Document And Entity Information
Document And Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Feb. 11, 2022 | Jun. 27, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | NTGR | ||
Entity Registrant Name | NETGEAR, Inc. | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Central Index Key | 0001122904 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
ICFR Auditor Attestation Flag | true | ||
Smaller Reporting Company | false | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Tax Identification Number | 77-0419172 | ||
Entity File Number | 000-50350 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Address, Address Line One | 350 East Plumeria Drive | ||
Entity Address, City or Town | San Jose | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 95134 | ||
City Area Code | (408) | ||
Local Phone Number | 907-8000 | ||
Security Exchange Name | NASDAQ | ||
Title of 12(b) Security | Common Stock, $0.001 par value | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity Interactive Data Current | Yes | ||
Entity Common Stock, Shares Outstanding (In shares) | 29,360,520 | ||
Entity Public Float | $ 1,150 | ||
Auditor Name | PricewaterhouseCoopers LLP | ||
Auditor Location | San Jose, California | ||
Auditor Firm ID | 238 | ||
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCE Portions of the Proxy Statement for the Registrant’s 2022 Annual Meeting of Stockholders are incorporated by reference in Part III of this Form 10-K. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 263,772 | $ 346,460 |
Short-term investments | 7,744 | 6,858 |
Accounts receivable, net of allowance for doubtful accounts of $399 and $1,081 as of December 31, 2021 and 2020, respectively | 261,158 | 337,052 |
Inventories | 315,667 | 172,112 |
Prepaid expenses and other current assets | 34,752 | 30,696 |
Total current assets | 883,093 | 893,178 |
Property and equipment, net | 13,335 | 16,080 |
Operating lease right-of-use assets | 23,176 | 29,411 |
Intangibles, net | 1,856 | 3,899 |
Goodwill | 80,721 | 80,721 |
Other non-current assets | 76,350 | 82,750 |
Total assets | 1,078,531 | 1,106,039 |
Current liabilities: | ||
Accounts payable | 73,729 | 90,902 |
Accrued employee compensation | 24,704 | 35,020 |
Other accrued liabilities | 224,584 | 218,375 |
Deferred revenue | 16,500 | 13,458 |
Income taxes payable | 1,528 | 7,318 |
Total current liabilities | 341,045 | 365,073 |
Non-current income taxes payable | 18,990 | 19,174 |
Non-current operating lease liabilities | 18,569 | 25,512 |
Other non-current liabilities | 3,112 | 6,896 |
Total liabilities | 381,716 | 416,655 |
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; shares issued and outstanding: 29,285,772 and 30,399,206 as of December 31, 2021 and 2020, respectively | 29 | 30 |
Additional paid-in capital | 923,228 | 882,709 |
Accumulated other comprehensive income (loss) | 149 | (35) |
Accumulated deficit | (226,591) | (193,320) |
Total stockholders’ equity | 696,815 | 689,384 |
Total liabilities and stockholders’ equity | $ 1,078,531 | $ 1,106,039 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Statement Of Financial Position [Abstract] | ||
Accounts receivable, net of allowance for doubtful accounts of $399 and $1,081 as of December 31, 2021 and 2020, respectively | $ 399 | $ 1,081 |
Preferred Stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 29,285,772 | 30,399,206 |
Common stock, shares outstanding (in shares) | 29,285,772 | 30,399,206 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Income Statement [Abstract] | ||||
Net revenue | $ 1,168,073 | $ 1,255,202 | $ 998,763 | |
Cost of revenue | 802,236 | 883,050 | 704,535 | |
Gross profit | 365,837 | 372,152 | 294,228 | |
Operating expenses: | ||||
Research and development | 92,967 | 88,788 | 77,982 | |
Sales and marketing | 145,961 | 147,854 | 138,150 | |
General and administrative | 59,659 | 61,148 | 49,432 | |
Other operating expenses (income), net | 653 | (1,182) | 2,476 | |
Total operating expenses | 299,240 | 296,608 | 268,040 | |
Income from operations | 66,597 | 75,544 | 26,188 | |
Other income (expenses), net | [1] | (1,093) | (4,741) | 3,383 |
Income before income taxes | 65,504 | 70,803 | 29,571 | |
Provision for income taxes | 16,117 | 12,510 | 3,780 | |
Net income | $ 49,387 | $ 58,293 | $ 25,791 | |
Net income per share | ||||
Basic | $ 1.63 | $ 1.95 | $ 0.83 | |
Diluted | $ 1.59 | $ 1.90 | $ 0.81 | |
Weighted average shares used to compute net income per share: | ||||
Basic | 30,241 | 29,897 | 30,936 | |
Diluted | 31,002 | 30,640 | 31,965 | |
[1] | Amounts included gain/loss on investments, net, of $(1.4) million, $(6.2) million and $(0.2) million for the years ended December 31, 2021, 2020 and 2019, respectively. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Statement Of Income And Comprehensive Income [Abstract] | |||
Net income | $ 49,387 | $ 58,293 | $ 25,791 |
Other comprehensive income, before tax: | |||
Change in unrealized gains and losses on derivatives | 215 | (64) | 30 |
Change in unrealized gains and losses on available-for-sale investments | 0 | 0 | 16 |
Other comprehensive income (loss), before tax | 215 | (64) | 46 |
Tax benefit (provision) related to derivatives | (31) | 8 | (6) |
Tax provision related to available-for-sale investments | 0 | 0 | (4) |
Other comprehensive income (loss), net of tax | 184 | (56) | 36 |
Comprehensive income | $ 49,571 | $ 58,237 | $ 25,827 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit |
Beginning balance at Dec. 31, 2018 | $ 627,552 | $ 32 | $ 793,585 | $ (15) | $ (166,050) |
Beginning balance (in shares) at Dec. 31, 2018 | 31,562 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Change in unrealized gains and losses on available-for-sale investments, net of tax | 12 | 12 | |||
Change in unrealized gains and losses on derivatives, net of tax | 24 | 24 | |||
Net income | 25,791 | 25,791 | |||
Stock-based compensation | 29,137 | 29,137 | |||
Repurchase of common stock | $ (75,946) | $ (3) | (75,943) | ||
Repurchase of common stock (in shares) | (2,400) | (2,406) | |||
Restricted stock unit withholdings | $ (6,521) | (6,521) | |||
Restricted stock unit withholdings (in shares) | (198) | (198) | |||
Issuance of common stock under stock-based compensation plans | $ 8,644 | $ 1 | 8,643 | ||
Issuance of common stock under stock-based compensation plans (in shares) | 967 | ||||
Ending balance at Dec. 31, 2019 | 608,693 | $ 30 | 831,365 | 21 | (222,723) |
Ending balance (in shares) at Dec. 31, 2019 | 29,925 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Change in unrealized gains and losses on derivatives, net of tax | (56) | (56) | |||
Net income | 58,293 | 58,293 | |||
Stock-based compensation | 30,505 | 30,505 | |||
Repurchase of common stock | $ (23,801) | $ (1) | (23,800) | ||
Repurchase of common stock (in shares) | (900) | (942) | |||
Restricted stock unit withholdings | $ (5,090) | (5,090) | |||
Restricted stock unit withholdings (in shares) | (198) | (198) | |||
Issuance of common stock under stock-based compensation plans | $ 20,840 | $ 1 | 20,839 | ||
Issuance of common stock under stock-based compensation plans (in shares) | 1,614 | ||||
Ending balance at Dec. 31, 2020 | 689,384 | $ 30 | 882,709 | (35) | (193,320) |
Ending balance (in shares) at Dec. 31, 2020 | 30,399 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Change in unrealized gains and losses on derivatives, net of tax | 184 | 184 | |||
Net income | 49,387 | 49,387 | |||
Stock-based compensation | 25,995 | 25,995 | |||
Repurchase of common stock | $ (75,000) | $ (2) | (74,998) | ||
Repurchase of common stock (in shares) | (2,100) | (2,146) | |||
Restricted stock unit withholdings | $ (7,660) | (7,660) | |||
Restricted stock unit withholdings (in shares) | (204) | (204) | |||
Issuance of common stock under stock-based compensation plans | $ 14,525 | $ 1 | 14,524 | ||
Issuance of common stock under stock-based compensation plans (in shares) | 1,237 | ||||
Ending balance at Dec. 31, 2021 | $ 696,815 | $ 29 | $ 923,228 | $ 149 | $ (226,591) |
Ending balance (in shares) at Dec. 31, 2021 | 29,286 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities: | |||
Net income | $ 49,387 | $ 58,293 | $ 25,791 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 13,906 | 18,931 | 19,406 |
Stock-based compensation | 25,995 | 30,505 | 29,137 |
Gain/loss on investments, net | 1,362 | 6,222 | 224 |
Change in fair value of contingent consideration | (3,003) | (2,928) | (25) |
Deferred income taxes | 4,498 | (9,386) | (1,379) |
Provision for excess and obsolete inventory | 3,877 | 7,872 | 3,878 |
Other | 0 | 74 | (170) |
Changes in assets and liabilities: | |||
Accounts receivable, net | 75,894 | (59,885) | 26,500 |
Inventories | (147,432) | 55,505 | 4,504 |
Prepaid expenses and other assets | (4,127) | 4,833 | (1,654) |
Accounts payable | (16,493) | 9,744 | (56,614) |
Accrued employee compensation | (10,316) | 15,718 | (11,642) |
Other accrued liabilities | 4,869 | 28,194 | (16,603) |
Deferred revenue | 2,978 | 8,112 | (3,354) |
Income taxes payable | (5,974) | 9,346 | (4,474) |
Net cash provided by (used in) operating activities | (4,579) | 181,150 | 13,525 |
Cash flows from investing activities: | |||
Purchases of short-term investments | (146) | (305) | (1,617) |
Proceeds from maturities of short-term investments | 710 | 290 | 70,790 |
Purchases of property and equipment | (9,864) | (10,296) | (14,230) |
Purchases of long-term investments | (685) | (6,525) | (5,484) |
Net cash provided by (used in) investing activities | (9,985) | (16,836) | 49,459 |
Cash flows from financing activities: | |||
Repurchases of common stock | (75,000) | (23,800) | (75,946) |
Restricted stock unit withholdings | (7,660) | (5,090) | (6,521) |
Proceeds from exercise of stock options | 9,620 | 16,950 | 5,027 |
Proceeds from issuance of common stock under employee stock purchase plan | 4,916 | 3,878 | 3,617 |
Net cash used in financing activities | (68,124) | (8,062) | (73,823) |
Net increase (decrease) in cash and cash equivalents | (82,688) | 156,252 | (10,839) |
Cash and cash equivalents, at beginning of period | 346,460 | 190,208 | 201,047 |
Cash and cash equivalents, at end of period | 263,772 | 346,460 | 190,208 |
Supplemental Cash Flow Information: | |||
Cash paid for income taxes, net | 20,589 | 8,218 | 8,876 |
Non-cash investing and financing activities: | |||
Unpaid property and equipment | $ 526 | $ 1,273 | $ 426 |
The Company and Summary of Sign
The Company and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
The Company and Summary of Significant Accounting Policies | Note 1. The Company and Summary of Significant Accounting Policies The Company NETGEAR, Inc. (“NETGEAR” or the “Company”) is a global company incorporated in Delaware in January 1996. The Company turns ideas into innovative, high-performance and premium networking products that connect people, power businesses and service providers and advance the way people live. enable people to collaborate and connect to a world of information and entertainment at or outside of the home. . a variety of technologies such as wireless (WiFi and 4G/5G mobile), Ethernet and powerline, with a focus on reliability and ease-of-use. create new technologies and services and to capitalize on technological inflection points and trends, such as WiFi 6, WiFi 6E, 5G, and audio and video over Ethernet. devices that create and extend wired and wireless networks, devices that attach to the network, such as smart digital canvasses, as well as services that complement and enhance our product line offerings. These products are available in multiple configurations to address the changing needs of our customers in each geographic region. 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”), broadband service providers and its direct online store at www.netgear.com 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. COVID-19 Pandemic The COVID-19 pandemic continues to have widespread, rapidly evolving and unpredictable impacts on global economies, inflation, supply chains, and work force participation, and has created significant volatility and disruption in financial markets. The pandemic has impacted, and is continuing to impact the supply chain in its ability to timely procure finished goods due to material shortages and freight capacity, its workforce and the operations of its customers, and has led to meaningfully increased costs of freight transportation and increased material and component costs for our products. Continued and extended periods of global supply chain, workforce availability and economic disruption could continue to significantly affect the business and statement of financial condition. The duration of the disruption from the pandemic remains uncertain due to the dynamic nature of the virus, and makes it difficult to reasonably estimate the impact of the COVID-19 pandemic on the business operations 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. As of the date of issuance of these consolidated financial statements, the Company is not aware of any specific event or circumstance that would require it to update its estimates, judgments or revise the carrying value of its assets or liabilities. These estimates may change, as new events occur and additional information is obtained, and are recognized in the consolidated financial statements as soon as they become known. Significant Accounting Policies 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. Investments Short-term investments are partially comprised of marketable and convertible debt securities that consist of government and private company debts with an original maturity or a remaining maturity at the time of purchase, of greater than three months and no more than 12 months. These debt 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. Credit losses on available-for-sale debt securities with unrealized losses are recognized as allowances for credit losses limited to the amount by which fair value is below amortized cost. issued by a publicly held company. This investment is Short-term investments also include 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 (expenses), net in the consolidated statements of operations. Long-term investments are comprised of equity investments without readily determinable fair values, investments in convertible debt securities and investments in limited partnership funds, and are included in Other non-current assets on the consolidated balance sheets. Equity investments without readily determinable fair values are accounted for at cost, less impairment and adjusted for subsequent observable price changes obtained from orderly transactions for identical or similar investments issued by the same investee. Such changes in the basis of the equity investment are recognized in Other income (expenses), net in the consolidated statements of operations. The Company does not have a controlling interest or the ability to exercise significant influence over these investees and these investments do not have readily determinable fair values. Investments in convertible debt securities are carried at fair value with unrealized gains and losses reported as a separate component of stockholders’ equity. Investments in 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 that generally mature within six months of inception to manage the exposures to foreign exchange risk related to expected future cash flows on certain forecasted revenue, cost of revenue, operating expenses, and on certain existing assets and liabilities. 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 designated as hedges under the authoritative guidance for derivatives are adjusted to fair value through earnings. For derivative instruments that hedge the exposure to variability in expected future cash flows and are designated as cash flow hedges, the gains or losses on the derivative instrument are reported as a component of accumulated other comprehensive income in stockholders’ equity and reclassified into the same line item in the statement of operations as the hedged transaction, and in the same period that the hedged transaction effects earnings. To receive hedge accounting treatment, cash flow hedges must be highly effective in offsetting changes to expected future cash flows on hedged transactions. 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. As of December 31, 2021, Best Buy, Inc. and affiliates and Amazon and affiliates accounted for approximately 26% and 14% of the Company’s total accounts receivable, respectively. As of December 31, 2020, Best Buy, Inc. and affiliates, Amazon and affiliates and Walmart and affiliates accounted for approximately 29%, 13% and 13% of the Company’s total accounts receivable, 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 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, Allowance for doubtful accounts The Company maintains an allowance for doubtful accounts for estimated credit losses resulting from the inability of its customers to make required payments and reviews it quarterly . The Company determines expected credit losses by performing credit evaluations of its customers’ financial condition, establishing specific reserves for customers in an adverse financial condition and adjusting for its expectations of changes in conditions that may impact the collectability of outstanding receivables . The Company considers factors such as historical experience, credit quality, age of the accounts receivable balances, and geographic or country-specific risks. 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. On a quarterly basis, the Company assesses the value of the inventory and writes down its value for estimated excess and obsolete inventory based upon assumptions about the future demand by reviewing inventory quantities on hand and on order under non-cancelable purchase commitments in comparison to the Company’s estimated forecast of product demand to determine what inventory, if any, is not saleable at or above cost. The Company’s analysis is primarily based on the demand forecast which 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. Leases The Company determines if an arrangement is a lease or contains a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, other accrued liabilities, and operating lease liabilities on the consolidated balance sheets. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. For certain office leases, the Company accounts for the lease and non-lease components as a single lease component to the extent that the timing and pattern of transfer are similar for the lease and non-lease components and the lease component qualifies as an operating lease. Lease expense is recognized on a straight-line basis over the lease term. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Generally the implicit rate of interest in arrangements is not readily determinable and the Company utilizes its incremental borrowing rate in determining the present value of lease payments. The Company’s incremental borrowing rate is a hypothetical rate based on a benchmark interest rate adjusted for its specific credit risk. The operating lease ROU asset includes any lease payments made and excludes lease incentives. 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. The Company identified the reporting units for the purpose of goodwill impairment testing as Connected Home, and SMB and performed a qualitative test for goodwill impairment of the two reporting units as of the first day of the fourth quarter, or October 4, 2021. Based upon the results of the qualitative testing, the Company believed that it was more-likely-than-not that the fair value of these reporting units were greater than their respective carrying values and therefore performing the next step of impairment test for these reporting units was unnecessary. No 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. Revenue Recognition Revenue from contracts with customers is recognized when control of the promised goods or services is transferred to the customers, in an amount that reflects the consideration that the Company expects to be entitled to in exchange for those goods or services. The Company derives its revenue primarily from product sales, consisting of sales of Connected Home and SMB hardware products to its customers - retailers, distributors and service providers. Revenue is recognized at a point in time when control of the goods is transferred to the customer, generally occurring upon shipment or delivery dependent upon the terms of the underlying contract. The amount recognized reflects the consideration the Company expects to be entitled to in exchange for the transferred goods. The Company evaluates its customers’ ability to pay based on various factors like historical payment experience, financial metrics and customer credit scores. Payment terms are typically less than two months from the date control over the product or service is transferred to the customer. Revenue for services relates primarily to sales of subscriptions of the Company’s value-added services, including security and privacy, parental controls and remote network management services as well as advanced technical support and extended warranty. Service revenue is generally recognized over time on a ratable basis over the contract term beginning on the date that the service is expected to be delivered. Service contracts are generally for 30 days or 12 months in length, billed either monthly or annually and generally in advance. The technical support services consist of telephone and internet access to technical support personnel and extended warranty, which begins generally after the standard warranty period and consists of hardware replacement and updates to software features provided on a when and if available basis. All such service or support sales are typically recognized using an output measure of progress by looking at the time elapsed as the contracts generally provide the customer equal benefit throughout the contract period because the Company transfers control evenly by providing a stand-ready service. To date, services revenue has not represented a significant percentage of our total revenue. Revenue from all sales types is recognized at the transaction price and is calculated as selling price net of variable consideration which may include estimates for future returns, sales incentives, and price protection. The Company’s standard obligation to its direct customers generally provides for a full refund in the event that such product is not merchantable or is found to be damaged or defective. The Company uses the expected value method to arrive at the amount of variable consideration which is based on management’s analysis of historical and anticipated returns information, sell through and channel inventory levels, current economic trends, and changes in customer demand. At the time the Company records the reduction to revenue, the Company includes within cost of revenue a write-down to reduce the carrying value of such products to net realizable value. In addition to channel warranty-related returns, certain distributors and retailers generally have the right to return product for stock rotation purposes. Sales incentive programs include certain reimbursement rights to qualified distributor and retailers for marketing expenditures. Distinct good or service received in exchange for payment from a customer are accrued within operating expenses or cost of revenue as appropriate, otherwise expenditures are recorded as a reduction of revenue. The Company provides for price protections in limited cases, with variable consideration assessed based on customary business practice such as anticipated price decreases, historical pricing information and customer claims processing. For products sold with third-party services where the Company obtains control of the products and/or service before transferring it to the customer, the Company recognizes revenue based on the gross amount billed to customers. The Company recognizes revenue on a net basis when the Company is acting as an agent between the customer and the vendor. The Company considers several factors in determining when it obtains control, such as determining the responsible party for fulfillment of the services, whether the Company has inventory risk before the service is transferred or if it has discretion to establish pricing for the third-party services. Contracts with Multiple Performance Obligations Some of the Company’s contracts with customers contain multiple promised goods or services. Such contracts include hardware products with bundled services, networking hardware with embedded software, various software subscription services and support. For these contracts, the Company accounts for the promises separately as individual performance obligations if they are distinct. Performance obligations are determined to be distinct if they are both capable of being distinct and distinct within the context of the contract. In determining whether performance obligations meet the criteria for being distinct, the Company considers a number of factors, such as the degree of interrelation and interdependence between obligations, and whether or not the good or service significantly modifies or transforms another good or service in the contract. The embedded software on most of the hardware products is not considered distinct and therefore the combined hardware and incidental software are treated as one performance obligation and recognized at the point in time when control of product transfers to the customer. Services included with certain hardware products are considered distinct, as a customer can benefit from the product without these services and, therefore, the hardware and service are treated as separate performance obligations. After identifying the separate performance obligations, the transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. Standalone selling prices are generally determined based on the prices charged to customers or using an adjusted market assessment. For products, the estimated standalone selling price of the hardware is directly observable from sales of those products based on a range of prices. Standalone selling price of the service is estimated using an adjusted market approach. This may include using information such as prices charged for similar offerings and other observable inputs. Revenue is recognized for each distinct performance obligation as control is transferred to the customer. In general, the hardware is recognized at time of shipping or delivery, while services and support are delivered over the stated service or support period. Hardware products bundled with services are recognized at the time control of the product transfers to the customer and the transaction price allocated to service is recognized over the estimated period the services are expected to be provided on a straight-line basis beginning when the customer is expected to activate their account. Deferred Revenue Deferred revenue consists of service and support fees due in advance of satisfying performance. The majority of the Company’s deferred revenue balance consists of the unrecognized portion of service revenue from its value-added services, including cyber security, parental controls and remote network management services as well as advanced technical support and extended warranty, which is recognized as revenue ratably over the contractual service period. Performance obligations expected to be fulfilled within one year are classified as current liabilities and the remaining are recorded as noncurrent liabilities. Warranties Hardware products regularly include warranties to the end customers that consist of bug fixes, minor updates such that the product continues to function according to published specs in a dynamic environment, and phone support. These standard warranties are assurance type warranties and do not offer any services beyond the assurance that the product will continue working as specified. Therefore, warranties are not considered separate performance obligations in the arrangement. Instead, the expected cost of product warranty is accrued as expense at the time we recognize revenue in accordance with authoritative guidance. Extended warranties are sold separately and include additional support services. The transaction price for extended warranties is accounted for as service revenue and recognized over the life of the contract. Shipping and Handling Shipping and handling fees billed to customers are included 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. The Company has elected to account for shipping and handling activities related to contracts with customers as costs to fulfill the promise to transfer the associated products. Shipping and handling costs associated with outbound freight totaled $16.4 million, $15.5 million and $8.7 million in the years ended December 31, 2021, 2020 and 2019 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 $25.2 million, $20.6 million, and $21.3 million in the years ended December 31, 2021, 2020 and 2019 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. The Tax Act introduced a new tax on global intangible low-taxed income (GILTI) effective as of January 1, 2018. The Company’s policy is to treat GILTI as a period cost if and when incurred. 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 performance shares, 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 |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2021 | |
Revenue From Contract With Customer [Abstract] | |
Revenue Recognition | Note 2. Revenue Recognition Revenue from contracts with customers is recognized when control of the promised goods or services is transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Transaction Price Allocated to the Remaining Performance Obligations Remaining performance obligations represent the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied as of the end of the reporting period. Unsatisfied and partially unsatisfied performance obligations consist of contract liabilities, in-transit orders with destination terms, and non-cancellable backlog. Non-cancellable backlog includes goods for which customer purchase orders have been accepted, that are scheduled or in the process of being scheduled for shipment, and that are not yet invoiced. The following table includes estimated revenue expected to be recognized in the future related to performance obligations that were unsatisfied or partially unsatisfied as of December 31, 2021: 2022 2023 Beyond 2023 Total (In thousands) Performance obligations $ 163,584 $ 1,752 $ 1,319 $ 166,655 Contract Costs Costs to fulfill a contract are capitalized when they relate directly to an existing contract or specific anticipated contract, generate or enhance resources that will be used to fulfill performance obligations and are recoverable. These costs include direct cost incurred at inception of a contract which enables the fulfillment of the performance obligation and totaled $3.8 million and $2.9 million as of December 31, 2021 and 2020, respectively. There was no impairment of capitalized contract costs in the fiscal years of 2021, 2020 and 2019. Applying the practical expedient, the Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that otherwise would have been recognized is one year or less. These costs are included in Sales and marketing and General and administrative expenses. If the incremental direct costs of obtaining a contract, which consist of sales commissions, relate to a service recognized over a period longer than one year, costs are deferred and amortized in line with the related services over the period of benefit. Deferred commissions are classified as non-current based on the original amortization period of over one year. As of December 31, 2021 and 2020, there were no deferred commissions. Contract Balances The Company records accounts receivable when it has an unconditional right to consideration. Contract liabilities are recorded when cash payments are received or due in advance of performance. Contract liabilities consist of advance payments and deferred revenue, where the Company has unsatisfied performance obligations. Contract liabilities are mainly classified as Deferred revenue on the consolidated balance sheets. Payment terms vary by customer. The time between invoicing and when payment is due is not significant. For certain products or services and customer types, payment is required before the products or services are delivered to the customer. The following table reflects the contract balances: Balance Sheet Location December 31, 2021 December 31, 2020 (In thousands) Accounts receivable, net Accounts receivable, net $ 261,158 $ 337,052 Contract liabilities - current Deferred revenue $ 16,500 $ 13,458 Contract liabilities - non-current Other non-current liabilities $ 3,100 $ 3,165 The difference in the balances of the Company’s contract assets and liabilities as of December 31, 2021 and 2020 primarily results from the timing difference between the Company’s performance and the customer’s payment. During the years ended December 31, 2021, 2020 and 2019, $31.9 million, $25.0 million and $14.5 million, respectively, of revenue were deferred due to unsatisfied performance obligations for service contracts and undelivered product commitments, $28.9 million, $16.9 million and $17.9 million, respectively, of revenue were recognized for the satisfaction of performance obligations, and $13.6 million, $6.5 million and $9.9 million, respectively, of this recognized revenue were included in the contract liability balance at the beginning of the period, respectively. There were no significant changes in estimates during the periods that would affect the contract balances. Disaggregation of Revenue In the following table, net revenue is disaggregated by geographic region and sales channel. The Company conducts business across three geographic regions: Americas; Europe, Middle East, and Africa (“EMEA”); and Asia Pacific (“APAC”). The table also includes reconciliations of the disaggregated revenue by reportable segment. The Company operates and reports in two segments: Connected Home, and . Year Ended December 31, 2021 2020 2019 Connected Home SMB Total Connected Home SMB Total Connected Home SMB Total (In thousands) Geographic regions: Americas $ 651,936 $ 134,390 $ 786,326 $ 788,402 $ 109,569 $ 897,971 $ 529,982 $ 123,024 $ 653,006 EMEA 112,368 117,461 229,829 129,929 91,736 221,665 91,586 108,513 200,099 APAC 89,168 62,750 151,918 89,214 46,352 135,566 89,823 55,835 145,658 Total $ 853,472 $ 314,601 $ 1,168,073 $ 1,007,545 $ 247,657 $ 1,255,202 $ 711,391 $ 287,372 $ 998,763 Sales channels: Service provider $ 129,052 $ 2,481 $ 131,533 $ 192,714 $ 3,150 $ 195,864 $ 128,852 $ 4,465 $ 133,317 Non-service provider 724,420 312,120 1,036,540 814,831 244,507 1,059,338 582,539 282,907 865,446 Total $ 853,472 $ 314,601 $ 1,168,073 $ 1,007,545 $ 247,657 $ 1,255,202 $ 711,391 $ 287,372 $ 998,763 |
Balance Sheet Components
Balance Sheet Components | 12 Months Ended |
Dec. 31, 2021 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Components | Note 3. Balance Sheet Components Inventories As of December 31, 2021 December 31, 2020 (In thousands) Raw materials $ 12,269 $ 7,756 Finished goods 303,398 164,356 Total $ 315,667 $ 172,112 The Company records provisions for excess and obsolete inventory based on assumptions about future demand and market conditions and the amounts incurred were $3.9 million, $7.9 million and $3.9 million for the years ended December 31, 2021, 2020 and 2019, respectively. 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, 2021 December 31, 2020 (In thousands) Computer equipment $ 9,979 $ 10,550 Furniture, fixtures and leasehold improvements 18,364 18,674 Software 30,280 29,499 Machinery and equipment 75,559 72,156 Total property and equipment, gross 134,182 130,879 Accumulated depreciation (120,847 ) (114,799 ) Total $ 13,335 $ 16,080 Depreciation expense pertaining to property and equipment was $11.7 million, $12.7 million and $12.3 million for the years ended December 31, 2021, 2020 and 2019, respectively. Intangibles, net As of December 31, 2021 As of December 31, 2020 Gross Accumulated Amortization Net Gross Accumulated Amortization Net (In thousands) Technology $ 59,799 $ (58,263 ) $ 1,536 $ 59,799 $ (57,835 ) $ 1,964 Customer contracts and relationships 56,800 (56,800 ) — 56,800 (55,534 ) 1,266 Other 10,345 (10,025 ) 320 10,345 (9,676 ) 669 Total $ 126,944 $ (125,088 ) $ 1,856 $ 126,944 $ (123,045 ) $ 3,899 Amortization of purchased intangibles in the years ended December 31, 2021, 2020 and 2019 was $2.0 million, $6.2 million and $7.0 million, respectively. No impairment charges were recorded in the years ended December 31, 2021, 2020 and 2019. As of December 31, 2021, estimated amortization expense related to finite-lived intangibles for each of the remaining years was as follows (in thousands): 2022 $ 528 2023 514 2024 514 2025 300 Total $ 1,856 Other non-current assets As of December 31, 2021 December 31, 2020 (In thousands) Non-current deferred income taxes $ 63,795 $ 68,323 Long-term investments 7,575 8,395 Other 4,980 6,032 Total $ 76,350 $ 82,750 Long-term investments The Company’s long-term investments are comprised of equity investments without readily determinable fair values, investments in convertible debt securities and investments in limited partnership funds. The changes in the carrying value of equity investments without readily determinable fair values were as follows (in thousands): Carrying value, as of December 31, 2019 $ 8,147 Additions 5,850 Impairment and downward adjustments for observable price changes (6,239 ) Carrying value, as of December 31, 2020 (1) 7,758 Additions 340 Disposals (1,499 ) Impairment (549 ) Upward adjustments for observable price changes 253 Carrying value, as of December 31, 2021 (1) $ 6,303 (1) The balances excluded the investment in limited partnership fund of $0.9 million and $0.6 million, as of December 31, 2021 and 2020, respectively. Additionally, the balance as of December 31, 2021 excluded an investment in convertible debt securities of $0.3 million. For the equity investments without readily determinable fair values as of December 31, 2021, cumulative downward adjustments for price changes and impairment was $8.4 million and cumulative upward adjustments for price changes was $0.4 million. Other accrued liabilities As of December 31, 2021 December 31, 2020 (In thousands) Current operating lease liabilities $ 9,220 $ 9,149 Sales and marketing 104,549 83,561 Warranty obligations 6,861 9,240 Sales returns (1) 42,869 66,972 Freight and duty 22,126 14,885 Other 38,959 34,568 Total $ 224,584 $ 218,375 ________________________ (1) Inventory expected to be received from future sales returns amounted to $21.8 million and $32.6 million as of December 31, 2021 and 2020, respectively. Provisions to write down expected returned inventory to net realizable value amounted to $13.2 million and $18.0 million as of December 31, 2021 and December 31, 2020, respectively. |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2021 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Note 4. Derivative Financial Instruments The Company’s subsidiaries have material future cash flows related to revenue and expenses denominated in currencies other than the U.S. dollar, the Company’s functional currency worldwide. The Company executes currency forward contracts that typically mature in less than 6 months to mitigate its currency risk, in currencies including Australian dollars, British pounds, euros, Canadian dollar, and Japanese yen. 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 enters into derivative contracts with high-quality financial institutions and limits the amount of credit exposure to any individual counter-party. The Company continuously evaluates the credit quality of its counter-party financial institutions and 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 or 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. Cash flow hedge gains and losses are recorded in the other comprehensive income (loss) (“OCI”) until the hedged item is recognized in earnings. Derivatives that are not designated as hedging instruments are adjusted to fair value through earnings in Other income (expenses), net in the consolidated statements of operations. 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 of the hedge relationships are 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 executes ten forward contracts per quarter with maturities under six months and with an average USD notional amount of approximately $6.0 million that are designated as cash flow hedges. The Company expects to reclassify to earnings all of the amounts recorded in OCI associated with its cash flow hedges over the next twelve months. OCI associated with cash flow hedges of foreign currency revenue, cost of revenue and operating expenses are recognized in the same period and in the same line item in the statement of operations as hedged item. The Company did not recognize any material net gains or losses related to anticipated transactions that failed to occur during the years ended December 31, 2021, 2020 and 2019. 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 not already hedged by de-designated cash flow hedges. 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. The Company adjusts its non-designated hedges monthly and typically executes about ten non-designated forwards per quarter with maturities less than three months and an average USD notional amount of approximately $2.0 million. Fair Value of Derivative Instruments The fair values of the Company’s derivative instruments and the line items on the consolidated balance sheets to which they were recorded were summarized as follows: Balance Sheet Balance Sheet Location December 31, 2021 December 31, 2020 Location December 31, 2021 December 31, 2020 (In thousands) (In thousands) Derivatives not designated as hedging instruments Prepaid expenses and other current assets $ 1,214 $ 324 Other accrued liabilities $ 321 $ 2,344 Derivatives designated as hedging instruments Prepaid expenses and other current assets 158 — Other accrued liabilities 23 38 Total $ 1,372 $ 324 $ 344 $ 2,382 Refer to Note 12, Fair Value Measurements, 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 on the consolidated balance sheets. As of December 31, 2021, the Company holds and reports $1.4 million of gross assets and $0.3 million of gross liabilities. Effect of Derivative Contracts on Consolidated Statement of Operations and Accumulated Other Comprehensive Income (Loss) The effects of the Company’s derivative instruments on AOCI and the consolidated statements of operations were summarized as follows: Year Ended December 31, 2019 2021 2020 2019 (In thousands) Derivatives designated as hedging instruments: Cash flow hedges Foreign currency forward contracts: Gains (losses) recognized in accumulated other comprehensive income (loss) - Effective Portion $ 668 $ (856 ) $ 1,565 Gains (losses) reclassified from accumulated other comprehensive income (loss) into income - Effective Portion (1) Net revenue $ 459 $ (954 ) $ 1,929 Cost of revenue $ (2 ) $ 2 $ (12 ) Research and development $ 31 $ 9 $ (57 ) Sales and marketing $ (30 ) $ 124 $ (284 ) General and administrative $ (5 ) $ 27 $ (41 ) Derivatives not designated as hedging instruments: Gains (losses) recognized in Other income (expenses), net $ 4,195 $ (3,861 ) $ 1,307 (1) Stockholders’ Equity |
Net Income Per Share
Net Income Per Share | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Note 5. 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 units and performance shares, and issuances of shares under the Employee Stock Purchase Plan (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 consisted of the following: Year Ended December 31, 2021 2020 2019 (In thousands, except per share data) Numerator: Net income $ 49,387 $ 58,293 $ 25,791 Denominator: Weighted average common shares - basic 30,241 29,897 30,936 Potentially dilutive common share equivalent 761 743 1,029 Weighted average common shares - dilutive 31,002 30,640 31,965 Basic net income per share $ 1.63 $ 1.95 $ 0.83 Diluted net income per share $ 1.59 $ 1.90 $ 0.81 Anti-dilutive employee stock-based awards, excluded 422 832 1,066 |
Other Income (Expenses), Net
Other Income (Expenses), Net | 12 Months Ended |
Dec. 31, 2021 | |
Other Income And Expenses [Abstract] | |
Other Income (Expenses), Net | Note 6. Other Income (Expenses), Net Other income (expenses), net consisted of the following: Year Ended December 31, 2021 2020 2019 (In thousands) Interest income $ 157 $ 436 $ 2,539 Foreign currency transaction gain (loss), net (4,848 ) 4,420 (697 ) Foreign currency contract gain (loss), net 4,195 (3,861 ) 1,307 Gain/loss on investments, net (1,362 ) (6,222 ) (224 ) Other 765 486 458 Total $ (1,093 ) $ (4,741 ) $ 3,383 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 7. Income Taxes Income before income taxes and the provision for income taxes consisted of the following: Year Ended December 31, 2021 2020 2019 (In thousands) United States $ 42,219 $ 42,124 $ 16,035 International 23,285 28,679 13,536 Total $ 65,504 $ 70,803 $ 29,571 Year Ended December 31, 2021 2020 2019 (In thousands) Current: U.S. Federal $ 6,198 $ 12,913 $ 4,761 State 644 3,587 791 Foreign 5,000 5,178 (386 ) 11,842 21,678 5,166 Deferred: U.S. Federal 4,607 (3,052 ) (574 ) State 595 (6,408 ) 104 Foreign (927 ) 292 (916 ) 4,275 (9,168 ) (1,386 ) Total $ 16,117 $ 12,510 $ 3,780 Net deferred tax assets consisted of the following: Year Ended December 31, 2021 2020 (In thousands) Deferred Tax Assets: Accruals and allowances $ 25,737 $ 25,041 Net operating loss carryforwards 1,010 1,352 Stock-based compensation 4,032 5,374 Operating lease liability 4,060 5,303 Deferred revenue 1,212 641 Acquired intangibles 29,857 33,860 Depreciation and amortization 1,661 1,651 Other 3,971 3,285 Total deferred tax assets 71,540 76,507 Deferred Tax Liabilities: Right of use asset (3,130 ) (4,264 ) Other (1,083 ) (987 ) Total deferred tax liabilities (4,213 ) (5,251 ) Valuation Allowance (1) (3,532 ) (2,933 ) Net deferred tax assets $ 63,795 $ 68,323 (1) Valuation allowance is presented gross. The valuation allowance net of the federal tax effect was $3.5 million and $2.9 million for the years ended December 31, 2021 and 2020, 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, 2021, a valuation allowance of $3.5 million was placed against certain federal tax and state attributes since the recovery of the assets is uncertain. There was a valuation allowance of $2.9 million placed against deferred tax assets as of December 31, 2020. Accordingly, the valuation allowance increased $0.6 million during 2021. 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, 2021, and as such no valuation allowance has been recorded against the remaining deferred tax assets. The effective tax rate differed from the applicable U.S. statutory federal income tax rate as follows: Year Ended December 31, 2021 2020 2019 Tax at federal statutory rate 21.0 % 21.0 % 21.0 % State, net of federal benefit 1.4 % 2.9 % 2.4 % Impact of international operations (1.8 )% (5.0 )% (0.8 )% Stock-based compensation 2.9 % 5.4 % 10.7 % Tax credits (1.9 )% (2.3 )% (5.9 )% Valuation allowance 0.3 % 1.8 % 0.9 % State Valuation Allowance Release — % (5.8 )% — % Base Erosion Anti-Abuse Tax 3.7 % — % 7.2 % Transaction costs (0.9 )% — % (2.5 )% Recognition of previously unrecognized tax benefits 0.0% 0.3 % (20.6 )% Others (0.1 )% (0.6 )% 0.4 % Provision for income taxes 24.6 % 17.7 % 12.8 % As a result of changes in fair value of available-for-sale securities and foreign currency hedging, income tax (provision) benefits of $(31,000), $8,000, and $(10,000) were recorded in comprehensive income related to the years ended December 31, 2021, 2020, and 2019, respectively. As of December 31, 2021, the Company has approximately $2.0 million of acquired federal net operating loss carryforwards. All the losses are subject to annual usage limitations under Internal Revenue Code Section 382. The federal losses expire in different years beginning in fiscal year 2022. 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 prior to 20 1 6 . 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 these years. The Company is currently under exa mination by the Internal Revenue Service (“IRS”) for the year ended December 31, 2018 . Additionally, the state of California commenced an examination of the 2016 through 2018 tax years. The Company has limited audit activity in various other states and 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 $ 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, 2018 $ 11,983 Additions based on tax positions related to the current year 385 Additions for tax positions of prior years 996 Settlements (705 ) Reductions for tax positions of prior years (3,440 ) Reductions due to lapse of applicable statutes (609 ) Adjustments due to foreign exchange rate movement 459 Balance as of December 31, 2019 9,069 Additions based on tax positions related to the current year 442 Additions for tax positions of prior years 253 Reductions due to lapse of applicable statutes (744 ) Adjustments due to foreign exchange rate movement 522 Balance as of December 31, 2020 9,542 Additions based on tax positions related to the current year 463 Additions for tax positions of prior years 50 Reductions due to lapse of applicable statutes (556 ) Adjustments due to foreign exchange rate movement (295 ) Balance as of December 31, 2021 $ 9,204 The total amount of net UTB that, if recognized would affect the effective tax rate as of December 31, 2021 is $7.3 million. The ending net UTB results from adjusting the gross balance at December 31, 2021 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, 2021, 2020, and 2019, total interest and penalties expensed were $0.2 million, $0.2 million, and $(1.4) million, respectively. As of December 31, 2021 and 2020, accrued interest and penalties on a gross basis was $2.4 million, and $2.3 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 has not provided deferred taxes on earnings of $7.4 million of undistributed earnings of foreign subsidiaries that are indefinitely reinvested outside of the U.S. The Company estimates that if these earnings were repatriated to the U.S., it would result in approximately $1.6 million in associated tax without consideration of foreign tax credits. Determination of foreign tax credit limitations depends on several factors which cannot be estimated. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 8. Commitments and Contingencies 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. As of December 31, 2021, the Company had approximately $94.8 million in short-term non-cancelable purchase commitments with suppliers or where the suppliers had procured unique materials and components upon receipts of the Company’s purchase orders. Commencing at the onset of the COVID-19 pandemic in March 2020, the Company experienced an elongation of the time from order placement to production primarily due to component shortages and supply chain disruption. The Company has responded by extending its ordering horizon to as long as 21 months issuing orders totaling approximately $882.6 million. Consequently, the Company may incur expenses for materials and components, such as chipsets purchased by the supplier to fulfill the purchase order if the purchase order is cancelled. Expenses incurred in respect of cancelled purchase orders has historically not been significant relative to the original order value. For those orders not governed by master purchase agreements, the commitments are governed by the commercial terms on the Company’s purchase orders subject to acknowledgment from its suppliers. The Company establishes a loss liability for all products it does not expect to sell or orders it anticipates cancelling for which it has committed purchases from suppliers. Such loss liability is included in Other accrued liabilities on the Company’s consolidated balance sheets. Losses incurred in relation to purchase commitments, including unique materials and components, amounted to $3.1 million, $2.6 million and $1.7 million for the years ended December 31, 2021, 2020 and 2019, respectively. Non-Trade Commitments As of December 31, 2021, the Company’s non-cancellable purchase commitments pertaining to non-trade activities were as follows (in thousands): 2022 $ 951 2023 1,737 2024 1,823 2025 1,914 2026 2,010 Thereafter 7,357 Total $ 15,792 Warranty Obligations Changes in the Company’s warranty obligations, which is included in Other accrued liabilities on the consolidated balance sheets, were as follows: Year Ended December 31, 2021 2020 2019 (In thousands) Balance as of beginning of the period $ 9,240 $ 10,556 $ 14,412 Provision for warranty liability made 4,522 7,330 7,050 Settlements made (6,901 ) (8,646 ) (10,906 ) Balance as of the end of the period $ 6,861 $ 9,240 $ 10,556 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, 20 2 1 . 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. The Company believes the estimated fair value of these agreements is minimal. Accordingly, the Company has no liabilities recorded for these agreements as of December 31, 2021. 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. 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 the Company has responded with a counter appeal brief on December 3, 2017 and awaits scheduling of the hearing. 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 and the Company received a positive decision on December 11, 2017. On June 11, 2018, the Italian government filed its appeal brief with the Supreme Court, and the Company filed its counter brief on July 12, 2018 and awaits scheduling of the hearing. 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. The hearing was held on May 21, 2018, and the Company received a favorable decision on June 12, 2018. On October 14, 2019, Milan Tax Office filed an appeal with the Supreme Court. The Company filed its counter brief with the Supreme Court on November 22, 2019 and awaits 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. The Regional Tax Court heard the case on February 26, 2019 for both years and issued a decision favorable to the Company on March 11, 2019. On October 14, 2019, Milan Tax Office filed an appeal with the Supreme Court. The Company filed its counter brief with the Supreme Court on November 22, 2019 and awaits 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. Vivato v. NETGEAR, Inc. On April 19, 2017, the Company was sued by XR Communications (d/b/a) Vivato (“Vivato”) in the United States District Court, Central District of California. Based on its complaint, Vivato purports to be a research and development and product company in the WiFi area, but it appears that Vivato is not currently a manufacturer of commercial products. The three (3) patents that Vivato asserts against the Company are U.S. Patent Nos. 7,062,296, 7,729,728, and 6,611,231. The ’296 and ’728 patents are entitled “Forced Beam Switching in Wireless Communication Systems Having Smart Antennas.” The ’231 patent is entitled “Wireless Packet Switched Communication Systems and Networks Using Adaptively Steered Antenna Arrays.” Vivato also has recently asserted the same patents in the Central District of California against D-Link, Ruckus, and Aruba, among others. According to the complaint, the accused products include WiFi access points and routers supporting MU-MIMO, including without limitation access points and routers utilizing the IEEE 802.11ac-2013 standard. The accused technology is standards-based, and more specifically, based on the transmit beamforming technology in the 802.11ac WiFi standard. The Company answered an amended complaint on July 7, 2017. In its answer, the Company objected to venue and recited that objection as a specific affirmative defense, so as to expressly reserve the same. The Company also raised several other affirmative defenses in its answer. On August 28, 2017, the Company submitted its initial disclosures to the plaintiff. The initial scheduling conference was on October 2, 2017, and the Court set five day jury trial for March 19, 2019 for the leading Vivato/D-Link case, meaning the Company’s trial date will be at some point after March 19, 2019. On March 20, 2018, the Company and other defendants in the various Vivato cases moved the Court to stay the case pending various IPRs filed on all of the patents in suit. Every asserted claim of all three patents-in-suit is now subject to challenge in IPRs that are pending before the U.S. Patent and Trial Appeal Board (“PTAB”). In particular, the Company, Belkin, and Ruckus are filing one set of IPRs on the three patents in suit; Cisco is filing another set of independent IPRs on the three patents in suit; and Aruba is filing yet another set of independent IPRs on the three patents in suit. On April 11, 2018, the Court granted the motion to stay pending filing of the IPRs. On May 3, 2018, the Company and other defendants filed their IPRs. The PTAB instituted the IPRs for the ’296 and ’728 patents, but not the ’231 patent from the Ruckus and Belkin set of petitions. However, the Cisco IPR for the ’231 patent was instituted. Vivato has proposed amendments to its claims and the parties have completed briefing the matter before the PTAB. In July and August of 2019, the Company and other defendants had two oral arguments before the PTAB regarding the ’296 and ’728 patents. The PTAB denied institution of petition for the’231 patent. On October 10, 2019, the PTAB issued a Final Written Decision invalidating all of the original claims at issue in the ’296 patent and denied Vivato’s motion to amend (the claims). In November 2019, the PTAB issued a Final Written Decision invalidating all of the challenged claims in the ’728 patent. In the meantime, the PTAB’s Final Written Decision in the Cisco IPR of the’231 patent found the claims to be valid and Cisco is appealing the finding. On November 25, 2020, the Federal Circuit affirmed the denial of Cisco’s IPR regarding the ’231 patent. Only the ’231 patent remained from the pending case filed in 2017 described above (“XR I”). The asserted claims in the ’231 patent have been held invalid by the Court in the Northern District of California in the case against Ruckus. Based on the ND Cal decision, the Company filed a collateral estoppel motion for summary judgment on the patent which has been granted, so the ’231 patent has been dropped from this case. On June 16, 2021, XR Communications filed a new suit (“XR II”) against the Company in the Central District of California (CDCA) alleging that the Company’s 802.11ax compliant products infringe XR’s U.S. Patents 7,729,728 (the ’728 Patent), 10,594,376 (the ’376 Patent), and 8,289,939 (the ’939 Patent). The Court held a claim construction hearing on January 18, 2022. The Company is currently conducting discovery in XR II. It is too early to reasonably estimate any financial impact to the Company resulting from this litigation matter. Hera Wireless v. NETGEAR, Inc. On July 14, 2017, the Company was sued by Sisvel (via Hera Wireless) in the District of Delaware on three related patents allegedly covering the 802.11n standard. Similar complaints were filed against Amazon, ARRIS, Belkin, Buffalo, and Roku. On December 12, 2017, the Company answered the complaint and asserted various affirmative defenses, including invalidity and noninfringement. A proposed joint Scheduling Order was submitted to the Court on January 24, 2018 with trial proposed for March of 2020. On February 27, 2018, Hera Wireless identified the accused products and the asserted claims, alleging that any 802.11n compliant product infringes, and identified only the Company’s Orbi and WND930 products with particularity. Hera Wireless’ infringement contentions were submitted on April 28, 2018. Discovery is ongoing. On June 28, 2018, the Company and other defendants submitted invalidity contentions. The Company along with other defendants jointly filed IPRs challenging three of the patents in suit on July 18, 2018. On September 14, 2018, the Company and other defendants jointly filed a second set of IPRs with the USPTO challenging the remaining six patents asserted in the Amended Complaint. All of the instituted IPRs have been decided in defendants’ favor, thereby canceling all claims for 8 of the 9 asserted patents. Hera initially appealed all of the adverse decisions to the Federal Circuit and has since withdrawn 7 of the appeals and filed reissue applications. While the Company awaits the decision on the remaining IPR filed in parallel by Intel, the district court case remains stayed. It is too early to reasonably estimate any financial impact to the Company resulting from this litigation matter. John Pham v. Arlo Technologies, Inc., NETGEAR Inc., et al., and other related actions On January 9, 2019 and January 10, 2019, February 1, 2019 and February 8, 2019, the Company was sued in four separate securities class action suits in Superior Court of California, County of Santa Clara, along with Arlo Technologies, individuals, and underwriters involved in the spin-off of Arlo. Two more similar state actions have been filed against Arlo Technologies Inc. et al. In total, six putative class action complaints were filed in California state court in Santa Clara County. The Company is named as a defendant in five of the six lawsuits. The complaints generally allege that Arlo’s IPO materials contained false and misleading statements, hiding problems with Arlo’s Ultra product. These claims are styled as violations of Sections 11, 12(a), and 15 of the Securities Act of 1933. On January 22, 2019, the Company and Arlo et al. were sued in the US District Court for the Northern District of California. Based on similar facts as those in the state court actions, the federal case alleged that the Defendants violated Sections 11 and 15 of the Securities Act of 1933 and sought remedies thereunder. On August 6, 2019, all the defendants, including NETGEAR, filed a motion to dismiss the federal court action. Plaintiffs filed their opposition brief on September 6, 2019 and defendants filed a reply on October 4, 2019. The state court action remained stayed pending the outcome of the federal action. On November 18, 2019, the parties participated in mediation, but did not settle the case. On December 5, 2019, the court held a hearing on the defendants’ motion to dismiss, and on December 19, 2019, granted that motion as to all counts, with leave to amend. On February 14, 2020, the Court granted the Parties’ stipulation to stay proceedings to permit filing of a motion for preliminary approval for classwide settlement. On March 11, 2021, the federal court in Northern District of California issued the approval order for the settlement, thereby concluding the federal matter. Three individuals who filed suit in state court requested exclusion from the settlement. On June 4, 2021, the three individuals– Pham, Perros, and Patel– renewed their state class action case in the Superior Court of California, County of Santa Clara with an amended Complaint. In response, the Company, Arlo and other co-defendants have jointly filed a motion to dismiss and a demurrer to the state court action on June 21, 2021 and July 7, 2021, respectively. On September 17, 2021, the Court granted Arlo and the Company’s motion to dismiss the case from state court. On November 16, 2021, Plaintiffs filed a Notice of Appeal. The parties have agreed to an extension of Plaintiffs’ opening brief to June 30, 2022. It is too early to reasonably estimate any financial impact to the Company resulting from this litigation matter. Aegis 11 S.A. v. NETGEAR Inc. On June 21, 2019, Aegis 11 S.A. (“Aegis”) sued the Company and several other defendants for patent infringement in the District of Delaware. Aegis asserted that NETGEAR’s WiFi routers infringe three patents related to the 802.11 standard: U.S. Patent No. 6,839,553, U.S. Patent No. 9,584,200, and U.S. Patent No. 9,848,443. In lieu of filing its Answer on October 15, 2019, the Company filed a partial motion to dismiss against one of the asserted claims based on unpatentable subject matter. On September 9, 2020, the Court granted the Defendants’ partial motion to dismiss one of the three patents filed in the case, U.S. Pat. 6,839,553 (the ’553 Patent). The dismissal was granted without prejudice. The Company filed its Answer on September 23, 2020. On October 20, 2020, Aegis filed an Amended Complaint with additional facts related to the ’553 Patent, and added a fourth patent, Pat. 9,350,434 (the ’434 patent). In response, the Company renewed its partial motion to dismiss the Amended Complaint. On August 30, 2021, the Court granted the Company’s renewed motion to dismiss the ’553 Patent from the Amended Complaint. The Company filed an Answer for the remaining counts involving the other three patents on September 27, 2021. The parties are in the discovery phase of the case. It is too early to reasonably estimate any financial impact to the Company resulting from this litigation matter. Altair Logix LLC v NETGEAR Inc. On July 28, 2020, Altair Logix LLC (“Altair”) sued the Company in the District of Delaware. Altair’s Complaint asserts that the Company’s Meural frame infringes U.S. Pat. 6,289,434 (the “434” Patent) titled “Apparatus and Method of Implementing Systems on Silicon Using Dynamic-Adaptive Run-Time Reconfigurable Circuits for Processing Multiple, Independent Data and Control Streams of Varying Rates.” The Company filed its Answer on January 12, 2021. On August 13, 2021, the Company also filed a motion to invalidate the patent based on 35 U.S.C. s.101 which has been denied. The claim construction hearing is scheduled for February 23, 2022. It is too early to reasonably estimate any financial impact to the Company resulting from this matter. Q3 Networking LLC v. NETGEAR Inc. On September 21 and September 22, 2020, Q3 Networking LLC (“Q3”) filed Complaints against the Company, Commscope (with Ruckus and Arris) and Hewlett Packard Enterprises (with Aruba Networks) (together “Defendants” or “Respondents”) at the District Court of Delaware and the International Trade Commission (“ITC”), respectively. Both actions allege that the Company’s routers and access points infringe four patents: U.S. Pats. 7,457,627 (the ’627 Patent), 7,609,677 (the ’677 Patent), 7,895,305 (the ’305 Patent), and 8,797,853 (the ’853 Patent) relating to different aspects of networking technology (e.g., 802.11and QoS). The ITC case was instituted on October 23, 2020. On November 10, 2020, NETGEAR filed, and the Court granted, a Motion to Stay the Delaware action while the ITC case is pending. On April 5 and April 6, 2021, the Company and co-respondents filed IPRs against the ’627 Patent and ’853 Patent, respectively. Q3 also has a pending case against the Company in China asserting Chinese Patent ZL01809893.2, the Chinese patent corresponding to the ’853 Patent, before the Jinan People’s Intermediate Court. The Jinan Court has stayed the infringement case pending the result of the invalidity challenge filed by the Company before the China National Intellectual Property Administration (“CNIPA”). On September 30, 2021, the CNIPA invalidated Q3’s Chinese patent. Trial was held at the ITC from July 28 through July 30, 2021. On December 7, 2021, the ITC issued an Initial Determination (“ID”) finding no violation or infringement of any of the patents by the Company but maintained the patents’ validity. Q3 has petitioned for a review of the ID by the Commission and the Respondents filed their own petition for a review of the patents’ validity. The panel will decide whether to review the ID by March 15, 2022. The district court case remains stayed. The Company has a pending IPR against the ’627 Patent before the Patent Trial and Appeal Board. It is too early to reasonably estimate any financial impact to the Company resulting from this matter. Beijing Tianxing Ebel Information Consulting Co., Ltd v. NETGEAR Inc. On or around October 19, 2020, Beijing Tianxing Ebel Information Consulting Co., Ltd (“Tianxing”) filed two Complaints against the Company in the Beijing Intellectual Property Court (“Beijing IP Court”). Tianxing’s Complaints assert that the Company’s ReadyNAS RR2304 infringes each of Chinese Patent Nos. ZL200410096563.1 and ZL201010144680.6. The patents are titled “Method for Treating Medium Access Control Address in Main and Spare Conversion” and “Network Access Method, System, Network Authentication Method, Equipment and Terminal,” respectively. In December 2020, NETGEAR Beijing was served with the third suit by Beijing Tianxing. This Complaint asserts that the Company’s ReadyNAS RR2304 infringes Chinese Patent No. ZL200510103486.2, titled “System and Method for Processing Link Fault of Wideband Access Apparatus.” The Company filed jurisdictional objections in all cases, but the Court has denied them. The infringement cases are now back in the substantive trial stage and the Company is preparing its defense. As of June 11, 2021, the Company has also completed all submissions for the invalidity challenges against the three patents at the CNIPA. Oral arguments for two of the patents were held on October 21, 2021 and October 29, 2021, and November 28, 2021. The CNIPA has invalidated Patent No. . The CNIPA maintained the validity of Patent No. ZL200510103486.2 The Company attended the invalidity hearing on October 21, 2021 for Patent No. ZL201010144680.6 It is too early to reasonably estimate any financial impact to the Company resulting from these matters. Network-1 Technologies v. NETGEAR Inc On December 15, 2020, Network-1 filed a breach of contract suit against the Company in New York State Court for failure to pay royalties for its Power over Ethernet (“PoE”) products under the parties’ Settlement and Licensing Agreement (“Agreement”). The Company disagrees with Network-1’s position on the Agreement. The parties did not reach an agreement in mediation. The Company filed a motion to compel arbitration pursuant to the Agreement and the hearing on the Company’s motion took place on October 14, 2021, where the Court denied the Company’s motion because a settlement demand had not yet been filed. As of November 3, 2021, the Company has filed an arbitration demand and renewed its motion to compel arbitration with the Court. The Company is awaiting the Court’s ruling on its renewed motion to compel arbitration. In the meantime, Network-1 has filed objections to the arbitrator’s jurisdiction over this case and the Company has responded. It is too early to reasonably estimate any financial impact to the Company resulting from this matter. WSOU v. NETGEAR Inc. On January 13, 2021, WSOU Investments, LLC (“WSOU”) filed three complaints against the Company in the US District Court for the Western District of Texas. WSOU alleges that the Company’s routers and switches infringe three patents related to wireless communication technologies. The patents asserted are US Patent Nos.: 7,512,096 (the “ʼ096 Patent”), 9,338,171 (the “ʼ171 Patent”) and 7,551,630 (the “ʼ630 Patent”). On April 15, 2021, the Company filed motions to dismiss for improper venue or to transfer in lieu of answering in all three cases. On July 30, 2021, WSOU voluntarily dismissed the three cases from the US District Court for the Western District of Texas in response to the Company’s motions to dismiss. WSOU refiled the three cases in the US Delaware Court for the District of Delaware on or around August 2, 2021. On September 24, 2021, the Company answered the two cases involving the ’630 and ’096 Patents, and filed a motion to dismiss based on 35 U.S.C. s.101 It is too early to reasonably estimate any financial impact to the Company resulting from these matters. Shenzhen Yuanyu and Gaoping Yaoyi v. NETGEAR Beijing On or around March 19, 2021, the Company’s Beijing entity was served in seven patent infringement suits filed by Shenzhen Yuanyu Investment Co., Ltd. and Gaoping Yaoyi Trading Co., Ltd., at the Jinan Intermediate People’s Court. Shenzhen Yuanyu asserted Chinese patents ZL201010616817.3, ZL200610168028.1, ZL200410057124.X, ZL200710074176.1 in four separate suits. Gaoping Yaoyi asserted Chinese patents ZL200410080537.X, ZL200810126154.X, and 200710086745.4 in three separate suits. All cases allege the Company’s Nighthawk XR300 and XR500 infringe the patent. As of June 28, 2021, the Company had completed all submissions for the invalidity challenges against the seven patents at the CNIPA. The CNIPA heard oral arguments regarding invalidity for four patents on September 13, 2021, September 15, 2021, September 23, 2021 and November 2, 2021, November 9, 2021 and November 30, 2021. The Company has received decisions on five patents. One patent (ZL200710086745.4) was invalidated, but the validity of the other four patents (ZL200410057124, ZL201010616817.3, ZL200410080537, It is too early to reasonably estimate any financial impact to the Company resulting from these matters. Beijing Yiwen v. NETGEAR Beijing On or around April 1, 2021, the Company’s Beijing entity was served in two patent infringement cases filed by Beijing Yiwen Impression Advertisement Co., Ltd. Beijing Yiwen sued NETGEAR Beijing at the Beijing IP Court alleging the Company’s GS748T infringes Chinese patents ZL200510103486.2 and ZL200510120823.9. The Company filed jurisdictional challenges in both of the infringement cases and is awaiting the Court’s ruling. As of June 11, 2021, the Company completed all submissions for the invalidity challenges against both patents at the CNIPA. The CNIPA maintained the validity for ZL200510103486.2. The CNIPA heard oral argument regarding invalidity of patent ZL200510120823.9 on October 14, 2021, and the Company is awaiting that ruling. The Company’s jurisdictional challenges for both infringement cases have been rejected and the cases have entered the substantive trial stage. It is too early to reasonably estimate any financial impact to the Company resulting from these matters. Shangdong Chengzi Medical Technology v. NETGEAR Beijing On or around June 8, 2021, the Company’s Beijing entity was served in two China patent infringement cases. Plaintiff Shangdong Chengzi sued NETGEAR Beijing at the Beijing IP Court alleging the Company’s Orbi RBR20 and XR500 infringe Chinese patent ZL200810007497.4, titled “A method and device for pre-alarming exception.” The Company filed jurisdictional challenges in both cases and is awaiting the Court’s ruling. On August 12, 2021, the Company filed a petition to invalidate the patent before the CNIPA and a hearing has been scheduled for February 25, 2022. It is too early to reasonably estimate any financial impact to the Company resulting from these matters. Gaoping Yaoyi Trading Co. v. NETGEAR Beijing On or around June 9, 2021, the Company was served in two China patent infringement cases. Plaintiff Gaoping Yaoyi, sued NETGEAR Beijing at the Liuzhou Intermediate People’s Court alleging the Company’s XR300 infringes Chinese patent ZL200710162875.1 and ZL201110389019.6, titled “Data stream information transmission method, communication system and equipment” and “Network access management method and network access device,” respectively. The Company filed jurisdictional challenges in both infringement cases and is awaiting the Court’s ruling. The CNIPA held an oral hearing for the invalidity case for patent ZL200710162875.1 on December 30, 2021 and the Company is awaiting the decision. It is too early to reasonably estimate any financial impact to the Company resulting from these matters. TrackThings LLC v. NETGEAR On June 21, 2021, TrackThings, a non-practicing entity, sued the Company in the Southern District of New York (SDNY). TrackThings asserts that the Company’s Orbi and Nighthawk mesh products infringe three patents related to mesh technology: U.S. Patent No. 9,642,017 (the ’017 Patent), titled “Apparatus and Method for Improving the Integrity and Performance of an Ad-Hoc Wireless Network,” U.S. Patent No. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders Equity Note [Abstract] | |
Stockholders' Equity | Note 9. Stockholders’ Equity Stock Repurchases From time to time, the Company’s Board of Directors has authorized programs under which the Company may repurchase shares of its common stock, depending on market conditions, in the open market or through privately negotiated transactions. Under the authorizations, 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. On October 24, 2021, the Board of Directors authorized the management to repurchase up to 3.0 million shares of the Company’s outstanding common stock, incremental to the remaining shares under the Company’s previous repurchase program. 3.5 2.1 shares $75.0 million, and , The Company repurchased, reported based on trade date, approximately , 198,000 and 198,000 shares of common stock at a cost of approximately $7.7 million, $5.1 million and 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 (loss) (“AOCI”) by component: Unrealized gains (losses) on available -for-sale investments Unrealized gains (losses) on derivatives Estimated tax benefit (provision) Total (In thousands) Balance as of December 31, 2018 $ (18 ) $ (8 ) $ 11 $ (15 ) Other comprehensive income (loss) before reclassifications 16 1,565 (332 ) 1,249 Less: Amount reclassified from accumulated other comprehensive income (loss) — 1,535 (322 ) 1,213 Net current period other comprehensive income (loss) 16 30 (10 ) 36 Balance as of December 31, 2019 $ (2 ) $ 22 $ 1 $ 21 Other comprehensive income (loss) before reclassifications — (856 ) 174 (682 ) Less: Amount reclassified from accumulated other comprehensive income (loss) — (792 ) 166 (626 ) Net current period other comprehensive income (loss) — (64 ) 8 (56 ) Balance as of December 31, 2020 $ (2 ) $ (42 ) $ 9 $ (35 ) Other comprehensive income (loss) before reclassifications — 668 (126 ) 542 Less: Amount reclassified from accumulated other comprehensive income (loss) — 453 (95 ) 358 Net current period other comprehensive income (loss) — 215 (31 ) 184 Balance as of December 31, 2021 $ (2 ) $ 173 $ (22 ) $ 149 The following table provides details about significant amounts reclassified out of each component of AOCI: Year Ended December 31, 2021 2020 2019 (In thousands) Amount Reclassified from AOCI Gains (losses) on cash flow hedge: Foreign currency forward contracts Affected line item in the statement of operations Net revenue $ 459 $ (954 ) $ 1,929 Cost of revenue (2 ) 2 (12 ) Research and development 31 9 (57 ) Sales and marketing (30 ) 124 (284 ) General and administrative (5 ) 27 (41 ) Total before tax 453 (792 ) 1,535 Tax impact (95 ) 166 (322 ) Total, net of tax $ 358 $ (626 ) $ 1,213 |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2021 | |
Employee Benefits And Share Based Compensation [Abstract] | |
Employee Benefit Plans | Note 10. 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, restricted stock units (“RSU”) 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. The original maximum aggregate number of shares that could be issued under the 2016 Plan was 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. In May 2018, the Company adopted amendments to the 2016 Plan which increased the number of shares of the Company’s common stock that may be issued under the 2016 plan by an additional 1.7 million shares. In January 2019, the Company received the approval from its Compensation Committee to increase the number of shares that the Company may be issued under the 2016 plan to a new total of 3.1 million shares, pursuant to the adjustment provisions of the 2016 Plan as a result of the Distribution. In May 2020, the Company adopted amendments to the 2016 Plan which increased the number of shares of the Company’s common stock that may be issued under the 2016 plan by an additional 2.0 million shares. As of December 31, 2021, approximately 1.8 million shares remained available for future grants under the 2016 Plan. Options granted generally vest over four years with the first tranche at the end of twelve months from the date of grant and the remaining shares vesting monthly over the remaining three years. Options granted generally expire in 10 years from the date of grant. RSUs granted generally vest in annual installments over four years at the end of a three-year 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. 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 and 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, 2021, 2020, and 2019, the Company recognized ESPP compensation expense of $1.7 million, $1.5 million and $1.4 million, respectively. Approximately 171,000 shares of common stock were purchased at an average exercise price of $28.72 in the year ended December 31, 2021. As of December 31, 2021, approximately 240,000 shares were reserved for future issuance under the ESPP. Option Activity Stock option activity 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, 2020 1,333 $ 27.86 Exercised (421 ) $ 22.81 Outstanding as of December 31, 2021 912 $ 30.19 6.11 $ 2,487 As of December 31, 2021 Vested and expected to vest 912 $ 30.19 6.11 $ 2,487 Exercisable Options 717 $ 30.96 5.74 $ 2,008 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 2021, or December 31, 2021, 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, 2021. This amount changes based on the fair market value of the Company’s stock. Total intrinsic value of options exercised for the years ended December 31, 2021, 2020, and 2019 was $6.7 million, $7.3 million and $3.5 million, respectively. The total fair value of options vested during the years ended December 31, 2021, 2020, and 2019 was $2.3 million, $3.2 million and $4.1 million, respectively. The following table summarizes significant ranges of outstanding and exercisable stock options as of December 31, 2021: 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) $18.58 - $25.37 264 4.09 $ 23.43 264 $ 23.43 $26.61 - $26.61 370 7.55 $ 26.61 186 $ 26.61 $38.32 - $41.67 278 6.12 $ 41.37 267 $ 41.42 $18.58 - $41.67 912 6.11 $ 30.19 717 $ 30.96 RSU Activity RSU activity was as follows: Number of Shares Weighted Average Grant Date Fair Value Per Share Weighted Average Remaining Contractual Term Average Intrinsic Value (In thousands) (In dollars) (In years) (In thousands) Outstanding as of December 31, 2020 1,584 $ 30.66 Granted 763 $ 38.53 Vested (645 ) $ 31.65 Cancelled (147 ) $ 33.28 Outstanding as of December 31, 2021 1,555 $ 33.86 1.38 $ 45,414 The total fair value of RSUs vested during the years ended December 31, 2021, 2020 and 2019 was $24.3 million, $16.1 million and $19.4 million, respectively. The grant date fair value of RSUs vested during the years ended December 31, 2021, 2020 and 2019 was $20.4 million, $20.4 million and $18.6 million, respectively. Performance Shares Activity In July 2020 and July 2021, the Company’s executive officers were granted performance shares with vesting occurring at the end of a three-year % to % of the target shares granted. At the end of each reporting period, the Company evaluates the probability of achieving the performance conditions and records the related stock-based compensation expense based on performance to date over the service period. Performance shares were never granted in the years prior to 2020. Performance shares activity was as follows: Number of Shares Weighted Average Grant Date Fair Value Per Share Weighted Average Remaining Contractual Term Average Intrinsic Value (In thousands) (In years) (In thousands) Outstanding as of December 31, 2018 — — Granted — — Vested — — Cancelled — — Outstanding as of December 31, 2019 — — Granted 141 $ 28.22 Vested — — Cancelled — — Outstanding as of December 31, 2020 141 $ 28.22 Granted 152 $ 37.58 Vested — — Cancelled — — Outstanding as of December 31, 2021 293 $ 33.07 2.08 $ 8,559 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 and performance shares is based on the closing fair market value of the Company’s common stock on the date of grant. The fair value of options granted and the purchase rights granted under the ESPP 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 purchase rights granted 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 under the 2016 Plan and the purchase rights granted under the ESPP is based on historical volatility over the most recent period commensurate with the estimated expected term. The Company has never declared or paid cash dividends on its capital stock and does not anticipate paying cash dividends in the foreseeable future. No stock options were granted during the years ended December 31, 2021 and 2020. In the year ended December 31, 2019, the weighted average expected life, risk-free interest rate, and expected volatility for the stock options granted was 6.2 years, 1.85%, and 33.9%, respectively, and the weighted average fair value was $9.72. The following table sets forth the weighted-average assumptions used to estimate the fair value of purchase rights granted under the ESPP: Year Ended December 31, 2021 2020 2019 ESPP Expected life (in years) 0.5 0.5 0.5 Risk-free interest rate 0.05 % 0.72 % 2.06 % Expected volatility 40.8 % 54.8 % 43.9 % The following table sets forth the stock-based compensation expense resulting from stock options, RSUs, performance shares and the ESPP included in the Company’s consolidated statements of operations: Year Ended December 31, 2021 2020 2019 (In thousands) Cost of revenue $ 2,103 $ 4,091 $ 2,843 Research and development 5,161 5,183 6,532 Sales and marketing 7,628 7,634 9,069 General and administrative 11,103 13,597 10,693 Total $ 25,995 $ 30,505 $ 29,137 Total stock-based compensation cost capitalized in inventory was less than $0.9 million as of each of the years ended December 31, 2021, 2020 and 2019, respectively. As of December 31, 2021, $0.9 million of unrecognized compensation cost related to stock options is expected to be recognized over a weighted-average period of 1.4 years and $37.0 million of unrecognized compensation cost related to unvested RSUs and performance shares is expected to be recognized over a weighted-average period of 2.5 years. If there are any modifications or cancellations of the underlying unvested awards, the Company may be required to accelerate, increase or cancel all or a portion of the remaining unearned stock-based compensation expense. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | Note 11. Segment Information Operating segments are components of an enterprise about which separate financial information is available and is evaluated quarterly 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. The Company operates and reports in two segments: Connected Home and SMB: • Connected Home: Focuses on consumers and provides high-performance, dependable and easy-to-use WiFi internet networking solutions such as WiFi 6, WiFi 6E Tri-band and Quad-band mesh systems, routers, 4G/5G mobile products, smart devices such as Meural digital canvasses, and subscription services that provide consumers with a range of value-added services focused on performance, security, privacy and premium support; and • SMB: focuses on small and medium sized businesses and provides solutions for business networking, wireless local area network (“LAN”), audio and video over Ethernet for Pro AV applications , security and remote management providing enterprise-class functionality at an affordable price. The Company believes that this structure reflects its current operational and financial management, and that it provides the best structure for the Company to focus on growth opportunities while maintaining financial discipline. The leadership team of each segment is focused on product and service 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 compensat ion expense, separation expense, change in fair value of contingent consideration, restructuring and other charges, litigation reserves, net , and other income (expense s ), net. 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, 2021 2020 2019 (In thousands, except percentage data) Net Revenue: Connected Home $ 853,472 $ 1,007,545 $ 711,391 SMB 314,601 247,657 287,372 Total net revenue $ 1,168,073 $ 1,255,202 $ 998,763 Contribution Income: Connected Home $ 116,889 $ 152,512 $ 67,775 Contribution margin 13.7 % 15.1 % 9.5 % SMB $ 62,136 $ 42,174 $ 67,282 Contribution margin 19.8 % 17.0 % 23.4 % Total segment contribution income $ 179,025 $ 194,686 $ 135,057 Corporate and unallocated costs (83,883 ) (83,867 ) (70,525 ) Amortization of intangibles (1) (1,897 ) (5,952 ) (6,731 ) Stock-based compensation expense (25,995 ) (30,505 ) (29,137 ) Separation expense — — (264 ) Change in fair value of contingent consideration 3,003 2,928 25 Restructuring and other charges (3,341 ) (1,702 ) (2,077 ) Litigation reserves, net (315 ) (44 ) (160 ) Other income (expenses), net (2) (1,093 ) (4,741 ) 3,383 Income before income taxes $ 65,504 $ 70,803 $ 29,571 (1) Amounts excluded amortization expense related to patents within purchased intangibles in cost of revenue. (2) Amounts included gain/loss on investments, net, of $(1.4) million, $(6.2) million and $(0.2) million for the years ended December 31, 2021, 2020 and 2019, respectively. The CODM does not evaluate operating segments using discrete asset information. Operations by Geographic Region For reporting purposes, revenue is generally attributed to each geographic region based on the location of the customer. The following table shows net revenue by geography: Year Ended December 31, 2021 2020 2019 (In thousands) United States (U.S.) $ 759,865 $ 866,161 $ 637,566 Americas (excluding U.S.) 26,461 31,810 15,440 EMEA 229,829 221,665 200,099 APAC 151,918 135,566 145,658 Total net revenue $ 1,168,073 $ 1,255,202 $ 998,763 Long-lived assets by Geographic Region The following table represents the Company’s long-lived assets located in geographic areas, which consist of property and equipment, net and operating lease right-of-use assets: As of December 31, 2021 December 31, 2020 (In thousands) United States (U.S.) $ 14,564 $ 19,173 Americas (excluding U.S.) 3,283 2,845 EMEA 2,465 3,215 Singapore 4,767 5,964 APAC (excluding Singapore) (1) 11,432 14,294 Total $ 36,511 $ 45,491 _______________________ (1) No individual Significant Customers For the year ended December 31, 2021, the Company had two customers, primarily within the Connected Home segment, that each individually accounted for 15% and 13% of net revenue, respectively. The Company had two customers, primarily within the Connected Home segment, that each individually accounted for 15% and 14% of net revenue for the year ended December 31, 2020, and 16% of net revenue for the year ended December 31, 2019, respectively. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 12. 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, 2021 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 $ 108,441 $ 108,441 $ — $ — Trading securities: mutual funds (1) 6,814 6,814 — — Available-for-sale investments: corporate equity securities (1) 751 751 — — Available-for-sale investments: certificates of deposit (1) 6 — 6 — Available-for-sale investments: convertible debt securities (2) 518 — 518 — Foreign currency forward contracts (3) 1,372 — 1,372 — Total assets measured at fair value $ 117,902 $ 116,006 $ 1,896 $ — Liabilities: Foreign currency forward contracts (4) $ 344 $ — $ 344 $ — Total liabilities measured at fair value $ 344 $ — $ 344 $ — As of December 31, 2020 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 $ 158,054 $ 158,054 $ — $ — Trading securities: mutual funds (1) 5,368 5,368 — — Available-for-sale investments: convertible debt securities (1) 1,326 — — 1,326 Available-for-sale investments: certificates of deposit (1) 165 — 165 — Foreign currency forward contracts (3) 324 — 324 — Total assets measured at fair value $ 165,237 $ 163,422 $ 489 $ 1,326 Liabilities: Foreign currency forward contracts (4) $ 2,382 $ — $ 2,382 $ — Contingent consideration (5) 3,000 — — 3,000 Total liabilities measured at fair value $ 5,382 $ — $ 2,382 $ 3,000 (1) Included in Short-term investments on the Company’s consolidated balance sheets. (2) $172,000 and $346,000 included in Short-term investments and Other non-current assets on the Company’s consolidated balance sheets, respectively. (3) Included in Prepaid expenses and other current assets on the Company’s consolidated balance sheets. ( 4 ) Included in Other accrued liabilities on the Company’s consolidated balance sheets. ( 5 ) The Company’s investments in money-market funds, corporate equity securities and mutual funds are classified within Level 1 of the fair value hierarchy because they are valued based on quoted market prices in active markets. The Company’s investments in convertible debt securities issued by a publicly held company and certificates of deposits |
Restructuring and Other Charges
Restructuring and Other Charges | 12 Months Ended |
Dec. 31, 2021 | |
Restructuring Charges [Abstract] | |
Restructuring and Other Charges | Note 13. Restructuring and Other Charges The Company accounts for its restructuring plans under the authoritative guidance for exit or disposal activities. The Company includes expenses related to restructuring and other charges in Other operating expenses (income), net in the consolidated statements of operations. Accrued restructuring and other charges are classified within Accrued employee compensation and Restructuring and other charges recognized in fiscal year 2021 were primarily for severance, and other costs in relation to the consolidation of offices in the APAC region and the reorganization of our supply chain function to gain some cost efficiencies The following table provides a summary of the activity related to accrued restructuring and other charges: Employee termination charges Lease contract termination and other charges Total (In thousands) Balance as of December 31, 2018 $ 775 $ 145 $ 920 Additions 2,082 166 2,248 Cash payments (1,783 ) (215 ) (1,998 ) Adjustments (142 ) (30 ) (172 ) Balance as of December 31, 2019 932 66 998 Additions 1,354 655 2,009 Cash payments (1,972 ) (415 ) (2,387 ) Adjustments (227 ) (79 ) (306 ) Balance as of December 31, 2020 87 227 314 Additions (1) 2,910 513 3,423 Cash payments (2,913 ) (578 ) (3,491 ) Adjustments (84 ) (139 ) (223 ) Balance as of December 31, 2021 $ — $ 23 $ 23 (1) |
Leases
Leases | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Leases | Note 14. Leases The Company leases office space, cars, distribution centers and equipment under non-cancellable operating lease arrangements with various expiration dates through May 2027. The leases have remaining lease terms of approximately 1 year to 5 years, some of which include options to extend for up to a further 5 years, and some of which include options to terminate prior to completion of the contractual lease term with or without penalties. The Company determines the duration of the lease arrangement giving thought to whether or not it is reasonably certain that the Company will exercise options to extend or terminate the lease arrangement ahead of its contractual term. The leases do not contain any material residual value guarantees. The components of lease cost were as follows: Year End December 31, 2021 2020 2019 (In Thousands) Operating lease cost $ 9,208 $ 10,482 $ 11,945 Short-term lease cost 563 1,702 1,111 Total lease cost (1) $ 9,771 $ 12,184 $ 13,056 _______________________ ( 1 ) Included in cost of revenue, sales and marketing, research and development and general and administration in the Company’s consolidated statement of operations . Supplemental cash flow information related to leases was as follows: Year End December 31, 2021 2020 2019 (In Thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows relating to operating leases $ 9,474 $ 12,127 $ 11,652 Lease liabilities arising from obtaining right-of-use assets: Operating leases $ 1,773 $ 9,463 $ 918 Supplemental balance sheet information related to leases was as follows: As of December 31, 2021 2020 Weighted Average Remaining Lease Term (in years) Operating leases 3.6 4.2 Weighted Average Discount Rate Operating leases 4.0 % 4.0 % As of December 31, 2021, maturities of operating lease liabilities were as follows (in thousands): Operating Lease 2022 $ 10,122 2023 7,199 2024 6,515 2025 4,812 2026 1,088 Thereafter 82 Total lease payments 29,818 Less imputed interest (2,029 ) Total $ 27,789 |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2021 | |
Valuation And Qualifying Accounts [Abstract] | |
Schedule II - Valuation and Qualifying Accounts | Schedule II—Valuation and Qualifying Accounts Balance at Beginning of Year Other Additions Deductions Balance at End of Year (In thousands) Allowance for doubtful accounts: Year ended December 31, 2021 $ 1,081 $ — $ 12 $ (694 ) $ 399 Year ended December 31, 2020 1,079 2 — — 1,081 Year ended December 31, 2019 1,254 — 21 (196 ) 1,079 |
The Company and Summary of Si_2
The Company and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of presentation | 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 | 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. |
COVID-19 Pandemic | COVID-19 Pandemic The COVID-19 pandemic continues to have widespread, rapidly evolving and unpredictable impacts on global economies, inflation, supply chains, and work force participation, and has created significant volatility and disruption in financial markets. The pandemic has impacted, and is continuing to impact the supply chain in its ability to timely procure finished goods due to material shortages and freight capacity, its workforce and the operations of its customers, and has led to meaningfully increased costs of freight transportation and increased material and component costs for our products. Continued and extended periods of global supply chain, workforce availability and economic disruption could continue to significantly affect the business and statement of financial condition. The duration of the disruption from the pandemic remains uncertain due to the dynamic nature of the virus, and makes it difficult to reasonably estimate the impact of the COVID-19 pandemic on the business operations |
Use of estimates | 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. As of the date of issuance of these consolidated financial statements, the Company is not aware of any specific event or circumstance that would require it to update its estimates, judgments or revise the carrying value of its assets or liabilities. These estimates may change, as new events occur and additional information is obtained, and are recognized in the consolidated financial statements as soon as they become known. |
Cash and cash equivalents | 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. |
Investments | Investments Short-term investments are partially comprised of marketable and convertible debt securities that consist of government and private company debts with an original maturity or a remaining maturity at the time of purchase, of greater than three months and no more than 12 months. These debt 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. Credit losses on available-for-sale debt securities with unrealized losses are recognized as allowances for credit losses limited to the amount by which fair value is below amortized cost. issued by a publicly held company. This investment is Short-term investments also include 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 (expenses), net in the consolidated statements of operations. Long-term investments are comprised of equity investments without readily determinable fair values, investments in convertible debt securities and investments in limited partnership funds, and are included in Other non-current assets on the consolidated balance sheets. Equity investments without readily determinable fair values are accounted for at cost, less impairment and adjusted for subsequent observable price changes obtained from orderly transactions for identical or similar investments issued by the same investee. Such changes in the basis of the equity investment are recognized in Other income (expenses), net in the consolidated statements of operations. The Company does not have a controlling interest or the ability to exercise significant influence over these investees and these investments do not have readily determinable fair values. Investments in convertible debt securities are carried at fair value with unrealized gains and losses reported as a separate component of stockholders’ equity. Investments in |
Certain risks and uncertainties | 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 | Derivative financial instruments The Company uses foreign currency forward contracts that generally mature within six months of inception to manage the exposures to foreign exchange risk related to expected future cash flows on certain forecasted revenue, cost of revenue, operating expenses, and on certain existing assets and liabilities. 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 designated as hedges under the authoritative guidance for derivatives are adjusted to fair value through earnings. For derivative instruments that hedge the exposure to variability in expected future cash flows and are designated as cash flow hedges, the gains or losses on the derivative instrument are reported as a component of accumulated other comprehensive income in stockholders’ equity and reclassified into the same line item in the statement of operations as the hedged transaction, and in the same period that the hedged transaction effects earnings. To receive hedge accounting treatment, cash flow hedges must be highly effective in offsetting changes to expected future cash flows on hedged transactions. |
Concentration of credit risk | 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. As of December 31, 2021, Best Buy, Inc. and affiliates and Amazon and affiliates accounted for approximately 26% and 14% of the Company’s total accounts receivable, respectively. As of December 31, 2020, Best Buy, Inc. and affiliates, Amazon and affiliates and Walmart and affiliates accounted for approximately 29%, 13% and 13% of the Company’s total accounts receivable, 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 counterparties cannot be ruled out. |
Fair value measurements | 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, |
Allowance for doubtful accounts | Allowance for doubtful accounts The Company maintains an allowance for doubtful accounts for estimated credit losses resulting from the inability of its customers to make required payments and reviews it quarterly . The Company determines expected credit losses by performing credit evaluations of its customers’ financial condition, establishing specific reserves for customers in an adverse financial condition and adjusting for its expectations of changes in conditions that may impact the collectability of outstanding receivables . The Company considers factors such as historical experience, credit quality, age of the accounts receivable balances, and geographic or country-specific risks. 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 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. On a quarterly basis, the Company assesses the value of the inventory and writes down its value for estimated excess and obsolete inventory based upon assumptions about the future demand by reviewing inventory quantities on hand and on order under non-cancelable purchase commitments in comparison to the Company’s estimated forecast of product demand to determine what inventory, if any, is not saleable at or above cost. The Company’s analysis is primarily based on the demand forecast which 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, 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. |
Leases | Leases The Company determines if an arrangement is a lease or contains a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, other accrued liabilities, and operating lease liabilities on the consolidated balance sheets. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. For certain office leases, the Company accounts for the lease and non-lease components as a single lease component to the extent that the timing and pattern of transfer are similar for the lease and non-lease components and the lease component qualifies as an operating lease. Lease expense is recognized on a straight-line basis over the lease term. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Generally the implicit rate of interest in arrangements is not readily determinable and the Company utilizes its incremental borrowing rate in determining the present value of lease payments. The Company’s incremental borrowing rate is a hypothetical rate based on a benchmark interest rate adjusted for its specific credit risk. The operating lease ROU asset includes any lease payments made and excludes lease incentives. |
Goodwill | 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. The Company identified the reporting units for the purpose of goodwill impairment testing as Connected Home, and SMB and performed a qualitative test for goodwill impairment of the two reporting units as of the first day of the fourth quarter, or October 4, 2021. Based upon the results of the qualitative testing, the Company believed that it was more-likely-than-not that the fair value of these reporting units were greater than their respective carrying values and therefore performing the next step of impairment test for these reporting units was unnecessary. No |
Intangibles, net | 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. |
Revenue Recognition | Revenue Recognition Revenue from contracts with customers is recognized when control of the promised goods or services is transferred to the customers, in an amount that reflects the consideration that the Company expects to be entitled to in exchange for those goods or services. The Company derives its revenue primarily from product sales, consisting of sales of Connected Home and SMB hardware products to its customers - retailers, distributors and service providers. Revenue is recognized at a point in time when control of the goods is transferred to the customer, generally occurring upon shipment or delivery dependent upon the terms of the underlying contract. The amount recognized reflects the consideration the Company expects to be entitled to in exchange for the transferred goods. The Company evaluates its customers’ ability to pay based on various factors like historical payment experience, financial metrics and customer credit scores. Payment terms are typically less than two months from the date control over the product or service is transferred to the customer. Revenue for services relates primarily to sales of subscriptions of the Company’s value-added services, including security and privacy, parental controls and remote network management services as well as advanced technical support and extended warranty. Service revenue is generally recognized over time on a ratable basis over the contract term beginning on the date that the service is expected to be delivered. Service contracts are generally for 30 days or 12 months in length, billed either monthly or annually and generally in advance. The technical support services consist of telephone and internet access to technical support personnel and extended warranty, which begins generally after the standard warranty period and consists of hardware replacement and updates to software features provided on a when and if available basis. All such service or support sales are typically recognized using an output measure of progress by looking at the time elapsed as the contracts generally provide the customer equal benefit throughout the contract period because the Company transfers control evenly by providing a stand-ready service. To date, services revenue has not represented a significant percentage of our total revenue. Revenue from all sales types is recognized at the transaction price and is calculated as selling price net of variable consideration which may include estimates for future returns, sales incentives, and price protection. The Company’s standard obligation to its direct customers generally provides for a full refund in the event that such product is not merchantable or is found to be damaged or defective. The Company uses the expected value method to arrive at the amount of variable consideration which is based on management’s analysis of historical and anticipated returns information, sell through and channel inventory levels, current economic trends, and changes in customer demand. At the time the Company records the reduction to revenue, the Company includes within cost of revenue a write-down to reduce the carrying value of such products to net realizable value. In addition to channel warranty-related returns, certain distributors and retailers generally have the right to return product for stock rotation purposes. Sales incentive programs include certain reimbursement rights to qualified distributor and retailers for marketing expenditures. Distinct good or service received in exchange for payment from a customer are accrued within operating expenses or cost of revenue as appropriate, otherwise expenditures are recorded as a reduction of revenue. The Company provides for price protections in limited cases, with variable consideration assessed based on customary business practice such as anticipated price decreases, historical pricing information and customer claims processing. For products sold with third-party services where the Company obtains control of the products and/or service before transferring it to the customer, the Company recognizes revenue based on the gross amount billed to customers. The Company recognizes revenue on a net basis when the Company is acting as an agent between the customer and the vendor. The Company considers several factors in determining when it obtains control, such as determining the responsible party for fulfillment of the services, whether the Company has inventory risk before the service is transferred or if it has discretion to establish pricing for the third-party services. Contracts with Multiple Performance Obligations Some of the Company’s contracts with customers contain multiple promised goods or services. Such contracts include hardware products with bundled services, networking hardware with embedded software, various software subscription services and support. For these contracts, the Company accounts for the promises separately as individual performance obligations if they are distinct. Performance obligations are determined to be distinct if they are both capable of being distinct and distinct within the context of the contract. In determining whether performance obligations meet the criteria for being distinct, the Company considers a number of factors, such as the degree of interrelation and interdependence between obligations, and whether or not the good or service significantly modifies or transforms another good or service in the contract. The embedded software on most of the hardware products is not considered distinct and therefore the combined hardware and incidental software are treated as one performance obligation and recognized at the point in time when control of product transfers to the customer. Services included with certain hardware products are considered distinct, as a customer can benefit from the product without these services and, therefore, the hardware and service are treated as separate performance obligations. After identifying the separate performance obligations, the transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. Standalone selling prices are generally determined based on the prices charged to customers or using an adjusted market assessment. For products, the estimated standalone selling price of the hardware is directly observable from sales of those products based on a range of prices. Standalone selling price of the service is estimated using an adjusted market approach. This may include using information such as prices charged for similar offerings and other observable inputs. Revenue is recognized for each distinct performance obligation as control is transferred to the customer. In general, the hardware is recognized at time of shipping or delivery, while services and support are delivered over the stated service or support period. Hardware products bundled with services are recognized at the time control of the product transfers to the customer and the transaction price allocated to service is recognized over the estimated period the services are expected to be provided on a straight-line basis beginning when the customer is expected to activate their account. Deferred Revenue Deferred revenue consists of service and support fees due in advance of satisfying performance. The majority of the Company’s deferred revenue balance consists of the unrecognized portion of service revenue from its value-added services, including cyber security, parental controls and remote network management services as well as advanced technical support and extended warranty, which is recognized as revenue ratably over the contractual service period. Performance obligations expected to be fulfilled within one year are classified as current liabilities and the remaining are recorded as noncurrent liabilities. Warranties Hardware products regularly include warranties to the end customers that consist of bug fixes, minor updates such that the product continues to function according to published specs in a dynamic environment, and phone support. These standard warranties are assurance type warranties and do not offer any services beyond the assurance that the product will continue working as specified. Therefore, warranties are not considered separate performance obligations in the arrangement. Instead, the expected cost of product warranty is accrued as expense at the time we recognize revenue in accordance with authoritative guidance. Extended warranties are sold separately and include additional support services. The transaction price for extended warranties is accounted for as service revenue and recognized over the life of the contract. Shipping and Handling Shipping and handling fees billed to customers are included 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. The Company has elected to account for shipping and handling activities related to contracts with customers as costs to fulfill the promise to transfer the associated products. Shipping and handling costs associated with outbound freight totaled $16.4 million, $15.5 million and $8.7 million in the years ended December 31, 2021, 2020 and 2019 respectively. |
Research and development | Research and development Costs incurred in the research and development of new products are charged to expense as incurred. |
Advertising costs | Advertising costs Advertising costs are expensed as incurred. Total advertising and promotional expenses were $25.2 million, $20.6 million, and $21.3 million in the years ended December 31, 2021, 2020 and 2019 respectively. |
Income taxes | 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. The Tax Act introduced a new tax on global intangible low-taxed income (GILTI) effective as of January 1, 2018. The Company’s policy is to treat GILTI as a period cost if and when incurred. 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 | 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 performance shares, 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 | 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 (“ESPP”) is estimated using the Black-Scholes option pricing model. Estimated compensation cost relating to restricted stock units (“RSUs”) and performance shares is based on the closing fair market value of the Company’s common stock on the date of grant. the Company evaluates the probability of achieving the performance conditions at the end of each reporting period and records the related stock-based compensation expense based on performance to date over the service period. |
Comprehensive income | 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 | 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 (expenses), net. |
Recent accounting pronouncements | Recent accounting pronouncements Accounting Pronouncement Recently Adopted ASU 2019-12 In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”, which removes certain exceptions related to intra-period tax allocations and deferred tax accounting on outside basis differences in foreign subsidiaries. Additionally, it provides other simplifying measures for the accounting for income taxes. The Company adopted the new standard effective January 1, 2021. The adoption had no impact on the Company’s financial position, results of operations or cash flows. ASU 2020-04 In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting”, which provides optional expedients and exceptions for a limited period of time to ease the potential burden in accounting treatments related to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met Company’s currency forward rates under its hedging program and its incremental borrowing rate in determining the present value of lease payments The adoption had no material impact on the Company’s financial position, results of operations and cash flows. With the exception of the new standards discussed above, there have been no other new accounting pronouncements that have significance, or potential significance, to the Company’s financial position, results of operations and cash flows. |
The Company and Summary of Si_3
The Company and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Schedule of Estimated Useful Lives of 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 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Revenue From Contract With Customer [Abstract] | |
Schedule of Remaining Performance Obligations | The following table includes estimated revenue expected to be recognized in the future related to performance obligations that were unsatisfied or partially unsatisfied as of December 31, 2021: 2022 2023 Beyond 2023 Total (In thousands) Performance obligations $ 163,584 $ 1,752 $ 1,319 $ 166,655 |
Schedule of Contract Balances | The following table reflects the contract balances: Balance Sheet Location December 31, 2021 December 31, 2020 (In thousands) Accounts receivable, net Accounts receivable, net $ 261,158 $ 337,052 Contract liabilities - current Deferred revenue $ 16,500 $ 13,458 Contract liabilities - non-current Other non-current liabilities $ 3,100 $ 3,165 |
Schedule of Net Revenue Disaggregated by Geographical Region and Sales Channel | In the following table, net revenue is disaggregated by geographic region and sales channel. The Company conducts business across three geographic regions: Americas; Europe, Middle East, and Africa (“EMEA”); and Asia Pacific (“APAC”). The table also includes reconciliations of the disaggregated revenue by reportable segment. The Company operates and reports in two segments: Connected Home, and . Year Ended December 31, 2021 2020 2019 Connected Home SMB Total Connected Home SMB Total Connected Home SMB Total (In thousands) Geographic regions: Americas $ 651,936 $ 134,390 $ 786,326 $ 788,402 $ 109,569 $ 897,971 $ 529,982 $ 123,024 $ 653,006 EMEA 112,368 117,461 229,829 129,929 91,736 221,665 91,586 108,513 200,099 APAC 89,168 62,750 151,918 89,214 46,352 135,566 89,823 55,835 145,658 Total $ 853,472 $ 314,601 $ 1,168,073 $ 1,007,545 $ 247,657 $ 1,255,202 $ 711,391 $ 287,372 $ 998,763 Sales channels: Service provider $ 129,052 $ 2,481 $ 131,533 $ 192,714 $ 3,150 $ 195,864 $ 128,852 $ 4,465 $ 133,317 Non-service provider 724,420 312,120 1,036,540 814,831 244,507 1,059,338 582,539 282,907 865,446 Total $ 853,472 $ 314,601 $ 1,168,073 $ 1,007,545 $ 247,657 $ 1,255,202 $ 711,391 $ 287,372 $ 998,763 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Inventories | Inventories As of December 31, 2021 December 31, 2020 (In thousands) Raw materials $ 12,269 $ 7,756 Finished goods 303,398 164,356 Total $ 315,667 $ 172,112 |
Schedule of Property and Equipment, Net | Property and equipment, net As of December 31, 2021 December 31, 2020 (In thousands) Computer equipment $ 9,979 $ 10,550 Furniture, fixtures and leasehold improvements 18,364 18,674 Software 30,280 29,499 Machinery and equipment 75,559 72,156 Total property and equipment, gross 134,182 130,879 Accumulated depreciation (120,847 ) (114,799 ) Total $ 13,335 $ 16,080 |
Schedule of Intangibles, Net | Intangibles, net As of December 31, 2021 As of December 31, 2020 Gross Accumulated Amortization Net Gross Accumulated Amortization Net (In thousands) Technology $ 59,799 $ (58,263 ) $ 1,536 $ 59,799 $ (57,835 ) $ 1,964 Customer contracts and relationships 56,800 (56,800 ) — 56,800 (55,534 ) 1,266 Other 10,345 (10,025 ) 320 10,345 (9,676 ) 669 Total $ 126,944 $ (125,088 ) $ 1,856 $ 126,944 $ (123,045 ) $ 3,899 |
Schedule of Estimated Amortization Expense Related to Intangibles | As of December 31, 2021, estimated amortization expense related to finite-lived intangibles for each of the remaining years was as follows (in thousands): 2022 $ 528 2023 514 2024 514 2025 300 Total $ 1,856 |
Schedule of Other Non-Current Assets | Other non-current assets As of December 31, 2021 December 31, 2020 (In thousands) Non-current deferred income taxes $ 63,795 $ 68,323 Long-term investments 7,575 8,395 Other 4,980 6,032 Total $ 76,350 $ 82,750 |
Schedule of Changes in Carrying Value of Long-term Investments | Long-term investments The Company’s long-term investments are comprised of equity investments without readily determinable fair values, investments in convertible debt securities and investments in limited partnership funds. The changes in the carrying value of equity investments without readily determinable fair values were as follows (in thousands): Carrying value, as of December 31, 2019 $ 8,147 Additions 5,850 Impairment and downward adjustments for observable price changes (6,239 ) Carrying value, as of December 31, 2020 (1) 7,758 Additions 340 Disposals (1,499 ) Impairment (549 ) Upward adjustments for observable price changes 253 Carrying value, as of December 31, 2021 (1) $ 6,303 (1) The balances excluded the investment in limited partnership fund of $0.9 million and $0.6 million, as of December 31, 2021 and 2020, respectively. Additionally, the balance as of December 31, 2021 excluded an investment in convertible debt securities of $0.3 million. |
Schedule of Other Accrued Liabilities | Other accrued liabilities As of December 31, 2021 December 31, 2020 (In thousands) Current operating lease liabilities $ 9,220 $ 9,149 Sales and marketing 104,549 83,561 Warranty obligations 6,861 9,240 Sales returns (1) 42,869 66,972 Freight and duty 22,126 14,885 Other 38,959 34,568 Total $ 224,584 $ 218,375 ________________________ (1) Inventory expected to be received from future sales returns amounted to $21.8 million and $32.6 million as of December 31, 2021 and 2020, respectively. Provisions to write down expected returned inventory to net realizable value amounted to $13.2 million and $18.0 million as of December 31, 2021 and December 31, 2020, respectively. |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
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 were summarized as follows: Balance Sheet Balance Sheet Location December 31, 2021 December 31, 2020 Location December 31, 2021 December 31, 2020 (In thousands) (In thousands) Derivatives not designated as hedging instruments Prepaid expenses and other current assets $ 1,214 $ 324 Other accrued liabilities $ 321 $ 2,344 Derivatives designated as hedging instruments Prepaid expenses and other current assets 158 — Other accrued liabilities 23 38 Total $ 1,372 $ 324 $ 344 $ 2,382 |
Schedule of Company's Derivative Instruments on Accumulated Other Comprehensive Income and the Consolidated Statement of Operations | The effects of the Company’s derivative instruments on AOCI and the consolidated statements of operations were summarized as follows: Year Ended December 31, 2019 2021 2020 2019 (In thousands) Derivatives designated as hedging instruments: Cash flow hedges Foreign currency forward contracts: Gains (losses) recognized in accumulated other comprehensive income (loss) - Effective Portion $ 668 $ (856 ) $ 1,565 Gains (losses) reclassified from accumulated other comprehensive income (loss) into income - Effective Portion (1) Net revenue $ 459 $ (954 ) $ 1,929 Cost of revenue $ (2 ) $ 2 $ (12 ) Research and development $ 31 $ 9 $ (57 ) Sales and marketing $ (30 ) $ 124 $ (284 ) General and administrative $ (5 ) $ 27 $ (41 ) Derivatives not designated as hedging instruments: Gains (losses) recognized in Other income (expenses), net $ 4,195 $ (3,861 ) $ 1,307 (1) Stockholders’ Equity |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Net Income Per Share | Net income per share consisted of the following: Year Ended December 31, 2021 2020 2019 (In thousands, except per share data) Numerator: Net income $ 49,387 $ 58,293 $ 25,791 Denominator: Weighted average common shares - basic 30,241 29,897 30,936 Potentially dilutive common share equivalent 761 743 1,029 Weighted average common shares - dilutive 31,002 30,640 31,965 Basic net income per share $ 1.63 $ 1.95 $ 0.83 Diluted net income per share $ 1.59 $ 1.90 $ 0.81 Anti-dilutive employee stock-based awards, excluded 422 832 1,066 |
Other Income (Expenses), Net (T
Other Income (Expenses), Net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Other Income And Expenses [Abstract] | |
Schedule of Other Nonoperating Income (Expense) | Other income (expenses), net consisted of the following: Year Ended December 31, 2021 2020 2019 (In thousands) Interest income $ 157 $ 436 $ 2,539 Foreign currency transaction gain (loss), net (4,848 ) 4,420 (697 ) Foreign currency contract gain (loss), net 4,195 (3,861 ) 1,307 Gain/loss on investments, net (1,362 ) (6,222 ) (224 ) Other 765 486 458 Total $ (1,093 ) $ (4,741 ) $ 3,383 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
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, 2021 2020 2019 (In thousands) United States $ 42,219 $ 42,124 $ 16,035 International 23,285 28,679 13,536 Total $ 65,504 $ 70,803 $ 29,571 |
Schedule of Components of Income Tax Expense (Benefit) | Year Ended December 31, 2021 2020 2019 (In thousands) Current: U.S. Federal $ 6,198 $ 12,913 $ 4,761 State 644 3,587 791 Foreign 5,000 5,178 (386 ) 11,842 21,678 5,166 Deferred: U.S. Federal 4,607 (3,052 ) (574 ) State 595 (6,408 ) 104 Foreign (927 ) 292 (916 ) 4,275 (9,168 ) (1,386 ) Total $ 16,117 $ 12,510 $ 3,780 |
Schedule of Deferred Tax Assets and Liabilities | Net deferred tax assets consisted of the following: Year Ended December 31, 2021 2020 (In thousands) Deferred Tax Assets: Accruals and allowances $ 25,737 $ 25,041 Net operating loss carryforwards 1,010 1,352 Stock-based compensation 4,032 5,374 Operating lease liability 4,060 5,303 Deferred revenue 1,212 641 Acquired intangibles 29,857 33,860 Depreciation and amortization 1,661 1,651 Other 3,971 3,285 Total deferred tax assets 71,540 76,507 Deferred Tax Liabilities: Right of use asset (3,130 ) (4,264 ) Other (1,083 ) (987 ) Total deferred tax liabilities (4,213 ) (5,251 ) Valuation Allowance (1) (3,532 ) (2,933 ) Net deferred tax assets $ 63,795 $ 68,323 (1) Valuation allowance is presented gross. The valuation allowance net of the federal tax effect was $3.5 million and $2.9 million for the years ended December 31, 2021 and 2020, respectively |
Schedule of Effective Income Tax Rate Reconciliation | The effective tax rate differed from the applicable U.S. statutory federal income tax rate as follows: Year Ended December 31, 2021 2020 2019 Tax at federal statutory rate 21.0 % 21.0 % 21.0 % State, net of federal benefit 1.4 % 2.9 % 2.4 % Impact of international operations (1.8 )% (5.0 )% (0.8 )% Stock-based compensation 2.9 % 5.4 % 10.7 % Tax credits (1.9 )% (2.3 )% (5.9 )% Valuation allowance 0.3 % 1.8 % 0.9 % State Valuation Allowance Release — % (5.8 )% — % Base Erosion Anti-Abuse Tax 3.7 % — % 7.2 % Transaction costs (0.9 )% — % (2.5 )% Recognition of previously unrecognized tax benefits 0.0% 0.3 % (20.6 )% Others (0.1 )% (0.6 )% 0.4 % Provision for income taxes 24.6 % 17.7 % 12.8 % |
Schedule of Reconciliation of Unrecognized Tax Benefits | 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, 2018 $ 11,983 Additions based on tax positions related to the current year 385 Additions for tax positions of prior years 996 Settlements (705 ) Reductions for tax positions of prior years (3,440 ) Reductions due to lapse of applicable statutes (609 ) Adjustments due to foreign exchange rate movement 459 Balance as of December 31, 2019 9,069 Additions based on tax positions related to the current year 442 Additions for tax positions of prior years 253 Reductions due to lapse of applicable statutes (744 ) Adjustments due to foreign exchange rate movement 522 Balance as of December 31, 2020 9,542 Additions based on tax positions related to the current year 463 Additions for tax positions of prior years 50 Reductions due to lapse of applicable statutes (556 ) Adjustments due to foreign exchange rate movement (295 ) Balance as of December 31, 2021 $ 9,204 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Non-cancellable Purchase Commitments Pertaining to Non-trade Activities | As of December 31, 2021, the Company’s non-cancellable purchase commitments pertaining to non-trade activities were as follows (in thousands): 2022 $ 951 2023 1,737 2024 1,823 2025 1,914 2026 2,010 Thereafter 7,357 Total $ 15,792 |
Schedule of Changes in Warranty Obligations | Changes in the Company’s warranty obligations, which is included in Other accrued liabilities on the consolidated balance sheets, were as follows: Year Ended December 31, 2021 2020 2019 (In thousands) Balance as of beginning of the period $ 9,240 $ 10,556 $ 14,412 Provision for warranty liability made 4,522 7,330 7,050 Settlements made (6,901 ) (8,646 ) (10,906 ) Balance as of the end of the period $ 6,861 $ 9,240 $ 10,556 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders Equity Note [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table sets forth the changes in accumulated other comprehensive income (loss) (“AOCI”) by component: Unrealized gains (losses) on available -for-sale investments Unrealized gains (losses) on derivatives Estimated tax benefit (provision) Total (In thousands) Balance as of December 31, 2018 $ (18 ) $ (8 ) $ 11 $ (15 ) Other comprehensive income (loss) before reclassifications 16 1,565 (332 ) 1,249 Less: Amount reclassified from accumulated other comprehensive income (loss) — 1,535 (322 ) 1,213 Net current period other comprehensive income (loss) 16 30 (10 ) 36 Balance as of December 31, 2019 $ (2 ) $ 22 $ 1 $ 21 Other comprehensive income (loss) before reclassifications — (856 ) 174 (682 ) Less: Amount reclassified from accumulated other comprehensive income (loss) — (792 ) 166 (626 ) Net current period other comprehensive income (loss) — (64 ) 8 (56 ) Balance as of December 31, 2020 $ (2 ) $ (42 ) $ 9 $ (35 ) Other comprehensive income (loss) before reclassifications — 668 (126 ) 542 Less: Amount reclassified from accumulated other comprehensive income (loss) — 453 (95 ) 358 Net current period other comprehensive income (loss) — 215 (31 ) 184 Balance as of December 31, 2021 $ (2 ) $ 173 $ (22 ) $ 149 |
Schedule of Reclassification out of AOCI | The following table provides details about significant amounts reclassified out of each component of AOCI: Year Ended December 31, 2021 2020 2019 (In thousands) Amount Reclassified from AOCI Gains (losses) on cash flow hedge: Foreign currency forward contracts Affected line item in the statement of operations Net revenue $ 459 $ (954 ) $ 1,929 Cost of revenue (2 ) 2 (12 ) Research and development 31 9 (57 ) Sales and marketing (30 ) 124 (284 ) General and administrative (5 ) 27 (41 ) Total before tax 453 (792 ) 1,535 Tax impact (95 ) 166 (322 ) Total, net of tax $ 358 $ (626 ) $ 1,213 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Employee Benefits And Share Based Compensation [Abstract] | |
Schedule of Stock Option Activity | Stock option activity 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, 2020 1,333 $ 27.86 Exercised (421 ) $ 22.81 Outstanding as of December 31, 2021 912 $ 30.19 6.11 $ 2,487 As of December 31, 2021 Vested and expected to vest 912 $ 30.19 6.11 $ 2,487 Exercisable Options 717 $ 30.96 5.74 $ 2,008 |
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, 2021: 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) $18.58 - $25.37 264 4.09 $ 23.43 264 $ 23.43 $26.61 - $26.61 370 7.55 $ 26.61 186 $ 26.61 $38.32 - $41.67 278 6.12 $ 41.37 267 $ 41.42 $18.58 - $41.67 912 6.11 $ 30.19 717 $ 30.96 |
Schedule of RSU Activity | RSU activity was as follows: Number of Shares Weighted Average Grant Date Fair Value Per Share Weighted Average Remaining Contractual Term Average Intrinsic Value (In thousands) (In dollars) (In years) (In thousands) Outstanding as of December 31, 2020 1,584 $ 30.66 Granted 763 $ 38.53 Vested (645 ) $ 31.65 Cancelled (147 ) $ 33.28 Outstanding as of December 31, 2021 1,555 $ 33.86 1.38 $ 45,414 |
Schedule of Performance Shares Activity | Performance shares were never granted in the years prior to 2020. Performance shares activity was as follows: Number of Shares Weighted Average Grant Date Fair Value Per Share Weighted Average Remaining Contractual Term Average Intrinsic Value (In thousands) (In years) (In thousands) Outstanding as of December 31, 2018 — — Granted — — Vested — — Cancelled — — Outstanding as of December 31, 2019 — — Granted 141 $ 28.22 Vested — — Cancelled — — Outstanding as of December 31, 2020 141 $ 28.22 Granted 152 $ 37.58 Vested — — Cancelled — — Outstanding as of December 31, 2021 293 $ 33.07 2.08 $ 8,559 |
Schedule of Weighted Average Assumptions | The following table sets forth the weighted-average assumptions used to estimate the fair value of purchase rights granted under the ESPP: Year Ended December 31, 2021 2020 2019 ESPP Expected life (in years) 0.5 0.5 0.5 Risk-free interest rate 0.05 % 0.72 % 2.06 % Expected volatility 40.8 % 54.8 % 43.9 % |
Schedule of Total Stock-Based Compensation Expense Resulting from Stock Options, RSUs, Performance Shares and the ESPP | The following table sets forth the stock-based compensation expense resulting from stock options, RSUs, performance shares and the ESPP included in the Company’s consolidated statements of operations: Year Ended December 31, 2021 2020 2019 (In thousands) Cost of revenue $ 2,103 $ 4,091 $ 2,843 Research and development 5,161 5,183 6,532 Sales and marketing 7,628 7,634 9,069 General and administrative 11,103 13,597 10,693 Total $ 25,995 $ 30,505 $ 29,137 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Reportable Segments 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, 2021 2020 2019 (In thousands, except percentage data) Net Revenue: Connected Home $ 853,472 $ 1,007,545 $ 711,391 SMB 314,601 247,657 287,372 Total net revenue $ 1,168,073 $ 1,255,202 $ 998,763 Contribution Income: Connected Home $ 116,889 $ 152,512 $ 67,775 Contribution margin 13.7 % 15.1 % 9.5 % SMB $ 62,136 $ 42,174 $ 67,282 Contribution margin 19.8 % 17.0 % 23.4 % Total segment contribution income $ 179,025 $ 194,686 $ 135,057 Corporate and unallocated costs (83,883 ) (83,867 ) (70,525 ) Amortization of intangibles (1) (1,897 ) (5,952 ) (6,731 ) Stock-based compensation expense (25,995 ) (30,505 ) (29,137 ) Separation expense — — (264 ) Change in fair value of contingent consideration 3,003 2,928 25 Restructuring and other charges (3,341 ) (1,702 ) (2,077 ) Litigation reserves, net (315 ) (44 ) (160 ) Other income (expenses), net (2) (1,093 ) (4,741 ) 3,383 Income before income taxes $ 65,504 $ 70,803 $ 29,571 (1) Amounts excluded amortization expense related to patents within purchased intangibles in cost of revenue. (2) Amounts included gain/loss on investments, net, of $(1.4) million, $(6.2) million and $(0.2) million for the years ended December 31, 2021, 2020 and 2019, respectively. |
Schedule of Net Revenue by Geography | The following table shows net revenue by geography Year Ended December 31, 2021 2020 2019 (In thousands) United States (U.S.) $ 759,865 $ 866,161 $ 637,566 Americas (excluding U.S.) 26,461 31,810 15,440 EMEA 229,829 221,665 200,099 APAC 151,918 135,566 145,658 Total net revenue $ 1,168,073 $ 1,255,202 $ 998,763 |
Schedule of Long-Lived Asset By Geographic Region | The following table represents the Company’s long-lived assets located in geographic areas, which consist of property and equipment, net and operating lease right-of-use assets: As of December 31, 2021 December 31, 2020 (In thousands) United States (U.S.) $ 14,564 $ 19,173 Americas (excluding U.S.) 3,283 2,845 EMEA 2,465 3,215 Singapore 4,767 5,964 APAC (excluding Singapore) (1) 11,432 14,294 Total $ 36,511 $ 45,491 _______________________ (1) No individual |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Assets and Liabilities Measured on Recurring Basis | The following tables summarize assets and liabilities measured at fair value on a recurring basis: As of December 31, 2021 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 $ 108,441 $ 108,441 $ — $ — Trading securities: mutual funds (1) 6,814 6,814 — — Available-for-sale investments: corporate equity securities (1) 751 751 — — Available-for-sale investments: certificates of deposit (1) 6 — 6 — Available-for-sale investments: convertible debt securities (2) 518 — 518 — Foreign currency forward contracts (3) 1,372 — 1,372 — Total assets measured at fair value $ 117,902 $ 116,006 $ 1,896 $ — Liabilities: Foreign currency forward contracts (4) $ 344 $ — $ 344 $ — Total liabilities measured at fair value $ 344 $ — $ 344 $ — As of December 31, 2020 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 $ 158,054 $ 158,054 $ — $ — Trading securities: mutual funds (1) 5,368 5,368 — — Available-for-sale investments: convertible debt securities (1) 1,326 — — 1,326 Available-for-sale investments: certificates of deposit (1) 165 — 165 — Foreign currency forward contracts (3) 324 — 324 — Total assets measured at fair value $ 165,237 $ 163,422 $ 489 $ 1,326 Liabilities: Foreign currency forward contracts (4) $ 2,382 $ — $ 2,382 $ — Contingent consideration (5) 3,000 — — 3,000 Total liabilities measured at fair value $ 5,382 $ — $ 2,382 $ 3,000 (1) Included in Short-term investments on the Company’s consolidated balance sheets. (2) $172,000 and $346,000 included in Short-term investments and Other non-current assets on the Company’s consolidated balance sheets, respectively. (3) Included in Prepaid expenses and other current assets on the Company’s consolidated balance sheets. ( 4 ) Included in Other accrued liabilities on the Company’s consolidated balance sheets. ( 5 ) |
Restructuring and Other Charg_2
Restructuring and Other Charges (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Restructuring Charges [Abstract] | |
Summary of Activity Related to Accrued Restructuring and Other Charges | The following table provides a summary of the activity related to accrued restructuring and other charges: Employee termination charges Lease contract termination and other charges Total (In thousands) Balance as of December 31, 2018 $ 775 $ 145 $ 920 Additions 2,082 166 2,248 Cash payments (1,783 ) (215 ) (1,998 ) Adjustments (142 ) (30 ) (172 ) Balance as of December 31, 2019 932 66 998 Additions 1,354 655 2,009 Cash payments (1,972 ) (415 ) (2,387 ) Adjustments (227 ) (79 ) (306 ) Balance as of December 31, 2020 87 227 314 Additions (1) 2,910 513 3,423 Cash payments (2,913 ) (578 ) (3,491 ) Adjustments (84 ) (139 ) (223 ) Balance as of December 31, 2021 $ — $ 23 $ 23 (1) |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Summary of Lease Cost and Supplemental Cash Flow Information | The components of lease cost were as follows: Year End December 31, 2021 2020 2019 (In Thousands) Operating lease cost $ 9,208 $ 10,482 $ 11,945 Short-term lease cost 563 1,702 1,111 Total lease cost (1) $ 9,771 $ 12,184 $ 13,056 _______________________ ( 1 ) Included in cost of revenue, sales and marketing, research and development and general and administration in the Company’s consolidated statement of operations . Supplemental cash flow information related to leases was as follows: Year End December 31, 2021 2020 2019 (In Thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows relating to operating leases $ 9,474 $ 12,127 $ 11,652 Lease liabilities arising from obtaining right-of-use assets: Operating leases $ 1,773 $ 9,463 $ 918 |
Summary of Supplemental Balance Sheet Information | Supplemental balance sheet information related to leases was as follows: As of December 31, 2021 2020 Weighted Average Remaining Lease Term (in years) Operating leases 3.6 4.2 Weighted Average Discount Rate Operating leases 4.0 % 4.0 % |
Schedule of Operating Lease Liability Maturities | As of December 31, 2021, maturities of operating lease liabilities were as follows (in thousands): Operating Lease 2022 $ 10,122 2023 7,199 2024 6,515 2025 4,812 2026 1,088 Thereafter 82 Total lease payments 29,818 Less imputed interest (2,029 ) Total $ 27,789 |
The Company and Summary of Si_4
The Company and Summary of Significant Accounting Policies (Narrative) (Details) | 12 Months Ended | ||
Dec. 31, 2021USD ($)Customersegment | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Significant Accounting Policies [Line Items] | |||
Equity investments | $ 7,575,000 | $ 8,395,000 | |
Number of reportable segments | segment | 2 | ||
Goodwill impairment charges | $ 0 | 0 | $ 0 |
Accumulated goodwill impairment charges | 74,200,000 | ||
Goodwill | $ 80,721,000 | 80,721,000 | |
Subscription contracts, typical length | Service contracts are generally for 30 days or 12 months in length, billed either monthly or annually and generally in advance. | ||
Shipping and handling costs | $ 145,961,000 | 147,854,000 | 138,150,000 |
Advertising and promotional expenses | 25,200,000 | 20,600,000 | 21,300,000 |
Connected Home | |||
Significant Accounting Policies [Line Items] | |||
Goodwill | 44,400,000 | 44,400,000 | 44,400,000 |
SMB | |||
Significant Accounting Policies [Line Items] | |||
Goodwill | 36,300,000 | 36,300,000 | 36,300,000 |
Limited Partnership Fund | |||
Significant Accounting Policies [Line Items] | |||
Equity investments | 900,000 | 600,000 | |
Limited Partnership Fund | Fair Value Measured at Net Asset Value Per Share | |||
Significant Accounting Policies [Line Items] | |||
Equity investments | $ 900,000 | $ 600,000 | |
Minimum | |||
Significant Accounting Policies [Line Items] | |||
Finite-lived intangible asset, useful life (in years) | 3 years | ||
Maximum | |||
Significant Accounting Policies [Line Items] | |||
Finite-lived intangible asset, useful life (in years) | 10 years | ||
Accounts Receivable | Customer Concentration Risk | |||
Significant Accounting Policies [Line Items] | |||
Concentration risk, customer | No other customers accounted for 10% or greater of the Company’s total accounts receivable. | ||
Number of customer | Customer | 0 | ||
Accounts Receivable | Customer Concentration Risk | Minimum | |||
Significant Accounting Policies [Line Items] | |||
Concentration risk, percentage | 10.00% | ||
Accounts Receivable | Best Buy Inc | Customer Concentration Risk | |||
Significant Accounting Policies [Line Items] | |||
Concentration risk, percentage | 26.00% | 29.00% | |
Accounts Receivable | Amazon | Customer Concentration Risk | |||
Significant Accounting Policies [Line Items] | |||
Concentration risk, percentage | 14.00% | 13.00% | |
Accounts Receivable | Walmart | Customer Concentration Risk | |||
Significant Accounting Policies [Line Items] | |||
Concentration risk, percentage | 13.00% | ||
Shipping and Handling | |||
Significant Accounting Policies [Line Items] | |||
Shipping and handling costs | $ 16,400,000 | $ 15,500,000 | $ 8,700,000 |
Foreign Exchange Forward | Maximum | |||
Significant Accounting Policies [Line Items] | |||
Derivative, term of contract (in months) | 6 months |
The Company and Summary of Si_5
The Company and Summary of Significant Accounting Policies (Property and Equipment, Net Schedule of Estimated Useful Lives) (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Computer equipment | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 2 years |
Furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 2 years |
Software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Machinery and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 2 years |
Machinery and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Leasehold improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Revenue Recognition (Schedule o
Revenue Recognition (Schedule of Remaining Performance Obligations) (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Performance obligations, amount | $ 166,655 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2022-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Performance obligations, amount | $ 163,584 |
Performance obligations, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2023-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Performance obligations, amount | $ 1,752 |
Performance obligations, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-01-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Performance obligations, amount | $ 1,319 |
Performance obligations, period |
Revenue Recognition (Schedule_2
Revenue Recognition (Schedule of Remaining Performance Obligations) (Details 1) $ in Thousands | Dec. 31, 2021USD ($) |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Performance obligations, amount | $ 166,655 |
Revenue Recognition (Narrative)
Revenue Recognition (Narrative) (Details) | 12 Months Ended | ||
Dec. 31, 2021USD ($)segmentregion | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Revenue From Contract With Customer [Abstract] | |||
Capitalized contract costs | $ 3,800,000 | $ 2,900,000 | |
Capitalized contract costs, impairment | 0 | 0 | $ 0 |
Deferred commissions | 0 | 0 | |
Revenue deferred due to unsatisfied performance obligations | 31,900,000 | 25,000,000 | 14,500,000 |
Revenue recognized for satisfaction of performance obligations | 28,900,000 | 16,900,000 | 17,900,000 |
Contract with Customer, Liability Included In Beginning Balance, Revenue Recognized | $ 13,600,000 | $ 6,500,000 | $ 9,900,000 |
Number of geographic regions in which the Company conducts business | region | 3 | ||
Number of operating segments | segment | 2 | ||
Number of reportable segments | segment | 2 |
Revenue Recognition (Schedule_3
Revenue Recognition (Schedule of Contract Balances) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Revenue From Contract With Customer [Abstract] | ||
Accounts receivable, net | $ 261,158 | $ 337,052 |
Contract liabilities - current | 16,500 | 13,458 |
Contract liabilities - non-current | $ 3,100 | $ 3,165 |
Revenue Recognition (Schedule_4
Revenue Recognition (Schedule of Net Revenue Disaggregated by Geographical Region and Sales Channel) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | |||
Total net revenue | $ 1,168,073 | $ 1,255,202 | $ 998,763 |
Service provider | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | 131,533 | 195,864 | 133,317 |
Non-service provider | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | 1,036,540 | 1,059,338 | 865,446 |
Americas | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | 786,326 | 897,971 | 653,006 |
EMEA | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | 229,829 | 221,665 | 200,099 |
APAC | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | 151,918 | 135,566 | 145,658 |
Connected Home | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | 853,472 | 1,007,545 | 711,391 |
Connected Home | Service provider | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | 129,052 | 192,714 | 128,852 |
Connected Home | Non-service provider | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | 724,420 | 814,831 | 582,539 |
Connected Home | Americas | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | 651,936 | 788,402 | 529,982 |
Connected Home | EMEA | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | 112,368 | 129,929 | 91,586 |
Connected Home | APAC | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | 89,168 | 89,214 | 89,823 |
SMB | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | 314,601 | 247,657 | 287,372 |
SMB | Service provider | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | 2,481 | 3,150 | 4,465 |
SMB | Non-service provider | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | 312,120 | 244,507 | 282,907 |
SMB | Americas | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | 134,390 | 109,569 | 123,024 |
SMB | EMEA | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | 117,461 | 91,736 | 108,513 |
SMB | APAC | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | $ 62,750 | $ 46,352 | $ 55,835 |
Balance Sheet Components (Sched
Balance Sheet Components (Schedule of Inventories) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Balance Sheet Related Disclosures [Abstract] | ||
Raw materials | $ 12,269 | $ 7,756 |
Finished goods | 303,398 | 164,356 |
Total | $ 315,667 | $ 172,112 |
Balance Sheet Components (Narra
Balance Sheet Components (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |||
Provisions for excess and obsolete inventory | $ 3,877,000 | $ 7,872,000 | $ 3,878,000 |
Amortization expense | 2,000,000 | 6,200,000 | 7,000,000 |
Intangible assets impairment charges | 0 | $ 0 | $ 0 |
Equity securities without readily determinable fair value, cumulative downward adjustments for price change and impairment loss | 8,400,000 | ||
Cumulative upward adjustments for price changes | $ 400,000 |
Balance Sheet Components (Sch_2
Balance Sheet Components (Schedule of Property and Equipment, Net) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Total property and equipment, gross | $ 134,182 | $ 130,879 |
Accumulated depreciation | (120,847) | (114,799) |
Total | 13,335 | 16,080 |
Computer equipment | ||
Total property and equipment, gross | 9,979 | 10,550 |
Furniture, fixtures and leasehold improvements | ||
Total property and equipment, gross | 18,364 | 18,674 |
Software | ||
Total property and equipment, gross | 30,280 | 29,499 |
Machinery and equipment | ||
Total property and equipment, gross | $ 75,559 | $ 72,156 |
Balance Sheet Components (Prope
Balance Sheet Components (Property and Equipment, Other Information) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |||
Depreciation and amortization | $ 11.7 | $ 12.7 | $ 12.3 |
Balance Sheet Components (Sch_3
Balance Sheet Components (Schedule of Intangibles, Net) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Intangible Assets [Line Items] | ||
Gross | $ 126,944 | $ 126,944 |
Accumulated Amortization | (125,088) | (123,045) |
Net | 1,856 | 3,899 |
Technology | ||
Intangible Assets [Line Items] | ||
Gross | 59,799 | 59,799 |
Accumulated Amortization | (58,263) | (57,835) |
Net | 1,536 | 1,964 |
Customer contracts and relationships | ||
Intangible Assets [Line Items] | ||
Gross | 56,800 | 56,800 |
Accumulated Amortization | (56,800) | (55,534) |
Net | 0 | 1,266 |
Other | ||
Intangible Assets [Line Items] | ||
Gross | 10,345 | 10,345 |
Accumulated Amortization | (10,025) | (9,676) |
Net | $ 320 | $ 669 |
Balance Sheet Components (Sch_4
Balance Sheet Components (Schedule of Estimated Amortization Expense Related to Intangibles) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Balance Sheet Related Disclosures [Abstract] | ||
2022 | $ 528 | |
2023 | 514 | |
2024 | 514 | |
2025 | 300 | |
Net | $ 1,856 | $ 3,899 |
Balance Sheet Components (Sch_5
Balance Sheet Components (Schedule of Other Non-Current Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Balance Sheet Related Disclosures [Abstract] | ||
Non-current deferred income taxes | $ 63,795 | $ 68,323 |
Long-term investments | 7,575 | 8,395 |
Other | 4,980 | 6,032 |
Total | $ 76,350 | $ 82,750 |
Balance Sheet Components (Sch_6
Balance Sheet Components (Schedule of Changes in Carrying Value of Long-term Investments) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | |||
Balance Sheet Related Disclosures [Abstract] | ||||
Beginning Balance | $ 7,758 | [1] | $ 8,147 | |
Additions | 340 | 5,850 | ||
Disposals | (1,499) | |||
Impairment and downward adjustments for observable price changes | (549) | (6,239) | ||
Upward adjustments for observable price changes | 253 | |||
Ending Balance | [1] | $ 6,303 | $ 7,758 | |
[1] | The balances excluded the investment in limited partnership fund of $0.9 million and $0.6 million, as of December 31, 2021 and 2020, respectively. Additionally, the balance as of December 31, 2021 excluded an investment in convertible debt securities of $0.3 million. |
Balance Sheet Components (Sch_7
Balance Sheet Components (Schedule of Changes in Carrying Value of Long-term Investments) (Parentheticals) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Balance Sheet Related Disclosures [Line Items] | ||
Equity investments | $ 7,575 | $ 8,395 |
Limited partnership fund | ||
Balance Sheet Related Disclosures [Line Items] | ||
Equity investments | 900 | $ 600 |
Convertible debt securities | ||
Balance Sheet Related Disclosures [Line Items] | ||
Equity investments | $ 300 |
Balance Sheet Components (Sch_8
Balance Sheet Components (Schedule of Other Accrued Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | |
Balance Sheet Related Disclosures [Abstract] | |||
Current operating lease liabilities | $ 9,220 | $ 9,149 | |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | us-gaap:OtherLiabilitiesCurrent | us-gaap:OtherLiabilitiesCurrent | |
Sales and marketing | $ 104,549 | $ 83,561 | |
Warranty obligations | 6,861 | 9,240 | |
Sales returns | [1] | 42,869 | 66,972 |
Freight and duty | 22,126 | 14,885 | |
Other | 38,959 | 34,568 | |
Total | $ 224,584 | $ 218,375 | |
[1] | Inventory expected to be received from future sales returns amounted to $21.8 million and $32.6 million as of December 31, 2021 and 2020, respectively. Provisions to write down expected returned inventory to net realizable value amounted to $13.2 million and $18.0 million as of December 31, 2021 and December 31, 2020, respectively. |
Balance Sheet Components (Sch_9
Balance Sheet Components (Schedule of Other Accrued Liabilities) (Parentheticals) (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Balance Sheet Related Disclosures [Abstract] | ||
Inventory expected to be received from future sales returns | $ 21.8 | $ 32.6 |
Provisions to write down expected returned inventory to net realizable value | $ 13.2 | $ 18 |
Derivative Financial Instrume_3
Derivative Financial Instruments (Narrative) (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021USD ($)derivative_instrument | Dec. 31, 2020USD ($) | Dec. 31, 2019 | |
Derivative [Line Items] | |||
Gross amount assets | $ 1,372 | $ 324 | |
Foreign currency forward contracts | Derivatives Not Designated as Hedging Instruments | |||
Derivative [Line Items] | |||
Approximate number of derivatives per quarter | derivative_instrument | 10 | ||
Notional amount | $ 2,000 | ||
Foreign currency forward contracts | Cash Flow Hedges | |||
Derivative [Line Items] | |||
Approximate number of derivatives per quarter | derivative_instrument | 10 | ||
Notional amount | $ 6,000 | ||
Estimated term of reclassification from OCI to Income | 12 months | 12 months | 12 months |
Offsetting derivative assets and liabilities | |||
Derivative [Line Items] | |||
Gross amount assets | $ 1,400 | ||
Gross amount liabilities | $ 300 | ||
Maximum | Foreign currency forward contracts | |||
Derivative [Line Items] | |||
Term of derivative contracts | 6 months | ||
Maximum | Foreign currency forward contracts | Derivatives Not Designated as Hedging Instruments | |||
Derivative [Line Items] | |||
Term of derivative contracts | 3 months | ||
Maximum | Foreign currency forward contracts | Cash Flow Hedges | |||
Derivative [Line Items] | |||
Term of derivative contracts | 6 months |
Derivative Financial Instrume_4
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, 2021 | Dec. 31, 2020 |
Derivatives, Fair Value [Line Items] | ||
Gross Amounts of recognized assets | $ 1,372 | $ 324 |
Gross Amounts of recognized liabilities | 344 | 2,382 |
Prepaid expenses and other current assets | Derivatives not designated as hedging instruments | ||
Derivatives, Fair Value [Line Items] | ||
Gross Amounts of recognized assets | 1,214 | 324 |
Prepaid expenses and other current assets | Derivatives designated as hedging instruments | ||
Derivatives, Fair Value [Line Items] | ||
Gross Amounts of recognized assets | 158 | |
Other accrued liabilities | Derivatives not designated as hedging instruments | ||
Derivatives, Fair Value [Line Items] | ||
Gross Amounts of recognized liabilities | 321 | 2,344 |
Other accrued liabilities | Derivatives designated as hedging instruments | ||
Derivatives, Fair Value [Line Items] | ||
Gross Amounts of recognized liabilities | $ 23 | $ 38 |
Derivative Financial Instrume_5
Derivative Financial Instruments (Schedule of Company's Derivative Instruments on Accumulated Other Comprehensive Income and the Consolidated Statement of Operations) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Derivatives designated as hedging instruments | Cash Flow Hedges | Foreign Exchange Forward | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gains (losses) recognized in accumulated other comprehensive income (loss) - Effective Portion | $ 668 | $ (856) | $ 1,565 |
Derivatives designated as hedging instruments | Cash Flow Hedges | Foreign Exchange Forward | Net revenue | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gains (losses) reclassified from accumulated other comprehensive income (loss) into income (loss) - Effective Portion | 459 | (954) | 1,929 |
Derivatives designated as hedging instruments | Cash Flow Hedges | Foreign Exchange Forward | Cost of revenue | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gains (losses) reclassified from accumulated other comprehensive income (loss) into income (loss) - Effective Portion | (2) | 2 | (12) |
Derivatives designated as hedging instruments | Cash Flow Hedges | Foreign Exchange Forward | Research and development | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gains (losses) reclassified from accumulated other comprehensive income (loss) into income (loss) - Effective Portion | 31 | 9 | (57) |
Derivatives designated as hedging instruments | Cash Flow Hedges | Foreign Exchange Forward | Sales and marketing | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gains (losses) reclassified from accumulated other comprehensive income (loss) into income (loss) - Effective Portion | (30) | 124 | (284) |
Derivatives designated as hedging instruments | Cash Flow Hedges | Foreign Exchange Forward | General and administrative | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gains (losses) reclassified from accumulated other comprehensive income (loss) into income (loss) - Effective Portion | (5) | 27 | (41) |
Derivatives not designated as hedging instruments | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gains (losses) recognized in Other income (expenses), net | $ 4,195 | $ (3,861) | $ 1,307 |
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 | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Numerator: | |||
Net income | $ 49,387 | $ 58,293 | $ 25,791 |
Denominator: | |||
Weighted average common shares - basic | 30,241 | 29,897 | 30,936 |
Potentially dilutive common share equivalent | 761 | 743 | 1,029 |
Weighted average common shares - dilutive | 31,002 | 30,640 | 31,965 |
Basic net income per share | $ 1.63 | $ 1.95 | $ 0.83 |
Diluted net income per share | $ 1.59 | $ 1.90 | $ 0.81 |
Anti-dilutive employee stock-based awards, excluded | 422 | 832 | 1,066 |
Other Income (Expenses), Net (D
Other Income (Expenses), Net (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Other Income And Expenses [Abstract] | ||||
Interest income | $ 157 | $ 436 | $ 2,539 | |
Foreign currency transaction gain (loss), net | (4,848) | 4,420 | (697) | |
Foreign currency contract gain (loss), net | 4,195 | (3,861) | 1,307 | |
Gain/loss on investments, net | (1,362) | (6,222) | (224) | |
Other | 765 | 486 | 458 | |
Total | [1] | $ (1,093) | $ (4,741) | $ 3,383 |
[1] | Amounts included gain/loss on investments, net, of $(1.4) million, $(6.2) million and $(0.2) million for the years ended December 31, 2021, 2020 and 2019, respectively. |
Income Taxes (Schedule of Incom
Income Taxes (Schedule of Income Before Income Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
United States | $ 42,219 | $ 42,124 | $ 16,035 |
International | 23,285 | 28,679 | 13,536 |
Income before income taxes | $ 65,504 | $ 70,803 | $ 29,571 |
Income Taxes (Schedule of Provi
Income Taxes (Schedule of Provision For Income Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Current: | |||
U.S. Federal | $ 6,198 | $ 12,913 | $ 4,761 |
State | 644 | 3,587 | 791 |
Foreign | 5,000 | 5,178 | (386) |
Current, Total | 11,842 | 21,678 | 5,166 |
Deferred: | |||
U.S. Federal | 4,607 | (3,052) | (574) |
State | 595 | (6,408) | 104 |
Foreign | (927) | 292 | (916) |
Deferred, Total | 4,275 | (9,168) | (1,386) |
Provision for income taxes | $ 16,117 | $ 12,510 | $ 3,780 |
Income Taxes (Schedule of Defer
Income Taxes (Schedule of Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred Tax Assets: | ||
Accruals and allowances | $ 25,737 | $ 25,041 |
Net operating loss carryforwards | 1,010 | 1,352 |
Stock-based compensation | 4,032 | 5,374 |
Operating lease liability | 4,060 | 5,303 |
Deferred revenue | 1,212 | 641 |
Acquired intangibles | 29,857 | 33,860 |
Depreciation and amortization | 1,661 | 1,651 |
Other | 3,971 | 3,285 |
Total deferred tax assets | 71,540 | 76,507 |
Deferred Tax Liabilities: | ||
Right of use asset | (3,130) | (4,264) |
Other | (1,083) | (987) |
Total deferred tax liabilities | (4,213) | (5,251) |
Valuation Allowance | (3,532) | (2,933) |
Net deferred tax assets | 63,795 | 68,323 |
Valuation allowance, net of federal tax | $ 3,500 | $ 2,900 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Line Items] | |||
Valuation allowance | $ 3,532 | $ 2,933 | |
Valuation allowance increased | 600 | ||
Net current period other comprehensive income (loss) | (31) | 8 | $ (10) |
Possible reduction in liabilities for uncertain tax positions | 500 | ||
Unrecognized tax benefits that would impact effective tax rate | 7,300 | ||
Unrecognized tax benefits, income tax penalties and interest expense | 200 | 200 | $ (1,400) |
Unrecognized tax benefits, income tax penalties and interest accrued | 2,400 | $ 2,300 | |
Undistributed earnings | 7,400 | ||
Associated tax without consideration of foreign tax credit | 1,600 | ||
US Federal | |||
Income Tax Disclosure [Line Items] | |||
Operating loss carryforwards | $ 2,000 | ||
Operating loss carryforwards expiration year | 2022 | ||
ITALY | Earliest Tax Year | |||
Income Tax Disclosure [Line Items] | |||
Income tax examination, year under examination | 2004 | ||
ITALY | Latest Tax Year | |||
Income Tax Disclosure [Line Items] | |||
Income tax examination, year under examination | 2012 | ||
Internal Revenue Service (IRS) | Tax Year 2018 | |||
Income Tax Disclosure [Line Items] | |||
Income tax examination, year under examination | 2018 | ||
State of California | Earliest Tax Year | |||
Income Tax Disclosure [Line Items] | |||
Income tax examination, year under examination | 2016 | ||
State of California | Latest Tax Year | |||
Income Tax Disclosure [Line Items] | |||
Income tax examination, year under examination | 2018 |
Income Taxes (Schedule of Effec
Income Taxes (Schedule of Effective Income Tax Rate Reconciliation) (Details) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |||
Tax at federal statutory rate | 21.00% | 21.00% | 21.00% |
State, net of federal benefit | 1.40% | 2.90% | 2.40% |
Impact of international operations | (1.80%) | (5.00%) | (0.80%) |
Stock-based compensation | 2.90% | 5.40% | 10.70% |
Tax credits | (1.90%) | (2.30%) | (5.90%) |
Valuation allowance | 0.30% | 1.80% | 0.90% |
State Valuation Allowance Release | 0.00% | (5.80%) | 0.00% |
Base Erosion Anti-Abuse Tax | 3.70% | 0.00% | 7.20% |
Transaction costs | (0.90%) | 0.00% | (2.50%) |
Recognition of previously unrecognized tax benefits | 0.00% | 0.30% | (20.60%) |
Others | (0.10%) | (0.60%) | 0.40% |
Provision for income taxes | 24.60% | 17.70% | 12.80% |
Income Taxes (Schedule of Recon
Income Taxes (Schedule of Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Beginning balance | $ 9,542 | $ 9,069 | $ 11,983 |
Additions based on tax positions related to the current year | 463 | 442 | 385 |
Additions for tax positions of prior years | 50 | 253 | 996 |
Settlements | (705) | ||
Reductions for tax positions of prior years | (3,440) | ||
Reductions due to lapse of applicable statutes | (556) | (744) | (609) |
Adjustments due to foreign exchange rate movement | (295) | 522 | 459 |
Ending balance | $ 9,204 | $ 9,542 | $ 9,069 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) | Sep. 27, 2021patent | Sep. 24, 2021case | Jun. 28, 2021patent | Jun. 21, 2021patent | Jun. 11, 2021patent | Jun. 09, 2021case | Jun. 08, 2021case | Apr. 01, 2021case | Mar. 19, 2021case | Jan. 13, 2021patent | Oct. 19, 2020case | Sep. 09, 2020patent | Jun. 21, 2019patent | Feb. 08, 2019case | Sep. 14, 2018patent | Jul. 18, 2018patent | Jul. 14, 2017patent | Apr. 19, 2017patent | Nov. 02, 2021patent | Dec. 31, 2021USD ($)claimpatent | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Short-term non-cancelable purchase commitments with suppliers | $ | $ 94,800,000 | |||||||||||||||||||||
Total issuing orders | $ | 882,600,000 | |||||||||||||||||||||
Losses incurred related to purchase commitments | $ | 3,100,000 | $ 2,600,000 | $ 1,700,000 | |||||||||||||||||||
Liabilities recorded for director and officer indemnification agreements | $ | 0 | |||||||||||||||||||||
Liabilities recorded for customers, distributors, and resellers indemnification agreements | $ | $ 0 | |||||||||||||||||||||
Number of existing cases and proceedings that the Company currently believes are liking to have a material adverse effect on its financial position | claim | claim | 0 | |||||||||||||||||||||
The future length the Company currently considered regarding existing cases and proceedings that are likely to have a material adverse effect on it (in months) | 12 months | |||||||||||||||||||||
Number of class action lawsuits | case | 6 | |||||||||||||||||||||
Netgear and Arlo | ||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Number of class action lawsuits | case | 4 | |||||||||||||||||||||
Arlo | ||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Number of class action lawsuits | case | 2 | |||||||||||||||||||||
NETGEAR | ||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Number of class action lawsuits | case | 5 | |||||||||||||||||||||
Vivato v. NETGEAR | ||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Number of patents under litigation | 3 | |||||||||||||||||||||
Hera Wireless v. NETGEAR | ||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Number of patents accused of infringing upon | 6 | 3 | 3 | 9 | ||||||||||||||||||
Number of patents claims canceled | 8 | |||||||||||||||||||||
Aegis 11 S.A. v. NETGEAR [Member] | ||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Number of patents accused of infringing upon | 3 | |||||||||||||||||||||
Number of patents | 3 | 3 | ||||||||||||||||||||
Number of patents dismissed | 1 | |||||||||||||||||||||
Beijing Tianxing Ebel Information Consulting Co., Ltd v. NETGEAR Inc. | ||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Number of complaints filed against company | case | 2 | |||||||||||||||||||||
Number of patents submitted for invalidity challenges at CNIPA | 3 | |||||||||||||||||||||
WSOU v. NETGEAR Inc | ||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Number of patents | 3 | |||||||||||||||||||||
Number of cases answered by company | case | 2 | |||||||||||||||||||||
Shenzhen Yuanyu and Gaoping Yaoyi v. NETGEAR Beijing | ||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Number of patents submitted for invalidity challenges at CNIPA | 7 | 4 | ||||||||||||||||||||
Number of patent infringement cases | case | 7 | |||||||||||||||||||||
Number of patents on which decisions received | 5 | |||||||||||||||||||||
Number of patents invalidated | 1 | |||||||||||||||||||||
Number of patents for which validity is maintained | 4 | |||||||||||||||||||||
Number of patents for which appeals filed | 3 | |||||||||||||||||||||
Beijing Yiwen v. NETGER Beijing | ||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Number of patent infringement cases | case | 2 | |||||||||||||||||||||
Shangdong Chengzi Medical Technology v. NETGER Beijing | ||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Number of patent infringement cases | case | 2 | |||||||||||||||||||||
Gaoping Yaoyi Trading Co. v. NETGER Beijing | ||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Number of patent infringement cases | case | 2 | |||||||||||||||||||||
TrackThings LLC v. NETGEAR | ||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Number of patents | 3 | |||||||||||||||||||||
46 to 60 Days | ||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Percentage of cancelable orders | 50.00% | |||||||||||||||||||||
31 to 45 Days | ||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Percentage of cancelable orders | 25.00% | |||||||||||||||||||||
Minimum | 46 to 60 Days | ||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Required notice period prior to expected shipment date | 46 days | |||||||||||||||||||||
Minimum | 31 to 45 Days | ||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Required notice period prior to expected shipment date | 31 days | |||||||||||||||||||||
Maximum | ||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Ordering horizon extended period | 21 months | |||||||||||||||||||||
Maximum | 46 to 60 Days | ||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Required notice period prior to expected shipment date | 60 days | |||||||||||||||||||||
Maximum | 31 to 45 Days | ||||||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||||||
Required notice period prior to expected shipment date | 45 days |
Commitments and Contingencies_3
Commitments and Contingencies (Schedule of Non-cancellable Purchase Commitments Pertaining to Non-trade Activities (Details) - Non -Trade Activities $ in Thousands | Dec. 31, 2021USD ($) |
Purchase Obligation Fiscal Year Maturity [Line Items] | |
2022 | $ 951 |
2023 | 1,737 |
2024 | 1,823 |
2025 | 1,914 |
2026 | 2,010 |
Thereafter | 7,357 |
Total | $ 15,792 |
Commitments and Contingencies_4
Commitments and Contingencies (Schedule of Changes in Warranty Obligations) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | |||
Balance as of beginning of the period | $ 9,240 | $ 10,556 | $ 14,412 |
Provision for warranty liability made | 4,522 | 7,330 | 7,050 |
Settlements made | (6,901) | (8,646) | (10,906) |
Balance as of the end of the period | $ 6,861 | $ 9,240 | $ 10,556 |
Stockholders' Equity (Narrative
Stockholders' Equity (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Oct. 24, 2021 | |
Class Of Stock [Line Items] | ||||
Shares remaining authorized for repurchase (in shares) | 3,500,000 | |||
Stock repurchased (in shares) | 2,100,000 | 900,000 | 2,400,000 | |
Cost of stock repurchased | $ 75,000 | $ 23,801 | $ 75,946 | |
RSU withholdings (in shares) | 204,000 | 198,000 | 198,000 | |
RSU withholdings | $ 7,660 | $ 5,090 | $ 6,521 | |
Maximum | ||||
Class Of Stock [Line Items] | ||||
Number of outstanding shares authorized to be repurchased, incremental to remaining shares | 3,000,000 |
Stockholders' Equity (Schedule
Stockholders' Equity (Schedule of Changes in Accumulated Other Comprehensive Income (Loss) by Component) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Estimated tax benefit (provision) | |||
Beginning balance | $ 9 | $ 1 | $ 11 |
Other comprehensive income (loss) before reclassifications | (126) | 174 | (332) |
Less: Amount reclassified from accumulated other comprehensive income (loss) | (95) | 166 | (322) |
Net current period other comprehensive income (loss) | (31) | 8 | (10) |
Ending balance | (22) | 9 | 1 |
AOCI, after tax | |||
Beginning balance | 689,384 | 608,693 | 627,552 |
Other comprehensive income (loss) before reclassifications | 542 | (682) | 1,249 |
Less: Amount reclassified from accumulated other comprehensive income (loss) | 358 | (626) | 1,213 |
Net current period other comprehensive income (loss) | 184 | (56) | 36 |
Ending balance | 696,815 | 689,384 | 608,693 |
Unrealized gains (losses) on available-for-sale investments | |||
AOCI, before tax | |||
Beginning balance | (2) | (2) | (18) |
Other comprehensive income (loss) before reclassifications | 0 | 0 | 16 |
Less: Amount reclassified from accumulated other comprehensive income (loss) | 0 | 0 | 0 |
Net current period other comprehensive income (loss) | 0 | 0 | 16 |
Ending balance | (2) | (2) | (2) |
Unrealized gains (losses) on derivatives | |||
AOCI, before tax | |||
Beginning balance | (42) | 22 | (8) |
Other comprehensive income (loss) before reclassifications | 668 | (856) | 1,565 |
Less: Amount reclassified from accumulated other comprehensive income (loss) | 453 | (792) | 1,535 |
Net current period other comprehensive income (loss) | 215 | (64) | 30 |
Ending balance | 173 | (42) | 22 |
AOCI | |||
AOCI, after tax | |||
Beginning balance | (35) | 21 | (15) |
Ending balance | $ 149 | $ (35) | $ 21 |
Stockholders' Equity (Schedul_2
Stockholders' Equity (Schedule of Reclassifications out of AOCI) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Reclassification Out of Accumulated Other Comprehensive Income [Line Items] | |||
Net revenue | $ 1,168,073 | $ 1,255,202 | $ 998,763 |
Cost of revenue | 802,236 | 883,050 | 704,535 |
Research and development | 92,967 | 88,788 | 77,982 |
Sales and marketing | 145,961 | 147,854 | 138,150 |
General and administrative | 59,659 | 61,148 | 49,432 |
Income before income taxes | 65,504 | 70,803 | 29,571 |
Tax impact | (16,117) | (12,510) | (3,780) |
Amount Reclassified from AOCI | |||
Reclassification Out of Accumulated Other Comprehensive Income [Line Items] | |||
Net revenue | 459 | (954) | 1,929 |
Cost of revenue | (2) | 2 | (12) |
Research and development | 31 | 9 | (57) |
Sales and marketing | (30) | 124 | (284) |
General and administrative | (5) | 27 | (41) |
Income before income taxes | 453 | (792) | 1,535 |
Tax impact | (95) | 166 | (322) |
Total, net of tax | $ 358 | $ (626) | $ 1,213 |
Employee Benefit Plans (Narrati
Employee Benefit Plans (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 31, 2019 | May 31, 2018 | May 31, 2020 | Apr. 30, 2016 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock-based compensation | $ 25,995 | $ 30,505 | $ 29,137 | ||||
2006 Long Term Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Expiration date | Apr. 13, 2016 | ||||||
A2016 Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of additional shares reserved for future grant (in shares) | 3,100,000 | 1,700,000 | 2,000,000 | 2,500,000 | |||
Additional shares available for issuance (in shares) | 699,827 | ||||||
Number of shares remained available for future grant (in shares) | 1,800,000 | ||||||
Employee Stock Purchase Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of additional shares reserved for future grant (in shares) | 1,000,000 | ||||||
Number of shares remained available for future grant (in shares) | 240,000 | ||||||
Maximum percentage of compensation contributed by employees (in percentage) | 10.00% | ||||||
Purchase percentage of stock at fair market value (in percentage) | 85.00% | ||||||
Number of shares authorized (in shares) | 2,000,000 | ||||||
Stock-based compensation | $ 1,700 | 1,500 | 1,400 | ||||
Shares purchased under ESPP | 171,000 | ||||||
Weighted average price of shares purchased under ESPP (in dollars per share) | $ 28.72 | ||||||
Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock-based compensation cost capitalized in inventory | $ 900 | 900 | $ 900 | ||||
Stock Options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Weighted average estimated fair value of options granted | $ 9.72 | ||||||
Options, exercises in period, intrinsic value | 6,700 | 7,300 | $ 3,500 | ||||
Options, vested in period, total fair value | 2,300 | 3,200 | $ 4,100 | ||||
Weighted average expected life | 6 years 2 months 12 days | ||||||
Risk-free interest rate | 1.85% | ||||||
Expected volatility | 33.90% | ||||||
Total unrecognized compensation | $ 900 | ||||||
Weighted-average period of recognition of stock based compensation | 1 year 4 months 24 days | ||||||
Stock Options | A2016 Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting term | 4 years | ||||||
Expiration period | 10 years | ||||||
Stock Options | Target Shares Granted | A2016 Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting term | 12 months | ||||||
Stock Options | Remaining Tranche | A2016 Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting term | 3 years | ||||||
Performance Shares | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting term | 3 years | ||||||
Performance Shares | A2016 Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting term | 3 years | ||||||
Performance Shares | Target Shares Granted | Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Percentage vest of performance shares | 0.00% | ||||||
Performance Shares | Target Shares Granted | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Percentage vest of performance shares | 150.00% | ||||||
Restricted Stock Units (RSUs) | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
RSU aggregate intrinsic value, vested | $ 24,300 | 16,100 | $ 19,400 | ||||
RSU fair value, vested | 20,400 | $ 20,400 | $ 18,600 | ||||
Total unrecognized compensation | $ 37,000 | ||||||
Weighted-average period of recognition of stock based compensation | 2 years 6 months | ||||||
Restricted Stock Units (RSUs) | A2016 Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting term | 4 years | ||||||
ESPP | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Weighted average expected life | 6 months | 6 months | 6 months | ||||
Risk-free interest rate | 0.05% | 0.72% | 2.06% | ||||
Expected volatility | 40.80% | 54.80% | 43.90% | ||||
Expected dividend rate | 0.00% | 0.00% | 0.00% |
Employee Benefit Plans (Schedul
Employee Benefit Plans (Schedule of Stock Option Activity) (Details) - Stock Options $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Number of shares, beginning balance (in shares) | shares | 1,333 |
Number of shares, exercised (in shares) | shares | (421) |
Number of shares, ending balance (in shares) | shares | 912 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |
Vested and expected to vest (in shares) | shares | 912 |
Exercisable (in shares) | shares | 717 |
Beginning balance (in dollars per share) | $ / shares | $ 27.86 |
Exercised (in dollars per share) | $ / shares | 22.81 |
Ending balance (in dollars per share) | $ / shares | 30.19 |
Vested and expected to vest, weighted average exercise price (in dollars per share) | $ / shares | 30.19 |
Exercisable, weighted average exercise price (in dollars per share) | $ / shares | $ 30.96 |
Outstanding, Weighted Average Remaining Contractual Term | 6 years 1 month 9 days |
Vested and expected to vest, weighted average remaining contractual term | 6 years 1 month 9 days |
Exercisable, weighted average remaining contractual term | 5 years 8 months 26 days |
Outstanding, Intrinsic Value | $ | $ 2,487 |
Vested and expected to vest, aggregate intrinsic value | $ | 2,487 |
Exercisable, intrinsic value | $ | $ 2,008 |
Employee Benefit Plans (Sched_2
Employee Benefit Plans (Schedule of Ranges of Outstanding And Exercisable Stock Options) (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
$18.58 - $25.37 | |
Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price, lower range (USD per share) | $ 18.58 |
Exercise price, upper range (USD per share) | $ 25.37 |
Number of outstanding options (in shares) | shares | 264 |
Outstanding options, weighted-average remaining contractual life | 4 years 1 month 2 days |
Outstanding options, weighted- average exercise price per share (in dollars per share) | $ 23.43 |
Number of exercisable options (in shares) | shares | 264 |
Exercisable options, weighted-average exercise price (in dollars per share) | $ 23.43 |
$26.61 - $26.61 | |
Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price, lower range (USD per share) | 26.61 |
Exercise price, upper range (USD per share) | $ 26.61 |
Number of outstanding options (in shares) | shares | 370 |
Outstanding options, weighted-average remaining contractual life | 7 years 6 months 18 days |
Outstanding options, weighted- average exercise price per share (in dollars per share) | $ 26.61 |
Number of exercisable options (in shares) | shares | 186 |
Exercisable options, weighted-average exercise price (in dollars per share) | $ 26.61 |
$38.32 - $41.67 | |
Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price, lower range (USD per share) | 38.32 |
Exercise price, upper range (USD per share) | $ 41.67 |
Number of outstanding options (in shares) | shares | 278 |
Outstanding options, weighted-average remaining contractual life | 6 years 1 month 13 days |
Outstanding options, weighted- average exercise price per share (in dollars per share) | $ 41.37 |
Number of exercisable options (in shares) | shares | 267 |
Exercisable options, weighted-average exercise price (in dollars per share) | $ 41.42 |
$18.58 - $41.67 | |
Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price, lower range (USD per share) | 18.58 |
Exercise price, upper range (USD per share) | $ 41.67 |
Number of outstanding options (in shares) | shares | 912 |
Outstanding options, weighted-average remaining contractual life | 6 years 1 month 9 days |
Outstanding options, weighted- average exercise price per share (in dollars per share) | $ 30.19 |
Number of exercisable options (in shares) | shares | 717 |
Exercisable options, weighted-average exercise price (in dollars per share) | $ 30.96 |
Employee Benefit Plans (Sched_3
Employee Benefit Plans (Schedule of RSU Activity) (Details) - Restricted Stock Units (RSUs) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($)$ / sharesshares | |
Number of Shares | |
Beginning balance (in shares) | shares | 1,584 |
Granted (in shares) | shares | 763 |
Vested (in shares) | shares | (645) |
Cancelled (in shares) | shares | (147) |
Ending balance (in shares) | shares | 1,555 |
Weighted Average Grant Date Fair Value Per Share | |
Beginning Balance (in dollars per share) | $ / shares | $ 30.66 |
Granted (in dollars per share) | $ / shares | 38.53 |
Vested (in dollars per share) | $ / shares | 31.65 |
Cancelled (in dollars per share) | $ / shares | 33.28 |
Ending Balance (in dollars per share) | $ / shares | $ 33.86 |
Weighted Average Remaining Contractual Term | 1 year 4 months 17 days |
Average Intrinsic Value | $ | $ 45,414 |
Employee Benefit Plans (Sched_4
Employee Benefit Plans (Schedule of Performance Shares Activity) (Details) - Performance Shares - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Weighted Average Grant Date Fair Value Per Share | ||
Beginning Balance (in dollars per share) | $ 28.22 | |
Granted (in dollars per share) | 37.58 | $ 28.22 |
Ending Balance (in dollars per share) | $ 33.07 | $ 28.22 |
Weighted Average Remaining Contractual Term | 2 years 29 days | |
Average Intrinsic Value | $ 8,559 | |
Number of Shares | ||
Beginning balance (in shares) | 141 | |
Granted (in shares) | 152 | 141 |
Ending balance (in shares) | 293 | 141 |
Employee Benefit Plans (Sched_5
Employee Benefit Plans (Schedule of Valuation and Expense Information) (Details) - ESPP | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected life (in years) | 6 months | 6 months | 6 months |
Risk-free interest rate | 0.05% | 0.72% | 2.06% |
Expected volatility | 40.80% | 54.80% | 43.90% |
Employee Benefit Plans (Sched_6
Employee Benefit Plans (Schedule of Total Stock-Based Compensation Expense Resulting from Stock Options, RSUs, Performance Shares and the ESPP) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation | $ 25,995 | $ 30,505 | $ 29,137 |
Cost of revenue | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation | 2,103 | 4,091 | 2,843 |
Research and development | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation | 5,161 | 5,183 | 6,532 |
Sales and marketing | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation | 7,628 | 7,634 | 9,069 |
General and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation | $ 11,103 | $ 13,597 | $ 10,693 |
Segment Information (Narrative)
Segment Information (Narrative) (Details) | 12 Months Ended | ||
Dec. 31, 2021Customersegment | Dec. 31, 2020Customer | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | |||
Number of operating segments | 2 | ||
Number of reportable segments | 2 | ||
Connected Home | Net revenue | |||
Segment Reporting Information [Line Items] | |||
Number of customer | Customer | 2 | 2 | |
Connected Home | Net revenue | Customer A | Customer Concentration Risk | Sales Revenue | |||
Segment Reporting Information [Line Items] | |||
Concentration risk, percentage | 15.00% | 15.00% | |
Connected Home | Net revenue | Customer B | Customer Concentration Risk | Sales Revenue | |||
Segment Reporting Information [Line Items] | |||
Concentration risk, percentage | 13.00% | 14.00% | |
Connected Home | Net revenue | Customer A and B | Customer Concentration Risk | Sales Revenue | |||
Segment Reporting Information [Line Items] | |||
Concentration risk, percentage | 16.00% |
Segment Information (Schedule o
Segment Information (Schedule of Reportable Segments and Reconciliation of Segment Contribution Income to Income Before Income Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Segment Reporting Information [Line Items] | ||||
Total net revenue | $ 1,168,073 | $ 1,255,202 | $ 998,763 | |
Total segment contribution income | 179,025 | 194,686 | 135,057 | |
Corporate and unallocated costs | (83,883) | (83,867) | (70,525) | |
Amortization of intangibles | [1] | (1,897) | (5,952) | (6,731) |
Stock-based compensation expense | (25,995) | (30,505) | (29,137) | |
Separation expense | 0 | 0 | (264) | |
Change in fair value of contingent consideration | 3,003 | 2,928 | 25 | |
Restructuring and other charges | (3,341) | (1,702) | (2,077) | |
Litigation reserves, net | (315) | (44) | (160) | |
Other income (expenses), net | [2] | (1,093) | (4,741) | 3,383 |
Income before income taxes | 65,504 | 70,803 | 29,571 | |
Connected Home | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | 853,472 | 1,007,545 | 711,391 | |
Total segment contribution income | $ 116,889 | $ 152,512 | $ 67,775 | |
Segment contribution margin | 13.70% | 15.10% | 9.50% | |
SMB | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenue | $ 314,601 | $ 247,657 | $ 287,372 | |
Total segment contribution income | $ 62,136 | $ 42,174 | $ 67,282 | |
Segment contribution margin | 19.80% | 17.00% | 23.40% | |
[1] | Amounts excluded amortization expense related to patents within purchased intangibles in cost of revenue. | |||
[2] | Amounts included gain/loss on investments, net, of $(1.4) million, $(6.2) million and $(0.2) million for the years ended December 31, 2021, 2020 and 2019, respectively. |
Segment Information (Schedule_2
Segment Information (Schedule of Reportable Segments and Reconciliation of Segment Contribution Income to Income (Loss) Before Income Taxes) (Parenthetical) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Segment Reporting [Abstract] | |||
Gain/loss on investments, net | $ (1,362) | $ (6,222) | $ (224) |
Segment Information (Schedule_3
Segment Information (Schedule of Net Revenue by Geographic Areas) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | |||
Total net revenue | $ 1,168,073 | $ 1,255,202 | $ 998,763 |
United States (U.S.) | |||
Segment Reporting Information [Line Items] | |||
Total net revenue | 759,865 | 866,161 | 637,566 |
Americas (excluding U.S.) | |||
Segment Reporting Information [Line Items] | |||
Total net revenue | 26,461 | 31,810 | 15,440 |
EMEA | |||
Segment Reporting Information [Line Items] | |||
Total net revenue | 229,829 | 221,665 | 200,099 |
APAC | |||
Segment Reporting Information [Line Items] | |||
Total net revenue | $ 151,918 | $ 135,566 | $ 145,658 |
Segment Information (Schedule_4
Segment Information (Schedule of Long-Lived Asset by Geographic Region) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total | $ 36,511 | $ 45,491 | |
United States (U.S.) | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total | 14,564 | 19,173 | |
Americas (excluding U.S.) | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total | 3,283 | 2,845 | |
EMEA | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total | 2,465 | 3,215 | |
Singapore | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total | 4,767 | 5,964 | |
Asia Pacific Excluding Singapore | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total | [1] | $ 11,432 | $ 14,294 |
[1] | No individual |
Segment Information (Schedule_5
Segment Information (Schedule of Long-Lived Asset by Geographic Region) (Parenthetical) (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Maximum | Asia Pacific Excluding Singapore | |
Revenues From External Customers And Long Lived Assets [Line Items] | |
Percentage of total long-lived assets owned | 10.00% |
Fair Value Measurements (Summar
Fair Value Measurements (Summary of Valuation of Company's Financial Instruments by Various Levels) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Assets measured at fair value | $ 117,902 | $ 165,237 | |||
Liabilities measured at fair value | 344 | 5,382 | |||
Quoted market prices in active markets (Level 1) | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Assets measured at fair value | 116,006 | 163,422 | |||
Liabilities measured at fair value | 0 | 0 | |||
Significant other observable inputs (Level 2) | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Assets measured at fair value | 1,896 | 489 | |||
Liabilities measured at fair value | 344 | 2,382 | |||
Significant unobservable inputs (Level 3) | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Assets measured at fair value | 0 | 1,326 | |||
Liabilities measured at fair value | 0 | 3,000 | |||
Cash equivalents | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Assets measured at fair value | 108,441 | 158,054 | |||
Cash equivalents | Quoted market prices in active markets (Level 1) | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Assets measured at fair value | 108,441 | 158,054 | |||
Cash equivalents | Significant other observable inputs (Level 2) | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Assets measured at fair value | 0 | 0 | |||
Cash equivalents | Significant unobservable inputs (Level 3) | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Assets measured at fair value | 0 | 0 | |||
Certificates of deposit | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Assets measured at fair value | [1] | 6 | 165 | ||
Certificates of deposit | Quoted market prices in active markets (Level 1) | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Assets measured at fair value | [1] | 0 | 0 | ||
Certificates of deposit | Significant other observable inputs (Level 2) | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Assets measured at fair value | [1] | 6 | 165 | ||
Certificates of deposit | Significant unobservable inputs (Level 3) | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Assets measured at fair value | [1] | 0 | 0 | ||
Trading securities | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Assets measured at fair value | [1] | 6,814 | 5,368 | ||
Trading securities | Quoted market prices in active markets (Level 1) | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Assets measured at fair value | [1] | 6,814 | 5,368 | ||
Trading securities | Significant other observable inputs (Level 2) | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Assets measured at fair value | [1] | 0 | 0 | ||
Trading securities | Significant unobservable inputs (Level 3) | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Assets measured at fair value | [1] | 0 | 0 | ||
Available-for-sale Investments, Convertible Debt Securities | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Assets measured at fair value | 518 | [2] | 1,326 | [1] | |
Available-for-sale Investments, Convertible Debt Securities | Quoted market prices in active markets (Level 1) | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Assets measured at fair value | 0 | [2] | 0 | [1] | |
Available-for-sale Investments, Convertible Debt Securities | Significant other observable inputs (Level 2) | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Assets measured at fair value | 518 | [2] | 0 | [1] | |
Available-for-sale Investments, Convertible Debt Securities | Significant unobservable inputs (Level 3) | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Assets measured at fair value | 0 | [2] | 1,326 | [1] | |
Corporate Equity Securities | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Assets measured at fair value | [1] | 751 | |||
Corporate Equity Securities | Quoted market prices in active markets (Level 1) | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Assets measured at fair value | [1] | 751 | |||
Corporate Equity Securities | Significant other observable inputs (Level 2) | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Assets measured at fair value | [1] | 0 | |||
Corporate Equity Securities | Significant unobservable inputs (Level 3) | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Assets measured at fair value | [1] | 0 | |||
Contingent Consideration | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Liabilities measured at fair value | [3] | 3,000 | |||
Contingent Consideration | Quoted market prices in active markets (Level 1) | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Liabilities measured at fair value | [3] | 0 | |||
Contingent Consideration | Significant other observable inputs (Level 2) | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Liabilities measured at fair value | [3] | 0 | |||
Contingent Consideration | Significant unobservable inputs (Level 3) | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Liabilities measured at fair value | [3] | 3,000 | |||
Foreign currency forward contracts | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Assets measured at fair value | [4] | 1,372 | 324 | ||
Liabilities measured at fair value | [5] | 344 | 2,382 | ||
Foreign currency forward contracts | Quoted market prices in active markets (Level 1) | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Assets measured at fair value | [4] | 0 | 0 | ||
Liabilities measured at fair value | [5] | 0 | 0 | ||
Foreign currency forward contracts | Significant other observable inputs (Level 2) | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Assets measured at fair value | [4] | 1,372 | 324 | ||
Liabilities measured at fair value | [5] | 344 | 2,382 | ||
Foreign currency forward contracts | Significant unobservable inputs (Level 3) | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Assets measured at fair value | [4] | 0 | 0 | ||
Liabilities measured at fair value | [5] | $ 0 | $ 0 | ||
[1] | Included in Short-term investments on the Company’s consolidated balance sheets | ||||
[2] | $172,000 and $346,000 included in Short-term investments and Other non-current assets on the Company’s consolidated balance sheets, respectively. | ||||
[3] | Included in Other non-current accrued liabilities on the Company’s consolidated balance sheets. The contingent consideration represented the estimated fair value of the additional variable cash consideration payable in connection with the acquisition of Meural in August 2018 that was contingent upon the achievement of certain technical and service revenue milestones. | ||||
[4] | Included in Prepaid expenses and other current assets on the Company’s consolidated balance sheets. | ||||
[5] | Included in Other accrued liabilities on the Company’s consolidated balance sheets. |
Fair Value Measurements (Summ_2
Fair Value Measurements (Summary of Valuation of Company's Financial Instruments by Various Levels) (Parenthetical) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | $ 7,744 | $ 6,858 |
Other non-current assets | 76,350 | $ 82,750 |
Convertible debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 172,000 | |
Other non-current assets | $ 346,000 |
Fair Value Measurements - (Narr
Fair Value Measurements - (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Change in fair value of contingent consideration | $ 3,003 | $ 2,928 | $ 25 |
Merual | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Change in fair value of contingent consideration | $ 3,000 |
Restructuring and Other Charg_3
Restructuring and Other Charges (Summary of Activity Related to Accrued Restructuring and Other Charges ) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Restructuring Cost And Reserve [Line Items] | ||||
Beginning balance | $ 314 | $ 998 | $ 920 | |
Additions | 3,423 | [1] | 2,009 | 2,248 |
Cash payments | (3,491) | (2,387) | (1,998) | |
Adjustments | (223) | (306) | (172) | |
Ending balance | 23 | 314 | 998 | |
Employee Termination Charges | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Beginning balance | 87 | 932 | 775 | |
Additions | 2,910 | [1] | 1,354 | 2,082 |
Cash payments | (2,913) | (1,972) | (1,783) | |
Adjustments | (84) | (227) | (142) | |
Ending balance | 87 | 932 | ||
Lease Contract Termination and Other Charges | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Beginning balance | 227 | 66 | 145 | |
Additions | 513 | [1] | 655 | 166 |
Cash payments | (578) | (415) | (215) | |
Adjustments | (139) | (79) | (30) | |
Ending balance | $ 23 | $ 227 | $ 66 | |
[1] | Total restructuring and other charges recognized in the Company’s consolidated statements of operations for the period presented included non-cash charges and adjustments, net of $0.1 million, which were excluded from the table above. |
Restructuring and Other Charg_4
Restructuring and Other Charges (Summary of Activity Related to Accrued Restructuring and Other Charges ) (Parenthetical) (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Restructuring Charges [Abstract] | |
Restructuring non-cash charges and adjustments, net | $ 0.1 |
Leases (Narrative) (Details)
Leases (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Lessee, Lease, Description [Line Items] | |
Lease expiration date | May 2027 |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Operating lease, remaining lease term | 5 years |
Operating lease, renewal term option | 5 years |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Operating lease, remaining lease term | 1 year |
Leases (Lease Cost) (Details)
Leases (Lease Cost) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Leases [Abstract] | ||||
Operating lease cost | $ 9,208 | $ 10,482 | $ 11,945 | |
Short-term Lease, Cost | 563 | 1,702 | 1,111 | |
Total lease cost | [1] | $ 9,771 | $ 12,184 | $ 13,056 |
[1] | Included in cost of revenue, sales and marketing, research and development and general and administration in the Company’s consolidated statement of operations . |
Leases (Supplemental Cash Flow
Leases (Supplemental Cash Flow Information) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows relating to operating leases | $ 9,474 | $ 12,127 | $ 11,652 |
Lease liabilities arising from obtaining right-of-use assets: | |||
Operating leases | $ 1,773 | $ 9,463 | $ 918 |
Leases (Supplemental Balance Sh
Leases (Supplemental Balance Sheet Information) (Details) | Dec. 31, 2021 | Dec. 31, 2020 |
Weighted Average Remaining Lease Term (in years) | ||
Operating leases | 3 years 7 months 6 days | 4 years 2 months 12 days |
Weighted Average Discount Rate | ||
Operating leases | 4.00% | 4.00% |
Leases (Maturities of Operating
Leases (Maturities of Operating Lease Liabilities - Topic 842) (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Leases [Abstract] | |
2022 | $ 10,122 |
2023 | 7,199 |
2024 | 6,515 |
2025 | 4,812 |
2026 | 1,088 |
Thereafter | 82 |
Total lease payments | 29,818 |
Less imputed interest | (2,029) |
Total | $ 27,789 |
Schedule II - Valuation and Q_2
Schedule II - Valuation and Qualifying Accounts (Details) - Allowance for doubtful accounts - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of year | $ 1,081 | $ 1,079 | $ 1,254 |
Other | 0 | 2 | 0 |
Additions | 12 | 0 | 21 |
Deductions | (694) | 0 | (196) |
Balance at end of year | $ 399 | $ 1,081 | $ 1,079 |