Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 28, 2018 | Jun. 30, 2017 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | PI | ||
Entity Registrant Name | IMPINJ INC | ||
Entity Central Index Key | 1,114,995 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 21,317,792 | ||
Entity Public Float | $ 635,374,303 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 19,285 | $ 33,636 |
Short-term investments | 38,831 | 66,905 |
Accounts receivable, net of allowances of $3,625 and $284 at December 31, 2017 and 2016, respectively | 22,244 | 17,447 |
Inventory | 47,083 | 27,734 |
Prepaid expenses and other current assets | 2,359 | 3,004 |
Total current assets | 129,802 | 148,726 |
Property and equipment, net of accumulated depreciation of $13,587 and $10,227 at December 31, 2017 and 2016, respectively | 18,110 | 14,929 |
Other non-current assets | 241 | |
Goodwill and other intangible assets, net | 3,881 | 3,881 |
Total assets | 152,034 | 167,536 |
Current liabilities: | ||
Accounts payable | 4,666 | 7,166 |
Accrued compensation and employee related benefits | 5,729 | 7,647 |
Accrued liabilities | 3,162 | 6,098 |
Current portion of long-term debt | 4,088 | 2,589 |
Current portion of capital lease obligations | 936 | 1,130 |
Current portion of deferred rent | 628 | 306 |
Current portion of deferred revenue | 714 | 445 |
Total current liabilities | 19,923 | 25,381 |
Long-term debt, net of current portion | 5,500 | 9,676 |
Capital lease obligations, net of current portion | 745 | 1,698 |
Long-term liabilities — other | 532 | 770 |
Deferred rent, net of current portion | 5,891 | 5,022 |
Deferred revenue, net of current portion | 501 | 966 |
Total liabilities | 33,092 | 43,513 |
Stockholders' equity: | ||
Preferred stock, $0.001 par value — 5,000 shares authorized, no shares issued and outstanding at December 31, 2017 and 2016, respectively | ||
Common stock, $0.001 par value — 495,000 shares authorized, 20,973 and 20,336 shares issued and outstanding at December 31, 2017 and 2016, respectively | 21 | 20 |
Additional paid-in capital | 323,482 | 311,216 |
Accumulated other comprehensive income (loss) | (36) | (10) |
Accumulated deficit | (204,525) | (187,203) |
Total stockholders' equity | 118,942 | 124,023 |
Total liabilities and stockholders' equity | $ 152,034 | $ 167,536 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Statement Of Financial Position [Abstract] | ||
Accounts receivable, allowances | $ 3,625 | $ 284 |
Property and equipment, accumulated depreciation | $ 13,587 | $ 10,227 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 495,000,000 | 495,000,000 |
Common stock, shares issued | 20,973,000 | 20,336,000 |
Common stock, shares outstanding | 20,973,000 | 20,336,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | |||
Revenue | $ 125,300,000 | $ 112,287,000 | $ 78,479,000 |
Cost of revenue | 60,359,000 | 52,834,000 | 37,633,000 |
Gross profit | 64,941,000 | 59,453,000 | 40,846,000 |
Operating expenses: | |||
Research and development | 32,220,000 | 25,185,000 | 17,579,000 |
Sales and marketing | 31,579,000 | 22,330,000 | 14,579,000 |
General and administrative | 18,161,000 | 12,426,000 | 7,087,000 |
Total operating expenses | 81,960,000 | 59,941,000 | 39,245,000 |
Income (loss) from operations | (17,019,000) | (488,000) | 1,601,000 |
Interest income (expense) and other income (expense), net: | |||
Interest expense | (908,000) | (1,633,000) | (1,208,000) |
Interest income and other income (expense), net | 508,000 | 616,000 | 673,000 |
Total interest income (expense) and other, net | (400,000) | (1,017,000) | (535,000) |
Income (loss) before tax expense | (17,419,000) | (1,505,000) | 1,066,000 |
Income tax benefit (expense) | 97,000 | (168,000) | (166,000) |
Net income (loss) | (17,322,000) | (1,673,000) | 900,000 |
Less: Accretion of preferred stock | (6,258,000) | (11,301,000) | |
Net income (loss) attributable to common stockholders | $ (17,322,000) | $ (7,931,000) | $ (10,401,000) |
Net income (loss) per share attributable to common stockholders — basic and diluted | $ (0.84) | $ (0.74) | $ (2.67) |
Weighted-average shares used to compute net income (loss) per shares attributable to common stockholders — basic and diluted | 20,680 | 10,778 | 3,893 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement Of Income And Comprehensive Income [Abstract] | |||
Net income (loss) | $ (17,322) | $ (1,673) | $ 900 |
Other comprehensive income (loss), net of tax: | |||
Unrealized gains (losses) on investments | (26) | (10) | |
Total other comprehensive income (loss) | (26) | (10) | |
Comprehensive income (loss) | $ (17,348) | $ (1,683) | $ 900 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Redeemable Convertible Preferred Stock - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Beginning balance | $ 97,963 | $ 86,662 |
Accretion of redeemable convertible preferred stock | 6,258 | 11,301 |
Issuance of preferred stock upon exercise of preferred stock warrants | 1,863 | |
Conversion of preferred stock into common stock at initial public offering | (106,084) | |
Ending balance | 97,963 | |
Series 1 | ||
Beginning balance | $ 60,184 | $ 48,883 |
Beginning balance, shares | 5,334 | 5,334 |
Accretion of redeemable convertible preferred stock | $ 6,258 | $ 11,301 |
Conversion of preferred stock into common stock at initial public offering | $ (66,442) | |
Conversion of preferred stock into common stock at initial public offering, shares | (5,334) | |
Ending balance | $ 60,184 | |
Ending balance, shares | 5,334 | |
Series 2 | ||
Beginning balance | $ 37,779 | $ 37,779 |
Beginning balance, shares | 2,552 | 2,552 |
Issuance of preferred stock upon exercise of preferred stock warrants | $ 1,863 | |
Issuance of preferred stock upon exercise of preferred stock warrants, shares | 106 | |
Conversion of preferred stock into common stock at initial public offering | $ (39,642) | |
Conversion of preferred stock into common stock at initial public offering, shares | (2,658) | |
Ending balance | $ 37,779 | |
Ending balance, shares | 2,552 |
Consolidated Statements of Cha7
Consolidated Statements of Changes in Stockholders' Equity (Deficit) - USD ($) shares in Thousands, $ in Thousands | Total | IPO | Common Stock | Common StockIPO | Additional Paid-In Capital | Additional Paid-In CapitalIPO | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) |
Beginning balance at Dec. 31, 2014 | $ (76,471) | $ 4 | $ 109,740 | $ (186,215) | ||||
Beginning balance, shares at Dec. 31, 2014 | 3,728 | |||||||
Issuance of common stock, net of issuance costs | 649 | 649 | ||||||
Issuance of common stock, net of issuance costs, shares | 654 | |||||||
Stock-based compensation | 1,188 | 1,188 | ||||||
Accretion of preferred stock | (11,301) | (11,301) | ||||||
Net income (loss) | 900 | 900 | ||||||
Ending balance at Dec. 31, 2015 | (85,035) | $ 4 | 100,276 | (185,315) | ||||
Ending balance, shares at Dec. 31, 2015 | 4,382 | |||||||
Issuance of common stock, net of issuance costs | 453 | $ 107,192 | $ 7 | 453 | $ 107,185 | |||
Issuance of common stock, net of issuance costs, shares | 197 | 7,047 | ||||||
Stock-based compensation | 2,765 | 2,765 | ||||||
Accretion of preferred stock | (6,258) | (6,258) | ||||||
Conversion of Preferred Stock Warrants Into Common Stock Warrants Initial Public Offering | 505 | 505 | ||||||
Common Stock Issued in Connection with Net Exercises of Common Stock Warrants | 55 | |||||||
Conversion of preferred stock into common stock at initial public offering | 106,084 | $ 9 | 106,075 | |||||
Conversion of preferred stock into common stock at initial public offering, shares | 8,655 | |||||||
Net cumulative effect adjustment upon adoption of share-based payment guidance to account for forfeitures as they occur | 215 | (215) | ||||||
Net income (loss) | (1,673) | (1,673) | ||||||
Other comprehensive income (loss) | (10) | $ (10) | ||||||
Ending balance at Dec. 31, 2016 | 124,023 | $ 20 | 311,216 | (187,203) | (10) | |||
Ending balance, shares at Dec. 31, 2016 | 20,336 | |||||||
Issuance of common stock, net of issuance costs | 4,839 | $ 1 | 4,838 | |||||
Issuance of common stock, net of issuance costs, shares | 637 | |||||||
Stock-based compensation | 7,428 | 7,428 | ||||||
Net income (loss) | (17,322) | (17,322) | ||||||
Other comprehensive income (loss) | (26) | (26) | ||||||
Ending balance at Dec. 31, 2017 | $ 118,942 | $ 21 | $ 323,482 | $ (204,525) | $ (36) | |||
Ending balance, shares at Dec. 31, 2017 | 20,973 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating activities: | |||
Net income (loss) | $ (17,322) | $ (1,673) | $ 900 |
Adjustment to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 3,950 | 2,869 | 1,972 |
Amortization and write-off of debt issuance costs | 95 | 239 | 152 |
Amortization of premium on short-term investments | 70 | 31 | |
Revaluation of warrant liability | (559) | (703) | |
Stock-based compensation | 7,428 | 2,765 | 1,178 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (4,822) | (4,515) | (3,327) |
Inventory | (19,349) | (15,897) | (2,783) |
Prepaid expenses and other assets | 439 | (1,759) | (360) |
Deferred revenue | (196) | 17 | (466) |
Deferred rent | 1,191 | 86 | 4,601 |
Accounts payable | (2,836) | 3,883 | 754 |
Accrued compensation and benefits | (1,735) | 3,462 | 1,356 |
Accrued liabilities | (2,799) | 1,554 | 182 |
Net cash provided by (used in) operating activities | (35,886) | (9,497) | 3,456 |
Investing activities: | |||
Purchases of investments | (49,125) | (67,103) | |
Proceeds from maturities of investments | 77,075 | ||
Purchases of property and equipment | (6,552) | (3,530) | (7,450) |
Net cash provided by (used in) investing activities | 21,398 | (70,633) | (7,450) |
Financing activities: | |||
Proceeds from initial public offering, net of offering costs | 108,096 | ||
Payments on capital lease financing obligations | (1,147) | (1,229) | (824) |
Payments on term loans | (2,772) | (65,320) | (6,115) |
Proceeds from term loans | 61,436 | 13,899 | |
Proceeds from exercise of stock options and employee stock purchase plan | 4,656 | 600 | 538 |
Proceeds from issuance of preferred stock upon exercise of warrants | 62 | ||
Payments of deferred offering costs | (600) | (322) | |
Net cash provided by (used in) financing activities | 137 | 103,645 | 7,176 |
Net increase (decrease) in cash and cash equivalents | (14,351) | 23,515 | 3,182 |
Cash and cash equivalents: | |||
Beginning of period | 33,636 | 10,121 | 6,939 |
End of period | 19,285 | 33,636 | 10,121 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 814 | 1,503 | 973 |
Supplemental disclosure of non-cash financing and investing activities: | |||
Accretion on preferred stock | 6,258 | 11,301 | |
Vesting of early exercise stock options | 183 | 167 | 117 |
Additions to property and equipment through capital lease | 341 | 2,907 | |
Accrued not yet paid offering costs | 626 | 315 | |
Purchases of property and equipment not yet paid | 579 | 1,538 | 347 |
Write-off of fully depreciated property and equipment | $ 592 | 1,571 | $ 1,913 |
Conversion of convertible preferred stock to common stock | 106,084 | ||
Conversion of convertible preferred stock warrants to common stock warrants | $ 505 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Description of Business | Note 1. Description of Business Impinj, Inc., a Delaware corporation, is headquartered in Seattle, Washington. Impinj enables wireless connectivity for everyday items, delivering each item’s unique identity, location and authenticity to business and consumer applications. Impinj’s platform spans endpoints, connectivity and software and provides wireless item connectivity and information delivery. Impinj derives revenue from selling endpoint ICs, readers, gateways, reader ICs and software as well as from development, service and license agreements. Our integrated platform connects billions of everyday items to applications, delivering real-time information to businesses about items they create, manage, transport and sell. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements include Impinj, Inc. and its wholly-owned subsidiaries. Intercompany balances and transactions have been eliminated in consolidation. These consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles, or GAAP . Principles of Consolidation Our consolidated financial statements include the accounts of Impinj, Inc. and our wholly-owned subsidiaries Impinj RFID Technology (Shanghai) Co., Ltd., located in China, Impinj UK Ltd., located in United Kingdom, Impinj Japan LLC, located in Japan, Pi Operations (Thailand) Co., Ltd, located in Thailand, Impinj France SARL, located in France, and Impinj International, Ltd., located in the Cayman Islands. Public Offerings On July 26, 2016, we closed our initial public offering of 5,520,000 shares of common stock at an initial price to the public of $14.00 per share, including 720,000 shares of common stock pursuant to the underwriters’ option to purchase additional shares, resulting in aggregate net proceeds to us of $68.5 million after deducting underwriting discounts and commissions and offering costs. Upon the effectiveness of the registration statement related to the initial public offering on July 20, 2016, all of our outstanding shares of redeemable convertible preferred stock and outstanding preferred stock warrants, which automatically net exercised, converted into 8,531,146 shares and 123,759 shares, respectively, of common stock. The related carrying value of the redeemable convertible preferred stock and warrants of $106.1 million and $505,000, respectively, were reclassified to common stock and additional paid-in capital. On December 7, 2016, we closed our follow-on public offering of 1,527,380 shares of common stock at a price to the public of $27.00 per share, resulting in aggregate net proceeds to us of $38.7 million after deducting underwriting discounts and commissions and offering costs. Reverse Stock Split On June 16, 2016, our board of directors and stockholders approved an amendment to our certificate of incorporation to effect a reverse split of shares of our authorized, issued and outstanding common stock and redeemable convertible preferred stock at a 1-for-12 ratio. The reverse stock split was effected on July 8, 2016. The par value of our common stock and the par value of our redeemable convertible preferred stock were not adjusted as a result of the reverse stock split. All authorized, issued and outstanding shares of common stock and redeemable convertible preferred stock, warrants for common stock and redeemable convertible preferred stock, options to purchase common stock and the related per share amounts contained in these consolidated financial statements have been retroactively adjusted to reflect this reverse stock split for all periods presented. Offering Costs Offering costs, consisting of legal, accounting and other fees and costs related to our public offerings, were capitalized. Total offering costs of approximately $4.1 million were deferred through the completion of the public offerings and upon closing of each of the public offerings in 2016 were reclassified to additional paid-in capital as a reduction of the proceeds. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the related disclosures at the date of the financial statements, as well as the reported amounts of revenue and expenses during the periods presented. On an ongoing basis, we evaluate our estimates, including those related to revenue recognition, reserve for returns, collectability of accounts receivable, estimated costs to complete development contracts, warranty obligations, deferred revenue, sales incentives, inventory excess and obsolescence, depreciable lives of fixed assets, the determination of the fair value of stock awards and warrants and accrued liabilities, compensation and employee related benefits. To the extent there are material differences between these estimates, judgments, or assumptions and actual results, our financial statements will be affected. Risks and Uncertainties Inherent in our business are various risks and uncertainties, including that we are developing advanced technologies and new applications in a rapidly changing industry. These risks include the failure to develop and extend our products and the rejection of our products by consumers, as well as other risks and uncertainties. If we do not successfully implement our business plan, certain assets may not be recoverable, certain liabilities may not be paid and investments in our capital stock may not be recoverable. Our success depends upon the acceptance of our technology, development of sales and distribution channels and our ability to generate significant revenue from the use of our technology. Concentrations of Credit Risk Financial instruments , which potentially subject us to concentrations of credit risk, We place cash and cash equivalents and investments with major financial institutions, which management assesses to be of high credit quality, in order to limit exposure of our investments. The following table presents t Year Ended December 31, 2017 2016 2015 Revenue: Avery 18 % 14 % 16 % Smartrac 14 16 14 Arizon 13 11 9 Shang Yang 7 10 15 Blue Star 10 9 10 62 % 60 % 64 % As of December 31, 2017 2016 Accounts Receivable: Smartrac 17 % 15 % Shang Yang 10 11 Blue Star 11 11 Invengo 10 18 48 % 55 % Concentration of Supplier Risk We outsource the manufacturing and production of our hardware products to a limited number of suppliers. Although there are a limited number of manufacturers for hardware products, we believe that other suppliers could provide similar products on comparable terms. A change in suppliers, however, could cause a delay in manufacturing and a possible loss of sales, which would adversely affect our operating results. Cash and Cash Equivalents Cash includes demand deposits with banks or financial institutions. Cash equivalents include short-term, highly liquid investments that are both readily convertible to known amounts of cash, and so near their maturity that they present minimal risk of changes in value because of changes in interest rates. Our cash equivalents include only investments with an original or remaining maturity of three months or less at the date of purchase. We regularly maintain cash in excess of federally insured limits at financial institutions. Investments Our investments consist of fixed income securities, which include U.S. government agency securities, corporate notes and bonds and commercial paper. As the investments are available to support current operations, our available-for-sale securities are classified as short-term investments. Available-for-sale securities are carried at fair value with unrealized gains and losses reported as a component of accumulated other comprehensive income (loss) in stockholders’ equity, while realized gains and losses and other-than-temporary impairments are reported as a component of net income (loss) based on specific identification. An impairment charge is recorded in the consolidated statements of operations for declines in fair value below the cost of an individual investment that are deemed to be other than temporary. We assess whether a decline in value is temporary based on the length of time that the fair market value has been below cost, the severity of the decline and the intent and ability to hold or sell the investment. We did not identify any investments as other-than-temporarily impaired as of December 31, 2017 or 2016. Accounts Receivable and Allowances Accounts receivable consists of amounts billed currently due from customers and amounts earned not yet billed on development agreements, net of an allowance for doubtful accounts, an allowance for sales returns and an allowance for price exceptions. The allowance for doubtful accounts is our best estimate of the amount of probable credit losses in existing accounts receivable and is determined based on our historical collections experience, age of the receivable, knowledge of the customer and the condition of the general economy and industry as a whole We record changes in our estimate to the allowance for doubtful accounts through bad debt expense and relieve the allowance when accounts are ultimately determined to be uncollectible. Bad debt expense is included in general and administrative expenses. The allowance for sales returns is our best estimate based on historical experience and currently available evidence. We record changes in our estimate to the allowance for sales returns through revenue and relieve the allowance when product returns are received. . Balance at beginning of year Charged to reductions revenue Applied price concession credit Balance at end of year Allowance for sales returns: During year ended December 31, 2017 $ 63 $ 3,250 $ (31 ) $ 3,282 During year ended December 31, 2016 128 — (65 ) 63 During year ended December 31, 2015 151 73 (96 ) 128 The allowance for price exceptions is our best estimate based on historical experience. For the periods presented, price exceptions are not material and are not included in the table above. Inventory Inventories consist of a combination of raw materials, work-in-progress and finished goods and are stated at the lower of cost or net realizable value. Cost is determined using the average costing method, which approximates the first in, first out method. We establish reserves for excess and obsolete inventory based on our analysis of inventory levels, future sales forecasts and the estimated utility of our inventory. If our review indicates a reduction in utility below carrying value, we reduce our inventory to a new cost basis through a charge to cost of revenue. For the periods presented in this report, inventory write-downs and sales of inventory previously written-down were not material. Property and Equipment Property and equipment is recorded at cost and depreciated using the straight-line method over the estimated useful lives of the related assets. The useful lives are as follows: Category Useful Life Laboratory equipment 3 to 5 years Computer equipment and software 2 to 5 years Furniture and fixtures 3 to 7 years Equipment acquired under capital leases 3 to 7 years Leasehold improvements Shorter of remaining lease term or expected useful life Maintenance and repair costs are charged to expense as incurred. Major improvements, which extend the useful life of the related asset, are capitalized. Upon disposal of a fixed asset, we record a gain or loss based on the differences between the proceeds received and the net book value of the disposed asset. Goodwill Goodwill is measured as the excess of the cost of acquisition over the sum of the amounts assigned to identifiable tangible and intangible assets acquired less liabilities assumed. For goodwill, we perform an impairment assessment at the reporting unit level on an annual basis as of the end of our September month end or more frequently if circumstances warrant. Our annual impairment assessment requires a comparison of the fair value of each of our reporting units to the respective carrying value. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. If the carrying value of a reporting unit is greater than its fair value, an impairment loss will be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. Additionally, we will consider the income tax effect from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss. Revenue Recognition We generate revenue from sales of our hardware and software products, and from development and service agreements and licensing agreements. We recognize revenue when: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the price is fixed or determinable; and (4) collection is probable. Sales agreements do not generally provide for a right of return for refund but for certain distributors provide for a right of return in exchange for other similar products, subject to time and quantity limitations. When we give our distributors the right to exchange eligible products, we estimate the expected exchanges based on an analysis of historical experience. We may provide other credits or considerations to our customers, which are accounted for as sales incentives when estimating the amount of revenue to recognize. The price of our products and revenue we recognize varies with changes in marketing incentives and returns we offer to our customers and their customers. Credits and returns are estimated at contract inception and updated at the end of each reporting period as additional information becomes available and only to the extent that it is probable that a significant reversal of any incremental revenue will not occur. We sell our reader and gateway products in combination with a limited hardware warranty against manufacturer defect. Our hardware warranty includes access to repair or replacement of hardware in the event of breakage or failure resulting directly from a manufacturer defect; this warranty is provided to all customers and considered an integral part of the initial product sale. Certain software is integrated with our reader and gateway products and is essential to the functionality of the integrated products. We also sell other software that configures, manages and controls readers and gateways which is not considered essential to the functionality of the hardware product. Our multi-element arrangements generally include a combination of hardware products, non-essential software, extended warranty, enhanced maintenance and services. We allocate revenue to software and non-software deliverables based on their relative fair value. Amounts allocated to extended warranty, enhanced maintenance and services sold with our reader products are deferred and recognized on a straight-line basis over the arrangement term. Accounting principles establish a hierarchy to determine the selling price to be used for allocating revenue to non-software deliverables as follows: (1) vendor-specific objective evidence of selling price, or VSOE; (2) third-party evidence of selling price, or TPE; and (3) best estimated selling prices, or ESP. VSOE generally exists only when we sell the deliverable separately and is the price actually charged by us for that deliverable on a stand-alone basis. When VSOE cannot be established, we attempt to establish the selling price of each element based on TPE. TPE is determined based on competitor prices for similar deliverables when sold separately. We are unable to reliably determine what similar competitor products’ selling prices are on a stand-alone basis and are therefore typically not able to determine TPE. When we are unable to establish selling price using VSOE or TPE, we use ESP in the allocation of arrangement consideration. The objective of ESP is to determine the price at which we would transact a sale if the product or service were sold on a stand-alone basis. Our ESPs for all products and services are calculated using a method consistent with the way management prices new products. We consider multiple factors in developing the ESPs for our products including our historical pricing and discounting practices, the costs incurred to manufacture the product or deliver the service, the nature of the customer relationship and market trends. In addition, we may consider other factors as appropriate, including the pricing of competitive alternatives if they exist and product-specific business objectives. We regularly review VSOE and ESP and maintain internal controls over the establishment and updates of these estimates. We sell software that configures, manages and controls readers and gateways which is not considered essential to the functionality of the hardware product. For software deliverables, we recognize revenue in accordance with industry specific software accounting guidance for stand-alone software licenses and related support services. Revenue from software deliverables that do not require significant production, modification or customization of our software is generally recognized when: (1) delivery has occurred; (2) there is no customer acceptance clause in the contract; (3) there are no significant post-delivery obligations remaining; (4) the price is fixed; and (5) collection of the resulting receivable is reasonably assured. For transactions where we have established VSOE for the fair value of support services as measured by the renewal prices paid by our customers when the services are sold separately on a stand-alone basis, we use the residual method to determine the amount of software revenue to be recognized. Under the residual method, the fair value of the undelivered elements is deferred and the remaining portion of the sales amount is recognized as license revenue. Support services revenue is deferred and recognized ratably over the period during which the services are to be performed, which is typically from one to three years. In those instances where we have not established VSOE of our support services, the license and service revenue is recognized on a straight-line basis over the support period. We account for development, service and licensing agreements generally by recognizing the revenue ratably over the performance period or as services are performed; advance payments under these agreements are initially deferred. Revenue associated with these agreements for the periods presented in this report was not material. Payment terms range from 30 days to 120 days. We present revenue net of sales tax in our consolidated statements of operations. Shipping charges billed to customers are included in revenue and the related shipping costs are included in cost of revenue. Guarantees and Product Warranties In the normal course of business to facilitate sales of our products, we indemnify other parties, including customers, distributors, resellers and parties to other transactions with us, with respect to certain matters. We have agreed to hold the other party harmless against losses arising from a breach of representations or covenants, from intellectual property infringement and from other claims made against certain parties. 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 determine 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. We provide limited warranty coverage for most products, generally ranging from a period of 90 days to one year from the date of shipment. A liability is recorded for the estimated cost of product warranties based on historical claims, product failure rates and other factors when the related revenue is recognized. We review these estimates periodically and adjust the warranty reserves as actual experience differs from historical estimates or other information becomes available. The warranty liability primarily includes the anticipated cost of materials, labor and shipping necessary to repair or replace the product. Accrued warranty costs in 2017 and 2016 were not material. Research and Development Costs Research and development costs are expensed as incurred and consist of salaries and related benefits of product development personnel, contract developers, prototype materials and other expenses related to the development of new and improved products. Foreign Currency The functional currency for all of our subsidiaries is the U.S. dollar. All foreign currency transactions are initially measured and recorded in U.S. dollars using the exchange rate on the date of the transaction. Foreign currency denominated assets and liabilities are remeasured at the end of each reporting period using the exchange rate at that date. We record remeasurement gains and losses in other income (expense), net on the consolidated statements of operations. Income Taxes We use the asset and liability approach for accounting, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial statement and tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to be in effect when such assets and liabilities are recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the year that includes the enactment date. We determine deferred tax assets, including historical net operating losses, and deferred tax liabilities, based on temporary differences between the book and tax bases of assets and liabilities. We believe that it is currently more likely than not that our deferred tax assets will not be realized and as such, we have recorded a full valuation allowance for these assets. We evaluate the likelihood of the ability to realize deferred tax assets in future periods on a quarterly basis, and when appropriate evidence indicates we would release our valuation allowance accordingly. We utilize a two-step approach for evaluating uncertain tax positions. First, we evaluate recognition, which requires us to determine if the weight of available evidence indicates that a tax position is more likely than not to be sustained upon audit, including resolution of related appeals or litigation processes. If a tax position is not considered more likely than not to be sustained, no benefits of the position are recognized. Second, we measure the uncertain tax position based on the largest amount of benefit which is more likely than not to be realized on effective settlement. This process involves estimating our actual current tax exposure, including assessing the risks associated with tax audits, together with assessing temporary differences resulting from the different treatment of items for tax and financial reporting purposes. If actual results differ from our estimates, our net operating loss and credit carryforwards could be materially impacted. Our realization of the benefits of the NOLs and credit carryforwards depends on sufficient taxable income in future years. We have established a valuation allowance against the carrying value of our deferred tax assets, as it is not currently more likely than not that we will be able to realize these deferred tax assets. In addition, utilization of NOLs and credits to offset future income subject to taxes may be subject to substantial annual limitations due to the “change in ownership” provisions of the Code and similar state provisions. Events that cause limitations in the amount of NOLs that we may utilize in any one year include, but are not limited to, a cumulative ownership change of more than 50%, as defined by Code Sections 382 and 383, over a three-year period. Utilization of our NOLs and tax credit carryforwards could be significantly reduced if a cumulative ownership change of more than 50% has occurred in our past or occurs in our future. We do not anticipate that the amount of our existing unrecognized tax benefits will significantly increase or decrease within the next 12 months. Due to the presence of NOLs in most jurisdictions, our tax years remain open for examination by taxing authorities back to 2000. On December 22, 2017, the U.S. government enacted comprehensive tax legislation under the Tax Cuts and Jobs Act, (“the Tax Act”). The Tax Act makes broad and complex changes to the U.S. tax code, including but not limited to: (1) reducing the U.S. federal corporate tax rate from 35 percent to 21 percent; (2) requiring companies to pay a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries; (3) generally eliminating U.S. federal income taxes on dividends from foreign subsidiaries; (4) eliminating the corporate alternative minimum tax (“AMT”) and how AMT credits are utilized; and (5) changing rules related to uses and limitations of net operating loss carryforwards created in tax years beginning after December 31, 2017. The Securities and Exchange Commission requires a company to reflect the income tax effects of those aspects of the Tax Act for which the accounting under the accounting rules is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but the company is able to determine a reasonable estimate, it should record a provisional estimate in the financial statements. Further, the implementation guidance also provides for a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete their accounting pursuant to the accounting rules. Stock-Based Compensation We have stock-based compensation plans that are more fully described in Note 10. Stock-based compensation cost is measured on the grant date, based on the estimated fair value of the award using a Black-Scholes option model and recognized as an expense over the employee’s requisite service period on a straight-line basis. We account for stock-based compensation arrangements with non-employees using a fair value approach. The fair value of these awards is measured using the Black-Scholes option pricing model reflecting the same assumptions as applied to employee awards in each of the reported periods, other than the expected life, which is assumed to be the remaining contractual life of the award. The compensation costs of these arrangements are subject to remeasurement over the vesting terms as earned. Stock-based compensation expense on awards granted to nonemployees was not material for 2017, 2016 and 2015. Prior to the closing of our initial public offering, we granted stock options at exercise prices believed to be equal to the fair value of the common stock underlying such options as determined by the board of directors, with input from management, on the date of grant. Because such grants occurred prior to the public trading of our common stock, the board of directors exercised significant judgment in determining the fair market value of our common stock. The valuations were consistent with the guidance and methods outlined in the AICPA Practice Aid, Valuation of Privately-Held-Company Equity Securities Issued as Compensation , or AICPA Practice Aid, for all option grant dates. After the closing of the initial public offering, we granted stock options with exercise prices based on market prices. We use the Black-Scholes-Merton option-pricing model to determine the fair value for option awards. In valuing our option awards, we make assumptions about risk-free interest rates, dividend yields, volatility, and weighted-average expected lives. These estimates involve inherent uncertainties and the application of management’s judgment. If factors change and different assumptions are used, our stock-based compensation expense could be materially different in the future. We have not paid and do not anticipate paying cash dividends on common stock; therefore, the expected dividend yield is assumed to be zero. In addition, through December 31, 2016, we made assumptions about estimated forfeiture rates. Beginning on January 1, 2017, we elected to account for forfeitures as they occur. We also use the Black-Scholes-Merton option pricing model to determine the fair value of each common share issued under the Employee Stock Purchase Plan, or the ESPP. The fair value for the ESPP grants is determined on the first day of each offering period. For issuances of restricted stock units, we determine the fair value of the award based on the market value of our common stock at the date of grant. Warrant Liability We account for preferred stock warrant liabilities at fair value. Warrant liability costs are recognized based on their grant date fair value estimated using the Black-Scholes option pricing model. To date, all warrants have been issued in connection with entering into or refinancing of our credit facilities and the costs of the warrants were accounted for as a debt discount which is amortized and recognized in interest expense over the term of the associated credit facility. Warrants issued to purchase preferred stock were adjusted to fair value at each period end as estimated using the Black-Scholes model and the associated change in fair value is included in other income (expense), net on the consolidated statements of operations. Upon the effectiveness of the registration statement related to the initial public offering on July 20, 2016, all of our outstanding warrants automatically converted into shares of common stock. Net Loss per Share Attributable to Common Stockholders Net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding. We have outstanding stock options, unvested common stock subject to repurchase, warrants and convertible preferred stock, which are included in the calculation of diluted net loss attributable to common stockholders per share whenever to do so would be dilutive. We calculate basic and diluted net loss per share attributable to common stockholders in conformity with the two-class method, in those periods where we had participating securities. We consider all series of convertible preferred stock to be participating securities. Under the two-class method, the net loss attributable to common stockholders is not allocated to the convertible preferred stock as the holders of convertible preferred stock do not have a contractual obligation to share in losses. The diluted net loss per share attributable to common stockholders is computed by giving effect to all potential dilutive common stock equivalents outstanding for the period. For purposes of this calculation, convertible preferred stock, options to purchase common stock and warrants to purchase common stock and convertible preferred stock are considered potentially dilutive securities but have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is antidilutive. Basic and diluted net loss per share was the same for each period presented, as the inclusion of all potential common shares outstanding would have been antidilutive. Recently Adopted Accounting Standards In January 2017, the Financial Accounting Standards Board, or FASB, issued guidance simplifying the test for goodwill impairment. This standard eliminates Step 2 from the goodwill impairment test, instead requiring an entity to recognize a goodwill impairment charge for the amount by which the goodwill carrying amount exceeds the reporting unit’s fair value. This guidance is effective for interim and annual goodwill impairment tests in fiscal years beginning after December 15, 2019, and early adoption is permitted. This guidance must be applied on a prospective basis. We adopted this guidance on January 1, 2017 for interim and annual goodwill impairment tests. Adoption of this guidance did not impact our financial position, results of operations or cash flows. In July 2015, the FASB issued guidance on the measurement of inventory. The amendments require the measurement of inventory at the lower of cost or net realizable value; where net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This guidance is effective for interim and annual reporting periods beginning after December 31, 2016, and early adoption is permitted. We adopted this guidance on January 1, 2017. A doption of this guidance did not have a material impact on Recently Issued Accounting Standards Not Yet Adopted In January 2017, the FASB issued guidance to narrow the definition of a business. This standard provides guidance to assist entities with evaluating when a set of transferred assets and activities is a business. This guidance is effective for interim and annual reporting periods beginning after December 15, 2017, and early adoption is permitted. This guidance must be applied prospectively to transactions occurring within th |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note Fair Value Measurement Accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. The standards also establish a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value: • Level 1 — Quoted prices in active markets for identical assets or liabilities. • Level 2 — Assets and liabilities valued based on observable market data for similar instruments, such as quoted prices for similar assets or liabilities. • Level 3 — Unobservable inputs that are supported by little or no market activity; instruments valued based on the best available data, some of which is internally developed, and considers risk premiums that a market participant would require. We applied the following methods and assumptions in estimating our fair value measurements: Cash equivalents — Cash equivalents are comprised of highly liquid investments, including money market funds and certificates of deposit, with an original or remaining maturity of three months or less at the date of purchase . The fair value measurement of these assets is based on quoted market prices in active markets. Investments — Our investments consist of fixed income securities, which include U.S. government agency securities and corporate notes and bonds. The fair value measurement of these assets is based on observable market-based inputs or inputs that are derived principally from or corroborated by observable market data by correlation or other means. Long-term debt — The fair values of our long-term debt approximates carrying value based on the borrowing rates currently available to us for loans with similar terms using Level 2 inputs. The following tables present the balances of assets measured at fair value on a recurring basis, by level within the fair value hierarchy, as of the dates presented (in thousands): December 31, 2017 Level 1 Level 2 Cash equivalents: Money market funds $ 10,393 $ — Commercial paper — 1,000 Short-term investments: U.S. government agency securities — 13,970 Corporate notes and bonds — 7,503 Commercial paper — 8,972 Treasury bills — 8,386 Total $ 10,393 $ 39,831 December 31, 2016 Level 1 Level 2 Cash equivalents: Money market funds $ 14,065 $ — U.S. government agency securities — 4,997 Corporate notes and bonds — 959 Commercial paper — 2,948 Short-term investments: U.S. government agency securities — 36,531 Corporate notes and bonds — 19,252 Commercial paper — 11,122 Total $ 14,065 $ 75,809 We did not have any Level 3 assets as of December 31, 2017 or 2016. There were no liabilities measured at fair value as of December 31, 2017 or 2016. |
Cash, Cash Equivalents and Inve
Cash, Cash Equivalents and Investments | 12 Months Ended |
Dec. 31, 2017 | |
Cash And Cash Equivalents [Abstract] | |
Cash, Cash Equivalents and Investments | Note 4. Cash, Cash Equivalents and Investments The following tables present the amortized cost, gross unrealized gains and losses, and estimated fair market value of our cash and cash equivalents and available-for-sale securities as of the dates presented (in thousands): December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash $ 7,892 $ — $ — $ 7,892 Cash equivalents: Money market funds 10,393 — — 10,393 Commercial Paper 1,000 — — 1,000 Short-term investments: U.S. government agency securities 13,979 — (9 ) 13,970 Corporate notes and bonds 7,514 — (11 ) 7,503 Commercial Paper 8,972 — — 8,972 Treasury bills 8,402 — (16 ) 8,386 Total $ 58,152 $ — $ (36 ) $ 58,116 December 31, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash $ 10,667 $ — $ — $ 10,667 Cash equivalents: Money market funds 14,065 — — 14,065 U.S. government agency securities 4,996 1 — 4,997 Corporate notes and bonds 959 — — 959 Commercial paper 2,948 — — 2,948 Short-term investments: U.S. government agency securities 36,535 6 (10 ) 36,531 Corporate notes and bonds 19,259 2 (9 ) 19,252 Commercial paper 11,122 — — 11,122 Total $ 100,551 $ 9 $ (19 ) $ 100,541 The contractual maturities are due in one year of less for our available-for-sale investments as of December 31, 2017. |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Inventory | Note 5. Inventory The following table presents the detail of inventories as of the dates presented (in thousands): December 31, December 31, 2017 2016 Raw materials $ 1,351 $ 5,482 Work-in-process 15,647 5,556 Finished goods 30,085 16,696 Total Inventory $ 47,083 $ 27,734 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment | Note 6. Property and Equipment The following table presents the detail of p roperty and equipment as of the dates presented (in thousands): December 31, 2017 2016 Laboratory equipment $ 11,223 $ 6,687 Computer equipment and software 4,213 2,529 Furniture and fixtures 1,117 228 Equipment acquired under capital leases 4,468 6,172 Leasehold improvements 10,676 9,540 31,697 25,156 Less: Accumulated depreciation (13,587 ) (10,227 ) $ 18,110 $ 14,929 Depreciation expense, which includes amortization of leased assets, was $3.9 million, $2.9 million and $1.9 million for the years ended December 31, 2017, 2016 and 2015, respectively. The net book value of property and equipment acquired under capital leases was $1.7 million and $2.7 million at December 31, 2017 and 2016, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 7. Income Taxes We are subject to federal and state income taxes in the United States and foreign jurisdictions. In 2017, we recorded a tax benefit of $97,000, and in 2016 and 2015 tax expenses of $168,000 and $166,000, respectively. The following table presents the detail of income tax benefit (expense) for the periods presented (in thousands): Year Ended December 31, 2017 2016 2015 Current: U.S. - Federal $ — $ — $ — U.S. - State (8 ) (15 ) (56 ) Foreign (126 ) (63 ) (22 ) (134 ) (78 ) (78 ) Deferred: U.S. - Federal 241 (91 ) (88 ) U.S. - State (10 ) 1 — Foreign — — 231 (90 ) (88 ) Total income tax benefit (expense) $ 97 $ (168 ) $ (166 ) We have not recorded a liability for U.S. income taxes and foreign withholding taxes on the undistributed earnings of foreign subsidiaries of December 31, 2017 as we have no foreign undistributed earnings. We intend to permanently reinvest future such earnings outside the United States. The amount of unrecognized deferred tax liability related to these temporary differences is estimated to be approximately $17,000. The following table presents a reconciliation of the federal statutory rate and our effective tax rate for the periods presented: Year Ended December 31, 2017 2016 2015 U.S. Statutory Rate 34.0 % 34.0 % 34.0 % Change in valuation allowance 56.4 (11.8 ) 9.9 State taxes (net of federal benefit) 1.9 (4.4 ) 3.8 Federal research and development credit 7.1 67.4 (60.8 ) Incentive stock options 12.5 (46.2 ) 19.5 Unrecognized tax benefits (3.5 ) (47.1 ) 28.8 Preferred stock warrant revaluation — 12.6 (22.4 ) Impact of Tax Cuts and Jobs Act of 2017 (113.5 ) — — Return to provision - deductible transaction costs 5.6 — — Other, net 0.1 (15.5 ) 2.9 Effective income tax rate 0.6 % (11.0 )% 15.7 % The effective tax rate increased from the prior year due to the change in tax rates as a result of the enactment of new U.S. tax law in December 2017 and increase in taxes in foreign jurisdictions. We continue to maintain a full valuation allowance against our net deferred tax assets in the U.S. but recognize deferred income tax expense in the U.S. solely based on the amortization of goodwill intangibles. As a result of the change in tax law in the United States, the change in deferred tax liabilities related to goodwill decreased, resulting in a tax benefit. We also record current tax expense for certain state margin taxes that are based on income and on earnings in foreign jurisdictions. Deferred federal, state and foreign income taxes reflect the net tax impact of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and such amounts for tax purposes. The following table presents the significant components of our deferred tax assets and liabilities as of the dates presented (in thousands): December 31, 2017 2016 Net operating loss carryforwards (1) $ 27,090 $ 34,287 Credit carryforwards 7,478 6,492 Capitalized research and development 3,665 6,992 Deferred rent 1,189 1,825 Allowances 1,466 767 Deferred compensation 218 1,209 Deferred revenue 108 331 Stock compensation 525 220 Deferred tax assets 41,739 52,123 Less: valuation allowance (41,130 ) (50,959 ) Net deferred tax assets $ 609 $ 1,164 Deferred tax liability Goodwill (532 ) (766 ) Depreciation and amortization (609 ) (1,164 ) Deferred tax liabilities (1,141 ) (1,930 ) Net deferred tax liability $ (532 ) $ (766 ) (1) Realization of deferred tax assets is dependent upon the generation of future taxable income, if any, the timing and amount of which are uncertain. We have provided a full valuation allowance against the net deferred tax assets as of December 31, 2017 and 2016 because, based on the weight of available evidence, it is more likely than not (a likelihood of more than 50%) that some or all of the deferred tax assets will not be realized. $9.8 million during the year ended December 31, 2017 due to the change in enacted future tax rates under the Tax Cuts and Jobs Act, and increased $905,000 during the year ended December 31, 2016. We have accumulated federal tax losses of approximately $126.4 million and $100.0 million, respectively, as of December 31, 2017 and 2016, which are available to reduce future taxable income. We have accumulated state tax losses of approximately $18.4 million and $15.1 million, respectively, as of December 31, 2017 and 2016. Additionally, we have net research and development credit carryforwards of $9.7 million and $8.5 million, respectively, as of December 31, 2017 and 2016, which are available to reduce future tax liabilities. The tax loss and research and development credit carryforwards begin to expire in 2023. Under Sections 382 and 383 of the Internal Revenue Code, if a corporation undergoes an ownership change, the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes, such as research tax credits, to offset its post-change income or income tax liability may be limited. We are currently not under audit in any tax jurisdiction. Tax years from 2000 through 2017 are currently open for audit by federal and state taxing authorities. We establish reserves for tax positions based on estimates of whether, and the extent to which, additional taxes will be due. The reserves are established when we believe that positions might be challenged by taxing authorities despite our belief that our tax return positions are fully supportable. The following table presents the total balance of unrecognized tax benefits as of the dates presented (in thousands): Year ended December 31, 2017 2016 2015 Unrecognized tax benefits at beginning of the period $ 2,597 $ 1,878 $ 1,732 Gross increases to tax positions in prior periods 2 210 — Gross increases to tax positions in current periods 307 509 146 Unrecognized tax benefits at end of the period $ 2,906 $ 2,597 $ 1,878 At December 31, 2017, the total amount of unrecognized tax benefits of $2.9 million is recorded as a reduction to the deferred tax asset. We do not anticipate that the amount of existing unrecognized tax benefits will significantly increase or decrease within the next 12 months. Accrued interest and penalties related to unrecognized tax benefits are recorded as income tax expense and are zero. Tax Cuts and Jobs Act The Tax Act, was enacted on December 22, 2017. As described above, the Tax Act reduces the U.S. federal corporate tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred, and creates new taxes on certain foreign sourced earnings. Additionally, on December 22, 2017, the SEC issued Staff Accounting Bulletin 118, (“SAB 118”), which allows companies to record provisional amounts during a measurement period. As of December 31, 2017, we have not completed our accounting for the tax effects of enactment of the Tax Act; however, in certain cases, as described below, we have made a reasonable estimate of (1) the effects on our existing deferred tax balances and (2) the one-time transition tax. In other cases, we have not been able to make a reasonable estimate and continue to account for those items based on the provisions of the tax laws that were in effect immediately prior to enactment, as prescribed by SAB 118. A dditional work is necessary to analyze the impact of the Tax Act on our unremitted foreign earnings position and other components of the Tax Act. Any subsequent adjustment to these amounts will be recorded to current tax expense in the quarter of 2018 when the analysis is complete. In accordance with SAB 118, for the items which we are able to determine a reasonable estimate, we recognized a provisional amount of $19.8 million related to the revaluation of deferred tax assets, which is entirely offset by a corresponding decrease to the valuation allowance, resulting in no impact to current tax expense. In all cases, we will continue to make and refine our calculation as additional analysis is completed. In addition our estimates may also be affected as we gain a more thorough understanding of the new tax law and further guidance is issued from taxing authorities. We have not assessed the impact of certain other provisions of the Tax Act such as Global Intangible Low Taxed Income (“GILTI”). Further, we have not made a policy election with respect to the treatment of potential deferred tax assets or liabilities affected by GILTI. We will continue to refine our calculations and understanding of the Tax Act and make the necessary adjustments within the measurement period ending December 22, 2018. Provisional Amounts Deferred tax assets and liabilities were re-measured to reflect the reduction in the U.S. corporate income tax rate at the rates they are expected to reverse in the future, generally 21%. However, we are still analyzing certain aspects of the Tax Act and refining our calculations, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts. The provisional amount recorded related to the re-measurement of our deferred tax balances was $19.8 million. The impact of the one-time transition tax is based on our total post-1986 earnings and profits, or E&P, that we previously deferred from U.S. income taxes. We did not record a provisional amount due to E&P deficits from foreign operations. Further, the transition tax is based in part on the amount of those earnings held in cash and other specified assets. This amount may change when we finalize the calculation of post-1986 foreign E&P previously deferred from U.S. federal taxation and finalize the amounts held in cash or other specified assets. No additional income taxes have been provided for any remaining undistributed foreign earnings not subject to the transition tax, or any additional outside basis difference inherent in these entities, as these amounts continue to be indefinitely reinvested in foreign operations. The amount of unrecognized deferred tax liability related to any remaining undistributed foreign earnings not subject to the transition tax and additional outside basis difference in these entities as of December 31, 2017 is estimated to be $17,000. |
Debt Facilities
Debt Facilities | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt Facilities | Note 8. Debt Facilities Senior Credit Facility On April 24, 2017, we amended and restated our loan agreement, or senior credit facility, with Silicon Valley Bank. As amended, the senior credit facility provides for (1) a $25.0 million revolving credit facility, with a $5.0 million letter of credit subfacility, (2) a $10.5 million term loan and (3) approximately $1.7 million aggregate principal amount of outstanding equipment loans. The revolving credit facility reflects a $10.0 million increase in revolver borrowing capacity and is no longer subject to a borrowing base. Consistent with the prior loan agreement, the term loan will amortize over 36 months beginning on June 1, 2017, following an initial interest-only period, and will mature on May 1, 2020. We retain the ability to prepay the term loan at any time, subject to a prepayment fee of 1.0% of the outstanding principal amount if prepaid on or before May 27, 2018. At December 31, 2017, and $8.5 million of term loan borrowings outstanding. The senior credit facility also refinanced the current balance of the equipment loans outstanding in the principal amount of approximately $870,000, or the Equipment A Advance, and $815,000, or the Equipment B Advance, initially borrowed on September 20, 2016 and December 30, 2016, respectively. Beginning on May 1, 2017, the Equipment A Advance will continue to amortize over 29 months, maturing on September 1, 2019, and the Equipment B Advance will continue to amortize over 32 months, maturing on December 1, 2019. We may prepay the equipment loans in full at any time, subject to a prepayment fee equal to 2.0% of the principal amount of each equipment loan prepaid if such equipment loan is prepaid on or prior to the first anniversary of the date such equipment loan was initially borrowed, and 1.0% of the outstanding principal amount if prepaid after the first anniversary, but on or prior to the second anniversary, of the date such equipment loan was initially borrowed . At December 31, 2017, we had $1.2 million equipment loan borrowings outstanding. The loans accrue interest, at our option, at (1) a LIBOR rate determined in accordance with the senior credit facility, plus a margin of 2.75% or 3.25%, in the case of revolving borrowings, or 3.0% or 3.5%, in the case of the term loan and equipment loans, or (2) a prime rate determined in accordance with the senior credit facility, plus a margin of 0.0% or 0.5%, in the case of revolving borrowings, or 0.25% or 0.75%, in the case of the term loan and equipment loans, in each case with such margin determined based on our adjusted EBITDA for the preceding 12 month period. Interest is due and payable in arrears monthly for prime rate loans and at the end of an interest period for LIBOR rate loans. We are also obligated to pay other customary closing fees, commitment fees and letter of credit fees for a facility of this size and type. If our cash and investments in accounts maintained with the lender, plus availability under the revolving credit facility, falls below $50.0 million, the senior credit facility requires that we maintain compliance with (1) maximum adjusted EBITDA loss for the twelve month period ending as of the last day of each fiscal quarter of not greater than $7.5 million and (2) a ratio of unrestricted cash in accounts maintained with the lender plus net accounts receivable, to debt owed to the lender, of not less than 1.5 to 1.0. At December 31, 2017, $9.7 million of term loan and equipment loans were outstanding, excluding unamortized debt issuance costs of $113,000. The weighted average interest rate was 4.6% at December 31, 2017. The following table presents the scheduled principal maturities as of December 31, 2017 (in thousands): 2018 $ 4,167 2019 4,077 2020 1,458 Total $ 9,702 Mezzanine Credit Facility We had a mezzanine loan and security agreement, which we referred to as our mezzanine credit facility, with SG Enterprises II, LLC, which provided for a $5.0 million term loan which was drawn in September 2015. On July 26, 2016, we repaid without premium or penalty the principal and accrued interest on the $5.0 million term loan pursuant to the mezzanine credit facility and wrote-off unamortized debt discounts and issuance costs of $109,000. |
Redeemable Convertible Preferre
Redeemable Convertible Preferred Stock and Stockholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Statement Of Stockholders Equity [Abstract] | |
Redeemable Convertible Preferred Stock and Stockholders' Equity | Note 9. Redeemable Convertible Preferred Stock and Stockholders’ Equity Redeemable Convertible Preferred Stock Upon the effectiveness of the registration statement related to the initial public offering on July 20, 2016, all of our previously outstanding shares of redeemable convertible preferred stock automatically converted into 8,531,146 of common stock at the conversion rate of 1-to-1 and shares of Series 2 redeemable convertible preferred stock automatically converted into common stock at the conversion ratio of 1-to-1.25. The related carrying value of the of $106.1 million was reclassified to common stock and additional paid-in capital. Our previously outstanding Series 1 and Series 2 preferred stock included certain redemption provisions which prevented us from including these amounts in stockholders’ equity (deficit). Holders of our Series 1 and Series 2 redeemable convertible preferred stock were entitled to accretion equal to 7% annual interest (non-compounded) on the original price paid per share of the applicable series of preferred stock. We recorded no accretion in 2017 and accretion of $6.3 million and $11.3 million during 2016 and 2015, respectively, in respect of our outstanding Series 1 and Series 2 redeemable convertible preferred stock. Accretion is generally recorded against distributable earnings. Since we have accumulated losses, we recorded accretion against additional paid-in capital until there is no remaining capital. Preferred Stock Our board of directors has the authority to fix the designations, powers, preferences and rights, and the qualifications, limitations or restrictions thereof, of any wholly unissued series of preferred stock, and to increase or decrease the number of shares in any series of preferred stock, subject to limitations prescribed by law or by our certificate of incorporation. There was no preferred stock issued and outstanding as of December 31, 2017 or 2016. Common Stock As of December 31, 2017, we had authorized 495,000,000 shares of voting $0.001 par value common stock. Each holder of the common stock is entitled to one vote per common share. At its discretion, the Board of Directors may declare dividends on shares of common stock, subject to the prior rights of our preferred stockholders. Upon liquidation or dissolution, holders of common stock will receive distributions only after preferred stock preferences have been satisfied. The following shares of common stock have been reserved for future issuance as of the dates presented (in thousands): December 31, 2017 2016 Option awards outstanding 2,850 2,310 Restricted stock units outstanding 12 — Common stock reserved under equity incentive plans 1,221 1,198 Common stock reserved under employee stock purchase plan 374 — Total 4,457 3,508 |
Stock-Based Awards
Stock-Based Awards | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Awards | Note 10. Stock-Based Awards 2016 Equity Incentive Plan In June 2016, our board of directors adopted and our stockholders approved the 2016 Equity Incentive Plan, or the 2016 Plan, which became effective in July 2016 at which time the 2010 Equity Incentive Plan, or the 2010 Plan, was terminated. Our 2000 Stock Plan was terminated in March 2010. The number of shares of common stock reserved for issuance under the 2016 Plan may increase on January 1 of each year, beginning on January 1, 2017 and ending on and including January 1, 2026, by the least of (1) 1,825,000; (2) 5% of the total number of shares of common stock outstanding on December 31 of the preceding calendar year; and (3) a lesser number of shares determined by our board of directors. All options granted under the 2000 Stock Plan, the 2010 Plan and the 2016 Plan have a maximum 10-year term and generally vest and become exercisable over four years of continued employment or service as defined in each option agreement. We generally grant stock options with exercise prices that equal the fair value of the common stock on the date of grant. Option Awards The following table summarizes option award activity for the year ended December 31, 2017 (in thousands, except per share data and years): Number of Shares Options Weighted-Average Exercise Price Per Share Weighted-Average Remaining Contractual Life (Years) Total Intrinsic Value Outstanding at December 31, 2016 2,310 $ 8.84 Granted 1,275 36.26 Exercised (444 ) 3.64 Forfeited or Cancelled (291 ) 16.16 Outstanding at December 31, 2017 2,850 21.16 8.01 20,802 Vested and exercisable at December 31, 2017 1,009 $ 6.72 6.14 $ 16,128 The fair value of options granted is estimated at the date of grant using the Black-Scholes-Merton option-pricing model with the following assumptions for the periods presented: Stock Options Year Ended December 31, 2017 2016 2015 Risk-free interest rate 1.8% – 2.2% 1.1% – 2.1% 1.2% – 1.6% Expected dividends yield None None None Expected volatility 52.2% – 59.1% 40.8% – 49.5% 41.5% – 43.4% Weighted-average expected life 6.08 5.78 4.31 Weighted-average fair value of options granted $ 19.15 $ 9.60 $ 3.12 We determined that it was not practicable to calculate the volatility of our share price since we do not have an extensive public trading history for shares of our common stock a combination our historical volatility since becoming a publicly traded company and The total intrinsic value of options exercised during 2017, 2016 and 2015 was $14.9 million, $1.1 million and $3.8 million, respectively. As of December 31, 2017, our total unrecognized stock-based compensation cost related to unvested stock options was $27.3 million, which will be recognized over the weighted-average remaining requisite service period of 3.0 years. Unvested Shares Prior to the adoption of our 2016 Equity Incentive Plan, we provided employees with the opportunity to early exercise stock options subject to the original vesting schedule of the option. In the event of voluntary or involuntary termination of employment with us, we have an irrevocable and exclusive option to repurchase the unvested portion of the shares at the original exercise price after the termination of employment. We account for cash received in consideration for the purchase of unvested shares of common stock or the early exercise of unvested stock options as a current liability and include it in accrued compensation and employee related benefits on the consolidated balance sheet. We repurchased 1,765 unvested shares from terminated employees in 2017 and none in 2016. The following table summarizes activity of unvested shares related to early exercise of our common stock for the year ended December 31, 2017 (in thousands, except per share data): Shares Outstanding Number of Shares Weighted-Average Exercise Price per Share Outstanding at December 31, 2016 118 $ 3.30 Issued 1 4.71 Vested (69 ) 2.59 Repurchased (2 ) 3.19 Outstanding at December 31, 2017 48 4.32 Restricted Stock Units The following table summarizes activity for restricted stock units for the year ended December 31, 2017 (in thousands, except per share data): Shares Outstanding Number of Shares Weighted-Average Grant Date Fair Value Outstanding at December 31, 2016 — $ — Granted 12 46.53 Outstanding at December 31, 2017 12 46.53 The fair value of the outstanding restricted stock units will be recorded as stock-based compensation expense over the vesting period. As of December 31, 2017, there was $267,000 of total unrecognized compensation cost related to unvested restricted stock units, which is expected to be recognized over a weighted average period of 0.7 years. Employee Stock Purchase Plan In 2016, we adopted the 2016 Employee Stock Purchas e Plan, the ESPP, which became effective in July 2016. Under the ESPP, eligible employees can authorize payroll deductions for amounts up to 15% of their eligible compensation. A participant may purchase a maximum of 4,000 shares each six-month period or some lesser number of shares as determined by IRS rules. The offering periods generally start on the first trading day on or after February 20 and August 20 of each year, except for the first offering period, which commenced on July 21, 2016 and will end on the first trading day on or after February 20, 2017. Participants in an offering period will be granted the right to purchase common shares at a price per share that is 85% of the least of the fair market value of the shares at (1) the first day of the offering period and (2) the end of each purchase period within the offering period. The fair value of the ESPP options granted is determined using a Black-Scholes model and is amortized on a straight-line basis over the related offering period. As of December 31, 2017, the total unrecognized stock-based compensation related to the ESPP was $118,000 and will be recognized on a straight-line basis over the weighted-average remaining service period of 0.1 years . The fair value of the ESPP options granted is estimated at the start of the offering period using the Black-Scholes-Merton option-pricing model with the following assumptions for the periods presented: Employee Stock Purchase Plan Year Ended December 31, 2017 2016 Risk-free interest rate 0.7% – 1.1% 0.4% Expected term 0.5 years 0.5 years Expected volatility 66.5% – 71.2% 61.8% Stock-Based Compensation Expense The following table presents the detail of stock-based compensation expense amounts included in our consolidated statements of operations for the periods indicated (in thousands): Year Ended December 31, 2017 2016 2015 Cost of revenue $ 231 $ 96 $ 31 Research and development expense 2,431 983 305 Sales and marketing expense 3,113 1,289 692 General and administrative expense 1,653 397 150 Total stock-based compensation expense $ 7,428 $ 2,765 $ 1,178 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 11. Commitments and Contingencies Leases In July 2017, we entered into a lease for additional office space for our corporate headquarters in Seattle, Washington. We took possession of an additional 39,000 square feet in November 2017, and are obligated to make escalating monthly lease payments that will begin in February 2018 and continue through January 2023. We are entitled to landlord incentives totaling On February 13, 2018, the Company began implementing a restructuring to match strategic and financial objectives and optimize resources for long-term growth. As part of the restructuring, we ceased use of this office space. This subsequent event and our restructuring plans are more fully described in Note 15. In December 2014, we entered into a lease for our corporate headquarters in Seattle, Washington. Pursuant to the terms of this lease, we occupy a total of approximately 70,000 square feet, and we are obligated to make escalating monthly lease payments that began in January 2016 and continue through December 2026. The terms of the lease provide for rental payments on a graduated scale and the right to terminate this lease beginning in December 2022, subject to the payment of certain early termination fees. We received landlord incentives totaling In October 2013, we entered into a lease for our design laboratory in Seattle, Washington. We lease approximately 11,000 square feet under an operating lease that expires in October 2018 with an option to renew for an additional one or three year term. The terms of the lease provide for rental payments on a graduated scale and the right to terminate this lease early, beginning in December 2015, subject to the payment of certain early termination fees. We received landlord incentives of $108,000 and have used $95,000. We recorded these incentives as deferred rent obligations and are amortizing them as a reduction in rental expense over the term of the lease. We recognize rent expense on a straight-line basis over the lease period. Total rent expense under operating leases was $3.4 million, $2.9 million and $1.1 million for the years ended December 31, 2017, 2016 and 2015 respectively. We lease a portion of our property and equipment under capital leases, which include options allowing us to purchase the equipment at the end of the lease term. The following table presents future minimum lease payments under operating and capital leases as of December 31, 2017 were as follows (in thousands): Operating Capital 2018 $ 4,218 $ 1,024 2019 4,252 574 2020 4,379 269 2021 4,511 2 2022 4,646 — Thereafter 13,374 — Total minimum lease payments $ 35,380 $ 1,869 Less: Portion representing interest (188 ) Present value of capital lease obligations 1,681 Less: Current portion of capital lease obligations (936 ) Capital lease obligations net of current portion $ 745 Indemnifications In the normal course of business, we periodically enter into agreements that require us to indemnify either customers or suppliers for specific risks. While we cannot estimate our maximum exposure under these indemnification provisions, we do not expect them to have a material impact on our consolidated results of operations or financial condition . Obligations with Third-Party Manufacturers We manufacture products with third-party manufacturers. We are committed to purchase $23.5 million of inventory as of December 31, 2017. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Reporting | Note 12. Segment Reporting We have one reportable segment: the development and sale of our products and services. Our reportable segment has been identified based on how our chief operating decision-maker manages our business, makes operating decisions and evaluates operating performance. The chief executive officer acts as the chief operating decision-maker and reviews financial and operational information on an entity-wide basis. We have one business activity and there are no segment managers who are held accountable for operations, operating results or plans for levels or components. Accordingly, we have determined that we have a single reporting segment and operating unit structure. The chief executive officer reviews information about revenue categories, including endpoints, connectivity, software and other revenue. The following table presents our revenue categories for the periods presented (in thousands): Year ended December 31, 2017 2016 2015 Revenue: Endpoint ICs $ 91,699 $ 86,218 $ 52,854 Systems 33,601 26,069 25,625 Total revenue $ 125,300 $ 112,287 $ 78,479 Systems revenue includes sales of readers, gateways, reader ICs and software. Revenue from readers and gateways as a percentage of total revenue was 19%, 16% and 22% for years ended December 31, 2017, 2016 and 2015, respectively. None of our other product families within the above categories were above 10% of total revenue for the periods presented. Our assets are primarily located in the United States and not allocated to any specific geographic region. Therefore, geographic information is presented only for total revenue. Substantially all of our long-lived assets are located in the United States. The following table is based on the location of the value-added resellers, inlay manufacturers, reader OEMs, distributors or end users who purchased products and services directly from us. For sales to our resellers and distributors, their location may be different from the locations of the ultimate end users. The following table presents our sales by geography for the periods presented (in thousands): Year ended December 31, 2017 2016 2015 Americas $ 29,656 $ 26,401 $ 21,568 Asia Pacific 80,531 73,084 45,096 Europe, Middle East and Africa 15,113 12,802 11,815 Total revenue $ 125,300 $ 112,287 $ 78,479 Total revenue in the United States was $28.8 million, $25.9 million and $21.0 million |
Net Loss per Share
Net Loss per Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Net Loss per Share | Note 13. Net Loss per Share For the periods presented, the following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net income (loss) per share attributable to common stockholders (in thousands, expect per share amounts) : Year ended December 31, 2017 2016 2015 Numerator: Net income (loss) $ (17,322 ) $ (1,673 ) $ 900 Less: Accretion of preferred stock — (6,258 ) (11,301 ) Net income (loss) attributable to common stockholders $ (17,322 ) $ (7,931 ) $ (10,401 ) Denominator: Weighted-average common shares outstanding 20,763 10,904 4,067 Weighted-average unvested shares of common stock subject to repurchase (83 ) (126 ) (174 ) Weighted-average shares used to compute net income (loss) per share attributable to common stockholders — basic and diluted 20,680 10,778 3,893 Net income (loss) per share attributable to common stockholders — basic and diluted $ (0.84 ) $ (0.74 ) $ (2.67 ) The following outstanding options, warrants and shares of preferred stock were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because their effect would have been antidilutive (in thousands): Year ended December 31, 2017 2016 2015 Redeemable convertible preferred stock — — 7,885 Common stock warrants — — 25 Redeemable convertible preferred stock warrants — — 264 Unvested shares of common stock subject to repurchase 48 118 136 Stock options 2,911 2,310 1,896 |
Retirement Plans
Retirement Plans | 12 Months Ended |
Dec. 31, 2017 | |
Compensation And Retirement Disclosure [Abstract] | |
Retirement Plans | Note 14. Retirement Plans In 2001, we adopted a salary deferral 401(k) plan for our employees. The plan allows employees to contribute a percentage of their pretax earnings annually, subject to limitations imposed by the Internal Revenue Service. The plan also allows us to make a matching contribution, subject to certain limitations. To date, we have not made any contributions to the plan. |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Event | Note 15. Subsequent Events On February 13, 2018, the Company began implementing a restructuring to match strategic and financial objectives and optimize resources for long-term growth, including a reduction-in-force program affecting approximately 9% of our employees. As part of the restructuring, we will also look to reduce leased office space and close some remote offices. On March 5, 2018, the Company, amended its Senior Credit Facility, to, among other things, extend the maturity date of the revolving credit facility to March 5, 2020, and provide for a new $20.0 million term loan, the proceeds of which refinance $7.9 million outstanding under the existing term loan and $1.1 million of equipment loans outstanding under the Senior Credit Facility. The remaining term loan proceeds are available for general corporate purposes. The new term loan will amortize over 36 months, beginning on April 1, 2019, following an initial interest-only period, and mature on March 1, 2022. The Company retains the ability to prepay the term loan at any time, subject to a prepayment fee equal to 2.0% of the outstanding principal amount if prepaid on or before March 5, 2019, or 1.0% of the outstanding principal amount if prepaid after March 5, 2019, but on or before March 5, 2020. The amendment also amends the financial covenants under the Senior Credit Facility such that if the Company ’ |
Summary of Significant Accoun24
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements include Impinj, Inc. and its wholly-owned subsidiaries. Intercompany balances and transactions have been eliminated in consolidation. These consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles, or GAAP . |
Principles of Consolidation | Principles of Consolidation Our consolidated financial statements include the accounts of Impinj, Inc. and our wholly-owned subsidiaries Impinj RFID Technology (Shanghai) Co., Ltd., located in China, Impinj UK Ltd., located in United Kingdom, Impinj Japan LLC, located in Japan, Pi Operations (Thailand) Co., Ltd, located in Thailand, Impinj France SARL, located in France, and Impinj International, Ltd., located in the Cayman Islands. |
Public Offering | Public Offerings On July 26, 2016, we closed our initial public offering of 5,520,000 shares of common stock at an initial price to the public of $14.00 per share, including 720,000 shares of common stock pursuant to the underwriters’ option to purchase additional shares, resulting in aggregate net proceeds to us of $68.5 million after deducting underwriting discounts and commissions and offering costs. Upon the effectiveness of the registration statement related to the initial public offering on July 20, 2016, all of our outstanding shares of redeemable convertible preferred stock and outstanding preferred stock warrants, which automatically net exercised, converted into 8,531,146 shares and 123,759 shares, respectively, of common stock. The related carrying value of the redeemable convertible preferred stock and warrants of $106.1 million and $505,000, respectively, were reclassified to common stock and additional paid-in capital. On December 7, 2016, we closed our follow-on public offering of 1,527,380 shares of common stock at a price to the public of $27.00 per share, resulting in aggregate net proceeds to us of $38.7 million after deducting underwriting discounts and commissions and offering costs. |
Reverse Stock Split | Reverse Stock Split On June 16, 2016, our board of directors and stockholders approved an amendment to our certificate of incorporation to effect a reverse split of shares of our authorized, issued and outstanding common stock and redeemable convertible preferred stock at a 1-for-12 ratio. The reverse stock split was effected on July 8, 2016. The par value of our common stock and the par value of our redeemable convertible preferred stock were not adjusted as a result of the reverse stock split. All authorized, issued and outstanding shares of common stock and redeemable convertible preferred stock, warrants for common stock and redeemable convertible preferred stock, options to purchase common stock and the related per share amounts contained in these consolidated financial statements have been retroactively adjusted to reflect this reverse stock split for all periods presented. |
Offering Costs | Offering Costs Offering costs, consisting of legal, accounting and other fees and costs related to our public offerings, were capitalized. Total offering costs of approximately $4.1 million were deferred through the completion of the public offerings and upon closing of each of the public offerings in 2016 were reclassified to additional paid-in capital as a reduction of the proceeds. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the related disclosures at the date of the financial statements, as well as the reported amounts of revenue and expenses during the periods presented. On an ongoing basis, we evaluate our estimates, including those related to revenue recognition, reserve for returns, collectability of accounts receivable, estimated costs to complete development contracts, warranty obligations, deferred revenue, sales incentives, inventory excess and obsolescence, depreciable lives of fixed assets, the determination of the fair value of stock awards and warrants and accrued liabilities, compensation and employee related benefits. To the extent there are material differences between these estimates, judgments, or assumptions and actual results, our financial statements will be affected. |
Risks and Uncertainties | Risks and Uncertainties Inherent in our business are various risks and uncertainties, including that we are developing advanced technologies and new applications in a rapidly changing industry. These risks include the failure to develop and extend our products and the rejection of our products by consumers, as well as other risks and uncertainties. If we do not successfully implement our business plan, certain assets may not be recoverable, certain liabilities may not be paid and investments in our capital stock may not be recoverable. Our success depends upon the acceptance of our technology, development of sales and distribution channels and our ability to generate significant revenue from the use of our technology. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments , which potentially subject us to concentrations of credit risk, We place cash and cash equivalents and investments with major financial institutions, which management assesses to be of high credit quality, in order to limit exposure of our investments. The following table presents t Year Ended December 31, 2017 2016 2015 Revenue: Avery 18 % 14 % 16 % Smartrac 14 16 14 Arizon 13 11 9 Shang Yang 7 10 15 Blue Star 10 9 10 62 % 60 % 64 % As of December 31, 2017 2016 Accounts Receivable: Smartrac 17 % 15 % Shang Yang 10 11 Blue Star 11 11 Invengo 10 18 48 % 55 % |
Concentration of Supplier Risk | Concentration of Supplier Risk We outsource the manufacturing and production of our hardware products to a limited number of suppliers. Although there are a limited number of manufacturers for hardware products, we believe that other suppliers could provide similar products on comparable terms. A change in suppliers, however, could cause a delay in manufacturing and a possible loss of sales, which would adversely affect our operating results. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash includes demand deposits with banks or financial institutions. Cash equivalents include short-term, highly liquid investments that are both readily convertible to known amounts of cash, and so near their maturity that they present minimal risk of changes in value because of changes in interest rates. Our cash equivalents include only investments with an original or remaining maturity of three months or less at the date of purchase. We regularly maintain cash in excess of federally insured limits at financial institutions. |
Investments | Investments Our investments consist of fixed income securities, which include U.S. government agency securities, corporate notes and bonds and commercial paper. As the investments are available to support current operations, our available-for-sale securities are classified as short-term investments. Available-for-sale securities are carried at fair value with unrealized gains and losses reported as a component of accumulated other comprehensive income (loss) in stockholders’ equity, while realized gains and losses and other-than-temporary impairments are reported as a component of net income (loss) based on specific identification. An impairment charge is recorded in the consolidated statements of operations for declines in fair value below the cost of an individual investment that are deemed to be other than temporary. We assess whether a decline in value is temporary based on the length of time that the fair market value has been below cost, the severity of the decline and the intent and ability to hold or sell the investment. We did not identify any investments as other-than-temporarily impaired as of December 31, 2017 or 2016. |
Accounts Receivable and Allowances | Accounts Receivable and Allowances Accounts receivable consists of amounts billed currently due from customers and amounts earned not yet billed on development agreements, net of an allowance for doubtful accounts, an allowance for sales returns and an allowance for price exceptions. The allowance for doubtful accounts is our best estimate of the amount of probable credit losses in existing accounts receivable and is determined based on our historical collections experience, age of the receivable, knowledge of the customer and the condition of the general economy and industry as a whole We record changes in our estimate to the allowance for doubtful accounts through bad debt expense and relieve the allowance when accounts are ultimately determined to be uncollectible. Bad debt expense is included in general and administrative expenses. The allowance for sales returns is our best estimate based on historical experience and currently available evidence. We record changes in our estimate to the allowance for sales returns through revenue and relieve the allowance when product returns are received. . Balance at beginning of year Charged to reductions revenue Applied price concession credit Balance at end of year Allowance for sales returns: During year ended December 31, 2017 $ 63 $ 3,250 $ (31 ) $ 3,282 During year ended December 31, 2016 128 — (65 ) 63 During year ended December 31, 2015 151 73 (96 ) 128 The allowance for price exceptions is our best estimate based on historical experience. For the periods presented, price exceptions are not material and are not included in the table above. |
Inventory | Inventory Inventories consist of a combination of raw materials, work-in-progress and finished goods and are stated at the lower of cost or net realizable value. Cost is determined using the average costing method, which approximates the first in, first out method. We establish reserves for excess and obsolete inventory based on our analysis of inventory levels, future sales forecasts and the estimated utility of our inventory. If our review indicates a reduction in utility below carrying value, we reduce our inventory to a new cost basis through a charge to cost of revenue. For the periods presented in this report, inventory write-downs and sales of inventory previously written-down were not material. |
Property and Equipment | Property and Equipment Property and equipment is recorded at cost and depreciated using the straight-line method over the estimated useful lives of the related assets. The useful lives are as follows: Category Useful Life Laboratory equipment 3 to 5 years Computer equipment and software 2 to 5 years Furniture and fixtures 3 to 7 years Equipment acquired under capital leases 3 to 7 years Leasehold improvements Shorter of remaining lease term or expected useful life Maintenance and repair costs are charged to expense as incurred. Major improvements, which extend the useful life of the related asset, are capitalized. Upon disposal of a fixed asset, we record a gain or loss based on the differences between the proceeds received and the net book value of the disposed asset. |
Goodwill | Goodwill Goodwill is measured as the excess of the cost of acquisition over the sum of the amounts assigned to identifiable tangible and intangible assets acquired less liabilities assumed. For goodwill, we perform an impairment assessment at the reporting unit level on an annual basis as of the end of our September month end or more frequently if circumstances warrant. Our annual impairment assessment requires a comparison of the fair value of each of our reporting units to the respective carrying value. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. If the carrying value of a reporting unit is greater than its fair value, an impairment loss will be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. Additionally, we will consider the income tax effect from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss. |
Revenue Recognition | Revenue Recognition We generate revenue from sales of our hardware and software products, and from development and service agreements and licensing agreements. We recognize revenue when: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the price is fixed or determinable; and (4) collection is probable. Sales agreements do not generally provide for a right of return for refund but for certain distributors provide for a right of return in exchange for other similar products, subject to time and quantity limitations. When we give our distributors the right to exchange eligible products, we estimate the expected exchanges based on an analysis of historical experience. We may provide other credits or considerations to our customers, which are accounted for as sales incentives when estimating the amount of revenue to recognize. The price of our products and revenue we recognize varies with changes in marketing incentives and returns we offer to our customers and their customers. Credits and returns are estimated at contract inception and updated at the end of each reporting period as additional information becomes available and only to the extent that it is probable that a significant reversal of any incremental revenue will not occur. We sell our reader and gateway products in combination with a limited hardware warranty against manufacturer defect. Our hardware warranty includes access to repair or replacement of hardware in the event of breakage or failure resulting directly from a manufacturer defect; this warranty is provided to all customers and considered an integral part of the initial product sale. Certain software is integrated with our reader and gateway products and is essential to the functionality of the integrated products. We also sell other software that configures, manages and controls readers and gateways which is not considered essential to the functionality of the hardware product. Our multi-element arrangements generally include a combination of hardware products, non-essential software, extended warranty, enhanced maintenance and services. We allocate revenue to software and non-software deliverables based on their relative fair value. Amounts allocated to extended warranty, enhanced maintenance and services sold with our reader products are deferred and recognized on a straight-line basis over the arrangement term. Accounting principles establish a hierarchy to determine the selling price to be used for allocating revenue to non-software deliverables as follows: (1) vendor-specific objective evidence of selling price, or VSOE; (2) third-party evidence of selling price, or TPE; and (3) best estimated selling prices, or ESP. VSOE generally exists only when we sell the deliverable separately and is the price actually charged by us for that deliverable on a stand-alone basis. When VSOE cannot be established, we attempt to establish the selling price of each element based on TPE. TPE is determined based on competitor prices for similar deliverables when sold separately. We are unable to reliably determine what similar competitor products’ selling prices are on a stand-alone basis and are therefore typically not able to determine TPE. When we are unable to establish selling price using VSOE or TPE, we use ESP in the allocation of arrangement consideration. The objective of ESP is to determine the price at which we would transact a sale if the product or service were sold on a stand-alone basis. Our ESPs for all products and services are calculated using a method consistent with the way management prices new products. We consider multiple factors in developing the ESPs for our products including our historical pricing and discounting practices, the costs incurred to manufacture the product or deliver the service, the nature of the customer relationship and market trends. In addition, we may consider other factors as appropriate, including the pricing of competitive alternatives if they exist and product-specific business objectives. We regularly review VSOE and ESP and maintain internal controls over the establishment and updates of these estimates. We sell software that configures, manages and controls readers and gateways which is not considered essential to the functionality of the hardware product. For software deliverables, we recognize revenue in accordance with industry specific software accounting guidance for stand-alone software licenses and related support services. Revenue from software deliverables that do not require significant production, modification or customization of our software is generally recognized when: (1) delivery has occurred; (2) there is no customer acceptance clause in the contract; (3) there are no significant post-delivery obligations remaining; (4) the price is fixed; and (5) collection of the resulting receivable is reasonably assured. For transactions where we have established VSOE for the fair value of support services as measured by the renewal prices paid by our customers when the services are sold separately on a stand-alone basis, we use the residual method to determine the amount of software revenue to be recognized. Under the residual method, the fair value of the undelivered elements is deferred and the remaining portion of the sales amount is recognized as license revenue. Support services revenue is deferred and recognized ratably over the period during which the services are to be performed, which is typically from one to three years. In those instances where we have not established VSOE of our support services, the license and service revenue is recognized on a straight-line basis over the support period. We account for development, service and licensing agreements generally by recognizing the revenue ratably over the performance period or as services are performed; advance payments under these agreements are initially deferred. Revenue associated with these agreements for the periods presented in this report was not material. Payment terms range from 30 days to 120 days. We present revenue net of sales tax in our consolidated statements of operations. Shipping charges billed to customers are included in revenue and the related shipping costs are included in cost of revenue. |
Guarantees and Product Warranties | Guarantees and Product Warranties In the normal course of business to facilitate sales of our products, we indemnify other parties, including customers, distributors, resellers and parties to other transactions with us, with respect to certain matters. We have agreed to hold the other party harmless against losses arising from a breach of representations or covenants, from intellectual property infringement and from other claims made against certain parties. 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 determine 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. We provide limited warranty coverage for most products, generally ranging from a period of 90 days to one year from the date of shipment. A liability is recorded for the estimated cost of product warranties based on historical claims, product failure rates and other factors when the related revenue is recognized. We review these estimates periodically and adjust the warranty reserves as actual experience differs from historical estimates or other information becomes available. The warranty liability primarily includes the anticipated cost of materials, labor and shipping necessary to repair or replace the product. Accrued warranty costs in 2017 and 2016 were not material. |
Research and Development Costs | Research and Development Costs Research and development costs are expensed as incurred and consist of salaries and related benefits of product development personnel, contract developers, prototype materials and other expenses related to the development of new and improved products. |
Foreign Currency | Foreign Currency The functional currency for all of our subsidiaries is the U.S. dollar. All foreign currency transactions are initially measured and recorded in U.S. dollars using the exchange rate on the date of the transaction. Foreign currency denominated assets and liabilities are remeasured at the end of each reporting period using the exchange rate at that date. We record remeasurement gains and losses in other income (expense), net on the consolidated statements of operations. |
Income Taxes | Income Taxes We use the asset and liability approach for accounting, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial statement and tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to be in effect when such assets and liabilities are recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the year that includes the enactment date. We determine deferred tax assets, including historical net operating losses, and deferred tax liabilities, based on temporary differences between the book and tax bases of assets and liabilities. We believe that it is currently more likely than not that our deferred tax assets will not be realized and as such, we have recorded a full valuation allowance for these assets. We evaluate the likelihood of the ability to realize deferred tax assets in future periods on a quarterly basis, and when appropriate evidence indicates we would release our valuation allowance accordingly. We utilize a two-step approach for evaluating uncertain tax positions. First, we evaluate recognition, which requires us to determine if the weight of available evidence indicates that a tax position is more likely than not to be sustained upon audit, including resolution of related appeals or litigation processes. If a tax position is not considered more likely than not to be sustained, no benefits of the position are recognized. Second, we measure the uncertain tax position based on the largest amount of benefit which is more likely than not to be realized on effective settlement. This process involves estimating our actual current tax exposure, including assessing the risks associated with tax audits, together with assessing temporary differences resulting from the different treatment of items for tax and financial reporting purposes. If actual results differ from our estimates, our net operating loss and credit carryforwards could be materially impacted. Our realization of the benefits of the NOLs and credit carryforwards depends on sufficient taxable income in future years. We have established a valuation allowance against the carrying value of our deferred tax assets, as it is not currently more likely than not that we will be able to realize these deferred tax assets. In addition, utilization of NOLs and credits to offset future income subject to taxes may be subject to substantial annual limitations due to the “change in ownership” provisions of the Code and similar state provisions. Events that cause limitations in the amount of NOLs that we may utilize in any one year include, but are not limited to, a cumulative ownership change of more than 50%, as defined by Code Sections 382 and 383, over a three-year period. Utilization of our NOLs and tax credit carryforwards could be significantly reduced if a cumulative ownership change of more than 50% has occurred in our past or occurs in our future. We do not anticipate that the amount of our existing unrecognized tax benefits will significantly increase or decrease within the next 12 months. Due to the presence of NOLs in most jurisdictions, our tax years remain open for examination by taxing authorities back to 2000. On December 22, 2017, the U.S. government enacted comprehensive tax legislation under the Tax Cuts and Jobs Act, (“the Tax Act”). The Tax Act makes broad and complex changes to the U.S. tax code, including but not limited to: (1) reducing the U.S. federal corporate tax rate from 35 percent to 21 percent; (2) requiring companies to pay a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries; (3) generally eliminating U.S. federal income taxes on dividends from foreign subsidiaries; (4) eliminating the corporate alternative minimum tax (“AMT”) and how AMT credits are utilized; and (5) changing rules related to uses and limitations of net operating loss carryforwards created in tax years beginning after December 31, 2017. The Securities and Exchange Commission requires a company to reflect the income tax effects of those aspects of the Tax Act for which the accounting under the accounting rules is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but the company is able to determine a reasonable estimate, it should record a provisional estimate in the financial statements. Further, the implementation guidance also provides for a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete their accounting pursuant to the accounting rules. |
Stock-Based Compensation | Stock-Based Compensation We have stock-based compensation plans that are more fully described in Note 10. Stock-based compensation cost is measured on the grant date, based on the estimated fair value of the award using a Black-Scholes option model and recognized as an expense over the employee’s requisite service period on a straight-line basis. We account for stock-based compensation arrangements with non-employees using a fair value approach. The fair value of these awards is measured using the Black-Scholes option pricing model reflecting the same assumptions as applied to employee awards in each of the reported periods, other than the expected life, which is assumed to be the remaining contractual life of the award. The compensation costs of these arrangements are subject to remeasurement over the vesting terms as earned. Stock-based compensation expense on awards granted to nonemployees was not material for 2017, 2016 and 2015. Prior to the closing of our initial public offering, we granted stock options at exercise prices believed to be equal to the fair value of the common stock underlying such options as determined by the board of directors, with input from management, on the date of grant. Because such grants occurred prior to the public trading of our common stock, the board of directors exercised significant judgment in determining the fair market value of our common stock. The valuations were consistent with the guidance and methods outlined in the AICPA Practice Aid, Valuation of Privately-Held-Company Equity Securities Issued as Compensation , or AICPA Practice Aid, for all option grant dates. After the closing of the initial public offering, we granted stock options with exercise prices based on market prices. We use the Black-Scholes-Merton option-pricing model to determine the fair value for option awards. In valuing our option awards, we make assumptions about risk-free interest rates, dividend yields, volatility, and weighted-average expected lives. These estimates involve inherent uncertainties and the application of management’s judgment. If factors change and different assumptions are used, our stock-based compensation expense could be materially different in the future. We have not paid and do not anticipate paying cash dividends on common stock; therefore, the expected dividend yield is assumed to be zero. In addition, through December 31, 2016, we made assumptions about estimated forfeiture rates. Beginning on January 1, 2017, we elected to account for forfeitures as they occur. We also use the Black-Scholes-Merton option pricing model to determine the fair value of each common share issued under the Employee Stock Purchase Plan, or the ESPP. The fair value for the ESPP grants is determined on the first day of each offering period. For issuances of restricted stock units, we determine the fair value of the award based on the market value of our common stock at the date of grant. |
Warrant Liability | Warrant Liability We account for preferred stock warrant liabilities at fair value. Warrant liability costs are recognized based on their grant date fair value estimated using the Black-Scholes option pricing model. To date, all warrants have been issued in connection with entering into or refinancing of our credit facilities and the costs of the warrants were accounted for as a debt discount which is amortized and recognized in interest expense over the term of the associated credit facility. Warrants issued to purchase preferred stock were adjusted to fair value at each period end as estimated using the Black-Scholes model and the associated change in fair value is included in other income (expense), net on the consolidated statements of operations. Upon the effectiveness of the registration statement related to the initial public offering on July 20, 2016, all of our outstanding warrants automatically converted into shares of common stock. |
Net Loss per Share Attributable to Common Stockholders | Net Loss per Share Attributable to Common Stockholders Net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding. We have outstanding stock options, unvested common stock subject to repurchase, warrants and convertible preferred stock, which are included in the calculation of diluted net loss attributable to common stockholders per share whenever to do so would be dilutive. We calculate basic and diluted net loss per share attributable to common stockholders in conformity with the two-class method, in those periods where we had participating securities. We consider all series of convertible preferred stock to be participating securities. Under the two-class method, the net loss attributable to common stockholders is not allocated to the convertible preferred stock as the holders of convertible preferred stock do not have a contractual obligation to share in losses. The diluted net loss per share attributable to common stockholders is computed by giving effect to all potential dilutive common stock equivalents outstanding for the period. For purposes of this calculation, convertible preferred stock, options to purchase common stock and warrants to purchase common stock and convertible preferred stock are considered potentially dilutive securities but have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is antidilutive. Basic and diluted net loss per share was the same for each period presented, as the inclusion of all potential common shares outstanding would have been antidilutive. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In January 2017, the Financial Accounting Standards Board, or FASB, issued guidance simplifying the test for goodwill impairment. This standard eliminates Step 2 from the goodwill impairment test, instead requiring an entity to recognize a goodwill impairment charge for the amount by which the goodwill carrying amount exceeds the reporting unit’s fair value. This guidance is effective for interim and annual goodwill impairment tests in fiscal years beginning after December 15, 2019, and early adoption is permitted. This guidance must be applied on a prospective basis. We adopted this guidance on January 1, 2017 for interim and annual goodwill impairment tests. Adoption of this guidance did not impact our financial position, results of operations or cash flows. In July 2015, the FASB issued guidance on the measurement of inventory. The amendments require the measurement of inventory at the lower of cost or net realizable value; where net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This guidance is effective for interim and annual reporting periods beginning after December 31, 2016, and early adoption is permitted. We adopted this guidance on January 1, 2017. A doption of this guidance did not have a material impact on |
Recently Issued Accounting Standards Not Yet Adopted | Recently Issued Accounting Standards Not Yet Adopted In January 2017, the FASB issued guidance to narrow the definition of a business. This standard provides guidance to assist entities with evaluating when a set of transferred assets and activities is a business. This guidance is effective for interim and annual reporting periods beginning after December 15, 2017, and early adoption is permitted. This guidance must be applied prospectively to transactions occurring within the period of adoption. We adopted this guidance on January 1, 2018. While we continue to assess all potential impacts of this new standard, In June 2016, the FASB issued guidance on the measurement of credit losses on financial instruments. This guidance requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. This guidance is effective for interim and annual reporting periods beginning after December 15, 2019, and early adoption is permitted. We expect to adopt this guidance on January 1, 2020. The adoption of this guidance requires a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. While we continue to assess all potential impacts of this new standard, In February 2016, the FASB issued guidance on leases. This standard requires the recognition of a right-of-use asset and lease liability on the balance sheet for all leases. This standard also requires more detailed disclosures to enable users of financial statements to understand the amount, timing, and uncertainty of cash flows arising from leases. This guidance is effective for interim and annual reporting periods beginning after December 15, 2018 and should be applied through a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, and early adoption is permitted. We expect to adopt this guidance on January 1, 2019. While we continue to assess all potential impacts of this new standard, we anticipate this standard will have a material impact on our financial position, primarily due to our office space operating leases, as we will be required to recognize right-of-use assets and lease liabilities on our consolidated balance sheets. However, we do not expect the adoption to have a significant impact on our results of operations or cash flows. In May 2014, the FASB issued guidance on revenue recognition. This guidance provides that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance also requires more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The effective date of this guidance for a public company is for interim and annual reporting periods beginning after December 15, 2017, early adoption is permitted, and the guidance must be applied retrospectively to each prior period presented or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application. We adopted the new revenue standard on January 1, 2018 utilizing the full retrospective transition method. In the fourth quarter of fiscal 2017, we finalized our assessment of the new standard, including completing our contract reviews and our evaluation of the incremental costs of obtaining a contract. Revenue recognition related to our hardware products, non-essential software, extended warranty, enhanced maintenance services and non-recurring engineering development agreements, and recognition of cost of sales commissions will remain substantially unchanged. The primary impact of adopting the new standard relates to software license revenue that will generally be recognized at the time of delivery, rather than ratably over the subscription period. Unrecognized software license revenue at December 31, 2017 and 2016 was not material. We continue to assess the impact the adoption of this guidance will have on our disclosures. We are implementing key control activities related to the new guidance, particularly related to evaluating the impact of the standard on products with more than one performance obligation, products with variable consideration, and the determination of the amortization period for contract costs. We have concluded that upon adoption of the new guidance, we will not need to implement new information technology systems. |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Schedule of Revenue and Accounts Receivable Concentration | The following table presents t otal revenue and accounts receivable concentration for the periods presented or as of the dates presented: Year Ended December 31, 2017 2016 2015 Revenue: Avery 18 % 14 % 16 % Smartrac 14 16 14 Arizon 13 11 9 Shang Yang 7 10 15 Blue Star 10 9 10 62 % 60 % 64 % As of December 31, 2017 2016 Accounts Receivable: Smartrac 17 % 15 % Shang Yang 10 11 Blue Star 11 11 Invengo 10 18 48 % 55 % |
Summary of Allowance for Sales Returns | The following table summarizes our allowance for sales returns (in thousands): Balance at beginning of year Charged to reductions revenue Applied price concession credit Balance at end of year Allowance for sales returns: During year ended December 31, 2017 $ 63 $ 3,250 $ (31 ) $ 3,282 During year ended December 31, 2016 128 — (65 ) 63 During year ended December 31, 2015 151 73 (96 ) 128 |
Schedule of Property and Equipment Estimated Useful Lives | Property and equipment is recorded at cost and depreciated using the straight-line method over the estimated useful lives of the related assets. The useful lives are as follows: Category Useful Life Laboratory equipment 3 to 5 years Computer equipment and software 2 to 5 years Furniture and fixtures 3 to 7 years Equipment acquired under capital leases 3 to 7 years Leasehold improvements Shorter of remaining lease term or expected useful life |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Summary of Assets Measured at Fair Value on Recurring Basis | The following tables present the balances of assets measured at fair value on a recurring basis, by level within the fair value hierarchy, as of the dates presented (in thousands): December 31, 2017 Level 1 Level 2 Cash equivalents: Money market funds $ 10,393 $ — Commercial paper — 1,000 Short-term investments: U.S. government agency securities — 13,970 Corporate notes and bonds — 7,503 Commercial paper — 8,972 Treasury bills — 8,386 Total $ 10,393 $ 39,831 December 31, 2016 Level 1 Level 2 Cash equivalents: Money market funds $ 14,065 $ — U.S. government agency securities — 4,997 Corporate notes and bonds — 959 Commercial paper — 2,948 Short-term investments: U.S. government agency securities — 36,531 Corporate notes and bonds — 19,252 Commercial paper — 11,122 Total $ 14,065 $ 75,809 |
Cash, Cash Equivalents and In27
Cash, Cash Equivalents and Investments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Cash And Cash Equivalents [Abstract] | |
Summary of Amortized Cost, Gross Unrealized Gains and Losses, and Estimated Fair Market Value of Cash and Cash Equivalents and Available-for-Sale Securities | The following tables present the amortized cost, gross unrealized gains and losses, and estimated fair market value of our cash and cash equivalents and available-for-sale securities as of the dates presented (in thousands): December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash $ 7,892 $ — $ — $ 7,892 Cash equivalents: Money market funds 10,393 — — 10,393 Commercial Paper 1,000 — — 1,000 Short-term investments: U.S. government agency securities 13,979 — (9 ) 13,970 Corporate notes and bonds 7,514 — (11 ) 7,503 Commercial Paper 8,972 — — 8,972 Treasury bills 8,402 — (16 ) 8,386 Total $ 58,152 $ — $ (36 ) $ 58,116 December 31, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash $ 10,667 $ — $ — $ 10,667 Cash equivalents: Money market funds 14,065 — — 14,065 U.S. government agency securities 4,996 1 — 4,997 Corporate notes and bonds 959 — — 959 Commercial paper 2,948 — — 2,948 Short-term investments: U.S. government agency securities 36,535 6 (10 ) 36,531 Corporate notes and bonds 19,259 2 (9 ) 19,252 Commercial paper 11,122 — — 11,122 Total $ 100,551 $ 9 $ (19 ) $ 100,541 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | The following table presents the detail of inventories as of the dates presented (in thousands): December 31, December 31, 2017 2016 Raw materials $ 1,351 $ 5,482 Work-in-process 15,647 5,556 Finished goods 30,085 16,696 Total Inventory $ 47,083 $ 27,734 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property Plant And Equipment [Abstract] | |
Schedule of Property and Equipment | The following table presents the detail of p roperty and equipment as of the dates presented (in thousands): December 31, 2017 2016 Laboratory equipment $ 11,223 $ 6,687 Computer equipment and software 4,213 2,529 Furniture and fixtures 1,117 228 Equipment acquired under capital leases 4,468 6,172 Leasehold improvements 10,676 9,540 31,697 25,156 Less: Accumulated depreciation (13,587 ) (10,227 ) $ 18,110 $ 14,929 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Summary of Income Tax Expense | The following table presents the detail of income tax benefit (expense) for the periods presented (in thousands): Year Ended December 31, 2017 2016 2015 Current: U.S. - Federal $ — $ — $ — U.S. - State (8 ) (15 ) (56 ) Foreign (126 ) (63 ) (22 ) (134 ) (78 ) (78 ) Deferred: U.S. - Federal 241 (91 ) (88 ) U.S. - State (10 ) 1 — Foreign — — 231 (90 ) (88 ) Total income tax benefit (expense) $ 97 $ (168 ) $ (166 ) |
Reconciliation of U.S. Federal Statutory Income Tax Rate to Effective Income Tax Rate | The following table presents a reconciliation of the federal statutory rate and our effective tax rate for the periods presented: Year Ended December 31, 2017 2016 2015 U.S. Statutory Rate 34.0 % 34.0 % 34.0 % Change in valuation allowance 56.4 (11.8 ) 9.9 State taxes (net of federal benefit) 1.9 (4.4 ) 3.8 Federal research and development credit 7.1 67.4 (60.8 ) Incentive stock options 12.5 (46.2 ) 19.5 Unrecognized tax benefits (3.5 ) (47.1 ) 28.8 Preferred stock warrant revaluation — 12.6 (22.4 ) Impact of Tax Cuts and Jobs Act of 2017 (113.5 ) — — Return to provision - deductible transaction costs 5.6 — — Other, net 0.1 (15.5 ) 2.9 Effective income tax rate 0.6 % (11.0 )% 15.7 % |
Summary of Significant Components Deferred Tax Assets and Liabilities | Deferred federal, state and foreign income taxes reflect the net tax impact of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and such amounts for tax purposes. The following table presents the significant components of our deferred tax assets and liabilities as of the dates presented (in thousands): December 31, 2017 2016 Net operating loss carryforwards (1) $ 27,090 $ 34,287 Credit carryforwards 7,478 6,492 Capitalized research and development 3,665 6,992 Deferred rent 1,189 1,825 Allowances 1,466 767 Deferred compensation 218 1,209 Deferred revenue 108 331 Stock compensation 525 220 Deferred tax assets 41,739 52,123 Less: valuation allowance (41,130 ) (50,959 ) Net deferred tax assets $ 609 $ 1,164 Deferred tax liability Goodwill (532 ) (766 ) Depreciation and amortization (609 ) (1,164 ) Deferred tax liabilities (1,141 ) (1,930 ) Net deferred tax liability $ (532 ) $ (766 ) (1) |
Total Balance of Unrecognized Tax Benefits | The following table presents the total balance of unrecognized tax benefits as of the dates presented (in thousands): Year ended December 31, 2017 2016 2015 Unrecognized tax benefits at beginning of the period $ 2,597 $ 1,878 $ 1,732 Gross increases to tax positions in prior periods 2 210 — Gross increases to tax positions in current periods 307 509 146 Unrecognized tax benefits at end of the period $ 2,906 $ 2,597 $ 1,878 |
Debt Facilities (Tables)
Debt Facilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Scheduled Principal Maturities of Debt | The following table presents the scheduled principal maturities as of December 31, 2017 (in thousands): 2018 $ 4,167 2019 4,077 2020 1,458 Total $ 9,702 |
Redeemable Convertible Prefer32
Redeemable Convertible Preferred Stock and Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Statement Of Stockholders Equity [Abstract] | |
Summary of Shares of Common Stock Reserved for Future Issuance | The following shares of common stock have been reserved for future issuance as of the dates presented (in thousands): December 31, 2017 2016 Option awards outstanding 2,850 2,310 Restricted stock units outstanding 12 — Common stock reserved under equity incentive plans 1,221 1,198 Common stock reserved under employee stock purchase plan 374 — Total 4,457 3,508 |
Stock-Based Awards (Tables)
Stock-Based Awards (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Stock Option Activity | Option Awards The following table summarizes option award activity for the year ended December 31, 2017 (in thousands, except per share data and years): Number of Shares Options Weighted-Average Exercise Price Per Share Weighted-Average Remaining Contractual Life (Years) Total Intrinsic Value Outstanding at December 31, 2016 2,310 $ 8.84 Granted 1,275 36.26 Exercised (444 ) 3.64 Forfeited or Cancelled (291 ) 16.16 Outstanding at December 31, 2017 2,850 21.16 8.01 20,802 Vested and exercisable at December 31, 2017 1,009 $ 6.72 6.14 $ 16,128 |
Schedule of Stock Options Valuation Assumptions | The fair value of options granted is estimated at the date of grant using the Black-Scholes-Merton option-pricing model with the following assumptions for the periods presented: Stock Options Year Ended December 31, 2017 2016 2015 Risk-free interest rate 1.8% – 2.2% 1.1% – 2.1% 1.2% – 1.6% Expected dividends yield None None None Expected volatility 52.2% – 59.1% 40.8% – 49.5% 41.5% – 43.4% Weighted-average expected life 6.08 5.78 4.31 Weighted-average fair value of options granted $ 19.15 $ 9.60 $ 3.12 |
Summary of Unvested Shares Related to Early Exercise of Common Stock Activity | The following table summarizes activity of unvested shares related to early exercise of our common stock for the year ended December 31, 2017 (in thousands, except per share data): Shares Outstanding Number of Shares Weighted-Average Exercise Price per Share Outstanding at December 31, 2016 118 $ 3.30 Issued 1 4.71 Vested (69 ) 2.59 Repurchased (2 ) 3.19 Outstanding at December 31, 2017 48 4.32 |
Schedule of Employee Stock Purchase Plan Valuation Assumptions | The fair value of the ESPP options granted is estimated at the start of the offering period using the Black-Scholes-Merton option-pricing model with the following assumptions for the periods presented: Employee Stock Purchase Plan Year Ended December 31, 2017 2016 Risk-free interest rate 0.7% – 1.1% 0.4% Expected term 0.5 years 0.5 years Expected volatility 66.5% – 71.2% 61.8% |
Summary of Stock-Based Compensation Expense | Stock-Based Compensation Expense The following table presents the detail of stock-based compensation expense amounts included in our consolidated statements of operations for the periods indicated (in thousands): Year Ended December 31, 2017 2016 2015 Cost of revenue $ 231 $ 96 $ 31 Research and development expense 2,431 983 305 Sales and marketing expense 3,113 1,289 692 General and administrative expense 1,653 397 150 Total stock-based compensation expense $ 7,428 $ 2,765 $ 1,178 |
Restricted Stock Units | |
Summary of Restricted Stock Units | The following table summarizes activity for restricted stock units for the year ended December 31, 2017 (in thousands, except per share data): Shares Outstanding Number of Shares Weighted-Average Grant Date Fair Value Outstanding at December 31, 2016 — $ — Granted 12 46.53 Outstanding at December 31, 2017 12 46.53 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule Of Future Minimum Lease Payments For Operating And Capital Leases [Table Text Block] | The following table presents future minimum lease payments under operating and capital leases as of December 31, 2017 were as follows (in thousands): Operating Capital 2018 $ 4,218 $ 1,024 2019 4,252 574 2020 4,379 269 2021 4,511 2 2022 4,646 — Thereafter 13,374 — Total minimum lease payments $ 35,380 $ 1,869 Less: Portion representing interest (188 ) Present value of capital lease obligations 1,681 Less: Current portion of capital lease obligations (936 ) Capital lease obligations net of current portion $ 745 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Summary of Revenue Categories | The following table presents our revenue categories for the periods presented (in thousands): Year ended December 31, 2017 2016 2015 Revenue: Endpoint ICs $ 91,699 $ 86,218 $ 52,854 Systems 33,601 26,069 25,625 Total revenue $ 125,300 $ 112,287 $ 78,479 |
Summary of Sales by Geography | The following table presents our sales by geography for the periods presented (in thousands): Year ended December 31, 2017 2016 2015 Americas $ 29,656 $ 26,401 $ 21,568 Asia Pacific 80,531 73,084 45,096 Europe, Middle East and Africa 15,113 12,802 11,815 Total revenue $ 125,300 $ 112,287 $ 78,479 |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Reconciliation of the Numerator and Denominator used in Computing Basic and Diluted Net Income (Loss) Per Share Attributable to Common Stockholders | For the periods presented, the following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net income (loss) per share attributable to common stockholders (in thousands, expect per share amounts) : Year ended December 31, 2017 2016 2015 Numerator: Net income (loss) $ (17,322 ) $ (1,673 ) $ 900 Less: Accretion of preferred stock — (6,258 ) (11,301 ) Net income (loss) attributable to common stockholders $ (17,322 ) $ (7,931 ) $ (10,401 ) Denominator: Weighted-average common shares outstanding 20,763 10,904 4,067 Weighted-average unvested shares of common stock subject to repurchase (83 ) (126 ) (174 ) Weighted-average shares used to compute net income (loss) per share attributable to common stockholders — basic and diluted 20,680 10,778 3,893 Net income (loss) per share attributable to common stockholders — basic and diluted $ (0.84 ) $ (0.74 ) $ (2.67 ) |
Computation of Diluted Net Loss Per Share Attributable to Common Stockholders Effect in Antidilutive | The following outstanding options, warrants and shares of preferred stock were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because their effect would have been antidilutive (in thousands): Year ended December 31, 2017 2016 2015 Redeemable convertible preferred stock — — 7,885 Common stock warrants — — 25 Redeemable convertible preferred stock warrants — — 264 Unvested shares of common stock subject to repurchase 48 118 136 Stock options 2,911 2,310 1,896 |
Summary of Significant Accoun37
Summary of Significant Accounting Policies - Additional Information (Details) | Dec. 07, 2016USD ($)$ / sharesshares | Jul. 26, 2016USD ($)$ / sharesshares | Jun. 16, 2016 | Dec. 31, 2018 | Dec. 31, 2017USD ($)shares | Dec. 31, 2016USD ($)shares | Dec. 31, 2015USD ($)shares | Jul. 20, 2016USD ($)shares | Dec. 31, 2014USD ($) |
Significant Accounting Policies [Line Items] | |||||||||
Common stock, shares issued | 20,973,000 | 20,336,000 | |||||||
Aggregate net proceeds from issuance of stock | $ | $ 38,700,000 | $ 68,500,000 | |||||||
Outstanding shares of redeemable convertible preferred stock converted into common stock | 8,531,146 | 8,531,146 | |||||||
Warrants automatically converted into common stock | 123,759 | ||||||||
Reverse split of common stock | On June 16, 2016, our board of directors and stockholders approved an amendment to our certificate of incorporation to effect a reverse split of shares of our authorized, issued and outstanding common stock and redeemable convertible preferred stock at a 1-for-12 ratio. | ||||||||
Reverse stock split ratio | 0.0833 | ||||||||
Deferred offering costs | $ | $ 4,100,000 | $ 0 | $ 0 | ||||||
Cumulative ownership change percentage | 50.00% | ||||||||
Cumulative change in ownership period | 3 years | ||||||||
Income tax examination years, description | Due to the presence of NOLs in most jurisdictions, our tax years remain open for examination by taxing authorities back to 2000 | ||||||||
US federal corporate tax rate | 34.00% | 34.00% | 34.00% | ||||||
Expected dividend yield assumed | 0.00% | ||||||||
Scenario Forecast | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
US federal corporate tax rate | 21.00% | ||||||||
Minimum | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Payment Terms | 30 days | ||||||||
Maximum | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Payment Terms | 120 days | ||||||||
US federal corporate tax rate | 35.00% | ||||||||
Measurement period to implement the Tax Act effect | 1 year | ||||||||
Allowance for Sales Returns | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Amount reserved for sales returns | $ | $ 3,282,000 | $ 63,000 | $ 128,000 | $ 151,000 | |||||
Allowance for Sales Returns | Customer One | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Amount reserved for sales returns | $ | $ 3,200,000 | ||||||||
Common Stock | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Issuance of common stock | 637,000 | 197,000 | 654,000 | ||||||
Carrying value of redeemable convertible preferred stock | $ | $ 106,100,000 | $ 106,100,000 | |||||||
Additional Paid-in Capital | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Carrying value of warrants | $ | $ 505,000 | ||||||||
IPO | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Initial public offering closing date | Jul. 26, 2016 | ||||||||
Issuance of common stock | 5,520,000 | ||||||||
Common stock, share offering price | $ / shares | $ 14 | ||||||||
IPO | Common Stock | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Issuance of common stock | 7,047,000 | ||||||||
Underwriters option | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Common stock, shares issued | 720,000 | ||||||||
Follow-on Public Offering | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Issuance of common stock | 1,527,380 | ||||||||
Common stock, share offering price | $ / shares | $ 27 | ||||||||
Follow-on public offering closing date | Dec. 7, 2016 |
Summary of Significant Accoun38
Summary of Significant Accounting Policies - Schedule of Revenue and Accounts Receivable Concentration (Details) - Customer Concentration Risk | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 62.00% | 60.00% | 64.00% |
Revenue | Avery | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 18.00% | 14.00% | 16.00% |
Revenue | Smartrac | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 14.00% | 16.00% | 14.00% |
Revenue | Arizon | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 13.00% | 11.00% | 9.00% |
Revenue | Shang Yang | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 7.00% | 10.00% | 15.00% |
Revenue | Blue Star | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 10.00% | 9.00% | 10.00% |
Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 48.00% | 55.00% | |
Accounts Receivable | Smartrac | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 17.00% | 15.00% | |
Accounts Receivable | Shang Yang | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 10.00% | 11.00% | |
Accounts Receivable | Blue Star | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 11.00% | 11.00% | |
Accounts Receivable | Invengo | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 10.00% | 18.00% |
Summary of Significant Accoun39
Summary of Significant Accounting Policies - Summary of Allowance for Sales Returns (Details) - Allowance for Sales Returns - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Valuation And Qualifying Accounts Disclosure [Line Items] | |||
Balance at beginning of year | $ 63 | $ 128 | $ 151 |
Charged to reductions revenue | 3,250 | 73 | |
Applied price concession credit | (31) | (65) | (96) |
Balance at end of year | $ 3,282 | $ 63 | $ 128 |
Summary of Significant Accoun40
Summary of Significant Accounting Policies - Schedule of Property and Equipment Estimated Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Leasehold Improvements | |
Property Plant And Equipment [Line Items] | |
Property and equipment, estimated useful lives | Shorter of remaining lease term or expected useful life |
Minimum | Laboratory Equipment | |
Property Plant And Equipment [Line Items] | |
Property and equipment, estimated useful lives (Years) | 3 years |
Minimum | Computer Equipment and Software | |
Property Plant And Equipment [Line Items] | |
Property and equipment, estimated useful lives (Years) | 2 years |
Minimum | Furniture and Fixtures | |
Property Plant And Equipment [Line Items] | |
Property and equipment, estimated useful lives (Years) | 3 years |
Minimum | Equipment Acquired Under Capital Leases | |
Property Plant And Equipment [Line Items] | |
Property and equipment, estimated useful lives (Years) | 3 years |
Maximum | Laboratory Equipment | |
Property Plant And Equipment [Line Items] | |
Property and equipment, estimated useful lives (Years) | 5 years |
Maximum | Computer Equipment and Software | |
Property Plant And Equipment [Line Items] | |
Property and equipment, estimated useful lives (Years) | 5 years |
Maximum | Furniture and Fixtures | |
Property Plant And Equipment [Line Items] | |
Property and equipment, estimated useful lives (Years) | 7 years |
Maximum | Equipment Acquired Under Capital Leases | |
Property Plant And Equipment [Line Items] | |
Property and equipment, estimated useful lives (Years) | 7 years |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Assets Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | $ 10,393 | $ 14,065 |
Level 1 | Cash Equivalents | Money Market Funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | 10,393 | 14,065 |
Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | 39,831 | 75,809 |
Level 2 | Cash Equivalents | U.S. Government Agency Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | 4,997 | |
Level 2 | Cash Equivalents | Commercial Paper | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | 1,000 | 2,948 |
Level 2 | Cash Equivalents | Corporate Notes and Bonds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | 959 | |
Level 2 | Short-term Investments | U.S. Government Agency Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | 13,970 | 36,531 |
Level 2 | Short-term Investments | Commercial Paper | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | 8,972 | 11,122 |
Level 2 | Short-term Investments | Corporate Notes and Bonds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | 7,503 | $ 19,252 |
Level 2 | Short-term Investments | Treasury Bills | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | $ 8,386 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||
Liabilities measured at fair value | $ 0 | $ 0 |
Level 3 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||
Assets measured at fair value | $ 0 | $ 0 |
Cash, Cash Equivalents and In43
Cash, Cash Equivalents and Investments - Summary of Amortized Cost, Gross Unrealized Gains and Losses, and Estimated Fair Market Value of Cash and Cash Equivalents and Available-for-Sale Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Schedule Of Cash Cash Equivalents And Investments [Line Items] | ||
Amortized Cost | $ 58,152 | $ 100,551 |
Gross Unrealized Gains | 9 | |
Gross Unrealized Losses | (36) | (19) |
Fair Value | 58,116 | 100,541 |
Cash | ||
Schedule Of Cash Cash Equivalents And Investments [Line Items] | ||
Amortized Cost | 7,892 | 10,667 |
Fair Value | 7,892 | 10,667 |
Cash Equivalents | Money Market Funds | ||
Schedule Of Cash Cash Equivalents And Investments [Line Items] | ||
Amortized Cost | 10,393 | 14,065 |
Fair Value | 10,393 | 14,065 |
Cash Equivalents | U.S. Government Agency Securities | ||
Schedule Of Cash Cash Equivalents And Investments [Line Items] | ||
Amortized Cost | 4,996 | |
Gross Unrealized Gains | 1 | |
Fair Value | 4,997 | |
Cash Equivalents | Commercial Paper | ||
Schedule Of Cash Cash Equivalents And Investments [Line Items] | ||
Amortized Cost | 1,000 | 2,948 |
Fair Value | 1,000 | 2,948 |
Cash Equivalents | Corporate Notes and Bonds | ||
Schedule Of Cash Cash Equivalents And Investments [Line Items] | ||
Amortized Cost | 959 | |
Fair Value | 959 | |
Short-term Investments | U.S. Government Agency Securities | ||
Schedule Of Cash Cash Equivalents And Investments [Line Items] | ||
Amortized Cost | 13,979 | 36,535 |
Gross Unrealized Gains | 6 | |
Gross Unrealized Losses | (9) | (10) |
Fair Value | 13,970 | 36,531 |
Short-term Investments | Commercial Paper | ||
Schedule Of Cash Cash Equivalents And Investments [Line Items] | ||
Amortized Cost | 8,972 | 11,122 |
Fair Value | 8,972 | 11,122 |
Short-term Investments | Corporate Notes and Bonds | ||
Schedule Of Cash Cash Equivalents And Investments [Line Items] | ||
Amortized Cost | 7,514 | 19,259 |
Gross Unrealized Gains | 2 | |
Gross Unrealized Losses | (11) | (9) |
Fair Value | 7,503 | $ 19,252 |
Short-term Investments | Treasury Bills | ||
Schedule Of Cash Cash Equivalents And Investments [Line Items] | ||
Amortized Cost | 8,402 | |
Gross Unrealized Losses | (16) | |
Fair Value | $ 8,386 |
Cash, Cash Equivalents and In44
Cash, Cash Equivalents and Investments - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Cash And Cash Equivalents [Abstract] | |
Maximum contractual maturities due for available-for-sale investments | 1 year |
Inventory - Schedule of Invento
Inventory - Schedule of Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 1,351 | $ 5,482 |
Work-in-process | 15,647 | 5,556 |
Finished goods | 30,085 | 16,696 |
Total Inventory | $ 47,083 | $ 27,734 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 31,697 | $ 25,156 |
Less: Accumulated depreciation | (13,587) | (10,227) |
Property and equipment, net | 18,110 | 14,929 |
Laboratory Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 11,223 | 6,687 |
Computer Equipment and Software | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 4,213 | 2,529 |
Furniture and Fixtures | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 1,117 | 228 |
Equipment Acquired Under Capital Leases | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 4,468 | 6,172 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 10,676 | $ 9,540 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property Plant And Equipment [Abstract] | |||
Amortization of leased assets | $ 3.9 | $ 2.9 | $ 1.9 |
Property and equipment acquired under capital leases | $ 1.7 | $ 2.7 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Contingency [Line Items] | |||||
Income tax expense (benefit) | $ (97,000) | $ 168,000 | $ 166,000 | ||
Undistributed earnings of foreign subsidiaries | 0 | ||||
Unrecognized deferred tax liability | 17,000 | ||||
Increase (decrease) in valuation allowance | (9,800,000) | 905,000 | |||
Accumulated federal tax losses | 126,400,000 | 100,000,000 | |||
Accumulated state tax losses | 18,400,000 | 15,100,000 | |||
Research and development credit carry-forwards | $ 9,700,000 | 8,500,000 | |||
Federal tax credit carryforward expiration year | 2,023 | ||||
Unrecognized tax benefits | $ 2,906,000 | $ 2,597,000 | $ 1,878,000 | $ 1,732,000 | |
Accrued interest and penalties related to unrecognized tax benefits | $ 0 | ||||
US federal corporate tax rate | 34.00% | 34.00% | 34.00% | ||
Deferred tax assets, provisional amount | $ 19,800,000 | ||||
Maximum | |||||
Income Tax Contingency [Line Items] | |||||
US federal corporate tax rate | 35.00% | ||||
Scenario Plan | |||||
Income Tax Contingency [Line Items] | |||||
US federal corporate tax rate | 21.00% |
Income Taxes - Summary of Incom
Income Taxes - Summary of Income Tax Benefit (Expense) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current: | |||
U.S. - State | $ (8,000) | $ (15,000) | $ (56,000) |
Foreign | (126,000) | (63,000) | (22,000) |
Total current | (134,000) | (78,000) | (78,000) |
Deferred: | |||
U.S. - Federal | 241,000 | (91,000) | (88,000) |
U.S. - State | (10,000) | 1,000 | |
Total deferred | 231,000 | (90,000) | (88,000) |
Total income tax benefit (expense) | $ 97,000 | $ (168,000) | $ (166,000) |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of U.S. Federal Statutory Income Tax Rate to Effective Income Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
U.S. Statutory Rate | 34.00% | 34.00% | 34.00% |
Change in valuation allowance | 56.40% | (11.80%) | 9.90% |
State taxes (net of federal benefit) | 1.90% | (4.40%) | 3.80% |
Federal research and development credit | 7.10% | 67.40% | (60.80%) |
Incentive stock options | 12.50% | (46.20%) | 19.50% |
Unrecognized tax benefits | (3.50%) | (47.10%) | 28.80% |
Preferred stock warrant revaluation | 12.60% | (22.40%) | |
Impact of Tax Cuts and Jobs Act of 2017 | (113.50%) | ||
Return to provision - deductible transaction costs | 5.60% | ||
Other, net | 0.10% | (15.50%) | 2.90% |
Effective income tax rate | 0.60% | (11.00%) | 15.70% |
Income Taxes - Summary of Signi
Income Taxes - Summary of Significant Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Net operating loss carryforwards | [1] | $ 27,090 | $ 34,287 |
Credit carryforwards | 7,478 | 6,492 | |
Capitalized research and development | 3,665 | 6,992 | |
Deferred rent | 1,189 | 1,825 | |
Allowances | 1,466 | 767 | |
Deferred compensation | 218 | 1,209 | |
Deferred revenue | 108 | 331 | |
Stock compensation | 525 | 220 | |
Deferred tax assets | 41,739 | 52,123 | |
Less: valuation allowance | (41,130) | (50,959) | |
Net deferred tax assets | 609 | 1,164 | |
Deferred tax liability | |||
Goodwill | (532) | (766) | |
Depreciation and amortization | (609) | (1,164) | |
Deferred tax liabilities | (1,141) | (1,930) | |
Net deferred tax liability | $ (532) | $ (766) | |
[1] | During the prior year, we recorded an increase to the NOL and increase to the valuation allowance of $727,000 as a result of the adoption of ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting.” |
Income Taxes - Summary of Sig52
Income Taxes - Summary of Significant Components of Deferred Tax Assets and Liabilities (Parenthetical) (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Contingency [Line Items] | |||
Net operating loss carryforwards | [1] | $ 27,090,000 | $ 34,287,000 |
Accounting Standards Update 2016-09 [Member] | |||
Income Tax Contingency [Line Items] | |||
Net operating loss carryforwards | $ 727,000 | ||
[1] | During the prior year, we recorded an increase to the NOL and increase to the valuation allowance of $727,000 as a result of the adoption of ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting.” |
Income Taxes - Total Balance of
Income Taxes - Total Balance of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Unrecognized tax benefits at beginning of the period | $ 2,597 | $ 1,878 | $ 1,732 |
Gross increases to tax positions in prior periods | 2 | 210 | |
Gross increases to tax positions in current periods | 307 | 509 | 146 |
Unrecognized tax benefits at end of the period | $ 2,906 | $ 2,597 | $ 1,878 |
Debt Facilities - Senior Credit
Debt Facilities - Senior Credit Facility - Additional Information (Details) - USD ($) | Apr. 24, 2017 | Dec. 31, 2017 | Dec. 30, 2016 | Sep. 20, 2016 |
Silicon Valley Bank | ||||
Line Of Credit Facility [Line Items] | ||||
Line of credit facility, minimum threshold of cash, investments and credit facility availability pursuant to debt covenant | $ 50,000,000 | |||
Maximum | Silicon Valley Bank | ||||
Line Of Credit Facility [Line Items] | ||||
Adjusted EBITDA loss | $ 7,500,000 | |||
Unrestricted cash deposit ratio | 1.50% | |||
Minimum | Silicon Valley Bank | ||||
Line Of Credit Facility [Line Items] | ||||
Unrestricted cash deposit ratio | 1.00% | |||
Senior Credit Facility | Silicon Valley Bank | ||||
Line Of Credit Facility [Line Items] | ||||
Term loan and equipment loan borrowings outstanding, excluding unamortized debt issuance costs | $ 9,700,000 | |||
Unamortized debt issuance costs | $ 113,000 | |||
Credit facility, weighted average interest rate | 4.60% | |||
Term Loan Prepaid on or prior to First Anniversary | ||||
Line Of Credit Facility [Line Items] | ||||
Percentage of prepayment fee | 2.00% | |||
Term Loan Prepaid After First Anniversary but on or Prior to Second Anniversary | ||||
Line Of Credit Facility [Line Items] | ||||
Percentage of prepayment fee | 1.00% | |||
Revolving Credit Facility | ||||
Line Of Credit Facility [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 25,000,000 | |||
Increase from the prior loan agreement | $ 10,000 | |||
Revolving Credit Facility | LIBOR Rate 1 | ||||
Line Of Credit Facility [Line Items] | ||||
Line of credit facility, basis rate | 2.75% | |||
Revolving Credit Facility | LIBOR Rate 2 | ||||
Line Of Credit Facility [Line Items] | ||||
Line of credit facility, basis rate | 3.25% | |||
Revolving Credit Facility | Prime Rate 1 | ||||
Line Of Credit Facility [Line Items] | ||||
Line of credit facility, basis rate | 0.00% | |||
Revolving Credit Facility | Prime Rate 2 | ||||
Line Of Credit Facility [Line Items] | ||||
Line of credit facility, basis rate | 0.50% | |||
Revolving Credit Facility | Senior Credit Facility | ||||
Line Of Credit Facility [Line Items] | ||||
Amount of outstanding borrowings | $ 0 | |||
Letter of Credit | ||||
Line Of Credit Facility [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 5,000,000 | |||
Term Borrowings | ||||
Line Of Credit Facility [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 10,500,000 | |||
Line of credit facility, amortization period | 36 months | |||
Line of credit facility, mature date | May 1, 2020 | |||
Term Borrowings | Senior Credit Facility | ||||
Line Of Credit Facility [Line Items] | ||||
Amount of outstanding borrowings | $ 8,500,000 | |||
Term Borrowings | Term Loan Prepaid On or Before May 27, 2018 | Senior Credit Facility | ||||
Line Of Credit Facility [Line Items] | ||||
Percentage of prepayment fee | 1.00% | |||
Equipment Term Loan Facility | ||||
Line Of Credit Facility [Line Items] | ||||
Amount of outstanding borrowings | $ 1,700,000 | $ 1,200,000 | ||
Equipment A Advance | ||||
Line Of Credit Facility [Line Items] | ||||
Amount of outstanding borrowings | $ 870,000 | |||
Line of credit facility, amortization period | 29 months | |||
Line of credit facility, mature date | Sep. 1, 2019 | |||
Equipment B Advance | ||||
Line Of Credit Facility [Line Items] | ||||
Amount of outstanding borrowings | $ 815,000 | |||
Line of credit facility, amortization period | 32 months | |||
Line of credit facility, mature date | Dec. 1, 2019 | |||
Term Loan and Equipment Loans | LIBOR Rate 1 | ||||
Line Of Credit Facility [Line Items] | ||||
Line of credit facility, basis rate | 3.00% | |||
Term Loan and Equipment Loans | LIBOR Rate 2 | ||||
Line Of Credit Facility [Line Items] | ||||
Line of credit facility, basis rate | 3.50% | |||
Term Loan and Equipment Loans | Prime Rate 1 | ||||
Line Of Credit Facility [Line Items] | ||||
Line of credit facility, basis rate | 0.25% | |||
Term Loan and Equipment Loans | Prime Rate 2 | ||||
Line Of Credit Facility [Line Items] | ||||
Line of credit facility, basis rate | 0.75% |
Debt Facilities - Scheduled Pri
Debt Facilities - Scheduled Principal Maturities of Debt (Details) - Senior Credit Facility - Silicon Valley Bank $ in Thousands | Dec. 31, 2017USD ($) |
Line Of Credit Facility [Line Items] | |
2,018 | $ 4,167 |
2,019 | 4,077 |
2,020 | 1,458 |
Total | $ 9,702 |
Debt Facilities - Mezzanine Cre
Debt Facilities - Mezzanine Credit Facility - Additional Information (Details) - USD ($) | Dec. 31, 2017 | Apr. 24, 2017 | Sep. 30, 2015 |
Term Borrowings | |||
Line Of Credit Facility [Line Items] | |||
Line of credit facility, maximum borrowing capacity | $ 10,500,000 | ||
Mezzanine Credit Facility | SG Enterprises II, LLC | |||
Line Of Credit Facility [Line Items] | |||
Unamortized debt discounts and issuance costs | $ 109,000 | ||
Mezzanine Credit Facility | Term Borrowings | SG Enterprises II, LLC | |||
Line Of Credit Facility [Line Items] | |||
Line of credit facility, maximum borrowing capacity | $ 5,000,000 |
Redeemable Convertible Prefer57
Redeemable Convertible Preferred Stock and Stockholders' Equity - Additional Information (Details) | Jun. 16, 2016 | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($) | Jul. 20, 2016USD ($)shares |
Class Of Stock [Line Items] | |||||
Outstanding shares of redeemable convertible preferred stock converted into common stock | 8,531,146 | 8,531,146 | |||
Reverse stock split ratio | 0.0833 | ||||
Preferred stock, shares issued | 0 | 0 | |||
Preferred stock, shares outstanding | 0 | 0 | |||
Common stock, shares authorized | 495,000,000 | 495,000,000 | |||
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 | |||
Common stock, voting rights | Each holder of the common stock is entitled to one vote per common share | ||||
Common Stock | |||||
Class Of Stock [Line Items] | |||||
Carrying value of redeemable convertible preferred stock | $ | $ 106,100,000 | $ 106,100,000 | |||
Series 1 Redeemable Convertible Preferred Stock | |||||
Class Of Stock [Line Items] | |||||
Reverse stock split ratio | 1 | ||||
Series 2 Redeemable Convertible Preferred Stock | |||||
Class Of Stock [Line Items] | |||||
Reverse stock split ratio | 0.8 | ||||
Redeemable Convertible Preferred Stock | |||||
Class Of Stock [Line Items] | |||||
Redeemable convertible preferred stock accretion value non compounded interest percentage | 7.00% | ||||
Accretion to redeemable convertible preferred stock value | $ | $ 0 | $ 6,300,000 | $ 11,300,000 |
Redeemable Convertible Prefer58
Redeemable Convertible Preferred Stock and Stockholders' Equity - Summary of Shares of Common Stock Reserved for Future Issuance (Details) - shares shares in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Class Of Stock [Line Items] | ||
Total shares of common stock reserved for future issuance | 4,457 | 3,508 |
Stock Options | ||
Class Of Stock [Line Items] | ||
Total shares of common stock reserved for future issuance | 2,850 | 2,310 |
Restricted Stock Units | ||
Class Of Stock [Line Items] | ||
Total shares of common stock reserved for future issuance | 12 | |
Equity Incentive Plans | ||
Class Of Stock [Line Items] | ||
Total shares of common stock reserved for future issuance | 1,221 | 1,198 |
Employee Stock Purchase Plan | ||
Class Of Stock [Line Items] | ||
Total shares of common stock reserved for future issuance | 374 |
Stock-Based Awards - Additional
Stock-Based Awards - Additional Information (Details) - USD ($) | 1 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jul. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Common stock, shares reserved | 3,508,000 | 4,457,000 | 3,508,000 | ||
Total intrinsic value of options exercised | $ 14,900,000 | $ 1,100,000 | $ 3,800,000 | ||
Total fair value of options vested | 3,100,000 | $ 1,400,000 | $ 1,300,000 | ||
Unrecognized stock-based compensation cost related to stock options | $ 27,300,000 | ||||
Number of unvested shares repurchased from terminated employees | 1,765 | 0 | |||
Employee Stock Option | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Common stock, shares reserved | 2,310,000 | 2,850,000 | 2,310,000 | ||
Unrecognized stock-based compensation cost, period for recognition | 3 years | ||||
Restricted Stock Units | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Common stock, shares reserved | 12,000 | ||||
Unrecognized stock-based compensation cost related to stock options | $ 267,000 | ||||
Unrecognized stock-based compensation cost, period for recognition | 8 months 12 days | ||||
2016 Equity Incentive Plan | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Incentive plan effective date | Jul. 31, 2016 | ||||
Shares of common stock reserved for future issuance, description | The number of shares of common stock reserved for issuance under the 2016 Plan may increase on January 1 of each year, beginning on January 1, 2017 and ending on and including January 1, 2026, by the least of (1) 1,825,000; (2) 5% of the total number of shares of common stock outstanding on December 31 of the preceding calendar year; and (3) a lesser number of shares determined by our board of directors. | ||||
Options granted, maximum term | 10 years | ||||
Options granted, exercisable term | 4 years | ||||
2016 Equity Incentive Plan | Least of Potential Outcome One | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Common stock, shares reserved | 1,825,000 | ||||
2016 Equity Incentive Plan | Least of Potential Outcome Two | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Percentage of total number of shares of common stock outstanding | 5.00% | ||||
2016 Employee Stock Purchase Plan | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Common stock, shares reserved | 365,411 | ||||
Percentage of total number of shares of common stock outstanding | 1.00% | ||||
Unrecognized stock-based compensation cost, period for recognition | 1 month 6 days | ||||
Percentage of salary contribution by employees | 15.00% | ||||
Maximum number of shares purchase per employee | 4,000 | ||||
Percentage of price lesser than fair market value per share | 85.00% | ||||
Unrecognized stock-based compensation cost | $ 118,000 |
Stock-Based Awards - Summary of
Stock-Based Awards - Summary of Stock Option Activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($)$ / sharesshares | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Number of Shares Underlying Options, Outstanding, Beginning balance | shares | 2,310 |
Number of Shares Underlying Options, Granted | shares | 1,275 |
Number of Shares Underlying Options, Exercised | shares | (444) |
Number of Shares Underlying Options, Forfeited or Cancelled | shares | (291) |
Number of Shares Underlying Options, Outstanding, Ending balance | shares | 2,850 |
Number of Shares Underlying Options, Vested and exercisable | shares | 1,009 |
Weighted-Average Exercise Price Per Share, Outstanding, Beginning balance | $ / shares | $ 8.84 |
Weighted-Average Exercise Price Per Share, Granted | $ / shares | 36.26 |
Weighted-Average Exercise Price Per Share, Exercised | $ / shares | 3.64 |
Weighted-Average Exercise Price Per Share, Forfeited or Cancelled | $ / shares | 16.16 |
Weighted-Average Exercise Price Per Share, Outstanding, Ending balance | $ / shares | 21.16 |
Weighted-Average Exercise Price Per Share, Vested and exercisable | $ / shares | $ 6.72 |
Weighted-Average Remaining Contractual Life (Years), Outstanding | 8 years 3 days |
Weighted-Average Remaining Contractual Life (Years), Vested and exercisable | 6 years 1 month 20 days |
Total Intrinsic Value, Outstanding | $ | $ 20,802 |
Total Intrinsic Value, Vested and exercisable | $ | $ 16,128 |
Stock-Based Awards - Schedule o
Stock-Based Awards - Schedule of Stock Options Valuation Assumptions (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Expected dividends yield | 0.00% | ||
Stock Options | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Risk-free interest rates, minimum | 1.80% | 1.10% | 1.20% |
Risk-free interest rates, maximum | 2.20% | 2.10% | 1.60% |
Expected dividends yield | 0.00% | 0.00% | 0.00% |
Volatility, minimum | 52.20% | 40.80% | 41.50% |
Volatility, maximum | 59.10% | 49.50% | 43.40% |
Weighted-average expected life | 6.08 | 5.78 | 4.31 |
Weighted-average fair value of options granted | $ 19.15 | $ 9.60 | $ 3.12 |
Stock-Based Awards - Summary 62
Stock-Based Awards - Summary of Unvested Shares Related to Early Exercise of Common Stock Activity (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Number of Shares Outstanding, Balance | shares | 118 |
Number of Shares, Issued | shares | 1 |
Number of Shares, Vested | shares | (69) |
Number of Shares, Repurchased | shares | (2) |
Number of Shares Outstanding, Balance | shares | 48 |
Weighted-Average Exercise Price Per Share, Balance | $ / shares | $ 3.30 |
Weighted-Average Exercise Price Per Share, Issued | $ / shares | 4.71 |
Weighted-Average Exercise Price Per Share, Vested | $ / shares | 2.59 |
Weighted-Average Exercise Price Per Share, Repurchased | $ / shares | 3.19 |
Weighted-Average Exercise Price Per Share, Balance | $ / shares | $ 4.32 |
Stock-Based Awards - Summary 63
Stock-Based Awards - Summary of Restricted Stock Units (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Number of Shares Outstanding, Balance | 118 |
Number of Shares, Granted | 1,275 |
Number of Shares Outstanding, Balance | 48 |
Weighted-Average Exercise Price Per Share, Balance | $ / shares | $ 3.30 |
Weighted-Average Exercise Price Per Share, Balance | $ / shares | $ 4.32 |
Restricted Stock Units | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Number of Shares, Granted | 12 |
Number of Shares Outstanding, Balance | 12 |
Weighted-average fair value of options granted | $ / shares | $ 46.53 |
Weighted-Average Exercise Price Per Share, Balance | $ / shares | $ 46.53 |
Stock-Based Awards - Schedule64
Stock-Based Awards - Schedule of Employee Stock Purchase Plan Valuation Assumptions (Details) - Employee Stock Purchase Plan | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Risk-free interest rate | 0.40% | |
Risk-free interest rates, minimum | 0.70% | |
Risk-free interest rates, maximum | 1.10% | |
Expected term | 6 months | 6 months |
Expected volatility | 61.80% | |
Volatility, minimum | 66.50% | |
Volatility, maximum | 71.20% |
Stock-Based Awards - Summary 65
Stock-Based Awards - Summary of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | $ 7,428 | $ 2,765 | $ 1,178 |
Cost of Revenue | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | 231 | 96 | 31 |
Research and Development Expense | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | 2,431 | 983 | 305 |
Selling and Marketing Expense | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | 3,113 | 1,289 | 692 |
General and Administrative Expense | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | $ 1,653 | $ 397 | $ 150 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) | 1 Months Ended | 12 Months Ended | ||||
Jul. 31, 2017USD ($)ft² | Dec. 31, 2014USD ($)ft² | Oct. 31, 2013USD ($)ft² | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Operating Leased Assets [Line Items] | ||||||
Rent expense under operating leases | $ 3,400,000 | $ 2,900,000 | $ 1,100,000 | |||
Inventory purchase commitment, amount | $ 23,500,000 | |||||
Design Laboratory | ||||||
Operating Leased Assets [Line Items] | ||||||
Lease agreement entered date | 2013-10 | |||||
SeattleMember | ||||||
Operating Leased Assets [Line Items] | ||||||
Lease agreement entered date | 2017-07 | 2014-12 | ||||
Office space leased | ft² | 70,000 | |||||
Lease payments beginning date | 2018-02 | 2016-01 | ||||
Lease payments ending date | 2023-01 | 2026-12 | ||||
Incentive from landlord | $ 1,500,000 | $ 1,400,000 | ||||
Right to terminate lease early, beginning period | 2022-12 | |||||
SeattleMember | Design Laboratory | ||||||
Operating Leased Assets [Line Items] | ||||||
Office space leased | ft² | 11,000 | |||||
Incentive from landlord | $ 108,000 | |||||
Right to terminate lease early, beginning period | 2015-12 | |||||
Lease expiration date | 2018-10 | |||||
Additional lease renewal term | one or three year term | |||||
Incentive amount used | $ 95,000 | |||||
SeattleMember | Additional Lease | ||||||
Operating Leased Assets [Line Items] | ||||||
Office space leased | ft² | 39,000 |
Commitments and Contingencies67
Commitments and Contingencies - Future Minimum Lease Payments Under Operating and Capital Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Commitments And Contingencies Disclosure [Abstract] | ||
Operating leases, 2018 | $ 4,218 | |
Operating leases, 2019 | 4,252 | |
Operating leases, 2020 | 4,379 | |
Operating leases, 2021 | 4,511 | |
Operating leases, 2022 | 4,646 | |
Operating leases, Thereafter | 13,374 | |
Operating leases, Total minimum lease payments | 35,380 | |
Capital leases, 2018 | 1,024 | |
Capital leases, 2019 | 574 | |
Capital leases, 2020 | 269 | |
Capital leases, 2021 | 2 | |
Capital leases, Total minimum lease payments | 1,869 | |
Less: Portion representing interest | (188) | |
Present value of capital lease obligations | 1,681 | |
Less: Current portion of capital lease obligations | (936) | $ (1,130) |
Capital lease obligations, net of current portion | $ 745 | $ 1,698 |
Segment Reporting - Additional
Segment Reporting - Additional Information (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017USD ($)Segment | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Segment Reporting Information [Line Items] | |||
Number of reportable segments | Segment | 1 | ||
Description of long-lived assets located | Substantially all of our long-lived assets are located in the United States. | ||
Total revenue | $ 125,300 | $ 112,287 | $ 78,479 |
United States | |||
Segment Reporting Information [Line Items] | |||
Total revenue | $ 28,800 | $ 25,900 | $ 21,000 |
Readers and Gateways | |||
Segment Reporting Information [Line Items] | |||
Percentage of Revenue | 19.00% | 16.00% | 22.00% |
Segment Reporting - Summary of
Segment Reporting - Summary of Sales by Product (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue: | |||
Total revenue | $ 125,300 | $ 112,287 | $ 78,479 |
Endpoint ICs | |||
Revenue: | |||
Total revenue | 91,699 | 86,218 | 52,854 |
Systems | |||
Revenue: | |||
Total revenue | $ 33,601 | $ 26,069 | $ 25,625 |
Segment Reporting - Summary o70
Segment Reporting - Summary of Sales by Geography (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | |||
Total revenue | $ 125,300 | $ 112,287 | $ 78,479 |
Americas | |||
Segment Reporting Information [Line Items] | |||
Total revenue | 29,656 | 26,401 | 21,568 |
Asia Pacific | |||
Segment Reporting Information [Line Items] | |||
Total revenue | 80,531 | 73,084 | 45,096 |
Europe, Middle East and Africa | |||
Segment Reporting Information [Line Items] | |||
Total revenue | $ 15,113 | $ 12,802 | $ 11,815 |
Net Loss per Share - Reconcilia
Net Loss per Share - Reconciliation of the Numerator and Denominator used in Computing Basic and Diluted Net Income (Loss) Per Share Attributable to Common Stockholders (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Numerator: | |||
Net income (loss) | $ (17,322) | $ (1,673) | $ 900 |
Less: Accretion of preferred stock | (6,258) | (11,301) | |
Net income (loss) attributable to common stockholders | $ (17,322) | $ (7,931) | $ (10,401) |
Denominator: | |||
Weighted-average common shares outstanding | 20,763 | 10,904 | 4,067 |
Weighted-average unvested shares of common stock subject to repurchase | (83) | (126) | (174) |
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders — basic and diluted | 20,680 | 10,778 | 3,893 |
Net income (loss) per share attributable to common stockholders — basic and diluted | $ (0.84) | $ (0.74) | $ (2.67) |
Net Loss per Share - Computatio
Net Loss per Share - Computation of Diluted Net Income (Loss) Per Share Attributable to Common Stockholders Effect in Antidilutive (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Redeemable Convertible Preferred Stock | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 7,885 | ||
Common Stock Warrants | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 25 | ||
Redeemable Convertible Preferred Stock Warrants | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 264 | ||
Unvested Shares of Common Stock Subject to Repurchase | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 48 | 118 | 136 |
Stock Options | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 2,911 | 2,310 | 1,896 |
Subsequent Event - Additional I
Subsequent Event - Additional Information (Details) - USD ($) | Mar. 05, 2018 | Feb. 13, 2018 | Apr. 24, 2017 | Dec. 31, 2017 |
Term Borrowings | ||||
Subsequent Event [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 10,500,000 | |||
Line of credit facility, mature date | May 1, 2020 | |||
Line of credit facility, amortization period | 36 months | |||
Revolving Credit Facility | ||||
Subsequent Event [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 25,000,000 | |||
Equipment Term Loan Facility | ||||
Subsequent Event [Line Items] | ||||
Amount of outstanding borrowings | $ 1,700,000 | $ 1,200,000 | ||
Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Restructuring implementation date | Feb. 13, 2018 | |||
Percentage of employees affected under reduction in force program | 9.00% | |||
Subsequent Event | Beginning on March 5, 2018 and Ending on December 31, 2018 | ||||
Subsequent Event [Line Items] | ||||
Line of credit facility minimum threshold of cash in accounts maintained with Lender plus availability pursuant to financial covenant | $ 60,000,000 | |||
Subsequent Event | Beginning on January 1, 2019 and All Times Thereafter | ||||
Subsequent Event [Line Items] | ||||
Line of credit facility minimum threshold of cash in accounts maintained with Lender plus availability pursuant to financial covenant | 55,000,000 | |||
Subsequent Event | Term Borrowings | ||||
Subsequent Event [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 20,000,000 | |||
Line of credit facility, mature date | Mar. 1, 2022 | |||
Amount of outstanding borrowings | $ 7,900,000 | |||
Line of credit facility, amortization period | 36 months | |||
Line of credit facility, beginning date | Apr. 1, 2019 | |||
Subsequent Event | Term Borrowings | Term Loan Prepaid On or Before March 5, 2019 | ||||
Subsequent Event [Line Items] | ||||
Percentage of prepayment fee | 2.00% | |||
Subsequent Event | Term Borrowings | Term Loan Prepaid After March 5,2019, But On or Before March 5, 2020 | ||||
Subsequent Event [Line Items] | ||||
Percentage of prepayment fee | 1.00% | |||
Subsequent Event | Revolving Credit Facility | ||||
Subsequent Event [Line Items] | ||||
Line of credit facility, mature date | Mar. 5, 2020 | |||
Subsequent Event | Equipment Term Loan Facility | ||||
Subsequent Event [Line Items] | ||||
Amount of outstanding borrowings | $ 1,100,000 |