Document And Entity Information
Document And Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 09, 2018 | Jul. 02, 2017 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | NETGEAR, INC | ||
Entity Central Index Key | 1,122,904 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 31,381,182 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 848.2 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
ASSETS | ||
Cash and cash equivalents | $ 202,870 | $ 240,468 |
Short-term investments | 126,926 | 125,514 |
Accounts receivable, net | 412,798 | 313,839 |
Inventories | 245,894 | 247,862 |
Prepaid expenses and other current assets | 27,176 | 35,102 |
Total current assets | 1,015,664 | 962,785 |
Property and equipment, net | 20,660 | 19,473 |
Intangibles, net | 24,988 | 37,899 |
Goodwill | 85,463 | 85,463 |
Other non-current assets | 61,789 | 78,836 |
Total assets | 1,208,564 | 1,184,456 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Accounts payable | 111,915 | 112,436 |
Accrued employee compensation | 27,752 | 33,096 |
Other accrued liabilities | 222,470 | 170,674 |
Deferred revenue | 55,284 | 35,301 |
Income taxes payable | 7,015 | 5,146 |
Total current liabilities | 424,436 | 356,653 |
Non-current income taxes payable | 31,544 | 15,119 |
Other non-current liabilities | 22,099 | 15,865 |
Total liabilities | 478,079 | 387,637 |
Commitments and contingencies (Note 8) | ||
Stockholders’ equity: | ||
Preferred stock: $0.001 par value; 5,000,000 shares authorized; none issued or outstanding | 0 | 0 |
Common stock: $0.001 par value; 200,000,000 shares authorized; shared issued and outstanding: 31,319,578 and 32,958,444 as of December 31, 2017 and 2016, respectively | 31 | 33 |
Additional paid-in capital | 603,137 | 566,307 |
Accumulated other comprehensive income (loss) | (851) | 1,938 |
Retained earnings | 128,168 | 228,541 |
Total stockholders’ equity | 730,485 | 796,819 |
Total liabilities and stockholders’ equity | $ 1,208,564 | $ 1,184,456 |
Consolidated Balance Sheets Con
Consolidated Balance Sheets Consolidated Balance Sheets (Parentheticals) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred Stock, Par or Stated Value Per Share | $ 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 or Stated Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 |
Common Stock, Shares, Issued | 31,319,578 | 32,958,444 |
Common Stock, Shares, Outstanding | 31,319,578 | 32,958,444 |
Consolidated Statements Of Oper
Consolidated Statements Of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Net revenue | $ 1,406,920 | $ 1,328,298 | $ 1,300,695 |
Cost of revenue | 1,010,878 | 916,113 | 933,016 |
Gross profit | 396,042 | 412,185 | 367,679 |
Operating expenses: | |||
Research and development | 94,603 | 89,367 | 86,499 |
Sales and marketing | 158,168 | 150,355 | 146,794 |
General and administrative | 56,421 | 54,482 | 45,313 |
Restructuring and other charges | 97 | 3,881 | 6,398 |
Litigation reserves, net | 176 | 73 | (2,682) |
Total operating expenses | 309,465 | 298,158 | 282,322 |
Income from operations | 86,577 | 114,027 | 85,357 |
Interest income | 2,113 | 1,163 | 295 |
Other income (expense), net | 2,024 | (121) | (88) |
Income before income taxes | 90,714 | 115,069 | 85,564 |
Provision for income taxes | 71,278 | 39,218 | 36,980 |
Net Income | $ 19,436 | $ 75,851 | $ 48,584 |
Net income per share: | |||
Basic net income per share (in dollars per share) | $ 0.61 | $ 2.32 | $ 1.47 |
Diluted net income per share (in dollars per share) | $ 0.59 | $ 2.25 | $ 1.44 |
Weighted average shares outstanding used to compute net income per share: | |||
Basic (in shares) | 32,097 | 32,758 | 33,161 |
Diluted (in shares) | 33,044 | 33,728 | 33,788 |
Consolidated Statement of Compr
Consolidated Statement of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Net Income | $ 19,436 | $ 75,851 | $ 48,584 |
Other comprehensive income (loss), before tax: | |||
Unrealized gain (loss) on derivative instruments | (3,068) | 2,187 | 0 |
Unrealized gain (loss) on available-for-sale securities | (115) | 33 | (56) |
Other comprehensive income (loss), before tax | (3,183) | 2,220 | (56) |
Tax benefit (provision) related to derivative instruments | 352 | (273) | 0 |
Tax benefit (provision) related to available-for-sale securities | 42 | (12) | 21 |
Other comprehensive income (loss), net of tax | (2,789) | 1,935 | (35) |
Comprehensive income | $ 16,647 | $ 77,786 | $ 48,549 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity Statement - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Retained Earnings [Member] |
Balance,shares at Dec. 31, 2014 | 34,709,000 | ||||
Balance at Dec. 31, 2014 | $ 721,565 | $ 35 | $ 454,144 | $ 38 | $ 267,348 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Change in unrealized gains and losses on available-for-sale securities, net of tax | (35) | (35) | |||
Net Income | 48,584 | 48,584 | |||
Share-based Compensation expense | $ 16,813 | 16,813 | |||
Repurchases of common stock, shares | (3,800,000) | (3,770,000) | |||
Repurchases of common stock, value | $ (117,680) | $ (4) | (117,676) | ||
Restricted stock unit withholdings, shares | (85,000) | (85,000) | |||
Restricted stock unit withholdings, value | $ (2,629) | (2,629) | |||
Issuance of common stock under stock-based compensation plans, shares | 1,747,000 | ||||
Issuance of common stock under stock-based compensation plans, value | 44,325 | $ 2 | 44,323 | ||
Income tax impact associated with stock option exercises | (2,233) | (2,233) | |||
Balance,shares at Dec. 31, 2015 | 32,601,000 | ||||
Balance at Dec. 31, 2015 | 708,710 | $ 33 | 513,047 | 3 | 195,627 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Change in unrealized gains and losses on available-for-sale securities, net of tax | 21 | 21 | |||
Change in unrealized gains and losses on derivatives, net of tax | 1,914 | 1,914 | |||
Net Income | 75,851 | 75,851 | |||
Share-based Compensation expense | $ 19,180 | 19,180 | |||
Repurchases of common stock, shares | (900,000) | (894,000) | |||
Repurchases of common stock, value | $ (38,252) | $ (1) | (38,251) | ||
Restricted stock unit withholdings, shares | (105,000) | (105,000) | |||
Restricted stock unit withholdings, value | $ (4,686) | (4,686) | |||
Issuance of common stock under stock-based compensation plans, shares | 1,356,000 | ||||
Issuance of common stock under stock-based compensation plans, value | 31,627 | $ 1 | 31,626 | ||
Income tax impact associated with stock option exercises | 2,454 | 2,454 | |||
Balance,shares at Dec. 31, 2016 | 32,958,000 | ||||
Balance at Dec. 31, 2016 | 796,819 | $ 33 | 566,307 | 1,938 | 228,541 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Cumulative Effect of New Accounting Principle in Period of Adoption | 92 | 327 | (235) | ||
Change in unrealized gains and losses on available-for-sale securities, net of tax | (73) | (73) | |||
Change in unrealized gains and losses on derivatives, net of tax | (2,716) | (2,716) | |||
Net Income | 19,436 | 19,436 | |||
Share-based Compensation expense | $ 22,147 | 22,147 | |||
Repurchases of common stock, shares | (2,400,000) | (2,378,000) | |||
Repurchases of common stock, value | $ (113,161) | $ (2) | (113,159) | ||
Restricted stock unit withholdings, shares | (135,000) | (135,000) | |||
Restricted stock unit withholdings, value | $ (6,415) | (6,415) | |||
Issuance of common stock under stock-based compensation plans, shares | 875,000 | ||||
Issuance of common stock under stock-based compensation plans, value | 14,356 | $ 0 | 14,356 | ||
Income tax impact associated with stock option exercises | 0 | ||||
Balance,shares at Dec. 31, 2017 | 31,320,000 | ||||
Balance at Dec. 31, 2017 | $ 730,485 | $ 31 | $ 603,137 | $ (851) | $ 128,168 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Taxes Paid | $ 32,090 | $ 35,149 | $ 40,273 |
Cash flows from operating activities: | |||
Net Income | 19,436 | 75,851 | 48,584 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 26,094 | 31,993 | 35,850 |
Purchase premium amortization/discount accretion on investments, net | 46 | 167 | (57) |
Non-cash stock-based compensation | 22,147 | 18,949 | 16,825 |
Income tax impact associated with stock option exercises | 0 | 2,454 | (2,233) |
Deferred income taxes | 21,836 | (2,723) | (710) |
Changes in assets and liabilities, net of effect of acquisitions: | |||
Accounts receivable | (98,959) | (23,206) | (14,952) |
Inventories | 1,967 | (34,744) | 9,765 |
Prepaid expenses and other assets | 5,161 | 5,932 | 560 |
Accounts payable | (784) | 21,327 | (14,990) |
Accrued employee compensation | (5,345) | 5,228 | 6,280 |
Other accrued liabilities | 57,650 | 6,907 | 29,987 |
Deferred revenue | 19,982 | 6,176 | (2,496) |
Income taxes payable | 18,293 | 3,870 | (1,263) |
Net cash provided by operating activities | 87,524 | 118,181 | 111,150 |
Cash flows from investing activities: | |||
Purchases of short-term investments | (136,556) | (144,271) | (110,316) |
Proceeds from maturities of short-term investments | 135,549 | 115,291 | 130,273 |
Purchases of property and equipment | (13,674) | (10,972) | (14,000) |
Purchases of cost method investments | (4,400) | 0 | 0 |
Payments made in connection with business acquisitions, net of cash acquired | (737) | (8,807) | 0 |
Net cash provided by (used in) investing activities | (19,818) | (48,759) | 5,957 |
Cash flows from financing activities: | |||
Repurchases of common stock | (113,161) | (38,252) | (117,680) |
Restricted stock unit withholdings | (6,415) | (4,686) | (2,629) |
Proceeds from exercise of stock options | 9,508 | 28,147 | 40,928 |
Proceeds from issuance of common stock under employee stock purchase plan | 4,764 | 3,892 | 2,985 |
Net cash used in financing activities | (105,304) | (10,899) | (76,396) |
Net increase (decrease) in cash and cash equivalents | (37,598) | 58,523 | 40,711 |
Cash and cash equivalents, at beginning of period | 240,468 | 181,945 | 141,234 |
Cash and cash equivalents, at end of period | $ 202,870 | $ 240,468 | $ 181,945 |
The Company and Summary of Sign
The Company and Summary of Significant Accounting Policies (Notes) | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block] | The Company and Summary of Significant Accounting Policies The Company NETGEAR, Inc. (“NETGEAR” or the “Company”) was incorporated in Delaware in January 1996. The Company is a global company that delivers innovative networking and Internet connected products to consumers and growing businesses. The Company's products are built on a variety of proven technologies such as wireless (WiFi and LTE), Ethernet and powerline, with a focus on reliability and ease-of-use. The product line consists of devices that create and extend wired and wireless networks as well as devices that provide a special function and attach to the network, such as IP security cameras and home automation devices and services. These products are available in multiple configurations to address the changing needs of the customers in each geographic region in which the Company's products are sold. Beginning with fiscal year 2017, the Company operates and reports in three segments: Arlo, Connected Home, and Small and Medium Business ("SMB"). The Company believes that this structure reflects its current operational and financial management, and provides the best structure for the Company to focus on growth opportunities while maintaining financial discipline. Each segment contains leadership focused on the product development efforts, both from a product marketing and engineering standpoint, to service the unique needs of their customers. Arlo segment focuses on intelligent internet-connected products for consumers and businesses that provide security and safety; Connected Home segment focuses on consumers and consists of high-performance, dependable and easy-to-use LTE and WiFi internet networking solutions; and SMB segment focuses on small and medium-sized businesses and consists of business networking, storage and security solutions that bring enterprise-class functionality to small and medium-sized businesses at an affordable price. The Company sells networking products through multiple sales channels worldwide, including traditional retailers, online retailers, wholesale distributors, direct market resellers (“DMRs”), value-added resellers (“VARs”), and broadband service providers. Reclassification In the first fiscal quarter of 2017, the Company reorganized its operating segment structure resulting in a change to its reportable segments. This change primarily impacted Goodwill in Note 3, Balance Sheet Components and Note 11, Segment Information . The prior-year segment financial information has been reclassified to conform to the current-year presentation. None of the changes impact previously reported consolidated net revenue, income from operations, net income per share, total assets, or stockholders’ equity. Refer to Note 11, Segment Information , for a further discussion of the segment reorganization. In the first fiscal quarter of 2017, the Company elected to apply the presentation requirements for cash flows related to excess tax benefits retrospectively to all periods presented upon adoption of ASU 2016-09. Refer to " Accounting Pronouncement Recently Adopted" within this Note for a further discussion of the impact from the adoption of ASU 2016-09. Basis of presentation The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All inter-company accounts and transactions have been eliminated in the consolidation of these subsidiaries. Fiscal periods The Company's fiscal year begins on January 1 of the year stated and ends on December 31 of the same year. The Company reports its results on a fiscal quarter basis rather than on a calendar quarter basis. Under the fiscal quarter basis, each of the first three fiscal quarters ends on the Sunday closest to the calendar quarter end, with the fourth quarter ending on December 31. Use of estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates. Cash and cash equivalents The Company considers all highly liquid investments with an original maturity or a remaining maturity at the time of purchase of three months or less to be cash equivalents. The Company deposits cash and cash equivalents with high credit quality financial institutions. Short-term investments Short-term investments are partially comprised of marketable securities that consist of government securities with an original maturity or a remaining maturity at the time of purchase, of greater than three months and no more than 12 months. The marketable securities are held in the Company's name with one high quality financial institution, which acts as the Company's custodian and investment manager. These marketable securities are classified as available-for-sale securities in accordance with the provisions of the authoritative guidance for investments and are carried at fair value with unrealized gains and losses reported as a separate component of stockholders' equity. Short-term investments are also comprised of marketable securities related to deferred compensation under the Company’s Deferred Compensation Plan. Mutual funds are the only investments allowed in the Company's Deferred Compensation Plan and the investments are held in a grantor trust formed by the Company. The Company has classified these investments as trading securities as the grantor trust actively manages the asset allocation to match the participants’ notional fund allocations. These securities are recorded at fair market value with unrealized gains and losses included in other income (expense), net. Certain risks and uncertainties The Company's products are concentrated in the networking and smart connected industries, which are characterized by rapid technological advances, changes in customer requirements and evolving regulatory requirements and industry standards. The success of the Company depends on management's ability to anticipate and/or to respond quickly and adequately to such changes. Any significant delays in the development or introduction of products could have a material adverse effect on the Company's business and operating results. The Company relies on a limited number of third parties to manufacture all of its products. If any of the Company's third-party manufacturers cannot or will not manufacture its products in required volumes, on a cost-effective basis, in a timely manner, or at all, the Company will have to secure additional manufacturing capacity. Any interruption or delay in manufacturing could have a material adverse effect on the Company's business and operating results. Derivative financial instruments The Company uses foreign currency forward contracts to manage the exposures to foreign exchange risk related to expected future cash flows on certain forecasted revenue, costs of revenue, operating expenses, and on certain existing assets and liabilities. Foreign currency forward contracts generally mature within eleven months of inception. Under its foreign currency risk management strategy, the Company utilizes derivative instruments to reduce the impact of currency exchange rate movements on the Company's operating results by offsetting gains and losses on the forward contracts with increases or decreases in foreign currency transactions. The company does not use derivative financial instruments for speculative purposes. The Company accounts for its derivative instruments as either assets or liabilities and records them at fair value. Derivatives that are not defined as hedges in the authoritative guidance for derivatives and hedging must be adjusted to fair value through earnings. For derivative instruments that hedge the exposure to variability in expected future cash flows that are designated as cash flow hedges, the effective portion of the gain or loss on the derivative instrument is reported as a component of accumulated other comprehensive income in stockholders' equity and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. The ineffective portion of the gain or loss on the derivative instrument is recognized in current earnings. To receive hedge accounting treatment, cash flow hedges must be highly effective in offsetting changes to expected future cash flows on hedged transactions. For derivatives designated as cash flow hedges, changes in the time value are excluded from the assessment of hedge effectiveness and are recognized in earnings. Concentration of credit risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents, short-term investments and accounts receivable. The Company believes that there is minimal credit risk associated with the investment of its cash and cash equivalents and short-term investments, due to the restrictions placed on the type of investment that can be entered into under the Company's investment policy. The Company's short-term investments consist of investment-grade securities, and the Company's cash and investments are held and managed by recognized financial institutions. The Company's customers are primarily distributors as well as retailers and broadband service providers who sell or distribute the products to a large group of end-users. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of the Company's customers to make required payments. The Company regularly performs credit evaluations of the Company's customers' financial condition and considers factors such as historical experience, credit quality, age of the accounts receivable balances, geographic or country-specific risks and current economic conditions that may affect customers' ability to pay. The Company does not require collateral from its customers. The Company secures credit insurance for certain customers in international and domestic markets. As of December 31, 2017 and 2016 , Best Buy, Inc. and affiliates accounted for 35% and 38% of the Company's total accounts receivable, respectively. Amazon and affiliates accounted for 12% and 11% of the Company's total accounts receivable as of December 31, 2017 and 2016 , respectively. No other customers accounted for 10% or greater of the Company's total accounts receivable. The Company is exposed to credit loss in the event of nonperformance by counterparties to the foreign currency forward contracts used to mitigate the effect of foreign currency exchange rate changes. The Company believes the counterparties for its outstanding contracts are large, financially sound institutions and thus, the Company does not anticipate nonperformance by these counterparties. In the event of turbulence or the onset of a financial crisis in financial markets, the failure of additional counterparties cannot be ruled out. Fair value measurements The carrying amounts of the Company's financial instruments, including cash equivalents, short-term investments, accounts receivable, and accounts payable approximate their fair values due to their short maturities. Foreign currency forward contracts are recorded at fair value based on observable market data. Refer to Note 12, Fair Value Measurements, in Notes to Consolidated Financial Statements for disclosures regarding fair value measurements in accordance with the authoritative guidance for fair value measurements and disclosures. Allowance for doubtful accounts The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company regularly performs credit evaluations of its customers' financial condition and considers factors such as historical experience, credit quality, age of the accounts receivable balances, and geographic or country-specific risks and economic conditions that may affect a customer's ability to pay. The allowance for doubtful accounts is reviewed quarterly and adjusted if necessary based on the Company's assessments of its customers' ability to pay. If the financial condition of the Company's customers should deteriorate or if actual defaults are higher than the Company's historical experience, additional allowances may be required, which could have an adverse impact on operating expenses. Inventories Inventories consist primarily of finished goods which are valued at the lower of cost and net realizable value, with cost being determined using the first-in, first-out method. The Company writes down its inventories based on estimated excess and obsolete inventories determined primarily by the demand forecast but takes into account market conditions, product development plans, product life expectancy and other factors. At the point of loss recognition, a new, lower cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase of the newly established cost basis. Property and equipment, net Property and equipment are stated at historical cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets as follows: Computer equipment 2 years Furniture and fixtures 5 years Software 2-5 years Machinery and equipment 2-3 years Leasehold improvements Shorter of the lease term or 5 years Recoverability of assets to be held and used is measured by comparing the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of the asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. The carrying value of the asset is reviewed on a regular basis for the existence of facts, both internal and external, that may suggest impairment. Charges related to the impairment of property and equipment were insignificant for the years ended December 31, 2017 , 2016 and 2015 . Goodwill Goodwill represents the purchase price over estimated fair value of net assets of businesses acquired in a business combination. Goodwill acquired in a business combination is not amortized, but instead tested for impairment at least annually on the first day of the fourth quarter. Should certain events or indicators of impairment occur between annual impairment tests, the Company performs the impairment test as those events or indicators occur. Examples of such events or circumstances include the following: a significant decline in the Company’s expected future cash flows; a sustained, significant decline in the Company’s stock price and market capitalization; a significant adverse change in the business climate; and slower growth rates. Goodwill is tested for impairment at the reporting unit level by first performing a qualitative assessment to determine whether it is more likely than not (that is, a likelihood of more than 50%) that the fair value of the reporting unit is less than its carrying value. The qualitative assessment considers the following factors: macroeconomic conditions, industry and market considerations, cost factors, overall company financial performance, events affecting the reporting units, and changes in the Company's share price. If the reporting unit does not pass the qualitative assessment, the Company estimates its fair value and compares the fair value with the carrying value of its reporting unit, including goodwill. If the fair value is greater than the carrying value of its reporting unit, no impairment is recorded. If the fair value is less than the carrying value, an impairment loss is recognized for the amount that the carrying amount of a reporting unit, including goodwill, exceeds its fair value, limited to the total amount of goodwill allocated to that reporting unit. The impairment charge would be recorded to earnings in the consolidated statements of operations. In the first fiscal quarter of 2017, the Company reorganized its operating segment structure resulting in a change to its reportable segments. The Company identified the reporting units for the purpose of goodwill impairment testing as Arlo, Connected Home, and SMB reporting units. The Company did not recognize any goodwill impairment charges during the years ended December 31, 2017 , 2016 and 2015 . Refer to Goodwill in Note 3, Balance Sheet Components, for further discussions on its goodwill impairment testing relating to the segment change and its annual goodwill impairment testing. Intangibles, net Purchased intangibles with finite lives are amortized using the straight-line method over the estimated economic lives of the assets, which range from three to ten years. Finite-lived intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. During the years ended December 31, 2017 , there were no events or changes in circumstances that indicated the carrying amount of our finite-lived assets may not be recoverable from their undiscounted cash flows. Consequently, we did not perform an impairment test. The Company recorded no impairments to intangibles during the years ended December 31, 2017 , 2016 and 2015 . Warranty obligations The Company provides for estimated future warranty obligations at the time revenue is recognized. The Company's standard warranty obligation to its direct customers generally provides for a right of return of any product for a full refund in the event that such product is not merchantable or is found to be damaged or defective. At the time revenue is recognized, an estimate of future warranty returns is recorded to reduce revenue in the amount of the expected credit or refund to be provided to its direct customers. At the time the Company records the reduction to revenue related to warranty returns, the Company includes within cost of revenue a write-down to reduce the carrying value of such products to net realizable value. The Company's standard warranty obligation to its end-users provides for replacement of a defective product for one or more years. Factors that affect the warranty obligation include product failure rates, material usage, and service delivery costs incurred in correcting product failures. The estimated cost associated with fulfilling the Company's warranty obligation to end-users is recorded in cost of revenue. Because the Company's products are manufactured by third-party manufacturers, in certain cases the Company has recourse to the third-party manufacturer for replacement or credit for the defective products. The Company gives consideration to amounts recoverable from its third-party manufacturers in determining its warranty liability. Revenue recognition Revenue from product sales is generally recognized at the time the product is shipped provided that persuasive evidence of an arrangement exists, title and risk of loss has transferred to the customer, the selling price is fixed or determinable and collection of the related receivable is reasonably assured. Currently, for some of the Company's customers, title passes to the customer upon delivery to the port or country of destination, upon their receipt of the product, or upon the customer's resale of the product. At the end of each fiscal quarter, the Company estimates and defers revenue related to product where title has not transferred. The revenue continues to be deferred until such time that title passes to the customer. The Company assesses collectability based on a number of factors, including general economic and market conditions, past transaction history with the customer, and the creditworthiness of the customer. If the Company determines that collection is not reasonably assured, then revenue is deferred until receipt of the payment from the customer. The Company has product offerings with multiple elements. The Company's multiple-element product offerings include hardware with free services, networking hardware with embedded software, various software subscription services, and support, which are considered separate units of accounting. In general, the hardware and networking hardware with embedded software are delivered up front, while the free services are delivered over the stated service period, or the estimated useful life. The subscription services and support are delivered over the subscription and support period whether included in a multiple-element offering or not. The Company allocates revenue to the deliverables based upon their relative selling price. Revenue allocated to each unit of accounting is then recognized when persuasive evidence of an arrangement exists, title and risk of loss has transferred to the customer, the selling price is fixed or determinable and collection of the related receivable is reasonably assured. When applying the relative selling price method, the Company determines the selling price for each deliverable using vendor-specific objective evidence ("VSOE") of fair value of the deliverable, or when VSOE of fair value is unavailable, its best estimate of selling price (“ESP”), as the Company has determined it is unable to establish third-party evidence of selling price for the deliverables. In determining VSOE, the Company requires that a substantial majority of the selling prices for a deliverable sold on a stand-alone basis fall within a reasonably narrow pricing range, generally evidenced by approximately 80% of such historical stand-alone transactions falling within +/-15% of the median price. The Company determines ESP for a deliverable by considering multiple factors including, but not limited to, market conditions, competitive landscape, internal costs, gross margin objectives and pricing practices. The objective of ESP is to determine the price at which the Company would transact a sale if the deliverable were sold on a stand-alone basis. The determination of ESP is made through consultation with and formal approval by the Company's management, taking into consideration the go-to-market strategy. Certain distributors and retailers generally have the right to return product for stock rotation purposes. Upon shipment of the product, the Company reduces revenue for an estimate of potential future product warranty and stock rotation returns related to the current period product revenue. Management analyzes historical returns, channel inventory levels, current economic trends and changes in customer demand for the Company's products when evaluating the adequacy of the allowance for sales returns, namely warranty and stock rotation returns. Revenue on shipments is also reduced for estimated price protection and sales incentives deemed to be contra-revenue under the authoritative guidance for revenue recognition. Sales incentives The Company accrues for sales incentives as a marketing expense if it receives an identifiable benefit in exchange and can reasonably estimate the fair value of the identifiable benefit received; otherwise, it is recorded as a reduction to revenues. As a consequence, the Company records a substantial portion of its channel marketing costs as a reduction of revenue. The Company records estimated reductions to revenues for sales incentives at the later of when the related revenue is recognized or when the program is offered to the customer or end consumer. Shipping and handling fees and costs The Company includes shipping and handling fees billed to customers in net revenue. Shipping and handling costs associated with inbound freight are included in cost of revenue. In cases where the Company gives a freight allowance to the customer for their own inbound freight costs, such costs are appropriately recorded as a reduction in net revenue. Shipping and handling costs associated with outbound freight are included in sales and marketing expenses and totaled $9.4 million , $9.2 million and $10.4 million in the years ended December 31, 2017 , 2016 and 2015 respectively. Research and development Costs incurred in the research and development of new products are charged to expense as incurred. Advertising costs Advertising costs are expensed as incurred. Total advertising and promotional expenses were $33.3 million , $24.5 million , and $19.4 million in the years ended December 31, 2017 , 2016 and 2015 respectively. Income taxes The Company accounts for income taxes under an asset and liability approach. Under this method, income tax expense is recognized for the amount of taxes payable or refundable for the current year. In addition, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences resulting from different treatment for tax versus accounting for certain items, such as accruals and allowances not currently deductible for tax purposes. These differences result in deferred tax assets and liabilities, which are included within the consolidated balance sheets. The Company must then assess the likelihood that the Company's deferred tax assets will be recovered from future taxable income and to the extent the Company believes that recovery is not more likely than not, the Company must establish a valuation allowance. The Company’s assessment considers the recognition of deferred tax assets on a jurisdictional basis. Accordingly, in assessing its future taxable income on a jurisdictional basis, the Company considers the effect of its transfer pricing policies on that income. In the ordinary course of business there is inherent uncertainty in assessing the Company's income tax positions. The Company assesses its tax positions and records benefits for all years subject to examination based on management's evaluation of the facts, circumstances and information available at the reporting date. For those tax positions where it is more likely than not that a tax benefit will be sustained, the Company records the largest amount of tax benefit with a greater than 50 percent likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is not more likely than not that a tax benefit will be sustained, no tax benefit has been recorded in the financial statements. Where applicable, associated interest and penalties have also been recognized as a component of income tax expense. Net income per share Basic net income per share is computed by dividing the net income for the period by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by dividing the net income for the period by the weighted average number of shares of common stock and potentially dilutive common stock outstanding during the period. Potentially dilutive common shares include common shares issuable upon exercise of stock options, vesting of restricted stock awards, and issuances of shares under the Employee Stock Purchase Plan, which are reflected in diluted net income per share by application of the treasury stock method. Potentially dilutive common shares are excluded from the computation of diluted net income per share when their effect is anti-dilutive. Stock-based compensation The Company measures stock-based compensation at the grant date based on the fair value of the award. The fair value of stock options and the shares offered under the Employee Stock Purchase Plan is estimated using the Black-Scholes option pricing model. Estimated compensation cost relating to restricted stock units (“RSUs”) is based on the closing fair market value of the Company’s common stock on the date of grant. The compensation expense for equity awards is recognized over the vesting period of the award under a graded vesting method. Upon the adoption of ASU 2016-09, the Company elected to account for forfeitures as they occur, rather than estimating expected forfeitures. Additionally, upon the adoption, the Company prospectively recorded all excess tax benefits and tax deficiencies arising from stock awards vesting or settlement as income tax expense or benefit rather than in equity. Refer to Recent accounting pronouncements below for a further discussion of the impact from the adoption of ASU 2016-09, and refer to Note 10, Employee Benefit Plans, for a further discussion on stock-based compensation. Comprehensive income Comprehensive income consists of net income and other gains and losses affecting stockholder's equity that the Company excluded from net income, including gains and losses related to fair value of short-term investments and the effective portion of cash flow hedges that were outstanding as of the end of the year. Foreign currency translation and re-measurement The Company's functional currency is the U.S. dollar for all of its international subsidiaries. Foreign currency transactions of international subsidiaries are re-measured into U.S. dollars at the end-of-period exchange rates for monetary assets and liabilities, and at historical exchange rates for non-monetary assets. Revenue is re-measured at average exchange rates in effect during each period. Expenses are re-measured at average exchange rates in effect during each period, except for expenses related to non-monetary assets, which are re-measured at historical exchange rates. Gains and losses arising from foreign currency transactions are included in Other income (expense), net. Recent accounting pronouncements Accounting Pronouncement Recently Adopted In March 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-09, "Improvements to Employee Share-Based Payment Accounting" (Topic 718), which simplifies the accounting for share-based payment transactions. The new guidance requires excess tax benefits and tax deficiencies to be recorded in the income statement when stock awards vest or are settled. In addition, cash flows related to excess tax benefits will no longer be separately classified as an inflow from financing activities with a corresponding outflow from operating activities but will be classified along with other income tax cash flows as an operating activity. The standard also allows the entity to repurchase more of an employee’s vesting shares for tax withholding purposes without triggering liability accounting, clarifies that all cash payments made to tax authorities on an employee’s behalf for withheld shares should be presented as a financing activity on the cash flows statement, and provides an accounting policy election to account for forfeitures as they occur. The new guidance became effective for the Company in the first fiscal quarter of 2017. Upon adoption on January 1, 2017, the Company prospectively recorded all excess tax benefits and tax deficiencies arising from stock awards vesting or settlement as income tax expense or benefit rather than in equity. For the years ended December 31, 2017, the impact of the adoption was the recognition of $2.7 million excess tax benefits as a component of the provision for income taxes. The Company elected to account for forfeitures as they occur, rather than estimating expected forfeitures, which resulted in net cumulative-effect adjustment of $0.2 million decrease to retained earnings as of January 1, 2017. The Company elected to apply the presentation requirements for cash flows related to excess tax benefits retrospectively to all periods presented, which resulted in an increase to both net cash provided by operating activities and net cash used in financing activities of $3.0 million and $0.8 million for the years ended December 31, 2016 and 2015, respectively, on the consolidated statements of cash flows. The presentation requirement for cash flows related to employee taxes paid for withheld shares had no impact to any of the periods presented on the consolidated statements of cash flows since the Company has historically been presented such cash flows as a financing activity. Accounting Pronouncements Not Yet Effective In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers" (Topic 606), which was further updated in March, April, May and December 20 |
Business Acquisitions
Business Acquisitions | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Business Acquisitions | Business Acquisition Placemeter, Inc. On November 30, 2016 , the Company acquired Placemeter, Inc. ("Placemeter"), an industry leader in computer vision analytics, for total purchase consideration of $9.6 million . The Company believes Placemeter’s engineering talent will add great value to NETGEAR’s Arlo Smart security team, and their proprietary computer vision algorithms will help to build leading video analytics solutions for the Arlo platform. The Company paid $8.8 million of the aggregate purchase price in the fourth fiscal quarter of 2016 and paid the remaining $0.8 million in the first fiscal quarter of 2017. The acquisition qualified as a business combination and was accounted for using the acquisition method of accounting. The results of Placemeter have been included in the consolidated financial statements since the date of acquisition. Pro forma results of operations for the acquisition are not presented as the financial impact to the Company's consolidated results of operations is not material. The allocation of the purchase price was as follows (in thousands): Cash and cash equivalents $ 8 Accounts receivable 11 Prepaid expenses and other current assets 130 Property and equipment 83 Intangibles 6,000 Goodwill 3,742 Accounts payable (40 ) Other accrued liabilities (74 ) Deferred tax liabilities (308 ) Total purchase price $ 9,552 The $3.7 million of goodwill recorded on the acquisition of Placemeter is not deductible for U.S. federal or U.S. state income tax purposes. The goodwill recognized, which was assigned to the Company's former retail segment upon acquisition and was allocated to the Arlo segment under its current reporting structure, is primarily attributable to expected synergies resulting from the acquisition. In connection with the acquisition, the Company recorded $0.3 million of deferred tax liabilities net of deferred tax assets. The deferred tax liabilities were recorded for the book basis of intangible assets for which the Company has no tax basis. The deferred tax liabilities are reduced by the tax benefit of the net operating losses as of the date of the acquisition after consideration of limitations on the use under U.S. Internal Revenue Code section 382. The Company designated $5.5 million of the acquired intangibles as software technology and a further $0.2 million of the acquired intangibles as database. The valuations were arrived at using the replacement cost method, with consideration having been given to the estimated time, investment and resources required to recreate the acquired intangibles. A discount rate of 15.0% was used in the valuation of each intangible. The acquired intangibles are being amortized over an estimated useful life of four years . The Company designated $0.3 million of the acquired intangibles as non-compete agreements. The value was calculated based on the present value of the future estimated cash flows derived from projections of future operations attributable to the non-compete agreements and discounted at 20.0% . The acquired agreements are being amortized over an estimated useful life of three years . |
Balance Sheet Components
Balance Sheet Components | 12 Months Ended |
Dec. 31, 2017 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Components | Balance Sheet Components Available-for-sale short-term investments As of December 31, 2017 December 31, 2016 Cost Unrealized Gain Unrealized Loss Estimated Fair Value Cost Unrealized Gain Unrealized Loss Estimated Fair Value (In thousands) U.S. treasuries $ 124,816 $ — $ (146 ) $ 124,670 $ 123,869 $ 9 $ (40 ) $ 123,838 Certificates of deposits 162 — — 162 148 — — 148 Total $ 124,978 $ — $ (146 ) $ 124,832 $ 124,017 $ 9 $ (40 ) $ 123,986 The Company’s short-term investments are primarily comprised of marketable securities that are classified as available-for-sale and consist of government securities with an original maturity or remaining maturity at the time of purchase of greater than three months and no more than twelve months . Accordingly, none of the available-for-sale securities have unrealized losses greater than 12 months. Cost method investments The carrying value of the Company's cost method investments was $4.5 million and $0.1 million as of December 31, 2017 and 2016 , respectively. These investments are accounted under the cost method because the Company does not have a controlling interest or the ability to exercise significant influence over these companies and these investments do not have readily determinable fair values. These investments are included in other non-current assets in the consolidated balance sheets and are carried at cost, adjusted for any impairment. The Company monitors these investments for impairment on a quarterly basis, and adjusts carrying value for any impairment charges recognized. There were no impairments recognized during the years ended December 31, 2017 , 2016 and 2015 , respectively. Realized gains and losses on these investments are reported in other income (expense), net in the consolidated statements of operations. The Company did not recognize any material realized gains or losses during the years ended December 31, 2017 , 2016 and 2015 , respectively. Accounts receivable, net As of December 31, 2017 December 31, 2016 (In thousands) Gross accounts receivable $ 437,891 $ 333,080 Allowance for doubtful accounts (1,257 ) (1,255 ) Allowance for sales returns (20,189 ) (13,506 ) Allowance for price protection (3,647 ) (4,480 ) Total allowances (25,093 ) (19,241 ) Total accounts receivable, net $ 412,798 $ 313,839 Inventories As of December 31, 2017 December 31, 2016 (In thousands) Raw materials $ 4,465 $ 4,596 Finished goods 241,429 243,266 Total inventories $ 245,894 $ 247,862 The Company records provisions for excess and obsolete inventory based on forecasts of future demand. While management believes the estimates and assumptions underlying its current forecasts are reasonable, there is risk that additional charges may be necessary if current forecasts are greater than actual demand. Property and equipment, net As of December 31, 2017 December 31, 2016 (In thousands) Computer equipment $ 10,114 $ 10,557 Furniture, fixtures and leasehold improvements 21,640 20,827 Software 28,997 28,663 Machinery and equipment 62,490 63,446 Total property and equipment, gross 123,241 123,493 Accumulated depreciation and amortization (102,581 ) (104,020 ) Total property and equipment, net $ 20,660 $ 19,473 Depreciation and amortization expense pertaining to property and equipment was $13.2 million , $14.6 million and $18.1 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. Intangibles, net As of December 31, 2017 As of December 31, 2016 Gross Accumulated Amortization Net Gross Accumulated Amortization Net (In thousands) Technology $ 66,599 $ (62,172 ) $ 4,427 $ 66,599 $ (57,381 ) $ 9,218 Customer contracts and relationships 56,500 (37,430 ) 19,070 56,500 (30,375 ) 26,125 Other 11,045 (9,554 ) 1,491 11,045 (8,489 ) 2,556 Total intangibles, net 134,144 (109,156 ) 24,988 $ 134,144 $ (96,245 ) $ 37,899 Amortization of purchased intangibles in the years ended December 31, 2017 , 2016 and 2015 was $12.9 million , $17.0 million and $17.3 million , respectively. No impairment charges were recorded in the years ended December 31, 2017 , 2016 and 2015 . As of December 31, 2017, estimated amortization expense related to finite-lived intangibles for each of the next five years and thereafter is as follows (in thousands): 2018 $ 9,396 2019 7,544 2020 6,622 2021 1,413 2022 13 Total estimated amortization expense $ 24,988 Goodwill As discussed in Note 11, Segment Information , during the first fiscal quarter of 2017, the Company's Chief Operating Decision Maker requested changes in the information that he regularly reviews for purposes of allocating resources and assessing performance. With these changes, the Company revised its reportable segments. Beginning with fiscal year 2017, the Company operates and reports in three segments: Arlo, Connected Home, and SMB. Goodwill was reallocated to the reportable segments using a relative fair value approach. As a result, the Company completed assessments of any potential goodwill impairment for all reportable segments immediately prior to and after the reallocation and determined that no impairment existed. The changes in the carrying amount of goodwill during the years ended December 31, 2017 and 2016 are as follows: Old Segments New Segments Retail Commercial Service Provider Total Arlo Connected Home SMB Total (In thousands) As of December 31, 2015 $ 45,442 $ 36,279 $ — $ 81,721 $ — $ — $ — $ — Goodwill from acquisition of Placemeter 3,742 — — 3,742 — — — — As of December 31, 2016 49,184 36,279 — 85,463 — — — — Relative fair value approach (49,184 ) (36,279 ) — (85,463 ) 21,149 28,035 36,279 85,463 As of January 1, 2017 — — — — 21,149 28,035 36,279 85,463 As of December 31, 2017 $ — $ — $ — $ — $ 21,149 $ 28,035 $ 36,279 $ 85,463 In the fourth fiscal quarter of 2017 , the Company early adopted ASU 2017-04 "Intangibles-Goodwill and Other: Simplifying the Test for Goodwill Impairment" and completed the annual impairment test of goodwill. The test was performed as of the first day of the fourth quarter, or October 2, 2017. The Company performed a qualitative test for goodwill impairment of the Arlo, Connected Home, and SMB reporting units as of October 2, 2017. Based upon the results of the qualitative testing, the respective fair values of these reporting units were substantially in excess of their carrying values. The Company believes it is more-likely-than-not that the fair value of these reporting units are greater than their respective carrying values and therefore performing the next step of the impairment test for these reporting units was unnecessary. No goodwill impairment was recognized in the years ended December 31, 2017 , 2016 or 2015 . Accumulated goodwill impairment charges for the years ended December 31, 2017 and 2016 , was $74.2 million and $74.2 million , respectively. Other non-current assets As of December 31, 2017 December 31, 2016 (In thousands) Non-current deferred income taxes $ 49,468 $ 70,859 Other 12,321 7,977 Total other non-current assets $ 61,789 $ 78,836 Other accrued liabilities As of December 31, 2017 December 31, 2016 (In thousands) Sales and marketing programs $ 96,153 $ 74,330 Warranty obligation 75,824 58,520 Freight 10,567 8,980 Other 39,926 28,844 Total other accrued liabilities $ 222,470 $ 170,674 |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments The Company’s subsidiaries have had, and will continue to have material future cash flows, including revenue and expenses, which are denominated in currencies other than the Company’s functional currency. The Company and all its subsidiaries designate the U.S. dollar as the functional currency. Changes in exchange rates between the Company’s functional currency and other currencies in which the Company transacts business will cause fluctuations in cash flow expectations and cash flow realized or settled. Accordingly, the Company uses derivatives to mitigate its business exposure to foreign exchange risk. The Company enters into foreign currency forward contracts in Australian dollars, British pounds, Euros, Canadian dollar, and Japanese yen to manage the exposures to foreign exchange risk related to expected future cash flows on certain forecasted revenue, costs of revenue, operating expenses and existing assets and liabilities. The Company does not enter into derivatives transactions for trading or speculative purposes. The Company’s foreign currency forward contracts do not contain any credit-risk-related contingent features. The Company is exposed to credit losses in the event of nonperformance by the counter-parties of its forward contracts. The Company enters into derivative contracts with high-quality financial institutions and limits the amount of credit exposure to any one counter-party. In addition, the derivative contracts typically mature in less than eleven months and the Company continuously evaluates the credit standing of its counter-party financial institutions. The counter-parties to these arrangements are large highly rated financial institutions and the Company does not consider non-performance a material risk. The Company may choose not to hedge certain foreign exchange exposures for a variety of reasons, including, but not limited to, materiality, accounting considerations and the prohibitive economic cost of hedging particular exposures. There can be no assurance the hedges will offset more than a portion of the financial impact resulting from movements in foreign exchange rates. The Company’s accounting policies for these instruments are based on whether the instruments are designated as hedge or non-hedge instruments in accordance with the authoritative guidance for derivatives and hedging. The Company records all derivatives on the balance sheets at fair value. The effective portions of cash flow hedges are recorded in other comprehensive income ("OCI") until the hedged item is recognized in earnings. Derivatives that are not designated as hedging instruments and the ineffective portions of its designated hedges are adjusted to fair value through earnings in other income (expense), net in the consolidated statements of operations. The fair values of the Company’s derivative instruments and the line items on the consolidated balance sheets to which they were recorded as of December 31, 2017 , and 2016 , are summarized as follows: Balance Sheets Location December 31, Balance Sheets Location December 31, 2017 2016 2017 2016 (In thousands) (In thousands) Derivative contracts not designated as hedging instruments Prepaid expenses and other current assets $ 1,314 $ 5,873 Other accrued liabilities $ 7,128 $ 1,002 Derivative contracts designated as hedging instruments Prepaid expenses and other current assets 485 2,890 Other accrued liabilities 1,064 703 Total $ 1,799 $ 8,763 $ 8,192 $ 1,705 Refer to Note 12, Fair Value Measurements, in Notes to Consolidated Financial Statements for detailed disclosures regarding fair value measurements in accordance with the authoritative guidance for fair value measurements and disclosures. Offsetting Derivative Assets and Liabilities The Company has entered into master netting arrangements which allow net settlements under certain conditions. Although netting is permitted, it is currently the Company's policy and practice to record all derivative assets and liabilities on a gross basis in the consolidated balance sheets. The following tables set forth the offsetting of derivative assets as of December 31, 2017 and 2016 : As of December 31, 2017 Gross Amounts Not Offset in the Consolidated Balance Sheets Gross Amounts of Recognized Assets Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts Of Assets Presented in the Consolidated Balance Sheets Financial Instruments Cash Collateral Pledged Net Amount (In thousands) Bank of America $ 1,664 $ — $ 1,664 $ (1,664 ) $ — $ — Wells Fargo 135 — 135 (135 ) — — Total $ 1,799 $ — $ 1,799 $ (1,799 ) $ — $ — As of December 31, 2016 Gross Amounts Not Offset in the Consolidated Balance Sheets Gross Amounts of Recognized Assets Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts Of Assets Presented in the Consolidated Balance Sheets Financial Instruments Cash Collateral Pledged Net Amount (In thousands) J.P. Morgan Chase $ 1,492 $ — $ 1,492 $ (442 ) $ — $ 1,050 Wells Fargo 7,271 — 7,271 (1,263 ) — 6,008 Total $ 8,763 $ — $ 8,763 $ (1,705 ) $ — $ 7,058 The following tables set forth the offsetting of derivative liabilities as of December 31, 2017 and 2016 : As of December 31, 2017 Gross Amounts Not Offset in the Consolidated Balance Sheets Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts Of Liabilities Presented in the Consolidated Balance Sheets Financial Instruments Cash Collateral Pledged Net Amount (In thousands) Bank of America $ 7,815 $ — $ 7,815 $ (1,664 ) $ — $ 6,151 Wells Fargo 377 — 377 (135 ) — 242 Total $ 8,192 $ — $ 8,192 $ (1,799 ) $ — $ 6,393 As of December 31, 2016 Gross Amounts Not Offset in the Consolidated Balance Sheets Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts Of Liabilities Presented in the Consolidated Balance Sheets Financial Instruments Cash Collateral Pledged Net Amount (In thousands) J.P. Morgan Chase $ 442 $ — $ 442 $ (442 ) $ — $ — Wells Fargo 1,263 — 1,263 (1,263 ) — — Total $ 1,705 $ — $ 1,705 $ (1,705 ) $ — $ — Cash flow hedges To help manage the exposure of operating margins to fluctuations in foreign currency exchange rates, the Company hedges a portion of its anticipated foreign currency revenue, costs of revenue and certain operating expenses. These hedges are designated at the inception of the hedge relationship as cash flow hedges under the authoritative guidance for derivatives and hedging. Effectiveness is tested at least quarterly both prospectively and retrospectively using regression analysis to ensure that the hedge relationship has been effective and is likely to remain effective in the future. The Company typically hedges portions of its anticipated foreign currency exposure less than eleven months. The Company enters into about 10 forward contracts per quarter with an average size of approximately $8.0 million USD equivalent related to its cash flow hedging program. The Company expects to reclassify to earnings all of the amounts recorded in OCI associated with its cash flow hedges over the next 12 months. OCI associated with cash flow hedges of foreign currency revenue is recognized as a component of net revenue in the same period as the related revenue is recognized. OCI associated with cash flow hedges of foreign currency costs of revenue and operating expenses are recognized as a component of cost of revenue and operating expense in the same period as the related costs of revenue and operating expenses are recognized. Derivative instruments designated as cash flow hedges must be de-designated as hedges when it is probable the forecasted hedged transaction will not occur within the designated hedge period or if not recognized within 60 days following the end of the hedge period. Deferred gains and losses in OCI associated with such derivative instruments are reclassified immediately into earnings through other income (expense), net. Any subsequent changes in the fair value of such derivative instruments are reflected in current earnings unless they are re-designated as hedges of other transactions. The Company did not recognize any material net gains or losses related to the loss of hedge designation on discontinued cash flow hedges during the years ended December 31, 2017 , 2016 and 2015 . The pre-tax effects of the Company’s derivative instruments on OCI and the consolidated statements of operations for the years ended December 31, 2017 , 2016 and 2015 are summarized as follows: Derivatives Designated as Hedging Instruments Year Ended December 31, 2017 Gains (Losses) Recognized in OCI - Effective Portion Location of Gains (Losses) Reclassified from OCI into Income - Effective Portion Gains (Losses) Reclassified from OCI into Income - Effective Portion (1) Location of Gains (Losses) Recognized in Income and Excluded from Effectiveness Testing Amount of Gains (Losses) Recognized in Income and Excluded from Effectiveness Testing (In thousands) Cash flow hedges: Foreign currency forward contracts $ (10,692 ) Net revenue $ (8,693 ) Other income (expense), net $ 1,587 Foreign currency forward contracts — Cost of revenue 18 Other income (expense), net — Foreign currency forward contracts — Operating expenses 1,051 Other income (expense), net — Total $ (10,692 ) $ (7,624 ) $ 1,587 _________________________ (1) Refer to Note 9, Stockholders' Equity , which summarizes the accumulated other comprehensive income activity related to derivatives. Derivatives Designated as Hedging Instruments Year Ended December 31, 2016 Gains (Losses) Recognized in OCI - Effective Portion Location of Gains (Losses) Reclassified from OCI into Income - Effective Portion Gains (Losses) Reclassified from OCI into Income - Effective Portion (1) Location of Gains (Losses) Recognized in Income and Excluded from Effectiveness Testing Amount of Gains (Losses) Recognized in Income and Excluded from Effectiveness Testing (In thousands) Cash flow hedges: Foreign currency forward contracts $ 3,007 Net revenue $ 1,100 Other income (expense), net $ 365 Foreign currency forward contracts — Cost of revenue (6 ) Other income (expense), net — Foreign currency forward contracts — Operating expenses (274 ) Other income (expense), net — Total $ 3,007 $ 820 $ 365 _________________________ (1) Refer to Note 9, Stockholders' Equity , which summarizes the accumulated other comprehensive income activity related to derivatives. Derivatives Designated as Hedging Instruments Year Ended December 31, 2015 Gains (Losses) Recognized in OCI - Effective Portion Location of Gains (Losses) Reclassified from OCI into Income - Effective Portion Gains (Losses) Reclassified from OCI into Income - Effective Portion (1) Location of Gains (Losses) Recognized in Income and Excluded from Effectiveness Testing Amount of Gains (Losses) Recognized in Income and Excluded from Effectiveness Testing (In thousands) Cash flow hedges: Foreign currency forward contracts $ 453 Net revenue $ 462 Other income (expense), net $ (52 ) Foreign currency forward contracts — Cost of revenue 6 Other income (expense), net — Foreign currency forward contracts — Operating expenses (15 ) Other income (expense), net — Total $ 453 $ 453 $ (52 ) _________________________ (1) Refer to Note 9, Stockholders' Equity , which summarizes the accumulated other comprehensive income activity related to derivatives. The Company did not recognize any material net gains or losses related to the ineffective portion of cash flow hedges during the years ended December 31, 2017 , 2016 and 2015 . Non-designated hedges The Company enters into non-designated hedges under the authoritative guidance for derivatives and hedging to manage the exposure of non-functional currency monetary assets and liabilities held on its financial statements to fluctuations in foreign currency exchange rates, as well as to reduce volatility in other income and expense. The non-designated hedges are generally expected to offset the changes in value of its net non-functional currency asset and liability position resulting from foreign exchange rate fluctuations. Foreign currency denominated accounts receivable and payable are hedged with non-designated hedges when the related anticipated foreign revenue and expenses are recognized in the Company’s financial statements. The Company also hedges certain non-functional currency monetary assets and liabilities that may not be incorporated into the cash flow hedge program. The Company adjusts its non-designated hedges monthly and enters into about ten non-designated derivatives per quarter. The average size of its non-designated hedges is approximately $2.0 million USD equivalent and these hedges normally range from one to three months in duration. The effects of the Company’s derivatives not designated as hedging instruments in other income (expense), net in the consolidated statements of operations for the years ended December 31, 2017 , 2016 and 2015 , are as follows: Year ended December 31, Derivatives Not Designated as Hedging Instruments Location of Gains (Losses) Recognized in Income on Derivative 2017 2016 2015 (In thousands) Foreign currency forward contracts Other income (expense), net (6,945 ) 3,789 $ 4,956 |
Net Income Per Share
Net Income Per Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Net Income Per Share Basic net income per share is computed by dividing the net income for the period by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by dividing the net income for the period by the weighted average number of shares of common stock and potentially dilutive common stock outstanding during the period. Potentially dilutive common shares include common shares issuable upon exercise of stock options, vesting of restricted stock awards, and issuances of shares under the ESPP, which are reflected in diluted net income per share by application of the treasury stock method. Potentially dilutive common shares are excluded from the computation of diluted net income per share when their effect is anti-dilutive. Net income per share for the years ended December 31, 2017 , 2016 and 2015 was as follows: Year Ended December 31, 2017 2016 2015 (In thousands, except per share data) Numerator: Net income $ 19,436 $ 75,851 $ 48,584 Denominator: Weighted average common shares - basic 32,097 32,758 33,161 Potentially dilutive common share equivalent 947 970 627 Weighted average common shares - dilutive 33,044 33,728 33,788 Basic net income per share $ 0.61 $ 2.32 $ 1.47 Diluted net income per share $ 0.59 $ 2.25 $ 1.44 Anti-dilutive employee stock-based awards, excluded 279 258 1,807 |
Other Income (Expense), Net (No
Other Income (Expense), Net (Notes) | 12 Months Ended |
Dec. 31, 2017 | |
Other Income and Expenses [Abstract] | |
Other Income and Other Expense Disclosure [Text Block] | Other Income (Expense), Net Other income (expense), net consisted of the following: Year Ended December 31, 2017 2016 2015 (In thousands) Foreign currency transaction gain (loss), net $ 7,238 $ (3,835 ) $ (5,114 ) Foreign currency contract gain (loss), net (5,358 ) 4,154 4,904 Other 144 (440 ) 122 Total $ 2,024 $ (121 ) $ (88 ) |
Income Taxes Income Taxes (Note
Income Taxes Income Taxes (Notes) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | Income Taxes Income before income taxes and the provision for income taxes consisted of the following: Year Ended December 31, 2017 2016 2015 (In thousands) United States $ 57,989 $ 88,748 $ 88,681 International 32,725 26,321 (3,117 ) Total $ 90,714 $ 115,069 $ 85,564 Year Ended December 31, 2017 2016 2015 (In thousands) Current: U.S. Federal $ 40,532 $ 33,267 $ 30,970 State 4,463 2,693 3,139 Foreign 4,305 6,278 6,105 49,300 42,238 40,214 Deferred: U.S. Federal 23,005 (2,052 ) (2,645 ) State (288 ) 441 134 Foreign (739 ) (1,409 ) (723 ) 21,978 (3,020 ) (3,234 ) Total $ 71,278 $ 39,218 $ 36,980 Net deferred tax assets consisted of the following: Year Ended December 31, 2017 2016 (In thousands) Deferred Tax Assets: Accruals and allowances $ 23,661 $ 32,303 Net operating loss carryforwards 3,317 6,358 Stock-based compensation 6,015 8,250 Deferred rent 1,977 3,002 Deferred revenue 2,740 1,957 Tax credit carryforwards 974 1,543 Acquired intangibles 14,907 21,871 Depreciation and amortization 1,185 1,160 Total deferred tax assets 54,776 76,444 Deferred Tax Liabilities: Depreciation and amortization — — Other (126 ) (991 ) Total deferred tax liabilities (126 ) (991 ) Valuation Allowance (1) (5,182 ) (4,594 ) Net deferred tax assets $ 49,468 $ 70,859 _________________________ (1) Valuation allowance is presented gross. The valuation allowance net of the federal tax effect is $4.1 million and $3.0 million for the years ended December 31, 2017 and 2016 , respectively. Management's judgment is required in determining the Company's provision for income taxes, its deferred tax assets and any valuation allowance recorded against its deferred tax assets. As of December 31, 2017 , a valuation allowance of $5.2 million was placed against California deferred tax assets since the recovery of the assets is uncertain. There was a valuation allowance of $4.6 million placed against deferred tax assets as of December 31, 2016 . Accordingly, the valuation allowance increased $0.6 million during 2017 . In management's judgment it is more likely than not that the remaining deferred tax assets will be realized in the future as of December 31, 2017 , and as such no valuation allowance has been recorded against the remaining deferred tax assets. The effective tax rate differs from the applicable U.S. statutory federal income tax rate as follows: Year Ended December 31, 2017 2016 2015 Tax at federal statutory rate 35.0 % 35.0 % 35.0 % State, net of federal benefit 1.1 % 1.8 % 2.6 % Impact of international operations (6.4 )% (2.7 )% 7.1 % Stock-based compensation (0.9 )% 1.2 % (0.4 )% Tax credits (1.6 )% (0.9 )% (1.2 )% Impact of the Tax Act 53.3 % — % — % Others (1.9 )% (0.3 )% 0.1 % Provision for income taxes 78.6 % 34.1 % 43.2 % Income tax benefits (provision) in the amount of $2.5 million and $(2.2) million related to stock options were credited to additional paid-in capital during the years ended December 31, 2016 , and 2015 , respectively. On January 1, 2017, the Company adopted ASU 2016-09, "Improvements to Employee Share-Based Payment Accounting" (Topic 718) upon which all income tax benefits are recorded in income tax expense. As a result of changes in fair value of available-for-sale securities and foreign currency hedging, income tax (provision) benefits of $0.4 million , $(0.3) million and $21,000 were recorded in comprehensive income related to the years ended December 31, 2017 , 2016 , and 2015 , respectively. As of December 31, 2017 , the Company has approximately $15.8 million of acquired federal net operating loss carry forwards as well as $3.1 million of California tax credits carryforwards. All of the losses are subject to annual usage limitations under Internal Revenue Code Section 382. The federal losses expire in different years beginning in fiscal 2021 . The California tax credit carryforwards have no expiration. On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) was signed into law making significant changes to the Internal Revenue Code. Changes include, but are not limited to, a corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, the transition of U.S international taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017. The Company has calculated an estimate of the impact of the Tax Act in is year end income tax provision in accordance with its understanding of the Tax Act and guidance available as of the date of this filing and as a result has recorded $48.3 million as additional income tax expense in the fourth fiscal quarter of 2017, the period in which the legislation was enacted. The provisional amount related to the remeasurement of certain deferred tax assets and liabilities, based on the rates at which they are expected to reverse in the future, was $26.6 million . The provisional amount related to the one-time transition tax on the mandatory deemed repatriation of foreign earnings was $21.7 million . On December 22, 2017, Staff Accounting Bulletin No. 118 ("SAB 118") was issued to address the application of US GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Act. In accordance with SAB 118, the Company has determined that the $21.7 million of current tax expense recorded in connection with the transition tax on the mandatory deemed repatriation of foreign earnings was a provisional amount and a reasonable estimate at December 31, 2017. As further guidance is issued by Treasury, additional work may be necessary to ensure earnings as required by the calculations are properly determined. Additionally, as a result of the Tax Act, the Company has not completed its evaluation of its indefinite reinvestment assertion with regard to foreign earnings under ASC 740-30. As a result, deferred tax liabilities may be increased or decreased during the period allowed under SAB 118. Further, no estimate can currently be made and no provisional amounts were recorded in the financial statements for the impact of the Global Intangible Low-Taxed Income (“GILTI”) provision of the Tax Act. The GILTI provision imposes taxes on foreign earnings in excess of a deemed return on tangible assets. This tax is effective for the Company after the end of the current fiscal year. However, the company is evaluating whether deferred taxes should be recorded in relation to the GILTI provisions or if the tax should be recorded in the period in which it occurs. Based on the current interpretation, the company may choose either method as an accounting policy election. The Company has not yet decided on the accounting policy related to GILTI and will only do so after completion of an analysis. Any subsequent adjustment to any of these amounts will be recorded to current tax expense during the measurement period provided under SAB 118. The Company files income tax returns in the U.S. federal jurisdiction and various state, local, and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state, or local income tax examinations for years before 2013. During August 2017, the U.S. federal Internal Revenue Service (IRS) completed its audit of the tax year ended December 31, 2014 without change. The Company is no longer subject to foreign income tax examinations before 2004. The Italian Tax Authority (ITA) has audited the Company’s 2004 through 2012 tax years. The Company is currently in litigation with the ITA with respect to all of these years. In August 2017, the German Tax Authority (GTA) completed its examination of the Company’s 2008 and 2013 tax years without change. During 2016, the United Kingdom HMRC (Her Majesty’s Revenue and Customs) initiated an audit of the Company’s 2014 and 2015 tax years. They have since added the 2016 year to their query. Additionally, in December, 2017 the French Tax Authority commenced an audit of the Company’s 2015 and 2016 tax years. The Company has limited audit activity in various states and other foreign jurisdictions. Due to the uncertain nature of ongoing tax audits, the Company has recorded its liability for uncertain tax positions as part of its long-term liability as payments cannot be anticipated over the next 12 months. The existing tax positions of the Company continue to generate an increase in the liability for uncertain tax positions. The liability for uncertain tax positions may be reduced for liabilities that are settled with taxing authorities or on which the statute of limitations could expire without assessment from tax authorities. The possible reduction in liabilities for uncertain tax positions resulting from the expiration of statutes of limitation in multiple jurisdictions in the next 12 months is approximately $0.9 million , excluding the interest, penalties and the effect of any related deferred tax assets or liabilities. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits (“UTB”) is as follows: Federal, State, and Foreign Tax (In thousands) Balance as of December 31, 2014 $ 13,364 Additions based on tax positions related to the current year 1,608 Additions for tax positions of prior years 228 Settlements (199 ) Reductions for tax positions of prior years (302 ) Reductions due to lapse of applicable statutes (1,053 ) Adjustments due to foreign exchange rate movement (816 ) Balance as of December 31, 2015 12,830 Additions based on tax positions related to the current year 1,523 Additions for tax positions of prior years 45 Reductions for tax positions of prior years (237 ) Reductions due to lapse of applicable statutes (627 ) Adjustments due to foreign exchange rate movement (569 ) Balance as of December 31, 2016 $ 12,965 Additions based on tax positions related to the current year 938 Additions for tax positions of prior years 32 Reductions for tax positions of prior years (1,477 ) Reductions due to lapse of applicable statutes (899 ) Adjustments due to foreign exchange rate movement 1,008 Balance as of December 31, 2017 $ 12,567 The total amount of net UTB that, if recognized would affect the effective tax rate as of December 31, 2017 is $10.4 million . The ending net UTB results from adjusting the gross balance at December 31, 2017 for items such as U.S. federal and state deferred tax, interest, and deductible taxes. The net UTB is included as a component of non-current income taxes payable within the consolidated balance sheets. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense. During the years ended December 31, 2017 , 2016 , and 2015 , total interest and penalties expensed were $(0.4) million , $0.6 million and $0.1 million , respectively. As of December 31, 2017 and 2016 , accrued interest and penalties on a gross basis was $3.3 million and $3.6 million , respectively. Included in accrued interest are amounts related to tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. The Company continues to permanently reinvest its earnings overseas but is in the process of evaluating this position in light of the Tax Act. The earnings were approximately $175.0 million and $154.2 million as of December 31, 2017 and 2016 , respectively. Due to the impact of the Tax Act, no additional U.S. taxes are anticipated on these earnings. |
Commitments And Contingencies
Commitments And Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments And Contingencies | Commitments and Contingencies Leases The Company leases office space, cars and equipment under operating leases, with various expiration dates through December 2026 . Rent expense in the years ended of December 31, 2017 , 2016 , and 2015 was $10.1 million , $9.5 million , and $9.8 million , respectively. The terms of some of the Company’s office leases provide for rental payments on a graduated scale. The Company recognizes rent expense on a straight-line basis over the lease period, and has accrued for rent expense incurred but not paid. As of December 31, 2017, future minimum lease payments under non-cancelable operating leases are as follows (in thousands): 2018 $ 8,924 2019 7,718 2020 6,092 2021 5,715 2022 5,638 Thereafter 12,921 Total future minimum lease payments $ 47,008 Purchase Obligations The Company has entered into various inventory-related purchase agreements with suppliers. Generally, under these agreements, 50% of orders are cancelable by giving notice 46 to 60 days prior to the expected shipment date and 25% of orders are cancelable by giving notice 31 to 45 days prior to the expected shipment date. Orders are non-cancelable within 30 days prior to the expected shipment date. As of December 31, 2017 , the Company had approximately $153.1 million in non-cancelable purchase commitments with suppliers. The Company establishes a loss liability for all products it does not expect to sell for which it has committed purchases from suppliers. Such losses have not been material to date. From time to time the Company’s suppliers procure unique complex components on the Company's behalf. If these components do not meet specified technical criteria or are defective, the Company should not be obligated to purchase the materials. However, disputes may arise as a result and significant resources may be spent resolving such disputes. Warranty obligations Changes in the Company's warranty liability, which is included in other accrued liabilities in the consolidated balance sheets, are as follows: Year Ended December 31, 2017 2016 2015 (In thousands) Balance at the beginning of the year $ 58,520 $ 56,706 $ 44,888 Provision for warranty obligations made during the year 131,263 87,570 80,085 Settlements made during the year (113,959 ) (85,756 ) (68,267 ) Balance at the end of year $ 75,824 $ 58,520 $ 56,706 Guarantees and Indemnifications The Company, as permitted under Delaware law and in accordance with its Bylaws, indemnifies its officers and directors for certain events or occurrences, subject to certain limits, while the officer or director is or was serving at the Company’s request in such capacity. The term of the indemnification period is for the officer’s or director’s lifetime. The maximum amount of potential future indemnification is unlimited; however, the Company has a Director and Officer Insurance Policy that enables it to recover a portion of any future amounts paid. As a result of its insurance policy coverage, the Company believes the fair value of each indemnification agreement is minimal. Accordingly, the Company has no liabilities recorded for these agreements as of December 31, 2017 . In its sales agreements, the Company typically agrees to indemnify its direct customers, distributors and resellers (the “Indemnified Parties”) for any expenses or liability resulting from claimed infringements by the Company's products of patents, trademarks or copyrights of third parties that are asserted against the Indemnified Parties, subject to customary carve outs. The terms of these indemnification agreements are generally perpetual after execution of the agreement. The maximum amount of potential future indemnification is generally unlimited. From time to time, the Company receives requests for indemnity and may choose to assume the defense of such litigation asserted against the Indemnified Parties. Accordingly, the Company has no liabilities recorded for these agreements as of December 31, 2017 . Employment Agreements The Company has signed various employment agreements with key executives pursuant to which, if their employment is terminated without cause, such employees are entitled to receive their base salary (and commission or bonus, as applicable) for 52 weeks (for the Chief Executive Officer), 39 weeks (for the Senior Vice President of Worldwide Operations and Support) and up to 26 weeks (for other key executives). Such employees will also continue to have equity awards vest for up to a one -year period following such termination without cause. If a termination without cause or resignation for good reason occurs within one year of a change in control, such employees are entitled to full acceleration (for the Chief Executive Officer) and up to two years acceleration (for other key executives) of any unvested portion of his or her equity awards. The Company has no liabilities recorded for these agreements as of December 31, 2017 . Litigation and Other Legal Matters The Company is involved in disputes, litigation, and other legal actions, including, but not limited to, the matters described below. In all cases, at each reporting period, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. In such cases, the Company accrues for the amount, or if a range, the Company accrues the low end of the range, only if there is not a better estimate than any other amount within the range, as a component of legal expense within litigation reserves, net. The Company monitors developments in these legal matters that could affect the estimate the Company had previously accrued. In relation to such matters, the Company currently believes that there are no existing claims or proceedings that are likely to have a material adverse effect on its financial position within the next twelve months, or the outcome of these matters is currently not determinable. There are many uncertainties associated with any litigation, and these actions or other third-party claims against the Company may cause the Company to incur costly litigation and/or substantial settlement charges. In addition, the resolution of any intellectual property litigation may require the Company to make royalty payments, which could have an adverse effect in future periods. If any of those events were to occur, the Company's business, financial condition, results of operations, and cash flows could be adversely affected. The actual liability in any such matters may be materially different from the Company's estimates, which could result in the need to adjust the liability and record additional expenses. Ericsson v. NETGEAR, Inc. On September 14, 2010, Ericsson Inc. and Telefonaktiebolaget LM Ericsson (collectively “Ericsson”) filed a patent infringement lawsuit against the Company and defendants D-Link Corporation, D-Link Systems, Inc., Acer, Inc., Acer America Corporation, and Gateway, Inc. in the U.S. District Court, Eastern District of Texas alleging that the defendants infringe certain Ericsson patents. The Company has been accused of infringing eight U.S. patents: 5,790,516 (the “‘516 Patent”); 6,330,435 (the “‘435 Patent”); 6,424,625 (the “‘625 Patent”); 6,519,223 (the “‘223 Patent”); 6,772,215 (the “‘215 Patent”); 5,987,019 (the “‘019 Patent”); 6,466,568 (the “‘568 Patent”); and 5,771,468 (the “'468 Patent"). Ericsson generally alleged that the Company and the other defendants infringe the Ericsson patents through the defendants' IEEE 802.11-compliant products. In addition, Ericsson alleged that the Company infringed the claimed methods and apparatuses of the '468 Patent through the Company's PCMCIA routers. On June 22, 2012, Intel filed its Complaint in Intervention, meaning that Intel also became a defendant. During litigation, Ericsson (a) dismissed the '468 Patent with prejudice and gave the Company a covenant not to sue as to products in the marketplace now or in the past, (b) dropped the '516 Patent and (c) dropped the '223 Patent, except for those products that use Intel chips. A jury trial occurred in the Eastern District of Texas from June 3 through June 13, 2013. After hearing the evidence, the jury found no infringement of the '435 and '223 Patents, and the jury found infringement of claim 1 of the '625 Patent, claims 1 and 5 of the '568 Patent, and claims 1 and 2 of the '215 Patent. The jury also found that there was no willful infringement by any defendant. Additionally, the jury found no invalidity of the asserted claims of the '435 and '625 Patents. The jury assessed the following damages against the defendants: D-Link: $435,000 ; NETGEAR: $3,555,000 ; Acer/Gateway: $1,170,000 ; Dell: $1,920,000 ; Toshiba: $2,445,000 ; Belkin: $600,000 . The damages awards equated to 15 cents per unit for each accused 802.11 device sold by each defendant ( 5 cents per patent). The Company and other defendants appealed the jury verdict. On December 4, 2014, the Federal Circuit issued its opinion and order in the appeal. The Federal Circuit vacated the entirety of the $3.6 million jury verdict against the Company and other defendants’ damages awards and also vacated the ongoing 15 cent s per unit royalty verdict, finding that the District Court had not properly instructed the jury on royalty rates and Ericsson’s licensing promises. While the Federal Circuit found the district court had inadequate jury instructions, it held that there was enough evidence for the jury to find infringement of two claims of U.S. Patent Number 6,466,568 and two claims of U.S. Patent Number 6,772,215, but reversed the lower court’s decision not to grant a noninfringement judgment as a matter of law regarding the third patent, U.S. Patent Number 6,424,625, finding that no reasonable jury could find that the ‘625 Patent was infringed by the defendants. The case was remanded for further proceedings. In September 2013, Broadcom filed petitions in the USPTO at the Patent Trial and Appeal Board (PTAB) seeking inter partes review (“IPR”) of Ericsson’s three patents that the jury found were infringed by the Company and other defendants. On March 6, 2015, the PTAB invalidated all the claims of these three patents that were asserted against the Company and other defendants, ruling these claims were anticipated or obvious in light of prior art. This PTAB decision comes on top of the Federal Circuit decision (a) vacating the jury verdict after finding that the district court had not properly instructed the jury on royalty rates and Ericsson’s licensing promises, and (b) ruling that no reasonable jury could have found the ‘625 Patent infringed. Accordingly, the Company has reversed the accruals related to this case. Ericsson appealed the PTAB’s Broadcom IPR decision to the Federal Circuit and also requested that the PTAB reconsider its decision. The PTAB denied Ericsson’s request for reconsideration. On appeal to the Federal Circuit, Ericsson argued that the PTAB’s determination that Broadcom had timely filed its IPR petitions was improper and that the PTAB should not have invalidated the claims of the '625 Patent, the '568 Patent, and '215 Patent. The Federal Circuit upheld the invalidity of the patents’ claims, as previously determined by the PTAB, and ruled that Ericsson could not appeal the timeliness of Broadcom’s IPR petitions. Ericsson petitioned the Federal Circuit for an en banc rehearing of the Federal Circuit's panel decision that Broadcom was timely in bringing its IPRs, and the Federal Circuit agreed to the en banc rehearing. On January 8, 2018, the Federal Circuit sitting en banc ruled that the timeliness of Broadcom’s IPR petitions was an appealable issue. The case will now go back to the original Federal Circuit panel to decide what to do - if there are enough facts on the record, the panel could decide the timeliness issue outright, or send the case back to the PTAB to conduct discovery on whether Broadcom should be time barred. The present status of the case continues to be that the Company does not infringe any valid Ericsson patent. Agenzia Entrate Provincial Revenue Office 1 of Milan v. NETGEAR International, Inc. In November 2012, the Italian tax police began a comprehensive tax audit of NETGEAR International, Inc.’s Italian Branch. The scope of the audit initially was from 2004 through 2011 and was subsequently expanded to include 2012 . The tax audit encompassed Corporate Income Tax (IRES), Regional Business Tax (IRAP) and Value-Added Tax (VAT). In December 2013, December 2014, August 2015, and December 2015 an assessment was issued by Inland Revenue Agency, Provincial Head Office No. 1 of Milan-Auditing Department (Milan Tax Office) for the 2004 tax year, the 2005 through 2007 tax years, the 2008 through 2010 tax years, and the 2011 through 2012 tax years, respectively. In May 2014, the Company filed with the Provincial Tax Court of Milan an appeal brief, including a Request for Hearing in Open Court and Request for Suspension of the Tax Assessment for the 2004 year. The hearing was held and decision was issued on December 19, 2014. The Tax Court decided in favor of the Company and nullified the assessment by the Inland Revenue Agency for 2004. The Inland Revenue Agency appealed the decision of the Tax Court on June 12, 2015. The Company filed its counter appeal with respect to the 2004 year during September 2015. On February 26, 2016, the Regional Tax Court conducted the appeals hearing for the 2004 year, ruling in favor of the Company. On June 13, 2016, the Inland Revenue Agency appealed the decision to the Supreme Court. The Company filed a counter appeal on July 23, 2016 and is awaiting scheduling of the hearing. In June 2015, the Company filed with the Provincial Tax Court of Milan an appeal brief including a Request for Hearing in Open Court and Request for Suspension of the Tax Assessment for the 2005 through 2006 tax years. The hearing for suspension was held and the Request for Suspension of payment was granted. The hearing for the validity of the tax assessment for 2005 and 2006 was held in December 2015 with the Provincial Tax Court issuing its decision in favor of the Company. The Inland Revenue Agency filed its appeal with the Regional Tax Court. The Company filed its counter brief on September 30, 2016 and the hearing was held on March 22, 2017. A decision favorable to the Company was issued by the Court on July 5, 2017. The Italian Tax Authority has appealed the decision to the Supreme Court and Netgear has responded with a counter appeal brief on December 3, 2017. The hearing for the validity of the tax assessment for 2007 was held on March 10, 2016 with the Provincial Tax Court who issued its decision in favor of the Company on April 7, 2016. The Inland Revenue Agency has filed its appeal to the Regional Tax Court and the Company has submitted its counter brief. The hearing was held on November 17, 2017. Netgear is waiting on a decision to be issued. With respect to 2008 through 2010, the Company filed its appeal briefs with the Provincial Tax Court in October 2015 and the hearing for the validity of the tax assessments was held on April 21, 2016. A decision favorable to the Company was issued on May 12, 2016. The Inland Revenue Agency has filed its appeal to the Regional Tax Court. The Company filed its counter brief on February 5, 2017 and awaits the scheduling of the hearing. With respect to 2011 through 2012, the Company has filed its appeal brief on February 26, 2016 with the Provincial Tax Court to contest the relevant tax assessments. The hearing for suspension was held and the Request for Suspension of payment was granted. On October 13, 2016, the Company filed its final brief with the Provincial Tax Court. The hearing was held on October 24, 2016 and a decision favorable to the Company was issued by the Court. The Inland Revenue Agency appealed the decision before the Regional Tax Court on April 19, 2017. The Company filed its counter brief on June 16, 2017 and awaits the scheduling of the hearing. With regard to all tax years, it is too early to reasonably estimate any financial impact to the Company resulting from this litigation matter. Via Vadis v. NETGEAR, Inc. On August 22, 2014, the Company was sued by Via Vadis, LLC and AC Technologies, S.A. (“Via Vadis”), in the Western District of Texas. The complaint alleges that the Company’s ReadyNAS and Stora products “with built-in BitTorrent software" allegedly infringe three related patents of Via Vadis (U.S. Patent Nos. 7,904,680, RE40, 521, and 8,656,125). Via Vadis filed similar complaints against Belkin, Buffalo, Blizzard, D-Link, and Amazon. By referring to “built-in BitTorrent software,” the Company believes that the complaint is referring to the BitTorrent Sync application, which was released by BitTorrent Inc. in spring of 2014. At a high-level, the application allows file synchronization across multiple devices by storing the underlying files on multiple local devices, rather than on a centralized server. The Company’s ReadyNAS products do not include BitTorrent software when sold. The BitTorrent application is provided as one of a multitude of potential download options, but the software itself is not included on the Company’s devices when shipped. Therefore, the only viable allegation at this point is an indirect infringement allegation. On November 10, 2014, the Company answered the complaint denying that it infringes the patents in suit and also asserting the affirmative defenses that the patents in suit are invalid and barred by the equitable doctrines of laches, waiver, and/or estoppel. On February 6, 2015, the Company filed its motion to transfer venue from the Western District of Texas to the Northern District of California with the Court; on February 13, 2015, Via Vadis filed its opposition to the Company’s motion to transfer; and on February 20, 2015, the Company filed its reply brief on its motion to transfer. In early April 2015, the Company received the plaintiff’s infringement contentions, and on June 12, 2015, the defendants served invalidity contentions. On July 30, 2015, the Court granted the Company’s motion to transfer venue to the Northern District of California. In addition, the Company learned that Amazon and Blizzard filed petitions for the inter partes reviews (“IPRs”) for the patents in suit. On October 30, 2015, the Company and Via Vadis filed a joint stipulation requesting that the Court vacate all deadlines and enter a stay of all proceedings in the case pending the Patent Trial and Appeal Board’s final non-appealable decision on the IPRs initiated by Amazon and Blizzard. On November 2, 2015, the Court granted the requested stay. On March 8, 2016, the Patent Trial and Appeal Board issued written decisions instituting the IPRs jointly filed by Amazon and Blizzard. In early March of 2017, The Patent Trial and Appeal Board (PTAB) issued various decisions regarding Amazon’s and Blizzard’s IPRs of the patents in suit. One of the IPRs of the '125 patent resulted in a finding by the PTAB that Amazon and Blizzard had had failed to show invalidity. The second IPR on the '125 patent, however, resulted in cancellation of all claims asserted in Via Vadis’s suit against the Company. Reissue '521 did not have any claims found invalid by the PTAB, and some dependent claims of the '680 patent survived the IPRs, and some claims of the '680 patent were canceled. The Northern District of California case against the Company remains stayed. It is too early to reasonably estimate any financial impact to the Company resulting from this litigation matter. Chrimar Systems, Inc. v NETGEAR, Inc. On July 1, 2015, the Company was sued by a non-practicing entity named Chrimar Systems, Inc., doing business as CMS Technologies and Chrimar Holding Company, LLC (collectively, “CMS”), in the Eastern District of Texas for allegedly infringing four patents-U.S. Patent Nos. 8,155,012 (the “'012 Patent”), entitled “System and method for adapting a piece of terminal equipment”; 8,942,107 (the “'107 Patent”), entitled “Piece of ethernet terminal equipment”; 8,902,760 (the “'760 Patent”), entitled “Network system and optional tethers”; and 9,019,838 (the “'838 Patent”), entitled “Central piece of network equipment” (collectively “patents-in-suit”). The patents-in-suit relate to using or embedding an electrical DC current or signal into an existing Ethernet communication link in order to transmit additional data about the devices on the communication link, and the specifications for the patents are identical. It appears that CMS has approximately 40 active cases in the Eastern District of Texas, as well as some cases in the Northern District of California on the patents-in-suit and the parent patent to the patents-in-suit. The Company answered the complaint on September 15, 2015. On November 24, 2015, CMS served its infringement contentions on the Company, and CMS is generally attempting to assert that the patents in suit cover the Power over Ethernet standard (802.3af and 802.3at) used by certain of the Company's products. On December 3, 2015, the Company filed with the Court a motion to transfer venue to the District Court for the Northern District of California and their memorandum of law in support thereof. On December 23, 2015, CMS filed its response to the Company’s motion to transfer, and, on January 8, 2016, the Company filed its reply brief in support of its motion to transfer venue. On January 15, 2016, the Court granted the Company’s motion to transfer venue to the District Court for the Northern District of California. The initial case management conference in the Northern District of California occurred on May 13, 2016, and on August 19, 2016, the parties exchanged preliminary claim constructions and extrinsic evidence. On August 26, 2016, the Company and three defendants in other Northern District of California CMS cases (Juniper Networks, Inc., Ruckus Wireless, Inc., and Fortinet, Inc.) submitted motions to stay their cases. The defendants in part argued that stays were appropriate pending the resolution of the currently-pending IPRs of the patents-in-suit before the Patent Trial and Appeal Board (PTAB), including four IPR Petitions filed by Juniper. On September 9, 2016, CMS submitted its opposition to the motions to stay the cases. On September 26, 2016, the Court ordered the cases stayed in their entirety, until the PTAB reaches institution decisions with respect to Juniper’s four pending IPR petitions. Juniper’s four IPR petitions were instituted by the PTAB in January 2017, and the Company subsequently moved to join the IPR petitions as an “understudy” to Juniper, only assuming a more active role in the petitions in the event Juniper settles with CMS. For all four patents in suit against the Company, the PTAB ordered that (a) the Petitioners’ (the Company, Ruckus, and Brocade) Motion for Joinder to the Juniper IPRs is granted; (b) the Petitioners IPRs are instituted on the same grounds as in the Juniper ‘IPRs and Petitioners are joined with the Juniper IPRs; and (c) all further filings by Petitioners in the joined proceedings will be in the Juniper IPRs. On December 21, 2017, the PTAB issued the first of the four Final Written Decisions in the IPRs filed by the Company on the patents in suit, ruling that the claims of the ‘107 Patent asserted by Chrimar were invalid. This was quickly followed by two more Final Written Decisions -- on January 3, 2018, the ’838 patent’s asserted claims were ruled invalid, and on January 23, 2018 the ‘012 patent’s asserted claims were ruled invalid. Chrimar has 30 days from each Final Written Decision to seek a rehearing at the PTAB and 63 days from each to file an appeal. The PTAB has yet to rule on the ‘760 patent, and the Company expects that ruling in a few months. The Northern District of California CMS cases remain stayed in their entirety by the Court. It is too early to reasonably estimate any financial impact to the Company resulting from this litigation matter. Tessera v. NETGEAR, Inc. On May 23, 2016, Tessera Technologies, Inc., Tessera, Inc., and Invensas Corp. (collectively, “Tessera”) filed a complaint requesting that the U.S. International Trade Commission (“Commission”) commence an investigation pursuant to Section 337 by reason of alleged infringement of certain patent claims by the Company and other respondents. On June 20, 2016, the Commission issued the related Notice of Investigation, and the Investigation was instituted on June 24, 2016. The Tessera complaint alleges that the following respondents unlawfully import into the U.S., sell for importation, and/or sell within the U.S. after importation certain semiconductor devices, semiconductor device packages, and products containing the same that infringe one or more claims of U.S. Patent Nos. 6,856,007 (the ‘007 patent), 6,849,946 (the ‘946 patent), and 6,133,136 (the ‘136 patent) (collectively, the “asserted patents”): Broadcom Limited of Singapore; Broadcom Corp. of Irvine, California; Avago Technologies Limited of Singapore; Avago Technologies U.S. Inc. of San Jose, California; Arista Networks, Inc. of Santa Clara, California; ARRIS International plc of Suwanee, Georgia; ARRIS Group, Inc. of Suwanee, Georgia; ARRIS Technology, Inc. of Horsham, Pennsylvania; ARRIS Enterprises LLC of Suwanee, Georgia; ARRIS Solutions, Inc. of Suwanee, Georgia; Pace Ltd. (formerly Pace plc) of England; Pace Americas, LLC of Boca Raton, Florida; Pace USA, LLC of Boca Raton, Florida; ASUSTeK Computer Inc. of Taiwan; ASUS Computer International of Fremont, California; Comcast Cable Communications, LLC of Philadelphia, Pennsylvania; Comcast Cable Communications Management, LLC of Philadelphia, Pennsylvania; Comcast Business Communications, LLC of Philadelphia, Pennsylvania; HTC Corp. of Taiwan; HTC America, Inc. of Bellevue, Washington; Technicolor S.A. of France; Technicolor USA, Inc. of Indianapolis, Indiana; Technicolor Connected Home USA LLC of Indianapolis, Indiana; and the Company. According to the complaint, the asserted patents generally relate to semiconductor packaging technology. In particular, the ‘007 patent relates to a compact and economical semiconductor chip assembly that includes a packaged semiconductor chip, a chip carrier with a metallic thermal conductor, and a circuit panel with a thermal conductor mounting. The ‘946 patent relates to a semiconductor layout configuration and method that results in a more efficient planarization process for a semiconductor chip. Lastly, the ‘136 patent relates to a structure for metal interconnects used in semiconductor packaging. In the complaint, Tessera states that the respondents import and sell products that infringe the asserted patents. In particular, the complaint refers to multiple categories of accused semiconductor products associated with Broadcom and asserts that the remaining respondents import and sell products that contain these infringing Broadcom semiconductor products. Tessera requested that the Commission issue a permanent limited exclusion order and a permanent cease and desist order directed at the respondents and related entities. Concurrently with the filing of the instant ITC complaint, Tessera also filed a complaint against Broadcom Corp. in the U.S. District Court for the District of Delaware alleging infringement of the asserted patents. The Company has not been sued in Delaware or any other jurisdiction other than the ITC. The Company stipulated to certain facts regarding its importation and inventory of Broadcom-based products in return for various relief from discovery, such as reduced depositions and discovery responses in the ITC case. As per the ITC schedule, the parties exchanged direct exhibits and witness statements on February 20, 2017; rebuttal exhibits and witness statements on March 3, 2017; pre-trial briefs on March 9, 2017; and Motions in limine on March 13, 2017. The 5-day evidentiary hearing before the ITC Administrative Law Judge (“ALJ”) commenced on March 27, 2017 and ended on March 31, 2017. The ITC rules provide for possible closing arguments before the ALJ after post-hearing briefing, which were submitted on April 19, 2017. Reply post-trial briefs were submitted on May 1, 2017. On June 30, 2017 the ALJ released the Initial Determination based on the 5-day evidentiary hearing and related briefing. For the ‘946 patent, the ALJ found the four (4) claims infringed and valid, and that there is a domestic industry. For the ‘136 patent, the ALJ found the nine (9) claims were infringed and valid, but no domestic industry. For the ‘007 patent, the ALJ found (1) one claim infringed by the Company and Technicolor, claims 13 and 16 not infringed, all three asserted claims invalid, including the one claim found to be infringed, and no domestic industry. In summary, the ALJ found a violation of section 337 of the Tariff Act due to infringement by the Company and other respondents of the ‘946 patent, but not as to the ‘136 patent or ‘007 patent. There is no violation with respect to the ‘136 patent even though it was found to be infringed and valid by the ALJ because Tessera could not show a domestic industry. On August 2, 2017, the Company and other respondents filed their Public Interest Statements with the ITC and also submitted briefing to the ITC indicating why the adverse findings for the respondents of the Initial Determination should be reviewed. On August 10, 2017, the Commission extended the target date for the investigation from October 30, 2017 to December 1, 2017 and also extended the date for determination of whether to review the Initial Determination from August 31, 2017 to September 29, 2017, and, on that date, the Commission determined to review essentially all issues on the ’946 and ’136 patents, and none of the issues for the ’007 patent. Thus, the asserted claims of the ‘007 patent have been ruled invalid, and the ‘007 patent is out of the investigation. On October 13, 2017, the respondents and Tessera submitted their Opening Submissions to the Commission. These Opening Submissions included opening briefs on infringement and invalidity topics, opening briefs on remedy, opening briefs on the public interest, opening briefs on bonding, and public interest submissions by the public. The Reply Submissions to the opening briefs were submitted on October 23, 2017. On December 12, 2017, Tessera and Broadcom reached a verbal agreement to settle all the litigation matters between the two companies. As part of the settlement, Broadcom received a license for itself and its customers, including the Company, to Tessera’s portfolio of semiconductor manufacturing patents, including the three patents in the ITC action. On December 15, 2017, the ITC respondents, including the Company, entered into a written settlement agreement with Tessera, whereby dismissal of the ITC action was agreed upon. As part of the settlement agreement, the parties admitted no wrongdoing or violation of law. On December 19, 2017, the ITC granted the parties’ joint motion to terminate the ITC action. This litigation matter did not have a material financial impact on the Company. Realtime Data v. NETGEAR, Inc. On February 27, 2017, the Company was sued in the Eastern District of Texas by Realtime Data LLC (“Realtime”), which claims to do business as “Ixo.” The complaint includes four (4) asserted patents: • US 9,054,728, Data compression systems and methods; • US 7,415,530, System and methods for accelerated data storage and retrieval; • US 9,116,908, System and methods for accelerated data storage and retrieval; and • US 8,717,204, Methods for encoding and decoding data The accused products specifically include the Company’s “ReadyDATA RD5200, RDD516, ReadyRECOVER” products. Generally, the complaint alleges that the asserted patents are directed to various compression / decompression algorithms and systems and is directed at the Company’s ReadyDATA, ReadyNAS, and ReadyRECOVER products. Realtime has filed several patent suits over the last few years and the asserted patents have gone through various rounds of litigation and IPRs. In this particular tranche of Realtime lawsuits, Realtime also sued Array Networks, Barracuda Networks, Carbonite, Circadence, Comm Vault, Exinda and Snacor. The Company received an extension until May 8, 2017 to answer the complaint and answered the complaint on that date. On August 15, 2017, the Company filed its motion to transfer venue for convenience from the Eastern District of Texas to the Northern District of California. On September 19, 2017, the |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Stock Repurchases On October 21, 2008, October 17, 2014, July 21, 2015 and April 25, 2017, the Company’s Board of Directors authorized management to repurchase up to 6.0 million , 3.0 million , 3.0 million and 3.0 million shares of the Company’s outstanding common stock, respectively, which, at the time of authorization, were incremental to the remaining shares under the share repurchase programs. Under the authorizations, the Company may repurchase shares of its common stock, depending on market conditions, in the open market or through privately negotiated transactions. The timing and actual number of shares subject to repurchase are at the discretion of management and are contingent on a number of factors, such as levels of cash generation from operations, cash requirements for acquisitions and the price of the Company’s common stock. As of December 31, 2017 , 2.0 million shares remained authorized for repurchase under the repurchase program. The Company repurchased, reported based on trade date, approximately 2.4 million shares of common stock at a cost of $113.2 million during the year ended December 31, 2017 . During the years ended December 31, 2016 and 2015 , the Company repurchased and retired, reported based on trade date, approximately 0.9 million shares of common stock at a cost of $38.3 million and approximately 3.8 million shares of common stock at a cost of $117.7 million , respectively. The Company repurchased, as reported based on trade date, approximately 135,000 shares of common stock at a cost of $6.4 million , to help administratively facilitate the withholding and subsequent remittance of personal income and payroll taxes for individuals receiving RSUs during the year ended December 31, 2017 . Similarly, during the years ended December 31, 2016 and 2015 , the Company repurchased approximately 105,000 shares of common stock at a cost of $4.7 million and 85,000 shares of common stock at a cost of $2.6 million , respectively, to help facilitate tax withholding for RSUs. These shares were retired upon repurchase. The Company’s policy related to repurchases of its common stock is to charge the excess of cost over par value to retained earnings. All repurchases were made in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended. Accumulated Other Comprehensive Income (Loss) The following table sets forth the changes in accumulated other comprehensive income ("AOCI") by component during the years ended December 31, 2017 , 2016 and 2015 : Unrealized gains (losses) on available-for-sale securities Unrealized gains (losses) on derivatives Estimated tax benefit (provision) Total (In thousands) Balance as of December 31, 2014 $ (8 ) $ 43 $ 3 $ 38 Other comprehensive income (loss) before reclassifications (56 ) 453 21 418 Less: Amount reclassified from accumulated other comprehensive income — 453 — 453 Net current period other comprehensive income (loss) (56 ) — 21 (35 ) Balance as of December 31, 2015 $ (64 ) $ 43 $ 24 $ 3 Other comprehensive income (loss) before reclassifications 33 3,007 (572 ) 2,468 Less: Amount reclassified from accumulated other comprehensive income — 820 (287 ) 533 Net current period other comprehensive income (loss) 33 2,187 (285 ) 1,935 Balance as of December 31, 2016 $ (31 ) $ 2,230 $ (261 ) $ 1,938 Other comprehensive income (loss) before reclassifications (115 ) (10,692 ) 3,062 (7,745 ) Less: Amount reclassified from accumulated other comprehensive income — (7,624 ) 2,668 (4,956 ) Net current period other comprehensive income (loss) (115 ) (3,068 ) 394 (2,789 ) Balance as of December 31, 2017 $ (146 ) $ (838 ) $ 133 $ (851 ) The following tables provide details about significant amounts reclassified out of each component of accumulated other comprehensive income for the years ended December 31, 2017 , 2016 and 2015 : Year Ended December 31, Details about Accumulated Other Comprehensive Income Components 2017 2016 2015 Amount Reclassified from AOCI Affected Line Item in the Statements of Operations Amount Reclassified from AOCI Affected Line Item in the Statements of Operations Amount Reclassified from AOCI Affected Line Item in the Statements of Operations (In thousands) Gains (losses) on cash flow hedge: Foreign currency forward contracts $ (8,693 ) Net revenue $ 1,100 Net revenue $ 462 Net revenue Foreign currency forward contracts 18 Cost of revenue (6 ) Cost of revenue 6 Cost of revenue Foreign currency forward contracts 1,051 Operating expenses (274 ) Operating expenses (15 ) Operating expenses (7,624 ) Total before tax 820 Total before tax 453 Total before tax 2,668 Tax impact (287 ) Tax impact — Tax impact (1) $ (4,956 ) Total, net of tax $ 533 Total, net of tax $ 453 Total, net of tax _________________________ (1) Under the Company's 2015 tax structure, all hedging gains and losses from derivative contracts were ultimately borne by a legal entity in a jurisdiction with no income tax. |
Employee Benefit Plans (Notes)
Employee Benefit Plans (Notes) | 12 Months Ended |
Dec. 31, 2017 | |
Employee Benefits and Share-based Compensation, Noncash [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans 2003 Stock Plan In April 2003, the Company adopted the 2003 Stock Plan (the “2003 Plan”). The 2003 Plan provided for the granting of stock options to employees and consultants of the Company. During the second fiscal quarter of 2013, the Company's 2003 Stock Plan expired. No further equity awards can be granted under the 2003 Plan. Outstanding awards under the 2003 Stock Plan remain subject to the terms and conditions of the 2003 plan. 2006 Long Term Incentive Plan In April 2006, the Company adopted the 2006 Long Term Incentive Plan (the “2006 Plan”). The 2006 Plan provides for the granting of stock options, stock appreciation rights, restricted stock, performance awards and other stock awards, to eligible directors, employees and consultants of the Company. The Company's 2006 Plan expired on April 13, 2016 by its terms. No further equity awards can be granted under the 2006 Plan. Outstanding awards under the 2006 Stock Plan remain subject to the terms and conditions of the 2006 plan. 2016 Equity Incentive Plan In April 2016, the Company's Board of Directors adopted the 2016 Equity Incentive Plan (the "2016 Plan") which was approved by the Company's stockholders at the 2016 Annual Meeting of Stockholders on June 3, 2016. The 2016 Plan provides for the granting of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares and performance units to eligible directors, employees and consultants of the Company. Award vesting periods for this plan are generally four years . The maximum aggregate number of shares that may be issued under the 2016 Plan is 2.5 million Shares, plus (i) any shares that were available for grant under the Company’s 2006 Plan as of immediately prior to the 2006 Plan's expiration by its terms, which was 699,827 shares, plus (ii) any shares granted under the 2006 Plan that expire, are forfeited to or repurchased by the Company. As of December 31, 2017 , approximately 1.9 million shares were reserved for future grants under the 2016 Plan. Options granted under the 2016 Plan may be either incentive stock options or nonstatutory stock options. Incentive stock options (“ISO”) may be granted only to Company employees (including officers and directors who are also employees). Nonstatutory stock options (“NSO”) may be granted to Company employees, directors and consultants. Options may be granted for periods of up to ten years and at prices no less than the estimated fair value of the common stock on the date of grant. In addition, the exercise price of an ISO granted to a 10% shareholder shall not be less than 110% of the estimated fair value of the shares on the date of grant. Options granted under the 2016 Plan generally vest over four years, the first tranche at the end of twelve months and the remaining shares underlying the option vesting monthly over the remaining three years . Stock Appreciation Rights may be granted under the 2016 Plan subject to the terms specified by the plan administrator, provided that the term of any such right may not exceed ten years from the date of grant. The exercise price may not be less than the fair market value of the Company’s common stock on the date of grant. Restricted stock awards may be granted under the 2016 Plan subject to the terms specified by the plan administrator. The period over which any restricted award may fully vest is generally no less than three years . Restricted stock awards are nonvested stock awards that may include grants of restricted stock or grants of restricted stock units. Restricted stock awards are rights to acquire or purchase shares that generally are subject to transferability and forfeitability restrictions for a specified period. Restricted stock has the same voting rights as other common stock and is considered to be currently issued and outstanding. Restricted stock units do not have the voting rights of common stock, and the shares underlying the restricted stock units are not considered issued and outstanding. The Company expenses the cost of the restricted stock awards, which is determined to be the fair market value of the shares at the date of grant, ratably over the period during which the restrictions lapse. Performance units and performance shares are awards that result in a payment to a participant only if specified performance objectives or other vesting provisions are achieved during a specified performance period. Each performance unit will have an initial value established by the Administrator on or before the grant date. Each performance share will have an initial value equal to the fair market value of a share on the grant date. The plan administrator will determine the number of performance awards that will be granted and will establish the performance goals and other conditions for payment of such performance awards. The period of measuring the achievement of performance goals will be specified by an award agreement. Other stock or cash awards may be granted under the 2016 Plan subject to the terms specified by the plan administrator. Any shares subject to restricted stock, restricted stock units, performance units, or performance shares awarded under the 2016 Plan will be counted against the shares available for issuance under the 2016 Plan as one and fifty-eight hundredths (1.58) shares for every one share subject to such awards. Any shares of common stock subject to an award that is forfeited, settled in cash, expires or is otherwise settled without the issuance of shares shall again be available for awards under the 2016 Plan. Additionally, any shares that are tendered by a participant of the 2016 Plan or retained by the Company as full or partial payment to the Company for the purchase of an award or to satisfy tax withholding obligations in connection with an award shall no longer again be made available for issuance under the 2016 Plan. Employee Stock Purchase Plan The Company sponsors an Employee Stock Purchase Plan (the “ESPP”), pursuant to which eligible employees may contribute up to 10% of compensation, subject to certain income limits, to purchase shares of the Company’s common stock. Prior to February 16, 2016, employees could purchase stock semi-annually at a price equal to 85% of the fair market value on the purchase date. Beginning February 16, 2016, the terms of the plan include a look-back feature that enables employees to purchase stock semi-annually at a price equal to 85% of the lesser of the fair market value at the beginning of the offering period or the purchase date. The duration of each offering period is generally six-months. In April 2016, the Company approved an amendment to the plan to increase the number of shares of common stock authorized for sale under the plan by 1.0 million shares to a total of 2.0 million shares. For the years ended December 31, 2017 , 2016 , and 2015 , the Company recognized ESPP compensation expense of $1.5 million , $1.3 million and $0.5 million , respectively. Employees purchased 111,000 shares of common stock at an average exercise price of $43.00 in fiscal 2017 . As of December 31, 2017 , 0.9 million shares were reserved for future issuance under the ESPP. Option Activity Stock option activity during the year ended December 31, 2017 was as follows: Number of Shares Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (In thousands) (In dollars) (In years) (In thousands) Outstanding as of December 31, 2016 1,884 $ 31.14 Granted 348 43.07 Exercised (352 ) 27.23 Expired (1 ) 31.70 Outstanding as of December 31, 2017 1,879 $ 34.08 6.13 $ 46,346 As of December 31, 2017 Vested and expected to vest 1,879 $ 34.08 6.13 $ 46,346 Exercisable Options 1,205 $ 30.94 4.72 $ 33,512 The aggregate intrinsic values in the table above represent the total pre-tax intrinsic values (the difference between the Company’s closing stock price on the last trading day of 2017 and the exercise price, multiplied by the number of shares underlying the in-the-money options) that would have been received by the option holders had all option holders exercised their options on December 31, 2017 . This amount changes based on the fair market value of the Company’s stock. Total intrinsic value of options exercised for the year ended December 31, 2017 , 2016 , and 2015 was $7.7 million , $14.5 million and $11.4 million , respectively. The total fair value of options vested during the years ended December 31, 2017 , 2016 , and 2015 was $3.8 million , $4.2 million and $6.5 million , respectively. The following table summarizes significant ranges of outstanding and exercisable stock options as of December 31, 2017 : Options Outstanding Options Exercisable Range of Exercise Prices Shares Outstanding Weighted- Average Remaining Contractual Life Weighted- Average Exercise Price Per Share Shares Exercisable Weighted- Average Exercise Price Per Share (In thousands) (In years) (In dollars) (In thousands) (In dollars) $10.69 - $31.28 435 4.55 $ 24.55 334 $ 22.50 $31.31 - $32.54 443 5.50 32.19 410 32.16 $32.55 - $39.53 651 5.84 36.93 459 35.93 $40.01 - $42.70 330 9.39 42.68 2 40.01 $49.20 - $49.20 20 9.80 49.20 — — $10.69 - $49.20 1,879 6.13 $ 34.08 1,205 $ 30.94 RSU Activity RSU activity during the year ended December 31, 2017 was as follows: Number of Shares Weighted Average Grant Date Fair Value Per Share Weighted Average Remaining Contractual Term Aggregate (In thousands) (In dollars) (In years) (In thousands) Outstanding as of December 31, 2016 996 $ 36.22 Granted 618 49.45 Vested (412 ) 35.46 Cancelled (72 ) 44.16 Outstanding as of December 31, 2017 1,130 $ 43.22 1.43 $ 66,390 Total intrinsic value of RSUs, or the release date fair value of RSUs, vested during the years ended December 31, 2017 , 2016 and 2015 was $19.5 million , $15.4 million and $8.9 million , respectively. The total fair value or RSUs, or the grant date fair value of RSUs, vested during the years ended December 31, 2017 , 2016 and 2015 was $14.6 million , $10.8 million and $8.8 million , respectively. Valuation and Expense Information The Company measures stock-based compensation at the grant date based on the estimated fair value of the award. Estimated compensation cost relating to RSUs is based on the closing fair market value of the Company’s common stock on the date of grant. Prior to February 16, 2016, the fair value of ESPP is based on the 15% discount at purchase, since the price of the shares is determined at the purchase date. The fair value of options granted and the shares offered under the ESPP commencing February 16, 2016 is estimated on the date of grant using a Black-Scholes-Merton option valuation model that uses the assumptions noted in the following table. The estimated expected term of options granted is derived from historical data on employee exercise and post-vesting employment termination behavior. The risk free interest rate of options granted and the shares offered under the ESPP is based on the implied yield currently available on U.S. Treasury securities with a remaining term commensurate with the estimated expected term. Expected volatility of options granted and the shares offered under the ESPP is based on historical volatility over the most recent period commensurate with the estimated expected term. The following table sets forth the weighted-average assumptions used to estimate the fair value option grants during the years ended December 31, 2017 , 2016 and 2015 and purchase rights granted under the ESPP commencing February 16, 2016 during the years ended December 31, 2017 and 2016 : Year Ended December 31, 2017 2016 2015 2017 2016 2015 Stock Options ESPP Expected life (in years) 4.4 4.4 4.5 0.5 0.5 N/A Risk-free interest rate 1.66 % 1.28 % 1.44 % 0.93 % 0.43 % N/A Expected volatility 31.6 % 35.4 % 39.3 % 29.7 % 38.3 % N/A Dividend yield — — — — — N/A The weighted average estimated fair value of options granted during the years ended December 31, 2017 , 2016 and 2015 was $12.35 , $12.28 and $10.83 , respectively. The following table sets forth stock-based compensation expense resulting from stock options, restricted stock awards, and the Employee Stock Purchase Plan included in the Company’s consolidated statements of operations: Year Ended December 31, 2017 2016 2015 (In thousands) Cost of revenue $ 2,005 $ 1,740 $ 1,566 Research and development 4,927 4,075 3,451 Sales and marketing 5,959 5,065 5,022 General and administrative 9,256 8,069 6,786 Total $ 22,147 $ 18,949 $ 16,825 The Company recognizes these compensation costs on a straight-line basis over the requisite service period of the award, which is generally the award vesting term of four years . Upon the adoption of ASU 2016-09, the Company elected to account for forfeitures as they occur, rather than estimating expected forfeitures. Refer to recently adopted accounting pronouncement under Note 1, The Company and Summary of Significant Accounting Policies, for a further discussion of the impact from the adoption of ASU 2016-09. Total stock-based compensation cost capitalized in inventory was less than $0.5 million in the years ended December 31, 2017 , 2016 and 2015 . As of December 31, 2017 , $7.4 million of unrecognized compensation cost related to stock options is expected to be recognized over a weighted-average period of 2.6 years. As of December 31, 2017 , $37.2 million of unrecognized compensation cost related to unvested RSUs is expected to be recognized over a weighted-average period of 2.5 years. 401(k) Plan In April 2000, the Company adopted the NETGEAR 401(k) Plan to which employees may contribute up to 100% of salary subject to the legal maximum. In the first fiscal quarter of 2012, the Company began matching 50% of contributions for employees that remain active with the Company through the end of the fiscal year, up to a maximum of $6,000 in employee contributions. During the years ended December 31, 2017 , 2016 and 2015 the Company recognized $1.0 million , $1.0 million and $0.9 million , respectively, in expenses related to the 401(k) match. |
Segment Information (Notes)
Segment Information (Notes) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Information, Operations By Geographic Area And Customer Concentration | Segment Information Operating segments are components of an enterprise about which separate financial information is available and is regularly evaluated by management, namely the Chief Operating Decision Maker (“CODM”) of an organization, in order to determine operating and resource allocation decisions. By this definition, the Company has identified its CEO as the CODM. In the first fiscal quarter of 2017, the Company's CODM requested changes to the information that he regularly reviews for purposes of allocating resources and assessing performance. The Company reorganized its operating segment structure, resulting in a change to its reportable segments. The former Service Provider segment was integrated into the current segments which are organized by product groups. Beginning with fiscal year 2017, the Company operates and reports in three segments: Arlo, Connected Home, and Small and Medium Business ("SMB"): • Arlo: Focused on intelligent internet-connected products for consumers and businesses that provide security and safety; • Connected Home: Focused on consumers and consists of high-performance, dependable and easy-to-use LTE and WiFi internet networking solutions; and • SMB: Focused on small and medium-sized businesses and consists of business networking, storage and security solutions that bring enterprise-class functionality to small and medium-sized businesses at an affordable price. The Company believes that this structure reflects its current operational and financial management, and provides the best structure for the Company to focus on growth opportunities while maintaining financial discipline. Each segment contains leadership focused on the product development efforts, both from a product marketing and engineering standpoint, to service the unique needs of their customers. The results of the reportable segments are derived directly from the Company’s management reporting system. The results are based on the Company’s method of internal reporting and are not necessarily in conformity with accounting principles generally accepted in the United States. Management measures the performance of each segment based on several metrics, including contribution income. Segment contribution income includes all product line segment revenues less the related cost of sales, research and development and sales and marketing costs. Contribution income is used, in part, to evaluate the performance of, and allocate resources to, each of the segments. Certain operating expenses are not allocated to segments because they are separately managed at the corporate level. These unallocated indirect costs include corporate costs, such as corporate research and development, corporate marketing expense and general and administrative costs, amortization of intangibles, stock-based compensation expense, restructuring and other charges, losses on inventory commitments due to restructuring, litigation reserves, net, interest income and other income (expense), net. The CODM does not evaluate operating segments using discrete asset information. Financial information for each reportable segment and a reconciliation of segment contribution income to income before income taxes is as follows : Year Ended December 31, 2017 2016 * 2015 * (In thousands, except percentage data) Net revenue: Arlo $ 378,413 $ 188,469 $ 91,636 Connected Home 762,069 844,818 937,215 SMB 266,438 295,011 271,844 Total net revenue $ 1,406,920 $ 1,328,298 $ 1,300,695 Contribution income (loss): Arlo $ 29,591 $ (5,218 ) $ (126 ) Arlo contribution margin 7.8 % (2.8 )% (0.1 )% Connected Home 101,993 152,560 121,745 Connected Home contribution margin 13.4 % 18.1 % 13.0 % SMB 65,392 75,461 56,156 SMB contribution margin 24.5 % 25.6 % 20.7 % Total segment contribution income 196,976 222,803 177,775 Corporate and unallocated costs (75,382 ) (69,140 ) (54,501 ) Amortization of intangibles (1) (12,597 ) (16,733 ) (16,969 ) Stock-based compensation expense (22,147 ) (18,949 ) (16,825 ) Restructuring and other charges (97 ) (3,881 ) (6,398 ) Losses on inventory commitments due to restructuring — — (407 ) Litigation reserves, net (176 ) (73 ) 2,682 Interest income 2,113 1,163 295 Other income (expense), net 2,024 (121 ) (88 ) Income before income taxes $ 90,714 $ 115,069 $ 85,564 _________________________ (1) Amount excludes amortization expense related to patents within purchased intangibles in cost of revenue. * Prior year financial information for each reportable segment has been recast to conform to the current reportable segment structure effective on January 1, 2017. The following table shows net revenue from service provider customers within each of the reportable segments for the periods indicated: Year Ended December 31, 2017 2016 2015 (In thousands) Arlo $ 20,795 $ 19,758 $ 18,585 Connected Home 190,186 249,980 395,900 SMB 3,268 4,175 6,997 Total service provider net revenue $ 214,249 $ 273,913 $ 421,482 Operations by Geographic Area The Company conducts business across three geographic regions: Americas, Europe, Middle-East and Africa (“EMEA”) and Asia Pacific ("APAC"). Net revenue consists of gross product shipments and service revenue, less allowances for estimated sales returns for stock rotation and warranty, price protection, end-user customer rebates and other channel sales incentives deemed to be a reduction of net revenue per the authoritative guidance for revenue recognition, and net changes in deferred revenue. For reporting purposes revenue is attributed to each geographic region based on the location of the customer. The following table shows net revenue by geography for the years ended December 31, 2017 , 2016 and 2015 : Year Ended December 31, 2017 2016 2015 (In thousands) United States (U.S.) $ 927,952 $ 855,796 $ 779,361 Americas (excluding U.S.) 30,112 27,852 18,385 EMEA 253,885 245,405 321,714 APAC 194,971 199,245 181,235 Total net revenue $ 1,406,920 $ 1,328,298 $ 1,300,695 Long-lived assets by Geographic Area Long-lived assets include purchased intangibles, goodwill and property and equipment. The Company's property and equipment are located in the following geographic locations: As of December 31, 2017 December 31, 2016 December 31, 2015 (In thousands) United States $ 9,216 $ 9,542 $ 9,832 Canada 1,807 2,745 3,586 EMEA 141 210 468 China 6,803 5,219 6,562 APAC (excluding China) 2,693 1,757 1,936 Total property and equipment, net $ 20,660 $ 19,473 $ 22,384 Significant Customers Two customers, primarily within the Arlo and Connected Home segments, accounted for 19% and 14% of net revenue in the year ended December 31, 2017 , respectively. Two customers, primarily within the Arlo and Connected Home segments, accounted for 17% and 12% of net revenue in the year ended December 31, 2016, respectively. One customer, primarily within the Arlo and Connected Home segments, accounted for 15% of net revenue in the year ended December 31, 2015. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Of Financial Instruments | Fair Value Measurements The Company determines the fair values of its financial instruments based on 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. The classification of a financial asset or liability within the hierarchy is based upon the lowest level input that is significant to the fair value measurement. The fair value hierarchy prioritizes the inputs into three levels that may be used to measure fair value: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). The following tables summarize assets and liabilities measured at fair value on a recurring basis as of December 31, 2017 and 2016 : As of December 31, 2017 Total Quoted market prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) (In thousands) Assets: Cash equivalents: money-market funds $ 12,606 $ 12,606 $ — $ — Available-for-sale securities: U.S. treasuries (1) 124,670 124,670 — — Available-for-sale securities: certificates of deposit (1) 162 162 — — Trading securities: mutual funds (1) 2,094 2,094 — — Foreign currency forward contracts (2) 1,799 — 1,799 — Total assets measured at fair value $ 141,331 $ 139,532 $ 1,799 $ — Liabilities: Foreign currency forward contracts (3) $ 8,192 $ — $ 8,192 $ — Total liabilities measured at fair value $ 8,192 $ — $ 8,192 $ — _________________________ (1) Included in short-term investments on the Company's consolidated balance sheets. (2) Included in prepaid expenses and other current assets on the Company's consolidated balance sheets. (3) Included in other accrued liabilities on the Company's consolidated balance sheets. As of December 31, 2016 Total Quoted market prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) (In thousands) Assets: Cash equivalents: money-market funds $ 17,027 $ 17,027 $ — $ — Available-for-sale securities: U.S. treasuries (1) 123,838 123,838 — — Available-for-sale securities: certificates of deposit (1) 148 148 — — Trading securities: mutual funds (1) 1,528 1,528 — — Foreign currency forward contracts (2) 8,763 — 8,763 — Total assets measured at fair value $ 151,304 $ 142,541 $ 8,763 $ — Liabilities: Foreign currency forward contracts (3) $ 1,705 $ — $ 1,705 $ — Total liabilities measured at fair value $ 1,705 $ — $ 1,705 $ — _________________________ (1) Included in short-term investments on the Company's consolidated balance sheets. (2) Included in prepaid expenses and other current assets on the Company's consolidated balance sheets. (3) Included in other accrued liabilities on the Company's consolidated balance sheets. The Company's investments in cash equivalents and available-for-sale securities are classified within Level 1 of the fair value hierarchy because they are valued based on quoted market prices in active markets. The Company enters into foreign currency forward contracts with only those counterparties that have long-term credit ratings of A-/A3 or higher. The Company's foreign currency forward contracts are classified within Level 2 of the fair value hierarchy as they are valued using pricing models that take into account the contract terms as well as currency rates and counterparty credit rates. The Company verifies the reasonableness of these pricing models using observable market data for related inputs into such models. Additionally, the Company includes an adjustment for non-performance risk in the recognized measure of fair value of derivative instruments. As of December 31, 2017 and 2016 , the adjustment for non-performance risk did not have a material impact on the fair value of the Company's foreign currency forward contracts. The carrying value of non-financial assets and liabilities measured at fair value in the financial statements on a recurring basis, including accounts receivable and accounts payable, approximate fair value due to their short maturities. |
Restructuring and Other Charges
Restructuring and Other Charges (Notes) | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring Charges [Abstract] | |
Restructruring and Other Charges [Text Block] | Restructuring and Other Charges The Company accounts for its restructuring plans under the authoritative guidance for exit or disposal activities. The Company presents expenses related to restructuring and other charges as a separate line item in the consolidated statements of operations. Accrued restructuring and other charges are classified within other accrued liabilities in the consolidated balance sheets. No significant restructuring and other charges were recognized in fiscal 2017 and the last two quarters of fiscal 2016. Restructuring and other charges recognized in the second fiscal quarter of 2016 related primarily to severance as headcount reductions occurred within the former commercial segment. The headcount reductions were implemented in line with channel shift and changing buying behaviors being experienced for the former commercial business unit products. Restructuring and other charges recognized in the first fiscal quarter of 2016, and the first and second fiscal quarter of 2015 respectively related to actions to resize the former service provider segment and supporting functions. The actions were taken to match the reduced revenue outlook and to concentrate resources on LTE Advanced and long-term profitable accounts. Charges incurred in these periods primarily related to severance, other one-time termination benefits and other associated costs. Amounts attributable to lease contract termination charges will be paid over the remaining lease term until January 2022 . The following table provides a summary of accrued restructuring and other charges activity for the years ended December 31, 2017 , 2016 and 2015 : Employee termination charges Lease contract termination and other charges Total (In thousands) Balance as of December 31, 2014 $ 316 $ — $ 316 Additions (1) 4,689 1,257 5,946 Cash payments (4,992 ) (4 ) (4,996 ) Balance as of December 31, 2015 13 1,253 1,266 Additions (1) 3,128 629 3,757 Cash payments (2,941 ) (480 ) (3,421 ) Adjustments (194 ) — (194 ) Balance as of December 31, 2016 6 1,402 1,408 Additions — 97 97 Cash payments — (370 ) (370 ) Balance as of December 31, 2017 $ 6 $ 1,129 $ 1,135 _________________________ (1) Total restructuring and other charges recognized in the Company's consolidated statements of operations for the years ended December 31, 2016 and 2015 included non-cash charges and adjustments, net of $0.3 million and $0.5 million , respectively. These amounts have been excluded from the table above. |
Subsequent Event (Notes)
Subsequent Event (Notes) | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | Note 14. Subsequent Event On February 6, 2018, the Company announced that its Board of Directors has unanimously approved the pursuit of a separation of its Arlo business from NETGEAR. The separation is expected to be effected through an initial public offering (“IPO”) of newly issued shares of the common stock of Arlo Technologies, Inc. (“Arlo”), which will hold the Arlo business. The Company expects Arlo to issue less than 20% of its common stock in the IPO, which is expected to be completed in the second half of fiscal 2018, with NETGEAR to retain the remaining interest. The Company currently intends that, following the IPO, it will distribute the shares of Arlo common stock then held by NETGEAR to NETGEAR’s stockholders in a manner generally intended to qualify as tax-free to NETGEAR’s stockholders for U.S. federal income tax purposes. The Company also announced that it expects Matthew McRae to serve as Arlo’s Chief Executive Officer upon the completion of the IPO. The separation of the Arlo business, including the IPO and distribution, will be subject to market, tax and legal considerations, final approval by the Company’s Board of Directors and other customary requirements. Refer to Item 1A, Risk Factors of Part I of this Annual Report on Form 10-K for various risks and uncertainties associated with the planned separation. |
Quarterly Financial Data (Notes
Quarterly Financial Data (Notes) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Data [Abstract] | |
Quarterly Financial Information [Text Block] | QUARTERLY FINANCIAL DATA (In thousands, except per share amounts) (Unaudited) The following table presents unaudited quarterly financial information for each of the Company’s last eight quarters. This information has been derived from the Company’s unaudited financial statements and has been prepared on the same basis as the audited consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K. In the opinion of management, all necessary adjustments, consisting only of normal recurring adjustments, have been included to state fairly the quarterly results. December 31, October 1, July 2, April 2, Net revenue $ 397,057 $ 355,483 $ 330,723 $ 323,657 Gross profit $ 104,079 $ 103,095 $ 91,936 $ 96,932 Provision for income taxes $ 52,600 $ 5,767 $ 5,376 $ 7,535 Net income (loss) $ (31,934 ) $ 20,794 $ 14,582 $ 15,994 Net income (loss) per share—basic $ (1.02 ) $ 0.66 $ 0.45 $ 0.49 Net income (loss) per share—diluted $ (1.02 ) $ 0.64 $ 0.44 $ 0.47 December 31, October 2, July 3, April 3, Net revenue $ 367,929 $ 338,458 $ 311,655 $ 310,256 Gross profit $ 110,710 $ 103,122 $ 97,788 $ 100,565 Provision for income taxes $ 11,754 $ 9,144 $ 9,427 $ 8,893 Net income $ 22,109 $ 21,119 $ 16,034 $ 16,589 Net income per share—basic $ 0.67 $ 0.64 $ 0.49 $ 0.51 Net income per share—diluted $ 0.65 $ 0.62 $ 0.48 $ 0.50 |
Schedule II-Valuation and Quali
Schedule II-Valuation and Qualifying Accounts (Notes) | 12 Months Ended |
Dec. 31, 2017 | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule of Valuation and Qualifying Accounts Disclosure [Text Block] | Schedule II—Valuation and Qualifying Accounts Balance at Beginning of Year Additions Deductions Balance at End of Year (In thousands) Allowance for doubtful accounts: Year ended December 31, 2017 $ 1,255 $ 100 $ (98 ) $ 1,257 Year ended December 31, 2016 1,255 60 (60 ) 1,255 Year ended December 31, 2015 1,255 35 (35 ) 1,255 Allowance for sales returns and warranty: Year ended December 31, 2017 $ 72,026 $ 172,493 $ (148,506 ) $ 96,013 Year ended December 31, 2016 72,609 109,494 (110,077 ) 72,026 Year ended December 31, 2015 62,376 105,987 (95,754 ) 72,609 Allowance for price protection: Year ended December 31, 2017 $ 4,480 $ 7,764 $ (8,597 ) $ 3,647 Year ended December 31, 2016 2,125 12,239 (9,884 ) 4,480 Year ended December 31, 2015 1,806 7,467 (7,148 ) 2,125 |
The Company and Summary of Si24
The Company and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation [Policy Text Block] | Basis of presentation The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All inter-company accounts and transactions have been eliminated in the consolidation of these subsidiaries. |
Fiscal Periods [Policy Text Block] | Fiscal periods The Company's fiscal year begins on January 1 of the year stated and ends on December 31 of the same year. The Company reports its results on a fiscal quarter basis rather than on a calendar quarter basis. Under the fiscal quarter basis, each of the first three fiscal quarters ends on the Sunday closest to the calendar quarter end, with the fourth quarter ending on December 31. |
Use of Estimates [Policy Text Block] | Use of estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates. |
Cash and Cash Equivalents [Policy Text Block] | Cash and cash equivalents The Company considers all highly liquid investments with an original maturity or a remaining maturity at the time of purchase of three months or less to be cash equivalents. The Company deposits cash and cash equivalents with high credit quality financial institutions. |
Short-Term Investment [Policy Text Block] | Short-term investments Short-term investments are partially comprised of marketable securities that consist of government securities with an original maturity or a remaining maturity at the time of purchase, of greater than three months and no more than 12 months. The marketable securities are held in the Company's name with one high quality financial institution, which acts as the Company's custodian and investment manager. These marketable securities are classified as available-for-sale securities in accordance with the provisions of the authoritative guidance for investments and are carried at fair value with unrealized gains and losses reported as a separate component of stockholders' equity. Short-term investments are also comprised of marketable securities related to deferred compensation under the Company’s Deferred Compensation Plan. Mutual funds are the only investments allowed in the Company's Deferred Compensation Plan and the investments are held in a grantor trust formed by the Company. The Company has classified these investments as trading securities as the grantor trust actively manages the asset allocation to match the participants’ notional fund allocations. These securities are recorded at fair market value with unrealized gains and losses included in other income (expense), net. |
Certain Risks And Uncertainties [Policy Text Block] | Certain risks and uncertainties The Company's products are concentrated in the networking and smart connected industries, which are characterized by rapid technological advances, changes in customer requirements and evolving regulatory requirements and industry standards. The success of the Company depends on management's ability to anticipate and/or to respond quickly and adequately to such changes. Any significant delays in the development or introduction of products could have a material adverse effect on the Company's business and operating results. The Company relies on a limited number of third parties to manufacture all of its products. If any of the Company's third-party manufacturers cannot or will not manufacture its products in required volumes, on a cost-effective basis, in a timely manner, or at all, the Company will have to secure additional manufacturing capacity. Any interruption or delay in manufacturing could have a material adverse effect on the Company's business and operating results. |
Derivatives[Policy Text Block] | Derivative financial instruments The Company uses foreign currency forward contracts to manage the exposures to foreign exchange risk related to expected future cash flows on certain forecasted revenue, costs of revenue, operating expenses, and on certain existing assets and liabilities. Foreign currency forward contracts generally mature within eleven months of inception. Under its foreign currency risk management strategy, the Company utilizes derivative instruments to reduce the impact of currency exchange rate movements on the Company's operating results by offsetting gains and losses on the forward contracts with increases or decreases in foreign currency transactions. The company does not use derivative financial instruments for speculative purposes. The Company accounts for its derivative instruments as either assets or liabilities and records them at fair value. Derivatives that are not defined as hedges in the authoritative guidance for derivatives and hedging must be adjusted to fair value through earnings. For derivative instruments that hedge the exposure to variability in expected future cash flows that are designated as cash flow hedges, the effective portion of the gain or loss on the derivative instrument is reported as a component of accumulated other comprehensive income in stockholders' equity and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. The ineffective portion of the gain or loss on the derivative instrument is recognized in current earnings. To receive hedge accounting treatment, cash flow hedges must be highly effective in offsetting changes to expected future cash flows on hedged transactions. For derivatives designated as cash flow hedges, changes in the time value are excluded from the assessment of hedge effectiveness and are recognized in earnings. |
Concentration Risk, Credit Risk [Policy Text Block] | Concentration of credit risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents, short-term investments and accounts receivable. The Company believes that there is minimal credit risk associated with the investment of its cash and cash equivalents and short-term investments, due to the restrictions placed on the type of investment that can be entered into under the Company's investment policy. The Company's short-term investments consist of investment-grade securities, and the Company's cash and investments are held and managed by recognized financial institutions. The Company's customers are primarily distributors as well as retailers and broadband service providers who sell or distribute the products to a large group of end-users. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of the Company's customers to make required payments. The Company regularly performs credit evaluations of the Company's customers' financial condition and considers factors such as historical experience, credit quality, age of the accounts receivable balances, geographic or country-specific risks and current economic conditions that may affect customers' ability to pay. The Company does not require collateral from its customers. The Company secures credit insurance for certain customers in international and domestic markets. As of December 31, 2017 and 2016 , Best Buy, Inc. and affiliates accounted for 35% and 38% of the Company's total accounts receivable, respectively. Amazon and affiliates accounted for 12% and 11% of the Company's total accounts receivable as of December 31, 2017 and 2016 , respectively. No other customers accounted for 10% or greater of the Company's total accounts receivable. The Company is exposed to credit loss in the event of nonperformance by counterparties to the foreign currency forward contracts used to mitigate the effect of foreign currency exchange rate changes. The Company believes the counterparties for its outstanding contracts are large, financially sound institutions and thus, the Company does not anticipate nonperformance by these counterparties. In the event of turbulence or the onset of a financial crisis in financial markets, the failure of additional counterparties cannot be ruled out. |
Fair Value of Financial Instruments [Policy Text Block] | Fair value measurements The carrying amounts of the Company's financial instruments, including cash equivalents, short-term investments, accounts receivable, and accounts payable approximate their fair values due to their short maturities. Foreign currency forward contracts are recorded at fair value based on observable market data. Refer to Note 12, Fair Value Measurements, in Notes to Consolidated Financial Statements for disclosures regarding fair value measurements in accordance with the authoritative guidance for fair value measurements and disclosures. |
Allowance for doubtful accounts [Policy Text Block] | Allowance for doubtful accounts The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company regularly performs credit evaluations of its customers' financial condition and considers factors such as historical experience, credit quality, age of the accounts receivable balances, and geographic or country-specific risks and economic conditions that may affect a customer's ability to pay. The allowance for doubtful accounts is reviewed quarterly and adjusted if necessary based on the Company's assessments of its customers' ability to pay. If the financial condition of the Company's customers should deteriorate or if actual defaults are higher than the Company's historical experience, additional allowances may be required, which could have an adverse impact on operating expenses. |
Inventory, Policy [Policy Text Block] | Inventories Inventories consist primarily of finished goods which are valued at the lower of cost and net realizable value, with cost being determined using the first-in, first-out method. The Company writes down its inventories based on estimated excess and obsolete inventories determined primarily by the demand forecast but takes into account market conditions, product development plans, product life expectancy and other factors. At the point of loss recognition, a new, lower cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase of the newly established cost basis. |
Property, Plant and Equipment, Policy [Policy Text Block] | Property and equipment, net Property and equipment are stated at historical cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets as follows: Computer equipment 2 years Furniture and fixtures 5 years Software 2-5 years Machinery and equipment 2-3 years Leasehold improvements Shorter of the lease term or 5 years Recoverability of assets to be held and used is measured by comparing the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of the asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. The carrying value of the asset is reviewed on a regular basis for the existence of facts, both internal and external, that may suggest impairment. |
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | Goodwill Goodwill represents the purchase price over estimated fair value of net assets of businesses acquired in a business combination. Goodwill acquired in a business combination is not amortized, but instead tested for impairment at least annually on the first day of the fourth quarter. Should certain events or indicators of impairment occur between annual impairment tests, the Company performs the impairment test as those events or indicators occur. Examples of such events or circumstances include the following: a significant decline in the Company’s expected future cash flows; a sustained, significant decline in the Company’s stock price and market capitalization; a significant adverse change in the business climate; and slower growth rates. Goodwill is tested for impairment at the reporting unit level by first performing a qualitative assessment to determine whether it is more likely than not (that is, a likelihood of more than 50%) that the fair value of the reporting unit is less than its carrying value. The qualitative assessment considers the following factors: macroeconomic conditions, industry and market considerations, cost factors, overall company financial performance, events affecting the reporting units, and changes in the Company's share price. If the reporting unit does not pass the qualitative assessment, the Company estimates its fair value and compares the fair value with the carrying value of its reporting unit, including goodwill. If the fair value is greater than the carrying value of its reporting unit, no impairment is recorded. If the fair value is less than the carrying value, an impairment loss is recognized for the amount that the carrying amount of a reporting unit, including goodwill, exceeds its fair value, limited to the total amount of goodwill allocated to that reporting unit. The impairment charge would be recorded to earnings in the consolidated statements of operations. |
Goodwill and Intangible Assets, Intangible Assets, Policy [Policy Text Block] | Intangibles, net Purchased intangibles with finite lives are amortized using the straight-line method over the estimated economic lives of the assets, which range from three to ten years. Finite-lived intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. |
Standard Product Warranty, Policy [Policy Text Block] | Warranty obligations The Company provides for estimated future warranty obligations at the time revenue is recognized. The Company's standard warranty obligation to its direct customers generally provides for a right of return of any product for a full refund in the event that such product is not merchantable or is found to be damaged or defective. At the time revenue is recognized, an estimate of future warranty returns is recorded to reduce revenue in the amount of the expected credit or refund to be provided to its direct customers. At the time the Company records the reduction to revenue related to warranty returns, the Company includes within cost of revenue a write-down to reduce the carrying value of such products to net realizable value. The Company's standard warranty obligation to its end-users provides for replacement of a defective product for one or more years. Factors that affect the warranty obligation include product failure rates, material usage, and service delivery costs incurred in correcting product failures. The estimated cost associated with fulfilling the Company's warranty obligation to end-users is recorded in cost of revenue. Because the Company's products are manufactured by third-party manufacturers, in certain cases the Company has recourse to the third-party manufacturer for replacement or credit for the defective products. The Company gives consideration to amounts recoverable from its third-party manufacturers in determining its warranty liability. |
Revenue Recognition, Policy [Policy Text Block] | Revenue recognition Revenue from product sales is generally recognized at the time the product is shipped provided that persuasive evidence of an arrangement exists, title and risk of loss has transferred to the customer, the selling price is fixed or determinable and collection of the related receivable is reasonably assured. Currently, for some of the Company's customers, title passes to the customer upon delivery to the port or country of destination, upon their receipt of the product, or upon the customer's resale of the product. At the end of each fiscal quarter, the Company estimates and defers revenue related to product where title has not transferred. The revenue continues to be deferred until such time that title passes to the customer. The Company assesses collectability based on a number of factors, including general economic and market conditions, past transaction history with the customer, and the creditworthiness of the customer. If the Company determines that collection is not reasonably assured, then revenue is deferred until receipt of the payment from the customer. The Company has product offerings with multiple elements. The Company's multiple-element product offerings include hardware with free services, networking hardware with embedded software, various software subscription services, and support, which are considered separate units of accounting. In general, the hardware and networking hardware with embedded software are delivered up front, while the free services are delivered over the stated service period, or the estimated useful life. The subscription services and support are delivered over the subscription and support period whether included in a multiple-element offering or not. The Company allocates revenue to the deliverables based upon their relative selling price. Revenue allocated to each unit of accounting is then recognized when persuasive evidence of an arrangement exists, title and risk of loss has transferred to the customer, the selling price is fixed or determinable and collection of the related receivable is reasonably assured. When applying the relative selling price method, the Company determines the selling price for each deliverable using vendor-specific objective evidence ("VSOE") of fair value of the deliverable, or when VSOE of fair value is unavailable, its best estimate of selling price (“ESP”), as the Company has determined it is unable to establish third-party evidence of selling price for the deliverables. In determining VSOE, the Company requires that a substantial majority of the selling prices for a deliverable sold on a stand-alone basis fall within a reasonably narrow pricing range, generally evidenced by approximately 80% of such historical stand-alone transactions falling within +/-15% of the median price. The Company determines ESP for a deliverable by considering multiple factors including, but not limited to, market conditions, competitive landscape, internal costs, gross margin objectives and pricing practices. The objective of ESP is to determine the price at which the Company would transact a sale if the deliverable were sold on a stand-alone basis. The determination of ESP is made through consultation with and formal approval by the Company's management, taking into consideration the go-to-market strategy. Certain distributors and retailers generally have the right to return product for stock rotation purposes. Upon shipment of the product, the Company reduces revenue for an estimate of potential future product warranty and stock rotation returns related to the current period product revenue. Management analyzes historical returns, channel inventory levels, current economic trends and changes in customer demand for the Company's products when evaluating the adequacy of the allowance for sales returns, namely warranty and stock rotation returns. Revenue on shipments is also reduced for estimated price protection and sales incentives deemed to be contra-revenue under the authoritative guidance for revenue recognition. |
Revenue Recognition, Incentives [Policy Text Block] | Sales incentives The Company accrues for sales incentives as a marketing expense if it receives an identifiable benefit in exchange and can reasonably estimate the fair value of the identifiable benefit received; otherwise, it is recorded as a reduction to revenues. As a consequence, the Company records a substantial portion of its channel marketing costs as a reduction of revenue. The Company records estimated reductions to revenues for sales incentives at the later of when the related revenue is recognized or when the program is offered to the customer or end consumer. |
Shipping and Handling Cost, Policy [Policy Text Block] | Shipping and handling fees and costs The Company includes shipping and handling fees billed to customers in net revenue. Shipping and handling costs associated with inbound freight are included in cost of revenue. In cases where the Company gives a freight allowance to the customer for their own inbound freight costs, such costs are appropriately recorded as a reduction in net revenue. |
Research and Development Expense, Policy [Policy Text Block] | Research and development Costs incurred in the research and development of new products are charged to expense as incurred. |
Advertising Costs, Policy [Policy Text Block] | Advertising costs Advertising costs are expensed as incurred. |
Income Tax, Policy [Policy Text Block] | Income taxes The Company accounts for income taxes under an asset and liability approach. Under this method, income tax expense is recognized for the amount of taxes payable or refundable for the current year. In addition, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences resulting from different treatment for tax versus accounting for certain items, such as accruals and allowances not currently deductible for tax purposes. These differences result in deferred tax assets and liabilities, which are included within the consolidated balance sheets. The Company must then assess the likelihood that the Company's deferred tax assets will be recovered from future taxable income and to the extent the Company believes that recovery is not more likely than not, the Company must establish a valuation allowance. The Company’s assessment considers the recognition of deferred tax assets on a jurisdictional basis. Accordingly, in assessing its future taxable income on a jurisdictional basis, the Company considers the effect of its transfer pricing policies on that income. In the ordinary course of business there is inherent uncertainty in assessing the Company's income tax positions. The Company assesses its tax positions and records benefits for all years subject to examination based on management's evaluation of the facts, circumstances and information available at the reporting date. For those tax positions where it is more likely than not that a tax benefit will be sustained, the Company records the largest amount of tax benefit with a greater than 50 percent likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is not more likely than not that a tax benefit will be sustained, no tax benefit has been recorded in the financial statements. Where applicable, associated interest and penalties have also been recognized as a component of income tax expense. |
Earnings Per Share, Policy [Policy Text Block] | Net income per share Basic net income per share is computed by dividing the net income for the period by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by dividing the net income for the period by the weighted average number of shares of common stock and potentially dilutive common stock outstanding during the period. Potentially dilutive common shares include common shares issuable upon exercise of stock options, vesting of restricted stock awards, and issuances of shares under the Employee Stock Purchase Plan, which are reflected in diluted net income per share by application of the treasury stock method. Potentially dilutive common shares are excluded from the computation of diluted net income per share when their effect is anti-dilutive. |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Stock-based compensation The Company measures stock-based compensation at the grant date based on the fair value of the award. The fair value of stock options and the shares offered under the Employee Stock Purchase Plan is estimated using the Black-Scholes option pricing model. Estimated compensation cost relating to restricted stock units (“RSUs”) is based on the closing fair market value of the Company’s common stock on the date of grant. The compensation expense for equity awards is recognized over the vesting period of the award under a graded vesting method. Upon the adoption of ASU 2016-09, the Company elected to account for forfeitures as they occur, rather than estimating expected forfeitures. Additionally, upon the adoption, the Company prospectively recorded all excess tax benefits and tax deficiencies arising from stock awards vesting or settlement as income tax expense or benefit rather than in equity. |
Comprehensive Income [Policy Text Block] | Comprehensive income Comprehensive income consists of net income and other gains and losses affecting stockholder's equity that the Company excluded from net income, including gains and losses related to fair value of short-term investments and the effective portion of cash flow hedges that were outstanding as of the end of the year. |
Foreign Currency Transactions and Translations Policy [Policy Text Block] | Foreign currency translation and re-measurement The Company's functional currency is the U.S. dollar for all of its international subsidiaries. Foreign currency transactions of international subsidiaries are re-measured into U.S. dollars at the end-of-period exchange rates for monetary assets and liabilities, and at historical exchange rates for non-monetary assets. Revenue is re-measured at average exchange rates in effect during each period. Expenses are re-measured at average exchange rates in effect during each period, except for expenses related to non-monetary assets, which are re-measured at historical exchange rates. Gains and losses arising from foreign currency transactions are included in Other income (expense), net. |
The Company and Summary of Si25
The Company and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule Of Estimated Useful Lives Of Property and Equipment, Net [Table Text Block] | Property and equipment are stated at historical cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets as follows: Computer equipment 2 years Furniture and fixtures 5 years Software 2-5 years Machinery and equipment 2-3 years Leasehold improvements Shorter of the lease term or 5 years |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Placemeter [Member] | |
Business Acquisition [Line Items] | |
Schedule of Business Acquisitions, by Acquisition | Cash and cash equivalents $ 8 Accounts receivable 11 Prepaid expenses and other current assets 130 Property and equipment 83 Intangibles 6,000 Goodwill 3,742 Accounts payable (40 ) Other accrued liabilities (74 ) Deferred tax liabilities (308 ) Total purchase price $ 9,552 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule Of Available-For-Sale Short-Term | As of December 31, 2017 December 31, 2016 Cost Unrealized Gain Unrealized Loss Estimated Fair Value Cost Unrealized Gain Unrealized Loss Estimated Fair Value (In thousands) U.S. treasuries $ 124,816 $ — $ (146 ) $ 124,670 $ 123,869 $ 9 $ (40 ) $ 123,838 Certificates of deposits 162 — — 162 148 — — 148 Total $ 124,978 $ — $ (146 ) $ 124,832 $ 124,017 $ 9 $ (40 ) $ 123,986 |
Schedule Of Accounts Receivable And Related Allowances | Accounts receivable, net As of December 31, 2017 December 31, 2016 (In thousands) Gross accounts receivable $ 437,891 $ 333,080 Allowance for doubtful accounts (1,257 ) (1,255 ) Allowance for sales returns (20,189 ) (13,506 ) Allowance for price protection (3,647 ) (4,480 ) Total allowances (25,093 ) (19,241 ) Total accounts receivable, net $ 412,798 $ 313,839 |
Schedule Of Inventories | Inventories As of December 31, 2017 December 31, 2016 (In thousands) Raw materials $ 4,465 $ 4,596 Finished goods 241,429 243,266 Total inventories $ 245,894 $ 247,862 |
Schedule Of Property And Equipment, Net | Property and equipment, net As of December 31, 2017 December 31, 2016 (In thousands) Computer equipment $ 10,114 $ 10,557 Furniture, fixtures and leasehold improvements 21,640 20,827 Software 28,997 28,663 Machinery and equipment 62,490 63,446 Total property and equipment, gross 123,241 123,493 Accumulated depreciation and amortization (102,581 ) (104,020 ) Total property and equipment, net $ 20,660 $ 19,473 |
Schedule Of Purchased Intangibles, Net | Intangibles, net As of December 31, 2017 As of December 31, 2016 Gross Accumulated Amortization Net Gross Accumulated Amortization Net (In thousands) Technology $ 66,599 $ (62,172 ) $ 4,427 $ 66,599 $ (57,381 ) $ 9,218 Customer contracts and relationships 56,500 (37,430 ) 19,070 56,500 (30,375 ) 26,125 Other 11,045 (9,554 ) 1,491 11,045 (8,489 ) 2,556 Total intangibles, net 134,144 (109,156 ) 24,988 $ 134,144 $ (96,245 ) $ 37,899 |
Schedule Of Estimated Amortization Expense Related To Intangibles | As of December 31, 2017, estimated amortization expense related to finite-lived intangibles for each of the next five years and thereafter is as follows (in thousands): 2018 $ 9,396 2019 7,544 2020 6,622 2021 1,413 2022 13 Total estimated amortization expense $ 24,988 |
Schedule Of Goodwill | The changes in the carrying amount of goodwill during the years ended December 31, 2017 and 2016 are as follows: Old Segments New Segments Retail Commercial Service Provider Total Arlo Connected Home SMB Total (In thousands) As of December 31, 2015 $ 45,442 $ 36,279 $ — $ 81,721 $ — $ — $ — $ — Goodwill from acquisition of Placemeter 3,742 — — 3,742 — — — — As of December 31, 2016 49,184 36,279 — 85,463 — — — — Relative fair value approach (49,184 ) (36,279 ) — (85,463 ) 21,149 28,035 36,279 85,463 As of January 1, 2017 — — — — 21,149 28,035 36,279 85,463 As of December 31, 2017 $ — $ — $ — $ — $ 21,149 $ 28,035 $ 36,279 $ 85,463 |
Schedule of Other Assets, Noncurrent | Other non-current assets As of December 31, 2017 December 31, 2016 (In thousands) Non-current deferred income taxes $ 49,468 $ 70,859 Other 12,321 7,977 Total other non-current assets $ 61,789 $ 78,836 |
Schedule Of Other Accrued Liabilities | Other accrued liabilities As of December 31, 2017 December 31, 2016 (In thousands) Sales and marketing programs $ 96,153 $ 74,330 Warranty obligation 75,824 58,520 Freight 10,567 8,980 Other 39,926 28,844 Total other accrued liabilities $ 222,470 $ 170,674 |
Derivative Financial Instrume28
Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule Of Fair Values Of The Company's Derivative Instruments And The Line Items On The Consolidated Balance Sheets | The fair values of the Company’s derivative instruments and the line items on the consolidated balance sheets to which they were recorded as of December 31, 2017 , and 2016 , are summarized as follows: Balance Sheets Location December 31, Balance Sheets Location December 31, 2017 2016 2017 2016 (In thousands) (In thousands) Derivative contracts not designated as hedging instruments Prepaid expenses and other current assets $ 1,314 $ 5,873 Other accrued liabilities $ 7,128 $ 1,002 Derivative contracts designated as hedging instruments Prepaid expenses and other current assets 485 2,890 Other accrued liabilities 1,064 703 Total $ 1,799 $ 8,763 $ 8,192 $ 1,705 |
Schedule of Offsetting of Derivative Assets | The following tables set forth the offsetting of derivative assets as of December 31, 2017 and 2016 : As of December 31, 2017 Gross Amounts Not Offset in the Consolidated Balance Sheets Gross Amounts of Recognized Assets Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts Of Assets Presented in the Consolidated Balance Sheets Financial Instruments Cash Collateral Pledged Net Amount (In thousands) Bank of America $ 1,664 $ — $ 1,664 $ (1,664 ) $ — $ — Wells Fargo 135 — 135 (135 ) — — Total $ 1,799 $ — $ 1,799 $ (1,799 ) $ — $ — As of December 31, 2016 Gross Amounts Not Offset in the Consolidated Balance Sheets Gross Amounts of Recognized Assets Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts Of Assets Presented in the Consolidated Balance Sheets Financial Instruments Cash Collateral Pledged Net Amount (In thousands) J.P. Morgan Chase $ 1,492 $ — $ 1,492 $ (442 ) $ — $ 1,050 Wells Fargo 7,271 — 7,271 (1,263 ) — 6,008 Total $ 8,763 $ — $ 8,763 $ (1,705 ) $ — $ 7,058 |
Schedule of Offsetting of Derivative Liabilities | The following tables set forth the offsetting of derivative liabilities as of December 31, 2017 and 2016 : As of December 31, 2017 Gross Amounts Not Offset in the Consolidated Balance Sheets Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts Of Liabilities Presented in the Consolidated Balance Sheets Financial Instruments Cash Collateral Pledged Net Amount (In thousands) Bank of America $ 7,815 $ — $ 7,815 $ (1,664 ) $ — $ 6,151 Wells Fargo 377 — 377 (135 ) — 242 Total $ 8,192 $ — $ 8,192 $ (1,799 ) $ — $ 6,393 As of December 31, 2016 Gross Amounts Not Offset in the Consolidated Balance Sheets Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts Of Liabilities Presented in the Consolidated Balance Sheets Financial Instruments Cash Collateral Pledged Net Amount (In thousands) J.P. Morgan Chase $ 442 $ — $ 442 $ (442 ) $ — $ — Wells Fargo 1,263 — 1,263 (1,263 ) — — Total $ 1,705 $ — $ 1,705 $ (1,705 ) $ — $ — |
Schedule Of Company's Derivative Instruments On Other Comprehensive Income And The Consolidated Statement Of Operations | The pre-tax effects of the Company’s derivative instruments on OCI and the consolidated statements of operations for the years ended December 31, 2017 , 2016 and 2015 are summarized as follows: Derivatives Designated as Hedging Instruments Year Ended December 31, 2017 Gains (Losses) Recognized in OCI - Effective Portion Location of Gains (Losses) Reclassified from OCI into Income - Effective Portion Gains (Losses) Reclassified from OCI into Income - Effective Portion (1) Location of Gains (Losses) Recognized in Income and Excluded from Effectiveness Testing Amount of Gains (Losses) Recognized in Income and Excluded from Effectiveness Testing (In thousands) Cash flow hedges: Foreign currency forward contracts $ (10,692 ) Net revenue $ (8,693 ) Other income (expense), net $ 1,587 Foreign currency forward contracts — Cost of revenue 18 Other income (expense), net — Foreign currency forward contracts — Operating expenses 1,051 Other income (expense), net — Total $ (10,692 ) $ (7,624 ) $ 1,587 _________________________ (1) Refer to Note 9, Stockholders' Equity , which summarizes the accumulated other comprehensive income activity related to derivatives. Derivatives Designated as Hedging Instruments Year Ended December 31, 2016 Gains (Losses) Recognized in OCI - Effective Portion Location of Gains (Losses) Reclassified from OCI into Income - Effective Portion Gains (Losses) Reclassified from OCI into Income - Effective Portion (1) Location of Gains (Losses) Recognized in Income and Excluded from Effectiveness Testing Amount of Gains (Losses) Recognized in Income and Excluded from Effectiveness Testing (In thousands) Cash flow hedges: Foreign currency forward contracts $ 3,007 Net revenue $ 1,100 Other income (expense), net $ 365 Foreign currency forward contracts — Cost of revenue (6 ) Other income (expense), net — Foreign currency forward contracts — Operating expenses (274 ) Other income (expense), net — Total $ 3,007 $ 820 $ 365 _________________________ (1) Refer to Note 9, Stockholders' Equity , which summarizes the accumulated other comprehensive income activity related to derivatives. Derivatives Designated as Hedging Instruments Year Ended December 31, 2015 Gains (Losses) Recognized in OCI - Effective Portion Location of Gains (Losses) Reclassified from OCI into Income - Effective Portion Gains (Losses) Reclassified from OCI into Income - Effective Portion (1) Location of Gains (Losses) Recognized in Income and Excluded from Effectiveness Testing Amount of Gains (Losses) Recognized in Income and Excluded from Effectiveness Testing (In thousands) Cash flow hedges: Foreign currency forward contracts $ 453 Net revenue $ 462 Other income (expense), net $ (52 ) Foreign currency forward contracts — Cost of revenue 6 Other income (expense), net — Foreign currency forward contracts — Operating expenses (15 ) Other income (expense), net — Total $ 453 $ 453 $ (52 ) _________________________ (1) Refer to Note 9, Stockholders' Equity , which summarizes the accumulated other comprehensive income activity related to derivatives. |
Schedule Of Derivatives Not Designated As Hedging Instruments | The effects of the Company’s derivatives not designated as hedging instruments in other income (expense), net in the consolidated statements of operations for the years ended December 31, 2017 , 2016 and 2015 , are as follows: Year ended December 31, Derivatives Not Designated as Hedging Instruments Location of Gains (Losses) Recognized in Income on Derivative 2017 2016 2015 (In thousands) Foreign currency forward contracts Other income (expense), net (6,945 ) 3,789 $ 4,956 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule Of Net Income Per Share | Net income per share for the years ended December 31, 2017 , 2016 and 2015 was as follows: Year Ended December 31, 2017 2016 2015 (In thousands, except per share data) Numerator: Net income $ 19,436 $ 75,851 $ 48,584 Denominator: Weighted average common shares - basic 32,097 32,758 33,161 Potentially dilutive common share equivalent 947 970 627 Weighted average common shares - dilutive 33,044 33,728 33,788 Basic net income per share $ 0.61 $ 2.32 $ 1.47 Diluted net income per share $ 0.59 $ 2.25 $ 1.44 Anti-dilutive employee stock-based awards, excluded 279 258 1,807 |
Other Income (Expense), Net (Ta
Other Income (Expense), Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Other Income and Expenses [Abstract] | |
Schedule of Other Nonoperating Income (Expense) [Table Text Block] | Other income (expense), net consisted of the following: Year Ended December 31, 2017 2016 2015 (In thousands) Foreign currency transaction gain (loss), net $ 7,238 $ (3,835 ) $ (5,114 ) Foreign currency contract gain (loss), net (5,358 ) 4,154 4,904 Other 144 (440 ) 122 Total $ 2,024 $ (121 ) $ (88 ) |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Before Income Taxes | Income before income taxes and the provision for income taxes consisted of the following: Year Ended December 31, 2017 2016 2015 (In thousands) United States $ 57,989 $ 88,748 $ 88,681 International 32,725 26,321 (3,117 ) Total $ 90,714 $ 115,069 $ 85,564 |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | Year Ended December 31, 2017 2016 2015 (In thousands) Current: U.S. Federal $ 40,532 $ 33,267 $ 30,970 State 4,463 2,693 3,139 Foreign 4,305 6,278 6,105 49,300 42,238 40,214 Deferred: U.S. Federal 23,005 (2,052 ) (2,645 ) State (288 ) 441 134 Foreign (739 ) (1,409 ) (723 ) 21,978 (3,020 ) (3,234 ) Total $ 71,278 $ 39,218 $ 36,980 |
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | Net deferred tax assets consisted of the following: Year Ended December 31, 2017 2016 (In thousands) Deferred Tax Assets: Accruals and allowances $ 23,661 $ 32,303 Net operating loss carryforwards 3,317 6,358 Stock-based compensation 6,015 8,250 Deferred rent 1,977 3,002 Deferred revenue 2,740 1,957 Tax credit carryforwards 974 1,543 Acquired intangibles 14,907 21,871 Depreciation and amortization 1,185 1,160 Total deferred tax assets 54,776 76,444 Deferred Tax Liabilities: Depreciation and amortization — — Other (126 ) (991 ) Total deferred tax liabilities (126 ) (991 ) Valuation Allowance (1) (5,182 ) (4,594 ) Net deferred tax assets $ 49,468 $ 70,859 |
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | The effective tax rate differs from the applicable U.S. statutory federal income tax rate as follows: Year Ended December 31, 2017 2016 2015 Tax at federal statutory rate 35.0 % 35.0 % 35.0 % State, net of federal benefit 1.1 % 1.8 % 2.6 % Impact of international operations (6.4 )% (2.7 )% 7.1 % Stock-based compensation (0.9 )% 1.2 % (0.4 )% Tax credits (1.6 )% (0.9 )% (1.2 )% Impact of the Tax Act 53.3 % — % — % Others (1.9 )% (0.3 )% 0.1 % Provision for income taxes 78.6 % 34.1 % 43.2 % |
Schedule of Reconciliation of Unrecognized Tax Benefits [Table Text Block] | A reconciliation of the beginning and ending amount of gross unrecognized tax benefits (“UTB”) is as follows: Federal, State, and Foreign Tax (In thousands) Balance as of December 31, 2014 $ 13,364 Additions based on tax positions related to the current year 1,608 Additions for tax positions of prior years 228 Settlements (199 ) Reductions for tax positions of prior years (302 ) Reductions due to lapse of applicable statutes (1,053 ) Adjustments due to foreign exchange rate movement (816 ) Balance as of December 31, 2015 12,830 Additions based on tax positions related to the current year 1,523 Additions for tax positions of prior years 45 Reductions for tax positions of prior years (237 ) Reductions due to lapse of applicable statutes (627 ) Adjustments due to foreign exchange rate movement (569 ) Balance as of December 31, 2016 $ 12,965 Additions based on tax positions related to the current year 938 Additions for tax positions of prior years 32 Reductions for tax positions of prior years (1,477 ) Reductions due to lapse of applicable statutes (899 ) Adjustments due to foreign exchange rate movement 1,008 Balance as of December 31, 2017 $ 12,567 |
Commitments And Contingencies C
Commitments And Contingencies Commitments and contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | As of December 31, 2017, future minimum lease payments under non-cancelable operating leases are as follows (in thousands): 2018 $ 8,924 2019 7,718 2020 6,092 2021 5,715 2022 5,638 Thereafter 12,921 Total future minimum lease payments $ 47,008 |
Commitments And Contingencies P
Commitments And Contingencies Product Warranties (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Product Warranties Disclosures [Abstract] | |
Schedule of Product Warranty Liability [Table Text Block] | Changes in the Company's warranty liability, which is included in other accrued liabilities in the consolidated balance sheets, are as follows: Year Ended December 31, 2017 2016 2015 (In thousands) Balance at the beginning of the year $ 58,520 $ 56,706 $ 44,888 Provision for warranty obligations made during the year 131,263 87,570 80,085 Settlements made during the year (113,959 ) (85,756 ) (68,267 ) Balance at the end of year $ 75,824 $ 58,520 $ 56,706 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Schedule Of Accumulated Other Comprehensive Income | The following table sets forth the changes in accumulated other comprehensive income ("AOCI") by component during the years ended December 31, 2017 , 2016 and 2015 : Unrealized gains (losses) on available-for-sale securities Unrealized gains (losses) on derivatives Estimated tax benefit (provision) Total (In thousands) Balance as of December 31, 2014 $ (8 ) $ 43 $ 3 $ 38 Other comprehensive income (loss) before reclassifications (56 ) 453 21 418 Less: Amount reclassified from accumulated other comprehensive income — 453 — 453 Net current period other comprehensive income (loss) (56 ) — 21 (35 ) Balance as of December 31, 2015 $ (64 ) $ 43 $ 24 $ 3 Other comprehensive income (loss) before reclassifications 33 3,007 (572 ) 2,468 Less: Amount reclassified from accumulated other comprehensive income — 820 (287 ) 533 Net current period other comprehensive income (loss) 33 2,187 (285 ) 1,935 Balance as of December 31, 2016 $ (31 ) $ 2,230 $ (261 ) $ 1,938 Other comprehensive income (loss) before reclassifications (115 ) (10,692 ) 3,062 (7,745 ) Less: Amount reclassified from accumulated other comprehensive income — (7,624 ) 2,668 (4,956 ) Net current period other comprehensive income (loss) (115 ) (3,068 ) 394 (2,789 ) Balance as of December 31, 2017 $ (146 ) $ (838 ) $ 133 $ (851 ) |
Schedule of Reclassification out of Accumulated Other Comprehensive Income | The following tables provide details about significant amounts reclassified out of each component of accumulated other comprehensive income for the years ended December 31, 2017 , 2016 and 2015 : Year Ended December 31, Details about Accumulated Other Comprehensive Income Components 2017 2016 2015 Amount Reclassified from AOCI Affected Line Item in the Statements of Operations Amount Reclassified from AOCI Affected Line Item in the Statements of Operations Amount Reclassified from AOCI Affected Line Item in the Statements of Operations (In thousands) Gains (losses) on cash flow hedge: Foreign currency forward contracts $ (8,693 ) Net revenue $ 1,100 Net revenue $ 462 Net revenue Foreign currency forward contracts 18 Cost of revenue (6 ) Cost of revenue 6 Cost of revenue Foreign currency forward contracts 1,051 Operating expenses (274 ) Operating expenses (15 ) Operating expenses (7,624 ) Total before tax 820 Total before tax 453 Total before tax 2,668 Tax impact (287 ) Tax impact — Tax impact (1) $ (4,956 ) Total, net of tax $ 533 Total, net of tax $ 453 Total, net of tax _________________________ (1) Under the Company's 2015 tax structure, all hedging gains and losses from derivative contracts were ultimately borne by a legal entity in a jurisdiction with no income tax. |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Employee Benefits and Share-based Compensation, Noncash [Abstract] | |
Schedule Of Stock Option Activity | Option Activity Stock option activity during the year ended December 31, 2017 was as follows: Number of Shares Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (In thousands) (In dollars) (In years) (In thousands) Outstanding as of December 31, 2016 1,884 $ 31.14 Granted 348 43.07 Exercised (352 ) 27.23 Expired (1 ) 31.70 Outstanding as of December 31, 2017 1,879 $ 34.08 6.13 $ 46,346 As of December 31, 2017 Vested and expected to vest 1,879 $ 34.08 6.13 $ 46,346 Exercisable Options 1,205 $ 30.94 4.72 $ 33,512 |
Schedule of Ranges of Outstanding And Exercisable Stock Options | The following table summarizes significant ranges of outstanding and exercisable stock options as of December 31, 2017 : Options Outstanding Options Exercisable Range of Exercise Prices Shares Outstanding Weighted- Average Remaining Contractual Life Weighted- Average Exercise Price Per Share Shares Exercisable Weighted- Average Exercise Price Per Share (In thousands) (In years) (In dollars) (In thousands) (In dollars) $10.69 - $31.28 435 4.55 $ 24.55 334 $ 22.50 $31.31 - $32.54 443 5.50 32.19 410 32.16 $32.55 - $39.53 651 5.84 36.93 459 35.93 $40.01 - $42.70 330 9.39 42.68 2 40.01 $49.20 - $49.20 20 9.80 49.20 — — $10.69 - $49.20 1,879 6.13 $ 34.08 1,205 $ 30.94 |
Schedule Of RSU Activity | RSU Activity RSU activity during the year ended December 31, 2017 was as follows: Number of Shares Weighted Average Grant Date Fair Value Per Share Weighted Average Remaining Contractual Term Aggregate (In thousands) (In dollars) (In years) (In thousands) Outstanding as of December 31, 2016 996 $ 36.22 Granted 618 49.45 Vested (412 ) 35.46 Cancelled (72 ) 44.16 Outstanding as of December 31, 2017 1,130 $ 43.22 1.43 $ 66,390 |
Schedule Of Valuation And Expense Information | The following table sets forth the weighted-average assumptions used to estimate the fair value option grants during the years ended December 31, 2017 , 2016 and 2015 and purchase rights granted under the ESPP commencing February 16, 2016 during the years ended December 31, 2017 and 2016 : Year Ended December 31, 2017 2016 2015 2017 2016 2015 Stock Options ESPP Expected life (in years) 4.4 4.4 4.5 0.5 0.5 N/A Risk-free interest rate 1.66 % 1.28 % 1.44 % 0.93 % 0.43 % N/A Expected volatility 31.6 % 35.4 % 39.3 % 29.7 % 38.3 % N/A Dividend yield — — — — — N/A |
Schedule Of Total Stock-Based Compensation Expense Resulting From Stock Options, Restricted Stock Awards, And The Employee Stock Purchase Plan | The following table sets forth stock-based compensation expense resulting from stock options, restricted stock awards, and the Employee Stock Purchase Plan included in the Company’s consolidated statements of operations: Year Ended December 31, 2017 2016 2015 (In thousands) Cost of revenue $ 2,005 $ 1,740 $ 1,566 Research and development 4,927 4,075 3,451 Sales and marketing 5,959 5,065 5,022 General and administrative 9,256 8,069 6,786 Total $ 22,147 $ 18,949 $ 16,825 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule Of Reportable Segment And Reconciliation Of Segment Contribution Income To Income Before Income Taxes | Financial information for each reportable segment and a reconciliation of segment contribution income to income before income taxes is as follows : Year Ended December 31, 2017 2016 * 2015 * (In thousands, except percentage data) Net revenue: Arlo $ 378,413 $ 188,469 $ 91,636 Connected Home 762,069 844,818 937,215 SMB 266,438 295,011 271,844 Total net revenue $ 1,406,920 $ 1,328,298 $ 1,300,695 Contribution income (loss): Arlo $ 29,591 $ (5,218 ) $ (126 ) Arlo contribution margin 7.8 % (2.8 )% (0.1 )% Connected Home 101,993 152,560 121,745 Connected Home contribution margin 13.4 % 18.1 % 13.0 % SMB 65,392 75,461 56,156 SMB contribution margin 24.5 % 25.6 % 20.7 % Total segment contribution income 196,976 222,803 177,775 Corporate and unallocated costs (75,382 ) (69,140 ) (54,501 ) Amortization of intangibles (1) (12,597 ) (16,733 ) (16,969 ) Stock-based compensation expense (22,147 ) (18,949 ) (16,825 ) Restructuring and other charges (97 ) (3,881 ) (6,398 ) Losses on inventory commitments due to restructuring — — (407 ) Litigation reserves, net (176 ) (73 ) 2,682 Interest income 2,113 1,163 295 Other income (expense), net 2,024 (121 ) (88 ) Income before income taxes $ 90,714 $ 115,069 $ 85,564 _________________________ (1) Amount excludes amortization expense related to patents within purchased intangibles in cost of revenue. * Prior year financial information for each reportable segment has been recast to conform to the current reportable segment structure effective on January 1, 2017. |
Schedule of Service Provider Customers Revenue by Reporting Segments [Table Text Block] | The following table shows net revenue from service provider customers within each of the reportable segments for the periods indicated: Year Ended December 31, 2017 2016 2015 (In thousands) Arlo $ 20,795 $ 19,758 $ 18,585 Connected Home 190,186 249,980 395,900 SMB 3,268 4,175 6,997 Total service provider net revenue $ 214,249 $ 273,913 $ 421,482 |
Schedule Of Net Revenue By Geography | The following table shows net revenue by geography for the years ended December 31, 2017 , 2016 and 2015 : Year Ended December 31, 2017 2016 2015 (In thousands) United States (U.S.) $ 927,952 $ 855,796 $ 779,361 Americas (excluding U.S.) 30,112 27,852 18,385 EMEA 253,885 245,405 321,714 APAC 194,971 199,245 181,235 Total net revenue $ 1,406,920 $ 1,328,298 $ 1,300,695 |
Schedule Of Long-Lived Asset By Geography | The Company's property and equipment are located in the following geographic locations: As of December 31, 2017 December 31, 2016 December 31, 2015 (In thousands) United States $ 9,216 $ 9,542 $ 9,832 Canada 1,807 2,745 3,586 EMEA 141 210 468 China 6,803 5,219 6,562 APAC (excluding China) 2,693 1,757 1,936 Total property and equipment, net $ 20,660 $ 19,473 $ 22,384 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | As of December 31, 2016 Total Quoted market prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) (In thousands) Assets: Cash equivalents: money-market funds $ 17,027 $ 17,027 $ — $ — Available-for-sale securities: U.S. treasuries (1) 123,838 123,838 — — Available-for-sale securities: certificates of deposit (1) 148 148 — — Trading securities: mutual funds (1) 1,528 1,528 — — Foreign currency forward contracts (2) 8,763 — 8,763 — Total assets measured at fair value $ 151,304 $ 142,541 $ 8,763 $ — Liabilities: Foreign currency forward contracts (3) $ 1,705 $ — $ 1,705 $ — Total liabilities measured at fair value $ 1,705 $ — $ 1,705 $ — _________________________ (1) Included in short-term investments on the Company's consolidated balance sheets. (2) Included in prepaid expenses and other current assets on the Company's consolidated balance sheets. (3) Included in other accrued liabilities on the Company's consolidated balance sheets. As of December 31, 2017 Total Quoted market prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) (In thousands) Assets: Cash equivalents: money-market funds $ 12,606 $ 12,606 $ — $ — Available-for-sale securities: U.S. treasuries (1) 124,670 124,670 — — Available-for-sale securities: certificates of deposit (1) 162 162 — — Trading securities: mutual funds (1) 2,094 2,094 — — Foreign currency forward contracts (2) 1,799 — 1,799 — Total assets measured at fair value $ 141,331 $ 139,532 $ 1,799 $ — Liabilities: Foreign currency forward contracts (3) $ 8,192 $ — $ 8,192 $ — Total liabilities measured at fair value $ 8,192 $ — $ 8,192 $ — _________________________ (1) Included in short-term investments on the Company's consolidated balance sheets. (2) Included in prepaid expenses and other current assets on the Company's consolidated balance sheets. (3) Included in other accrued liabilities on the Company's consolidated balance sheets. |
Restructuring and Other Charg38
Restructuring and Other Charges (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring Charges [Abstract] | |
Restructuring and other charges [Table Text Block] | Employee termination charges Lease contract termination and other charges Total (In thousands) Balance as of December 31, 2014 $ 316 $ — $ 316 Additions (1) 4,689 1,257 5,946 Cash payments (4,992 ) (4 ) (4,996 ) Balance as of December 31, 2015 13 1,253 1,266 Additions (1) 3,128 629 3,757 Cash payments (2,941 ) (480 ) (3,421 ) Adjustments (194 ) — (194 ) Balance as of December 31, 2016 6 1,402 1,408 Additions — 97 97 Cash payments — (370 ) (370 ) Balance as of December 31, 2017 $ 6 $ 1,129 $ 1,135 _________________________ (1) Total restructuring and other charges recognized in the Company's consolidated statements of operations for the years ended December 31, 2016 and 2015 included non-cash charges and adjustments, net of $0.3 million and $0.5 million , respectively. These amounts have been excluded from the table above. |
Quarterly Financial Data (Table
Quarterly Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Data [Abstract] | |
Quarterly Financial Information [Table Text Block] | The following table presents unaudited quarterly financial information for each of the Company’s last eight quarters. This information has been derived from the Company’s unaudited financial statements and has been prepared on the same basis as the audited consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K. In the opinion of management, all necessary adjustments, consisting only of normal recurring adjustments, have been included to state fairly the quarterly results. December 31, October 1, July 2, April 2, Net revenue $ 397,057 $ 355,483 $ 330,723 $ 323,657 Gross profit $ 104,079 $ 103,095 $ 91,936 $ 96,932 Provision for income taxes $ 52,600 $ 5,767 $ 5,376 $ 7,535 Net income (loss) $ (31,934 ) $ 20,794 $ 14,582 $ 15,994 Net income (loss) per share—basic $ (1.02 ) $ 0.66 $ 0.45 $ 0.49 Net income (loss) per share—diluted $ (1.02 ) $ 0.64 $ 0.44 $ 0.47 December 31, October 2, July 3, April 3, Net revenue $ 367,929 $ 338,458 $ 311,655 $ 310,256 Gross profit $ 110,710 $ 103,122 $ 97,788 $ 100,565 Provision for income taxes $ 11,754 $ 9,144 $ 9,427 $ 8,893 Net income $ 22,109 $ 21,119 $ 16,034 $ 16,589 Net income per share—basic $ 0.67 $ 0.64 $ 0.49 $ 0.51 Net income per share—diluted $ 0.65 $ 0.62 $ 0.48 $ 0.50 |
The Company and Summary of Si40
The Company and Summary of Significant Accounting Policies Narrative (Details) - USD ($) | 12 Months Ended | |||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jan. 01, 2018 | Jan. 01, 2017 | |
Significant Accounting Policies [Line Items] | ||||||
Goodwill impairment charges | $ 0 | $ 0 | $ 0 | |||
Impairment of Intangible Assets (Excluding Goodwill) | 0 | 0 | 0 | |||
Shipping, Handling and Transportation Costs | 9,400,000 | 9,200,000 | 10,400,000 | |||
Marketing and Advertising Expense | $ 33,300,000 | 24,500,000 | 19,400,000 | |||
Cumulative Effect of New Accounting Principle in Period of Adoption | $ 92,000 | |||||
Minimum [Member] | ||||||
Significant Accounting Policies [Line Items] | ||||||
Finite-Lived Intangible Asset, Useful Life | 3 years | |||||
Standard Warranty Replacement of a Defective Product, Period | 1 year | |||||
Maximum [Member] | ||||||
Significant Accounting Policies [Line Items] | ||||||
Finite-Lived Intangible Asset, Useful Life | 10 years | |||||
Accounts Receivable [Member] | Best Buy Inc [Member] | Customer Concentration Risk [Member] | ||||||
Significant Accounting Policies [Line Items] | ||||||
Concentration Risk, Percentage | 35.00% | 38.00% | ||||
Accounts Receivable [Member] | Amazon [Member] | Customer Concentration Risk [Member] | ||||||
Significant Accounting Policies [Line Items] | ||||||
Concentration Risk, Percentage | 12.00% | 11.00% | ||||
Retained Earnings [Member] | ||||||
Significant Accounting Policies [Line Items] | ||||||
Cumulative Effect of New Accounting Principle in Period of Adoption | $ (235,000) | |||||
Accounting Standards Update 2016-09 [Member] | ||||||
Significant Accounting Policies [Line Items] | ||||||
Other Tax Expense (Benefit) | $ 2,700,000 | |||||
Excess Tax Benefit from Share-based Compensation, Operating Activities | 3,000,000 | 800,000 | ||||
Excess Tax Benefit from Share-based Compensation, Financing Activities | $ 3,000,000 | $ 800,000 | ||||
Accounting Standards Update 2016-09 [Member] | Retained Earnings [Member] | ||||||
Significant Accounting Policies [Line Items] | ||||||
Cumulative Effect of New Accounting Principle in Period of Adoption | $ (200,000) | |||||
Accounting Standards Update 2014-09 [Member] | Subsequent Event [Member] | Retained Earnings [Member] | Minimum [Member] | ||||||
Significant Accounting Policies [Line Items] | ||||||
New Accounting Pronouncement or Change in Accounting Principle, Cumulative Effect of Change on Equity or Net Assets | $ 10,000,000 | |||||
Accounting Standards Update 2014-09 [Member] | Subsequent Event [Member] | Retained Earnings [Member] | Maximum [Member] | ||||||
Significant Accounting Policies [Line Items] | ||||||
New Accounting Pronouncement or Change in Accounting Principle, Cumulative Effect of Change on Equity or Net Assets | 15,000,000 | |||||
Accounting Standards Update 2016-16 [Member] | Subsequent Event [Member] | ||||||
Significant Accounting Policies [Line Items] | ||||||
Other Tax Expense (Benefit) | $ (700,000) | |||||
Accounting Standards Update 2016-16 [Member] | Subsequent Event [Member] | Retained Earnings [Member] | ||||||
Significant Accounting Policies [Line Items] | ||||||
Deferred Tax Assets, Other | $ 21,000,000 |
The Company and Summary of Si41
The Company and Summary of Significant Accounting Policies Property and Equipment, Net (Schedule of Estimated Useful Lives) (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Computer Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 2 years |
Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Software [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 2 years |
Software [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Machinery and Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 2 years |
Machinery and Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Leasehold Improvements [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Estimated Useful Lives | Shorter of the lease term or 5 years |
Leasehold Improvements [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Business Acquisitions (Narrativ
Business Acquisitions (Narrative) (Details) - USD ($) $ in Thousands | Nov. 30, 2016 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 85,463 | $ 85,463 | ||
Placemeter [Member] | ||||
Business Acquisition [Line Items] | ||||
Total purchase price | $ 9,600 | |||
Purchase price, cash paid | $ 800 | $ 8,800 | ||
Intangibles | 6,000 | |||
Goodwill | 3,742 | |||
Placemeter [Member] | Technology [Member] | ||||
Business Acquisition [Line Items] | ||||
Intangibles | $ 5,500 | |||
Discount rate used to calculate present value of future cash flows ( in percentage) | 15.00% | |||
Acquired intangible assets, estimated useful life ( in years) | 4 years | |||
Placemeter [Member] | Database [Member] | ||||
Business Acquisition [Line Items] | ||||
Intangibles | $ 200 | |||
Discount rate used to calculate present value of future cash flows ( in percentage) | 15.00% | |||
Acquired intangible assets, estimated useful life ( in years) | 4 years | |||
Placemeter [Member] | Noncompete Agreements [Member] | ||||
Business Acquisition [Line Items] | ||||
Intangibles | $ 300 | |||
Discount rate used to calculate present value of future cash flows ( in percentage) | 20.00% | |||
Acquired intangible assets, estimated useful life ( in years) | 3 years | |||
Placemeter [Member] | US Federal [Member] | ||||
Business Acquisition [Line Items] | ||||
Business Acquisition, Goodwill, Expected Tax Deductible Amount | $ 0 | |||
Placemeter [Member] | State and Local Jurisdiction [Member] | ||||
Business Acquisition [Line Items] | ||||
Business Acquisition, Goodwill, Expected Tax Deductible Amount | $ 0 |
Business Acquisitions (Schedule
Business Acquisitions (Schedule Of Allocation Of Purchase Price) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Nov. 30, 2016 |
Business Acquisition [Line Items] | |||
Goodwill | $ 85,463 | $ 85,463 | |
Placemeter [Member] | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 8 | ||
Accounts receivable | 11 | ||
Prepaid expenses and other current assets | 130 | ||
Property and equipment | 83 | ||
Intangibles | 6,000 | ||
Goodwill | 3,742 | ||
Accounts payable | (40) | ||
Other accrued liabilities | (74) | ||
Deferred tax liabilities | (308) | ||
Total purchase price | $ 9,552 |
Balance Sheet Components (Narra
Balance Sheet Components (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Balance Sheet Components [Line Items] | |||
Cost Method Investments | $ 4,500,000 | $ 100,000 | |
Cost-method Investments, Other than Temporary Impairment | 0 | 0 | $ 0 |
Amortization expense | 12,900,000 | 17,000,000 | 17,300,000 |
Impairment of Intangible Assets (Excluding Goodwill) | 0 | 0 | 0 |
Goodwill impairment charges | 0 | 0 | $ 0 |
Goodwill, Impaired, Accumulated Impairment Loss | $ 74,200,000 | $ 74,200,000 |
Balance Sheet Components (Sched
Balance Sheet Components (Schedule Of Available-For-Sale Short-Term) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Schedule of Available-for-sale Securities [Line Items] | ||
Cost | $ 124,978 | $ 124,017 |
Unrealized Gain | 0 | 9 |
Unrealized Loss | (146) | (40) |
Estimated Fair Value | 124,832 | 123,986 |
Treasuries [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost | 124,816 | 123,869 |
Unrealized Gain | 0 | 9 |
Unrealized Loss | (146) | (40) |
Estimated Fair Value | 124,670 | 123,838 |
Certificates Of Deposits [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost | 162 | 148 |
Unrealized Gain | 0 | 0 |
Unrealized Loss | 0 | 0 |
Estimated Fair Value | $ 162 | $ 148 |
Balance Sheet Components (Sch46
Balance Sheet Components (Schedule Of Accounts Receivable And Related Allowances) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross accounts receivable | $ 437,891 | $ 333,080 |
Allowance for Doubtful Accounts Receivable, Current | (25,093) | (19,241) |
Total accounts receivable, net | 412,798 | 313,839 |
Allowance for Doubtful Accounts, Current [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Allowance for Doubtful Accounts Receivable, Current | (1,257) | (1,255) |
Allowance for Sales Returns [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Allowance for Doubtful Accounts Receivable, Current | (20,189) | (13,506) |
Allowance For Price Protection [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Allowance for Doubtful Accounts Receivable, Current | $ (3,647) | $ (4,480) |
Balance Sheet Components (Sch47
Balance Sheet Components (Schedule Of Inventories) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Balance Sheet Related Disclosures [Abstract] | ||
Raw materials | $ 4,465 | $ 4,596 |
Finished Goods | 241,429 | 243,266 |
Total | $ 245,894 | $ 247,862 |
Balance Sheet Components (Sch48
Balance Sheet Components (Schedule Of Property And Equipment, Net) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Total property and equipment, gross | $ 123,241 | $ 123,493 | |
Accumulated depreciation and amortization | (102,581) | (104,020) | |
Total property and equipment, net | 20,660 | 19,473 | $ 22,384 |
Computer Equipment [Member] | |||
Total property and equipment, gross | 10,114 | 10,557 | |
Furniture, Fixtures And Leasehold Improvements [Member] | |||
Total property and equipment, gross | 21,640 | 20,827 | |
Software [Member] | |||
Total property and equipment, gross | 28,997 | 28,663 | |
Machinery and Equipment [Member] | |||
Total property and equipment, gross | $ 62,490 | $ 63,446 |
Balance Sheet Components Balanc
Balance Sheet Components Balance Sheet Components - Property and Equipment, other information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation | $ 13.2 | $ 14.6 | $ 18.1 |
Balance Sheet Components (Sch50
Balance Sheet Components (Schedule Of Intangibles, Net) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Purchased Intangible Assets [Line Items] | ||
Gross | $ 134,144 | $ 134,144 |
Accumulated Amortization | (109,156) | (96,245) |
Finite-lived intangibles, net | 24,988 | 37,899 |
Technology [Member] | ||
Purchased Intangible Assets [Line Items] | ||
Gross | 66,599 | 66,599 |
Accumulated Amortization | (62,172) | (57,381) |
Finite-lived intangibles, net | 4,427 | 9,218 |
Customer Contracts And Relationships [Member] | ||
Purchased Intangible Assets [Line Items] | ||
Gross | 56,500 | 56,500 |
Accumulated Amortization | (37,430) | (30,375) |
Finite-lived intangibles, net | 19,070 | 26,125 |
Other [Member] | ||
Purchased Intangible Assets [Line Items] | ||
Gross | 11,045 | 11,045 |
Accumulated Amortization | (9,554) | (8,489) |
Finite-lived intangibles, net | $ 1,491 | $ 2,556 |
Balance Sheet Components (Sch51
Balance Sheet Components (Schedule Of Estimated Amortization Expense Related To Intangibles) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Balance Sheet Related Disclosures [Abstract] | ||
2,018 | $ 9,396 | |
2,019 | 7,544 | |
2,020 | 6,622 | |
2,021 | 1,413 | |
2,022 | 13 | |
Total expected amortization expense | $ 24,988 | $ 37,899 |
Balance Sheet Components (Sch52
Balance Sheet Components (Schedule Of Goodwill By Segment) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jan. 01, 2017 | |
Goodwill [Roll Forward] | ||||
Goodwill (period start) | $ 85,463 | |||
Goodwill impairment charges | 0 | $ 0 | $ 0 | |
Goodwill (period end) | 85,463 | 85,463 | ||
Arlo [Member] | ||||
Goodwill [Roll Forward] | ||||
Goodwill, Reclassified | $ 21,149 | |||
Goodwill (period end) | 21,149 | |||
Connected Home [Member] | ||||
Goodwill [Roll Forward] | ||||
Goodwill, Reclassified | 28,035 | |||
Goodwill (period end) | 28,035 | |||
SMB [Member] | ||||
Goodwill [Roll Forward] | ||||
Goodwill, Reclassified | 36,279 | |||
Goodwill (period end) | 36,279 | |||
New Segment, Total [Member] | ||||
Goodwill [Roll Forward] | ||||
Goodwill, Reclassified | 85,463 | |||
Retail [Member] | ||||
Goodwill [Roll Forward] | ||||
Goodwill (period start) | 49,184 | 45,442 | ||
Goodwill, Acquired during period | 3,742 | |||
Goodwill, Reclassified | (49,184) | |||
Goodwill (period end) | 49,184 | 45,442 | ||
Commercial [Member] | ||||
Goodwill [Roll Forward] | ||||
Goodwill (period start) | 36,279 | 36,279 | ||
Goodwill, Acquired during period | 0 | |||
Goodwill, Reclassified | (36,279) | |||
Goodwill (period end) | 36,279 | 36,279 | ||
Service Provider [Member] | ||||
Goodwill [Roll Forward] | ||||
Goodwill (period start) | 0 | 0 | ||
Goodwill, Acquired during period | 0 | |||
Goodwill, Reclassified | 0 | |||
Goodwill (period end) | 0 | 0 | ||
Old Segment, Total [Member] | ||||
Goodwill [Roll Forward] | ||||
Goodwill (period start) | $ 85,463 | 81,721 | ||
Goodwill, Acquired during period | 3,742 | |||
Goodwill, Reclassified | $ (85,463) | |||
Goodwill (period end) | $ 85,463 | $ 81,721 |
Balance Sheet Components Schedu
Balance Sheet Components Schedule of Other Non-Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Balance Sheet Related Disclosures [Abstract] | ||
Non-current deferred income taxes | $ 49,468 | $ 70,859 |
Other | 12,321 | 7,977 |
Total other non-current assets | $ 61,789 | $ 78,836 |
Balance Sheet Components (Sch54
Balance Sheet Components (Schedule Of Other Accrued Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Balance Sheet Related Disclosures [Abstract] | ||
Sales and marketing programs | $ 96,153 | $ 74,330 |
Warranty obligation | 75,824 | 58,520 |
Freight | 10,567 | 8,980 |
Other | 39,926 | 28,844 |
Total other accrued liabilities | $ 222,470 | $ 170,674 |
Derivative Financial Instrume55
Derivative Financial Instruments (Narrative) (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($)derivative_instrumentderivative_instruments | |
Foreign Currency Forward Contracts [Member] | Maximum [Member] | |
Derivative [Line Items] | |
Derivative, term of contract (in months) | 11 months |
Foreign Currency Forward Contracts [Member] | Cash Flow Hedges [Member] | |
Derivative [Line Items] | |
Approximate number of derivatives per quarter (in derivatives) | derivative_instrument | 10 |
Derivative, Average size of contracts | $ 8 |
Estimated term of reclassification from OCI to earnings (in months) | 12 months |
Hedge period of forecasted hedge transaction (in days) | 60 days |
Derivatives Designated As Hedging Instruments [Member] | Cash Flow Hedges [Member] | Maximum [Member] | |
Derivative [Line Items] | |
Derivative, term of contract (in months) | 11 months |
Derivatives Not Designated As Hedging Instruments [Member] | Foreign Currency Forward Contracts [Member] | |
Derivative [Line Items] | |
Derivative, Average size of contracts | $ 2 |
Derivatives Not Designated As Hedging Instruments [Member] | Foreign Currency Forward Contracts [Member] | Minimum [Member] | |
Derivative [Line Items] | |
Derivative, term of contract (in months) | 1 month |
Derivatives Not Designated As Hedging Instruments [Member] | Foreign Currency Forward Contracts [Member] | Maximum [Member] | |
Derivative [Line Items] | |
Derivative, term of contract (in months) | 3 months |
Approximate number of derivatives per quarter (in derivatives) | derivative_instruments | 10 |
Derivative Financial Instrume56
Derivative Financial Instruments (Schedule Of Fair Values Of The Company's Derivative Instruments And The Line Items On The Consolidated Balance Sheets) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Derivatives, Fair Value [Line Items] | ||
Gross Amounts of Recognized Assets | $ 1,799 | $ 8,763 |
Gross Amounts of Recognized Liabilities | 8,192 | 1,705 |
Prepaid Expenses And Other Current Assets [Member] | Derivatives Not Designated As Hedging Instruments [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Gross Amounts of Recognized Assets | 1,314 | 5,873 |
Prepaid Expenses And Other Current Assets [Member] | Derivatives Designated As Hedging Instruments [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Gross Amounts of Recognized Assets | 485 | 2,890 |
Other Current Liabilities [Member] | Derivatives Not Designated As Hedging Instruments [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Gross Amounts of Recognized Liabilities | 7,128 | 1,002 |
Other Current Liabilities [Member] | Derivatives Designated As Hedging Instruments [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Gross Amounts of Recognized Liabilities | $ 1,064 | $ 703 |
Derivative Financial Instrume57
Derivative Financial Instruments Scheduel of Offsetting of Derivative Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Offsetting of Derivative Assets [Line Items] | ||
Gross Amounts of Recognized Assets | $ 1,799 | $ 8,763 |
Gross Amounts Offset in the Consolidated Balance Sheets | 0 | 0 |
Net Amounts of Assets Presented in the Consolidated Balance Sheets | 1,799 | 8,763 |
Financial Instruments | (1,799) | (1,705) |
Cash Collateral Pledged | 0 | 0 |
Net Amount | 0 | 7,058 |
Bank of America [Member] | ||
Offsetting of Derivative Assets [Line Items] | ||
Gross Amounts of Recognized Assets | 1,664 | |
Gross Amounts Offset in the Consolidated Balance Sheets | 0 | |
Net Amounts of Assets Presented in the Consolidated Balance Sheets | 1,664 | |
Financial Instruments | (1,664) | |
Cash Collateral Pledged | 0 | |
Net Amount | 0 | |
J.P. Morgan Chase [Member] | ||
Offsetting of Derivative Assets [Line Items] | ||
Gross Amounts of Recognized Assets | 1,492 | |
Gross Amounts Offset in the Consolidated Balance Sheets | 0 | |
Net Amounts of Assets Presented in the Consolidated Balance Sheets | 1,492 | |
Financial Instruments | (442) | |
Cash Collateral Pledged | 0 | |
Net Amount | 1,050 | |
Wells Fargo Bank [Member] | ||
Offsetting of Derivative Assets [Line Items] | ||
Gross Amounts of Recognized Assets | 135 | 7,271 |
Gross Amounts Offset in the Consolidated Balance Sheets | 0 | 0 |
Net Amounts of Assets Presented in the Consolidated Balance Sheets | 135 | 7,271 |
Financial Instruments | (135) | (1,263) |
Cash Collateral Pledged | 0 | 0 |
Net Amount | $ 0 | $ 6,008 |
Derivative Financial Instrume58
Derivative Financial Instruments Schedule of Offsetting of Derivate Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Offsetting Liabilities [Line Items] | ||
Gross Amounts of Recognized Liabilities | $ 8,192 | $ 1,705 |
Gorss Amount Offset in the Consolidated Balance Sheets | 0 | 0 |
Net Amounts of LIabilities Presented in the Consolidated Balance Sheets | 8,192 | 1,705 |
Financial Instruments | (1,799) | (1,705) |
Cash Collateral Pledged | 0 | 0 |
Net Amounts | 6,393 | 0 |
Bank of America [Member] | ||
Offsetting Liabilities [Line Items] | ||
Gross Amounts of Recognized Liabilities | 7,815 | |
Gorss Amount Offset in the Consolidated Balance Sheets | 0 | |
Net Amounts of LIabilities Presented in the Consolidated Balance Sheets | 7,815 | |
Financial Instruments | (1,664) | |
Cash Collateral Pledged | 0 | |
Net Amounts | 6,151 | |
J.P. Morgan Chase [Member] | ||
Offsetting Liabilities [Line Items] | ||
Gross Amounts of Recognized Liabilities | 442 | |
Gorss Amount Offset in the Consolidated Balance Sheets | 0 | |
Net Amounts of LIabilities Presented in the Consolidated Balance Sheets | 442 | |
Financial Instruments | (442) | |
Cash Collateral Pledged | 0 | |
Net Amounts | 0 | |
Wells Fargo Bank [Member] | ||
Offsetting Liabilities [Line Items] | ||
Gross Amounts of Recognized Liabilities | 377 | 1,263 |
Gorss Amount Offset in the Consolidated Balance Sheets | 0 | 0 |
Net Amounts of LIabilities Presented in the Consolidated Balance Sheets | 377 | 1,263 |
Financial Instruments | (135) | (1,263) |
Cash Collateral Pledged | 0 | 0 |
Net Amounts | $ 242 | $ 0 |
Derivative Financial Instrume59
Derivative Financial Instruments (Schedule Of Company's Derivative Instruments On Other Comprehensive Income And The Consolidated Statement Of Operations) (Details) - Derivatives Designated As Hedging Instruments [Member] - Foreign Currency Forward Contracts [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain or (Loss) Recognized in OCI-Effective Portion | $ (10,692) | $ 3,007 | $ 453 |
Gain or (Loss) Reclassified from OCI into Income-Effective Portion | (7,624) | 820 | 453 |
Amount of Gain or (Loss) Recognized in Income and Excluded from Effectiveness Testing | 1,587 | 365 | (52) |
Net Revenue [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain or (Loss) Reclassified from OCI into Income-Effective Portion | (8,693) | 1,100 | 462 |
Cost Of Revenue [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain or (Loss) Reclassified from OCI into Income-Effective Portion | 18 | (6) | 6 |
Operating Expenses [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain or (Loss) Reclassified from OCI into Income-Effective Portion | 1,051 | (274) | (15) |
Other Income (Expense), net [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of Gain or (Loss) Recognized in Income and Excluded from Effectiveness Testing | $ 1,587 | $ 365 | $ (52) |
Derivative Financial Instrume60
Derivative Financial Instruments (Schedule Of Derivatives Not Designated As Hedging Instruments) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Other Income (Expense), net [Member] | Foreign Currency Forward Contracts [Member] | Derivatives Not Designated As Hedging Instruments [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of Gains or (Losses) Recognized in Income on Derivative | $ (6,945) | $ 3,789 | $ 4,956 |
Net Income Per Share (Schedule
Net Income Per Share (Schedule Of Net Income Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Oct. 01, 2017 | Jul. 02, 2017 | Apr. 02, 2017 | Dec. 31, 2016 | Oct. 02, 2016 | Jul. 03, 2016 | Apr. 03, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |||||||||||
Net Income | $ (31,934) | $ 20,794 | $ 14,582 | $ 15,994 | $ 22,109 | $ 21,119 | $ 16,034 | $ 16,589 | $ 19,436 | $ 75,851 | $ 48,584 |
Weighted average shares outstanding: Basic (in shares) | 32,097 | 32,758 | 33,161 | ||||||||
Dilutive potential common shares (in shares) | 947 | 970 | 627 | ||||||||
Weighted average shares outstanding: Total (in shares) | 33,044 | 33,728 | 33,788 | ||||||||
Basic net income per share (in dollars per share) | $ (1.02) | $ 0.66 | $ 0.45 | $ 0.49 | $ 0.67 | $ 0.64 | $ 0.49 | $ 0.51 | $ 0.61 | $ 2.32 | $ 1.47 |
Diluted net income per share (in dollars per share) | $ (1.02) | $ 0.64 | $ 0.44 | $ 0.47 | $ 0.65 | $ 0.62 | $ 0.48 | $ 0.50 | $ 0.59 | $ 2.25 | $ 1.44 |
Anti-dilutive employee stock-based awards, excluded(in shares) | 279 | 258 | 1,807 |
Other Income (Expense), Net (De
Other Income (Expense), Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Other Income and Expenses [Abstract] | |||
Foreign Currency Transaction Gain (loss), net | $ 7,238 | $ (3,835) | $ (5,114) |
Foreign Currency Contract Gain (Loss), Net | (5,358) | 4,154 | 4,904 |
Other | 144 | (440) | 122 |
Total | $ 2,024 | $ (121) | $ (88) |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Income Tax Disclosure [Line Items] | ||||
Income tax impact associated with stock option exercises | $ 0 | $ 2,454,000 | $ (2,233,000) | |
Other Comprehensive Income (Loss), Tax | 394,000 | (285,000) | 21,000 | |
Valuation Allowance | [1] | 5,182,000 | 4,594,000 | |
Valuation Allowance, Net of Federal Tax | 4,100,000 | 3,000,000 | ||
Tax Cuts and Jobs Act of 2017, Provisional Income Tax Expense (Benefit) | 48,300,000 | |||
Tax Cuts and Jobs Act of 2017, Provisional Income Tax Expense (Benefit) related to remeasurement of DTA, DTL | 26,600,000 | |||
Tax Cuts and Jobs Act of 2017, Provisional Income Tax Expense (Benefit) deemed repatriation of foreign earnings | 21,700,000 | |||
Possible reduction in liabilities for uncertain tax positions | 900,000 | |||
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | 10,400,000 | |||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense | (400,000) | 600,000 | $ 100,000 | |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | 3,300,000 | 3,600,000 | ||
Effective Income Tax Rate Reconciliation, Tax Credit, Foreign, Amount | 175,000,000 | 154,200,000 | ||
State and Local Jurisdiction [Member] | ||||
Income Tax Disclosure [Line Items] | ||||
Valuation Allowance | 5,200,000 | $ 4,600,000 | ||
Tax Credit Carryforwards | 3,100,000 | |||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | 600,000 | |||
US Federal [Member] | ||||
Income Tax Disclosure [Line Items] | ||||
Operating Loss Carryforwards | $ 15,800,000 | |||
Operating Loss Carryforwards Expiration Year | 2,021 | |||
ITALY | Earliest Tax Year [Member] | ||||
Income Tax Disclosure [Line Items] | ||||
Income Tax Examination, Year under Examination | 2,004 | |||
ITALY | Latest Tax Year [Member] | ||||
Income Tax Disclosure [Line Items] | ||||
Income Tax Examination, Year under Examination | 2,012 | |||
GERMANY | Earliest Tax Year [Member] | ||||
Income Tax Disclosure [Line Items] | ||||
Income Tax Examination, Year under Examination | 2,008 | |||
GERMANY | Latest Tax Year [Member] | ||||
Income Tax Disclosure [Line Items] | ||||
Income Tax Examination, Year under Examination | 2,013 | |||
UNITED KINGDOM | Earliest Tax Year [Member] | ||||
Income Tax Disclosure [Line Items] | ||||
Income Tax Examination, Year under Examination | 2,014 | |||
UNITED KINGDOM | Latest Tax Year [Member] | ||||
Income Tax Disclosure [Line Items] | ||||
Income Tax Examination, Year under Examination | 2,016 | |||
FRANCE | Earliest Tax Year [Member] | ||||
Income Tax Disclosure [Line Items] | ||||
Income Tax Examination, Year under Examination | 2,015 | |||
FRANCE | Latest Tax Year [Member] | ||||
Income Tax Disclosure [Line Items] | ||||
Income Tax Examination, Year under Examination | 2,016 | |||
[1] | Valuation allowance is presented gross. The valuation allowance net of the federal tax effect is $4.1 million and $3.0 million for the years ended December 31, 2017 and 2016, respectively. |
Income Taxes Schedule of Income
Income Taxes Schedule of Income Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
United States | $ 57,989 | $ 88,748 | $ 88,681 |
International | 32,725 | 26,321 | (3,117) |
Income before income taxes | $ 90,714 | $ 115,069 | $ 85,564 |
Income Taxes Schedule of Provis
Income Taxes Schedule of Provision For Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Oct. 01, 2017 | Jul. 02, 2017 | Apr. 02, 2017 | Dec. 31, 2016 | Oct. 02, 2016 | Jul. 03, 2016 | Apr. 03, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||||||||||
U.S. Federal | $ 40,532 | $ 33,267 | $ 30,970 | ||||||||
State | 4,463 | 2,693 | 3,139 | ||||||||
Foreign | 4,305 | 6,278 | 6,105 | ||||||||
Current, Total | 49,300 | 42,238 | 40,214 | ||||||||
U.S. Federal | 23,005 | (2,052) | (2,645) | ||||||||
State | (288) | 441 | 134 | ||||||||
Foreign | (739) | (1,409) | (723) | ||||||||
Deferred, Total | 21,978 | (3,020) | (3,234) | ||||||||
Provision for income taxes | $ 52,600 | $ 5,767 | $ 5,376 | $ 7,535 | $ 11,754 | $ 9,144 | $ 9,427 | $ 8,893 | $ 71,278 | $ 39,218 | $ 36,980 |
Income Taxes Schedule of Deferr
Income Taxes Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Accruals And Allowance | $ 23,661 | $ 32,303 | |
Operating Loss Carryforwards | 3,317 | 6,358 | |
Stock-Based Compensation | 6,015 | 8,250 | |
Deferred Rent | 1,977 | 3,002 | |
Deferred Revenue | 2,740 | 1,957 | |
Tax Credit Carryforwards | 974 | 1,543 | |
Acquired Intangibles | 14,907 | 21,871 | |
Depreciation And Amortization | 1,185 | 1,160 | |
Total Deferred Tax Assets | 54,776 | 76,444 | |
Depreciation And Amortization | 0 | 0 | |
Deferred Tax Liabilities, Other | (126) | (991) | |
Total Deferred Tax Liabilities | (126) | (991) | |
Valuation Allowance | [1] | (5,182) | (4,594) |
Net Deferred Tax Assets | $ 49,468 | $ 70,859 | |
[1] | Valuation allowance is presented gross. The valuation allowance net of the federal tax effect is $4.1 million and $3.0 million for the years ended December 31, 2017 and 2016, respectively. |
Income Taxes Schedule of Effect
Income Taxes Schedule of Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |||
Tax at federal statutory rate | 35.00% | 35.00% | 35.00% |
State, net of federal benefit | 1.10% | 1.80% | 2.60% |
Impact of international operations | (6.40%) | (2.70%) | 7.10% |
Stock-based compensation | (0.90%) | 1.20% | (0.40%) |
Tax credits | (1.60%) | (0.90%) | (1.20%) |
Impact of the Tax Act | 53.30% | 0.00% | 0.00% |
Others | (1.90%) | (0.30%) | 0.10% |
Effective Income Tax Rate Reconciliation, Percent | 78.60% | 34.10% | 43.20% |
Income Taxes Schedule of Reconc
Income Taxes Schedule of Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Beginning | $ 12,965 | $ 12,830 | $ 13,364 |
Additions based on tax positions related to the current year | 938 | 1,523 | 1,608 |
Additions for tax positions of prior years | 32 | 45 | 228 |
Settlements | (199) | ||
Reductions for tax positions of prior years | (1,477) | (237) | (302) |
Reductions due to lapse of applicable statutes | (899) | (627) | (1,053) |
Adjustments due to foreign exchange rate movement | 1,008 | (569) | (816) |
Ending | $ 12,567 | $ 12,965 | $ 12,830 |
Commitments And Contingencies (
Commitments And Contingencies (Narrative) (Details) | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2013USD ($)$ / products | Dec. 31, 2017USD ($)claimspatentcase | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($)$ / products | Sep. 14, 2010patents | |
Loss contingencies [Line Items] | ||||||
Operating leases expiration date | Dec. 31, 2026 | |||||
Operating Leases, Rent Expense | $ 10,100,000 | $ 9,500,000 | $ 9,800,000 | |||
Continued vesting period after termination without cause (in years) | 1 year | |||||
Number of days for non-cancellation of purchase obligations prior to expected shipment date (in days) | 30 days | |||||
Non-cancelable purchase commitments | $ 153,100,000 | |||||
Liability for Director and Officer Indemnification Agreements | 0 | |||||
Liability For Customers, Distributors, and Resellers Indemnification Agreements | 0 | |||||
Liabilities for executive's employment agreements | $ 0 | |||||
Number of exiting cases and proceedings that the Company currently believes are liking to have a material adverse effect on its financial position | claims | 0 | |||||
The future legnth the Company currently considered regarding existing cases and proceedings that are likely to have a material advese effect on it (in months) | 12 months | |||||
Number of patents company is accused of infringing (in patents) | patents | 8 | |||||
Estimated future RAND royalty rate 2018 through 2020 | $ / products | 5 | |||||
Reasonable and nondiscriminatory (RAND) royalty rate (USD per unit) | $ / products | 15 | |||||
Ericsson v. NETGEAR [Member] | ||||||
Loss contingencies [Line Items] | ||||||
Foregone colleting verdict amount (in USD) | $ 3,600,000 | |||||
Foregone reasonable and nondiscriminatory (RAND) royalty rate | $ / products | 0.15 | |||||
Chrismar Systems vs. NETGEAR [Member] | ||||||
Loss contingencies [Line Items] | ||||||
Number of patents company is accused of infringing (in patents) | patent | 4 | |||||
Number of active cases the suing company has | case | 40 | |||||
Realtime Data v. NETGEAR [Member] | ||||||
Loss contingencies [Line Items] | ||||||
Number of patents company is accused of infringing (in patents) | patent | 4 | |||||
Vivato v. NETGEAR [Member] | ||||||
Loss contingencies [Line Items] | ||||||
Number of patents company is accused of infringing (in patents) | patent | 3 | |||||
Hera Wireless v. NETGEAR [Member] | ||||||
Loss contingencies [Line Items] | ||||||
Number of patents company is accused of infringing (in patents) | patent | 3 | |||||
D-Link [Member] | Ericsson v. NETGEAR [Member] | ||||||
Loss contingencies [Line Items] | ||||||
Loss Contingency, Damages Awarded, Value | $ 435,000 | |||||
NETGEAR [Member] | Ericsson v. NETGEAR [Member] | ||||||
Loss contingencies [Line Items] | ||||||
Loss Contingency, Damages Awarded, Value | 3,555,000 | |||||
Toshiba [Member] | Ericsson v. NETGEAR [Member] | ||||||
Loss contingencies [Line Items] | ||||||
Loss Contingency, Damages Awarded, Value | 2,445,000 | |||||
Belkin [Member] | Ericsson v. NETGEAR [Member] | ||||||
Loss contingencies [Line Items] | ||||||
Loss Contingency, Damages Awarded, Value | 600,000 | |||||
Acer Gateway [Member] | Ericsson v. NETGEAR [Member] | ||||||
Loss contingencies [Line Items] | ||||||
Loss Contingency, Damages Awarded, Value | 1,170,000 | |||||
Dell [Member] | Ericsson v. NETGEAR [Member] | ||||||
Loss contingencies [Line Items] | ||||||
Loss Contingency, Damages Awarded, Value | $ 1,920,000 | |||||
46 To 60 Days [Member] | ||||||
Loss contingencies [Line Items] | ||||||
Percentage of cancelable orders | 50.00% | |||||
31 To 45 Days [Member] | ||||||
Loss contingencies [Line Items] | ||||||
Percentage of cancelable orders | 25.00% | |||||
Chief Executive Officer [Member] | ||||||
Loss contingencies [Line Items] | ||||||
Number of weeks for which salary is payable upon termination of employment without cause (in days) | 365 days | |||||
Number of years after change of control to trigger full accelerated vest of unvested portion of stock options (in years) | 1 year | |||||
Senior Vice President Of Worldwide Operations And Support [Member] | ||||||
Loss contingencies [Line Items] | ||||||
Number of weeks for which salary is payable upon termination of employment without cause (in days) | 273 days | |||||
Other Key Executives [Member] | ||||||
Loss contingencies [Line Items] | ||||||
Number of weeks for which salary is payable upon termination of employment without cause (in days) | 182 days | |||||
Maximum number of years covered by accelerated vest for other key executives if term without cause is within one year of change in control (in years) | 2 years | |||||
Minimum [Member] | 46 To 60 Days [Member] | ||||||
Loss contingencies [Line Items] | ||||||
Required notice period prior to the expected shipment date (in days) | 46 days | |||||
Minimum [Member] | 31 To 45 Days [Member] | ||||||
Loss contingencies [Line Items] | ||||||
Required notice period prior to the expected shipment date (in days) | 31 days | |||||
Maximum [Member] | 46 To 60 Days [Member] | ||||||
Loss contingencies [Line Items] | ||||||
Required notice period prior to the expected shipment date (in days) | 60 days | |||||
Maximum [Member] | 31 To 45 Days [Member] | ||||||
Loss contingencies [Line Items] | ||||||
Required notice period prior to the expected shipment date (in days) | 45 days | |||||
Earliest Tax Year [Member] | ITALY | ||||||
Loss contingencies [Line Items] | ||||||
Income Tax Examination, Year under Examination | 2,004 | |||||
Latest Tax Year [Member] | ITALY | ||||||
Loss contingencies [Line Items] | ||||||
Income Tax Examination, Year under Examination | 2,012 |
Commitments And Contingencies S
Commitments And Contingencies Schedule of Future Minimum Lease Paynments (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,018 | $ 8,924 |
2,019 | 7,718 |
2,020 | 6,092 |
2,021 | 5,715 |
2,022 | 5,638 |
Thereafter | 12,921 |
Total Future Minimum Lease Payments | $ 47,008 |
Commitments And Contingencies71
Commitments And Contingencies Product Warranty Liability (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Product Warranties Disclosures [Abstract] | |||
Balance at the beginning of the period | $ 58,520 | $ 56,706 | $ 44,888 |
Standard and Extended Product Warranty Accrual, Increase for Warranties Issued | 131,263 | 87,570 | 80,085 |
Settlements made during the year | (113,959) | (85,756) | (68,267) |
Balance at the end of the period | $ 75,824 | $ 58,520 | $ 56,706 |
Stockholders' Equity (Narrative
Stockholders' Equity (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Apr. 25, 2017 | Jul. 21, 2015 | Oct. 17, 2014 | Oct. 21, 2008 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock Repurchase Program, Number of Shares Authorized to be Repurchased (in shares) | 3,000,000 | 3,000,000 | 3,000,000 | 6,000,000 | |||
Repurchases of common stock, shares | 2,400,000 | 900,000 | 3,800,000 | ||||
Repurchases of common stock | $ 113,161 | $ 38,252 | $ 117,680 | ||||
Remaining Number of Shares Authorized to be Repurchased | 2,000,000 | ||||||
Restricted stock unit withholdings, shares | 135,000 | 105,000 | 85,000 | ||||
Restricted stock unit withholdings | $ 6,415 | $ 4,686 | $ 2,629 | ||||
Common Stock [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Repurchases of common stock, shares | 2,378,000 | 894,000 | 3,770,000 | ||||
Restricted stock unit withholdings, shares | 135,000 | 105,000 | 85,000 |
Stockholders' Equity (Schedule
Stockholders' Equity (Schedule Of Changes in Accumulated Other Comprehensive Income by Component Net of Tax) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accumulated Other Comprehensive Income (Loss), Tax [Roll Froward] [Roll Forward] | |||
AOCI Tax (Beginning balance) | $ (261,000) | $ 24,000 | $ 3,000 |
Other Comprehensive Income (Loss) before Reclassifications, Tax | 3,062,000 | (572,000) | 21,000 |
Reclassification from AOCI, Current Period, Tax | 2,668,000 | (287,000) | 0 |
Other Comprehensive Income (Loss), Tax | 394,000 | (285,000) | 21,000 |
AOCI Tax (Ending balance) | 133,000 | (261,000) | 24,000 |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning balance | 1,938,000 | 3,000 | 38,000 |
Other comprehensive (loss) income before reclassifications | (7,745,000) | 2,468,000 | 418,000 |
Amounts reclassified from accumulated other comprehensive income (loss) | (4,956,000) | 533,000 | 453,000 |
Net current period other comprehensive loss | (2,789,000) | 1,935,000 | (35,000) |
Ending balance | (851,000) | 1,938,000 | 3,000 |
Gains and losses on available for sale securities [Member] | |||
Accumulated Other Comprehensive Income (Loss), Before Tax [ Roll Forward] [Roll Forward] | |||
AOCI before tax (Beginning) | (31,000) | (64,000) | (8,000) |
Other Comprehensive Income (Loss), before Reclassifications, before Tax | (115,000) | 33,000 | (56,000) |
Reclassification from AOCI, Current Period, before Tax | 0 | 0 | 0 |
Other Comprehensive Income (Loss), before Tax | (115,000) | 33,000 | (56,000) |
AOCI before Tax (Ending) | (146,000) | (31,000) | (64,000) |
Gains and losses on derivatives [Member] | |||
Accumulated Other Comprehensive Income (Loss), Before Tax [ Roll Forward] [Roll Forward] | |||
AOCI before tax (Beginning) | 2,230,000 | 43,000 | 43,000 |
Other Comprehensive Income (Loss), before Reclassifications, before Tax | (10,692,000) | 3,007,000 | 453,000 |
Reclassification from AOCI, Current Period, before Tax | (7,624,000) | 820,000 | 453,000 |
Other Comprehensive Income (Loss), before Tax | (3,068,000) | 2,187,000 | 0 |
AOCI before Tax (Ending) | $ (838,000) | $ 2,230,000 | $ 43,000 |
Stockholders' Equity (Schedul74
Stockholders' Equity (Schedule of Reclassifications Out Of Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Reclassification Out of Accumulated Other Comprehensive Income [Line Items] | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | $ (4,956) | $ 533 | $ 453 | |
Derivatives Designated As Hedging Instruments [Member] | Foreign Currency Forward Contracts [Member] | ||||
Reclassification Out of Accumulated Other Comprehensive Income [Line Items] | ||||
Gain or (Loss) Reclassified from OCI into Income-Effective Portion | (7,624) | 820 | 453 | |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Tax | 2,668 | (287) | 0 | [1] |
Amounts reclassified from accumulated other comprehensive income (loss) | (4,956) | 533 | 453 | |
Derivatives Designated As Hedging Instruments [Member] | Foreign Currency Forward Contracts [Member] | Net Revenue [Member] | ||||
Reclassification Out of Accumulated Other Comprehensive Income [Line Items] | ||||
Gain or (Loss) Reclassified from OCI into Income-Effective Portion | (8,693) | 1,100 | 462 | |
Derivatives Designated As Hedging Instruments [Member] | Foreign Currency Forward Contracts [Member] | Cost Of Revenue [Member] | ||||
Reclassification Out of Accumulated Other Comprehensive Income [Line Items] | ||||
Gain or (Loss) Reclassified from OCI into Income-Effective Portion | 18 | (6) | 6 | |
Derivatives Designated As Hedging Instruments [Member] | Foreign Currency Forward Contracts [Member] | Operating Expenses [Member] | ||||
Reclassification Out of Accumulated Other Comprehensive Income [Line Items] | ||||
Gain or (Loss) Reclassified from OCI into Income-Effective Portion | $ 1,051 | $ (274) | $ (15) | |
[1] | Under the Company's 2015 tax structure, all hedging gains and losses from derivative contracts were ultimately borne by a legal entity in a jurisdiction with no income tax. |
Employee Benefit Plans (Narrati
Employee Benefit Plans (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Non-cash stock-based compensation | $ 22,147,000 | $ 18,949,000 | $ 16,825,000 |
Vesting term (in years) | 4 years | ||
Allocation of Recognized Period Costs, Capitalized Amount | $ 500,000 | 500,000 | 500,000 |
Maximum Percentage Contribution Of Salary By Employees | 100.00% | ||
Employer Matching Contribution, Percent of Employees' Gross Pay | 50.00% | ||
Maximum Contribution By Employer Value | $ 6,000 | ||
Cost Recognized | $ 1,000,000 | $ 1,000,000 | 900,000 |
Employee Stock Purchase Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of Additional Shares Authorized | 1,000,000 | ||
Number of Shares Authorized | 2,000,000 | ||
Shares purchased under ESPP | 111,000 | ||
Weighted Average Price of Shares Purchased under ESPP | $ 43 | ||
Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options, Exercises in Period, Intrinsic Value | $ 7,700,000 | $ 14,500,000 | 11,400,000 |
Options, Vested in Period, Total Fair Value | $ 3,800,000 | $ 4,200,000 | $ 6,500,000 |
Grants In Period, Weighted Average Grant Date Fair Value | $ 12.35 | $ 12.28 | $ 10.83 |
Total unrecognized compensation | $ 7,400,000 | ||
Weighted-average period of recognition of stock based compensation (in days) | 2 years 6 months 20 days | ||
RSUs [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total unrecognized compensation | $ 37,200,000 | ||
Weighted-average period of recognition of stock based compensation (in days) | 2 years 5 months 15 days | ||
Aggregate Intrinsic Value, Vested | $ 19,500,000 | $ 15,400,000 | $ 8,900,000 |
Equity Instruments Other than Options, Vested in Period, Fair Value | $ 14,600,000 | 10,800,000 | 8,800,000 |
2006 Long Term Incentive Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expiration Date | Apr. 13, 2016 | ||
2016 Incentive Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Minimum Percentage Of Exercise Price Granted To Ten Percentage Of Shareholders | 110.00% | ||
Common Stock, Capital Shares Reserved for Future Issuance | 2,500,000 | ||
Other Share Increase (Decrease) | 699,827 | ||
Number of shares reserved for future grant (in shares) | 1,900,000 | ||
Vesting term (in years) | 4 years | ||
2016 Incentive Plan [Member] | SARs [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Term Of Stock Appreciation Rights From Date Of Grant | 10 years | ||
2016 Incentive Plan [Member] | First Tranche [Member] | Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting term (in years) | 12 months | ||
2016 Incentive Plan [Member] | Remaining Tranche [Member] | Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting term (in years) | 3 years | ||
2016 Incentive Plan [Member] | Minimum [Member] | RSAs [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting term (in years) | 3 years | ||
Employee Stock Purchase Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Maximum Percentage of compensation contributed by employees (in percentage) | 10.00% | ||
Purchase percentage of stock at fair market value (in percentage) | 85.00% | ||
Discount from Market Price, Purchase Date | 15.00% | ||
Non-cash stock-based compensation | $ 1,500,000 | $ 1,300,000 | $ 500,000 |
Number of shares reserved for future grant (in shares) | 900,000 |
Employee Benefit Plans (Schedul
Employee Benefit Plans (Schedule Of Stock Option Activity) (Details) - Stock Options [Member] $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Number of Shares, Beginning Balance (in shares) | shares | 1,884 |
Number of Shares, Granted (in shares) | shares | 348 |
Number of Shares, Exercised (in shares) | shares | (352) |
Number of Shares, Expired (in shares) | shares | (1) |
Number of Shares, Ending Balance (in shares) | shares | 1,879 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |
Beginning Balance (in dollars per share) | $ / shares | $ 31.14 |
Grants (in dollars per share) | $ / shares | 43.07 |
Exercises (in dollars per share) | $ / shares | 27.23 |
Expired (in dollars per share) | $ / shares | 31.70 |
Ending Balance (in dollars per share) | $ / shares | $ 34.08 |
Outstanding, Weighted Average Remaining Contractual Term | 6 years 1 month 18 days |
Outstanding, Intrinsic Value | $ | $ 46,346 |
Vested and Expected to Vest, Number | shares | 1,879 |
Vested and Expected to Vest, Weighted Average Exercise Price | $ / shares | $ 34.08 |
Vested and Expected to Vest, Weighted Average Remaining Contractual Term | 6 years 1 month 18 days |
Vested and Expected to Vest, Aggregate Intrinsic Value | $ | $ 46,346 |
Exercisable, Number | shares | 1,205 |
Exercisable, Weighted Average Exercise Price | $ / shares | $ 30.94 |
Exercisable, Weighted Average Remaining Contractual Term | 4 years 8 months 18 days |
Exercisable, Intrinsic Value | $ | $ 33,512 |
Employee Benefit Plans (Sched77
Employee Benefit Plans (Schedule of Ranges of Outstanding And Exercisable Stock Optoins) (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of Outstanding Options | shares | 1,879 |
Outstanding Options, Weighted Average Remaining Contractual Term | 6 years 1 month 18 days |
Outstanding Options, Weighted Average Exercise Price | $ / shares | $ 34.08 |
Exercise Price Range, Number of Exercisable Options | shares | 1,205 |
Exercisable Options, Weighted Average Exercise Price | $ / shares | $ 30.94 |
$10.69 - $31.28 | |
Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of Outstanding Options | shares | 435 |
Outstanding Options, Weighted Average Remaining Contractual Term | 4 years 6 months 18 days |
Outstanding Options, Weighted Average Exercise Price | $ / shares | $ 24.55 |
Exercise Price Range, Number of Exercisable Options | shares | 334 |
Exercisable Options, Weighted Average Exercise Price | $ / shares | $ 22.50 |
$31.31 - $32.54 | |
Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of Outstanding Options | shares | 443 |
Outstanding Options, Weighted Average Remaining Contractual Term | 5 years 6 months 1 day |
Outstanding Options, Weighted Average Exercise Price | $ / shares | $ 32.19 |
Exercise Price Range, Number of Exercisable Options | shares | 410 |
Exercisable Options, Weighted Average Exercise Price | $ / shares | $ 32.16 |
$32.55 - $39.53 | |
Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of Outstanding Options | shares | 651 |
Outstanding Options, Weighted Average Remaining Contractual Term | 5 years 10 months 1 day |
Outstanding Options, Weighted Average Exercise Price | $ / shares | $ 36.93 |
Exercise Price Range, Number of Exercisable Options | shares | 459 |
Exercisable Options, Weighted Average Exercise Price | $ / shares | $ 35.93 |
$40.01 - $42.70 | |
Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of Outstanding Options | shares | 330 |
Outstanding Options, Weighted Average Remaining Contractual Term | 9 years 4 months 20 days |
Outstanding Options, Weighted Average Exercise Price | $ / shares | $ 42.68 |
Exercise Price Range, Number of Exercisable Options | shares | 2 |
Exercisable Options, Weighted Average Exercise Price | $ / shares | $ 40.01 |
$49.20 - $49.20 | |
Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of Outstanding Options | shares | 20 |
Outstanding Options, Weighted Average Remaining Contractual Term | 9 years 9 months 18 days |
Outstanding Options, Weighted Average Exercise Price | $ / shares | $ 49.20 |
Exercise Price Range, Number of Exercisable Options | shares | 0 |
Exercisable Options, Weighted Average Exercise Price | $ / shares | $ 0 |
Employee Benefit Plans (Sched78
Employee Benefit Plans (Schedule Of RSU Activity) (Details) - RSUs [Member] $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($)$ / sharesshares | |
Equity Instruments Other than Options, Nonvested [Roll Forward] | |
Beginning Balance (in shares) | shares | 996 |
RSUs granted (in shares) | shares | 618 |
RSUs vested (in shares) | shares | (412) |
RSUs cancelled (in shares) | shares | (72) |
Ending Balance (in shares) | shares | 1,130 |
Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |
Beginning Balance (in dollars per share) | $ / shares | $ 36.22 |
RSUs granted (in dollars per share) | $ / shares | 49.45 |
RSUs vested (in dollars per share) | $ / shares | 35.46 |
RSUs cancelled (in dollars per share) | $ / shares | 44.16 |
Ending Balance (in dollars per share) | $ / shares | $ 43.22 |
Weighted Average Remaining Contractual Terms | 1 year 5 months 6 days |
Equity Instruments Other than Options, Nonvested Intrinisc Value | $ | $ 66,390 |
Employee Benefit Plans (Sched79
Employee Benefit Plans (Schedule Of Valuation And Expense Information) (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Employee Stock Purchase Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected Term | 6 months | 6 months | |
Risk Free Interest Rate | 0.93% | 0.43% | |
Expected Volatility Rate | 29.70% | 38.30% | |
Dividend yield (in percentage) | 0.00% | 0.00% | |
Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected Term | 4 years 4 months 24 days | 4 years 4 months 24 days | 4 years 6 months |
Risk Free Interest Rate | 1.66% | 1.28% | 1.44% |
Expected Volatility Rate | 31.60% | 35.40% | 39.30% |
Dividend yield (in percentage) | 0.00% | 0.00% | 0.00% |
Employee Benefit Plans (Sched80
Employee Benefit Plans (Schedule Of Total Stock-Based Compensation Expense Resulting) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 22,147 | $ 18,949 | $ 16,825 |
Cost Of Revenue [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | 2,005 | 1,740 | 1,566 |
Research And Development [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | 4,927 | 4,075 | 3,451 |
Sales And Marketing [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | 5,959 | 5,065 | 5,022 |
General And Administrative [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 9,256 | $ 8,069 | $ 6,786 |
Segment Information (Narrative
Segment Information (Narrative) (Details) - business_unit | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Number of reportable segments (in segments) | 3 | ||
Arlo and Connected Home [Member] | Net Revenue [Member] | Customer A [Member] | |||
Concentration Risk, Percentage | 19.00% | 17.00% | 15.00% |
Arlo and Connected Home [Member] | Net Revenue [Member] | Customer B [Member] | |||
Concentration Risk, Percentage | 14.00% | 12.00% |
Schedule Of Reportable Segment
Schedule Of Reportable Segment And Reconciliation Of Segment Contribution Income To Income Before Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2017 | Oct. 01, 2017 | Jul. 02, 2017 | Apr. 02, 2017 | Dec. 31, 2016 | Oct. 02, 2016 | Jul. 03, 2016 | Apr. 03, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||||
Segment Reporting Information [Line Items] | ||||||||||||||
Total net revenue | $ 397,057 | $ 355,483 | $ 330,723 | $ 323,657 | $ 367,929 | $ 338,458 | $ 311,655 | $ 310,256 | $ 1,406,920 | $ 1,328,298 | $ 1,300,695 | |||
Total segment contribution income | 196,976 | 222,803 | 177,775 | |||||||||||
Corporate and unallocated costs | (75,382) | (69,140) | (54,501) | |||||||||||
Amortization of intangible assets | [1] | (12,597) | (16,733) | (16,969) | ||||||||||
Stock-based compensation expense | (22,147) | (18,949) | (16,825) | |||||||||||
Restructuring and other charges | (97) | (3,881) | (6,398) | |||||||||||
Losses on inventory commitments due to restructuring | 0 | 0 | (407) | |||||||||||
Litigation reserves, net | (176) | (73) | 2,682 | |||||||||||
Interest income | 2,113 | 1,163 | 295 | |||||||||||
Other income (expense), net | 2,024 | (121) | (88) | |||||||||||
Income before income taxes | 90,714 | 115,069 | 85,564 | |||||||||||
Arlo [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Total net revenue | 378,413 | 188,469 | [2] | 91,636 | [2] | |||||||||
Total segment contribution income | $ 29,591 | $ (5,218) | [2] | $ (126) | [2] | |||||||||
Segment contribution margin (in percentage) | 7.80% | (2.80%) | [2] | (0.10%) | [2] | |||||||||
Connected Home [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Total net revenue | $ 762,069 | $ 844,818 | [2] | $ 937,215 | [2] | |||||||||
Total segment contribution income | $ 101,993 | $ 152,560 | [2] | $ 121,745 | [2] | |||||||||
Segment contribution margin (in percentage) | 13.40% | 18.10% | [2] | 13.00% | [2] | |||||||||
SMB [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Total net revenue | $ 266,438 | $ 295,011 | [2] | $ 271,844 | [2] | |||||||||
Total segment contribution income | $ 65,392 | $ 75,461 | [2] | $ 56,156 | [2] | |||||||||
Segment contribution margin (in percentage) | 24.50% | 25.60% | [2] | 20.70% | [2] | |||||||||
[1] | Amount excludes amortization expense related to patents within purchased intangibles in cost of revenue. | |||||||||||||
[2] | Prior year financial information for each reportable segment has been recast to conform to the current reportable segment structure effective on January 1, 2017. |
Segment Information Schedule of
Segment Information Schedule of Net Revenue from Service Provider Customers by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2017 | Oct. 01, 2017 | Jul. 02, 2017 | Apr. 02, 2017 | Dec. 31, 2016 | Oct. 02, 2016 | Jul. 03, 2016 | Apr. 03, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||
Segment Reporting Information [Line Items] | |||||||||||||
Net revenue | $ 397,057 | $ 355,483 | $ 330,723 | $ 323,657 | $ 367,929 | $ 338,458 | $ 311,655 | $ 310,256 | $ 1,406,920 | $ 1,328,298 | $ 1,300,695 | ||
Arlo [Member] | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Net revenue | 378,413 | 188,469 | [1] | 91,636 | [1] | ||||||||
Connected Home [Member] | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Net revenue | 762,069 | 844,818 | [1] | 937,215 | [1] | ||||||||
SMB [Member] | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Net revenue | 266,438 | 295,011 | [1] | 271,844 | [1] | ||||||||
Service Provider [Member] | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Net revenue | 214,249 | 273,913 | 421,482 | ||||||||||
Service Provider [Member] | Arlo [Member] | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Net revenue | 20,795 | 19,758 | 18,585 | ||||||||||
Service Provider [Member] | Connected Home [Member] | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Net revenue | 190,186 | 249,980 | 395,900 | ||||||||||
Service Provider [Member] | SMB [Member] | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Net revenue | $ 3,268 | $ 4,175 | $ 6,997 | ||||||||||
[1] | Prior year financial information for each reportable segment has been recast to conform to the current reportable segment structure effective on January 1, 2017. |
Schedule Of Net Revenue By Geog
Schedule Of Net Revenue By Geography Periods (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Oct. 01, 2017 | Jul. 02, 2017 | Apr. 02, 2017 | Dec. 31, 2016 | Oct. 02, 2016 | Jul. 03, 2016 | Apr. 03, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | |||||||||||
Total net revenue | $ 397,057 | $ 355,483 | $ 330,723 | $ 323,657 | $ 367,929 | $ 338,458 | $ 311,655 | $ 310,256 | $ 1,406,920 | $ 1,328,298 | $ 1,300,695 |
United States [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total net revenue | 927,952 | 855,796 | 779,361 | ||||||||
Americas Excluding United States [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total net revenue | 30,112 | 27,852 | 18,385 | ||||||||
EMEA [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total net revenue | 253,885 | 245,405 | 321,714 | ||||||||
APAC [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total net revenue | $ 194,971 | $ 199,245 | $ 181,235 |
Schedule Of Long-Lived Asset By
Schedule Of Long-Lived Asset By Geographic Areas (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Long-lived assets | $ 20,660 | $ 19,473 | $ 22,384 |
United States [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Long-lived assets | 9,216 | 9,542 | 9,832 |
CANADA | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Long-lived assets | 1,807 | 2,745 | 3,586 |
EMEA [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Long-lived assets | 141 | 210 | 468 |
China [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Long-lived assets | 6,803 | 5,219 | 6,562 |
APAC Excluding China [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Long-lived assets | $ 2,693 | $ 1,757 | $ 1,936 |
Fair Value Measurements (Summar
Fair Value Measurements (Summary Of Valuation Of Company's Financial Instruments By Various Levels) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, Fair Value Disclosure, Recurring | $ 141,331 | $ 151,304 | |
Liabilities, Fair Value Disclosure, Recurring | 8,192 | 1,705 | |
Level 1 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, Fair Value Disclosure, Recurring | 139,532 | 142,541 | |
Liabilities, Fair Value Disclosure, Recurring | 0 | 0 | |
Level 2 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, Fair Value Disclosure, Recurring | 1,799 | 8,763 | |
Liabilities, Fair Value Disclosure, Recurring | 8,192 | 1,705 | |
Level 3 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, Fair Value Disclosure, Recurring | 0 | 0 | |
Liabilities, Fair Value Disclosure, Recurring | 0 | 0 | |
Foreign Currency Forward Contracts [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, Fair Value Disclosure, Recurring | [1] | 1,799 | 8,763 |
Liabilities, Fair Value Disclosure, Recurring | [2] | 8,192 | 1,705 |
Foreign Currency Forward Contracts [Member] | Level 1 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, Fair Value Disclosure, Recurring | 0 | 0 | |
Liabilities, Fair Value Disclosure, Recurring | 0 | 0 | |
Foreign Currency Forward Contracts [Member] | Level 2 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, Fair Value Disclosure, Recurring | 1,799 | 8,763 | |
Liabilities, Fair Value Disclosure, Recurring | 8,192 | 1,705 | |
Foreign Currency Forward Contracts [Member] | Level 3 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, Fair Value Disclosure, Recurring | 0 | 0 | |
Liabilities, Fair Value Disclosure, Recurring | 0 | 0 | |
Money Market Funds [Member] | Cash Equivalents [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, Fair Value Disclosure, Recurring | 12,606 | 17,027 | |
Money Market Funds [Member] | Cash Equivalents [Member] | Level 1 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, Fair Value Disclosure, Recurring | 12,606 | 17,027 | |
Money Market Funds [Member] | Cash Equivalents [Member] | Level 2 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, Fair Value Disclosure, Recurring | 0 | 0 | |
Money Market Funds [Member] | Cash Equivalents [Member] | Level 3 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, Fair Value Disclosure, Recurring | 0 | 0 | |
Treasuries [Member] | Available-For-Sale Securities [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, Fair Value Disclosure, Recurring | [3] | 124,670 | 123,838 |
Treasuries [Member] | Available-For-Sale Securities [Member] | Level 1 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, Fair Value Disclosure, Recurring | 124,670 | 123,838 | |
Treasuries [Member] | Available-For-Sale Securities [Member] | Level 2 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, Fair Value Disclosure, Recurring | 0 | 0 | |
Treasuries [Member] | Available-For-Sale Securities [Member] | Level 3 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, Fair Value Disclosure, Recurring | 0 | 0 | |
Certificates Of Deposits [Member] | Available-For-Sale Securities [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, Fair Value Disclosure, Recurring | [3] | 162 | 148 |
Certificates Of Deposits [Member] | Available-For-Sale Securities [Member] | Level 1 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, Fair Value Disclosure, Recurring | 162 | 148 | |
Certificates Of Deposits [Member] | Available-For-Sale Securities [Member] | Level 2 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, Fair Value Disclosure, Recurring | 0 | 0 | |
Certificates Of Deposits [Member] | Available-For-Sale Securities [Member] | Level 3 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, Fair Value Disclosure, Recurring | 0 | 0 | |
Mutual Funds [Member] | Trading Securities [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, Fair Value Disclosure, Recurring | [3] | 2,094 | 1,528 |
Mutual Funds [Member] | Trading Securities [Member] | Level 1 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, Fair Value Disclosure, Recurring | 2,094 | 1,528 | |
Mutual Funds [Member] | Trading Securities [Member] | Level 2 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, Fair Value Disclosure, Recurring | 0 | 0 | |
Mutual Funds [Member] | Trading Securities [Member] | Level 3 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets, Fair Value Disclosure, Recurring | $ 0 | $ 0 | |
[1] | Included in prepaid expenses and other current assets on the Company's consolidated balance sheets. | ||
[2] | Included in other accrued liabilities on the Company's consolidated balance sheets. | ||
[3] | Included in short-term investments on the Company's consolidated balance sheets. |
Restructuring and Other Charg87
Restructuring and Other Charges (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Facility Closing [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Completion Date | Jan. 31, 2022 |
Restructuring and Other Charg88
Restructuring and Other Charges Schedule of Restructuring and Other Charges (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |||
Restructuring Cost and Reserve [Line Items] | ||||||
Additions to restructuring cost | $ 97 | $ 3,757 | [1] | $ 5,946 | [1] | |
Payments for Restructuring | (370) | (3,421) | (4,996) | |||
Restructuring adjustment | (194) | |||||
Restructuring Reserve | 1,135 | 1,408 | 1,266 | $ 316 | ||
Non cash charges and adjustments, net | 300 | 500 | ||||
Employee Severance [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Additions to restructuring cost | 0 | 3,128 | [1] | 4,689 | [1] | |
Payments for Restructuring | 0 | (2,941) | (4,992) | |||
Restructuring adjustment | (194) | |||||
Restructuring Reserve | 6 | 6 | 13 | 316 | ||
Facility Closing [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Additions to restructuring cost | 97 | 629 | [1] | 1,257 | [1] | |
Payments for Restructuring | (370) | (480) | (4) | |||
Restructuring adjustment | 0 | |||||
Restructuring Reserve | $ 1,129 | $ 1,402 | $ 1,253 | $ 0 | ||
[1] | Total restructuring and other charges recognized in the Company's consolidated statements of operations for the years ended December 31, 2016 and 2015 included non-cash charges and adjustments, net of $0.3 million and $0.5 million, respectively. These amounts have been excluded from the table above. |
Quarterly Financial Data (Detai
Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Oct. 01, 2017 | Jul. 02, 2017 | Apr. 02, 2017 | Dec. 31, 2016 | Oct. 02, 2016 | Jul. 03, 2016 | Apr. 03, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Financial Data [Abstract] | |||||||||||
Net revenue | $ 397,057 | $ 355,483 | $ 330,723 | $ 323,657 | $ 367,929 | $ 338,458 | $ 311,655 | $ 310,256 | $ 1,406,920 | $ 1,328,298 | $ 1,300,695 |
Gross Profit | 104,079 | 103,095 | 91,936 | 96,932 | 110,710 | 103,122 | 97,788 | 100,565 | 396,042 | 412,185 | 367,679 |
Provision for income taxes | 52,600 | 5,767 | 5,376 | 7,535 | 11,754 | 9,144 | 9,427 | 8,893 | 71,278 | 39,218 | 36,980 |
Net Income | $ (31,934) | $ 20,794 | $ 14,582 | $ 15,994 | $ 22,109 | $ 21,119 | $ 16,034 | $ 16,589 | $ 19,436 | $ 75,851 | $ 48,584 |
Basic net income per share (in dollars per share) | $ (1.02) | $ 0.66 | $ 0.45 | $ 0.49 | $ 0.67 | $ 0.64 | $ 0.49 | $ 0.51 | $ 0.61 | $ 2.32 | $ 1.47 |
Diluted net income per share (in dollars per share) | $ (1.02) | $ 0.64 | $ 0.44 | $ 0.47 | $ 0.65 | $ 0.62 | $ 0.48 | $ 0.50 | $ 0.59 | $ 2.25 | $ 1.44 |
Schedule II-Valuation and Qua90
Schedule II-Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Allowance for Doubtful Accounts [Member] | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of year | $ 1,255 | $ 1,255 | $ 1,255 |
Additions | 100 | 60 | 35 |
Deductions | (98) | (60) | (35) |
Balance at end of year | 1,257 | 1,255 | 1,255 |
Allowance For Sales Returns And Product Warranty [Member] | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of year | 72,026 | 72,609 | 62,376 |
Additions | 172,493 | 109,494 | 105,987 |
Deductions | (148,506) | (110,077) | (95,754) |
Balance at end of year | 96,013 | 72,026 | 72,609 |
Allowance For Price Protection [Member] | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of year | 4,480 | 2,125 | 1,806 |
Additions | 7,764 | 12,239 | 7,467 |
Deductions | (8,597) | (9,884) | (7,148) |
Balance at end of year | $ 3,647 | $ 4,480 | $ 2,125 |