of certain performance criteria. The Company uses the straight-line method for expense attribution, and beginning with fiscal 2017, the Company does not estimate forfeitures, but accounts for them as incurred. The following table summarizes stock award activity for the nine months ended March 31, 2018 (in thousands, except grant date fair value): Number of Shares Weighted- Average Grant Date Fair Value Aggregate Fair Market Value Non-vested stock awards outstanding at June 30, 2017 6,664 $ 4.66 $ 61,440 Granted 4,335 11.26 Vested (2,488 ) 3.75 Cancelled (374 ) 7.23 Non-vested stock awards outstanding at March 31, 2018 8,137 $ 8.34 $ 90,084 The following table summarizes stock option activity for the nine months ended March 31, 2018 (in thousands, except per share and contractual term): Number of Shares Weighted-Average Exercise Price Per Share Weighted-Average Remaining Contractual Term (years) Aggregate Intrinsic Value Options outstanding at June 30, 2017 3,062 $ 4.06 4.19 $ 15,868 Exercised (779 ) 4.56 Cancelled (15 ) 4.25 Options outstanding at March 31, 2018 2,268 $ 3.89 3.11 $ 16,283 Vested and expected to vest at March 31, 2018 2,268 $ 3.89 3.11 $ 16,283 Exercisable at March 31, 2018 1,961 $ 4.10 2.95 $ 13,670 The fair value of each stock option grant under the 2013 Plan and 2005 Equity Incentive Plan is estimated on the date of grant using the Black-Scholes-Merton option valuation model with the weighted average assumptions noted in the following table. The Company uses the Monte-Carlo simulation model to determine the fair value and the derived service period of stock awards with market conditions, on the date of the grant. The expected term of options granted is derived from historical data on employee exercise and post-vesting employment termination behavior. The risk-free rate is based upon the estimated life of the option and the U.S. Treasury yield curve in effect at the time of grant. Expected volatility is based on the historical volatility on the Company’s stock. The fair value of each RSUs grant with performance-based vesting criteria (“PSUs”) under the 2013 Plan is estimated on the date of grant using the Monte-Carlo simulation model to determine the fair value and the derived service period of stock awards with market conditions, on the date of the grant. During the first quarter of fiscal 2018, the Company approved the grant of 1,154,014 stock awards to its vice president level employees or above (“VPs”), including 560,344 stock awards to its Executive Officers, and 939,925 stock awards to its other employees. Company. No PSUs were granted during the second quarter of fiscal 2018. For the PSUs referenced in the preceding paragraph, they will be considered earned once the Company s combined earnings per share equals or exceeds $0.32 for two consecutive quarters (the FY18 Performance Threshold ). Upon satisfying the FY18 Performance Threshold, the PSUs shall vest with respect to the same number of RSUs that have vested which were granted on the same date and thereafter, shall vest on the same schedule as the RSUs, subject to continued service to the Company. If the FY18 Performance Threshold is not met by the third anniversary of the grant date the award is canceled. In addition, the FY18 Performance Threshold shall be deemed satisfied upon the closing of a Change in Control (within the meaning of the Company’s 2013 Equity Incentive Plan) in the event the per share consideration received by the Company’s stockholders equals or exceeds $16.00 per share. During the three and nine months ended March 31, 2018, none of the PSU grants referenced above achieved their FY18 Performance Threshold. During the third quarter of fiscal 2018, the Company approved the grant of 100,000 stock awards with market-based vesting criteria to certain VPs with grant date fair values ranging from $10.61 to $12.19 determined by using the Monte-Carlo simulation model. During the first quarter of fiscal 2017, the Company approved the grant of 1,505,120 stock awards to its VPs, including 680,000 stock awards to its Executive Officers, and 1,053,300 stock awards to other Company employees. Fifty percent (50%) of the stock awards granted to the VPs were in the form of PSUs, with grant date fair values ranging from $3.02 to $3.09, and fifty percent (50%) of the stock awards granted were in the form of RSUs. The RSUs vest from the original grant date as to one-third (1/3) on the one-year anniversary and one-twelfth (1/12) each quarter thereafter, subject to continued service to the Company. No PSUs were granted during the second quarter of fiscal 2017. The PSUs were considered earned once the Company’s stock price equaled or exceeded $5.00 per share for 30 consecutive trading days after January 1, 2017 (the FY17 Performance Threshold ). Once the FY17 Performance Threshold goal was attainted the PSUs began to vest on the same schedule as the RSUs that were granted at the same time, subject to continued service to the Company. During the quarter ended March 31, 2017, all of the PSU grants referenced above achieved their FY17 Performance Threshold and as such, began vesting and will be released on the schedule as noted, subject to continued service to the Company. The fair value of each share purchase option under the Company ’ There were 1,151,759 and 1,114,707 shares issued under the ESPP during the three months ended March 31, 2018 and 2017, respectively. There were 2,419,689 and 2,218,306 shares issued under the ESPP during the nine months ended March 31, 2018 and 2017, respectively. The following assumptions were used to calculate the fair value of shares granted under the ESPP during the following periods: Three Months Ended Nine Months Ended March 31, 2018 March 31, 2017 March 31, 2018 March 31, 2017 Expected life 0.5 years 0.5 years 0.5 years 0.5 years Risk-free interest rate 1.15 % 0.40 % 1.64%–1.15% 0.40 % Volatility 42 % 37 % 42 % 40%–37% Dividend yield — % — % — % — % The weighted-average fair value of shares granted under the ESPP during the three months ended March 31, 2018 and 2017 was $4.00 and $1.34, respectively. The weighted-average fair value of shares granted under the ESPP during the nine months ended March 31, 2018 and 2017 was $3.26 and $1.24, respectively. |
Restructuring Charges
Restructuring Charges | 9 Months Ended |
Mar. 31, 2018 | |
Restructuring And Related Activities [Abstract] | |
Restructuring Charges | 8. Restructuring Charges 2018 Restructuring In the third quarter of fiscal 2018, the Company announced and began executing a reduction-in-force (the “2018 Restructuring”) to re-align the Company’s resources as a result of the Company’s recent acquisitions of the Campus Fabric Business and the Data Center Business. The Company recorded $ 4.9 million related to during the three months ended March 31, 2018. 2017 Restructuring The Company recorded restructuring charges, net of $7.7 million and $9.6 million for the three and nine months ended March 31, 2017, respectively. Pursuant with the WLAN Business acquisition from Zebra, the Company assumed a facility lease located at and transferred its headquarters to 6480 Via del Oro, San Jose, California. The Company consolidated its existing workforce from the Company’s previous headquarters location on Rio Robles Drive in San Jose, California, with employees assumed from Zebra at the Via del Oro site and exited the Rio Robles site on January 31, 2017. Due to the Company’s cease use of the Rio Robles facility and abandonment of all leasehold improvements, it accelerated the amortization of the remaining leasehold improvements balance for this site over the shortened service period such that the leasehold improvements were fully amortized on the cease-use date. The Company recorded accelerated amortization expense for the three and nine months ended March 31, 2017 of $0.9 million and $2.6 million respectively, and it is reflected in “Restructuring and related charges, net of reversals” in the condensed consolidated statements of operations. The Company entered into an agreement to sublease its Rio Robles California site during the third quarter of fiscal 2017. The sublease is for the remaining duration of the Company’s lease. The sublease resulted in adjustments to the prior estimates for the amount of sublease payments, timing of sublease activities and real estate commissions associated with the sublease. The net adjustments resulted in a charge of $1.5 million during the third quarter of fiscal 2017. Previously, in the second quarter of fiscal 2017, the Company had modified its estimated future obligations for non-cancelable lease payments and related future sub-leasing income and recorded charges of $0.1 million. The excess facilities payments will continue through fiscal year 2023, due to the length of the lease agreements. In conjunction with the above noted actions, the Company announced a reduction-in-force during the quarter ended March 31, 2017 affecting 90 employees. The Company recorded $5.3 million in severance and benefits charges during the period. Restructuring liabilities consisted of obligations pertaining to the estimated future obligations for non-cancelable lease payments, as well as severance and benefits obligations. The restructuring liabilities are recorded in “Other accrued liabilities” and “Other long-term liabilities” in the accompanying condensed consolidated balance sheets. Total restructuring and related liabilities consist of (in thousands): Excess Facilities Severance Benefits Other Total Balance as of June 30, 2017 $ 2,184 $ 1,853 $ 85 $ 4,122 Period charges — 4,920 — 4,920 Period payments (516 ) (4,198 ) (73 ) (4,787 ) Balance as of March 31, 2018 $ 1,668 $ 2,575 $ 12 $ 4,255 Less: current portion included in Other accrued liabilities 2,920 Restructuring accrual included in Other long-term liabilities $ 1,335 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Mar. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 9. Commitments and Contingencies Purchase Commitments The Company currently has arrangements with contract manufacturers and suppliers for the manufacture of its products. Those arrangements allow the contract manufactures to procure long lead-time component inventory based upon a rolling production forecast provided by the Company. The Company is obligated to purchase long lead-time component inventory that its contract manufacturer procures in accordance with the Company’s forecast, unless the Company gives notice of order cancellation outside of applicable component lead-times. As of March 31, 2018, the Company had non-cancelable commitments to purchase $151.5 million of such inventory. As of March 31, 2018 the Company had non-cancelable software and maintenance support commitments to purchase $17.5 million of software and support services. Legal Proceedings The Company may from time to time be party to litigation arising in the course of its business, including, without limitation, allegations relating to commercial transactions, business relationships or intellectual property rights. Such claims, even if not meritorious, could result in the expenditure of significant financial and managerial resources. Litigation in general, and intellectual property and securities litigation in particular, can be expensive and disruptive to normal business operations. Moreover, the results of legal proceedings are difficult to predict. In accordance with applicable accounting guidance, the Company records accruals for certain of its outstanding legal proceedings, investigations or claims when it is probable that a liability will be incurred and the amount of loss can be reasonably estimated. The Company evaluates, at least on a quarterly basis, developments in legal proceedings, investigations or claims that could affect the amount of any accrual, as well as any developments that would result in a loss contingency to become both probable and reasonably estimable. When a loss contingency is not both probable and reasonably estimable, the Company does not record a loss accrual. However, if the loss (or an additional loss in excess of any prior accrual) is at least a reasonable possibility and material, then the Company would disclose an estimate of the possible loss or range of loss, if such estimate can be made, or disclose that an estimate cannot be made. The assessment whether a loss is probable or a reasonable possibility, and whether the loss or a range of loss is estimable, involves a series of complex judgments about future events. Even if a loss is reasonably possible, the Company may not be able to estimate a range of possible loss, particularly where (i) the damages sought are substantial or indeterminate, (ii) the proceedings are in the early stages, or (iii) the matters involve novel or unsettled legal theories or a large number of parties. In such cases, there is considerable uncertainty regarding the ultimate resolution of such matters, including the amount of any possible loss, fine or penalty. Accordingly, for current proceedings, except as noted below, the Company is currently unable to estimate any reasonably possible loss or range of possible loss. However, an adverse resolution of one or more of such matters could have a material adverse effect on the Company's results of operations in a particular quarter or fiscal year. Brazilian Tax Assessment Matter On May 28, 2007, the Public Treasury Department of the State of Sao Paolo, Brazil (the “Tax Authority”) assessed our Brazilian subsidiary, Enterasys Networks do Brasil Ltda. (“Enterasys Brasil”), based on an alleged underpayment of taxes. The Tax Authority also charged interest and penalties with respect to the assessment (collectively, the “ICMS Tax Assessment”). The Tax Authority denied Enterasys Brasil the use of certain presumed tax credits granted by the State of Espirito Santo, Brazil under the terms of the FUNDAP program for the period from February 2003 to December 2004. The value of the disallowed presumed tax credits is BRL 3.4 million (approximately U.S. $1.0 million), excluding interest and penalties. All currency conversions in this Legal Proceedings section are as of March 31, 2018. Unable to resolve the matter at the administrative level, on October 1, 2014, Enterasys Brasil filed a lawsuit in the 11th Public Treasury Court of the Sao Paolo State Court of Justice (Judiciary District of Sao Paolo) to overturn or reduce the ICMS Tax Assessment. As part of this lawsuit, Enterasys Brasil requested a stay of execution, so that no tax foreclosure could be filed and no guarantee would be required until the court issued its final ruling. On or about October 6, 2014, the court granted a preliminary injunction staying any execution on the assessment, but requiring that Enterasys Brasil deposit the assessed amount with the court. Enterasys Brasil appealed this ruling and, on or about January 28, 2015, the appellate court ruled that no cash deposit (or guarantee) was required. In a decision dated August 28, 2017, and published on October 3, 2017, the court validated the assessment and penalty imposed by the Tax Authority, but ruled that the Tax Authority was charging an unlawfully high interest rate on the tax assessment and penalty amounts, and ordered the interest rate reduced to the maximum Federal rate. The August 28, 2017 decision, were it to become final, would require Enterasys Brasil to pay a total of BRL 16.8 million (approximately U.S. $5.1 million), which includes penalties, court costs, attorneys’ fees, and accrued interest as of March 31, 2018. The Company believes the ICMS Tax Assessment against Enterasys Brasil is without merit, and has appealed the lower court’s decision. The appellate court ruled that no cash deposit (or guarantee) is required during the pendency of the appeal. Based on the currently available information, the Company believes the ultimate outcome of the ICMS Tax Assessment litigation will not have a material adverse effect on the Company's financial position or overall results of operations. However, due to the complexities and uncertainty surrounding the judicial process in Brazil and the nature of the claims asserted, there can be no assurance of a favorable outcome for Enterasys Brasil, which recorded an accrual of BRL 9.4 million (approximately U.S. $2.8 million) as of the date the Company acquired Enterasys Networks . The Company made a demand on April 11, 2014 for a defense from, and indemnification by, the former equity holder of Enterasys Networks, Inc. (“Seller”) in connection with the ICMS Tax Assessment. Seller agreed to assume the defense of the ICMS Tax Assessment on May 20, 2014. In addition, through the settlement of an indemnification-related lawsuit with the Seller on June 18, 2015, Seller agreed to continue to defend the Company with respect to the ICMS Tax Assessment and to indemnify the Company for losses related thereto subject to certain conditions. These conditions include the offsetting of foreign income tax benefits realized by the Company in connection with the acquisition of Enterasys. Based upon current projections of the foreign income tax benefits to be realized, and the potential liability in the event of an adverse final judgment in the ICMS Tax Assessment litigation, the Company does not presently anticipate that any amounts under the indemnification will be due from the Seller in connection with the ICMS Tax Assessment. In re Extreme Networks, Inc. Securities Litigation On October 23 and 29, 2015, punitive class action complaints alleging violations of securities laws were filed in the U.S. District Court for the Northern District of California against the Company and three of its former officers (Charles W. Berger, Kenneth B. Arola, and John T. Kurtzweil). Subsequently, the cases were consolidated ( In re Extreme Networks, Inc. Securities Litigation On February 18, 2016, a shareholder derivative case was filed in the Superior Court of California, Santa Clara County ( Shaffer v. Kispert et al XR Communications, LLC d/b/a Vivato Technologies, LLC v. Extreme Networks, Inc. On April 19, 2017, XR Communications, LLC (“XR”) (d/b/a Vivato Technologies) filed a patent infringement lawsuit against the Company in the Central District of California ( XR Communications, LLC, dba Vivato Technologies v. Extreme Networks, Inc. Markman DIFF Scale Operation Research, LLC v. Extreme Networks, Inc. On March 15, 2018, DIFF Scale Operation Research, LLC (“DIFF”) filed a patent infringement lawsuit against the Company in the United States District Court for the Southern District of New York ( DIFF Scale Operation Research, LLC v. Extreme Networks, Inc. Be Labs, Inc. v. Extreme Networks, Inc. On April 25, 2018, Be Labs, Inc. (“Be Labs”) filed a patent infringement lawsuit against the Company in the United States District Court for the District of Delaware (Be Labs, Inc. v. Extreme Networks, Inc., No. 1:18-cv-00626). The complaint alleges direct and indirect infringement of two patents generally directed to a multimedia wireless distribution system for home or office use, and appears to accuse the Company’s 802.11ac- and 802.11n-compliant ExtremeWireless products. Be Labs seeks damages, pre- and post-judgment interest, attorneys’ fees, costs, and a permanent injunction. The Company believes the claims are without merit, and intends to defend them vigorously. Orckit IP, LLC v. Extreme Networks, Inc., Extreme Networks Ireland Ltd., and Extreme Networks GmbH On February 1, 2018, Orckit IP, LLC (“Orckit”) filed a patent infringement lawsuit against the Company and our Irish and German subsidiaries in the District Court in Dusseldorf, Germany. The lawsuit alleges direct and indirect infringement of the German portion of European Patent EP 1 958 364 B1 based on the offer, distribution, use, possession and/or importation into Germany of certain network switches equipped with the ExtremeXOS operating system. Orckit is seeking injunctive relief, an accounting, and an unspecified declaration of liability for damages and costs of the lawsuit. On May 3, Extreme Networks GmbH filed a separate nullity action in the Federal Patent Court in Munich, seeking to invalidate the asserted patents, and on May 4, the defendants answered the complaint, denying any infringement and seeking a stay of the action pending the conclusion of the nullity action. The Company believes the claims are without merit, and intends to defend them vigorously. Indemnification Obligations Subject to certain limitations, the Company may be obligated to indemnify its current and former directors, officers and employees. These obligations arise under the terms of its certificate of incorporation, its bylaws, applicable contracts, and applicable law. The obligation to indemnify, where applicable, generally means that the Company is required to pay or reimburse, and in certain circumstances the Company has paid or reimbursed, the individuals' reasonable legal expenses and possibly damages and other liabilities incurred in connection with certain legal matters. For example, the Company currently is paying or reimbursing legal expenses being incurred by certain current and former officers and directors in connection with the shareholder litigation described above. The Company also procures Directors and Officers insurance to help cover its defense and/or indemnification costs, although its ability to recover such costs through insurance is uncertain. While it is not possible to estimate the maximum potential amount that could be owed under these indemnification agreements due to the Company’s limited history with prior indemnification claims, indemnification (including defense) costs could, in the future, have a material adverse effect on the Company’s consolidated financial position, results of operations and cash flows. |
Income Taxes
Income Taxes | 9 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 10. Income Taxes For the three months ended March 31, 2018 and 2017, the Company recorded income tax provision of $1.7 million and $1.2 million, respectively. For the nine months ended March 31, 2018 and 2017, the Company recorded income tax provision of $1.8 million and $3.3 million, respectively. The income tax provisions for the three months ended March 31, 2018 and 2017, consisted primarily of taxes on the income of the Company’s foreign subsidiaries as well as tax expense associated with the establishment of a U.S. deferred tax liability for amortizable goodwill resulting from the acquisition of Enterasys Networks, Inc., the Zebra WLAN Business and the Campus Fabric Business. The income tax provisions for both fiscal years were calculated based on the actual results of operations for the three months ended March 31, 2018 and 2017, and therefore may not reflect the annual effective tax rate. The income tax provisions for the nine months ended March 31, 2018 and 2017 consisted primarily of taxes on the income of the Company’s foreign subsidiaries as well as tax expense associated with the establishment of a U.S. deferred tax liability for amortizable goodwill resulting from the acquisitions referenced above. The income tax provision for the nine months ended March 31, 2018 is offset by a tax benefit of $2.5 million resulting from the reduction of the U.S. Federal tax rate from 35% to 21% applied to our deferred tax liability related to amortizable goodwill as required by the recently enacted U.S. tax legislation discussed below. On December 22, 2017, the President of the United States signed and enacted into law H.R. 1, the Tax Cuts and Jobs Act (“TCJA”), which, except for certain provisions, is effective for tax years beginning on or after January 1, 2018. As a fiscal year taxpayer, the Company will not be subject to the majority of the tax law provisions until fiscal year 2019; however, there are certain significant items of impact that will be recognized in fiscal year 2018. Because a change in tax law is accounted for in the period of enactment, the effects of the TCJA, a tax benefit of $2.5 million, have been reflected in the second quarter of fiscal 2018. The TCJA’s primary change is a reduction in the U.S. Federal statutory corporate tax rate from 35% to 21%, including a pro rata reduction from 35% to 28% for the Company in fiscal 2018. As a result, the Company has recognized a tax benefit in the amount of $2.5 million in the second quarter of fiscal 2018 due to the revaluation of the Company's deferred tax liability related to amortizable goodwill to reflect the lower statutory rate. Because the U.S. deferred tax assets are offset by a full valuation allowance, the reduction in deferred tax assets for the lower rate was fully offset by a corresponding reduction in valuation allowance resulting in no additional tax provision. The TCJA moves the U.S. from a global taxation regime to a modified territorial regime. Under the territorial regime, the company’s foreign earnings will generally not be subject to tax in the US. As part of transitioning to this new regime, U.S. companies are required to pay tax on historical earnings generated offshore that have not been repatriated to the U.S. (“Transition Tax”). The Company has estimated as of the second quarter of fiscal 2018, there will be no incremental tax provision relating to the Transition Tax given the Company’s ability to utilize existing tax attributes to offset the impact of the deemed repatriation. The TCJA makes broad and complex changes to the U.S. tax code, and in certain instances, lacks clarity and is subject to interpretation until additional U.S. Treasury guidance is issued. On December 22, 2017, the SEC issued guidance under Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”), which allows registrants to record provisional amounts during a one year “measurement period” similar to that used when accounting for business combinations. However, the measurement period is deemed to have ended earlier when the registrant has obtained, prepared and analyzed the information necessary to finalize its accounting. During the measurement period, impacts of the law are expected to be recorded at the time a reasonable estimate for all or a portion of the effects can be made, and provisional amounts can be recognized and adjusted as information becomes available, prepared or analyzed. The SAB summarizes a three-step process to be applied at each reporting period to account for and qualitatively disclose: (1) the effects of the change in tax law for which accounting is complete; (2) provisional amounts (or adjustments to provisional amounts) for the effects of the tax law where accounting is not complete, but that a reasonable estimate has been determined; and (3) a reasonable estimate cannot yet be made and therefore taxes are reflected in accordance with law prior to the enactment of the TCJA. Amounts recorded where accounting is complete in the nine months ended March 31, 2018 principally relate to the reduction in the U.S. federal tax rate to 21 percent, which resulted in the Company reporting an income tax benefit of $2.5 million to remeasure deferred tax liabilities associated with indefinitely lived intangible assets that will reverse at the new 21% rate. Absent this deferred tax liability, the Company is in a net deferred tax asset position that is offset by a full valuation allowance. Though the impact of the rate change related to net deferred tax assets has a net tax effect of zero, the accounting to determine the gross change in the deferred tax position and the offsetting valuation is not yet complete. In accordance with Staff Accounting Bulletin (“SAB”) 118, the estimated income tax impact associated with the Transition Tax of zero represents our best estimate based on interpretation of the U.S. legislation as we are still accumulating data to finalize the underlying calculation. In accordance with SAB 118, estimated income tax impact associated with the Transition Tax is considered provisional and will be finalized prior to the end of the measurement period. The ultimate impact may differ from these provisional amounts, due to, among other things, additional analysis, changes in interpretations and assumptions the Company has made, additional regulatory guidance that may be issued, and actions the Company may take as a result of the TCJA. With respect to provisions of the TCJA effective for tax years beginning on or after January 1, 2018, the company anticipates several new provisions may potentially impact tax provisions in future periods including limitations on the deductibility of interest expense and certain executive compensation, a minimum tax on certain foreign earnings (i.e., global intangible low-taxed income or “GILTI”), as well as a base-erosion and anti-abuse tax (“BEAT”). The GILTI provisions require the Company to include in its U.S. income tax return foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary’s tangible assets. Based on initial assessment and interpretation of the new provision, the Company expects that it will be subject to incremental U.S. tax on GILTI income beginning in fiscal 2019. The Company may elect to account for GILTI tax as a component of tax expense in the period in which it is incurred or account for the GILTI tax in the measurement of deferred taxes. The Company is continuing to evaluate this particular provision and therefore has not yet elected a method but will do so once our analysis is complete. The BEAT provisions in the Tax Reform Act eliminate the deduction of certain base-erosion payments made to related foreign corporations, and impose a minimum tax if greater than regular tax. There is a reasonable amount of uncertainty surrounding the interpretation of this new provision, however, based on initial assessment and a conservative interpretation of the new provision, the Company expects that it will be subject to the incremental U.S. tax on BEAT income beginning in fiscal 2019. The Company has provided a full valuation allowance against all of its U.S. federal and state deferred tax assets as well as the deferred tax assets in Australia and Brazil. A valuation allowance is determined by assessing both negative and positive evidence to determine whether it is “more likely than not” that the deferred tax assets are recoverable; such assessment is required on a jurisdiction by jurisdiction basis. The Company's inconsistent earnings in recent periods, including a cumulative loss over the last three years, coupled with its difficulty in forecasting future revenue trends as well as the cyclical nature of its business represent sufficient negative evidence to require a full valuation allowance against its U.S. federal and state net deferred tax assets as well as the above mentioned foreign jurisdictions. This valuation allowance will be evaluated periodically and can be reversed partially or in whole if business results and the economic environment have sufficiently improved to support realization of some or all of the Company's deferred tax assets. The acquisition of Enterasys in October 2013 included a U.S. parent company as well as its wholly-owned domestic and foreign subsidiaries. The Company elected to treat this stock acquisition as an asset purchase by filing the required election forms under IRC Sec 338(h)(10). Additionally, the Company completed asset purchases of the Zebra WLAN Business, the Campus Fabric Business and the Brocade Data Center Business in October 2016, July 2017 and October 2017, respectively. The Company has estimated the value of the intangible assets from these transactions and is amortizing the amounts over 15 years for tax purposes. During the three and nine months ended March 31, 2018, the Company deducted $1.8 million and $5.5 million of tax amortization expense respectively, for each period related to capitalized goodwill resulting from these acquisitions. As of March 31, 2018, the Company recorded a deferred tax liability of $5.3 million related to this goodwill amortization which is not considered a future source of taxable income in evaluating the need for a valuation allowance against its deferred tax assets. The Company had $18.5 million of unrecognized tax benefits as of March 31, 2018. The future impact of the unrecognized tax benefit of $18.5 million, if recognized, would result in adjustments to deferred tax assets and corresponding adjustments to the valuation allowance. The Company does not anticipate any events to occur during the next twelve months that would reduce the unrealized tax benefit as currently stated in the Company’s balance sheet. The Company’s policy is to accrue interest and penalties related to the underpayment of income taxes as a component of tax expense in the accompanying condensed consolidated statements of operations. In general, the Company’s U.S. federal income tax returns are subject to examination by tax authorities for fiscal years 2001 forward due to net operating losses and the Company's state income tax returns are subject to examination for fiscal years 2000 forward due to net operating losses. The Company is currently under examination by the state of North Carolina for the fiscal years ended 2014, 2015 and 2016. |
Net Loss Per Share
Net Loss Per Share | 9 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | 11. Net Loss Per Share Basic earnings per share is calculated by dividing net earnings by the weighted average number of common shares outstanding during the period. Dilutive earnings per share is calculated by dividing net earnings by the weighted average number of common shares used in the basic earnings per share calculation plus the dilutive effect of shares subject to repurchase, options, warrants and unvested restricted stock units. The following table presents the calculation of net loss per share of basic and diluted (in thousands, except per share data): Three Months Ended Nine Months Ended March 31, 2018 March 31, 2017 March 31, 2018 March 31, 2017 (As adjusted) (As adjusted) Net loss $ (13,613 ) $ (4,977 ) $ (41,160 ) $ (14,948 ) Weighted-average shares used in per share calculation - basic and diluted 115,059 109,213 113,641 107,531 Net loss per share - basic and diluted $ (0.12 ) $ (0.05 ) $ (0.36 ) $ (0.14 ) The following securities were excluded from the computation of net loss per diluted share of common stock for the periods presented as their effect would have been anti-dilutive (in thousands): Three Months Ended Nine Months Ended March 31, 2018 March 31, 2017 March 31, 2018 March 31, 2017 Options to purchase common stock 2,379 — 2,649 398 Restricted stock units 8,213 4 7,670 7 Employee Stock Purchase Plan shares 972 269 1,101 269 Total shares excluded 11,564 273 11,420 674 |
Foreign Exchange Forward Contra
Foreign Exchange Forward Contracts | 9 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Foreign Exchange Forward Contracts | 12. Foreign Exchange Forward Contracts The Company uses derivative financial instruments to manage exposures to foreign currency. The Company’s objective for holding derivatives is to use the most effective methods to minimize the impact of these exposures. The Company does not enter into derivatives for speculative or trading purposes. The fair value of the Company’s derivatives in a gain position are recorded in “Prepaid expenses and other current assets” and derivatives in a loss position are recorded in “Other accrued liabilities” in the accompanying condensed consolidated balance sheets. Changes in the fair value of derivatives are recorded in “Other income (expense), net” in the accompanying condensed consolidated statements of operations. The Company enters into foreign exchange forward contracts to mitigate the effect of gains and losses generated by foreign currency transactions related to certain operating expenses and re-measurement of certain assets and liabilities denominated in foreign currencies. These derivatives do not qualify as hedges. As of March 31, 2018, forward foreign currency contracts had a notional principal amount of $6.7 million and an immaterial unrealized gain. These contracts have maturities of less than 90 days. Changes in the fair value of these foreign exchange forward contracts are offset largely by re-measurement of the underlying assets and liabilities. As of March 31, 2017, the Company did not have any derivative instruments outstanding. Foreign currency transactions gains and losses from operations was a loss of $0.3 million and a gain of $0.8 million for the three months ended March 31, 2018 and 2017, respectively. Foreign currency transactions gains and losses from operations was a loss of $1.5 million and a gain of less than $0.1 million for the nine months ended March 31, 2018 and 2017, respectively. |
Disclosure about Segments of an
Disclosure about Segments of an Enterprise and Geographic Areas | 9 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Disclosure about Segments of an Enterprise and Geographic Areas | 13. Disclosure about Segments of an Enterprise and Geographic Areas The Company operates in one segment, the development and marketing of network infrastructure equipment. The Company conducts business globally and is managed geographically. Revenue is attributed to a geographical area based on the location of its customers. The Company operates in three geographical areas: Americas, which includes the United States, Canada, Mexico, Central America and South America; EMEA, which includes Europe, Russia, Middle East and Africa; and APAC which includes Asia Pacific, South Asia, India, Australia and Japan. The Company attributes revenues to geographic regions and channels based on the customer's ship-to location as follows (in thousands): Three Months Ended March 31, 2018 March 31, 2017 (As adjusted) Distributor Direct Total Distributor Direct Total Americas: United States $ 76,392 $ 56,929 $ 133,321 $ 31,972 $ 47,367 $ 79,339 Other 4,288 6,165 10,453 1,559 1,901 3,460 Total Americas 80,680 63,094 143,774 33,531 49,268 82,799 EMEA: 58,668 36,120 94,788 32,090 20,136 52,226 APAC: 3,085 20,357 23,442 2,399 11,772 14,171 Total net revenues $ 142,433 $ 119,571 $ 262,004 $ 68,020 $ 81,176 $ 149,196 Nine Months Ended March 31, 2018 March 31, 2017 (As adjusted) Distributor Direct Total Distributor Direct Total Americas: United States $ 181,415 $ 160,484 $ 341,899 $ 98,026 $ 112,592 $ 210,618 Other 13,417 20,252 33,669 5,779 14,772 20,551 Total Americas 194,832 180,736 375,568 103,805 127,364 231,169 EMEA: 165,856 97,647 263,503 99,459 61,026 160,485 APAC: 11,480 54,291 65,771 5,464 31,059 36,523 Total net revenues $ 372,168 $ 332,674 $ 704,842 $ 208,728 $ 219,449 $ 428,177 The Company’s long-lived assets are attributed to the geographic regions as follows (in thousands): Long-lived Assets March 31, 2018 June 30, 2017 (As adjusted) Americas $ 189,321 $ 67,369 EMEA 15,586 8,998 APAC 10,334 4,275 Total long-lived assets $ 215,241 $ 80,642 |
Subsequent Event
Subsequent Event | 9 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Event | 14. Subsequent Event On May 1, 2018, the Company terminated the Amended and Restated Credit Agreement dated October 28, 2016, by and among the Company, as borrower, Silicon Valley Bank, as administrative agent, and the financial institutions that were a party thereto as lenders. On May 1, 2018, the Company entered into a Credit Agreement (the “New Credit Agreement”), by and among the Company, as borrower, BMO Harris Bank N.A., as an issuing lender and swingline lender, Bank of Montreal, as administrative and collateral agent, and the financial institutions or entities that are a party thereto as lenders. The New Credit Agreement provides for a $40 million five-year revolving credit facility (the “New Revolver”) and a $190 million five-year term loan (the “New Term Loan” and together with the New Revolver, the “New Senior Secured Credit Facilities”). On May 1, 2018, the Company borrowed $200 million under the New Senior Secured Credit Facilities in order to pay off the existing debt, as noted above and for general corporate purposes. Borrowings under the New Senior Secured Credit Facilities will bear interest, at the Company’s election, as of May 1, 2018, at a rate per annum equal to LIBOR plus 1.50% to 2.75%, or the adjusted base rate plus 0.50% to 1.75%, based on the Company’s Consolidated Leverage Ratio. In addition, the Company is required to pay a commitment fee of between 0.25% and 0.40% quarterly (currently 0.35%) on the unused portion of the New Revolver, also based on the Company’s Consolidated Leverage Ratio. Principal installments are payable on the New Term Loan in varying percentages quarterly starting June 30, 2018 and to the extent not previously paid, all outstanding balances are to be paid at maturity. The New Senior Secured Credit Facilities are secured by substantially all of the Company’s assets. Financial covenants under the New Credit Agreement require the Company to maintain a minimum consolidated fixed charge coverage ratio of at least 1.25:1.00 at the end of each fiscal quarter. In addition, the Company’s Consolidated Leverage Ratio shall not be greater than (i) 3.00:1.00 at the end of the fiscal quarters ending March 31, 2018 through September 30, 2019, (ii) 2.75:1.00 at the end of the fiscal quarters ending December 31, 2019 through March 31, 2021, and (iii) 2.50:1.00 at the end of the fiscal quarters ending June 30, 2021 and thereafter. The New Credit Agreement also includes covenants and restrictions that limit, among other things, the Company’s ability to incur additional indebtedness, create liens upon any of its property, merge, consolidate or sell all or substantially all of its assets. The New Credit Agreement also includes customary events of default, including failure to pay principal, interest or fees when due, failure to comply with covenants, the material breach of any of representations and warranties, certain insolvency or receivership events affecting the Company and its subsidiaries, the occurrence of certain material judgments, the occurrence of certain ERISA events, the invalidity of the loan documents or a change in control of the Company. The amounts outstanding under the New Senior Secured Credit Facilities may be accelerated upon certain events of default. |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Fiscal Year | Fiscal Year The Company uses a fiscal calendar year ending on June 30. All references herein to “fiscal 2018” or “2018” represent the fiscal year ending June 30, 2018. All references herein to “fiscal 2017” or “2017” represent the fiscal year ended June 30, 2017. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Extreme and its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated. The Company predominantly uses the United States Dollar as its functional currency. The functional currency for certain of its foreign subsidiaries is the local currency. For those subsidiaries that operate in a local currency functional environment, all assets and liabilities are translated to United States Dollars at current month end rates of exchange; and revenue and expenses are translated using the monthly average rate. |
Accounting Estimates | Accounting Estimates The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Estimates are used for, but are not limited to, the accounting for the allowances for doubtful accounts and sales returns, determining the fair value of acquired assets and assumed liabilities, estimated selling prices, inventory valuation and purchase commitments, depreciation and amortization, impairment of long-lived assets including goodwill, warranty accruals, restructuring liabilities, measurement of share-based compensation costs, measurements of contingent consideration and income taxes. Actual results could differ from these estimates. |
Revenue Recognition | Revenue Recognition The Company accounts for revenue in accordance with Topic 606, Revenue from Contracts with Customers, which the Company adopted on July 1, 2017, using the retrospective method. The Company derives the majority of its revenue from sales of its networking equipment, with the remaining revenue generated from service fees relating to maintenance contracts, professional services, and training for its products. The Company sells its products and maintenance contracts direct to customers and to partners in two distribution channels, or tiers. The first tier consists of a limited number of independent distributors that stock its products and sell primarily to resellers. The second tier of the distribution channel consists of a non-stocking distributors and value-added resellers that sell directly to end-users. Products and services may be sold separately or in bundled packages. The Company considers customer purchase orders, which in some cases are governed by master sales agreements, to be the contracts with a customer. For each contract, the Company considers the promise to transfer products and services, each of which are distinct, to be the identified performance obligations. In determining the transaction price the Company evaluates whether the price is subject to refund or adjustment to determine the net consideration to which the Company expects to be entitled. For all of the Company’s sales and distribution channels, revenue is recognized when control of the product is transferred to the customer (i.e., when the Company’s performance obligation is satisfied), which typically occurs at shipment for product sales. Revenue from maintenance contracts is recognized over time as the Company’s performance obligations are satisfied. This is typically the contractual service period, which ranges from one to three years. For product sales to value-added resellers of the Company, non-stocking distributors and end-user customers, the Company generally does not grant return privileges, except for defective products during the warranty period, nor does the Company grant pricing credits. Sales incentives and other programs that the Company may make available to these customers are considered to be a form of variable consideration and the Company maintains estimated accruals and allowances using the expected value method. There were no material changes in the current period to the estimated transaction price for performance obligations which were satisfied or partially satisfied during previous periods. Sales to stocking distributors are made under terms allowing certain price adjustments and limited rights of return (known as “stock rotation”) of the Company’s products held in their inventory. Revenue from sales to distributors is recognized upon the transfer of control to the distributor. Frequently, distributors need to sell at a price lower than the contractual distribution price in order to win business, and submit rebate requests for Company pre-approval prior to selling the product through at the discounted price. At the time the distributor invoices its customer or soon thereafter, the distributor submits a rebate claim to the Company to adjust the distributor’s cost from the contractual price to the pre-approved lower price. After the Company verifies that the claim was pre-approved, a credit memo is issued to the distributor for the rebate claim. In determining the transaction price, the Company considers these rebate adjustments to be variable consideration. Such price adjustments are estimated using the expected value method based on an analysis of actual claims, at the distributor level over a period of time considered adequate to account for current pricing and business trends. Stock rotation rights grant the distributor the ability to return certain specified amounts of inventory. Stock rotation adjustments are an additional form of variable consideration and are also estimated using the expected value method based on historical return rates. There were no material changes in the current period to the estimated variable consideration for performance obligations which were satisfied or partially satisfied during previous periods. Performance Obligations. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in Topic 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Certain of the Company’s contracts have multiple performance obligations, as the promise to transfer individual goods or services is separately identifiable from other promises in the contracts and, therefore, is distinct. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation based on its relative standalone selling price. The stand-alone selling prices are determined based on the prices at which the Company separately sells these products. For items that are not sold separately, the Company estimates the stand-alone selling prices using the best estimated selling price approach. The Company’s performance obligations are satisfied at a point in time or over time as work progresses. Substantially all of the Company’s product sales revenues as reflected on the condensed consolidated statements of operations for the three and nine months ended March 31, 2018 and 2017 are recognized at a point in time. Substantially all of the Company’s service revenue is recognized over time. For revenue recognized over time, the Company uses an input measure, days elapsed, to measure progress. On March 31, 2018, the Company had $156.6 million of remaining performance obligations, which is comprised of deferred maintenance revenue and services not yet delivered. The Company expects to recognize approximately 33 percent of its remaining performance obligations as revenue in fiscal 2018, an additional 48 percent in fiscal 2019 and 19 percent of the balance thereafter. Contract Balances. The timing of revenue recognition, billings and cash collections results in billed accounts receivable and deferred revenue in the consolidated balance sheet. Services provided under renewable support arrangements of the Company are billed in accordance with agreed-upon contractual terms, which are typically at periodic intervals (e.g., quarterly or annually). The Company sometimes receives payments from its customers in advance of services being provided, resulting in deferred revenues. These liabilities are reported on the consolidated balance sheet on a contract-by-contract basis at the end of each reporting period. Revenue recognized for the nine months ended March 31, 2018 and 2017, that was included in the deferred revenue balance at the beginning of each period was $66.7 million and $61.4 million, respectively. Revenue recognized for the three months ended March 31, 2018 and 2017 that was included in the deferred revenue balance at the beginning of each period was $50.6 million and $31.3 million, respectively. Contract Costs . The Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. Management expects that commission fees paid to sales representative as a result of obtaining service contracts and contract renewals are recoverable and therefore the Company capitalized them as contract costs in the amount of $3.1 million and $2.5 million at March 31, 2018 and June 30, 2017, respectively. Capitalized commission fees are amortized on a straight-line basis over the average period of service contracts of approximately three years, and are included in “Sales and marketing” in the accompanying condensed consolidated statements of operations. Amortization recognized during the three months ended March 31, 2018 and 2017, was $0.5 million and $0.4 million, respectively. Amortization recognized during the nine months ended March 31, 2018 and 2017 was $1.4 million and $1.1 million, respectively. There was no impairment loss in relation to the costs capitalized. Revenue by Category: The following table sets forth the Company’s revenue disaggregated by sales channel and geographic region based on the customer’s ship-to locations (in thousands, unaudited): Three Months Ended March 31, 2018 March 31, 2017 (As adjusted) Distributor Direct Total Distributor Direct Total Americas: United States $ 76,392 $ 56,929 $ 133,321 $ 31,972 $ 47,367 $ 79,339 Other 4,288 6,165 10,453 1,559 1,901 3,460 Total Americas 80,680 63,094 143,774 33,531 49,268 82,799 EMEA: 58,668 36,120 94,788 32,090 20,136 52,226 APAC: 3,085 20,357 23,442 2,399 11,772 14,171 Total net revenues $ 142,433 $ 119,571 $ 262,004 $ 68,020 $ 81,176 $ 149,196 Nine Months Ended March 31, 2018 March 31, 2017 (As adjusted) Distributor Direct Total Distributor Direct Total Americas: United States $ 181,415 $ 160,484 $ 341,899 $ 98,026 $ 112,592 $ 210,618 Other 13,417 20,252 33,669 5,779 14,772 20,551 Total Americas 194,832 180,736 375,568 103,805 127,364 231,169 EMEA: 165,856 97,647 263,503 99,459 61,026 160,485 APAC: 11,480 54,291 65,771 5,464 31,059 36,523 Total net revenues $ 372,168 $ 332,674 $ 704,842 $ 208,728 $ 219,449 $ 428,177 |
Business Combinations | Business Combinations The Company applies the acquisition method of accounting for business combinations. Under this method of accounting, all assets acquired and liabilities assumed are recorded at their respective fair values at the date of the completion of the transaction. Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, discount rates, intangibles and other asset lives, among other items. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). Market participants are assumed to be buyers and sellers in the principal (most advantageous) market for the asset or liability. Additionally, fair value measurements for an asset assume the highest and best use of that asset by market participants. As a result, we may have been required to value the acquired assets at fair value measures that do not reflect its intended use of those assets. Use of different estimates and judgments could yield different results. Any excess of the purchase price over the fair value of the net assets acquired is recognized as goodwill. If the fair value of net assets acquired exceeds the fair value of purchase price, a gain on bargain purchase is recognized in the statements of operations. Although we believe the assumptions and estimates we have made are reasonable and appropriate, they are based in part on historical experience and information that may be obtained from the management of the acquired company and are inherently uncertain. Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates or actual results. As a result, during the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our consolidated statements of operations. |
Cash, Cash Equivalents and Marketable Securities | Cash, Cash Equivalents and Marketable Securities The following is a summary of cash, cash equivalents and marketable securities (in thousands): March 31, 2018 June 30, 2017 Cash $ 98,677 $ 126,159 Cash equivalents 4,500 4,291 Total cash and cash equivalents 103,177 130,450 Marketable securities (consisting of available-for-sale securities) 2,091 — Total cash, cash equivalents and marketable securities $ 105,268 $ 130,450 The Company considers highly liquid investments with maturities of three months or less at the date of purchase to be cash equivalents. Marketable securities are recorded in “Prepaid expense and other current assets” in the accompanying condensed consolidated balance sheet as these are publicly-traded equity securities. Marketable securities are classified as available-for-sale and reported at fair value with unrealized gains and losses included in “Accumulated other comprehensive loss” in the accompanying condensed consolidated balance sheets. |
Inventories | Inventories The Company values its inventory at lower of cost or net realizable value. Cost is computed using standard cost, which approximates actual cost, on a first-in, first-out basis. The Company has established inventory allowances primarily determined by the demand of inventory or when conditions exist that suggest that inventory may be in excess of anticipated demand or is obsolete based upon assumptions about future demand. At the point of the loss recognition, a new, lower-cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis. Any written down or obsolete inventory subsequently sold has not had a material impact on gross margin for any of the periods disclosed. Inventories consist of the following (in thousands): March 31, 2018 June 30, 2017 (As Adjusted) Finished goods $ 63,306 $ 46,620 Raw materials 14,450 790 Total Inventories $ 77,756 $ 47,410 |
Property and Equipment, Net | Property and Equipment, Net Property and equipment consist of the following (in thousands): March 31, 2018 June 30, 2017 Computers and equipment $ 69,712 $ 34,716 Purchased software 16,908 11,785 Office equipment, furniture and fixtures 18,143 10,852 Leasehold improvements 47,039 23,046 Total property and equipment 151,802 80,399 Less: accumulated depreciation and amortization (65,315 ) (50,159 ) Property and equipment, net $ 86,487 $ 30,240 |
Intangibles | Intangibles The following tables summarize the components of gross and net intangible asset balances (dollars in thousands) Weighted Average Remaining Amortization Gross Carrying Accumulated Net Carrying Period Amount Amortization Amount March 31, 2018 Developed technology 3.8 years $ 117,500 $ 52,860 $ 64,640 Customer relationships 3.7 years 51,639 39,577 12,062 Maintenance contracts 0.6 years 17,000 15,016 1,984 Trade names 3.7 years 9,100 3,776 5,324 Backlogs — years 1,800 1,800 — License agreements 5.9 years 2,445 1,323 1,122 Other intangibles 1.9 years 1,382 1,108 274 Total intangibles, net $ 200,866 $ 115,460 $ 85,406 Weighted Average Remaining Amortization Gross Accumulated Net Carrying Period Amount Amortization Amount June 30, 2017 Developed technology 5.3 years $ 55,400 $ 42,689 $ 12,711 Customer relationships 3.3 years 40,300 37,567 2,733 Maintenance contracts 1.3 years 17,000 12,467 4,533 Trade names 4.3 years 5,100 2,846 2,254 License agreements 6.4 years 2,445 1,120 1,325 Other intangibles 2.7 years 1,382 1,001 381 Total intangibles, net with finite lives 121,627 97,690 23,937 In-process research and development, with indefinite life 1,400 — 1,400 Total intangibles, net $ 123,027 $ 97,690 $ 25,337 During the three months ended September 30, 2017, in-process research and development of $1.4 million included in the above table was reclassified to developed technology upon completion of the project and is being amortized over its estimated useful life. The amortization expense of intangibles for the periods presented is summarized below (in thousands): Three Months Ended Nine Months Ended March 31, 2018 March 31, 2017 March 31, 2018 March 31, 2017 Amortization in “Cost of revenues: Product” $ 4,647 $ 995 $ 11,310 $ 6,271 Amortization of intangibles 2,101 1,193 6,461 7,510 Total amortization $ 6,748 $ 2,188 $ 17,771 $ 13,781 The amortization expense that is recognized in “Cost of revenues: Product” is comprised of amortization for developed technology, license agreements and other intangibles. |
Goodwill | Goodwill The following table summarizes goodwill for the periods presented (in thousands): March 31, 2018 Balance as of June 30, 2017 $ 80,216 Additions due to acquisitions 49,028 Balance at end of period $ 129,244 During the nine months ended March 31, 2018, the Company completed acquisitions of the Campus Fabric Business and the Data Center Business, resulting in an additional goodwill of $36.4 million and $12.6 million, respectively. See Note 2 for additional information related to the acquisitions. |
Deferred Revenue | Deferred Revenue The Company offers for sale to its customers, renewable support arrangements that range from one to five years as well as professional and training services, which results in deferred revenue. |
Debt | Debt The Company’s debt is comprised of the following (in thousands): March 31, 2018 June 30, 2017 Current portion of long-term debt: Term Loan $ 25,260 $ 12,444 Less: unamortized debt issuance costs (540 ) (164 ) Current portion of long-term debt $ 24,720 $ 12,280 Long-term debt, less current portion: Term Loan $ 145,173 $ 71,268 Revolver 10,000 10,000 Less: unamortized debt issuance costs (1,215 ) (846 ) Total long-term debt, less current portion 153,958 80,422 Total debt $ 178,678 $ 92,702 In connection with the closing of Campus Fabric Business discussed in Note 2, the Company entered into the Second Amendment to the Amended and Restated Credit Agreement (“Second Amendment”), which amended the Amended and Restated Credit Agreement, dated as of October 28, 2016 (the “Credit Facility”), by and among the Company, as borrower, Silicon Valley Bank, as administrative agent and collateral agent, and lenders. Among other things, the Second Amendment (i) increased the amount of the available borrowing under the Credit Facility from $140.5 million to $243.7 million, composed of (a) the five-year term loan (“Term Loan”) in a principal amount of up to $183.7 million and (b) the five-year revolving credit facility (“Revolver”) in a principal amount of up to $60.0 million, (ii) extends the maturity date under the existing Term Loan and the termination date under the existing Revolver, (iii) provides for an uncommitted additional incremental loan facility in the principal amount of up to $50.0 million (“Incremental Facility”), and (iv) joins certain additional banks, financial institutions and institutional lenders as lenders pursuant to the terms of the Credit Facility. On July 14, 2017, the Company borrowed $80.0 million under the Term Loan which was used to fund the purchase of Campus Fabric Business. In connection with the closing of the acquisition of the Data Center Business discussed in Note 2, the Company entered into the Third Amendment to the Credit Facility (the “Third Amendment”) n October 26, 2017. Among other things, the Third Amendment (i) amends the negative covenant governing dispositions to increase the general dispositions basket for the fiscal year of the Company ending June 30, 2018, and (ii) amends certain definitions and provisions to update certain references to the Data Center Business Purchase Agreement (as defined above). On the Data Center Business Closing Date, the Company borrowed $20.0 million on the Term Loan to partially fund the acquisition of the Data Center Business. Borrowings under the Term Loan bear interest, at our option, at a rate equal to either the LIBOR rate (subject to a 0.0 3.25 1.25 0.0 3.25 1.25 0.375 0.50 The Company had $1.2 million of outstanding letters of credit and $48.8 million of availability under the Revolver as of March 31, 2018. On May 1, 2018, the Company terminated the Credit Facility. On May 1, 2018, the Company entered into a Credit Agreement (the “New Credit Agreement”), by and among the Company, as borrower, BMO Harris Bank N.A., as an issuing lender and swingline lender, Bank of Montreal, as administrative and collateral agent, and the financial institutions or entities that are a party thereto as lenders. The New Credit Agreement provides for a $40 million five-year revolving credit facility (the “New Revolver”) and a $190 million five-year term loan (the “New Term Loan” and together with the New Revolver, the “New Senior Secured Credit Facilities”). On May 1, 2018, the Company borrowed $200 million under the New Senior Secured Credit Facilities in order to pay off existing debt and for general corporate purposes. See Note 14 (Subsequent Events) to the condensed consolidated financial statements for more information on the New Credit Agreement. |
Guarantees and Product Warranties | Guarantees and Product Warranties Networking products may contain undetected hardware or software errors when new products or new versions or updates of existing products are released to the marketplace. The Company’s standard hardware warranty period is typically 12 months from the date of shipment to end-users and 90 days for software. For certain access products, the Company offers a limited lifetime hardware warranty commencing on the date of shipment from the Company and ending five (5) years following the Company’s announcement of the end of sale of such product. Upon shipment of products to its customers, the Company estimates expenses for the cost to repair or replace products that may be returned under warranty and accrue a liability in cost of product revenue for this amount. The determination of the Company’s warranty requirements is based on actual historical experience with the product or product family, estimates of repair and replacement costs and any product warranty problems that are identified after shipment. The Company estimates and adjusts these accruals at each balance sheet date in accordance with changes in these factors. Upon issuance of a standard product warranty, the Company discloses and recognizes a liability for the obligations it assumes under the product warranty. The following table summarizes the activity related to the Company’s product warranty liability during the three and nine months ended March 31, 2018 and 2017 (in thousands): Three Months Ended Nine Months Ended March 31, 2018 March 31, 2017 March 31, 2018 March 31, 2017 (As adjusted) (As adjusted) Balance beginning of period $ 13,010 $ 10,790 $ 10,584 $ 9,998 Warranties assumed due to acquisitions — — 3,682 2,034 New warranties issued 2,872 1,893 6,801 3,997 Warranty expenditures (3,070 ) (2,080 ) (8,255 ) (5,426 ) Balance end of period $ 12,812 $ 10,603 $ 12,812 $ 10,603 To facilitate sales of its products in the normal course of business, the Company indemnifies its resellers and end-user customers with respect to certain matters. The Company has agreed to hold the customer harmless against losses arising from a breach of intellectual property infringement or other. These agreements may limit the time within which an indemnification claim can be made and the amount of the claim. It is not possible to estimate the maximum potential amount under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. Historically, payments made by the Company under these agreements have not had a material impact on its operating results or financial position. |
Other Long-term Liabilities | Other long-term liabilities The following is a summary of long-term liabilities (in thousands): March 31, 2018 June 30, 2017 Acquisition related deferred payments, less current portion $ 14,147 $ — Acquisition-related contingent consideration obligations, less current portion 33,256 — Other 18,037 8,526 Total other long-term liabilities $ 65,440 $ 8,526 |
Advertising | Advertising All advertising costs are expensed as incurred. Advertising expenses for three and nine months ended March 31, 2018 and 2017, were immaterial. |
Concentrations | Concentrations The Company may be subject to concentration of credit risk as a result of certain financial instruments consisting of accounts receivable and marketable securities. The Company does not invest an amount exceeding 10% of its combined cash or cash equivalents in the securities of any one obligor or maker, except for obligations of the United States government, obligations of United States government agencies and money market accounts. The Company performs ongoing credit evaluations of its customers and generally does not require collateral in exchange for credit. The following table sets forth major customers accounting for 10% or more of our net revenues: Three Months Ended Nine Months Ended March 31, 2018 March 31, 2017 March 31, 2018 March 31, 2017 (As adjusted) (As adjusted) Westcon Group Inc. 14% 10% 14% 11% Tech Data Corporation 14% 13% 13% 15% Jenne Corporation 13% 14% 11% 14% The following customers account for more than 10% of the Company’s accounts receivable outstanding as of March 31, 2018, Tech Data 18% and Westcon Group 14% |
Earnings Per Share | Dilutive earnings per share is calculated by dividing net earnings by the weighted average number of common shares used in the basic earnings per share calculation plus the dilutive effect of shares subject to repurchase, options, warrants and unvested restricted stock units. |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Mar. 31, 2018 | |
Summary of Unaudited Pro Forma Financial Information | The following table summarizes the unaudited pro forma financial information (in thousands, except per share amounts): Three Months Ended Nine Months Ended March 31, 2018 March 31, 2017 March 31, 2018 March 31, 2017 (As adjusted) (As adjusted) Net revenues $ 262,004 $ 267,176 $ 799,044 $ 911,611 Net loss $ (13,613 ) $ (40,235 ) $ (21,235 ) $ (136,207 ) Net loss per share - basic $ (0.12 ) $ (0.37 ) $ (0.19 ) $ (1.27 ) Net loss per share - diluted $ (0.12 ) $ (0.37 ) $ (0.19 ) $ (1.27 ) Shares used in per share calculation - basic 115,059 109,213 113,641 107,531 Shares used in per share calculation - diluted 115,059 109,213 113,641 107,531 |
Data Center Business | |
Components of Aggregate Estimated Purchase Consideration | The components of aggregate estimated purchase consideration are as follows (in thousands): Estimated purchase consideration October 27, 2017 Cash paid to sellers at closing $ 23,000 Deferred payments 18,430 Contingent consideration 34,100 Working capital adjustment 6,534 Replacement of stock-based awards 2,273 Aggregate estimated purchase consideration $ 84,337 |
Summary of Allocation of Tangible and Identifiable Intangible Assets Acquired and Liabilities Assumed | The following table below summarizes the preliminary allocation as of March 31, 2018 of the tangible and identifiable intangible assets acquired and liabilities assumed (in thousands): Preliminary Allocation as of December 31, 2017 Change during three months ended March 31, 2018 Preliminary Allocation as of March 31, 2018 Accounts receivables $ 33,488 $ — $ 33,488 Inventories 19,973 (39 ) (a) 19,934 Prepaid expenses and other current assets 988 — 988 Property and equipment 29,160 — 29,160 Other assets 4,734 — 4,734 Accounts payable and accrued expenses (15,850 ) 113 (b) (15,737 ) Deferred revenue (33,519 ) 494 (c) (33,025 ) Net tangible assets acquired 38,974 568 39,542 Identifiable intangible assets 28,600 3,600 (d) 32,200 Goodwill 16,763 (4,168 ) 12,595 Total intangible assets acquired 45,363 (568 ) 44,795 Total net assets acquired $ 84,337 $ — $ 84,337 The changes during the period in the table above include: a) additional information regarding the existence of inventories and unpaid invoices as of the acquisition date, b) additional information on unpaid invoices as of the acquisition date, c) an adjustment of the fair value of deferred maintenance revenue and d) revised fair value based on adjustments to discount rate used in the models for usefulness of identifiable intangible assets. |
Schedule of Identifiable Intangible Assets Acquired as Part of Acquisition | The following table presents details of the identifiable intangible assets acquired as part of the acquisition (dollars in thousands): Intangible Assets Estimated Useful Life (in years) Amount Developed technology 2 - 5 $ 25,400 Customer relationships 5 5,400 Trade names 4 1,400 Total identifiable intangible assets $ 32,200 |
Campus Fabric Business | |
Summary of Allocation of Tangible and Identifiable Intangible Assets Acquired and Liabilities Assumed | The following table below summarizes the preliminary allocation as of March 31, 2018 of the tangible and identifiable intangible assets acquired and liabilities assumed (in thousands): Preliminary Allocation as of December 31, 2017 Change during three months ended March 31, 2018 Preliminary Allocation as of March 31, 2018 Accounts receivables $ 18,295 $ 417 (a) $ 18,712 Inventories 15,545 — 15,545 Prepaid expenses and other current assets 673 (24 ) (b) 649 Property and equipment 3,768 1,638 (c) 5,406 Other assets 5,311 (517 ) (d) 4,794 Accounts payable and accrued expenses (31,919 ) (395 ) (c) (32,314 ) Deferred revenue (10,051 ) 1,057 (e) (8,994 ) Other long-term liabilities (5,205 ) — (5,205 ) Net tangible assets acquired (3,583 ) 2,176 (1,407 ) Identifiable intangible assets 46,900 (4,700 ) (f) 42,200 In-process research and development 2,500 100 (f) 2,600 Goodwill 34,009 2,424 36,433 Total intangible assets acquired 83,409 (2,176 ) 81,233 Total net assets acquired $ 79,826 $ — $ 79,826 The changes during the period in the table above include: a) additional information on accounts receivable as of the acquisition date, b) additional information on prepaid expenses as of the acquisition date, c) update on preliminary estimate of the fair value of property and equipment which led to an increase, d) an adjustment of the fair value of deferred maintenance revenue and associated deferred cost of revenue, e) additional information on unpaid invoices as of the acquisition date, and f) revised fair value based on revisions to estimated useful life of identifiable intangible assets and in-process research and development acquired. |
Schedule of Identifiable Intangible Assets Acquired as Part of Acquisition | The following table presents details of the identifiable intangible assets acquired as part of the acquisition (dollars in thousands): Intangible Assets Estimated Useful Life (in years) Amount Developed technology 2 - 4 $ 32,700 Customer relationships 4 5,100 Trade names 4 - 5 2,600 Backlog 1 1,800 Total identifiable intangible assets $ 42,200 |
Zebra Technologies Corporation | |
Summary of Allocation of Tangible and Identifiable Intangible Assets Acquired and Liabilities Assumed | On October 28, 2016 , the Company completed its acquisition of the wireless local area network business (“WLAN Business”) from Zebra Technologies Corporation. Under the terms of the WLAN Asset Purchase Agreement, the Company acquired customers, employees, technology and other assets as well as assumed certain contracts and other liabilities of the WLAN Business, for a net cash consideration to $49.5 million The following table below summarizes the final allocation of the tangible and identifiable intangible assets acquired and liabilities assumed (in thousands): Final Allocation as of October 28, 2016 Accounts receivables, net $ 14,636 Inventories 13,593 Other current assets 808 Property and equipment 3,159 Other assets 7,634 Deferred revenue (14,159 ) Other liabilities (7,201 ) Total tangible assets acquired and liabilities assumed 18,470 Identifiable intangible assets 20,300 In-process research and development 1,400 Goodwill 9,339 Total intangible assets acquired 31,039 Total net assets acquired $ 49,509 |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Revenue by Sales Channel and Geographic Region | The following table sets forth the Company’s revenue disaggregated by sales channel and geographic region based on the customer’s ship-to locations (in thousands, unaudited): Three Months Ended March 31, 2018 March 31, 2017 (As adjusted) Distributor Direct Total Distributor Direct Total Americas: United States $ 76,392 $ 56,929 $ 133,321 $ 31,972 $ 47,367 $ 79,339 Other 4,288 6,165 10,453 1,559 1,901 3,460 Total Americas 80,680 63,094 143,774 33,531 49,268 82,799 EMEA: 58,668 36,120 94,788 32,090 20,136 52,226 APAC: 3,085 20,357 23,442 2,399 11,772 14,171 Total net revenues $ 142,433 $ 119,571 $ 262,004 $ 68,020 $ 81,176 $ 149,196 Nine Months Ended March 31, 2018 March 31, 2017 (As adjusted) Distributor Direct Total Distributor Direct Total Americas: United States $ 181,415 $ 160,484 $ 341,899 $ 98,026 $ 112,592 $ 210,618 Other 13,417 20,252 33,669 5,779 14,772 20,551 Total Americas 194,832 180,736 375,568 103,805 127,364 231,169 EMEA: 165,856 97,647 263,503 99,459 61,026 160,485 APAC: 11,480 54,291 65,771 5,464 31,059 36,523 Total net revenues $ 372,168 $ 332,674 $ 704,842 $ 208,728 $ 219,449 $ 428,177 |
Recent Accounting Pronounceme24
Recent Accounting Pronouncements (Tables) | 9 Months Ended |
Mar. 31, 2018 | |
Accounting Changes And Error Corrections [Abstract] | |
Schedule of Adjustments to Previously Reported Financial Statements from Adoption of Accounting Pronouncements | The following table presents the effect of the adoption of Topic 606 on our condensed consolidated balance sheet (unaudited) as of June 30, 2017, (in thousands): As of June 30, 2017 As Reported Adjustment As Adjusted Accounts receivable, net $ 120,770 $ (27,655 ) $ 93,115 Inventories 45,880 1,530 47,410 Total current assets 324,967 (26,125 ) 298,842 Other assets 22,586 2,479 25,065 Total assets 483,346 (23,646 ) 459,700 Accrued warranty 10,007 577 10,584 Other accrued liabilities 36,713 331 37,044 Deferred distributors revenue, net of cost of sales to distributors 43,525 (43,525 ) — Total current liabilities 255,822 (42,617 ) 213,205 Accumulated deficit (800,257 ) 18,971 (781,286 ) Total stockholders’ equity 106,707 18,971 125,678 Total liabilities and stockholders’ equity $ 483,346 $ (23,646 ) $ 459,700 The following tables present the effect of the adoption of Topic 606 on our condensed consolidated statements of operations (unaudited) for the three and nine months ended March 31, 2017 (in thousands, except per share amounts): Three Months Ended March 31, 2017 As Reported Adjustment As Adjusted Net revenues Product $ 110,789 $ 532 $ 111,321 Service 37,875 — 37,875 Total net revenues 148,664 532 149,196 Cost of revenues Product 52,401 (126 ) 52,275 Service 14,117 — 14,117 Total cost of revenues 66,518 (126 ) 66,392 Gross profit Product 58,388 658 59,046 Service 23,758 — 23,758 Total Gross profit 82,146 658 82,804 Sales and marketing expenses 38,759 31 38,790 Operating loss (3,246 ) 627 (2,619 ) Net loss before tax (4,438 ) 627 (3,811 ) Net loss $ (5,604 ) $ 627 $ (4,977 ) Basic and diluted net loss per share Net loss per share - basic $ (0.05 ) $ (0.05 ) Net loss per share - diluted $ (0.05 ) $ (0.05 ) Shares used in per share calculation - basic 109,213 109,213 Shares used in per share calculation - diluted 109,213 109,213 Nine Months Ended March 31, 2017 As Reported Adjustment As Adjusted Net revenues Product $ 310,709 $ 8,760 $ 319,469 Service 108,708 — 108,708 Total net revenues 419,417 8,760 428,177 Cost of revenues Product 155,987 3,164 159,151 Service 40,684 — 40,684 Total cost of revenues 196,671 3,164 199,835 Gross profit Product 154,722 5,596 160,318 Service 68,024 — 68,024 Total Gross profit 222,746 5,596 228,342 Sales and marketing expenses 116,824 (150 ) 116,674 Operating loss (15,367 ) 5,746 (9,621 ) Net loss before tax (17,442 ) 5,746 (11,696 ) Net loss $ (20,694 ) $ 5,746 $ (14,948 ) Basic and diluted net loss per share Net loss per share - basic $ (0.19 ) $ (0.14 ) Net loss per share - diluted $ (0.19 ) $ (0.14 ) Shares used in per share calculation - basic 107,531 107,531 Shares used in per share calculation - diluted 107,531 107,531 The following tables present the effect of the adoption of Topic 606 on our condensed consolidated statement of cash flows (unaudited) for the nine months ended March 31, 2017 (in thousands): Nine Months Ended March 31, 2017 As Reported Adjustment As Adjusted Cash flows from operating activities Net loss $ (20,694 ) $ 5,746 $ (14,948 ) Changes in operating assets and liabilities, net Accounts receivable (5,926 ) 13,158 7,232 Inventories 6,344 (1,620 ) 4,724 Prepaid expenses and other assets 8,181 (150 ) 8,031 Deferred distributors revenue, net of cost of sales to distributors 17,441 (17,441 ) — Other current and long-term liabilities 5,887 307 6,194 Net cash provided by operating activities 43,961 — 43,961 Cash flows from investing activities (69,159 ) — (69,159 ) Cash flows from financing activities 48,328 — 48,328 Foreign currency effect on cash 28 — 28 Net increase in cash and cash equivalents $ 23,158 $ — $ 23,158 |
Balance Sheet Accounts (Tables)
Balance Sheet Accounts (Tables) | 9 Months Ended |
Mar. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Summary of Cash, Cash Equivalents and Marketable Securities | The following is a summary of cash, cash equivalents and marketable securities (in thousands): March 31, 2018 June 30, 2017 Cash $ 98,677 $ 126,159 Cash equivalents 4,500 4,291 Total cash and cash equivalents 103,177 130,450 Marketable securities (consisting of available-for-sale securities) 2,091 — Total cash, cash equivalents and marketable securities $ 105,268 $ 130,450 |
Components of Inventories | Inventories consist of the following (in thousands): March 31, 2018 June 30, 2017 (As Adjusted) Finished goods $ 63,306 $ 46,620 Raw materials 14,450 790 Total Inventories $ 77,756 $ 47,410 |
Components of Property and Equipment | Property and equipment consist of the following (in thousands): March 31, 2018 June 30, 2017 Computers and equipment $ 69,712 $ 34,716 Purchased software 16,908 11,785 Office equipment, furniture and fixtures 18,143 10,852 Leasehold improvements 47,039 23,046 Total property and equipment 151,802 80,399 Less: accumulated depreciation and amortization (65,315 ) (50,159 ) Property and equipment, net $ 86,487 $ 30,240 |
Components of Gross and Net Intangible Asset Balances | The following tables summarize the components of gross and net intangible asset balances (dollars in thousands) Weighted Average Remaining Amortization Gross Carrying Accumulated Net Carrying Period Amount Amortization Amount March 31, 2018 Developed technology 3.8 years $ 117,500 $ 52,860 $ 64,640 Customer relationships 3.7 years 51,639 39,577 12,062 Maintenance contracts 0.6 years 17,000 15,016 1,984 Trade names 3.7 years 9,100 3,776 5,324 Backlogs — years 1,800 1,800 — License agreements 5.9 years 2,445 1,323 1,122 Other intangibles 1.9 years 1,382 1,108 274 Total intangibles, net $ 200,866 $ 115,460 $ 85,406 Weighted Average Remaining Amortization Gross Accumulated Net Carrying Period Amount Amortization Amount June 30, 2017 Developed technology 5.3 years $ 55,400 $ 42,689 $ 12,711 Customer relationships 3.3 years 40,300 37,567 2,733 Maintenance contracts 1.3 years 17,000 12,467 4,533 Trade names 4.3 years 5,100 2,846 2,254 License agreements 6.4 years 2,445 1,120 1,325 Other intangibles 2.7 years 1,382 1,001 381 Total intangibles, net with finite lives 121,627 97,690 23,937 In-process research and development, with indefinite life 1,400 — 1,400 Total intangibles, net $ 123,027 $ 97,690 $ 25,337 |
Summary of Amortization Expense of Intangibles | The amortization expense of intangibles for the periods presented is summarized below (in thousands): Three Months Ended Nine Months Ended March 31, 2018 March 31, 2017 March 31, 2018 March 31, 2017 Amortization in “Cost of revenues: Product” $ 4,647 $ 995 $ 11,310 $ 6,271 Amortization of intangibles 2,101 1,193 6,461 7,510 Total amortization $ 6,748 $ 2,188 $ 17,771 $ 13,781 |
Summary of Goodwill | The following table summarizes goodwill for the periods presented (in thousands): March 31, 2018 Balance as of June 30, 2017 $ 80,216 Additions due to acquisitions 49,028 Balance at end of period $ 129,244 |
Components of Debt | The Company’s debt is comprised of the following (in thousands): March 31, 2018 June 30, 2017 Current portion of long-term debt: Term Loan $ 25,260 $ 12,444 Less: unamortized debt issuance costs (540 ) (164 ) Current portion of long-term debt $ 24,720 $ 12,280 Long-term debt, less current portion: Term Loan $ 145,173 $ 71,268 Revolver 10,000 10,000 Less: unamortized debt issuance costs (1,215 ) (846 ) Total long-term debt, less current portion 153,958 80,422 Total debt $ 178,678 $ 92,702 |
Summary of Product Warranty Liability Activity | The following table summarizes the activity related to the Company’s product warranty liability during the three and nine months ended March 31, 2018 and 2017 (in thousands): Three Months Ended Nine Months Ended March 31, 2018 March 31, 2017 March 31, 2018 March 31, 2017 (As adjusted) (As adjusted) Balance beginning of period $ 13,010 $ 10,790 $ 10,584 $ 9,998 Warranties assumed due to acquisitions — — 3,682 2,034 New warranties issued 2,872 1,893 6,801 3,997 Warranty expenditures (3,070 ) (2,080 ) (8,255 ) (5,426 ) Balance end of period $ 12,812 $ 10,603 $ 12,812 $ 10,603 |
Summary of Long-term Liabilities | The following is a summary of long-term liabilities (in thousands): March 31, 2018 June 30, 2017 Acquisition related deferred payments, less current portion $ 14,147 $ — Acquisition-related contingent consideration obligations, less current portion 33,256 — Other 18,037 8,526 Total other long-term liabilities $ 65,440 $ 8,526 |
Schedule of Major Customers Accounting for 10% or More of Net Revenues | The following table sets forth major customers accounting for 10% or more of our net revenues: Three Months Ended Nine Months Ended March 31, 2018 March 31, 2017 March 31, 2018 March 31, 2017 (As adjusted) (As adjusted) Westcon Group Inc. 14% 10% 14% 11% Tech Data Corporation 14% 13% 13% 15% Jenne Corporation 13% 14% 11% 14% |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value for Financial Assets and Liabilities Measured on Recurring Basis | The following table presents the Company’s fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis (in thousands): March 31, 2018 Level 1 Level 2 Level 3 Total Assets Investments: Money market funds $ 4,500 $ — $ — $ 4,500 Marketable securities 2,091 — — 2,091 Total assets measured at fair value $ 6,591 $ — $ — $ 6,591 Liabilities Acquisition-related contingent consideration obligations $ — $ — $ 46,526 $ 46,526 Total liabilities measured at fair value $ — $ — $ 46,526 $ 46,526 June 30, 2017 Level 1 Level 2 Level 3 Total Assets Investments: Money market funds $ 4,291 $ — $ — $ 4,291 Investment in non-marketable equity — — 3,000 3,000 Total assets measured at fair value $ 4,291 $ — $ 3,000 $ 7,291 |
Schedule of Change in Acquisition-related Contingent Consideration Obligations | The change in the acquisition-related contingent consideration obligations is as follows (in thousands): Three Months Ended Nine Months Ended March 31, 2018 March 31, 2018 Beginning balance $ 47,030 $ — Initial fair value measurements — 47,030 Payments (671 ) (671 ) Accretion on discount 1,401 1,401 Change in fair value (1,234 ) (1,234 ) Ending balance $ 46,526 $ 46,526 |
Share-based Compensation (Table
Share-based Compensation (Tables) | 9 Months Ended |
Mar. 31, 2018 | |
Share Based Compensation [Abstract] | |
Shares Reserved for Issuance | The Company had reserved for issuance for the periods noted (in thousands): March 31, 2018 June 30, 2017 2014 Employee Stock Purchase Plan 5,365 7,785 Employee stock options and awards outstanding 10,405 9,726 2013 Equity Incentive Plan shares available for grant 11,944 7,629 Total shares reserved for issuance 27,714 25,140 |
Schedule of Recognized Share-based Compensation Expense | Share-based compensation expense recognized in the condensed consolidated financial statements by line item caption is as follows (in thousands): Three Months Ended Nine Months Ended March 31, 2018 March 31, 2017 March 31, 2018 March 31, 2017 Cost of product revenue $ 163 $ 73 $ 389 $ 262 Cost of service revenue 354 56 783 475 Research and development 2,367 625 5,247 2,593 Sales and marketing 2,735 809 7,077 3,129 General and administrative 2,199 911 6,150 2,869 Total share-based compensation expense $ 7,818 $ 2,474 $ 19,646 $ 9,328 |
Summary of Stock Award Activity | The following table summarizes stock award activity for the nine months ended March 31, 2018 (in thousands, except grant date fair value): Number of Shares Weighted- Average Grant Date Fair Value Aggregate Fair Market Value Non-vested stock awards outstanding at June 30, 2017 6,664 $ 4.66 $ 61,440 Granted 4,335 11.26 Vested (2,488 ) 3.75 Cancelled (374 ) 7.23 Non-vested stock awards outstanding at March 31, 2018 8,137 $ 8.34 $ 90,084 |
Summary of Stock Option Activity | The following table summarizes stock option activity for the nine months ended March 31, 2018 (in thousands, except per share and contractual term): Number of Shares Weighted-Average Exercise Price Per Share Weighted-Average Remaining Contractual Term (years) Aggregate Intrinsic Value Options outstanding at June 30, 2017 3,062 $ 4.06 4.19 $ 15,868 Exercised (779 ) 4.56 Cancelled (15 ) 4.25 Options outstanding at March 31, 2018 2,268 $ 3.89 3.11 $ 16,283 Vested and expected to vest at March 31, 2018 2,268 $ 3.89 3.11 $ 16,283 Exercisable at March 31, 2018 1,961 $ 4.10 2.95 $ 13,670 |
Schedule of Fair Value Assumptions for Stock Options and Employee Stock Purchase Plan Awards | The following assumptions were used to calculate the fair value of shares granted under the ESPP during the following periods: Three Months Ended Nine Months Ended March 31, 2018 March 31, 2017 March 31, 2018 March 31, 2017 Expected life 0.5 years 0.5 years 0.5 years 0.5 years Risk-free interest rate 1.15 % 0.40 % 1.64%–1.15% 0.40 % Volatility 42 % 37 % 42 % 40%–37% Dividend yield — % — % — % — % |
Restructuring Charges (Tables)
Restructuring Charges (Tables) | 9 Months Ended |
Mar. 31, 2018 | |
Restructuring And Related Activities [Abstract] | |
Restructuring Liabilities | Total restructuring and related liabilities consist of (in thousands): Excess Facilities Severance Benefits Other Total Balance as of June 30, 2017 $ 2,184 $ 1,853 $ 85 $ 4,122 Period charges — 4,920 — 4,920 Period payments (516 ) (4,198 ) (73 ) (4,787 ) Balance as of March 31, 2018 $ 1,668 $ 2,575 $ 12 $ 4,255 Less: current portion included in Other accrued liabilities 2,920 Restructuring accrual included in Other long-term liabilities $ 1,335 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 9 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table presents the calculation of net loss per share of basic and diluted (in thousands, except per share data): Three Months Ended Nine Months Ended March 31, 2018 March 31, 2017 March 31, 2018 March 31, 2017 (As adjusted) (As adjusted) Net loss $ (13,613 ) $ (4,977 ) $ (41,160 ) $ (14,948 ) Weighted-average shares used in per share calculation - basic and diluted 115,059 109,213 113,641 107,531 Net loss per share - basic and diluted $ (0.12 ) $ (0.05 ) $ (0.36 ) $ (0.14 ) |
Schedule of Antidilutive Securities Excluded from Earnings Per Share Calculation | The following securities were excluded from the computation of net loss per diluted share of common stock for the periods presented as their effect would have been anti-dilutive (in thousands): Three Months Ended Nine Months Ended March 31, 2018 March 31, 2017 March 31, 2018 March 31, 2017 Options to purchase common stock 2,379 — 2,649 398 Restricted stock units 8,213 4 7,670 7 Employee Stock Purchase Plan shares 972 269 1,101 269 Total shares excluded 11,564 273 11,420 674 |
Disclosure about Segments of 30
Disclosure about Segments of an Enterprise and Geographic Areas (Tables) | 9 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Revenues and Long Lived Assets by Geographic Regions and Channels | The Company attributes revenues to geographic regions and channels based on the customer's ship-to location as follows (in thousands): Three Months Ended March 31, 2018 March 31, 2017 (As adjusted) Distributor Direct Total Distributor Direct Total Americas: United States $ 76,392 $ 56,929 $ 133,321 $ 31,972 $ 47,367 $ 79,339 Other 4,288 6,165 10,453 1,559 1,901 3,460 Total Americas 80,680 63,094 143,774 33,531 49,268 82,799 EMEA: 58,668 36,120 94,788 32,090 20,136 52,226 APAC: 3,085 20,357 23,442 2,399 11,772 14,171 Total net revenues $ 142,433 $ 119,571 $ 262,004 $ 68,020 $ 81,176 $ 149,196 Nine Months Ended March 31, 2018 March 31, 2017 (As adjusted) Distributor Direct Total Distributor Direct Total Americas: United States $ 181,415 $ 160,484 $ 341,899 $ 98,026 $ 112,592 $ 210,618 Other 13,417 20,252 33,669 5,779 14,772 20,551 Total Americas 194,832 180,736 375,568 103,805 127,364 231,169 EMEA: 165,856 97,647 263,503 99,459 61,026 160,485 APAC: 11,480 54,291 65,771 5,464 31,059 36,523 Total net revenues $ 372,168 $ 332,674 $ 704,842 $ 208,728 $ 219,449 $ 428,177 The Company’s long-lived assets are attributed to the geographic regions as follows (in thousands): Long-lived Assets March 31, 2018 June 30, 2017 (As adjusted) Americas $ 189,321 $ 67,369 EMEA 15,586 8,998 APAC 10,334 4,275 Total long-lived assets $ 215,241 $ 80,642 |
Business Combinations (Narrativ
Business Combinations (Narratives) (Details) $ in Thousands | Dec. 01, 2017USD ($) | Oct. 27, 2017USD ($)Quarter | Jul. 14, 2017 | Mar. 07, 2017USD ($) | Oct. 28, 2016USD ($) | Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | Mar. 31, 2018USD ($)Acquisition | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) |
Business Acquisition [Line Items] | ||||||||||
Number of acquisitions completed | Acquisition | 3 | |||||||||
Upfront cash closing payment | $ 97,581 | $ 51,088 | ||||||||
Acquisition and integration related expenses | $ 9,316 | $ 3,418 | 47,675 | $ 9,908 | ||||||
Recorded gain from bargain purchase | 5,030 | |||||||||
Data Center Business | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Asset purchase agreement closing date | Oct. 27, 2017 | |||||||||
Upfront cash closing payment | $ 23,000 | |||||||||
Deferred payment to be paid per quarter | $ 1,000 | |||||||||
Number of quarters deferred payment to be paid | Quarter | 20 | |||||||||
Quarterly earn out payments in percentage of profits | 50.00% | |||||||||
Quarterly earn out payments period | 5 years | |||||||||
Increase in revenue | 90,200 | |||||||||
Acquisition and integration related expenses | 5,000 | 38,800 | ||||||||
Business acquisition, purchase price | $ 84,337 | |||||||||
Net assets acquired, financing receivables | 33,488 | 33,488 | $ 33,488 | |||||||
Net assets acquired, identifiable intangible assets | 32,200 | 32,200 | 28,600 | |||||||
Broadcom Corporation | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Consent fee paid to terminate previous asset purchase agreement | 25,000 | |||||||||
Campus Fabric Business | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Asset purchase agreement closing date | Jul. 14, 2017 | |||||||||
Increase in revenue | 127,700 | |||||||||
Acquisition and integration related expenses | 4,400 | 13,900 | ||||||||
Business acquisition, purchase price | $ 100,000 | |||||||||
Business acquisition, provisional consideration | $ 79,800 | |||||||||
Net assets acquired, financing receivables | 18,712 | 18,712 | 18,295 | |||||||
Net assets acquired, identifiable intangible assets | 42,200 | 42,200 | $ 46,900 | |||||||
Campus Fabric Business | In-Process Research and Development | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Fair value of indefinite lived intangibles | 2,600 | 2,600 | ||||||||
Campus Fabric Business | Developed Technology | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Fair value of indefinite lived intangibles | $ 2,600 | $ 2,600 | ||||||||
Capital Financing Business | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Asset purchase agreement closing date | Dec. 1, 2017 | |||||||||
Business combination, payments to seller in percentage of finance receivables | 90.00% | |||||||||
Net assets acquired, financing receivables | $ 13,700 | |||||||||
Net assets acquired, lease equipment | 3,500 | |||||||||
Net assets acquired, identifiable intangible assets | 800 | |||||||||
Fair value of contingent consideration | 13,000 | |||||||||
Capital Financing Business | Acquisition and Integration Costs | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Recorded gain from bargain purchase | $ 5,000 | |||||||||
Zebra Technologies Corporation | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Asset purchase agreement closing date | Oct. 28, 2016 | |||||||||
Net assets acquired, financing receivables | $ 14,636 | |||||||||
Net assets acquired, identifiable intangible assets | 20,300 | |||||||||
Net cash consideration | $ 49,500 |
Business Combinations (Componen
Business Combinations (Components of Aggregate Estimated Purchase Consideration) (Details) - USD ($) $ in Thousands | Oct. 27, 2017 | Mar. 31, 2018 | Mar. 31, 2017 |
Business Acquisition [Line Items] | |||
Cash paid to sellers at closing | $ 97,581 | $ 51,088 | |
Data Center Business | |||
Business Acquisition [Line Items] | |||
Cash paid to sellers at closing | $ 23,000 | ||
Deferred payments | 18,430 | ||
Contingent consideration | 34,100 | ||
Working capital adjustment | 6,534 | ||
Replacement of stock-based awards | 2,273 | ||
Aggregate estimated purchase consideration | $ 84,337 |
Business Combinations (Summary
Business Combinations (Summary of Preliminary Allocation of Tangible and Identifiable Intangible Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | |
Preliminary Allocation | |||
Goodwill | $ 129,244 | $ 80,216 | |
Data Center Business | |||
Preliminary Allocation | |||
Accounts receivables | 33,488 | $ 33,488 | |
Inventories | 19,934 | 19,973 | |
Prepaid expenses and other current assets | 988 | 988 | |
Property and equipment | 29,160 | 29,160 | |
Other assets | 4,734 | 4,734 | |
Accounts payable and accrued expenses | (15,737) | (15,850) | |
Deferred revenue | (33,025) | (33,519) | |
Total tangible assets acquired and liabilities assumed | 39,542 | 38,974 | |
Identifiable intangible assets | 32,200 | 28,600 | |
Goodwill | 12,595 | 16,763 | |
Total intangible assets acquired | 44,795 | 45,363 | |
Total net assets acquired | 84,337 | 84,337 | |
Change during three months ended March 31, 2018 | |||
Adjustments, Inventory | (39) | ||
Adjustments, Accounts payable and accrued expenses | 113 | ||
Adjustments, Deferred revenue | 494 | ||
Adjustments, Net tangible assets acquired | 568 | ||
Adjustments, Identifiable intangible assets | 3,600 | ||
Adjustments, Goodwill | (4,168) | ||
Adjustments, Total intangible assets acquired | (568) | ||
Campus Fabric Business | |||
Preliminary Allocation | |||
Accounts receivables | 18,712 | 18,295 | |
Inventories | 15,545 | 15,545 | |
Prepaid expenses and other current assets | 649 | 673 | |
Property and equipment | 5,406 | 3,768 | |
Other assets | 4,794 | 5,311 | |
Accounts payable and accrued expenses | (32,314) | (31,919) | |
Deferred revenue | (8,994) | (10,051) | |
Other long-term liabilities | (5,205) | (5,205) | |
Total tangible assets acquired and liabilities assumed | (1,407) | (3,583) | |
Identifiable intangible assets | 42,200 | 46,900 | |
In-process research and development | 2,600 | 2,500 | |
Goodwill | 36,433 | 34,009 | |
Total intangible assets acquired | 81,233 | 83,409 | |
Total net assets acquired | 79,826 | $ 79,826 | |
Change during three months ended March 31, 2018 | |||
Adjustments, Accounts receivables | 417 | ||
Adjustments, Prepaid expenses and other current assets | (24) | ||
Adjustments, Property and equipment | 1,638 | ||
Adjustments, Other assets | (517) | ||
Adjustments, Accounts payable and accrued expenses | (395) | ||
Adjustments, Deferred revenue | 1,057 | ||
Adjustments, Net tangible assets acquired | 2,176 | ||
Adjustments, Identifiable intangible assets | (4,700) | ||
Adjustments, In-process research and development | 100 | ||
Adjustments, Goodwill | 2,424 | ||
Adjustments, Total intangible assets acquired | $ (2,176) |
Business Combinations (Schedule
Business Combinations (Schedule of Identifiable Intangible Assets Acquired as Part of Acquisition) (Details) - USD ($) $ in Thousands | Oct. 27, 2017 | Jul. 14, 2017 |
Data Center Business | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amount | $ 32,200 | |
Data Center Business | Developed technology | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amount | $ 25,400 | |
Data Center Business | Developed technology | Minimum | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (in years) | 2 years | |
Data Center Business | Developed technology | Maximum | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (in years) | 5 years | |
Data Center Business | Customer relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (in years) | 5 years | |
Amount | $ 5,400 | |
Data Center Business | Trade names | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (in years) | 4 years | |
Amount | $ 1,400 | |
Campus Fabric Business | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amount | $ 42,200 | |
Campus Fabric Business | Developed technology | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amount | $ 32,700 | |
Campus Fabric Business | Developed technology | Minimum | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (in years) | 2 years | |
Campus Fabric Business | Developed technology | Maximum | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (in years) | 4 years | |
Campus Fabric Business | Customer relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (in years) | 4 years | |
Amount | $ 5,100 | |
Campus Fabric Business | Trade names | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amount | $ 2,600 | |
Campus Fabric Business | Trade names | Minimum | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (in years) | 4 years | |
Campus Fabric Business | Trade names | Maximum | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (in years) | 5 years | |
Campus Fabric Business | Backlog | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (in years) | 1 year | |
Amount | $ 1,800 |
Business Combinations (Summar35
Business Combinations (Summary of Final Allocation of Tangible and Identifiable Intangible Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Jun. 30, 2017 | Oct. 28, 2016 |
Final Allocation | |||
Goodwill | $ 129,244 | $ 80,216 | |
Zebra Technologies Corporation | |||
Final Allocation | |||
Accounts receivables, net | $ 14,636 | ||
Inventories | 13,593 | ||
Other current assets | 808 | ||
Property and equipment | 3,159 | ||
Other assets | 7,634 | ||
Deferred revenue | (14,159) | ||
Other liabilities | (7,201) | ||
Total tangible assets acquired and liabilities assumed | 18,470 | ||
Identifiable intangible assets | 20,300 | ||
In-process research and development | 1,400 | ||
Goodwill | 9,339 | ||
Total intangible assets acquired | 31,039 | ||
Total net assets acquired | $ 49,509 |
Business Combinations (Summar36
Business Combinations (Summary of Unaudited Pro Forma Financial Information) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Business Acquisition Pro Forma Information [Abstract] | ||||
Net revenues | $ 262,004 | $ 267,176 | $ 799,044 | $ 911,611 |
Net loss | $ (13,613) | $ (40,235) | $ (21,235) | $ (136,207) |
Net loss per share - basic | $ (0.12) | $ (0.37) | $ (0.19) | $ (1.27) |
Net loss per share - diluted | $ (0.12) | $ (0.37) | $ (0.19) | $ (1.27) |
Shares used in per share calculation - basic | 115,059 | 109,213 | 113,641 | 107,531 |
Shares used in per share calculation - diluted | 115,059 | 109,213 | 113,641 | 107,531 |
Summary of Significant Accoun37
Summary of Significant Accounting Policies (Narratives) (Details) | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | Mar. 31, 2018USD ($)Distribution_Channels | Mar. 31, 2017USD ($) | Jun. 30, 2017USD ($) | |
Significant Accounting Policies [Line Items] | |||||
Number of distribution channels | Distribution_Channels | 2 | ||||
Estimated selling price determination approach | Certain of the Company’s contracts have multiple performance obligations, as the promise to transfer individual goods or services is separately identifiable from other promises in the contracts and, therefore, is distinct. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation based on its relative standalone selling price. The stand-alone selling prices are determined based on the prices at which the Company separately sells these products. For items that are not sold separately, the Company estimates the stand-alone selling prices using the best estimated selling price approach. | ||||
Remaining revenue performance obligations | $ 156,600,000 | $ 156,600,000 | |||
Remaining revenue performance obligation, percentage of revenue expected to be recognized in 2018 | 33.00% | ||||
Remaining revenue performance obligation, percentage of revenue expected to be recognized in 2019 | 48.00% | ||||
Remaining revenue performance obligation, percentage of revenue expected to be recognized thereafter | 19.00% | ||||
Revenue recognized for deferred revenue balance | 50,600,000 | $ 31,300,000 | $ 66,700,000 | $ 61,400,000 | |
Commission Fees | |||||
Significant Accounting Policies [Line Items] | |||||
Contract costs capitalized, amount | 3,100,000 | $ 3,100,000 | $ 2,500,000 | ||
Contract costs capitalized, amortization period | 3 years | ||||
Contract costs capitalized, amortization method | straight-line basis | ||||
Contract costs capitalized, amortization expense | $ 500,000 | $ 400,000 | $ 1,400,000 | $ 1,100,000 | |
Contract costs capitalized, impairment loss | $ 0 | ||||
Minimum | |||||
Significant Accounting Policies [Line Items] | |||||
Contractual service period | 1 year | ||||
Maximum | |||||
Significant Accounting Policies [Line Items] | |||||
Contractual service period | 3 years |
Summary of Significant Accoun38
Summary of Significant Accounting Policies (Schedule of Revenues by Sales Channel and Geographic Regions) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Significant Accounting Policies [Line Items] | ||||
Net Revenues | $ 262,004 | $ 149,196 | $ 704,842 | $ 428,177 |
Distributor | ||||
Significant Accounting Policies [Line Items] | ||||
Net Revenues | 142,433 | 68,020 | 372,168 | 208,728 |
Direct | ||||
Significant Accounting Policies [Line Items] | ||||
Net Revenues | 119,571 | 81,176 | 332,674 | 219,449 |
United States | ||||
Significant Accounting Policies [Line Items] | ||||
Net Revenues | 133,321 | 79,339 | 341,899 | 210,618 |
United States | Distributor | ||||
Significant Accounting Policies [Line Items] | ||||
Net Revenues | 76,392 | 31,972 | 181,415 | 98,026 |
United States | Direct | ||||
Significant Accounting Policies [Line Items] | ||||
Net Revenues | 56,929 | 47,367 | 160,484 | 112,592 |
Other Americas | ||||
Significant Accounting Policies [Line Items] | ||||
Net Revenues | 10,453 | 3,460 | 33,669 | 20,551 |
Other Americas | Distributor | ||||
Significant Accounting Policies [Line Items] | ||||
Net Revenues | 4,288 | 1,559 | 13,417 | 5,779 |
Other Americas | Direct | ||||
Significant Accounting Policies [Line Items] | ||||
Net Revenues | 6,165 | 1,901 | 20,252 | 14,772 |
Total Americas | ||||
Significant Accounting Policies [Line Items] | ||||
Net Revenues | 143,774 | 82,799 | 375,568 | 231,169 |
Total Americas | Distributor | ||||
Significant Accounting Policies [Line Items] | ||||
Net Revenues | 80,680 | 33,531 | 194,832 | 103,805 |
Total Americas | Direct | ||||
Significant Accounting Policies [Line Items] | ||||
Net Revenues | 63,094 | 49,268 | 180,736 | 127,364 |
EMEA | ||||
Significant Accounting Policies [Line Items] | ||||
Net Revenues | 94,788 | 52,226 | 263,503 | 160,485 |
EMEA | Distributor | ||||
Significant Accounting Policies [Line Items] | ||||
Net Revenues | 58,668 | 32,090 | 165,856 | 99,459 |
EMEA | Direct | ||||
Significant Accounting Policies [Line Items] | ||||
Net Revenues | 36,120 | 20,136 | 97,647 | 61,026 |
APAC | ||||
Significant Accounting Policies [Line Items] | ||||
Net Revenues | 23,442 | 14,171 | 65,771 | 36,523 |
APAC | Distributor | ||||
Significant Accounting Policies [Line Items] | ||||
Net Revenues | 3,085 | 2,399 | 11,480 | 5,464 |
APAC | Direct | ||||
Significant Accounting Policies [Line Items] | ||||
Net Revenues | $ 20,357 | $ 11,772 | $ 54,291 | $ 31,059 |
Recent Accounting Pronounceme39
Recent Accounting Pronouncements - (Narratives) (Details) - Topic 606 | 9 Months Ended |
Mar. 31, 2018 | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |
Contract acquisition costs capitalization, description | Company capitalizes contract acquisition costs such as commissions paid for maintenance services contracts in excess of one year |
Minimum | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |
Contract acquisition costs capitalization period | 1 year |
Recent Accounting Pronounceme40
Recent Accounting Pronouncements - Schedule of Effect of Adoption of Topic 606 On Condensed Consolidated Balance Sheet (Unaudited) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2016 |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||||
Accounts receivable, net | $ 188,408 | $ 93,115 | ||||
Inventories | 77,756 | 47,410 | ||||
Total current assets | 396,000 | 298,842 | ||||
Other assets | 43,348 | 25,065 | ||||
Total assets | 740,485 | 459,700 | ||||
Accrued warranty | 12,812 | $ 13,010 | 10,584 | $ 10,603 | $ 10,790 | $ 9,998 |
Other accrued liabilities | 77,042 | 37,044 | ||||
Total current liabilities | 363,706 | 213,205 | ||||
Accumulated deficit | (822,446) | (781,286) | ||||
Total stockholders’ equity | 112,925 | 125,678 | ||||
Total liabilities and stockholders’ equity | $ 740,485 | 459,700 | ||||
As Reported | ||||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||||
Accounts receivable, net | 120,770 | |||||
Inventories | 45,880 | |||||
Total current assets | 324,967 | |||||
Other assets | 22,586 | |||||
Total assets | 483,346 | |||||
Accrued warranty | 10,007 | |||||
Other accrued liabilities | 36,713 | |||||
Deferred distributors revenue, net of cost of sales to distributors | 43,525 | |||||
Total current liabilities | 255,822 | |||||
Accumulated deficit | (800,257) | |||||
Total stockholders’ equity | 106,707 | |||||
Total liabilities and stockholders’ equity | 483,346 | |||||
Adjustment | Topic 606 | ||||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||||
Accounts receivable, net | (27,655) | |||||
Inventories | 1,530 | |||||
Total current assets | (26,125) | |||||
Other assets | 2,479 | |||||
Total assets | (23,646) | |||||
Accrued warranty | 577 | |||||
Other accrued liabilities | 331 | |||||
Deferred distributors revenue, net of cost of sales to distributors | (43,525) | |||||
Total current liabilities | (42,617) | |||||
Accumulated deficit | 18,971 | |||||
Total stockholders’ equity | 18,971 | |||||
Total liabilities and stockholders’ equity | $ (23,646) |
Recent Accounting Pronounceme41
Recent Accounting Pronouncements - Schedule of Effect of Adoption of Topic 606 On Condensed Consolidated Statement of Operations (Unaudited) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Net revenues: | ||||
Product | $ 203,527 | $ 111,321 | $ 543,151 | $ 319,469 |
Service | 58,477 | 37,875 | 161,691 | 108,708 |
Total net revenues | 262,004 | 149,196 | 704,842 | 428,177 |
Cost of revenues: | ||||
Product | 94,485 | 52,275 | 253,002 | 159,151 |
Service | 24,536 | 14,117 | 67,490 | 40,684 |
Total cost of revenues | 119,021 | 66,392 | 320,492 | 199,835 |
Gross profit: | ||||
Product | 109,042 | 59,046 | 290,149 | 160,318 |
Service | 33,941 | 23,758 | 94,201 | 68,024 |
Total gross profit | 142,983 | 82,804 | 384,350 | 228,342 |
Sales and marketing expenses | 72,240 | 38,790 | 193,460 | 116,674 |
Operating loss | (8,221) | (2,619) | (34,839) | (9,621) |
Net loss before tax | (11,884) | (3,811) | (39,373) | (11,696) |
Net loss | $ (13,613) | $ (4,977) | $ (41,160) | $ (14,948) |
Basic and diluted net loss per share | ||||
Net loss per share - basic | $ (0.12) | $ (0.05) | $ (0.36) | $ (0.14) |
Net loss per share - diluted | $ (0.12) | $ (0.05) | $ (0.36) | $ (0.14) |
Shares used in per share calculation - basic | 115,059 | 109,213 | 113,641 | 107,531 |
Shares used in per share calculation - diluted | 115,059 | 109,213 | 113,641 | 107,531 |
As Reported | ||||
Net revenues: | ||||
Product | $ 110,789 | $ 310,709 | ||
Service | 37,875 | 108,708 | ||
Total net revenues | 148,664 | 419,417 | ||
Cost of revenues: | ||||
Product | 52,401 | 155,987 | ||
Service | 14,117 | 40,684 | ||
Total cost of revenues | 66,518 | 196,671 | ||
Gross profit: | ||||
Product | 58,388 | 154,722 | ||
Service | 23,758 | 68,024 | ||
Total gross profit | 82,146 | 222,746 | ||
Sales and marketing expenses | 38,759 | 116,824 | ||
Operating loss | (3,246) | (15,367) | ||
Net loss before tax | (4,438) | (17,442) | ||
Net loss | $ (5,604) | $ (20,694) | ||
Basic and diluted net loss per share | ||||
Net loss per share - basic | $ (0.05) | $ (0.19) | ||
Net loss per share - diluted | $ (0.05) | $ (0.19) | ||
Shares used in per share calculation - basic | 109,213 | 107,531 | ||
Shares used in per share calculation - diluted | 109,213 | 107,531 | ||
Adjustment | Topic 606 | ||||
Net revenues: | ||||
Product | $ 532 | $ 8,760 | ||
Total net revenues | 532 | 8,760 | ||
Cost of revenues: | ||||
Product | (126) | 3,164 | ||
Total cost of revenues | (126) | 3,164 | ||
Gross profit: | ||||
Product | 658 | 5,596 | ||
Total gross profit | 658 | 5,596 | ||
Sales and marketing expenses | 31 | (150) | ||
Operating loss | 627 | 5,746 | ||
Net loss before tax | 627 | 5,746 | ||
Net loss | $ 627 | $ 5,746 |
Recent Accounting Pronounceme42
Recent Accounting Pronouncements - Schedule of Effect of Adoption of Topic 606 On Condensed Consolidated Statement of Cash Flows (Unaudited) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | ||||
Net loss | $ (13,613) | $ (4,977) | $ (41,160) | $ (14,948) |
Changes in operating assets and liabilities, net | ||||
Accounts receivable | (45,376) | 7,232 | ||
Inventories | 5,122 | 4,724 | ||
Prepaid expenses and other assets | (3,711) | 8,031 | ||
Other current and long-term liabilities | 2,743 | 6,194 | ||
Net cash provided by operating activities | (1,730) | 43,961 | ||
Cash flows from investing activities | (114,658) | (69,159) | ||
Cash flows from financing activities | 89,214 | 48,328 | ||
Foreign currency effect on cash | (99) | 28 | ||
Net increase in cash and cash equivalents | $ (27,273) | 23,158 | ||
As Reported | ||||
Cash flows from operating activities: | ||||
Net loss | (5,604) | (20,694) | ||
Changes in operating assets and liabilities, net | ||||
Accounts receivable | (5,926) | |||
Inventories | 6,344 | |||
Prepaid expenses and other assets | 8,181 | |||
Deferred distributors revenue, net of cost of sales to distributors | 17,441 | |||
Other current and long-term liabilities | 5,887 | |||
Net cash provided by operating activities | 43,961 | |||
Cash flows from investing activities | (69,159) | |||
Cash flows from financing activities | 48,328 | |||
Foreign currency effect on cash | 28 | |||
Net increase in cash and cash equivalents | 23,158 | |||
Adjustment | Topic 606 | ||||
Cash flows from operating activities: | ||||
Net loss | $ 627 | 5,746 | ||
Changes in operating assets and liabilities, net | ||||
Accounts receivable | 13,158 | |||
Inventories | (1,620) | |||
Prepaid expenses and other assets | (150) | |||
Deferred distributors revenue, net of cost of sales to distributors | (17,441) | |||
Other current and long-term liabilities | $ 307 |
Balance Sheet Accounts (Summary
Balance Sheet Accounts (Summary of Cash, Cash Equivalents and Marketable Securities) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2016 |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||||
Cash | $ 98,677 | $ 126,159 | ||
Cash equivalents | 4,500 | 4,291 | ||
Total cash and cash equivalents | 103,177 | 130,450 | $ 117,280 | $ 94,122 |
Marketable securities (consisting of available-for-sale securities) | 2,091 | |||
Total cash, cash equivalents and marketable securities | $ 105,268 | $ 130,450 |
Balance Sheet Accounts (Narrati
Balance Sheet Accounts (Narratives) (Details) - USD ($) | May 01, 2018 | Oct. 26, 2017 | Jul. 14, 2017 | Sep. 30, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Oct. 28, 2016 |
Balance Sheet Accounts [Line Items] | |||||||
Additional goodwill related to acquisition | $ 49,028,000 | ||||||
Borrowings under Term Loan | $ 100,000,000 | $ 48,250,000 | |||||
Standard hardware warranty period (in months) | 12 months | ||||||
Standard software warranty period (in days) | 90 days | ||||||
Limited lifetime hardware warranty maximum period after end of sale of product (in years) | 5 years | ||||||
Maximum investment in one obligor or maker (percent) | 10.00% | ||||||
Accounts Receivable | Westcon Group Inc. | |||||||
Balance Sheet Accounts [Line Items] | |||||||
Concentration risk (percent) | 14.00% | ||||||
Accounts Receivable | Tech Data Corporation | |||||||
Balance Sheet Accounts [Line Items] | |||||||
Concentration risk (percent) | 18.00% | ||||||
Term Loan | |||||||
Balance Sheet Accounts [Line Items] | |||||||
Interest rate, floor | 0.00% | ||||||
Term Loan | London Interbank Offered Rate (LIBOR) | |||||||
Balance Sheet Accounts [Line Items] | |||||||
Interest rate, applicable margin | 3.25% | ||||||
Term Loan | Adjusted Base Rate | |||||||
Balance Sheet Accounts [Line Items] | |||||||
Interest rate, applicable margin | 1.25% | ||||||
Revolving Facility | |||||||
Balance Sheet Accounts [Line Items] | |||||||
Interest rate, floor | 0.00% | ||||||
Borrowings available under facility | $ 48,800,000 | ||||||
Outstanding letters of credit | $ 1,200,000 | ||||||
Revolving Facility | London Interbank Offered Rate (LIBOR) | |||||||
Balance Sheet Accounts [Line Items] | |||||||
Interest rate, applicable margin | 3.25% | ||||||
Revolving Facility | Adjusted Base Rate | |||||||
Balance Sheet Accounts [Line Items] | |||||||
Interest rate, applicable margin | 1.25% | ||||||
Second Amendment | Subsequent Event | |||||||
Balance Sheet Accounts [Line Items] | |||||||
Termination date | May 1, 2018 | ||||||
New Credit Agreement | Subsequent Event | |||||||
Balance Sheet Accounts [Line Items] | |||||||
Commitment fee | 0.35% | ||||||
New Credit Agreement | Term Loan | Subsequent Event | |||||||
Balance Sheet Accounts [Line Items] | |||||||
Borrowing capacity from Credit Agreement | $ 190,000,000 | ||||||
Credit Facility, as amended term | 5 years | ||||||
New Credit Agreement | Revolving Facility | Subsequent Event | |||||||
Balance Sheet Accounts [Line Items] | |||||||
Borrowing capacity from Credit Agreement | $ 40,000,000 | ||||||
Credit Facility, as amended term | 5 years | ||||||
New Credit Agreement | New Senior Secured Credit Facilities | Subsequent Event | |||||||
Balance Sheet Accounts [Line Items] | |||||||
Credit facility, borrowed amount | $ 200,000,000 | ||||||
Campus Fabric Business | |||||||
Balance Sheet Accounts [Line Items] | |||||||
Additional goodwill related to acquisition | $ 36,400,000 | ||||||
Borrowings under Term Loan | $ 80,000,000 | ||||||
Campus Fabric Business | Credit Facility | |||||||
Balance Sheet Accounts [Line Items] | |||||||
Borrowing capacity from Credit Agreement | $ 140,500,000 | ||||||
Campus Fabric Business | Second Amendment | Credit Facility | |||||||
Balance Sheet Accounts [Line Items] | |||||||
Borrowing capacity from Credit Agreement | 243,700,000 | ||||||
Campus Fabric Business | Second Amendment | Term Loan | |||||||
Balance Sheet Accounts [Line Items] | |||||||
Borrowing capacity from Credit Agreement | $ 183,700,000 | ||||||
Credit Facility, as amended term | 5 years | ||||||
Campus Fabric Business | Second Amendment | Revolving Facility | |||||||
Balance Sheet Accounts [Line Items] | |||||||
Borrowing capacity from Credit Agreement | $ 60,000,000 | ||||||
Credit Facility, as amended term | 5 years | ||||||
Data Center Business | |||||||
Balance Sheet Accounts [Line Items] | |||||||
Additional goodwill related to acquisition | $ 12,600,000 | ||||||
Data Center Business | Term Loan | |||||||
Balance Sheet Accounts [Line Items] | |||||||
Borrowings under Term Loan | $ 20,000,000 | ||||||
Developed technology | In-process research and development, with indefinite life | |||||||
Balance Sheet Accounts [Line Items] | |||||||
In-process research and development reclassified to developed technology | $ 1,400,000 | ||||||
Maximum | |||||||
Balance Sheet Accounts [Line Items] | |||||||
Extended warranty period | 5 years | ||||||
Maximum | Revolving Facility | |||||||
Balance Sheet Accounts [Line Items] | |||||||
Commitment fee | 0.50% | ||||||
Maximum | New Credit Agreement | Subsequent Event | |||||||
Balance Sheet Accounts [Line Items] | |||||||
Commitment fee | 0.40% | ||||||
Maximum | New Credit Agreement | London Interbank Offered Rate (LIBOR) | Subsequent Event | |||||||
Balance Sheet Accounts [Line Items] | |||||||
Interest rate, applicable margin | 2.75% | ||||||
Maximum | New Credit Agreement | Adjusted Base Rate | Subsequent Event | |||||||
Balance Sheet Accounts [Line Items] | |||||||
Interest rate, applicable margin | 1.75% | ||||||
Maximum | Campus Fabric Business | Second Amendment | |||||||
Balance Sheet Accounts [Line Items] | |||||||
Additional incremental loan facility | $ 50,000,000 | ||||||
Minimum | |||||||
Balance Sheet Accounts [Line Items] | |||||||
Extended warranty period | 1 year | ||||||
Minimum | Revolving Facility | |||||||
Balance Sheet Accounts [Line Items] | |||||||
Commitment fee | 0.375% | ||||||
Minimum | New Credit Agreement | Subsequent Event | |||||||
Balance Sheet Accounts [Line Items] | |||||||
Commitment fee | 0.25% | ||||||
Minimum | New Credit Agreement | London Interbank Offered Rate (LIBOR) | Subsequent Event | |||||||
Balance Sheet Accounts [Line Items] | |||||||
Interest rate, applicable margin | 1.50% | ||||||
Minimum | New Credit Agreement | Adjusted Base Rate | Subsequent Event | |||||||
Balance Sheet Accounts [Line Items] | |||||||
Interest rate, applicable margin | 0.50% | ||||||
Cash equivalents | Maximum | |||||||
Balance Sheet Accounts [Line Items] | |||||||
Maturity period for investments | 3 months |
Balance Sheet Accounts (Compone
Balance Sheet Accounts (Components of Inventories) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Jun. 30, 2017 |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||
Finished goods | $ 63,306 | $ 46,620 |
Raw materials | 14,450 | 790 |
Total Inventories | $ 77,756 | $ 47,410 |
Balance Sheet Accounts (Compo46
Balance Sheet Accounts (Components of Property and Equipment) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Jun. 30, 2017 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 151,802 | $ 80,399 |
Less: accumulated depreciation and amortization | (65,315) | (50,159) |
Property and equipment, net | 86,487 | 30,240 |
Computers and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 69,712 | 34,716 |
Purchased software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 16,908 | 11,785 |
Office equipment, furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 18,143 | 10,852 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 47,039 | $ 23,046 |
Balance Sheet Accounts (Compo47
Balance Sheet Accounts (Components of Gross and Net Intangible Asset Balances) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Jun. 30, 2017 | |
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 200,866 | $ 121,627 |
Accumulated Amortization | 115,460 | 97,690 |
Net Carrying Amount | 85,406 | 23,937 |
Gross Carrying Amount, Intangibles | 123,027 | |
Net Carrying Amount, Intangibles | $ 85,406 | 25,337 |
In-process research and development, with indefinite life | ||
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | ||
Fair value of indefinite lived intangibles | $ 1,400 | |
Developed technology | ||
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Amortization Period | 3 years 9 months 18 days | 5 years 3 months 18 days |
Gross Carrying Amount | $ 117,500 | $ 55,400 |
Accumulated Amortization | 52,860 | 42,689 |
Net Carrying Amount | $ 64,640 | $ 12,711 |
Customer relationships | ||
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Amortization Period | 3 years 8 months 12 days | 3 years 3 months 18 days |
Gross Carrying Amount | $ 51,639 | $ 40,300 |
Accumulated Amortization | 39,577 | 37,567 |
Net Carrying Amount | $ 12,062 | $ 2,733 |
Maintenance contracts | ||
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Amortization Period | 7 months 6 days | 1 year 3 months 18 days |
Gross Carrying Amount | $ 17,000 | $ 17,000 |
Accumulated Amortization | 15,016 | 12,467 |
Net Carrying Amount | $ 1,984 | $ 4,533 |
Trade names | ||
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Amortization Period | 3 years 8 months 12 days | 4 years 3 months 18 days |
Gross Carrying Amount | $ 9,100 | $ 5,100 |
Accumulated Amortization | 3,776 | 2,846 |
Net Carrying Amount | 5,324 | $ 2,254 |
Backlogs | ||
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,800 | |
Accumulated Amortization | $ 1,800 | |
License agreements | ||
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Amortization Period | 5 years 10 months 24 days | 6 years 4 months 24 days |
Gross Carrying Amount | $ 2,445 | $ 2,445 |
Accumulated Amortization | 1,323 | 1,120 |
Net Carrying Amount | $ 1,122 | $ 1,325 |
Other intangibles | ||
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Amortization Period | 1 year 10 months 24 days | 2 years 8 months 12 days |
Gross Carrying Amount | $ 1,382 | $ 1,382 |
Accumulated Amortization | 1,108 | 1,001 |
Net Carrying Amount | $ 274 | $ 381 |
Balance Sheet Accounts (Summa48
Balance Sheet Accounts (Summary of Amortization Expense of Intangibles) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||||
Amortization in “Cost of revenues: Product” | $ 4,647 | $ 995 | $ 11,310 | $ 6,271 |
Amortization of intangibles | 2,101 | 1,193 | 6,461 | 7,510 |
Total amortization | $ 6,748 | $ 2,188 | $ 17,771 | $ 13,781 |
Balance Sheet Accounts (Summa49
Balance Sheet Accounts (Summary of Goodwill) (Details) $ in Thousands | 9 Months Ended |
Mar. 31, 2018USD ($) | |
Goodwill [Roll Forward] | |
Balance as of June 30, 2017 | $ 80,216 |
Additions due to acquisitions | 49,028 |
Balance at end of period | $ 129,244 |
Balance Sheet Accounts (Compo50
Balance Sheet Accounts (Components of Debt) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Jun. 30, 2017 |
Line Of Credit Facility [Line Items] | ||
Current portion of long-term debt | $ 24,720 | $ 12,280 |
Less: unamortized debt issuance costs | (540) | (164) |
Long-term debt, less current portion | 153,958 | 80,422 |
Less: unamortized debt issuance costs | (1,215) | (846) |
Total debt | 178,678 | 92,702 |
Term Loan | ||
Line Of Credit Facility [Line Items] | ||
Current portion of long-term debt | 25,260 | 12,444 |
Long-term debt, less current portion | 145,173 | 71,268 |
Revolver | ||
Line Of Credit Facility [Line Items] | ||
Long-term debt, less current portion | $ 10,000 | $ 10,000 |
Balance Sheet Accounts (Summa51
Balance Sheet Accounts (Summary of Product Warranty Liability Activity) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||||
Balance beginning of period | $ 13,010 | $ 10,790 | $ 10,584 | $ 9,998 |
Warranties assumed due to acquisitions | 3,682 | 2,034 | ||
New warranties issued | 2,872 | 1,893 | 6,801 | 3,997 |
Warranty expenditures | (3,070) | (2,080) | (8,255) | (5,426) |
Balance end of period | $ 12,812 | $ 10,603 | $ 12,812 | $ 10,603 |
Balance Sheet Accounts (Summa52
Balance Sheet Accounts (Summary of Long-term Liabilities) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Jun. 30, 2017 |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||
Acquisition related deferred payments, less current portion | $ 14,147 | |
Acquisition-related contingent consideration obligations, less current portion | 33,256 | |
Other | 18,037 | $ 8,526 |
Total other long-term liabilities | $ 65,440 | $ 8,526 |
Balance Sheet Accounts (Schedul
Balance Sheet Accounts (Schedule of Major Customers Accounting for 10% or More of Net Revenues) (Details) - Net Revenues | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Tech Data Corporation | ||||
Concentration Risk [Line Items] | ||||
Concentration risk (percent) | 14.00% | 13.00% | 13.00% | 15.00% |
Jenne Corporation | ||||
Concentration Risk [Line Items] | ||||
Concentration risk (percent) | 13.00% | 14.00% | 11.00% | 14.00% |
Westcon Group Inc. | ||||
Concentration Risk [Line Items] | ||||
Concentration risk (percent) | 14.00% | 10.00% | 14.00% | 11.00% |
Fair Value Measurements (Schedu
Fair Value Measurements (Schedule of Fair Value for Financial Assets and Liabilities Measured on Recurring Basis) (Details) - Recurring - USD ($) $ in Thousands | Mar. 31, 2018 | Jun. 30, 2017 |
Assets | ||
Total assets measured at fair value | $ 6,591 | $ 7,291 |
Liabilities | ||
Acquisition-related contingent consideration obligations | 46,526 | |
Total liabilities measured at fair value | 46,526 | |
Money market funds | ||
Assets | ||
Investments | 4,500 | 4,291 |
Marketable securities | ||
Assets | ||
Investments | 2,091 | |
Investment in non-marketable equity | ||
Assets | ||
Investments | 3,000 | |
Level 1 | ||
Assets | ||
Total assets measured at fair value | 6,591 | 4,291 |
Level 1 | Money market funds | ||
Assets | ||
Investments | 4,500 | 4,291 |
Level 1 | Marketable securities | ||
Assets | ||
Investments | 2,091 | |
Level 3 | ||
Assets | ||
Total assets measured at fair value | 3,000 | |
Liabilities | ||
Acquisition-related contingent consideration obligations | 46,526 | |
Total liabilities measured at fair value | $ 46,526 | |
Level 3 | Investment in non-marketable equity | ||
Assets | ||
Investments | $ 3,000 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narratives) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Jun. 30, 2015 | Jun. 30, 2017 | |
Level 1 Investments | |||||
Assets | |||||
Unrealized holding gain on investments | $ 700,000 | ||||
Level 2 Assets and Liabilities | |||||
Assets | |||||
Transfers of assets between Level 1 and Level 2 | 0 | $ 0 | |||
Transfers of Liabilities between Level 1 and Level 2 | 0 | 0 | |||
Long-term debt, fair value | $ 178,700,000 | $ 93,700,000 | |||
Level 3 Assets and Liabilities | |||||
Assets | |||||
Purchases of non-marketable equity investment | $ 3,000,000 | ||||
Consideration from sale of non-marketable equity investment | $ 6,800,000 | ||||
Consideration from sale of non-marketable equity investment in cash | 5,400,000 | ||||
Consideration from sale of non-marketable equity investment | 5,800,000 | ||||
Sale of non-marketable equity investment in cash | $ 4,900,000 | ||||
Shares received for sale of non-marketable equity investment | 41,685 | ||||
Shares held in escrow | 23,252 | ||||
Sale of non-marketable equity investment in shares market value | $ 900,000 | ||||
Remaining consideration from non-marketable securities in cash | 500,000 | ||||
Remaining consideration from non-marketable securities in shares | $ 500,000 | ||||
Escrow period | 18 months | ||||
Transfers of assets between Level 2 and Level 3 | $ 0 | $ 0 | |||
Transfers of liabilities between Level 2 and Level 3 | 0 | 0 | |||
Intangible asset and goodwill impairment | 0 | $ 0 | |||
Level 3 Assets and Liabilities | Common Stock | |||||
Assets | |||||
Consideration in shares for sale of non-marketable investment | 65,937 | ||||
Consideration from sale of non-marketable equity investment in shares market value | $ 1,400,000 | ||||
Level 3 Assets and Liabilities | Other Income (Expense), Net | |||||
Assets | |||||
Gain on investments | $ 3,800,000 |
Fair Value Measurements (Sche56
Fair Value Measurements (Schedule of Change in Acquisition-related Contingent Consideration Obligations) (Details) - Level 3 Assets and Liabilities - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Mar. 31, 2018 | Mar. 31, 2018 | |
Business Acquisition Contingent Consideration [Line Items] | ||
Beginning balance | $ 47,030 | |
Initial fair value measurements | $ 47,030 | |
Payments | (671) | (671) |
Accretion on discount | 1,401 | 1,401 |
Change in fair value | (1,234) | (1,234) |
Ending balance | $ 46,526 | $ 46,526 |
Share-based Compensation (Share
Share-based Compensation (Shares Reserved for Issuance) (Details) - shares shares in Thousands | Mar. 31, 2018 | Jun. 30, 2017 |
Class Of Stock [Line Items] | ||
Shares reserved for issuance | 27,714 | 25,140 |
2014 Employee Stock Purchase Plan | ||
Class Of Stock [Line Items] | ||
Shares reserved for issuance | 5,365 | 7,785 |
Employee Stock Options and Awards Outstanding | ||
Class Of Stock [Line Items] | ||
Shares reserved for issuance | 10,405 | 9,726 |
2013 Equity Incentive Plan Shares Available for Grant | ||
Class Of Stock [Line Items] | ||
Shares reserved for issuance | 11,944 | 7,629 |
Share-based Compensation (Sched
Share-based Compensation (Schedule of Recognized Share-based Compensation Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | $ 7,818 | $ 2,474 | $ 19,646 | $ 9,328 |
Cost of Product Revenue | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 163 | 73 | 389 | 262 |
Cost of Service Revenue | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 354 | 56 | 783 | 475 |
Research and Development | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 2,367 | 625 | 5,247 | 2,593 |
Sales and Marketing | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 2,735 | 809 | 7,077 | 3,129 |
General and Administrative | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | $ 2,199 | $ 911 | $ 6,150 | $ 2,869 |
Share-based Compensation (Summa
Share-based Compensation (Summary of Stock Award Activity) (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended | |
Mar. 31, 2018USD ($)$ / sharesshares | Jun. 30, 2017USD ($) | |
Number of Shares | ||
Non-vested stock awards outstanding at June 30, 2017 | shares | 6,664 | |
Granted | shares | 4,335 | |
Vested | shares | (2,488) | |
Cancelled | shares | (374) | |
Non-vested stock awards outstanding at March 31, 2018 | shares | 8,137 | |
Weighted-Average Grant Date Fair Value | ||
Non-vested stock awards outstanding at June 30, 2017 | $ / shares | $ 4.66 | |
Granted | $ / shares | 11.26 | |
Vested | $ / shares | 3.75 | |
Cancelled | $ / shares | 7.23 | |
Non-vested stock awards outstanding at March 31, 2018 | $ / shares | $ 8.34 | |
Aggregate Fair Market Value | ||
Non-vested stock awards outstanding at June 30, 2017 | $ | $ 90,084 | $ 61,440 |
Share-based Compensation (Sum60
Share-based Compensation (Summary of Stock Option Activity) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Jun. 30, 2017 | |
Number of Shares | ||
Options outstanding at June 30, 2017 | 3,062 | |
Exercised | (779) | |
Cancelled | (15) | |
Options outstanding at March 31, 2018 | 2,268 | 3,062 |
Vested and expected to vest at March 31, 2018 | 2,268 | |
Exercisable at March 31, 2018 | 1,961 | |
Weighted-Average Exercise Price Per Share | ||
Options outstanding at June 30, 2017 | $ 4.06 | |
Exercised | 4.56 | |
Cancelled | 4.25 | |
Options outstanding at March 31, 2018 | 3.89 | $ 4.06 |
Vested and expected to vest at March 31, 2018 | 3.89 | |
Exercisable at March 31, 2018 | $ 4.10 | |
Weighted-Average Remaining Contractual Term | ||
Options outstanding | 3 years 1 month 9 days | 4 years 2 months 8 days |
Vested and expected to vest at March 31, 2018 | 3 years 1 month 9 days | |
Exercisable at March 31, 2018 | 2 years 11 months 12 days | |
Aggregate Intrinsic Value | ||
Options outstanding | $ 16,283 | $ 15,868 |
Vested and expected to vest at March 31, 2018 | 16,283 | |
Exercisable at March 31, 2018 | $ 13,670 |
Share-based Compensation (Narra
Share-based Compensation (Narratives) (Details) | 3 Months Ended | 9 Months Ended | ||||||
Mar. 31, 2018$ / sharesshares | Dec. 31, 2017shares | Sep. 30, 2017Quarter$ / sharesshares | Mar. 31, 2017$ / sharesshares | Dec. 31, 2016shares | Sep. 30, 2016$ / sharesshares | Mar. 31, 2018$ / sharesshares | Mar. 31, 2017$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Restricted stock units granted | shares | 4,335,000 | |||||||
Restricted stock units granted, grant date fair value | $ 11.26 | |||||||
2014 Employee Stock Purchase Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock options granted | shares | 1,151,759 | 1,114,707 | 2,419,689 | 2,218,306 | ||||
Weighted-average grant-date fair value of options granted (in dollars per share) | $ 4 | $ 1.34 | $ 3.26 | $ 1.24 | ||||
Restricted Stock Units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Restricted stock units granted, percentage | 40.00% | |||||||
Share-based compensation arrangement by share-based payment award, award vesting percentage | The RSUs vest from the original grant date as to one-third (1/3) on the one-year anniversary and one-twelfth (1/12) each quarter thereafter, subject to continued service to the Company. | The RSUs vest from the original grant date as to one-third (1/3) on the one-year anniversary and one-twelfth (1/12) each quarter thereafter, subject to continued service to the Company. | ||||||
Performance Shares | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Restricted stock units granted | shares | 0 | 0 | 0 | 0 | ||||
Restricted stock units granted, grant date fair value | $ 10.90 | |||||||
Performance Shares | Minimum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Restricted stock units granted, grant date fair value | $ 3.02 | |||||||
Performance Shares | Maximum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Restricted stock units granted, grant date fair value | $ 3.09 | |||||||
Service-based Restricted Stock Units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Restricted stock units granted, percentage | 50.00% | 50.00% | ||||||
Market-Based Vesting | Minimum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Restricted stock units granted, grant date fair value | $ 10.61 | |||||||
Market-Based Vesting | Maximum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Restricted stock units granted, grant date fair value | $ 12.19 | |||||||
VPs | Restricted Stock Units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Restricted stock units granted | shares | 1,154,014 | 1,505,120 | ||||||
VPs | Performance Shares | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Restricted stock units granted, percentage | 50.00% | 50.00% | ||||||
VPs | Market-Based Vesting | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Restricted stock units granted | shares | 100,000 | |||||||
Executive Officers | Restricted Stock Units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Restricted stock units granted | shares | 560,344 | 680,000 | ||||||
Other Employees | Restricted Stock Units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Restricted stock units granted | shares | 939,925 | 1,053,300 | ||||||
Chief Executive Officers | Performance Shares | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Restricted stock units granted, percentage | 60.00% | |||||||
Employees | Performance Shares | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Performance stock unit vesting, earnings per share | $ 0.32 | |||||||
Performance stock unit vesting, consecutive quarters | Quarter | 2 | |||||||
Restricted stock units vesting, stock trigger price | $ 16 | $ 5 | ||||||
Restricted stock units vesting, Threshold consecutive trading days after January 1, 2017 | 30 days |
Share-based Compensation (Sch62
Share-based Compensation (Schedule of Fair Value Assumptions for Stock Options and Employee Stock Purchase Plan Awards) (Details) - Employee Stock Purchase Plan | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||||
Expected life | 6 months | 6 months | 6 months | 6 months |
Risk-free interest rate | 1.15% | 0.40% | 0.40% | |
Risk-free interest rate, maximum | 1.64% | |||
Risk-free interest rate, minimum | 1.15% | |||
Volatility | 42.00% | 37.00% | 42.00% | |
Volatility, maximum | 40.00% | |||
Volatility, minimum | 37.00% |
Restructuring Charges (Narrativ
Restructuring Charges (Narratives) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($)Employee | Dec. 31, 2016USD ($) | Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | |
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and related charges, net of reversals | $ 4,920 | $ 7,719 | $ 4,920 | $ 9,572 | |
Net adjustments associated with sublease | 1,500 | ||||
Restructuring charges | $ 4,920 | ||||
Sub Lease Income for Non-cancelable Lease Payments for Excess Facilities | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ 100 | ||||
2018 Reduction-in-force | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Severance and benefits charges | $ 4,900 | ||||
2017 Reduction-in-force | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and related charges, net of reversals | 7,700 | 9,600 | |||
Accelerated depreciation of leasehold improvements | 900 | $ 2,600 | |||
Reduction-in-force | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Severance and benefits charges | $ 5,300 | ||||
Number of employees eliminated under reduction-in-force | Employee | 90 |
Restructuring Charges (Restruct
Restructuring Charges (Restructuring Liabilities) (Details) $ in Thousands | 9 Months Ended |
Mar. 31, 2018USD ($) | |
Restructuring Cost and Reserve [Line Items] | |
Beginning balance | $ 4,122 |
Period charges | 4,920 |
Period payments | (4,787) |
Ending balance | 4,255 |
Less: current portion included in Other accrued liabilities | 2,920 |
Restructuring accrual included in Other long-term liabilities | 1,335 |
Excess Facilities | |
Restructuring Cost and Reserve [Line Items] | |
Beginning balance | 2,184 |
Period payments | (516) |
Ending balance | 1,668 |
Severance Benefits | |
Restructuring Cost and Reserve [Line Items] | |
Beginning balance | 1,853 |
Period charges | 4,920 |
Period payments | (4,198) |
Ending balance | 2,575 |
Other | |
Restructuring Cost and Reserve [Line Items] | |
Beginning balance | 85 |
Period payments | (73) |
Ending balance | $ 12 |
Commitments and Contingencies (
Commitments and Contingencies (Narratives) (Details) - Mar. 31, 2018 R$ in Millions | USD ($) | BRL (R$) |
Foreign | Secretariat of the Federal Revenue Bureau of Brazil | ||
Loss Contingencies [Line Items] | ||
Value of tax credits disallowed | $ 1,000,000 | R$ 3.4 |
Penalties, court costs, attorneys’ fees, and accrued interest | 5,100,000 | 16.8 |
Tax liability related to the ICMS Tax Assessments, accrued | 2,800,000 | R$ 9.4 |
Inventory Purchase Commitments | ||
Loss Contingencies [Line Items] | ||
Non-cancelable purchase commitments | 151,500,000 | |
Software and Support Services Commitments | ||
Loss Contingencies [Line Items] | ||
Non-cancelable purchase commitments | $ 17,500,000 |
Income Taxes (Narratives) (Deta
Income Taxes (Narratives) (Details) - USD ($) | Dec. 22, 2017 | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 |
Operating Loss Carryforwards [Line Items] | |||||||
Provision for income taxes | $ 1,729,000 | $ 1,166,000 | $ 1,787,000 | $ 3,252,000 | |||
U.S. Federal tax rate | 21.00% | 35.00% | |||||
Tax provision offset by tax benefit | $ 2,500,000 | ||||||
Description of effective date of enacted tax rate implementation | Effective for tax years beginning on or after January 1, 2018. | ||||||
Tax benefit | $ 2,500,000 | ||||||
Additional tax provision resulting corresponding reduction in valuation allowance | $ 0 | $ 0 | |||||
Unrecognized tax benefits | 18,500,000 | 18,500,000 | |||||
Unrecognized tax benefit future impact if recognized | 18,500,000 | 18,500,000 | |||||
Enterasys, Zebra WLAN Business and Campus Fabric Business | |||||||
Operating Loss Carryforwards [Line Items] | |||||||
Tax amortization deduction for capitalized goodwill | 1,800,000 | 5,500,000 | |||||
Deferred tax liability, goodwill | $ 5,300,000 | $ 5,300,000 | |||||
Amortization period for tax purposes | 15 years | ||||||
Fiscal 2,018 | |||||||
Operating Loss Carryforwards [Line Items] | |||||||
U.S. Federal tax rate | 28.00% |
Net Loss Per Share (Schedule of
Net Loss Per Share (Schedule of Earnings Per Share, Basic and Diluted) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Earnings Per Share Basic And Diluted [Abstract] | ||||
Net loss | $ (13,613) | $ (4,977) | $ (41,160) | $ (14,948) |
Weighted-average shares used in per share calculation - basic and diluted | 115,059 | 109,213 | 113,641 | 107,531 |
Net loss per share - basic and diluted | $ (0.12) | $ (0.05) | $ (0.36) | $ (0.14) |
Net Loss Per Share (Schedule 68
Net Loss Per Share (Schedule of Anti-Dilutive Shares Excluded from Earnings Per Share Calculation) (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of EPS | 11,564 | 273 | 11,420 | 674 |
Options to purchase common stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of EPS | 2,379 | 2,649 | 398 | |
Restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of EPS | 8,213 | 4 | 7,670 | 7 |
Employee Stock Purchase Plan shares | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of EPS | 972 | 269 | 1,101 | 269 |
Foreign Exchange Forward Cont69
Foreign Exchange Forward Contracts (Narratives) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Derivative [Line Items] | ||||
Foreign currency transaction realized gain (loss) | $ (300,000) | $ 800,000 | $ (1,500,000) | |
Maximum | ||||
Derivative [Line Items] | ||||
Foreign currency transaction realized gain (loss) | $ 100,000 | |||
Not Designated as Hedging Instrument | Forward Foreign Currency Contracts | ||||
Derivative [Line Items] | ||||
Notional principal amount of forward foreign currency contracts | $ 6,700,000 | $ 6,700,000 | ||
Maximum maturities for contracts | 90 days | |||
Derivative instruments outstanding | $ 0 | $ 0 |
Disclosure about Segments of 70
Disclosure about Segments of an Enterprise and Geographic Areas (Narratives) (Details) | 9 Months Ended |
Mar. 31, 2018SegmentGeographic_Area | |
Segment Reporting [Abstract] | |
Number of operating segments | Segment | 1 |
Number of geographic regions | Geographic_Area | 3 |
Disclosure about Segments of 71
Disclosure about Segments of an Enterprise and Geographic Areas (Schedule of Revenues by Geographic Regions and Channels) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Segment Reporting Information [Line Items] | ||||
Total net revenues | $ 262,004 | $ 149,196 | $ 704,842 | $ 428,177 |
Distributor | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | 142,433 | 68,020 | 372,168 | 208,728 |
Direct | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | 119,571 | 81,176 | 332,674 | 219,449 |
United States | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | 133,321 | 79,339 | 341,899 | 210,618 |
United States | Distributor | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | 76,392 | 31,972 | 181,415 | 98,026 |
United States | Direct | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | 56,929 | 47,367 | 160,484 | 112,592 |
Other Americas | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | 10,453 | 3,460 | 33,669 | 20,551 |
Other Americas | Distributor | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | 4,288 | 1,559 | 13,417 | 5,779 |
Other Americas | Direct | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | 6,165 | 1,901 | 20,252 | 14,772 |
Total Americas | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | 143,774 | 82,799 | 375,568 | 231,169 |
Total Americas | Distributor | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | 80,680 | 33,531 | 194,832 | 103,805 |
Total Americas | Direct | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | 63,094 | 49,268 | 180,736 | 127,364 |
EMEA | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | 94,788 | 52,226 | 263,503 | 160,485 |
EMEA | Distributor | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | 58,668 | 32,090 | 165,856 | 99,459 |
EMEA | Direct | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | 36,120 | 20,136 | 97,647 | 61,026 |
APAC | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | 23,442 | 14,171 | 65,771 | 36,523 |
APAC | Distributor | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | 3,085 | 2,399 | 11,480 | 5,464 |
APAC | Direct | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | $ 20,357 | $ 11,772 | $ 54,291 | $ 31,059 |
Disclosure about Segments of 72
Disclosure about Segments of an Enterprise and Geographic Areas (Schedule of Long Lived Assets by Segment) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Jun. 30, 2017 |
Segment Reporting Information [Line Items] | ||
Total long-lived assets | $ 215,241 | $ 80,642 |
Americas | ||
Segment Reporting Information [Line Items] | ||
Total long-lived assets | 189,321 | 67,369 |
EMEA | ||
Segment Reporting Information [Line Items] | ||
Total long-lived assets | 15,586 | 8,998 |
APAC | ||
Segment Reporting Information [Line Items] | ||
Total long-lived assets | $ 10,334 | $ 4,275 |
Subsequent Event (Narratives) (
Subsequent Event (Narratives) (Details) - USD ($) $ in Millions | May 01, 2018 | Mar. 31, 2018 |
Revolving Facility | Minimum | ||
Subsequent Event [Line Items] | ||
Commitment fee on quarterly basis | 0.375% | |
Revolving Facility | Maximum | ||
Subsequent Event [Line Items] | ||
Commitment fee on quarterly basis | 0.50% | |
Revolving Facility | London Interbank Offered Rate (LIBOR) | ||
Subsequent Event [Line Items] | ||
Interest rate, applicable margin | 3.25% | |
Revolving Facility | Adjusted Base Rate | ||
Subsequent Event [Line Items] | ||
Interest rate, applicable margin | 1.25% | |
Term Loan | London Interbank Offered Rate (LIBOR) | ||
Subsequent Event [Line Items] | ||
Interest rate, applicable margin | 3.25% | |
Term Loan | Adjusted Base Rate | ||
Subsequent Event [Line Items] | ||
Interest rate, applicable margin | 1.25% | |
Subsequent Event | Second Amendment | ||
Subsequent Event [Line Items] | ||
Termination date | May 1, 2018 | |
Subsequent Event | New Credit Agreement | ||
Subsequent Event [Line Items] | ||
Commitment fee on quarterly basis | 0.35% | |
Minimum fixed charge coverage ratio | 125.00% | |
Maximum leverage ratio during fiscal quarters ending March 31, 2018 through September 30, 2019 | 300.00% | |
Maximum leverage ratio during fiscal quarters ending December 31, 2019 through March 31, 2021 | 275.00% | |
Maximum leverage ratio during fiscal quarters ending June 30, 2021 and thereafter | 250.00% | |
Subsequent Event | New Credit Agreement | Minimum | ||
Subsequent Event [Line Items] | ||
Commitment fee on quarterly basis | 0.25% | |
Subsequent Event | New Credit Agreement | Maximum | ||
Subsequent Event [Line Items] | ||
Commitment fee on quarterly basis | 0.40% | |
Subsequent Event | New Credit Agreement | London Interbank Offered Rate (LIBOR) | Minimum | ||
Subsequent Event [Line Items] | ||
Interest rate, applicable margin | 1.50% | |
Subsequent Event | New Credit Agreement | London Interbank Offered Rate (LIBOR) | Maximum | ||
Subsequent Event [Line Items] | ||
Interest rate, applicable margin | 2.75% | |
Subsequent Event | New Credit Agreement | Adjusted Base Rate | Minimum | ||
Subsequent Event [Line Items] | ||
Interest rate, applicable margin | 0.50% | |
Subsequent Event | New Credit Agreement | Adjusted Base Rate | Maximum | ||
Subsequent Event [Line Items] | ||
Interest rate, applicable margin | 1.75% | |
Subsequent Event | New Credit Agreement | Revolving Facility | ||
Subsequent Event [Line Items] | ||
Borrowing capacity from Credit Agreement | $ 40 | |
Credit Facility, as amended term | 5 years | |
Subsequent Event | New Credit Agreement | Term Loan | ||
Subsequent Event [Line Items] | ||
Borrowing capacity from Credit Agreement | $ 190 | |
Credit Facility, as amended term | 5 years | |
Subsequent Event | New Credit Agreement | New Senior Secured Credit Facilities | ||
Subsequent Event [Line Items] | ||
Credit facility, borrowed amount | $ 200 |