Vocera Communications (VCRA) 10-Q 5 May 17 2017 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2017	May 03, 2017
Document and Entity Information [Abstract]
Entity Registrant Name	VOCERA COMMUNICATIONS, INC.
Entity Central Index Key	1,129,260
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
Amendment Flag	false
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		28,243,500

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Current assets
Cash and cash equivalents	$ 43,084	$ 35,033
Short-term investments	28,250	39,033
Accounts receivable, net of allowance	24,571	24,142
Other receivables	1,140	1,211
Inventories	3,744	4,556
Prepaid expenses and other current assets	3,777	3,364
Total current assets	104,566	107,339
Property and equipment, net	5,851	5,894
Intangible assets, net	17,068	18,200
Goodwill	49,246	49,246
Other long-term assets	1,516	1,394
Total assets	178,247	182,073
Current liabilities
Accounts payable	3,135	3,231
Product Warranty Accrual, Current	499	596
Accrued payroll and other current liabilities	12,757	15,896
Deferred revenue, current	39,745	43,845
Total current liabilities	55,637	62,972
Deferred revenue, long-term	16,292	11,155
Other long-term liabilities	4,570	4,505
Total liabilities	76,499	78,632
Commitments and contingencies (Note 7)
Stockholders' equity
Preferred stock, $0.0003 par value - 5,000,000 shares authorized as of March 31, 2017 and December 31, 2016; zero shares issued and outstanding	0	0
Common stock, $0.0003 par value - 100,000,000 shares authorized as of March 31, 2017 and December 31, 2016; 27,908,895 and 27,568,103 shares issued and outstanding as of March 31, 2017 and December 31, 2016, respectively	8	8
Additional paid-in capital	235,933	230,605
Accumulated other comprehensive loss	(72)	(69)
Accumulated deficit	(134,121)	(127,103)
Total stockholders’ equity	101,748	103,441
Total liabilities and stockholders’ equity	$ 178,247	$ 182,073

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheets (Paranthetical) - $ / shares	Mar. 31, 2017	Dec. 31, 2016
Liabilities and stockholders' equity
Common stock par value	$ 0.0003	$ 0.0003
Common stock shares authorized	100,000,000	100,000,000
Common stock shares issued	27,908,895	27,568,103
Common stock shares outstanding	27,908,895	27,568,103
Preferred Stock
Liabilities and stockholders' equity
Preferred stock par value	$ 0.0003	$ 0.0003
Preferred stock shares authorized	5,000,000	5,000,000
Preferred stock shares issued	0	0
Preferred stock shares outstanding	0	0

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Revenue
Product	$ 20,033	$ 13,802
Service	16,262	12,975
Total revenue	36,295	26,777
Cost of revenue
Product	6,409	4,449
Service	9,155	5,650
Total cost of revenue	15,564	10,099
Gross profit	20,731	16,678
Operating expenses
Research and development	6,929	3,972
Sales and marketing	14,581	12,026
General and administrative	5,695	4,336
Total operating expenses	27,205	20,334
Loss from operations	(6,474)	(3,656)
Interest income	105	178
Other income (expense), net	109	(14)
Loss before income taxes	(6,260)	(3,492)
Provision for income taxes	(380)	(92)
Net loss	$ (6,640)	$ (3,584)
Net loss per share
Basic and Diluted	$ (0.24)	$ (0.14)
Weighted average shares used to compute net loss per share
Basic and Diluted	27,751	26,379

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Statement of Comprehensive Income [Abstract]
Net loss	$ (6,640)	$ (3,584)
Other comprehensive loss, net:
Change in unrealized gain (loss) on investments, net of tax	(3)	172
Comprehensive loss	$ (6,643)	$ (3,412)

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Statement of Cash Flows [Abstract]
Other Operating Activities, Cash Flow Statement	$ 12	$ 3
Cash flows from operating activities
Net loss	6,640	3,584
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,804	726
Inventory provision	51	3
Change in lease-related performance liabilities	(169)	(194)
Stock-based compensation expense	3,583	2,546
Changes in operating assets and liabilities:
Accounts receivable	(429)	8,172
Other receivables	72	(103)
Inventories	761	(903)
Prepaid expenses and other assets	(536)	(354)
Accounts payable	(138)	568
Accrued payroll and other liabilities	(2,908)	(2,565)
Deferred revenue	1,037	(752)
Net cash used in operating activities	(3,500)	3,563
Cash flows from investing activities
Purchase of property and equipment	(600)	(733)
Purchase of short-term investments	(14,354)	(39,182)
Maturities of short-term investments	25,135	37,015
Proceeds from Sale of Available-for-sale Securities	0	713
Net cash used in investing activities	10,181	(2,187)
Cash flows from financing activities
Cash from lease-related performance obligations	0	387
Proceeds from exercise of stock options	1,912	406
Tax withholdings paid on behalf of employees for net share settlement	(542)	(341)
Net cash provided by financing activities	1,370	452
Net decrease in cash and cash equivalents	8,051	1,828
Cash and cash equivalents at beginning of period	35,033	20,572
Cash and cash equivalents at end of period	43,084	22,400
Supplemental disclosure of non-cash investing and financing activities:
Property and equipment in accounts payable and accrued liabilities	$ 86	$ 776

The Company and Summary of Sign

The Company and Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2017
Accounting Policies [Abstract]
The Company and Summary of Significant Accounting Policies	The Company and Summary of Significant Accounting Policies Organization and Business Vocera Communications, Inc. and its subsidiaries (the “Company” or “Vocera”) is a provider of secure, integrated, intelligent communication and clinical workflow solutions, focused on empowering mobile workers in healthcare, hospitality, energy and other mission-critical mobile work environments, in the United States and internationally. The significant majority of the Company’s business is generated from sales of its solutions in the healthcare market to help its customers improve quality of care, patient and staff experience and increase operational efficiency. The Vocera Communication System, which includes an intelligent enterprise software platform, a lightweight, wearable, voice-controlled communication badge and smartphone applications, enables users to connect instantly with other staff simply by saying the name, function or group name of the desired recipient. It also securely delivers text messages and alerts directly to and from smartphones, replacing legacy pagers. Our new Engage software is an event-driven, communication and workflow collaboration solution for the hospital environment. It features an advanced clinical rules engine and interoperates with data from multiple clinical systems. This enables the prioritization of notifications, including patient context, and sends messages to the right care team members on their mobile devices. Our software applications help improve care coordination, patient safety and patient satisfaction. Basis of Presentation The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X of the U.S. Securities and Exchange Commission, and include the accounts of Vocera and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated. Certain information and disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the annual audited consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 . The year-end condensed balance sheet data was derived from the Company’s audited financial statements, but does not include all disclosures required by GAAP. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s interim consolidated financial information. The results for the quarter presented are not necessarily indicative of the results to be expected for the year ending December 31, 2017 or for any other interim period or any other future year. The accounting policies followed in the preparation of these financial statements are consistent in all material respects with those presented in Note 1 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. Use of Estimates The preparation of the accompanying unaudited condensed consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting periods. The estimates include, but are not limited to, revenue recognition, warranty reserves, inventory reserves, goodwill and intangible assets, stock-based compensation expense, provisions for income taxes and contingencies. Actual results could differ from these estimates, and such differences could be material to the Company’s financial position and results of operations. Revenue Recognition The Company derives revenue from the sales of communication badges, perpetual software licenses for software that is essential to the functionality of the communication badges, smartphones, software maintenance, extended product warranty and professional services. The Company also derives revenue from the sale of licenses for software that is not essential to the functionality of the communication badges, which may include Clinical Integration and Vocera smartphone applications as well as certain subscription-based revenues including Vocera Care Experience. The Company’s revenue recognition policy has not changed from that described in its Annual Report on Form 10-K for the year ended December 31, 2016 . Transfer of sales-type leases to third-parties Proceeds from transfers of sales-type leases to third-party financial companies are allocated between the net investment in sales-type leases and the executory cost component for remaining service obligations based on relative present value. The difference between the amount of proceeds allocated to the net investment in lease and the carrying value of the net investment in lease is included in product revenue. Proceeds allocated to the executory cost component are accounted for as financing liabilities. For the three months ended March 31, 2017 and 2016 , the Company transferred zero and $0.3 million , respectively, of lease receivables in non-recourse sales to third-party financial companies, with immaterial net losses. For the three months ended March 31, 2017 and 2016 , the Company recorded zero and $0.4 million , respectively, of financing liabilities for future performance of executory service obligations. For lease receivables retained as of March 31, 2017 and December 31, 2016 , the Company recorded $1.6 million and $1.9 million of net investment in sales-type leases, respectively, equivalent to the minimum lease payments less the unearned interest portion. Recently Adopted Accounting Pronouncement In March 2016, the Financial Accounting Standards Board (FASB) issued new guidance related to accounting for stock-based payment award transactions. The guidance is designed to simplify several aspects of accounting for share-based payment award transactions, including the income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows and forfeiture rate calculations. The guidance eliminates the requirement to delay the recognition of excess tax benefits until they reduce current taxes payable. Under this standard, previously unrecognized excess tax benefits shall be recognized on a modified retrospective basis. However, as of January 1, 2017, the previously unrecognized excess tax benefits of $10.4 million had no impact on the Company’s accumulated deficit balance as the related U.S. deferred tax assets were fully offset by a valuation allowance. The guidance also requires excess tax benefits and deficiencies to be recognized prospectively in the provision for income taxes rather than additional paid-in capital. The Company therefore determined that adoption of the new guidance had no material impact on the condensed consolidated statement of operations and the condensed consolidated statement of cash flows. Further, the new guidance eliminates the requirement to estimate forfeitures and reduce stock compensation expense during the vesting period. Instead, companies can elect to account for actual forfeitures as they occur and record any previously unrecognized compensation expense for estimated forfeitures up to the period of adoption as a retrospective adjustment to beginning retained earnings. The Company has made the election to account for actual forfeitures as they occur starting in fiscal year 2017. During the three months ended March 31, 2017, the Company recorded a retrospective adjustment to accumulated deficit of $0.4 million Recent Accounting Pronouncements In May 2014, the FASB together with the International Accounting Standards Board issued converged guidance for revenue recognition that will replace most existing guidance, eliminate industry-specific guidance and provide a unified model for determining how and when revenue from contracts with customers should be recognized. Under the new guidance, an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). The Company currently plans to adopt using the full retrospective method, however, such determination could change depending on a number of factors including system readiness, the magnitude of the potential impact on the financial results, and its ability to gather sufficient data to assess the impact on prior period financial statements timely. Public entities are required to adopt the new guidance for annual reporting periods beginning December 15, 2017, including interim periods. The Company will adopt the new guidance on January 1, 2018. The Company anticipates the new guidance to have a material impact on its consolidated financial statements. While the Company is continuing to assess all potential impacts of the standard, the Company currently believes the most significant impact relates to the timing of revenue recognition for software licenses sold with professional services as it did not have vendor specific objective evidence (“VSOE”) for professional services under current guidance. Under the new standard, the requirement to have VSOE for undelivered elements is eliminated and the Company will recognize revenue for software licenses upon transfer of control to its customers. Additionally, the new standard requires the capitalization and amortization of costs related to obtaining a contract which are currently expensed at the time of sale. The Company is continuing to assess the impact of this guidance on its consolidated financial statements, as well as the determination of the method of adoption. In February 2016, the FASB amended lease accounting requirements to begin recording assets and liabilities arising from leases on the balance sheet. The new guidance will also require significant additional disclosures about the amount, timing and uncertainty of cash flows from leases. This new guidance will be effective beginning on January 1, 2019 using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply. The Company has not yet determined the future effect of the standard on its financial position or results of operations. In June 2016, the FASB issued new guidance related to the accounting for credit losses on instruments for both financial services and non-financial services entities. The new guidance introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments. It also modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. The guidance will be effective beginning January 1, 2020. Early adoption is permitted. The Company is currently evaluating the impact of this new guidance on its consolidated financial statements. In October 2016, the FASB issued amended guidance on the accounting for income taxes. The new guidance requires the recognition of the income tax consequences of an intercompany asset transfer, other than transfers of inventory, when the transfer occurs. The guidance will be effective for reporting periods beginning after December 15, 2017, with early adoption permitted. The Company is currently evaluating the impact of this new guidance on its consolidated financial statements, but does not expect that it will have a material impact on its consolidated financial statements. In January 2017, the FASB issued new guidance which clarifies the definition of a business to assist companies with evaluating whether transactions should be accounted for as acquisitions of assets or businesses. The new guidance requires a company to evaluate if substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of assets and activities is not a business. The guidance also requires a business to include at least one substantive process and narrows the definition of outputs by more closely aligning it with how outputs are described in the guidance for revenue from contracts with customers. The new guidance will be effective for the Company in the first quarter of 2018. Early adoption is permitted. The guidance should be applied prospectively to any transactions occurring within the period of adoption. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements. In January 2017, the FASB issued new guidance to simplify the accounting for goodwill impairment. The guidance simplifies the measurement of goodwill impairment by removing step 2 of the goodwill impairment test, which requires the determination of the fair value of individual assets and liabilities of a reporting unit. The new guidance requires goodwill impairment to be measured as the amount by which a reporting unit’s carrying value exceeds its fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The amendments should be applied on a prospective basis. The new standard is effective for fiscal years beginning after December 15, 2019 with early adoption permitted for interim or annual goodwill impairment tests performed after January 1, 2017. The Company is evaluating the impact of this new accounting guidance on its consolidated financial statements.

Fair Value of Financial Instrum

Fair Value of Financial Instruments	3 Months Ended
	Mar. 31, 2017
Fair Value Disclosures [Abstract]
Fair Value of Financial Instruments	Fair Value of Financial Instruments The Company’s cash, cash equivalents and short-term investments are carried at their fair values with any differences from their amortized cost recorded in equity as unrealized gains (losses) on marketable securities. As a basis for determining the fair value of its assets and liabilities, the Company follows a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs other than the quoted prices in active markets that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data which requires the Company to develop its own assumptions. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. For the three months ended March 31, 2017 , there have been no transfers between Level 1 and Level 2 fair value instruments and no transfers in or out of Level 3. The Company’s money market funds are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. The fair value of the Company’s Level 2 fixed income securities are obtained from independent pricing services, which may use quoted market prices for identical or comparable instruments or model-driven valuations using observable market data or other inputs corroborated by observable market data. The Company does not have any financial instruments which are valued using Level 3 inputs. The Company’s assets that are measured at fair value on a recurring basis, by level, within the fair value hierarchy as of March 31, 2017 and December 31, 2016 , are summarized as follows (in thousands): March 31, 2017 December 31, 2016 Level 1 Level 2 Total Level 1 Level 2 Total Assets Money market funds $ 11,909 $ — $ 11,909 $ 4,996 $ — $ 4,996 Commercial paper — 2,082 2,082 — 1,322 1,322 U.S. government agency securities — 3,282 3,282 — 4,177 4,177 U.S. Treasury securities — 1,300 1,300 — 2,045 2,045 Corporate debt securities — 27,234 27,234 — 33,166 33,166 Total assets measured at fair value $ 11,909 $ 33,898 $ 45,807 $ 4,996 $ 40,710 $ 45,706 The Company had no liabilities as of March 31, 2017 and December 31, 2016 that were measured at fair value on a recurring basis.

Cash, Cash Equivalents and Shor

Cash, Cash Equivalents and Short-term Investments	3 Months Ended
	Mar. 31, 2017
Cash and Cash Equivalents [Abstract]
Cash, Cash Equivalents, and Short-term Investments	Cash, Cash Equivalents and Short-Term Investments The following tables present current and prior-year-end balances for cash, cash equivalents and short-term investments (in thousands): As of March 31, 2017 Amortized Cost Unrealized Gains Unrealized Losses Fair value Cash and cash equivalents: Demand deposits and other cash $ 25,527 $ — $ — $ 25,527 Money market funds 11,909 — — 11,909 Commercial paper 600 — — 600 U.S. government agency securities 400 — — 400 Corporate debt securities 4,650 — (2 ) 4,648 Total cash and cash equivalents 43,086 — (2 ) 43,084 Short-Term Investments: Commercial paper 1,482 — — 1,482 U.S. government agency securities 2,883 — (1 ) 2,882 U.S. Treasury securities 1,301 — (1 ) 1,300 Corporate debt securities 22,598 2 (14 ) 22,586 Total short-term investments 28,264 2 (16 ) 28,250 Total cash, cash equivalents and short-term investments $ 71,350 $ 2 $ (18 ) $ 71,334 As of December 31, 2016 Amortized Cost Unrealized Gains Unrealized Losses Fair value Cash and cash equivalents: Demand deposits and other cash $ 28,360 $ — $ — $ 28,360 Money market funds 4,996 — — 4,996 Commercial paper 549 — — 549 Corporate debt securities 1,128 — — 1,128 Total cash and cash equivalents 35,033 — — 35,033 Short-Term Investments: Commercial paper 773 — — 773 U.S. government agency securities 4,176 1 — 4,177 U.S. Treasury securities 2,045 — — 2,045 Corporate debt securities 32,052 1 (15 ) 32,038 Total short-term investments 39,046 2 (15 ) 39,033 Total cash, cash equivalents and short-term investments $ 74,079 $ 2 $ (15 ) $ 74,066 The Company has determined that the unrealized losses on its short-term investments as of March 31, 2017 and December 31, 2016 do not constitute an “other than temporary impairment.” The unrealized losses for the short-term investments have all been in a continuous unrealized loss position for less than twelve months. The Company’s conclusion of no “other than temporary impairment” is based on the high credit quality of the securities, their short remaining maturity and the Company’s intent and ability to hold such loss securities until maturity. Classification of the cash, cash equivalent and short-term investments by contractual maturity was as follows: (in thousands) One year or shorter Total Balances as of March 31, 2017 Cash and cash equivalents (1) $ 43,084 $ 43,084 Short-term investments 28,250 28,250 Cash, cash equivalents and short-term investments $ 71,334 $ 71,334 Balances as of December 31, 2016 Cash and cash equivalents (1) $ 35,033 $ 35,033 Short-term investments 39,033 39,033 Cash, cash equivalents and short-term investments $ 74,066 $ 74,066 (1) Includes demand deposits and other cash, money market funds and other cash equivalent securities, all with 0-90 day maturity at purchase.

Net Loss Per Share

Net Loss Per Share	3 Months Ended
	Mar. 31, 2017
Earnings Per Share [Abstract]
Net Loss Per Share	Net Loss Per Share The following table sets forth the computation of basic and diluted net loss per share (in thousands, except per share amounts): Three months ended March 31, 2017 2016 Numerator: Net loss $ (6,640 ) $ (3,584 ) Denominator: Weighted-average shares used to compute net loss per common share - basic and diluted 27,751 26,379 Net loss per share Basic and diluted $ (0.24 ) $ (0.14 ) The following securities were not included in the calculation of diluted shares outstanding as the effect would have been anti-dilutive: Three months ended March 31, (in thousands) 2017 2016 Options to purchase common stock, including ESPP 2,193 3,125 Restricted stock units 2,147 1,371

Goodwill and Intangible Assets

Goodwill and Intangible Assets	3 Months Ended
	Mar. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill and Intangible Assets	Goodwill and Intangible Assets Goodwill As of March 31, 2017 and December 31, 2016 , the Company had $49.2 million and $49.2 million of goodwill, respectively, with $41.2 million and $8.0 million allocated to the Company’s Product and Services operating segments, respectively. As of March 31, 2017 , there were no changes in circumstances indicating that the carrying values of goodwill or acquired intangibles may not be recoverable. Intangible Assets Acquisition-related intangible assets are amortized either straight-line, or over the life of the assets on a basis that resembles the economic benefit of the assets. This yields amortization in the latter case that is higher in earlier periods of the useful life. The estimated useful lives and carrying value of acquired intangible assets are as follows: March 31, 2017 December 31, 2016 (in thousands) Range of Useful Life (years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed technology 3 to 7 $ 10,050 $ 3,459 $ 6,591 $ 10,050 $ 2,845 $ 7,205 Customer relationships 7 to 9 10,920 2,577 8,343 10,920 2,280 8,640 Backlog 3 1,400 194 1,206 1,400 78 1,322 Non-compete agreements 2 to 4 460 406 54 460 389 71 Trademarks 3 to 7 1,110 236 874 1,110 148 962 Intangible assets, net book value $ 23,940 $ 6,872 $ 17,068 $ 23,940 $ 5,740 $ 18,200 Amortization expense was $1.1 million and $0.2 million for the three months ended March 31, 2017 and 2016 , respectively. Amortization of acquired intangible assets is reflected in the cost of revenue for developed technology and backlog and in operating expenses for the other intangible assets. The estimated future amortization of existing acquired intangible assets as of March 31, 2017 was as follows: (in thousands) Future amortization 2017 (remaining nine months) $ 3,411 2018 4,424 2019 3,880 2020 1,251 2021 1,127 2022 1,050 Thereafter 1,925 Future amortization expense $ 17,068

Balance Sheet Components

Balance Sheet Components	3 Months Ended
	Mar. 31, 2017
Balance Sheet Components [Abstract]
Balance Sheet Components	Balance Sheet Components Inventories (in thousands) March 31, December 31, Raw materials $ 84 $ 103 Finished goods 3,660 4,453 Total inventories $ 3,744 $ 4,556 Property and equipment, net (in thousands) March 31, December 31, Computer equipment and software $ 9,107 $ 8,971 Furniture, fixtures and equipment 1,797 1,726 Leasehold improvements 4,260 4,144 Manufacturing tools and equipment 3,070 3,019 Construction in process 12 74 Property and equipment, at cost 18,246 17,934 Less: Accumulated depreciation (12,395 ) (12,040 ) Property and equipment, net $ 5,851 $ 5,894 Depreciation and amortization expense was $0.7 million and $0.5 million for the three months ended March 31, 2017 and 2016 , respectively. Net investment in sales-type leases The Company has sales-type leases with terms of 0.75 to 4 years. Sales-type lease receivables are collateralized by the underlying equipment. The components of the Company’s net investment in sales-type leases are as follows: (in thousands) March 31, December 31, Minimum payments to be received on sales-type leases $ 3,214 $ 3,566 Less: Unearned interest income and executory costs (1,635 ) (1,704 ) Net investment in sales-type leases 1,579 1,862 Less: Current portion (946 ) (1,066 ) Non-current net investment in sales-type leases $ 633 $ 796 There were no allowances for doubtful accounts on these leases as of March 31, 2017 and December 31, 2016 . There is no guaranteed or unguaranteed residual value on the leased equipment. The current and non-current net investments in sales-type leases are reported as components of the consolidated balance sheet captions “other receivables” and “other long-term assets,” respectively. The minimum payments expected to be received for future years under sales-type leases as of March 31, 2017 were as follows: (in thousands) Future lease payments 2017 (remaining nine months) $ 1,159 2018 1,257 2019 572 2020 226 2021 — Total $ 3,214 Accrued payroll and other current liabilities (in thousands) March 31, December 31, Payroll and related expenses $ 8,275 $ 10,385 Accrued payables 1,530 2,334 Deferred rent, current portion 237 229 Lease financing, current portion 799 801 Product warranty 499 596 Customer prepayments 683 769 Sales and use tax payable 335 451 Other 399 331 Total accrued payroll and other current liabilities $ 12,757 $ 15,896 The changes in the Company’s product warranty reserve are as follows: Three months ended March 31, (in thousands) 2017 2016 Warranty balance at the beginning of the period $ 596 $ 806 Warranty expense accrued for shipments during the period 138 172 Changes in estimate related to pre-existing warranties (152 ) (201 ) Warranty settlements made (83 ) (157 ) Total product warranty 499 620 Less: Long-term portion — (36 ) Current portion of warranty balance at the end of the period $ 499 $ 584

Commitments

Commitments	3 Months Ended
	Mar. 31, 2017
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies Disclosure	Commitments and Contingencies Non-cancelable Material Commitments The Company is required to purchase unused, non-cancelable, non-returnable raw material inventory that was purchased by its contract manufacturers based on committed finished goods orders from the Company, certain long lead-time raw materials based on the Company’s forecast and current work-in-progress materials. As of March 31, 2017 and December 31, 2016 , approximately $5.7 million and $5.4 million , respectively, of such inventory was purchased and held by the third-party manufacturers which was subject to these purchase guarantees. Leases The Company leases office space for its headquarters and subsidiaries under non-cancelable operating leases, which will expire between December 2017 and March 2022. The Company recognizes rent expense on a straight-line basis over the lease period, and has accrued for rent expense incurred but not paid. Facilities rent expense was $0.6 million and $0.6 million for the three months ended March 31, 2017 and 2016 , respectively. Future minimum lease payments at March 31, 2017 under non-cancelable operating leases are as follows: (in thousands) Operating leases 2017 (remaining nine months) $ 1,704 2018 2,205 2019 2,030 2020 1,687 2021 1,595 2022 402 Total minimum lease payments $ 9,623 Indemnifications The Company undertakes, in the ordinary course of business, to (i) defend customers and other parties from certain third-party claims associated with allegations of trade secret misappropriation, infringement of copyright, patent or other intellectual property rights, tortious damage to persons or property or breaches of certain Company obligations relating to confidentiality (e.g., safeguarding protected health information) and (ii) indemnify and hold harmless such parties from certain resulting damages, costs and other liabilities. The term of these undertakings may be perpetual and the maximum potential liability of the Company under certain of these undertakings is not determinable. Based on its historical experience, the Company believes the liability associated with these undertakings is minimal. The Company has entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers, other than liabilities arising from willful misconduct of the individual. The Company currently has directors and officers insurance. As there has been no significant history of losses, no expense accrual has been made. Litigation From time to time, the Company may be involved in lawsuits, claims, investigations and proceedings, consisting of intellectual property, commercial, employment and other matters which arise in the ordinary course of business. The Company defends itself vigorously against any such claims. Although the outcome of these matters is currently not determinable, management expects that any losses from existing matters that are probable or reasonably possible of being incurred as a result of these matters would not be material to the financial statements as a whole.

Stock-based Compensation and Aw

Stock-based Compensation and Awards	3 Months Ended
	Mar. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock-based Compensation and Award	Stock-based Compensation and Awards Stock Option Activity A summary of the stock option activity for the three months ended March 31, 2017 is presented below: Options outstanding Number of Options Weighted Average Exercise Price Weighted average remaining contractual term Aggregate intrinsic value (in years) (in thousands) Outstanding at December 31, 2016 2,436,845 $ 10.71 5.09 $ 20,643 Options granted — Options exercised (292,468 ) 6.54 Options canceled (3,447 ) 9.15 Outstanding at March 31, 2017 2,140,930 $ 11.29 5.00 $ 29,098 At March 31, 2017 , there was $1.5 million of unrecognized compensation cost related to options which is expected to be recognized over a weighted-average period of 1.26 years . As of March 31, 2017 , there were 1,771,674 shares that remained available for future issuance of options, restricted stock units (“RSUs”) or other equity awards under the 2012 Equity Incentive Plan. Employee Stock Purchase Plan In March 2012, the Company’s 2012 Employee Stock Purchase Plan (the “ESPP”) was approved. No shares of common stock were purchased during the three months ended March 31, 2017 and 2016. As of March 31, 2017 , there were 744,140 shares available for future issuance under the ESPP. The following Black-Scholes option-pricing assumptions were used for each respective period for the ESPP: Three months ended March 31, 2017 2016 Expected term (in years) 0.50 0.50 Volatility 32.0% 41.5% Risk-free interest rate 0.61% 0.33% Dividend yield 0% 0% Restricted Stock Units A summary of RSU activity for the three months ended March 31, 2017 is presented below: Restricted Stock Units Number of shares Weighted Average Grant Date Fair Value per Share Outstanding at December 31, 2016 2,128,735 $ 13.17 Granted 111,850 20.41 Vested (75,373 ) 13.71 Forfeited (18,412 ) 15.60 Outstanding at March 31, 2017 2,146,800 $ 13.50 At March 31, 2017 , there was $20.6 million of unrecognized compensation cost related to RSUs, which is expected to be recognized over a weighted-average period of 1.86 years . Allocation of Stock-Based Compensation Expense The following table presents the allocation of stock-based compensation expense: Three months ended March 31, (in thousands) 2017 2016 Cost of revenue $ 520 $ 269 Research and development 412 226 Sales and marketing 1,265 1,010 General and administrative 1,386 1,041 Total stock-based compensation $ 3,583 $ 2,546

Segments

Segments	3 Months Ended
	Mar. 31, 2017
Segment Reporting [Abstract]
Segments	Segments The Company has two operating segments, which are both reportable business segments: (i) Product and (ii) Service, both of which are comprised of Vocera’s and its wholly-owned subsidiaries’ results of operations. The following table presents a summary of the operating segments: Three months ended March 31, (in thousands) 2017 2016 Revenue Product $ 20,033 $ 13,802 Service 16,262 12,975 Total revenue 36,295 26,777 Cost of Revenue Product 6,409 4,449 Service 9,155 5,650 Total cost of revenue 15,564 10,099 Gross profit Product 13,624 9,353 Service 7,107 7,325 Total gross profit 20,731 16,678 Operating expenses 27,205 20,334 Interest income, net and other 214 164 Loss before income taxes $ (6,260 ) $ (3,492 )

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2017
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes The Company recorded a $0.4 million and $0.1 million provision for income taxes for the three months ended March 31, 2017 and 2016 , respectively. The provision for the three months ended March 31, 2017 was primarily due to the accretion of deferred tax liability associated with the Extension Healthcare goodwill, taxes on international operations and state income taxes. The provision for the three months ended March 31, 2016 was primarily due to taxes on international operations and state income taxes. As of March 31, 2017 , the Company has provided a valuation allowance against certain federal and state deferred tax assets. Management continues to evaluate the realizability of deferred tax assets and the related valuation allowance. If management’s assessment of the deferred tax assets or the corresponding valuation allowance were to change, the Company would record the related adjustment to income during the period in which management makes the determination. As of March 31, 2017 , there were no material changes to either the nature or the amounts of the uncertain tax positions previously determined for the year ended December 31, 2016 .

Business Acquisition

Business Acquisition	3 Months Ended
	Mar. 31, 2017
Business Combinations [Abstract]
Business Combination Disclosure	11. Business Acquisitions Acquisition of Extension Healthcare On October 27, 2016, the Company acquired all of the outstanding equity interest of Extension Healthcare for $52.5 million in cash. Refer to the Company’s report on Form 10-K for the year ended December 31, 2016 for disclosures related to the identifiable assets acquired and liabilities assumed in connection with the acquisition. The Company did not have any adjustments to previously recorded amounts in the purchase price allocation. The results of operations of Extension Healthcare are included in the Company's consolidated results of operations beginning in the fourth quarter of fiscal 2016. The Company determined that it is impracticable to provide comparative pro forma financial information related to the acquisition for the period ended March 31, 2016 as Extension Healthcare did not historically prepare financial statements in accordance with GAAP for interim financial reporting and significant estimates of amounts to be included in such pro forma financial information would be required and subject to an inordinate level of subjectivity.

The Company and Summary of Si18

The Company and Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2017
Accounting Policies [Abstract]
Nature of Operations	Organization and Business Vocera Communications, Inc. and its subsidiaries (the “Company” or “Vocera”) is a provider of secure, integrated, intelligent communication and clinical workflow solutions, focused on empowering mobile workers in healthcare, hospitality, energy and other mission-critical mobile work environments, in the United States and internationally. The significant majority of the Company’s business is generated from sales of its solutions in the healthcare market to help its customers improve quality of care, patient and staff experience and increase operational efficiency. The Vocera Communication System, which includes an intelligent enterprise software platform, a lightweight, wearable, voice-controlled communication badge and smartphone applications, enables users to connect instantly with other staff simply by saying the name, function or group name of the desired recipient. It also securely delivers text messages and alerts directly to and from smartphones, replacing legacy pagers. Our new Engage software is an event-driven, communication and workflow collaboration solution for the hospital environment. It features an advanced clinical rules engine and interoperates with data from multiple clinical systems. This enables the prioritization of notifications, including patient context, and sends messages to the right care team members on their mobile devices. Our software applications help improve care coordination, patient safety and patient satisfaction.
Basis of Presentation	Basis of Presentation The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X of the U.S. Securities and Exchange Commission, and include the accounts of Vocera and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated. Certain information and disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the annual audited consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 . The year-end condensed balance sheet data was derived from the Company’s audited financial statements, but does not include all disclosures required by GAAP. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s interim consolidated financial information. The results for the quarter presented are not necessarily indicative of the results to be expected for the year ending December 31, 2017 or for any other interim period or any other future year.
Use of Estimates	Use of Estimates The preparation of the accompanying unaudited condensed consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting periods. The estimates include, but are not limited to, revenue recognition, warranty reserves, inventory reserves, goodwill and intangible assets, stock-based compensation expense, provisions for income taxes and contingencies. Actual results could differ from these estimates, and such differences could be material to the Company’s financial position and results of operations.
Revenue Recognition	Revenue Recognition The Company derives revenue from the sales of communication badges, perpetual software licenses for software that is essential to the functionality of the communication badges, smartphones, software maintenance, extended product warranty and professional services. The Company also derives revenue from the sale of licenses for software that is not essential to the functionality of the communication badges, which may include Clinical Integration and Vocera smartphone applications as well as certain subscription-based revenues including Vocera Care Experience. The Company’s revenue recognition policy has not changed from that described in its Annual Report on Form 10-K for the year ended December 31, 2016 .
Lease, Policy	Transfer of sales-type leases to third-parties Proceeds from transfers of sales-type leases to third-party financial companies are allocated between the net investment in sales-type leases and the executory cost component for remaining service obligations based on relative present value. The difference between the amount of proceeds allocated to the net investment in lease and the carrying value of the net investment in lease is included in product revenue. Proceeds allocated to the executory cost component are accounted for as financing liabilities.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In May 2014, the FASB together with the International Accounting Standards Board issued converged guidance for revenue recognition that will replace most existing guidance, eliminate industry-specific guidance and provide a unified model for determining how and when revenue from contracts with customers should be recognized. Under the new guidance, an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). The Company currently plans to adopt using the full retrospective method, however, such determination could change depending on a number of factors including system readiness, the magnitude of the potential impact on the financial results, and its ability to gather sufficient data to assess the impact on prior period financial statements timely. Public entities are required to adopt the new guidance for annual reporting periods beginning December 15, 2017, including interim periods. The Company will adopt the new guidance on January 1, 2018. The Company anticipates the new guidance to have a material impact on its consolidated financial statements. While the Company is continuing to assess all potential impacts of the standard, the Company currently believes the most significant impact relates to the timing of revenue recognition for software licenses sold with professional services as it did not have vendor specific objective evidence (“VSOE”) for professional services under current guidance. Under the new standard, the requirement to have VSOE for undelivered elements is eliminated and the Company will recognize revenue for software licenses upon transfer of control to its customers. Additionally, the new standard requires the capitalization and amortization of costs related to obtaining a contract which are currently expensed at the time of sale. The Company is continuing to assess the impact of this guidance on its consolidated financial statements, as well as the determination of the method of adoption. In February 2016, the FASB amended lease accounting requirements to begin recording assets and liabilities arising from leases on the balance sheet. The new guidance will also require significant additional disclosures about the amount, timing and uncertainty of cash flows from leases. This new guidance will be effective beginning on January 1, 2019 using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply. The Company has not yet determined the future effect of the standard on its financial position or results of operations. In June 2016, the FASB issued new guidance related to the accounting for credit losses on instruments for both financial services and non-financial services entities. The new guidance introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments. It also modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. The guidance will be effective beginning January 1, 2020. Early adoption is permitted. The Company is currently evaluating the impact of this new guidance on its consolidated financial statements. In October 2016, the FASB issued amended guidance on the accounting for income taxes. The new guidance requires the recognition of the income tax consequences of an intercompany asset transfer, other than transfers of inventory, when the transfer occurs. The guidance will be effective for reporting periods beginning after December 15, 2017, with early adoption permitted. The Company is currently evaluating the impact of this new guidance on its consolidated financial statements, but does not expect that it will have a material impact on its consolidated financial statements. In January 2017, the FASB issued new guidance which clarifies the definition of a business to assist companies with evaluating whether transactions should be accounted for as acquisitions of assets or businesses. The new guidance requires a company to evaluate if substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of assets and activities is not a business. The guidance also requires a business to include at least one substantive process and narrows the definition of outputs by more closely aligning it with how outputs are described in the guidance for revenue from contracts with customers. The new guidance will be effective for the Company in the first quarter of 2018. Early adoption is permitted. The guidance should be applied prospectively to any transactions occurring within the period of adoption. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements. In January 2017, the FASB issued new guidance to simplify the accounting for goodwill impairment. The guidance simplifies the measurement of goodwill impairment by removing step 2 of the goodwill impairment test, which requires the determination of the fair value of individual assets and liabilities of a reporting unit. The new guidance requires goodwill impairment to be measured as the amount by which a reporting unit’s carrying value exceeds its fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The amendments should be applied on a prospective basis. The new standard is effective for fiscal years beginning after December 15, 2019 with early adoption permitted for interim or annual goodwill impairment tests performed after January 1, 2017. The Company is evaluating the impact of this new accounting guidance on its consolidated financial statements. In March 2016, the Financial Accounting Standards Board (FASB) issued new guidance related to accounting for stock-based payment award transactions. The guidance is designed to simplify several aspects of accounting for share-based payment award transactions, including the income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows and forfeiture rate calculations. The guidance eliminates the requirement to delay the recognition of excess tax benefits until they reduce current taxes payable. Under this standard, previously unrecognized excess tax benefits shall be recognized on a modified retrospective basis. However, as of January 1, 2017, the previously unrecognized excess tax benefits of $10.4 million had no impact on the Company’s accumulated deficit balance as the related U.S. deferred tax assets were fully offset by a valuation allowance. The guidance also requires excess tax benefits and deficiencies to be recognized prospectively in the provision for income taxes rather than additional paid-in capital. The Company therefore determined that adoption of the new guidance had no material impact on the condensed consolidated statement of operations and the condensed consolidated statement of cash flows. Further, the new guidance eliminates the requirement to estimate forfeitures and reduce stock compensation expense during the vesting period. Instead, companies can elect to account for actual forfeitures as they occur and record any previously unrecognized compensation expense for estimated forfeitures up to the period of adoption as a retrospective adjustment to beginning retained earnings. The Company has made the election to account for actual forfeitures as they occur starting in fiscal year 2017. During the three months ended March 31, 2017, the Company recorded a retrospective adjustment to accumulated deficit of $0.4 million
Fair Value of Fin. Instruments, Policy	Fair Value of Financial Instruments The Company’s cash, cash equivalents and short-term investments are carried at their fair values with any differences from their amortized cost recorded in equity as unrealized gains (losses) on marketable securities. As a basis for determining the fair value of its assets and liabilities, the Company follows a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs other than the quoted prices in active markets that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data which requires the Company to develop its own assumptions. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. For the three months ended March 31, 2017 , there have been no transfers between Level 1 and Level 2 fair value instruments and no transfers in or out of Level 3. The Company’s money market funds are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. The fair value of the Company’s Level 2 fixed income securities are obtained from independent pricing services, which may use quoted market prices for identical or comparable instruments or model-driven valuations using observable market data or other inputs corroborated by observable market data. The Company does not have any financial instruments which are valued using Level 3 inputs.
Goodwill, Policy	Goodwill As of March 31, 2017 and December 31, 2016 , the Company had $49.2 million and $49.2 million of goodwill, respectively, with $41.2 million and $8.0 million allocated to the Company’s Product and Services operating segments, respectively. As of March 31, 2017 , there were no changes in circumstances indicating that the carrying values of goodwill or acquired intangibles may not be recoverable.
Intangible Assets, Policy	Intangible Assets Acquisition-related intangible assets are amortized either straight-line, or over the life of the assets on a basis that resembles the economic benefit of the assets. This yields amortization in the latter case that is higher in earlier periods of the useful life.
Purchase commitments	Non-cancelable Material Commitments The Company is required to purchase unused, non-cancelable, non-returnable raw material inventory that was purchased by its contract manufacturers based on committed finished goods orders from the Company, certain long lead-time raw materials based on the Company’s forecast and current work-in-progress materials. As of March 31, 2017 and December 31, 2016 , approximately $5.7 million and $5.4 million , respectively, of such inventory was purchased and held by the third-party manufacturers which was subject to these purchase guarantees.
Operating leases	Leases The Company leases office space for its headquarters and subsidiaries under non-cancelable operating leases, which will expire between December 2017 and March 2022. The Company recognizes rent expense on a straight-line basis over the lease period, and has accrued for rent expense incurred but not paid. Facilities rent expense was $0.6 million and $0.6 million for the three months ended March 31, 2017 and 2016 , respectively.
Segment Reporting, Policy	The Company has two operating segments, which are both reportable business segments: (i) Product and (ii) Service, both of which are comprised of Vocera’s and its wholly-owned subsidiaries’ results of operations.

Fair Value of Financial Insturm

Fair Value of Financial Insturments (Tables)	3 Months Ended
	Mar. 31, 2017
Fair Value Disclosures [Abstract]
Assets and Liabilities Measured at Fair Value on a Recurring Basis	The Company’s assets that are measured at fair value on a recurring basis, by level, within the fair value hierarchy as of March 31, 2017 and December 31, 2016 , are summarized as follows (in thousands): March 31, 2017 December 31, 2016 Level 1 Level 2 Total Level 1 Level 2 Total Assets Money market funds $ 11,909 $ — $ 11,909 $ 4,996 $ — $ 4,996 Commercial paper — 2,082 2,082 — 1,322 1,322 U.S. government agency securities — 3,282 3,282 — 4,177 4,177 U.S. Treasury securities — 1,300 1,300 — 2,045 2,045 Corporate debt securities — 27,234 27,234 — 33,166 33,166 Total assets measured at fair value $ 11,909 $ 33,898 $ 45,807 $ 4,996 $ 40,710 $ 45,706

Cash, Cash Equivalents and Sh20

Cash, Cash Equivalents and Short-term Investments (Tables)	3 Months Ended
	Mar. 31, 2017
Cash and Cash Equivalents [Abstract]
Schedule of Cash, Cash Equivalents and Available-For-Sale Investments	The following tables present current and prior-year-end balances for cash, cash equivalents and short-term investments (in thousands): As of March 31, 2017 Amortized Cost Unrealized Gains Unrealized Losses Fair value Cash and cash equivalents: Demand deposits and other cash $ 25,527 $ — $ — $ 25,527 Money market funds 11,909 — — 11,909 Commercial paper 600 — — 600 U.S. government agency securities 400 — — 400 Corporate debt securities 4,650 — (2 ) 4,648 Total cash and cash equivalents 43,086 — (2 ) 43,084 Short-Term Investments: Commercial paper 1,482 — — 1,482 U.S. government agency securities 2,883 — (1 ) 2,882 U.S. Treasury securities 1,301 — (1 ) 1,300 Corporate debt securities 22,598 2 (14 ) 22,586 Total short-term investments 28,264 2 (16 ) 28,250 Total cash, cash equivalents and short-term investments $ 71,350 $ 2 $ (18 ) $ 71,334 As of December 31, 2016 Amortized Cost Unrealized Gains Unrealized Losses Fair value Cash and cash equivalents: Demand deposits and other cash $ 28,360 $ — $ — $ 28,360 Money market funds 4,996 — — 4,996 Commercial paper 549 — — 549 Corporate debt securities 1,128 — — 1,128 Total cash and cash equivalents 35,033 — — 35,033 Short-Term Investments: Commercial paper 773 — — 773 U.S. government agency securities 4,176 1 — 4,177 U.S. Treasury securities 2,045 — — 2,045 Corporate debt securities 32,052 1 (15 ) 32,038 Total short-term investments 39,046 2 (15 ) 39,033 Total cash, cash equivalents and short-term investments $ 74,079 $ 2 $ (15 ) $ 74,066
Investments Classified by Contractual Maturity Date	Classification of the cash, cash equivalent and short-term investments by contractual maturity was as follows: (in thousands) One year or shorter Total Balances as of March 31, 2017 Cash and cash equivalents (1) $ 43,084 $ 43,084 Short-term investments 28,250 28,250 Cash, cash equivalents and short-term investments $ 71,334 $ 71,334 Balances as of December 31, 2016 Cash and cash equivalents (1) $ 35,033 $ 35,033 Short-term investments 39,033 39,033 Cash, cash equivalents and short-term investments $ 74,066 $ 74,066 (1) Includes demand deposits and other cash, money market funds and other cash equivalent securities, all with 0-90 day maturity at purchase.

Net Loss Per Share (Tables)

Net Loss Per Share (Tables)	3 Months Ended
	Mar. 31, 2017
Earnings Per Share [Abstract]
Schedule of the computation of basic and diluted net income (loss) per share	The following table sets forth the computation of basic and diluted net loss per share (in thousands, except per share amounts): Three months ended March 31, 2017 2016 Numerator: Net loss $ (6,640 ) $ (3,584 ) Denominator: Weighted-average shares used to compute net loss per common share - basic and diluted 27,751 26,379 Net loss per share Basic and diluted $ (0.24 ) $ (0.14 )
Schedule of antidilutive securities excluded from computation of earnings per share	The following securities were not included in the calculation of diluted shares outstanding as the effect would have been anti-dilutive: Three months ended March 31, (in thousands) 2017 2016 Options to purchase common stock, including ESPP 2,193 3,125 Restricted stock units 2,147 1,371

Goodwill and Intangible Assets

Goodwill and Intangible Assets (Tables)	3 Months Ended
	Mar. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Finite-Lived Intangible Assets	The estimated useful lives and carrying value of acquired intangible assets are as follows: March 31, 2017 December 31, 2016 (in thousands) Range of Useful Life (years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed technology 3 to 7 $ 10,050 $ 3,459 $ 6,591 $ 10,050 $ 2,845 $ 7,205 Customer relationships 7 to 9 10,920 2,577 8,343 10,920 2,280 8,640 Backlog 3 1,400 194 1,206 1,400 78 1,322 Non-compete agreements 2 to 4 460 406 54 460 389 71 Trademarks 3 to 7 1,110 236 874 1,110 148 962 Intangible assets, net book value $ 23,940 $ 6,872 $ 17,068 $ 23,940 $ 5,740 $ 18,200
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense	Amortization of acquired intangible assets is reflected in the cost of revenue for developed technology and backlog and in operating expenses for the other intangible assets. The estimated future amortization of existing acquired intangible assets as of March 31, 2017 was as follows: (in thousands) Future amortization 2017 (remaining nine months) $ 3,411 2018 4,424 2019 3,880 2020 1,251 2021 1,127 2022 1,050 Thereafter 1,925 Future amortization expense $ 17,068

Balance Sheet Components (Table

Balance Sheet Components (Tables)	3 Months Ended
	Mar. 31, 2017
Balance Sheet Components [Abstract]
Inventories	Inventories (in thousands) March 31, December 31, Raw materials $ 84 $ 103 Finished goods 3,660 4,453 Total inventories $ 3,744 $ 4,556
Property and Equipment	Property and equipment, net (in thousands) March 31, December 31, Computer equipment and software $ 9,107 $ 8,971 Furniture, fixtures and equipment 1,797 1,726 Leasehold improvements 4,260 4,144 Manufacturing tools and equipment 3,070 3,019 Construction in process 12 74 Property and equipment, at cost 18,246 17,934 Less: Accumulated depreciation (12,395 ) (12,040 ) Property and equipment, net $ 5,851 $ 5,894 Depreciation and amortization expense was $0.7 million and $0.5 million for the three months ended March 31, 2017 and 2016 , respectively.
Schedule of Components of Leveraged Lease Investments	Net investment in sales-type leases The Company has sales-type leases with terms of 0.75 to 4 years. Sales-type lease receivables are collateralized by the underlying equipment. The components of the Company’s net investment in sales-type leases are as follows: (in thousands) March 31, December 31, Minimum payments to be received on sales-type leases $ 3,214 $ 3,566 Less: Unearned interest income and executory costs (1,635 ) (1,704 ) Net investment in sales-type leases 1,579 1,862 Less: Current portion (946 ) (1,066 ) Non-current net investment in sales-type leases $ 633 $ 796 There were no allowances for doubtful accounts on these leases as of March 31, 2017 and December 31, 2016 . There is no guaranteed or unguaranteed residual value on the leased equipment. The current and non-current net investments in sales-type leases are reported as components of the consolidated balance sheet captions “other receivables” and “other long-term assets,” respectively.
Schedule of Future Minimum Lease Payments for Capital Leases	The minimum payments expected to be received for future years under sales-type leases as of March 31, 2017 were as follows: (in thousands) Future lease payments 2017 (remaining nine months) $ 1,159 2018 1,257 2019 572 2020 226 2021 — Total $ 3,214
Accrued Liabilities	Accrued payroll and other current liabilities (in thousands) March 31, December 31, Payroll and related expenses $ 8,275 $ 10,385 Accrued payables 1,530 2,334 Deferred rent, current portion 237 229 Lease financing, current portion 799 801 Product warranty 499 596 Customer prepayments 683 769 Sales and use tax payable 335 451 Other 399 331 Total accrued payroll and other current liabilities $ 12,757 $ 15,896
Schedule of Product Warranty Liability	The changes in the Company’s product warranty reserve are as follows: Three months ended March 31, (in thousands) 2017 2016 Warranty balance at the beginning of the period $ 596 $ 806 Warranty expense accrued for shipments during the period 138 172 Changes in estimate related to pre-existing warranties (152 ) (201 ) Warranty settlements made (83 ) (157 ) Total product warranty 499 620 Less: Long-term portion — (36 ) Current portion of warranty balance at the end of the period $ 499 $ 584

Commitments and Contingencies (

Commitments and Contingencies (Tables)	3 Months Ended
	Mar. 31, 2017
Commitments and Contingencies Disclosure [Abstract]
Schedule of Future Minimum Rental Payments for Operating Leases	Future minimum lease payments at March 31, 2017 under non-cancelable operating leases are as follows: (in thousands) Operating leases 2017 (remaining nine months) $ 1,704 2018 2,205 2019 2,030 2020 1,687 2021 1,595 2022 402 Total minimum lease payments $ 9,623

Stock-based Compensation and 25

Stock-based Compensation and Awards (Tables)	3 Months Ended
	Mar. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Rollforward of stock option activity	A summary of the stock option activity for the three months ended March 31, 2017 is presented below: Options outstanding Number of Options Weighted Average Exercise Price Weighted average remaining contractual term Aggregate intrinsic value (in years) (in thousands) Outstanding at December 31, 2016 2,436,845 $ 10.71 5.09 $ 20,643 Options granted — Options exercised (292,468 ) 6.54 Options canceled (3,447 ) 9.15 Outstanding at March 31, 2017 2,140,930 $ 11.29 5.00 $ 29,098
Equity B-S-M Valuation Assumptions	The following Black-Scholes option-pricing assumptions were used for each respective period for the ESPP: Three months ended March 31, 2017 2016 Expected term (in years) 0.50 0.50 Volatility 32.0% 41.5% Risk-free interest rate 0.61% 0.33% Dividend yield 0% 0%
Rollforward of RSA and RSU activty	A summary of RSU activity for the three months ended March 31, 2017 is presented below: Restricted Stock Units Number of shares Weighted Average Grant Date Fair Value per Share Outstanding at December 31, 2016 2,128,735 $ 13.17 Granted 111,850 20.41 Vested (75,373 ) 13.71 Forfeited (18,412 ) 15.60 Outstanding at March 31, 2017 2,146,800 $ 13.50
Allocation of Recognized Period Costs	The following table presents the allocation of stock-based compensation expense: Three months ended March 31, (in thousands) 2017 2016 Cost of revenue $ 520 $ 269 Research and development 412 226 Sales and marketing 1,265 1,010 General and administrative 1,386 1,041 Total stock-based compensation $ 3,583 $ 2,546

Segments Segments (Tables)

Segments Segments (Tables)	3 Months Ended
	Mar. 31, 2017
Segment Reporting [Abstract]
Segments	The following table presents a summary of the operating segments: Three months ended March 31, (in thousands) 2017 2016 Revenue Product $ 20,033 $ 13,802 Service 16,262 12,975 Total revenue 36,295 26,777 Cost of Revenue Product 6,409 4,449 Service 9,155 5,650 Total cost of revenue 15,564 10,099 Gross profit Product 13,624 9,353 Service 7,107 7,325 Total gross profit 20,731 16,678 Operating expenses 27,205 20,334 Interest income, net and other 214 164 Loss before income taxes $ (6,260 ) $ (3,492 )

The Company and Summary of Si27

The Company and Summary of Significant Accounting Policies Narrative (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Accounting Policies [Abstract]
sales type capital leases transfered to banks	$ 0	$ 300,000
Initial financing liability during period incurred for future executory services on transfered leases	0	$ 400,000
Net Investment in Sales Type Leases	1,579,000		$ 1,862,000
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount	10,400,000
Cumulative Effect of New Accounting Principle in Period of Adoption	$ 400,000

Fair Value of Financial Instr28

Fair Value of Financial Instruments (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value, Assets, Level 2 to Level 1 Transfers, Amount	$ 0
Fair Value, Assets, Level 1 to Level 2 Transfers, Amount	0
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Transfers Into Level 3	0
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers out of Level 3	0
Assets, Fair Value Disclosure [Abstract]
Cash and Cash Equivalents, Fair Value Disclosure	43,084,000	$ 35,033,000
AFS Securities, Fair Value Disclosure	28,250,000	39,033,000
Fair Value, Measurements, Recurring
Assets, Fair Value Disclosure [Abstract]
Total assets measured at fair value	45,807,000	45,706,000
Fair Value, Measurements, Recurring | Level 1
Assets, Fair Value Disclosure [Abstract]
Total assets measured at fair value	11,909,000	4,996,000
Fair Value, Measurements, Recurring | Level 2
Assets, Fair Value Disclosure [Abstract]
Total assets measured at fair value	33,898,000	40,710,000
Fair Value, Measurements, Recurring | Money market funds
Assets, Fair Value Disclosure [Abstract]
Cash and Cash Equivalents, Fair Value Disclosure	11,909,000	4,996,000
Fair Value, Measurements, Recurring | Money market funds | Level 1
Assets, Fair Value Disclosure [Abstract]
Cash and Cash Equivalents, Fair Value Disclosure	11,909,000	4,996,000
Fair Value, Measurements, Recurring | Money market funds | Level 2
Assets, Fair Value Disclosure [Abstract]
Cash and Cash Equivalents, Fair Value Disclosure	0	0
Fair Value, Measurements, Recurring | Commercial paper
Assets, Fair Value Disclosure [Abstract]
AFS Securities, Fair Value Disclosure	2,082,000	1,322,000
Fair Value, Measurements, Recurring | Commercial paper | Level 1
Assets, Fair Value Disclosure [Abstract]
AFS Securities, Fair Value Disclosure	0	0
Fair Value, Measurements, Recurring | Commercial paper | Level 2
Assets, Fair Value Disclosure [Abstract]
AFS Securities, Fair Value Disclosure	2,082,000	1,322,000
Fair Value, Measurements, Recurring | U.S. government agency securities
Assets, Fair Value Disclosure [Abstract]
AFS Securities, Fair Value Disclosure	3,282,000	4,177,000
Fair Value, Measurements, Recurring | U.S. government agency securities | Level 1
Assets, Fair Value Disclosure [Abstract]
AFS Securities, Fair Value Disclosure	0	0
Fair Value, Measurements, Recurring | U.S. government agency securities | Level 2
Assets, Fair Value Disclosure [Abstract]
AFS Securities, Fair Value Disclosure	3,282,000	4,177,000
Fair Value, Measurements, Recurring | U.S. Treasury securities
Assets, Fair Value Disclosure [Abstract]
AFS Securities, Fair Value Disclosure	1,300,000	2,045,000
Fair Value, Measurements, Recurring | U.S. Treasury securities | Level 1
Assets, Fair Value Disclosure [Abstract]
AFS Securities, Fair Value Disclosure	0	0
Fair Value, Measurements, Recurring | U.S. Treasury securities | Level 2
Assets, Fair Value Disclosure [Abstract]
AFS Securities, Fair Value Disclosure	1,300,000	2,045,000
Fair Value, Measurements, Recurring | Corporate debt securities
Assets, Fair Value Disclosure [Abstract]
AFS Securities, Fair Value Disclosure	27,234,000	33,166,000
Fair Value, Measurements, Recurring | Corporate debt securities | Level 1
Assets, Fair Value Disclosure [Abstract]
AFS Securities, Fair Value Disclosure	0	0
Fair Value, Measurements, Recurring | Corporate debt securities | Level 2
Assets, Fair Value Disclosure [Abstract]
AFS Securities, Fair Value Disclosure	$ 27,234,000	$ 33,166,000

Schedule of Available for Sale

Schedule of Available for Sale Securities (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Cash and cash equivalents [Abstract]
Cash and Cash Equivalents, Amortized Cost	$ 43,086	$ 35,033
Cash And Cash Equivalents, Gross Unrealized Gains	0	0
Cash And Cash Equivalents, Gross Unrealized Losses	(2)	0
Cash and Cash Equivalents, Fair Value Disclosure	43,084	35,033
Short-term Investments [Abstract]
AFS Securities, Amortized Cost Basis	28,264	39,046
Available-for-sale Securities, Gross Unrealized Gain1	2	2
Available-for-sale Securities, Gross Unrealized Loss1	(16)	(15)
AFS Securities, Fair Value Disclosure	28,250	39,033
Cash, Cash Equivalents, and Short-term Investments [Abstract]
Cash, Cash Equiv. And S-T Investments, Amortized Cost	71,350	74,079
Cash, Cash Equiv. And S-T Investments, Gross Unrealized Gains	2	2
Cash, Cash Equiv. And S-T Investments, Gross Unrealized Losses	(18)	(15)
Cash, Cash Equiv. And S-T Investments, Fair Value Disclosure	71,334	74,066
Demand deposits and other cash
Cash and cash equivalents [Abstract]
Cash and Cash Equivalents, Amortized Cost	25,527	28,360
Cash And Cash Equivalents, Gross Unrealized Gains	0	0
Cash And Cash Equivalents, Gross Unrealized Losses	0	0
Cash and Cash Equivalents, Fair Value Disclosure	25,527	28,360
Money market funds
Cash and cash equivalents [Abstract]
Cash and Cash Equivalents, Amortized Cost	11,909	4,996
Cash And Cash Equivalents, Gross Unrealized Gains	0	0
Cash And Cash Equivalents, Gross Unrealized Losses	0	0
Cash and Cash Equivalents, Fair Value Disclosure	11,909	4,996
Commercial Paper in CE
Cash and cash equivalents [Abstract]
Cash and Cash Equivalents, Amortized Cost	600	549
Cash And Cash Equivalents, Gross Unrealized Gains	0	0
Cash And Cash Equivalents, Gross Unrealized Losses	0	0
Cash and Cash Equivalents, Fair Value Disclosure	600	549
U.S. government agency securities
Cash and cash equivalents [Abstract]
Cash and Cash Equivalents, Amortized Cost	400
Cash And Cash Equivalents, Gross Unrealized Gains	0
Cash And Cash Equivalents, Gross Unrealized Losses	0
Cash and Cash Equivalents, Fair Value Disclosure	400
Corporate Debt Securities
Cash and cash equivalents [Abstract]
Cash and Cash Equivalents, Amortized Cost	4,650	1,128
Cash And Cash Equivalents, Gross Unrealized Gains	0	0
Cash And Cash Equivalents, Gross Unrealized Losses	(2)	0
Cash and Cash Equivalents, Fair Value Disclosure	4,648	1,128
Commercial paper in STI
Short-term Investments [Abstract]
AFS Securities, Amortized Cost Basis	1,482	773
Available-for-sale Securities, Gross Unrealized Gain1	0	0
Available-for-sale Securities, Gross Unrealized Loss1	0	0
AFS Securities, Fair Value Disclosure	1,482	773
U.S. government agency securities
Short-term Investments [Abstract]
AFS Securities, Amortized Cost Basis	2,883	4,176
Available-for-sale Securities, Gross Unrealized Gain1	0	1
Available-for-sale Securities, Gross Unrealized Loss1	(1)	0
AFS Securities, Fair Value Disclosure	2,882	4,177
U.S. Treasury securities
Short-term Investments [Abstract]
AFS Securities, Amortized Cost Basis	1,301	2,045
Available-for-sale Securities, Gross Unrealized Gain1	0	0
Available-for-sale Securities, Gross Unrealized Loss1	(1)	0
AFS Securities, Fair Value Disclosure	1,300	2,045
Corporate Debt Securities
Short-term Investments [Abstract]
AFS Securities, Amortized Cost Basis	22,598	32,052
Available-for-sale Securities, Gross Unrealized Gain1	2	1
Available-for-sale Securities, Gross Unrealized Loss1	(14)	(15)
AFS Securities, Fair Value Disclosure	$ 22,586	$ 32,038

Contractual maturities of cash,

Contractual maturities of cash, cash equivalent and short-term investment (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Schedule of Available-for-sale Securities [Line Items]
Cash and cash equivalents (1)	$ 43,084	$ 35,033
Short-term investments	28,250	39,033
Cash, cash equivalents and short-term investments	71,334	74,066
Maturity up to one year
Schedule of Available-for-sale Securities [Line Items]
Cash and cash equivalents (1)	43,084	35,033
Short-term investments	28,250	39,033
Cash, cash equivalents and short-term investments	$ 71,334	$ 74,066

Schedule of the computation of

Schedule of the computation of basic and diluted net income (loss) per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Numerator:
Net loss	$ (6,640)	$ (3,584)
Denominator:
Weighted Average Number of Shares Outstanding, Basic and Diluted	27,751	26,379
Net loss per share
Earnings Per Share, Basic and Diluted	$ (0.24)	$ (0.14)

Schedule of antidilutive securi

Schedule of antidilutive securities excluded from computation of earnings per share (Details) - shares shares in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Options to purchase common stock, including ESPP
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	2,193	3,125
Restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	2,147	1,371

Schedule of Finite-Lived Intang

Schedule of Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangibles, AmortExp, 2021	$ 1,050
Finite-Lived Intangibles, AmortExp Remainder 2016	3,411
Accumulated Amortization	6,872	$ 5,740
Finite-Lived Intangible Assets, Net	17,068
Finite-Lived Intangible Assets, Useful Life
Intangible assets, gross	23,940	23,940
Intangible assets, net book value	17,068	18,200
Developed technology
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	10,050	10,050
Accumulated Amortization	3,459	2,845
Finite-Lived Intangible Assets, Net	6,591	7,205
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	10,920	10,920
Accumulated Amortization	2,577	2,280
Finite-Lived Intangible Assets, Net	8,343	8,640
Order or Production Backlog [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	1,400
Noncompete Agreements
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	460	460
Accumulated Amortization	406	389
Finite-Lived Intangible Assets, Net	54	71
Trademarks
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	1,110	1,110
Accumulated Amortization	236	148
Finite-Lived Intangible Assets, Net	$ 874	$ 962
Minimum | Developed technology
Finite-Lived Intangible Assets, Useful Life
Finite-lived intangible asset, useful life	3 years
Minimum | Customer relationships
Finite-Lived Intangible Assets, Useful Life
Finite-lived intangible asset, useful life	7 years
Minimum | Order or Production Backlog [Member]
Finite-Lived Intangible Assets, Useful Life
Finite-lived intangible asset, useful life	3 years
Minimum | Noncompete Agreements
Finite-Lived Intangible Assets, Useful Life
Finite-lived intangible asset, useful life	2 years
Minimum | Trademarks
Finite-Lived Intangible Assets, Useful Life
Finite-lived intangible asset, useful life	3 years
Maximum | Developed technology
Finite-Lived Intangible Assets, Useful Life
Finite-lived intangible asset, useful life	7 years
Maximum | Customer relationships
Finite-Lived Intangible Assets, Useful Life
Finite-lived intangible asset, useful life	9 years
Maximum | Order or Production Backlog [Member]
Finite-Lived Intangible Assets, Useful Life
Finite-lived intangible asset, useful life	3 years
Maximum | Noncompete Agreements
Finite-Lived Intangible Assets, Useful Life
Finite-lived intangible asset, useful life	4 years
Maximum | Trademarks
Finite-Lived Intangible Assets, Useful Life
Finite-lived intangible asset, useful life	7 years

Future amortization schedule (D

Future amortization schedule (Details) $ in Thousands	Mar. 31, 2017USD ($)
Goodwill and intangible assets [Abstract]
Finite-Lived Intangibles, AmortExp Remainder 2016	$ 3,411
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months	4,424
Finite-Lived Intangibles, AmortExp, 2018	3,880
Finite-Lived Intangibles, AmortExp, 2019	1,251
Finite-Lived Intangibles, AmortExp, 2020	1,127
Finite-Lived Intangibles, AmortExp, 2021	1,050
Finite-Lived Intangibles, AmortExp, after 2021	1,925
Finite-Lived Intangible Assets, Net	$ 17,068

Goodwill and Intangible Asset35

Goodwill and Intangible Assets Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Finite-Lived Intangible Assets [Line Items]
Goodwill	$ 49,246		$ 49,246
Intangibles - period amortization expense [Abstract]
Amortization expense	1,100	$ 200
Product Segment [Member]
Finite-Lived Intangible Assets [Line Items]
Goodwill	41,200
Service Segment [Member]
Finite-Lived Intangible Assets [Line Items]
Goodwill	$ 8,000

Inventories (Details)

Inventories (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Inventory, Net [Abstract]
Raw materials	$ 84	$ 103
Finished goods	3,660	4,453
Total inventories	$ 3,744	$ 4,556

Property and Equipment (Details

Property and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	$ 18,246		$ 17,934
Less: Accumulated depreciation	(12,395)		(12,040)
Property and equipment, net	5,851		5,894
Depreciation, Depletion and Amortization [Abstract]
Depreciation	700	$ 500
Computer equipment and software
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	9,107		8,971
Furniture, fixtures and equipment
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	1,797		1,726
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	4,260		4,144
Manufacturing tools and equipment
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	3,070		3,019
Construction in process
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	$ 12		$ 74

Investment in Sales Type Leases

Investment in Sales Type Leases (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Capital Leased Assets [Line Items]
Net Investment in Sales Type Leases, Future Minimum Payments-Gross	$ 3,214	$ 3,566
Net Investment in Sales Type Leases, Deferred Income	(1,635)	(1,704)
Net Investment in Sales Type Leases	1,579	1,862
Net Investment in Sales Type Leases, Current	(946)	(1,066)
Net Investment in Sales Type Leases, Noncurrent	$ 633	$ 796
Minimum
Capital Leased Assets [Line Items]
Lessors, Capital Leases, Term of contract	9 months
Maximum
Capital Leased Assets [Line Items]
Lessors, Capital Leases, Term of contract	4 years

Future payments- sales type lea

Future payments- sales type leases (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Balance Sheet Components [Abstract]
Sales-type Leases, Future Minimum Payments, Remainder of 2016	$ 1,159
Capital Leases, Future Minimum Payments Due in 2017	1,257
Capital Leases, Future Minimum Payments Due in Two Years	572
Sales-type Leases, Future Minimum Payments Due in 2018	226
Capital Leases, Future Minimum Payments Due in 2019	0
Net Investment in Sales Type Leases, Future Minimum Payments-Gross	$ 3,214	$ 3,566

Accrued Liabilities (Details)

Accrued Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Accrued Liabilities, Current [Abstract]
Payroll and related expenses	$ 8,275	$ 10,385
Accrued payables	1,530	2,334
Deferred Rent Credit, Current	237	229
Lease financing, current portion	799	801
Product warranty	499	596
Customer Refund Liability, Current	683	769
Sales and use tax payable	335	451
Other	399	331
Total accrued payroll and other current liabilities	$ 12,757	$ 15,896

Schedule of Product Liability (

Schedule of Product Liability (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward]
Product warranty accrual, at the beginning of the period	$ 596	$ 806
Warranty expenses accrued	138	172
Product Warranty Accrual, Preexisting, Increase (Decrease)	(152)	(201)
Warranty settlements made	(83)	(157)
Product warranty accrual, at the end of period	499	584
Product Warranty Accrual	499	620
Product Warranty Accrual, Noncurrent	$ 0	$ (36)

Schedule of Future Minimum Rent

Schedule of Future Minimum Rental Payments for Operating Leases (Details) $ in Thousands	Mar. 31, 2017USD ($)
Operating Leases, Future Minimum Payments Due, by FY
Remainder of 2016	$ 1,704
Operating Leases, Future Minimum Payments, 2017	2,205
Operating Leases, Future Minimum Payments, 2018	2,030
Operating Leases, Future Minimum Payments, 2019	1,687
Operating Leases, Future Minimum Payments, 2020	1,595
Operating Leases, Future Minimum Payments, 2021	402
Total minimum lease payments	$ 9,623

Commitments Narrative (Details)

Commitments Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Unrecorded Unconditional Purchase Obligation [Line Items]
Operating Leases, Rent Expense, Net	$ 0.6	$ 0.6
Inventories
Unrecorded Unconditional Purchase Obligation [Line Items]
Unrecorded Unconditional Purchase Obligation	$ 5.7		$ 5.4

Stock Option Activity (Details)

Stock Option Activity (Details) - Stock Options - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Number of Options (in shares):
Beginning balance	2,436,845
Options granted	0
Options exercised	(292,468)
Options canceled	(3,447)
Ending balance	2,140,930	2,436,845
Weighted Average Exercise Price (in dollars per share):
Beginning balance	$ 10.71
Options granted
Options exercised	6.54
Options canceled	9.15
Ending balance	$ 11.29	$ 10.71
Wtd avg remaining term, Outstanding	5 years	5 years 1 month 2 days
Aggregate intrinsic value, Outstanding	$ 29,098	$ 20,643

Summary of Equity B-S-M Assumpt

Summary of Equity B-S-M Assumptiuons (Details)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Equity Option
Equity B-S-M Fair Value Assumptions
Expected Term (in years)
Equity Option | Minimum
Equity B-S-M Fair Value Assumptions
Expected Term (in years)
Volatility		41.30%
Interest Rate		1.62%
Equity Option | Maximum
Equity B-S-M Fair Value Assumptions
Expected Term (in years)
Volatility		41.80%
Interest Rate		1.63%
2012 Employee Stock Purchase Plan | ESPP
Equity B-S-M Fair Value Assumptions
Expected Term (in years)	6 months	6 months
Volatility	32.00%	41.50%
Interest Rate	0.61%	0.33%
Dividend yield	0.00%	0.00%
2012 Employee Stock Purchase Plan | ESPP | Minimum
Equity B-S-M Fair Value Assumptions
Expected Term (in years)
Volatility	38.00%	33.60%
Interest Rate	0.33%	0.07%
2012 Employee Stock Purchase Plan | ESPP | Maximum
Equity B-S-M Fair Value Assumptions
Expected Term (in years)
Volatility	41.50%	57.80%
Interest Rate	0.38%	0.09%

Summary of Restricted Stock Act

Summary of Restricted Stock Activity (Details) - Restricted Stock Units	3 Months Ended
	Mar. 31, 2017$ / sharesshares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Comp-other than options - Period for Recognition- Comp cost not yet rocognized	1 year 10 months 10 days
Number of Shares:
Beginning balance | shares	2,128,735
Granted | shares	111,850
Vested | shares	(75,373)
Forfeited | shares	(18,412)
Ending balance | shares	2,146,800
Weighted Average Grant Date Fair Value per Share (in dollars per share):
Beginning balance | $ / shares	$ 13.17
Granted | $ / shares	20.41
Vested | $ / shares	13.71
Forfeited | $ / shares	15.60
Ending balance | $ / shares	$ 13.50

Share-based Compensaton Allocat

Share-based Compensaton Allocated to Expense Captions (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 3,583	$ 2,546
Cost of Sales
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	520	269
Research and Development Expense
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	412	226
Selling and Marketing Expense
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	1,265	1,010
General and Administrative Expense
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 1,386	$ 1,041

Narrative (Details)

Narrative (Details) $ in Millions	3 Months Ended
	Mar. 31, 2017USD ($)shares
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Unamortized Compensation Cost, Stock Options | $	$ 1.5
Uamortized Compensation Cost Not yet Recognized, Period Remaining, Options	1 year 3 months 4 days
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options | $	$ 20.6
Stock Comp-other than options - Period for Recognition- Comp cost not yet rocognized	1 year 10 months 10 days
2012 Stock Option Plan | Stock options and restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares Available for Grant | shares	1,771,674
2012 Employee Stock Purchase Plan | ESPP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares Available for Grant | shares	744,140

Segments Operating Segments (De

Segments Operating Segments (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2017USD ($)Segments	Mar. 31, 2016USD ($)
Segment Reporting [Abstract]
Number of reportable segments | Segments	2
Revenue
Product	$ 20,033	$ 13,802
Service	16,262	12,975
Total revenue	36,295	26,777
Cost of revenue
Product	6,409	4,449
Service	9,155	5,650
Cost of Goods and Services Sold	15,564	10,099
Gross profit
Product	13,624	9,353
Service	7,107	7,325
Total gross profit	20,731	16,678
Calculation of pretax profit (loss) [Abstract]
Operating expenses	27,205	20,334
Interest income, net and other	214	164
Loss before income taxes	$ (6,260)	$ (3,492)

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Income Tax Disclosure [Abstract]
Income Tax Expense (Benefit)	$ 380	$ 92

Business Acquisition - PPA (Det

Business Acquisition - PPA (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Goodwill	$ 49,246	$ 49,246

Business Acquisition Narrative

Business Acquisition Narrative (Details) - USD ($) $ in Thousands	Oct. 27, 2016	Mar. 31, 2017	Dec. 31, 2016
Business Acquisition [Line Items]
Goodwill		$ 49,246	$ 49,246
Payments to acquire businesses	$ 52,500
Noncompete Agreements | Minimum
Business Acquisition [Line Items]
Finite-lived intangible asset, useful life		2 years
Noncompete Agreements | Maximum
Business Acquisition [Line Items]
Finite-lived intangible asset, useful life		4 years
Product Segment [Member]
Business Acquisition [Line Items]
Goodwill		$ 41,200
Service Segment [Member]
Business Acquisition [Line Items]
Goodwill		$ 8,000

Subsequent Event Extension Heal

Subsequent Event Extension Healthcare Acquisition (Details) $ in Millions	Oct. 27, 2016USD ($)
Subsequent Event [Line Items]
Payments to acquire businesses	$ 52.5