Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 03, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | INFN | |
Entity Registrant Name | INFINERA CORP | |
Entity Central Index Key | 1,138,639 | |
Current Fiscal Year End Date | --12-29 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding (in shares) | 152,990,398 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 30, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 63,308 | $ 116,345 |
Short-term investments | 58,860 | 147,596 |
Accounts receivable, net of allowance for doubtful accounts of $869 in 2018 and $892 in 2017 | 148,026 | 126,152 |
Inventory | 219,343 | 214,704 |
Prepaid expenses and other current assets | 46,102 | 43,140 |
Total current assets | 535,639 | 647,937 |
Property, plant and equipment, net | 136,769 | 135,942 |
Intangible assets | 71,795 | 92,188 |
Goodwill | 179,165 | 195,615 |
Long-term investments | 6,586 | 36,129 |
Other non-current assets | 11,026 | 9,859 |
Total assets | 940,980 | 1,117,670 |
Current liabilities: | ||
Accounts payable | 80,345 | 58,124 |
Accrued expenses | 48,180 | 39,782 |
Accrued compensation and related benefits | 44,352 | 45,751 |
Short-term debt, net | 0 | 144,928 |
Accrued warranty | 13,670 | 13,670 |
Deferred revenue | 54,556 | 72,421 |
Total current liabilities | 241,103 | 374,676 |
Accrued warranty, non-current | 16,567 | 17,239 |
Deferred revenue, non-current | 14,932 | 22,502 |
Deferred tax liability | 16,247 | 21,609 |
Other long-term liabilities | 14,719 | 16,279 |
Commitments and contingencies (Note 16) | ||
Stockholders’ equity: | ||
Preferred stock, $0.001 par value Authorized shares – 25,000 and no shares issued and outstanding | 0 | 0 |
Common stock, $0.001 par value Authorized shares – 500,000 as of June 30, 2018 and December 30, 2017 Issued and outstanding shares – 152,940 as of June 30, 2018 and 149,471 as of December 30, 2017 | 153 | 149 |
Additional paid-in capital | 1,450,136 | 1,417,043 |
Accumulated other comprehensive income (loss) | (21,984) | 6,254 |
Accumulated deficit | (790,893) | (758,081) |
Total stockholders' equity | 637,412 | 665,365 |
Total liabilities and stockholders’ equity | $ 940,980 | $ 1,117,670 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 30, 2017 |
Statement of Financial Position [Abstract] | ||
Net of allowance for doubtful accounts | $ 869 | $ 892 |
Preferred stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 25,000,000 | 25,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Common stock, authorized shares (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 152,940,000 | 149,471,000 |
Common stock, shares outstanding (in shares) | 152,940,000 | 149,471,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jul. 01, 2017 | Jun. 30, 2018 | Jul. 01, 2017 | |
Revenue: | ||||
Total revenue | $ 208,227 | $ 176,821 | $ 410,908 | $ 352,343 |
Cost of revenue: | ||||
Restructuring and related | 26 | 0 | 43 | 0 |
Total cost of revenue | 123,922 | 111,989 | 244,435 | 223,455 |
Gross profit | 84,305 | 64,832 | 166,473 | 128,888 |
Operating expenses: | ||||
Research and development | 56,158 | 57,377 | 114,839 | 112,460 |
Sales and marketing | 29,721 | 29,397 | 60,213 | 58,838 |
General and administrative | 18,365 | 18,563 | 36,201 | 35,922 |
Restructuring and related | 1,680 | 0 | 1,517 | 0 |
Total operating expenses | 105,924 | 105,337 | 212,770 | 207,220 |
Loss from operations | (21,619) | (40,505) | (46,297) | (78,332) |
Other income (expense), net: | ||||
Interest income | 629 | 862 | 1,526 | 1,613 |
Interest expense | (2,501) | (3,456) | (6,184) | (6,859) |
Other gain (loss), net | 1,429 | (252) | 1,935 | (382) |
Total other income (expense), net | (443) | (2,846) | (2,723) | (5,628) |
Loss before income taxes | (22,062) | (43,351) | (49,020) | (83,960) |
Benefit from income taxes | (124) | (512) | (802) | (670) |
Net loss | $ (21,938) | $ (42,839) | $ (48,218) | $ (83,290) |
Net loss per common share: | ||||
Basic (in usd per share) | $ (0.14) | $ (0.29) | $ (0.32) | $ (0.57) |
Diluted (in usd per share) | $ (0.14) | $ (0.29) | $ (0.32) | $ (0.57) |
Weighted average shares used in computing net loss per common share: | ||||
Basic (in shares) | 152,259 | 147,538 | 151,296 | 146,662 |
Diluted (in shares) | 152,259 | 147,538 | 151,296 | 146,662 |
Product | ||||
Revenue: | ||||
Revenue | $ 175,288 | $ 143,360 | $ 346,917 | $ 290,413 |
Cost of revenue: | ||||
Cost of revenue | 110,857 | 100,302 | 218,522 | 199,634 |
Services | ||||
Revenue: | ||||
Revenue | 32,939 | 33,461 | 63,991 | 61,930 |
Cost of revenue: | ||||
Cost of revenue | $ 13,039 | $ 11,687 | $ 25,870 | $ 23,821 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jul. 01, 2017 | Jun. 30, 2018 | Jul. 01, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (21,938) | $ (42,839) | $ (48,218) | $ (83,290) |
Other comprehensive income (loss), net of tax: | ||||
Unrealized loss on available-for-sale investments | 224 | 22 | 99 | (60) |
Foreign currency translation adjustment | (23,495) | 18,426 | (28,311) | 24,643 |
Tax related to available-for-sale investment | (26) | 0 | (26) | 0 |
Net change in accumulated other comprehensive income (loss) | (23,297) | 18,448 | (28,238) | 24,583 |
Comprehensive loss | $ (45,235) | $ (24,391) | $ (76,456) | $ (58,707) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||
Jun. 30, 2018 | Jul. 01, 2017 | Jun. 30, 2018 | Jul. 01, 2017 | Dec. 30, 2017 | Jun. 30, 2018 | Dec. 30, 2017 | Jul. 01, 2017 | |||||||
Cash Flows from Operating Activities: | ||||||||||||||
Net loss | $ (21,938) | $ (42,839) | $ (48,218) | $ (83,290) | ||||||||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||||
Depreciation and amortization | 33,250 | 32,623 | ||||||||||||
Non-cash restructuring and related credits | (81) | 0 | ||||||||||||
Amortization of debt discount and issuance costs | 5,072 | 5,529 | ||||||||||||
Impairment of intangible assets | 0 | 252 | ||||||||||||
Stock-based compensation expense | 23,027 | 23,257 | ||||||||||||
Other loss | 167 | 320 | ||||||||||||
Changes in assets and liabilities: | ||||||||||||||
Accounts receivable | (22,015) | 27,629 | ||||||||||||
Inventory | (8,703) | (12,700) | ||||||||||||
Prepaid expenses and other assets | (1,809) | (8,127) | ||||||||||||
Accounts payable | 24,458 | 16,927 | ||||||||||||
Accrued liabilities and other expenses | (14,617) | (12,503) | ||||||||||||
Deferred revenue | 2,351 | 10,065 | ||||||||||||
Net cash used in operating activities | (7,118) | (18) | ||||||||||||
Cash Flows from Investing Activities: | ||||||||||||||
Purchase of available-for-sale investments | (2,986) | (107,854) | ||||||||||||
Proceeds from sales of available-for-sale investments | 23,114 | 3,998 | ||||||||||||
Proceeds from maturities of investments | 98,112 | 79,003 | ||||||||||||
Purchase of property and equipment | (21,503) | (39,200) | ||||||||||||
Net cash provided by (used in) investing activities | 96,737 | (64,053) | ||||||||||||
Cash Flows from Financing Activities: | ||||||||||||||
Acquisition of noncontrolling interest | 0 | (471) | ||||||||||||
Repayment of debt | (150,000) | 0 | ||||||||||||
Proceeds from issuance of common stock | 11,066 | 11,115 | ||||||||||||
Minimum tax withholding paid on behalf of employees for net share settlement | (964) | (823) | ||||||||||||
Net cash provided by (used in) financing activities | (139,898) | 9,821 | ||||||||||||
Effect of exchange rate changes on cash and restricted cash | (2,218) | 2,943 | ||||||||||||
Net change in cash, cash equivalents and restricted cash | (52,497) | (51,307) | ||||||||||||
Cash, cash equivalents and restricted cash at beginning of period | 121,486 | 177,580 | $ 177,580 | |||||||||||
Cash, cash equivalents and restricted cash at end of period | 68,989 | [1] | 126,273 | [1] | 68,989 | [1] | 126,273 | [1] | 121,486 | |||||
Supplemental disclosures of cash flow information: | ||||||||||||||
Cash paid for income taxes, net of refunds | 2,210 | 2,683 | ||||||||||||
Cash paid for interest | 1,328 | 1,316 | ||||||||||||
Supplemental schedule of non-cash investing activities: | ||||||||||||||
Transfer of inventory to fixed assets | 1,684 | 2,087 | ||||||||||||
Restricted Cash and Cash Equivalents [Abstract] | ||||||||||||||
Cash and cash equivalents | $ 63,308 | $ 116,345 | $ 119,820 | |||||||||||
Short-term restricted cash | 308 | 1,423 | ||||||||||||
Long-term restricted cash | 5,373 | 5,030 | ||||||||||||
Total cash, cash equivalents and restricted cash | $ 68,989 | [1] | $ 126,273 | [1] | $ 121,486 | $ 177,580 | $ 177,580 | $ 68,989 | [1] | $ 121,486 | $ 126,273 | [1] | ||
[1] | Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets: June 30, 2018 July 1, 2017 (In thousands)Cash and cash equivalents$63,308 $119,820Short-term restricted cash308 1,423Long-term restricted cash5,373 5,030Total cash, cash equivalents and restricted cash$68,989 $126,273 |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Significant Accounting Policies Basis of Presentation Infinera Corporation (the “Company”) prepared its interim condensed consolidated financial statements that accompany these notes in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”), consistent in all material respects with those applied in the Company’s Annual Report on Form 10-K for the fiscal year ended December 30, 2017 . The Company has made certain estimates, assumptions and judgments that can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements, as well as the reported amounts of revenue and expenses during the periods presented. Significant estimates, assumptions and judgments made by management include revenue recognition, stock-based compensation, inventory valuation, accrued warranty, business combinations, fair value measurement of investments and accounting for income taxes. Other estimates, assumptions and judgments made by management include allowances for sales returns, allowances for doubtful accounts, useful life of intangible assets, and property, plant and equipment. Management believes that the estimates and judgments upon which they rely are reasonable based upon information available to them at the time that these estimates and judgments are made. To the extent there are material differences between these estimates and actual results, the Company’s condensed consolidated financial statements will be affected. The interim financial information is unaudited, but reflects all adjustments that are, in management’s opinion, necessary to provide a fair presentation of results for the interim periods presented. All adjustments are of a normal recurring nature. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. This interim information should be read in conjunction with the consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 30, 2017 . To date, a few of the Company’s customers have accounted for a significant portion of its revenue. For the three months ended June 30, 2018 , two customers individually accounted for 23% and 13% of the Company's total revenue and for the corresponding period in 2017, three customers individually accounted for 17% , 10% and 10% of the Company's total revenue. For the six months ended June 30, 2018, two customers individually accounted for 26% and 12% of the Company's total revenue and for the corresponding period in 2017, one customer individually accounted for 18% of the Company's total revenue. There have been no material changes in the Company’s significant accounting policies for the six months ended June 30, 2018 as compare d to those disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 30, 2017 , with the exception of the Company's revenue recognition policy. Effective December 31, 2017, the Company adopted Accounting Standards Update No. 2014-09, "Revenue from Contracts with Customers (Topic 606)” (“ASC 606”). See Note 3, “Revenue Recognition” to the Notes to Condensed Consolidated Financial Statements for discussion on the impact of the adoption of these standards on the Company's policy for revenue recognition. The Company adopted Accounting Standards Update 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash” (“ASU 2016-18”), during the first quarter of fiscal 2018, using the retrospective transition approach. Restricted cash in the prior period has been included with cash and cash equivalents when reconciling the beginning and ending total amounts on the statement of cash flows for the six months ended July 1, 2017, to conform to the current period presentation. The adoption of ASU 2016-18 did not have a material impact on the cash flow activity presented on the Company's condensed consolidated statement of cash flows. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Pronouncements Recently Adopted In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118, “Income Tax Accounting Implications of the Tax Cuts and Jobs Act" (“SAB 118”), which allows the Company to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. Since the U.S. Tax Cuts and Jobs Act (the “Tax Act”) was passed in December 2017, and ongoing guidance and accounting interpretation are expected over the next 12 months, the Company considers the accounting of the transition tax and deferred tax re-measurements to be incomplete due to the forthcoming guidance and the ongoing analysis of final year-end data and tax positions. The Company expects to complete the analysis within the measurement period in accordance with SAB 118. In March 2018, the Financial Accounting Standards Board (the “FASB”) issued ASU 2018-05, “Amendments to SEC Paragraphs Pursuant to SAB 118” and added such SEC guidance to Accounting Standards Codification 740, “Income Taxes, codified under the title: Income Tax Accounting Implications of the Tax Cuts and Jobs Act.” In May 2017, the FASB issued Accounting Standards Update No. 2017-09, “Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting” (“ASU 2017-09”), which amends the scope of modification accounting for share-based payment arrangements, and provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under Topic 718. The Company's adoption of ASU 2017-09 during its first quarter of 2018 had no impact on its condensed consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. As such, restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and ending-of-period total amounts shown on the statement of cash flows. The Company adopted ASU 2016-18 during the first quarter of fiscal 2018, using the retrospective transition approach. See the condensed consolidated statements of cash flows for a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts on the condensed consolidated statements of cash flows. In May 2016, the FASB issued Accounting Standards Update No. 2016-11, “Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815): Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting (SEC Update)” (“ASU 2016-11”), which rescinds various standards codified as part of Topic 605, Revenue Recognition in relation to the future adoption of Topic 606. These rescissions include changes to topics pertaining to revenue and expense recognition for freight services in process, accounting for shipping and handling fees and costs, and accounting for consideration given by a vendor to a customer. The Company adopted ASU 2016-11 during the first quarter of 2018. See Note 3, “Revenue Recognition” to the Notes to Condensed Consolidated Financial Statements for more information. In May 2014, the FASB issued ASC 606, which creates a single, joint revenue standard that is consistent across all industries and markets for companies that prepare their financial statements in accordance with U.S. GAAP. Under ASC 606, an entity is required to recognize revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to receive in exchange for those goods or services. In August 2015, the FASB issued Accounting Standards update 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date,” which deferred the effective date of ASC 606 by one year with early adoption permitted beginning after December 15, 2016. The updated standard is effective for interim and annual periods beginning after December 15, 2017. In April 2016, the FASB issued Accounting Standards Update No. 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing,” which clarifies the implementation guidance on identifying performance obligations and licensing. In May 2016, the FASB issued Accounting Standards Update No. 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients,” which amends the guidance on collectability, noncash consideration, presentation of sales tax and transition. In December 2016, the FASB issued Accounting Standards Update No. 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers,” to increase stakeholders' awareness of the proposals and to expedite improvements to ASC 606. ASC 606 also includes Subtopic 340-40, “Other Assets and Deferred Costs - Contracts with Customers,” which requires the deferral of incremental costs of obtaining a contract with a customer. Collectively, the Company refers to ASC 606 and Subtopic 340-40 as “ASC 606.” The Company adopted ASC 606 as of December 31, 2017 using the modified retrospective transition method applied to those contracts that were not completed as of December 31, 2017. See Note 3, “Revenue Recognition” to the Notes to Condensed Consolidated Financial Statements for more information. In January 2016, the FASB issued Accounting Standards Update No. 2016-01, “Financial Instruments (Topic 825): Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”), which requires equity investments to be measured at fair value with changes in fair value recognized in the income statement and simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. The Company adopted ASU 2016-01 during its first quarter of 2018 and the adoption did not have a material impact on its condensed consolidated financial statements. See Note 4, “Fair Value Measurements” to the Notes to Condensed Consolidated Financial Statements for more information. Accounting Pronouncements Not Yet Effective In June 2018, the FASB issued Accounting Standards Update No. 2018-07, “Improvements to Nonemployee Share-Based Payment Accounting” (“ASU 2018-07”), which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under ASU 2018-07, certain guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. The guidance will be effective for the Company's first quarter of 2019 and early adoption is permitted. As the Company does not have material nonemployee awards, it does not expect the adoption of ASU 2018-07 to have a material impact on its consolidated financial statements. In January 2017, the FASB issued Accounting Standards Update No. 2017-04, “Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”). The guidance eliminates Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The same one-step impairment test will be applied to goodwill at all reporting units, even those with zero or negative carrying amounts. Entities will be required to disclose the amount of goodwill at reporting units with zero or negative carrying amounts. ASU 2017-04 will be effective for the Company's annual or any interim goodwill impairment tests in its first quarter of fiscal 2020. The Company is currently evaluating the impact the adoption of ASU 2017-04 will have on its consolidated financial statements. In June 2016, the FASB issued Accounting Standards Update No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”), which requires measurement and recognition of expected credit losses for financial assets held. This guidance is effective for the Company in its first quarter of fiscal 2020 and early adoption is permitted. The Company is currently evaluating the impact the adoption of ASU 2016-13 will have on its consolidated financial statements. In February 2016, the FASB issued Accounting Standards Update 2016-02, “Leases (Topic 842)” (“ASU 2016-02”), which amends the existing accounting standards for leases. The new standard requires lessees to record a right-of-use asset and a corresponding lease liability on the balance sheet (with the exception of short-term leases). For lessees, leases will continue to be classified as either operating or financing in the income statement. This guidance is effective for the Company in its first quarter of fiscal 2019 and early adoption is permitted. ASU 2016-02 is required to be applied with a modified retrospective approach and requires application of the new standard at the beginning of the earliest comparative period presented. In July 2018, the FASB issued ASU 2018-11 “Leases (Topic 842): Targeted Improvements,” (“ASU 2018-11”), which provides lessees an additional (and optional) transition method to apply the new leasing standard to all open leases at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company is currently evaluating the impact the adoption of ASU 2016-02 and ASU 2018-11 will have on its consolidated financial statements and expects to have increases in the assets and liabilities of its consolidated balance sheets. |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Effective December 31, 2017, the Company adopted ASC 606, using the modified retrospective method applied to those contracts that were not completed as of December 31, 2017. Results for the reporting periods after December 31, 2017 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historical accounting under Topic 605. The Company recognizes revenue when control of the promised goods or services is transferred to its customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company determines revenue recognition by applying the following five-step approach: • identification of the contract, or contracts, with a customer; • identification of the performance obligations in the contract; • determination of the transaction price; • allocation of the transaction price to the performance obligations in the contract; and • recognition of revenue when, or as, the Company satisfies a performance obligation. Many of the Company's product sales are sold in combination with installation and deployment services along with initial hardware and software support. The Company's product sales are also sold with spares management, on-site hardware replacement services, network management operations, software subscription, extended hardware warranty or training. Initial software and hardware support services are generally delivered over a one-year period in connection with the initial purchase. Software warranty provides customers with maintenance releases during the warranty support period and hardware warranty provides replacement or repair of equipment that fails to perform in line with specifications. Software subscription service includes software warranty and additionally provides customers with rights to receive unspecified software product upgrades released during the support period. Spares management and on-site hardware replacement services include the replacement of defective units at customer sites in accordance with specified service level agreements. Network operations management includes the day-to-day operation of a customer's network. These services are generally delivered on an annual basis. The Company evaluates each promised good and service in a contract to determine whether it represents a distinct performance obligation or should be accounted for as a combined performance obligation. Services revenue includes software subscription services, installation and deployment services, spares management, on-site hardware replacement services, network operations management, extended hardware warranty services and training. Revenue from software subscription, spares management, on-site hardware replacement services, network operations management and extended hardware warranty contracts is deferred and is recognized ratably over the contractual support period, which is generally one year, as services are provided over the course of the entire period. Revenue related to training and installation and deployment services is recognized upon completion of the services. Contracts and customer purchase orders are generally used to determine the existence of an arrangement. In addition, shipping documents and customer acceptances, when applicable, are used to verify delivery and transfer of title. The Company typically satisfies its performance obligations upon shipment or delivery of product depending on the contractual terms. Payment terms to customers generally range from net 30 to 120 days from invoice, which are considered to be standard payment terms. The Company assesses its ability to collect from its customers based primarily on the creditworthiness and past payment history of the customer. Customer product returns are approved on a case by case basis. Specific reserve provisions are made based upon a specific review of all the approved product returns where the customer has yet to return the products to generate the related sales return credit at the end of a period. Estimated sales returns are recorded as a reduction to revenue. For sales to resellers, the same revenue recognition criteria apply. It is the Company’s practice to identify an end-user prior to shipment to a reseller. The Company does not offer rights of return or price protection to its resellers. The Company reports revenue net of any required taxes collected from customers and remitted to government authorities, with the collected taxes recorded as current liabilities until remitted to the relevant government authority. ASC 606 Adoption The Company recorded a net reduction to the opening balance of its accumulated deficit of $15.4 million as of December 31, 2017 due to the cumulative impact of adopting ASC 606, with the impact primarily related to its services revenue. The impact to revenue for the three and six months ended June 30, 2018 was an increase of $1.6 million and a decrease of $1.6 million , respectively, as a result of applying ASC 606. The details of the significant changes and quantitative impact of the Company’s adoption of ASC 606 are set out below. Customer Purchase Commitments The Company makes available software licenses that are non-essential to the functionality of the hardware by providing customers the ability to purchase incremental bandwidth capacity. Line modules generally include a specific initial capacity and incremental capacity can be added by the purchase of Infinera Instant Bandwidth (“IB”) licenses. IB licenses are considered distinct performance obligations because customers can provision additional transmission capacity on demand without the deployment of any incremental equipment. Some contracts commit the customer to purchase incremental IB licenses within a specified time frame from the initial line module shipment. The time frame varies by customer and ranges between 12 to 24 months. If the customer does not purchase the additional capacity within the time frame as stated in the contract, the Company has the right to deliver and invoice such IB licenses to the customer. Under ASC 605, the additional incremental licenses were not included as an element of the initial arrangement because fees for the future purchase were not fixed. Under ASC 606, future committed licenses are considered to be additional performance obligations when a minimum purchase obligation is present, as evidenced by enforceable rights and obligations. As such, the Company is required to estimate the variable consideration for future IB licenses as part of determining the contract transaction price. Contract Termination Rights The contract term is determined on the basis of the period over which the parties to the contract have present enforceable rights and obligations. Certain customer contracts include a termination for convenience clause that allows the customer to terminate services without penalty, upon advance notification. The Company concluded that the duration of support contracts do not extend beyond the non-cancellable portion of the contract. Variable Consideration The consideration associated with customer contracts is generally fixed. Variable consideration includes discounts, rebates, refunds, credits, incentives, penalties, or other similar items. The amount of consideration that can vary is not a substantial portion of total consideration . Variable consideration estimates will be re-assessed at each reporting period until a final outcome is determined. The changes to the original transaction price due to a change in estimated variable consideration will be applied on a retrospective basis, with the adjustment recorded in the period in which the change occurs. Changes to variable consideration will be tracked and material changes disclosed. Stand-alone Selling Price Stand-alone selling price is the price at which an entity would sell a good or service on a stand-alone (or separate) basis at contract inception. Under the model, the observable price of a good or service sold separately provides the best evidence of stand-alone selling price. However, in certain situations, stand-alone selling prices will not be readily observable and the entity must estimate the stand-alone selling price. When allocating on a relative stand-alone selling price basis, any discount provided in the contract is generally allocated proportionately to all of the performance obligations in the contract. The majority of products and services offered by the Company have readily observable selling prices. For products and services that do not, the Company generally estimates stand-alone selling price using the market assessment approach based on expected selling price and adjusts those prices as necessary to reflect the Company’s costs and margins. As part of its stand-alone selling price policy, the Company reviews product pricing on a periodic basis to identify any significant changes and revise its expected selling price assumptions as appropriate. Shipping and Handling The Company treats shipping and handling activities as costs to fulfill the Company's promise to transfer products. Shipping and handling fees billed to customers are recorded as a reduction to cost of product. Capitalization of Costs to Obtain a Contract The Company has assessed the treatment of costs to obtain or fulfill a contract with a customer. Sales commissions have historically been expensed as incurred. Under ASC 606, the Company capitalizes sales commissions related to multi-year service contracts and amortizes the asset over the period of benefit, which is the service period. Sales commissions paid on contract renewals, including service contract renewals, is commensurate with the sales commissions paid on the initial contracts. The Company elected ASC 606's practical expedient to expense sales commissions as incurred when the amortization period of the related contract term is one year or less. These costs are recorded as sales and marketing expense and included on the balance sheet as accrued compensation and related benefits until paid. As of June 30, 2018, the ending balance of the Company’s capitalized costs to obtain a contract was $0.4 million . The Company's amortization expense was not material for the three and six months ended June 30, 2018. Disaggregation of Revenue The following table presents the Company's revenue disaggregated by revenue source (in thousands): Three Months Ended Six Months Ended June 30, 2018 July 1, 2017 June 30, 2018 July 1, 2017 Product $ 175,288 $ 143,360 $ 346,917 $ 290,413 Services 32,939 33,461 63,991 61,930 Total revenue $ 208,227 $ 176,821 $ 410,908 $ 352,343 The following tables present the Company's revenue disaggregated by geography, based on the shipping address of the customer and by customer channel (in thousands): Three Months Ended Six Months Ended June 30, 2018 July 1, 2017 (1) June 30, 2018 July 1, 2017 (1) United States $ 120,987 $ 112,196 $ 250,012 $ 211,976 Other Americas 4,877 2,971 10,092 9,006 Europe, Middle East and Africa 62,162 47,910 121,361 105,323 Asia Pacific 20,201 13,744 29,443 26,038 Total revenue $ 208,227 $ 176,821 $ 410,908 $ 352,343 Three Months Ended Six Months Ended June 30, 2018 July 1, 2017 (1) June 30, 2018 July 1, 2017 (1) Direct $ 195,624 $ 166,826 $ 384,086 $ 332,772 Indirect 12,603 9,995 26,822 19,571 Total revenue $ 208,227 $ 176,821 $ 410,908 $ 352,343 (1) Prior period amounts have not been adjusted under the modified retrospective method. Contract Balances The following table provides information about receivables, contract assets and contract liabilities from contracts with customers (in thousands): June 30, 2018 At Adoption Accounts receivable, net $ 148,026 $ 135,245 Contract assets $ 2,644 $ 2,825 Deferred revenue $ 69,488 $ 75,458 Revenue recognized for the six months ended June 30, 2018 that was included in the deferred revenue balance at the beginning of the reporting period was $26.9 million . Changes in the contract asset and liability balances during the three and six months ended June 30, 2018 were not materially impacted by other factors. Transaction Price Allocated to the Remaining Performance Obligation The Company’s remaining performance obligations represent the transaction price allocated to performance obligations that are unsatisfied or partially satisfied, consisting of deferred revenue and backlog. The Company’s backlog represents purchase orders received from customers for future product shipments and services. The Company’s backlog is subject to future events that could cause the amount or timing of the related revenue to change, and, in certain cases, may be canceled without penalty. Orders in backlog may be fulfilled several quarters following receipt or may relate to multi-year support service obligations. The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially satisfied) at the end of the reporting period (in thousands): Remainder of 2018 2019 2020 2021 2022 Thereafter Total Revenue expected to be recognized in the future as of June 30, 2018 $ 145,741 $ 23,591 $ 15,966 $ 3,555 $ 2,235 $ 2,042 $ 193,130 Impacts on Financial Statements The following tables summarize the impacts of adopting ASC 606 on the Company's condensed consolidated statement of operations for the three and six months ended June 30, 2018 and the Company's condensed consolidated balance sheet as of December 31, 2017 (in thousands): Three Months Ended June 30, 2018 As Reported Adjustments Balances Without Adoption of ASC 606 Income Statement Revenue Product $ 175,288 $ (2,839 ) $ 172,449 Services 32,939 1,198 34,137 $ 208,227 $ (1,641 ) $ 206,586 Costs and expenses Cost of revenue $ 123,922 $ 712 $ 124,634 Net loss $ (21,938 ) $ (2,353 ) $ (24,291 ) Net loss per share - basic and diluted $ (0.14 ) $ (0.02 ) $ (0.16 ) Six Months Ended June 30, 2018 As Reported Adjustments Balances Without Adoption of ASC 606 Income Statement Revenue Product $ 346,917 $ (895 ) $ 346,022 Services 63,991 2,480 66,471 $ 410,908 $ 1,585 $ 412,493 Costs and expenses Cost of revenue $ 244,435 $ 1,240 $ 245,675 Net loss $ (48,218 ) $ 345 $ (47,873 ) Net loss per share - basic and diluted $ (0.32 ) $ — $ (0.32 ) Balance at December 30, 2017 Adjustments due to ASC 606 As Adjusted Balance at December 31, 2017 Balance Sheet Assets Accounts receivable, net $ 126,152 $ 9,093 $ 135,245 Inventory $ 214,704 $ (239 ) $ 214,465 Prepaid expenses and other assets $ 43,339 $ 2,731 $ 46,070 Liabilities Accrued expenses $ 39,782 $ 15,645 $ 55,427 Deferred revenue $ 94,923 $ (19,465 ) $ 75,458 Equity Accumulated deficit $ (758,081 ) $ 15,406 $ (742,675 ) |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Pursuant to the accounting guidance for fair value measurements and its subsequent updates, fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. Valuation techniques used by the Company are based upon observable and unobservable inputs. Observable or market inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s assumptions about market participant assumptions based on the best information available. Observable inputs are the preferred source of values. These two types of inputs create the following fair value hierarchy: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Prices or valuations that require management inputs that are both significant to the fair value measurement and unobservable. The Company measures its cash equivalents, foreign currency exchange forward contracts and marketable debt securities at fair value and classifies its investments in accordance with the fair value hierarchy. The Company’s money market funds and U.S. treasuries are classified within Level 1 of the fair value hierarchy and are valued based on quoted prices in active markets for identical securities. The Company classifies its certificates of deposit, commercial paper, U.S. agency notes, corporate bonds and foreign currency exchange forward contracts within Level 2 of the fair value hierarchy as follows: Certificates of Deposit The Company reviews market pricing and other observable market inputs for the same or similar securities obtained from a number of industry standard data providers. In the event that a transaction is observed for the same or similar security in the marketplace, the price on that transaction reflects the market price and fair value on that day. In the absence of any observable market transactions for a particular security, the fair market value at period end would be equal to the par value. These inputs represent quoted prices for similar assets or these inputs have been derived from observable market data. Commercial Paper The Company reviews market pricing and other observable market inputs for the same or similar securities obtained from a number of industry standard data providers. In the event that a transaction is observed for the same or similar security in the marketplace, the price on that transaction reflects the market price and fair value on that day and then follows a revised accretion schedule to determine the fair market value at period end. In the absence of any observable market transactions for a particular security, the fair market value at period end is derived by accreting from the last observable market price. These inputs represent quoted prices for similar assets or these inputs have been derived from observable market data accreted mathematically to par. U.S. Agency Notes The Company reviews trading activity and pricing for its U.S. agency notes as of the measurement date. When sufficient quoted pricing for identical securities is not available, the Company uses market pricing and other observable market inputs for similar securities obtained from a number of industry standard data providers. These inputs represent quoted prices for similar assets in active markets or these inputs have been derived from observable market data. Corporate Bonds The Company reviews trading activity and pricing for each of the corporate bond securities in its portfolio as of the measurement date and determines if pricing data of sufficient frequency and volume in an active market exists in order to support Level 1 classification of these securities. If sufficient quoted pricing for identical securities is not available, the Company obtains market pricing and other observable market inputs for similar securities from a number of industry standard data providers. In instances where multiple prices exist for similar securities, these prices are used as inputs into a distribution-curve to determine the fair market value at period end. Foreign Currency Exchange Forward Contracts As discussed in Note 5, “Derivative Instruments” to the Notes to Condensed Consolidated Financial Statements, the Company mainly holds non-speculative foreign exchange forward contracts to hedge certain foreign currency exchange exposures. The Company estimates the fair values of derivatives based on quoted market prices or pricing models using current market rates. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, credit risk, foreign exchange rates, and forward and spot prices for currencies. The following tables represent the Company’s fair value hierarchy for its assets and liabilities measured at fair value on a recurring basis (in thousands): As of June 30, 2018 As of December 30, 2017 Fair Value Measured Using Fair Value Measured Using Level 1 Level 2 Total Level 1 Level 2 Total Assets Money market funds $ 231 $ — $ 231 $ 20,371 $ — $ 20,371 Certificates of deposit — — — — 240 240 Commercial paper — — — — 26,912 26,912 Corporate bonds — 46,881 46,881 — 118,558 118,558 U.S. agency notes — 5,485 5,485 — 5,480 5,480 U.S. treasuries 7,970 — 7,970 35,408 — 35,408 Total assets $ 8,201 $ 52,366 $ 60,567 $ 55,779 $ 151,190 $ 206,969 Liabilities Foreign currency exchange forward contracts $ — $ (167 ) $ (167 ) $ — $ (204 ) $ (204 ) During the three and six months ended June 30, 2018 , there were no transfers of assets or liabilities between Level 1 and Level 2 of the fair value hierarchy. As of June 30, 2018 and December 30, 2017 , none of the Company’s existing securities were classified as Level 3 securities. The Company classifies the following assets and liabilities within Level 3 of the fair value hierarchy and applies fair value accounting on a nonrecurring basis when impairment indicators exist or upon the existence of observable fair values: Equity Investment In 2016, the Company invested $7.0 million in a privately-held company. As of June 30, 2018, and December 30, 2017, the Company's equity investment balance was $5.1 million . Beginning the first quarter of 2018, the Company adopted ASU 2016-01, which requires equity investments to be measured at fair value with changes in fair value recognized in net income. As a result of adopting this new standard, the Company's non-marketable equity securities formerly classified as cost-method investments are measured and recorded using the measurement alternative. Equity securities measured and recorded using the measurement alternative are recorded at cost minus impairment, if any, plus or minus changes resulting from qualifying observable price changes. Adjustments resulting from impairments and qualifying observable price changes are recorded in the income statement. No initial adoption adjustment was recorded for these instruments since the standard was required to be applied prospectively for securities measured using the measurement alternative. The Company regularly evaluates the carrying value of its equity investment for impairment. When a qualitative assessment indicates that impairment exists, the Company measures the investment at fair value. Adjustments resulting from impairments are recorded in other income (expense), net, in the accompanying condensed consolidated statements of operations. As of December 30, 2017, the Company determined that its non-marketable equity securities formerly classified as a cost-method investment was impaired, resulting in an impairment charge of $1.9 million to adjust the carrying value to estimated fair value. During the three and six months ended June 30, 2018 and July 1, 2017, no impairment charges were recorded. Facilities-related Charges In the fourth quarter of 2017, the Company implemented a plan to restructure its worldwide operations (the “2017 Restructuring Plan”). As a result of the plan, the Company calculated the fair value of its facilities-related charges of $7.3 million , based on estimated future discounted cash flows and unobservable inputs, which included the amount and timing of estimated sublease rental receipts that the Company could reasonably obtain over the remaining lease term and the discount rate. During the first quarter of 2018, the Company revised the estimates to its facilities-related accruals. See Note 8, “Restructuring and Related Costs” to the Notes to Condensed Consolidated Financial Statements for more information. Cash, cash equivalents and investments were as follows (in thousands): June 30, 2018 Adjusted Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash $ 63,077 $ — $ — $ 63,077 Money market funds 231 — — 231 Total cash and cash equivalents $ 63,308 $ — $ — $ 63,308 Corporate bonds 45,663 — (258 ) 45,405 U.S. agency notes 5,500 — (15 ) 5,485 U.S. treasuries 7,996 — (26 ) 7,970 Total short-term investments $ 59,159 $ — $ (299 ) $ 58,860 Corporate bonds 1,496 — (20 ) 1,476 Total long-term investments $ 1,496 $ — $ (20 ) $ 1,476 Total cash, cash equivalents and investments $ 123,963 $ — $ (319 ) $ 123,644 December 30, 2017 Adjusted Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash $ 87,991 $ — $ — $ 87,991 Money market funds 20,371 — — 20,371 U.S. treasuries 7,984 — (1 ) 7,983 Total cash and cash equivalents $ 116,346 $ — $ (1 ) $ 116,345 Certificates of deposit 240 — — 240 Commercial paper 26,924 — (12 ) 26,912 Corporate bonds 90,685 — (155 ) 90,530 U.S. agency notes 2,500 — (11 ) 2,489 U.S. treasuries 27,495 — (70 ) 27,425 Total short-term investments $ 147,844 $ — $ (248 ) $ 147,596 Corporate bonds 28,186 — (158 ) 28,028 U.S. agency notes 3,002 — (11 ) 2,991 Total long-term investments $ 31,188 $ — $ (169 ) $ 31,019 Total cash, cash equivalents and investments $ 295,378 $ — $ (418 ) $ 294,960 As of June 30, 2018 , the Company’s available-for-sale investments have contractual maturity terms of up to 15 months . Gross realized gains and losses on investments were insignificant in all periods. The specific identification method is used to account for gains and losses on available-for-sale investments. As of June 30, 2018 , the Company had $122.2 million of cash, cash equivalents and short-term investments, including $32.6 million of cash and cash equivalents held by its foreign subsidiaries. The Company's cash in foreign locations is used for operational and investing activities in those locations, and the Company does not currently have the need or the intent to repatriate those funds to the United States. |
Derivative Instruments
Derivative Instruments | 6 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments Foreign Currency Exchange Forward Contracts The Company transacts business in various foreign currencies and has international sales, cost of sales, and expenses denominated in foreign currencies, and carries foreign-currency-denominated monetary assets and liabilities, subjecting the Company to foreign currency risk. The Company’s primary foreign currency risk management objective is to protect the U.S. dollar value of future cash flows and minimize the volatility of reported earnings. The Company utilizes foreign currency exchange forward contracts, primarily short term in nature. The Company periodically enters into foreign currency exchange forward contracts to manage its exposure to fluctuation in foreign exchange rates that arise from its euro and British pound denominated receivables and restricted cash balances. Gains and losses on these contracts are intended to offset the impact of foreign exchange rate fluctuations on the underlying foreign currency denominated accounts receivables and restricted cash, and therefore, do not subject the Company to material balance sheet risk. The Company also enters into foreign currency exchange forward contracts to reduce the volatility of cash flows primarily related to forecasted revenues and expenses denominated in euros, British pound and Swedish kronor (“SEK”). The contracts are settled at maturity and at rates agreed to at inception of the contracts. The gains and losses on these foreign currency derivatives are recorded to the consolidated statement of operations line item, in the current period, to which the item that is being economically hedged is recorded. During the first quarter of 2018, the Company posted $0.9 million of collateral on its derivative instruments to cover potential credit risk exposure. This amount is classified as other long-term restricted cash on the accompanying condensed consolidated balance sheets. For the three months ended June 30, 2018 and July 1, 2017 , the before-tax effect of the foreign currency exchange forward contracts were a gain of $1.2 million and a loss $1.5 million , respectively, and for the six months ended June 30, 2018 and July 1, 2017, the before-tax effect of the foreign currency exchange forward contracts were a gain of $0.5 million and a loss of $1.8 million , respectively. In each of these periods, the impact of the gross gains and losses were offset by foreign exchange rate fluctuations on the underlying foreign currency denominated amounts. As of June 30, 2018 , the Company did not designate foreign currency exchange forward contracts as hedges for accounting purposes and accordingly, changes in the fair value are recorded in the accompanying condensed consolidated statements of operations. These contracts were entered into with one high-quality institution and the Company consistently monitors the creditworthiness of the counterparties. The fair value of derivative instruments not designated as hedging instruments in the Company’s condensed consolidated balance sheets was as follows (in thousands): As of June 30, 2018 As of December 30, 2017 Gross Notional (1) Other Accrued Liabilities Gross Notional (1) Other Accrued Liabilities Foreign currency exchange forward contracts Related to euro denominated receivables $ 16,157 $ (165 ) $ 24,794 $ (202 ) Related to euro denominated restricted cash $ 245 (2 ) $ 252 (2 ) $ (167 ) $ (204 ) (1) Represents the face amounts of forward contracts that were outstanding as of the period noted. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill Goodwill is recorded when the purchase price of an acquisition exceeds the fair value of the net tangible and identified intangible assets acquired. The following table presents details of the Company’s goodwill during the six months ended June 30, 2018 (in thousands): Balance as of December 30, 2017 $ 195,615 Foreign currency translation adjustments (16,450 ) Balance as of June 30, 2018 $ 179,165 The gross carrying amount of goodwill may change due to the effects of foreign currency fluctuations as these assets are denominated in SEK. To date, the Company has zero accumulated impairment loss on goodwill. Intangible Assets The following tables present details of the Company’s intangible assets as of June 30, 2018 and December 30, 2017 (in thousands, except for weighted-average): June 30, 2018 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted-Average Remaining Useful Life (In Years) Intangible assets with finite lives: Customer relationships $ 46,754 $ (16,666 ) $ 30,088 5.1 Developed technology 95,895 (54,188 ) 41,707 2.2 Total intangible assets $ 142,649 $ (70,854 ) $ 71,795 3.4 December 30, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Remaining Useful Life (In Years) Intangible assets with finite lives: Customer relationships $ 51,050 $ (15,007 ) $ 36,043 5.6 Developed technology 104,708 (48,563 ) 56,145 2.7 Total intangible assets $ 155,758 $ (63,570 ) $ 92,188 3.9 The gross carrying amount of intangible assets and the related amortization expense of intangible assets may change due to the effects of foreign currency fluctuations as these assets are denominated in SEK. Amortization expense was $6.5 million and $13.4 million for the three and six months ended June 30, 2018 , respectively, and was $6.6 million and $12.9 million , respectively, for the corresponding periods in 2017. Intangible assets are carried at cost less accumulated amortization. Amortization expenses are recorded to the appropriate cost and expense categories. During 2017, the Company recorded an impairment charge to research and development expenses of $0.3 million for certain intangible assets, which the Company has determined that the carrying value will not be recoverable. During the first quarter of 2017, the Company transferred $0.3 million of its in-process technology to developed technology, which is being amortized over a useful life of five years. The following table summarizes the Company’s estimated future amortization expense of intangible assets with finite lives as of June 30, 2018 (in thousands): Fiscal Years Total Remainder of 2018 2019 2020 2021 2022 2023 and Thereafter Total future amortization expense $ 71,795 $ 12,634 $ 24,699 $ 18,024 $ 6,589 $ 6,016 $ 3,833 |
Balance Sheet Details
Balance Sheet Details | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Details | Balance Sheet Details Restricted Cash The Company’s restricted cash balance is primarily comprised of certificates of deposit and money market funds, of which the majority is not insured by the Federal Deposit Insurance Corporation. These amounts primarily collateralize the Company’s issuances of standby letters of credit and bank guarantees. Additionally, the Company's restricted cash balance includes amounts pledged as collateral on its derivative instruments. The following table provides details of selected balance sheet items (in thousands): June 30, 2018 December 30, 2017 Inventory Raw materials $ 30,503 $ 27,568 Work in process 61,648 59,662 Finished goods 127,192 127,474 Total inventory $ 219,343 $ 214,704 Property, plant and equipment, net Computer hardware $ 14,703 $ 13,881 Computer software (1) 32,835 32,521 Laboratory and manufacturing equipment 259,756 246,380 Land and building 12,347 12,347 Furniture and fixtures 2,517 2,474 Leasehold and building improvements 43,163 43,475 Construction in progress 33,431 34,816 Subtotal $ 398,752 $ 385,894 Less accumulated depreciation and amortization (261,983 ) (249,952 ) Total property, plant and equipment, net $ 136,769 $ 135,942 Accrued expenses Loss contingency related to non-cancelable purchase commitments $ 7,017 $ 6,379 Professional and other consulting fees 5,451 5,305 Taxes payable 3,589 3,707 Royalties 5,526 5,404 Restructuring accrual 3,425 5,490 Right of return 11,427 — Other accrued expenses 11,745 13,497 Total accrued expenses $ 48,180 $ 39,782 (1) Included in computer software at June 30, 2018 and December 30, 2017 were $11.4 million related to enterprise resource planning ( “ ERP ” ) systems that the Company implemented. The unamortized ERP costs at June 30, 2018 and December 30, 2017 were $3.8 million and $4.7 million , respectively. |
Restructuring and Related Costs
Restructuring and Related Costs | 6 Months Ended |
Jun. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | Restructuring and Related Costs In the fourth quarter of 2017, the Company implemented the 2017 Restructuring Plan in order to reduce expenses and establish a more cost-effective structure that better aligns the Company's operations with its long-term strategies. As part of the 2017 Restructuring Plan, the Company implemented several changes that it believes will help its research and development efficiency, with consolidation of its development sites, including closure of its Beijing, China design center, process changes to more broadly leverage the Company's engineering resources across regions and product line development, and prioritization of research and development initiatives. Outside of engineering, the Company also made changes to allow it to operate more efficiently as it scales the business, including reducing the Company's facilities footprint and writing off certain equipment that will not be utilized in the future. Finally, the Company realigned its inventory levels to match its new technology cadence and go to market strategies. As of December 30, 2017, the 2017 Restructuring Plan had been substantially completed and the Company does not expect to record significant future charges under this plan in 2018. During the six months ended June 30, 2018, the Company revised the estimates to its facilities-related and severance expenses, and recorded an impairment on term license agreements, as described further below. The following table presents restructuring and related costs (credits) included in cost of revenue and operating expenses in the accompanying consolidated statements of operations under the 2017 Restructuring Plan (in thousands): Three Months Ended Six Months Ended June 30, 2018 June 30, 2018 Cost of Revenue Operating Expenses Cost of Revenue Operating Expenses Severance and related expenses $ 26 $ 900 $ 43 $ 1,845 Facilities — 47 — (1,037 ) Asset impairment — (50 ) — (74 ) License impairment — 783 — 783 Total $ 26 $ 1,680 $ 43 $ 1,517 Restructuring liabilities are reported within accrued expenses and other long-term liabilities in the accompanying consolidated balance sheets (in thousands): December 30, 2017 Charges (Credits) Cash Non-cash Settlements and Other June 30, 2018 Severance and related expenses $ 3,672 $ 1,888 $ (4,029 ) $ — $ 1,531 Facilities 6,947 (1,037 ) (998 ) (40 ) 4,872 Asset impairment — (74 ) — 74 — License impairment — 783 — (96 ) 687 Total $ 10,619 $ 1,560 $ (5,027 ) $ (62 ) $ 7,090 During the first half of 2018, the Company revised its estimates related to its facilities closures due to the sublease of two restructured facilities and also recorded severance costs for additional impacted employees. Additionally, the Company recorded an impairment of $0.8 million related to term license agreements that were determined to have no future use. The Company expects the payments related to these term license agreements to be fully paid by the third quarter of 2019. As of June 30, 2018, the Company's restructuring liability was comprised of $4.9 million related to facility closures, with leases through January 2022, and $1.5 million of severance and related expenses, which are expected to be substantially paid by the second quarter of 2019 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) Accumulated other comprehensive income (loss) includes certain changes in equity that are excluded from net loss. The following table sets forth the changes in accumulated other comprehensive income (loss) by component for the six months ended June 30, 2018 (in thousands): Unrealized Loss on Other Available-for-Sale Securities Foreign Currency Translation Accumulated Tax Effect Total Balance at December 30, 2017 $ (418 ) $ 7,551 $ (879 ) $ 6,254 Net current-period other comprehensive loss 99 (28,311 ) (26 ) (28,238 ) Balance at June 30, 2018 $ (319 ) $ (20,760 ) $ (905 ) $ (21,984 ) |
Basic and Diluted Net Loss Per
Basic and Diluted Net Loss Per Common Share | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Net Loss Per Common Share | Basic and Diluted Net Loss Per Common Share Basic net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed using net loss and the weighted average number of common shares outstanding plus potentially dilutive common shares outstanding during the period. Potentially dilutive common shares include the assumed exercise of outstanding stock options, assumed release of outstanding restricted stock units (“RSUs”) and performance stock units (“PSUs”), and assumed issuance of common stock under the Company's Employee Stock Purchase Plan (“ESPP”) using the treasury stock method. Potentially dilutive common shares also include the assumed conversion of the $150.0 million in aggregate principal amount of 1.75% convertible senior notes due June 1, 2018 (the “Notes”) from the conversion spread (as further discussed in Note 11, “Convertible Senior Notes” to the Notes to Condensed Consolidated Financial Statements disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 30, 2017). The Company includes the common shares underlying PSUs in the calculation of diluted net income per share only when they become contingently issuable. The following table sets forth the computation of net loss per common share – basic and diluted (in thousands, except per share amounts): Three Months Ended Six Months Ended June 30, 2018 July 1, 2017 June 30, 2018 July 1, 2017 Net loss $ (21,938 ) $ (42,839 ) $ (48,218 ) $ (83,290 ) Weighted average common shares outstanding - basic and diluted 152,259 147,538 151,296 146,662 Net loss per common share - basic and diluted $ (0.14 ) $ (0.29 ) $ (0.32 ) $ (0.57 ) The Company incurred net losses during the three and six months ended June 30, 2018 and July 1, 2017, and as a result, potential common shares from stock options, RSUs, PSUs, assumed release of outstanding shares under the ESPP and assumed conversion of the Notes from the conversion spread were not included in the diluted shares used to calculate net loss per share, as their inclusion would have been anti-dilutive. The following sets forth the potentially dilutive shares excluded from the computation of the diluted net loss per share because their effect was anti-dilutive (in thousands): Three Months Ended Six Months Ended June 30, 2018 July 1, 2017 June 30, 2018 July 1, 2017 Stock options 1,118 1,407 1,153 1,521 RSUs 7,579 6,500 8,509 7,137 PSUs 1,242 1,464 1,394 1,439 ESPP shares — 892 1,124 923 Total 9,939 10,263 12,180 11,020 |
Convertible Senior Notes
Convertible Senior Notes | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Convertible Senior Notes | Convertible Senior Notes In May 2013, the Company issued the Notes, which matured on June 1, 2018. Upon maturity of the Notes, the Company repaid in full all $150.0 million in aggregate principal amount and the final coupon interest of $1.3 million . The net carrying amount of the debt obligation as of December 30, 2017 was as follows (in thousands): Principal $ 150,000 Unamortized discount (4,670 ) Unamortized issuance cost (402 ) Net carrying amount $ 144,928 As of December 30, 2017 , the carrying amount of the equity component of the Notes was $43.3 million . The following table sets forth total interest expense recognized related to the Notes (in thousands): Three Months Ended Six Months Ended June 30, 2018 July 1, 2017 June 30, 2018 July 1, 2017 Contractual interest expense $ 438 $ 656 $ 1,094 $ 1,313 Amortization of debt issuance costs 163 222 402 437 Amortization of debt discount 1,892 2,577 4,671 5,091 Total interest expense $ 2,493 $ 3,455 $ 6,167 $ 6,841 The coupon rate was 1.75% . For the three and six months ended June 30, 2018 and July 1, 2017 , the debt discount and debt issuance costs were amortized, using an annual effective interest rate of 10.23% , to interest expense over the term of the Notes. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Stock-based Compensation Plans The Company has stock-based compensation plans pursuant to which the Company has granted stock options, RSUs and PSUs. The Company also has an ESPP for all eligible employees. In February 2016, the Company's board of directors adopted the 2016 Equity Incentive Plan (“2016 Plan”) and the Company's stockholders approved the 2016 Plan in May 2016. In May 2018, the Company's stockholders approved an amendment to the 2016 Plan to increase the number of shares authorized for issuance under the 2016 Plan by 1.5 million shares. As of June 30, 2018 , the Company has reserved a total of 15.4 million shares of common stock for issuance of stock options, RSUs and PSUs to employees, non-employees, consultants and members of the Company's board of directors, pursuant to the 2016 Plan, plus any shares subject to awards granted under the Company’s 2007 Equity Incentive Plan (the “2007 Plan”) that, after the effective date of the 2016 Plan, expire, are forfeited or otherwise terminate without having been exercised in full to the extent such awards were exercisable, and shares issued pursuant to awards granted under the 2007 Plan that, after the effective date of the 2016 Plan, are forfeited to or repurchased by the Company due to failure to vest. The 2016 Plan has a maximum term of 10 years from the date of adoption, or it can be earlier terminated by the Company's board of directors. The 2007 Plan was canceled; however, it continues to govern outstanding grants under the 2007 Plan. The following tables summarize the Company’s equity award activity and related information (in thousands, except per share data): Number of Stock Options Weighted-Average Exercise Price Per Share Aggregate Intrinsic Value Outstanding at December 30, 2017 1,397 $ 8.11 $ 1 Stock options granted — $ — Stock options exercised (226 ) $ 7.44 $ 489 Stock options canceled (53 ) $ 11.57 Outstanding at June 30, 2018 1,118 $ 8.08 $ 2,062 Exercisable at June 30, 2018 1,118 $ 8.08 $ 2,062 Number of Restricted Stock Units Weighted- Average Grant Date Fair Value Per Share Aggregate Intrinsic Value Outstanding at December 30, 2017 6,791 $ 11.55 $ 42,988 RSUs granted 3,344 $ 10.92 RSUs released (2,021 ) $ 13.12 $ 22,849 RSUs canceled (535 ) $ 11.32 Outstanding at June 30, 2018 7,579 $ 10.87 $ 75,257 Number of Performance Stock Units Weighted- Average Grant Date Fair Value Per Share Aggregate Intrinsic Value Outstanding at December 30, 2017 1,367 $ 16.28 $ 8,651 PSUs granted 505 $ 15.87 PSUs released (28 ) $ 15.93 $ 273 PSUs canceled (602 ) $ 15.98 Outstanding at June 30, 2018 1,242 $ 16.26 $ 12,334 Expected to vest at June 30, 2018 1,054 $ 10,466 The aggregate intrinsic value of unexercised stock options is calculated as the difference between the closing price of the Company’s common stock of $9.93 at June 29, 2018 (the last trading day of the fiscal quarter) and the exercise prices of the underlying stock options. The aggregate intrinsic value of the stock options that have been exercised is calculated as the difference between the fair market value of the common stock at the date of exercise and the exercise price of the underlying stock options. The aggregate intrinsic value of unreleased RSUs and unreleased PSUs is calculated using the closing price of the Company's common stock of $9.93 at June 29, 2018 (the last trading day of the fiscal quarter). The aggregate intrinsic value of RSUs and PSUs released is calculated using the fair market value of the common stock at the date of release. The following table presents total stock-based compensation cost for instruments granted but not yet amortized, net of estimated forfeitures, of the Company’s equity compensation plans as of June 30, 2018 . These costs are expected to be amortized on a straight-line basis over the following weighted-average periods (in thousands, except for weighted-average period): Unrecognized Compensation Expense, Net Weighted- Average Period (in years) RSUs $ 71,263 2.8 PSUs $ 11,423 1.7 Employee Stock Options The Company did not grant any stock options during the three and six months ended June 30, 2018 . Amortization of stock-based compensation related to stock options in the three and six months ended June 30, 2018 and the corresponding periods in 2017 was insignificant. Employee Stock Purchase Plan The fair value of the shares was estimated at the date of grant using the following assumptions (expense amounts in thousands): Three Months Ended Six Months Ended Employee Stock Purchase Plan June 30, 2018 July 1, 2017 June 30, 2018 July 1, 2017 Volatility 62% 51% 62% 51% Risk-free interest rate 1.90% 0.81% 1.90% 0.81% Expected life 0.5 years 0.5 years 0.5 years 0.5 years Estimated fair value $3.13 $3.46 $3.13 $3.46 Total stock-based compensation expense $1,337 $1,392 $2,892 $3,073 Restricted Stock Units During the three and six months ended June 30, 2018 , the Company granted RSUs to employees and members of the Company's board of directors to receive 0.2 million shares and 3.3 million shares of the Company’s common stock, respectively. All RSUs awarded are subject to each individual's continued service to the Company through each applicable vesting date. The Company accounted for the fair value of the RSUs using the closing market price of the Company’s common stock on the date of grant. Amortization of stock-based compensation related to RSUs in the three and six months ended June 30, 2018 was approximately $8.0 million and $15.4 million , respectively, and was $8.4 million and $16.0 million in the corresponding periods of 2017, respectively. Performance Stock Units Pursuant to the 2007 Plan and the 2016 Plan, the Company has granted PSUs to certain of the Company’s executive officers, senior management and other employees. All PSUs awarded are subject to each individual's continued service to the Company through each applicable vesting date and if the performance metrics are not met within the time limits specified in the award agreements, the PSUs will be canceled. PSUs granted to the Company’s executive officers and senior management under the 2007 Plan during 2016 are based on the total stockholder return (“TSR”) of the Company's common stock price as compared to the TSR of the S&P North American Technology Multimedia Networking Index (“SPGIIPTR”) over the span of one year , two years and three years . The number of shares to be issued upon vesting of these PSUs range from zero to two times the target number of PSUs granted depending on the Company’s performance against the SPGIIPTR. PSUs granted to the Company’s executive officers and senior management under the 2016 Plan during 2017 and the first half of 2018 are based on the TSR of the Company's common stock price relative to the TSR of the individual companies listed in the SPGIIPTR over the span of one year, two years and three years. The number of shares to be issued upon vesting of these PSUs range from zero to two times the target number of PSUs granted depending on the Company’s performance against the individual companies listed in the SPGIIPTR. The ranges of estimated values of the PSUs granted that are compared to the index, as well as the assumptions used in calculating these values were based on estimates as follows: 2018 2017 2016 Index SPGIIPTR SPGIIPTR SPGIIPTR Index volatility 33% 33% - 34% 18% Infinera volatility 58% - 59% 55% - 56% 55% Risk-free interest rate 2.37% - 2.40% 1.41% - 1.63% 0.95% - 1.07% Correlation with index/index component 0.04 - 0.48 0.10 - 0.49 0.58 - 0.59 Estimated fair value $14.99 - $19.46 $15.23 - $17.35 $10.31 - $16.62 In addition, certain other PSUs granted to the Company’s executive officers, senior management and certain other employees will only vest upon the achievement of specific financial or operational performance criteria. The following table summarizes by grant year, the Company’s PSU activity for the six months ended June 30, 2018 (in thousands): Grant Year Total Number of Performance Stock Units 2015 2016 2017 2018 Outstanding at December 30, 2017 1,367 77 420 869 — PSUs granted 505 — — — 505 PSUs released (28 ) — (28 ) — — PSUs canceled (602 ) (77 ) (194 ) (331 ) — Outstanding at June 30, 2018 1,242 — 198 538 505 Amortization of stock-based compensation related to PSUs in the three and six months ended June 30, 2018 was approximately $2.6 million and $4.7 million , respectively, and was $2.8 million and $4.6 million in the corresponding periods of 2017, respectively. Stock-Based Compensation The following tables summarize the effects of stock-based compensation on the Company’s condensed consolidated balance sheets and statements of operations for the periods presented (in thousands): June 30, 2018 December 30, 2017 Stock-based compensation effects in inventory $ 5,222 $ 5,255 Three Months Ended Six Months Ended June 30, 2018 July 1, 2017 June 30, 2018 July 1, 2017 Stock-based compensation effects included in net loss before income taxes Cost of revenue $ 624 $ 834 $ 502 $ 1,558 Research and development 4,192 4,184 8,516 7,964 Sales and marketing 3,046 3,273 5,944 5,999 General and administration 2,767 2,852 5,534 5,392 $ 10,629 $ 11,143 $ 20,496 $ 20,913 Cost of revenue – amortization from balance sheet (1) 1,415 1,237 2,531 2,344 Total stock-based compensation expense $ 12,044 $ 12,380 $ 23,027 $ 23,257 (1) Stock-based compensation expense deferred to inventory and deferred inventory costs in prior periods and recognized in the current period. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Benefit from income taxes for the three and six months ended June 30, 2018 were $0.1 million and $0.8 million , respectively, on pre-tax losses of $22.1 million and $49.0 million , respectively. This compared to a benefit from income taxes of $0.5 million and $0.7 million , respectively, on pre-tax losses of $43.4 million and $84.0 million for the three and six months ended July 1, 2017, respectively. Benefit from income taxes decreased by approximately $0.4 million in the three months ended June 30, 2018 as a result of higher foreign tax expense, as compared to the corresponding period in 2017. Benefit from income taxes increased by $0.1 million relating to higher forecasted tax expense incurred ratably through the six months ended June 30, 2018, offset by the release of tax reserves due to statute of limitations expiration. Due to the Company’s current operating losses and tax loss carryforwards in the United States and cost-plus international structures outside of Sweden, the tax expense or benefit is less sensitive to pretax income or loss than would otherwise be expected, compared to the statutory tax rate. In all periods, the tax expense and benefit projected in the Company's effective tax rate assumptions primarily represents foreign taxes of the Company's overseas subsidiaries compensated on a cost-plus basis, as well as the results of the Company's Swedish operations, inclusive of purchase accounting amortization and other charges for the three and six months ended June 30, 2018. The Company must assess the likelihood that some portion or all of its deferred tax assets will be recovered from future taxable income within the respective jurisdictions. In the past, the Company established a valuation allowance against its deferred tax assets as it determined that its ability to recover the value of these assets did not meet the “more-likely-than-not” standard. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management judgment is required on an on-going basis to determine whether it needs to maintain the valuation allowance recorded against its net deferred tax assets. The Company must consider all positive and negative evidence, including its forecasts of taxable income over the applicable carryforward periods, its current financial performance, its market environment and other factors in evaluating the need for a valuation allowance against its net U.S. deferred tax assets. At June 30, 2018, the Company does not believe that it is more-likely-than-not that it would be able to utilize its domestic deferred tax assets in the foreseeable future. Accordingly, the domestic net deferred tax assets continued to be fully reserved with a valuation allowance. To the extent that the Company determines that deferred tax assets are realizable on a more-likely-than-not basis, and adjustment is needed, that adjustment will be recorded in the period that the determination is made and would generally decrease the valuation allowance and record a corresponding benefit to earnings. The Company reasonably estimated the impact of the Tax Act on its income tax provision for the year ended December 30, 2017, based on its understanding of the Tax Act and guidance at that time. The estimates are subject to adjustment during a measurement period not to extend beyond one year from the enactment date of the Tax Act, or by December 22, 2018. During the three and six months ended June 30, 2018, no adjustments to prior year estimates were made. Adjustments may be made during the measurement period subject to refinement of the Company's analysis and further technical guidance. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is the Company’s Chief Executive Officer (“CEO”). The Company’s CEO reviews financial information presented on a consolidated basis, accompanied by information about revenue by geographic region for purposes of allocating resources and evaluating financial performance. The Company has one business activity as a provider of optical transport networking equipment, software and services. Accordingly, the Company is considered to be in a single reporting segment and operating unit structure. The following table sets forth long-lived assets by geographic region (in thousands): June 30, 2018 December 30, 2017 United States $ 129,632 $ 128,582 Other Americas 1,237 661 Europe, Middle East and Africa 3,235 3,527 Asia Pacific 2,665 3,172 Total property, plant and equipment, net $ 136,769 $ 135,942 For information regarding revenue disaggregated by geography, see Note 3, “Revenue Recognition” to the Notes to Condensed Consolidated Financial Statements. |
Guarantees
Guarantees | 6 Months Ended |
Jun. 30, 2018 | |
Guarantees [Abstract] | |
Guarantees | Guarantees Product Warranties Activity related to product warranty was as follows (in thousands): Three Months Ended Six Months Ended June 30, 2018 July 1, 2017 June 30, 2018 July 1, 2017 Beginning balance $ 30,848 $ 35,980 $ 30,909 $ 40,342 Charges to operations 5,166 5,022 9,523 9,681 Utilization (4,067 ) (3,901 ) (8,505 ) (7,289 ) Change in estimate (1) (1,710 ) (4,701 ) (1,690 ) (10,334 ) Balance at the end of the period $ 30,237 $ 32,400 $ 30,237 $ 32,400 (1) The Company records product warranty liabilities based on the latest quality and cost information available as of the date the revenue is recorded. The changes in estimate shown here are due to changes in overall actual failure rates, the mix of new versus used units related to replacement of failed units, and changes in the estimated cost of repair. As the Company's products mature over time, failure rates and repair costs generally decline leading to favorable changes in warranty reserves. In addition, during the first quarter of 2017, due to product quality improvements, the Company revised certain estimates used in calculating its product warranties that resulted in a one-time reduction to the warranty accrual of $2.2 million . Letters of Credit and Bank Guarantees The Company had $3.8 million of standby letters of credit and bank guarantees outstanding as of June 30, 2018 that consisted of $1.9 million related to customer performance guarantees, $1.2 million related to value added tax and customs' licenses, and $0.7 million related to property leases. The Company had $4.2 million of standby letters of credit and bank guarantees outstanding as of December 30, 2017 that consisted of $2.2 million related to customer performance guarantees, $1.3 million related to a value added tax license and $0.7 million related to property leases. As of June 30, 2018 and December 30, 2017 , the Company had a line of credit for approximately $1.6 million and $1.6 million , respectively, to support the issuance of letters of credit, of which zero and zero had been issued and outstanding, respectively. The Company has pledged approximately $5.0 million and $5.2 million of assets of a subsidiary to secure this line of credit and other obligations as of June 30, 2018 and December 30, 2017 , respectively. |
Litigation and Contingencies
Litigation and Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation and Contingencies | Litigation and Contingencies Legal Matters On November 23, 2016, Oyster Optics, LLC (“Oyster Optics”) filed a complaint against the Company in the United States District Court for the Eastern District of Texas. The complaint asserts U.S. Patent Nos. 6,469,816, 6,476,952, 6,594,055, 7,099,592, 7,620,327 (the “'327 patent”), 8,374,511 (the “'511 patent”) and 8,913,898 (the “'898 patent”) (collectively, the “Oyster Optics patents in suit”). The complaint seeks unspecified damages and a permanent injunction. The Company filed its answer to Oyster Optics' complaint on February 3, 2017. The Company filed two petitions for Inter Partes Review (“IPR”) of the '898 patent with the U.S. Patent and Trademark Office (“USPTO”). Other defendants have filed IPR petitions in connection with the remaining Oyster Optics patents in suit. The USPTO instituted two IPRs of the '511 patent and two IPRs of '898 patent but denied IPR petitions in connection with the '327 patent. A Markman decision was issued on December 5, 2017 and fact discovery closed on December 22, 2017. Oyster Optics dropped all '511 and '898 patents, leaving only a few claims in the '327 patent at issue in the case. On May 15, 2018, Oyster Optics filed a new patent infringement complaint in the United States District Court for the Eastern District of Texas, naming the Company as a defendant. In its new complaint, Oyster Optics alleges infringement of the ‘327 patent, U.S. Patent No. 9,749,040 and the ‘898 patent. On June 8, 2018, the court granted the parties’ joint motion to sever and consolidate the first-filed lawsuit with the later filed case. The court has not set a procedural schedule for the consolidated case. The Company filed its answer to the new complaint on July 16, 2018. The Company is currently unable to predict the outcome of this litigation and therefore cannot reasonably estimate the possible loss or range of loss, if any, arising from this matter. On March 24, 2017, Core Optical Technologies, LLC (“Core Optical”) filed a complaint against the Company in the United States District Court for the Central District of California. The complaint asserts U.S. Patent No. 6,782,211 (the “Core Optical patent in suit”). The complaint seeks unspecified damages and a permanent injunction. The Company believes that it does not infringe any valid and enforceable claim of the Core Optical patent in suit and intends to defend this action vigorously. The Company filed its answer to Core Optical's complaint on September 25, 2017. A Markman hearing was held on May 9, 2018 and the court has set a trial for March 2019. On June 14, 2018, the Company filed a petition for IPR of the Core Optical patent in suit. Core Optical contacted the Company on July 19, 2018 to propose that the case be stayed pending the IPR. The Company agreed to Core Optical’s proposal, and the parties filed a joint motion to stay, which the court granted on July 31, 2018. The Company is unable to predict the outcome of this litigation at this time and therefore cannot reasonably estimate the possible loss or range of loss, if any, arising from this matter. In addition to the matters described above, the Company is subject to various legal proceedings, claims and litigation arising in the ordinary course of business. While the outcome of these matters is currently not determinable, the Company does not expect that the ultimate costs to resolve these matters will have a material effect on its consolidated financial position, results of operations or cash flows. Loss Contingencies The Company is subject to the possibility of various losses arising in the ordinary course of business. These may relate to disputes, litigation and other legal actions. In the preparation of its quarterly and annual financial statements, the Company considers the likelihood of loss or the incurrence of a liability, including whether it is probable, reasonably possible or remote that a liability has been incurred, as well as the Company’s ability to reasonably estimate the amount of loss, in determining loss contingencies. In accordance with U.S. GAAP, an estimated loss contingency is accrued when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. The Company regularly evaluates current information to determine whether any accruals should be adjusted and whether new accruals are required. As of June 30, 2018, the Company has accrued the estimated liabilities associated with certain loss contingencies. Indemnification Obligations From time to time, the Company enters into certain types of contracts that contingently require it to indemnify parties against third party claims. The terms of such indemnification obligations vary. These contracts may relate to: (i) certain real estate leases under which the Company may be required to indemnify property owners for environmental and other liabilities, and other claims arising from the Company’s use of the applicable premises; (ii) contracts with certain customers, which require the Company to indemnify them as further described below; and (iii) certain agreements with the Company’s officers, directors and certain key employees, under which the Company may be required to indemnify such persons for liabilities as further described below. In addition, the Company has agreed to indemnify certain customers for claims made against the Company’s products, where such claims allege infringement of third party intellectual property rights, including, but not limited to, patents, registered trademarks, and/or copyrights. Under the aforementioned intellectual property indemnification clauses, the Company may be obligated to defend the customer and pay for the damages awarded against the customer under an infringement claim as well as the customer’s attorneys’ fees and costs. These indemnification obligations generally do not expire after termination or expiration of the agreement containing the indemnification obligation. In certain cases, there are limits on and exceptions to the Company’s potential liability for indemnification. Although historically, the Company has not made significant payments under these indemnification obligations, the Company cannot estimate the amount of potential future payments, if any, that it might be required to make as a result of these agreements. The maximum potential amount of any future payments that the Company could be required to make under these indemnification obligations could be significant. As permitted under Delaware law and the Company’s charter and bylaws, the Company has agreements whereby it indemnifies certain of its officers and each of its directors. The term of the indemnification period is for the officer’s or director’s lifetime for certain events or occurrences while the officer or director is, or was, serving at the Company’s request in such capacity. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements could be significant; however, the Company has a director and officer insurance policy that may reduce its exposure and enable it to recover all or a portion of any future amounts paid. As a result of its insurance policy coverage, the Company believes the estimated fair value of these indemnification agreements is minimal. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Event On July 23, 2018, the Company announced its intent to acquire Telecom Holding Parent LLC, a privately held global supplier of open, hyperscale network solutions (such company, “Coriant” and such purchase, the “Acquisition”). The Company believes the Acquisition will significantly scale the Company as the next wave of global network spending begins, creating one of the world’s largest optical network equipment providers. Under the terms of a definitive purchase agreement governing the Acquisition, subject to customary adjustments, the Company will pay approximately $150 million in cash at closing, and estimated additional amounts of $25 million in the two quarters post-closing and $55 million over a period of years. The Company will issue approximately 21 million shares, which when combined with the cash consideration, results in total transaction consideration of approximately $430 million . The Acquisition is anticipated to close in the Company’s third fiscal quarter ending September 29, 2018, subject to customary closing conditions. |
Recent Accounting Pronounceme24
Recent Accounting Pronouncements (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Pronouncements Recently Adopted In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118, “Income Tax Accounting Implications of the Tax Cuts and Jobs Act" (“SAB 118”), which allows the Company to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. Since the U.S. Tax Cuts and Jobs Act (the “Tax Act”) was passed in December 2017, and ongoing guidance and accounting interpretation are expected over the next 12 months, the Company considers the accounting of the transition tax and deferred tax re-measurements to be incomplete due to the forthcoming guidance and the ongoing analysis of final year-end data and tax positions. The Company expects to complete the analysis within the measurement period in accordance with SAB 118. In March 2018, the Financial Accounting Standards Board (the “FASB”) issued ASU 2018-05, “Amendments to SEC Paragraphs Pursuant to SAB 118” and added such SEC guidance to Accounting Standards Codification 740, “Income Taxes, codified under the title: Income Tax Accounting Implications of the Tax Cuts and Jobs Act.” In May 2017, the FASB issued Accounting Standards Update No. 2017-09, “Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting” (“ASU 2017-09”), which amends the scope of modification accounting for share-based payment arrangements, and provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under Topic 718. The Company's adoption of ASU 2017-09 during its first quarter of 2018 had no impact on its condensed consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. As such, restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and ending-of-period total amounts shown on the statement of cash flows. The Company adopted ASU 2016-18 during the first quarter of fiscal 2018, using the retrospective transition approach. See the condensed consolidated statements of cash flows for a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts on the condensed consolidated statements of cash flows. In May 2016, the FASB issued Accounting Standards Update No. 2016-11, “Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815): Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting (SEC Update)” (“ASU 2016-11”), which rescinds various standards codified as part of Topic 605, Revenue Recognition in relation to the future adoption of Topic 606. These rescissions include changes to topics pertaining to revenue and expense recognition for freight services in process, accounting for shipping and handling fees and costs, and accounting for consideration given by a vendor to a customer. The Company adopted ASU 2016-11 during the first quarter of 2018. See Note 3, “Revenue Recognition” to the Notes to Condensed Consolidated Financial Statements for more information. In May 2014, the FASB issued ASC 606, which creates a single, joint revenue standard that is consistent across all industries and markets for companies that prepare their financial statements in accordance with U.S. GAAP. Under ASC 606, an entity is required to recognize revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to receive in exchange for those goods or services. In August 2015, the FASB issued Accounting Standards update 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date,” which deferred the effective date of ASC 606 by one year with early adoption permitted beginning after December 15, 2016. The updated standard is effective for interim and annual periods beginning after December 15, 2017. In April 2016, the FASB issued Accounting Standards Update No. 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing,” which clarifies the implementation guidance on identifying performance obligations and licensing. In May 2016, the FASB issued Accounting Standards Update No. 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients,” which amends the guidance on collectability, noncash consideration, presentation of sales tax and transition. In December 2016, the FASB issued Accounting Standards Update No. 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers,” to increase stakeholders' awareness of the proposals and to expedite improvements to ASC 606. ASC 606 also includes Subtopic 340-40, “Other Assets and Deferred Costs - Contracts with Customers,” which requires the deferral of incremental costs of obtaining a contract with a customer. Collectively, the Company refers to ASC 606 and Subtopic 340-40 as “ASC 606.” The Company adopted ASC 606 as of December 31, 2017 using the modified retrospective transition method applied to those contracts that were not completed as of December 31, 2017. See Note 3, “Revenue Recognition” to the Notes to Condensed Consolidated Financial Statements for more information. In January 2016, the FASB issued Accounting Standards Update No. 2016-01, “Financial Instruments (Topic 825): Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”), which requires equity investments to be measured at fair value with changes in fair value recognized in the income statement and simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. The Company adopted ASU 2016-01 during its first quarter of 2018 and the adoption did not have a material impact on its condensed consolidated financial statements. See Note 4, “Fair Value Measurements” to the Notes to Condensed Consolidated Financial Statements for more information. Accounting Pronouncements Not Yet Effective In June 2018, the FASB issued Accounting Standards Update No. 2018-07, “Improvements to Nonemployee Share-Based Payment Accounting” (“ASU 2018-07”), which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under ASU 2018-07, certain guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. The guidance will be effective for the Company's first quarter of 2019 and early adoption is permitted. As the Company does not have material nonemployee awards, it does not expect the adoption of ASU 2018-07 to have a material impact on its consolidated financial statements. In January 2017, the FASB issued Accounting Standards Update No. 2017-04, “Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”). The guidance eliminates Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The same one-step impairment test will be applied to goodwill at all reporting units, even those with zero or negative carrying amounts. Entities will be required to disclose the amount of goodwill at reporting units with zero or negative carrying amounts. ASU 2017-04 will be effective for the Company's annual or any interim goodwill impairment tests in its first quarter of fiscal 2020. The Company is currently evaluating the impact the adoption of ASU 2017-04 will have on its consolidated financial statements. In June 2016, the FASB issued Accounting Standards Update No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”), which requires measurement and recognition of expected credit losses for financial assets held. This guidance is effective for the Company in its first quarter of fiscal 2020 and early adoption is permitted. The Company is currently evaluating the impact the adoption of ASU 2016-13 will have on its consolidated financial statements. In February 2016, the FASB issued Accounting Standards Update 2016-02, “Leases (Topic 842)” (“ASU 2016-02”), which amends the existing accounting standards for leases. The new standard requires lessees to record a right-of-use asset and a corresponding lease liability on the balance sheet (with the exception of short-term leases). For lessees, leases will continue to be classified as either operating or financing in the income statement. This guidance is effective for the Company in its first quarter of fiscal 2019 and early adoption is permitted. ASU 2016-02 is required to be applied with a modified retrospective approach and requires application of the new standard at the beginning of the earliest comparative period presented. In July 2018, the FASB issued ASU 2018-11 “Leases (Topic 842): Targeted Improvements,” (“ASU 2018-11”), which provides lessees an additional (and optional) transition method to apply the new leasing standard to all open leases at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company is currently evaluating the impact the adoption of ASU 2016-02 and ASU 2018-11 will have on its consolidated financial statements and expects to have increases in the assets and liabilities of its consolidated balance sheets. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table presents the Company's revenue disaggregated by revenue source (in thousands): Three Months Ended Six Months Ended June 30, 2018 July 1, 2017 June 30, 2018 July 1, 2017 Product $ 175,288 $ 143,360 $ 346,917 $ 290,413 Services 32,939 33,461 63,991 61,930 Total revenue $ 208,227 $ 176,821 $ 410,908 $ 352,343 The following tables present the Company's revenue disaggregated by geography, based on the shipping address of the customer and by customer channel (in thousands): Three Months Ended Six Months Ended June 30, 2018 July 1, 2017 (1) June 30, 2018 July 1, 2017 (1) United States $ 120,987 $ 112,196 $ 250,012 $ 211,976 Other Americas 4,877 2,971 10,092 9,006 Europe, Middle East and Africa 62,162 47,910 121,361 105,323 Asia Pacific 20,201 13,744 29,443 26,038 Total revenue $ 208,227 $ 176,821 $ 410,908 $ 352,343 Three Months Ended Six Months Ended June 30, 2018 July 1, 2017 (1) June 30, 2018 July 1, 2017 (1) Direct $ 195,624 $ 166,826 $ 384,086 $ 332,772 Indirect 12,603 9,995 26,822 19,571 Total revenue $ 208,227 $ 176,821 $ 410,908 $ 352,343 (1) Prior period amounts have not been adjusted under the modified retrospective method. |
Contract with Customer, Asset and Liability | The following table provides information about receivables, contract assets and contract liabilities from contracts with customers (in thousands): June 30, 2018 At Adoption Accounts receivable, net $ 148,026 $ 135,245 Contract assets $ 2,644 $ 2,825 Deferred revenue $ 69,488 $ 75,458 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially satisfied) at the end of the reporting period (in thousands): Remainder of 2018 2019 2020 2021 2022 Thereafter Total Revenue expected to be recognized in the future as of June 30, 2018 $ 145,741 $ 23,591 $ 15,966 $ 3,555 $ 2,235 $ 2,042 $ 193,130 |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The following tables summarize the impacts of adopting ASC 606 on the Company's condensed consolidated statement of operations for the three and six months ended June 30, 2018 and the Company's condensed consolidated balance sheet as of December 31, 2017 (in thousands): Three Months Ended June 30, 2018 As Reported Adjustments Balances Without Adoption of ASC 606 Income Statement Revenue Product $ 175,288 $ (2,839 ) $ 172,449 Services 32,939 1,198 34,137 $ 208,227 $ (1,641 ) $ 206,586 Costs and expenses Cost of revenue $ 123,922 $ 712 $ 124,634 Net loss $ (21,938 ) $ (2,353 ) $ (24,291 ) Net loss per share - basic and diluted $ (0.14 ) $ (0.02 ) $ (0.16 ) Six Months Ended June 30, 2018 As Reported Adjustments Balances Without Adoption of ASC 606 Income Statement Revenue Product $ 346,917 $ (895 ) $ 346,022 Services 63,991 2,480 66,471 $ 410,908 $ 1,585 $ 412,493 Costs and expenses Cost of revenue $ 244,435 $ 1,240 $ 245,675 Net loss $ (48,218 ) $ 345 $ (47,873 ) Net loss per share - basic and diluted $ (0.32 ) $ — $ (0.32 ) Balance at December 30, 2017 Adjustments due to ASC 606 As Adjusted Balance at December 31, 2017 Balance Sheet Assets Accounts receivable, net $ 126,152 $ 9,093 $ 135,245 Inventory $ 214,704 $ (239 ) $ 214,465 Prepaid expenses and other assets $ 43,339 $ 2,731 $ 46,070 Liabilities Accrued expenses $ 39,782 $ 15,645 $ 55,427 Deferred revenue $ 94,923 $ (19,465 ) $ 75,458 Equity Accumulated deficit $ (758,081 ) $ 15,406 $ (742,675 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Measured at Fair Value on Recurring Basis | The following tables represent the Company’s fair value hierarchy for its assets and liabilities measured at fair value on a recurring basis (in thousands): As of June 30, 2018 As of December 30, 2017 Fair Value Measured Using Fair Value Measured Using Level 1 Level 2 Total Level 1 Level 2 Total Assets Money market funds $ 231 $ — $ 231 $ 20,371 $ — $ 20,371 Certificates of deposit — — — — 240 240 Commercial paper — — — — 26,912 26,912 Corporate bonds — 46,881 46,881 — 118,558 118,558 U.S. agency notes — 5,485 5,485 — 5,480 5,480 U.S. treasuries 7,970 — 7,970 35,408 — 35,408 Total assets $ 8,201 $ 52,366 $ 60,567 $ 55,779 $ 151,190 $ 206,969 Liabilities Foreign currency exchange forward contracts $ — $ (167 ) $ (167 ) $ — $ (204 ) $ (204 ) |
Investments at Fair Value | Cash, cash equivalents and investments were as follows (in thousands): June 30, 2018 Adjusted Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash $ 63,077 $ — $ — $ 63,077 Money market funds 231 — — 231 Total cash and cash equivalents $ 63,308 $ — $ — $ 63,308 Corporate bonds 45,663 — (258 ) 45,405 U.S. agency notes 5,500 — (15 ) 5,485 U.S. treasuries 7,996 — (26 ) 7,970 Total short-term investments $ 59,159 $ — $ (299 ) $ 58,860 Corporate bonds 1,496 — (20 ) 1,476 Total long-term investments $ 1,496 $ — $ (20 ) $ 1,476 Total cash, cash equivalents and investments $ 123,963 $ — $ (319 ) $ 123,644 December 30, 2017 Adjusted Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash $ 87,991 $ — $ — $ 87,991 Money market funds 20,371 — — 20,371 U.S. treasuries 7,984 — (1 ) 7,983 Total cash and cash equivalents $ 116,346 $ — $ (1 ) $ 116,345 Certificates of deposit 240 — — 240 Commercial paper 26,924 — (12 ) 26,912 Corporate bonds 90,685 — (155 ) 90,530 U.S. agency notes 2,500 — (11 ) 2,489 U.S. treasuries 27,495 — (70 ) 27,425 Total short-term investments $ 147,844 $ — $ (248 ) $ 147,596 Corporate bonds 28,186 — (158 ) 28,028 U.S. agency notes 3,002 — (11 ) 2,991 Total long-term investments $ 31,188 $ — $ (169 ) $ 31,019 Total cash, cash equivalents and investments $ 295,378 $ — $ (418 ) $ 294,960 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair Value of Derivative Instruments not Designated as Hedging Instruments | The fair value of derivative instruments not designated as hedging instruments in the Company’s condensed consolidated balance sheets was as follows (in thousands): As of June 30, 2018 As of December 30, 2017 Gross Notional (1) Other Accrued Liabilities Gross Notional (1) Other Accrued Liabilities Foreign currency exchange forward contracts Related to euro denominated receivables $ 16,157 $ (165 ) $ 24,794 $ (202 ) Related to euro denominated restricted cash $ 245 (2 ) $ 252 (2 ) $ (167 ) $ (204 ) (1) Represents the face amounts of forward contracts that were outstanding as of the period noted. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table presents details of the Company’s goodwill during the six months ended June 30, 2018 (in thousands): Balance as of December 30, 2017 $ 195,615 Foreign currency translation adjustments (16,450 ) Balance as of June 30, 2018 $ 179,165 |
Schedule of Finite-Lived Intangible Assets | The following tables present details of the Company’s intangible assets as of June 30, 2018 and December 30, 2017 (in thousands, except for weighted-average): June 30, 2018 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted-Average Remaining Useful Life (In Years) Intangible assets with finite lives: Customer relationships $ 46,754 $ (16,666 ) $ 30,088 5.1 Developed technology 95,895 (54,188 ) 41,707 2.2 Total intangible assets $ 142,649 $ (70,854 ) $ 71,795 3.4 December 30, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Remaining Useful Life (In Years) Intangible assets with finite lives: Customer relationships $ 51,050 $ (15,007 ) $ 36,043 5.6 Developed technology 104,708 (48,563 ) 56,145 2.7 Total intangible assets $ 155,758 $ (63,570 ) $ 92,188 3.9 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The following table summarizes the Company’s estimated future amortization expense of intangible assets with finite lives as of June 30, 2018 (in thousands): Fiscal Years Total Remainder of 2018 2019 2020 2021 2022 2023 and Thereafter Total future amortization expense $ 71,795 $ 12,634 $ 24,699 $ 18,024 $ 6,589 $ 6,016 $ 3,833 |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Details of Selected Balance Sheet Items | The following table provides details of selected balance sheet items (in thousands): June 30, 2018 December 30, 2017 Inventory Raw materials $ 30,503 $ 27,568 Work in process 61,648 59,662 Finished goods 127,192 127,474 Total inventory $ 219,343 $ 214,704 Property, plant and equipment, net Computer hardware $ 14,703 $ 13,881 Computer software (1) 32,835 32,521 Laboratory and manufacturing equipment 259,756 246,380 Land and building 12,347 12,347 Furniture and fixtures 2,517 2,474 Leasehold and building improvements 43,163 43,475 Construction in progress 33,431 34,816 Subtotal $ 398,752 $ 385,894 Less accumulated depreciation and amortization (261,983 ) (249,952 ) Total property, plant and equipment, net $ 136,769 $ 135,942 Accrued expenses Loss contingency related to non-cancelable purchase commitments $ 7,017 $ 6,379 Professional and other consulting fees 5,451 5,305 Taxes payable 3,589 3,707 Royalties 5,526 5,404 Restructuring accrual 3,425 5,490 Right of return 11,427 — Other accrued expenses 11,745 13,497 Total accrued expenses $ 48,180 $ 39,782 (1) Included in computer software at June 30, 2018 and December 30, 2017 were $11.4 million related to enterprise resource planning ( “ ERP ” ) systems that the Company implemented. The unamortized ERP costs at June 30, 2018 and December 30, 2017 were $3.8 million and $4.7 million , respectively. |
Restructuring and Related Cos30
Restructuring and Related Costs (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | The following table presents restructuring and related costs (credits) included in cost of revenue and operating expenses in the accompanying consolidated statements of operations under the 2017 Restructuring Plan (in thousands): Three Months Ended Six Months Ended June 30, 2018 June 30, 2018 Cost of Revenue Operating Expenses Cost of Revenue Operating Expenses Severance and related expenses $ 26 $ 900 $ 43 $ 1,845 Facilities — 47 — (1,037 ) Asset impairment — (50 ) — (74 ) License impairment — 783 — 783 Total $ 26 $ 1,680 $ 43 $ 1,517 |
Schedule of Restructuring Reserve by Type of Cost | Restructuring liabilities are reported within accrued expenses and other long-term liabilities in the accompanying consolidated balance sheets (in thousands): December 30, 2017 Charges (Credits) Cash Non-cash Settlements and Other June 30, 2018 Severance and related expenses $ 3,672 $ 1,888 $ (4,029 ) $ — $ 1,531 Facilities 6,947 (1,037 ) (998 ) (40 ) 4,872 Asset impairment — (74 ) — 74 — License impairment — 783 — (96 ) 687 Total $ 10,619 $ 1,560 $ (5,027 ) $ (62 ) $ 7,090 |
Accumulated Other Comprehensi31
Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Summary of Changes in Accumulated Other Comprehensive Income (Loss) | The following table sets forth the changes in accumulated other comprehensive income (loss) by component for the six months ended June 30, 2018 (in thousands): Unrealized Loss on Other Available-for-Sale Securities Foreign Currency Translation Accumulated Tax Effect Total Balance at December 30, 2017 $ (418 ) $ 7,551 $ (879 ) $ 6,254 Net current-period other comprehensive loss 99 (28,311 ) (26 ) (28,238 ) Balance at June 30, 2018 $ (319 ) $ (20,760 ) $ (905 ) $ (21,984 ) |
Basic and Diluted Net Loss Pe32
Basic and Diluted Net Loss Per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Computation of Net Income (Loss) Per Common Share Basic and Diluted | The following table sets forth the computation of net loss per common share – basic and diluted (in thousands, except per share amounts): Three Months Ended Six Months Ended June 30, 2018 July 1, 2017 June 30, 2018 July 1, 2017 Net loss $ (21,938 ) $ (42,839 ) $ (48,218 ) $ (83,290 ) Weighted average common shares outstanding - basic and diluted 152,259 147,538 151,296 146,662 Net loss per common share - basic and diluted $ (0.14 ) $ (0.29 ) $ (0.32 ) $ (0.57 ) |
Antidilutive Shares Excluded from Computation of Diluted Net Income (Loss) Per Share | The following sets forth the potentially dilutive shares excluded from the computation of the diluted net loss per share because their effect was anti-dilutive (in thousands): Three Months Ended Six Months Ended June 30, 2018 July 1, 2017 June 30, 2018 July 1, 2017 Stock options 1,118 1,407 1,153 1,521 RSUs 7,579 6,500 8,509 7,137 PSUs 1,242 1,464 1,394 1,439 ESPP shares — 892 1,124 923 Total 9,939 10,263 12,180 11,020 |
Convertible Senior Notes (Table
Convertible Senior Notes (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Components of Convertible Senior Notes | The net carrying amount of the debt obligation as of December 30, 2017 was as follows (in thousands): Principal $ 150,000 Unamortized discount (4,670 ) Unamortized issuance cost (402 ) Net carrying amount $ 144,928 |
Interest Expense Recognized Related To Notes | The following table sets forth total interest expense recognized related to the Notes (in thousands): Three Months Ended Six Months Ended June 30, 2018 July 1, 2017 June 30, 2018 July 1, 2017 Contractual interest expense $ 438 $ 656 $ 1,094 $ 1,313 Amortization of debt issuance costs 163 222 402 437 Amortization of debt discount 1,892 2,577 4,671 5,091 Total interest expense $ 2,493 $ 3,455 $ 6,167 $ 6,841 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Company's Equity Award Activity - Options | The following tables summarize the Company’s equity award activity and related information (in thousands, except per share data): Number of Stock Options Weighted-Average Exercise Price Per Share Aggregate Intrinsic Value Outstanding at December 30, 2017 1,397 $ 8.11 $ 1 Stock options granted — $ — Stock options exercised (226 ) $ 7.44 $ 489 Stock options canceled (53 ) $ 11.57 Outstanding at June 30, 2018 1,118 $ 8.08 $ 2,062 Exercisable at June 30, 2018 1,118 $ 8.08 $ 2,062 |
Summary of Company's Equity Award Activity - RSUs | Number of Restricted Stock Units Weighted- Average Grant Date Fair Value Per Share Aggregate Intrinsic Value Outstanding at December 30, 2017 6,791 $ 11.55 $ 42,988 RSUs granted 3,344 $ 10.92 RSUs released (2,021 ) $ 13.12 $ 22,849 RSUs canceled (535 ) $ 11.32 Outstanding at June 30, 2018 7,579 $ 10.87 $ 75,257 |
Summary of Company's Equity Award Activity - PSUs | Number of Performance Stock Units Weighted- Average Grant Date Fair Value Per Share Aggregate Intrinsic Value Outstanding at December 30, 2017 1,367 $ 16.28 $ 8,651 PSUs granted 505 $ 15.87 PSUs released (28 ) $ 15.93 $ 273 PSUs canceled (602 ) $ 15.98 Outstanding at June 30, 2018 1,242 $ 16.26 $ 12,334 Expected to vest at June 30, 2018 1,054 $ 10,466 |
Total Stock Based Compensation Cost for Instruments Granted but Not Yet Amortized | The following table presents total stock-based compensation cost for instruments granted but not yet amortized, net of estimated forfeitures, of the Company’s equity compensation plans as of June 30, 2018 . These costs are expected to be amortized on a straight-line basis over the following weighted-average periods (in thousands, except for weighted-average period): Unrecognized Compensation Expense, Net Weighted- Average Period (in years) RSUs $ 71,263 2.8 PSUs $ 11,423 1.7 |
Estimated Fair Value of ESPP Shares | The fair value of the shares was estimated at the date of grant using the following assumptions (expense amounts in thousands): Three Months Ended Six Months Ended Employee Stock Purchase Plan June 30, 2018 July 1, 2017 June 30, 2018 July 1, 2017 Volatility 62% 51% 62% 51% Risk-free interest rate 1.90% 0.81% 1.90% 0.81% Expected life 0.5 years 0.5 years 0.5 years 0.5 years Estimated fair value $3.13 $3.46 $3.13 $3.46 Total stock-based compensation expense $1,337 $1,392 $2,892 $3,073 |
Schedule of Share-based Payment Award, Valuation Assumptions | The ranges of estimated values of the PSUs granted that are compared to the index, as well as the assumptions used in calculating these values were based on estimates as follows: 2018 2017 2016 Index SPGIIPTR SPGIIPTR SPGIIPTR Index volatility 33% 33% - 34% 18% Infinera volatility 58% - 59% 55% - 56% 55% Risk-free interest rate 2.37% - 2.40% 1.41% - 1.63% 0.95% - 1.07% Correlation with index/index component 0.04 - 0.48 0.10 - 0.49 0.58 - 0.59 Estimated fair value $14.99 - $19.46 $15.23 - $17.35 $10.31 - $16.62 |
Schedule of Nonvested Performance Based Units Activity by Grant Year | The following table summarizes by grant year, the Company’s PSU activity for the six months ended June 30, 2018 (in thousands): Grant Year Total Number of Performance Stock Units 2015 2016 2017 2018 Outstanding at December 30, 2017 1,367 77 420 869 — PSUs granted 505 — — — 505 PSUs released (28 ) — (28 ) — — PSUs canceled (602 ) (77 ) (194 ) (331 ) — Outstanding at June 30, 2018 1,242 — 198 538 505 |
Summary of Effects of Stock-Based Compensation on Company's Balance Sheets and Statements of Operations | The following tables summarize the effects of stock-based compensation on the Company’s condensed consolidated balance sheets and statements of operations for the periods presented (in thousands): June 30, 2018 December 30, 2017 Stock-based compensation effects in inventory $ 5,222 $ 5,255 Three Months Ended Six Months Ended June 30, 2018 July 1, 2017 June 30, 2018 July 1, 2017 Stock-based compensation effects included in net loss before income taxes Cost of revenue $ 624 $ 834 $ 502 $ 1,558 Research and development 4,192 4,184 8,516 7,964 Sales and marketing 3,046 3,273 5,944 5,999 General and administration 2,767 2,852 5,534 5,392 $ 10,629 $ 11,143 $ 20,496 $ 20,913 Cost of revenue – amortization from balance sheet (1) 1,415 1,237 2,531 2,344 Total stock-based compensation expense $ 12,044 $ 12,380 $ 23,027 $ 23,257 (1) Stock-based compensation expense deferred to inventory and deferred inventory costs in prior periods and recognized in the current period. |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Table of Long Lived Assets | The following table sets forth long-lived assets by geographic region (in thousands): June 30, 2018 December 30, 2017 United States $ 129,632 $ 128,582 Other Americas 1,237 661 Europe, Middle East and Africa 3,235 3,527 Asia Pacific 2,665 3,172 Total property, plant and equipment, net $ 136,769 $ 135,942 |
Guarantees (Tables)
Guarantees (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Guarantees [Abstract] | |
Activity Related to Product Warranty | Activity related to product warranty was as follows (in thousands): Three Months Ended Six Months Ended June 30, 2018 July 1, 2017 June 30, 2018 July 1, 2017 Beginning balance $ 30,848 $ 35,980 $ 30,909 $ 40,342 Charges to operations 5,166 5,022 9,523 9,681 Utilization (4,067 ) (3,901 ) (8,505 ) (7,289 ) Change in estimate (1) (1,710 ) (4,701 ) (1,690 ) (10,334 ) Balance at the end of the period $ 30,237 $ 32,400 $ 30,237 $ 32,400 (1) The Company records product warranty liabilities based on the latest quality and cost information available as of the date the revenue is recorded. The changes in estimate shown here are due to changes in overall actual failure rates, the mix of new versus used units related to replacement of failed units, and changes in the estimated cost of repair. As the Company's products mature over time, failure rates and repair costs generally decline leading to favorable changes in warranty reserves. In addition, during the first quarter of 2017, due to product quality improvements, the Company revised certain estimates used in calculating its product warranties that resulted in a one-time reduction to the warranty accrual of $2.2 million . |
Basis of Presentation and Sig37
Basis of Presentation and Significant Accounting Policies (Details) - Sales revenue, net - Customer concentration risk | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jul. 01, 2017 | Jun. 30, 2018 | Jul. 01, 2017 | |
Customer One | ||||
Concentration Risk [Line Items] | ||||
Concentration risk | 23.00% | 17.00% | 26.00% | 18.00% |
Customer Two | ||||
Concentration Risk [Line Items] | ||||
Concentration risk | 13.00% | 10.00% | 12.00% | |
Customer Three | ||||
Concentration Risk [Line Items] | ||||
Concentration risk | 10.00% |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2018 | Jul. 01, 2017 | Jun. 30, 2018 | Jul. 01, 2017 | Dec. 31, 2017 | Dec. 30, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Accumulated deficit | $ (790,893) | $ (790,893) | $ (742,675) | $ (758,081) | ||
Revenues | 208,227 | $ 176,821 | 410,908 | $ 352,343 | ||
Capitalized cost to obtain contract | 400 | 400 | ||||
Deferred revenue recognized | 26,900 | |||||
Adjustments | Accounting Standards Update 2014-09 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Accumulated deficit | $ 15,406 | |||||
Revenues | $ (1,641) | $ 1,585 | ||||
Minimum | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Payment term | 30 days | |||||
Purchase commitment time frame | 12 months | |||||
Maximum | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Payment term | 120 days | |||||
Purchase commitment time frame | 24 months |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jul. 01, 2017 | Jun. 30, 2018 | Jul. 01, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 208,227 | $ 176,821 | $ 410,908 | $ 352,343 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 120,987 | 112,196 | 250,012 | 211,976 |
Other Americas | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 4,877 | 2,971 | 10,092 | 9,006 |
Europe, Middle East and Africa | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 62,162 | 47,910 | 121,361 | 105,323 |
Asia Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 20,201 | 13,744 | 29,443 | 26,038 |
Product | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 175,288 | 143,360 | 346,917 | 290,413 |
Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 32,939 | 33,461 | 63,991 | 61,930 |
Direct | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 195,624 | 166,826 | 384,086 | 332,772 |
Indirect | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 12,603 | $ 9,995 | $ 26,822 | $ 19,571 |
Revenue Recognition - Contract
Revenue Recognition - Contract with Customer, Asset and Liability (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | Dec. 30, 2017 |
Revenue from Contract with Customer [Abstract] | |||
Accounts receivable, net | $ 148,026 | $ 135,245 | $ 126,152 |
Accounts receivable, net | 2,644 | 2,825 | |
Deferred revenue | $ 69,488 | $ 75,458 |
Revenue Recognition - Revenue,
Revenue Recognition - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction (Details) $ in Thousands | Jun. 30, 2018USD ($) |
Revenue from Contract with Customer [Abstract] | |
Revenue expected to be recognized in the future as of June 30, 2018 | $ 193,130 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-12-31 | |
Revenue from Contract with Customer [Abstract] | |
Revenue expected to be recognized in the future as of June 30, 2018 | 145,741 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-12-31 | |
Revenue from Contract with Customer [Abstract] | |
Revenue expected to be recognized in the future as of June 30, 2018 | 23,591 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-12-31 | |
Revenue from Contract with Customer [Abstract] | |
Revenue expected to be recognized in the future as of June 30, 2018 | 15,966 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-12-31 | |
Revenue from Contract with Customer [Abstract] | |
Revenue expected to be recognized in the future as of June 30, 2018 | 3,555 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-12-31 | |
Revenue from Contract with Customer [Abstract] | |
Revenue expected to be recognized in the future as of June 30, 2018 | 2,235 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-12-31 | |
Revenue from Contract with Customer [Abstract] | |
Revenue expected to be recognized in the future as of June 30, 2018 | $ 2,042 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of New Accounting Pronouncements and Changes in Accounting Principles (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2018 | Jul. 01, 2017 | Jun. 30, 2018 | Jul. 01, 2017 | Dec. 31, 2017 | Dec. 30, 2017 | |
Revenue | ||||||
Revenues | $ 208,227 | $ 176,821 | $ 410,908 | $ 352,343 | ||
Costs and expenses | ||||||
Cost of revenue | 123,922 | 111,989 | 244,435 | 223,455 | ||
Net loss | $ (21,938) | $ (42,839) | $ (48,218) | $ (83,290) | ||
Net loss per share - basic and diluted (in dollars per share) | $ (0.14) | $ (0.29) | $ (0.32) | $ (0.57) | ||
Assets | ||||||
Accounts receivable, net | $ 148,026 | $ 148,026 | $ 135,245 | $ 126,152 | ||
Inventory | 219,343 | 219,343 | 214,465 | 214,704 | ||
Prepaid expenses and other current assets | 46,070 | 43,339 | ||||
Liabilities | ||||||
Accrued expenses | 48,180 | 48,180 | 55,427 | 39,782 | ||
Deferred revenue | 75,458 | 94,923 | ||||
Equity | ||||||
Accumulated deficit | (790,893) | (790,893) | $ (742,675) | (758,081) | ||
Balances Without Adoption of ASC 606 | ||||||
Revenue | ||||||
Revenues | 206,586 | 412,493 | ||||
Costs and expenses | ||||||
Cost of revenue | 124,634 | 245,675 | ||||
Net loss | $ (24,291) | $ (47,873) | ||||
Net loss per share - basic and diluted (in dollars per share) | $ (0.16) | $ (0.32) | ||||
Accounting Standards Update 2014-09 | Adjustments | ||||||
Revenue | ||||||
Revenues | $ (1,641) | $ 1,585 | ||||
Costs and expenses | ||||||
Cost of revenue | 712 | 1,240 | ||||
Net loss | $ (2,353) | $ 345 | ||||
Net loss per share - basic and diluted (in dollars per share) | $ (0.02) | $ 0 | ||||
Assets | ||||||
Accounts receivable, net | 9,093 | |||||
Inventory | (239) | |||||
Prepaid expenses and other current assets | 2,731 | |||||
Liabilities | ||||||
Accrued expenses | 15,645 | |||||
Deferred revenue | (19,465) | |||||
Equity | ||||||
Accumulated deficit | $ 15,406 | |||||
Product | ||||||
Revenue | ||||||
Revenue | $ 175,288 | $ 143,360 | $ 346,917 | $ 290,413 | ||
Product | Balances Without Adoption of ASC 606 | ||||||
Revenue | ||||||
Revenue | 172,449 | 346,022 | ||||
Product | Accounting Standards Update 2014-09 | Adjustments | ||||||
Revenue | ||||||
Revenue | (2,839) | (895) | ||||
Services | ||||||
Revenue | ||||||
Revenue | 32,939 | $ 33,461 | 63,991 | $ 61,930 | ||
Services | Balances Without Adoption of ASC 606 | ||||||
Revenue | ||||||
Revenue | 34,137 | 66,471 | ||||
Services | Accounting Standards Update 2014-09 | Adjustments | ||||||
Revenue | ||||||
Revenue | $ 1,198 | $ 2,480 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Fair value, measurements, recurring - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 30, 2017 |
Assets | ||
Total assets | $ 60,567 | $ 206,969 |
Foreign currency exchange forward contracts | ||
Liabilities | ||
Foreign currency exchange forward contracts | (167) | (204) |
Money market funds | ||
Assets | ||
Total assets | 231 | 20,371 |
Certificates of deposit | ||
Assets | ||
Total assets | 0 | 240 |
Commercial paper | ||
Assets | ||
Total assets | 0 | 26,912 |
Corporate bonds | ||
Assets | ||
Total assets | 46,881 | 118,558 |
U.S. agency notes | ||
Assets | ||
Total assets | 5,485 | 5,480 |
U.S. treasuries | ||
Assets | ||
Total assets | 7,970 | 35,408 |
Level 1 | ||
Assets | ||
Total assets | 8,201 | 55,779 |
Level 1 | Foreign currency exchange forward contracts | ||
Liabilities | ||
Foreign currency exchange forward contracts | 0 | 0 |
Level 1 | Money market funds | ||
Assets | ||
Total assets | 231 | 20,371 |
Level 1 | Certificates of deposit | ||
Assets | ||
Total assets | 0 | 0 |
Level 1 | Commercial paper | ||
Assets | ||
Total assets | 0 | 0 |
Level 1 | Corporate bonds | ||
Assets | ||
Total assets | 0 | 0 |
Level 1 | U.S. agency notes | ||
Assets | ||
Total assets | 0 | 0 |
Level 1 | U.S. treasuries | ||
Assets | ||
Total assets | 7,970 | 35,408 |
Level 2 | ||
Assets | ||
Total assets | 52,366 | 151,190 |
Level 2 | Foreign currency exchange forward contracts | ||
Liabilities | ||
Foreign currency exchange forward contracts | (167) | (204) |
Level 2 | Money market funds | ||
Assets | ||
Total assets | 0 | 0 |
Level 2 | Certificates of deposit | ||
Assets | ||
Total assets | 0 | 240 |
Level 2 | Commercial paper | ||
Assets | ||
Total assets | 0 | 26,912 |
Level 2 | Corporate bonds | ||
Assets | ||
Total assets | 46,881 | 118,558 |
Level 2 | U.S. agency notes | ||
Assets | ||
Total assets | 5,485 | 5,480 |
Level 2 | U.S. treasuries | ||
Assets | ||
Total assets | $ 0 | $ 0 |
Fair Value Measurements - Inves
Fair Value Measurements - Investments at Fair Value (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 30, 2017 |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Cash | $ 63,077 | $ 87,991 |
Adjusted Amortized Cost | 123,963 | 295,378 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (319) | (418) |
Fair Value | 123,644 | 294,960 |
Cash and Cash Equivalents | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Adjusted Amortized Cost | 63,308 | 116,346 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | (1) |
Fair Value | 63,308 | 116,345 |
Cash and Cash Equivalents | Money market funds | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Adjusted Amortized Cost | 231 | 20,371 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 231 | 20,371 |
Cash and Cash Equivalents | U.S. treasuries | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Adjusted Amortized Cost | 7,984 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (1) | |
Fair Value | 7,983 | |
Short-term Investments | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Adjusted Amortized Cost | 59,159 | 147,844 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (299) | (248) |
Fair Value | 58,860 | 147,596 |
Short-term Investments | Commercial paper | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Adjusted Amortized Cost | 26,924 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (12) | |
Fair Value | 26,912 | |
Short-term Investments | Corporate bonds | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Adjusted Amortized Cost | 45,663 | 90,685 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (258) | (155) |
Fair Value | 45,405 | 90,530 |
Short-term Investments | U.S. treasuries | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Adjusted Amortized Cost | 7,996 | 27,495 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (26) | (70) |
Fair Value | 7,970 | 27,425 |
Short-term Investments | Certificates of deposit | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Adjusted Amortized Cost | 240 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | 0 | |
Fair Value | 240 | |
Short-term Investments | U.S. agency notes | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Adjusted Amortized Cost | 5,500 | 2,500 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (15) | (11) |
Fair Value | 5,485 | 2,489 |
Other Long-term Investments | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Adjusted Amortized Cost | 1,496 | 31,188 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (20) | (169) |
Fair Value | 1,476 | 31,019 |
Other Long-term Investments | Corporate bonds | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Adjusted Amortized Cost | 1,496 | 28,186 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (20) | (158) |
Fair Value | $ 1,476 | 28,028 |
Other Long-term Investments | U.S. agency notes | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Adjusted Amortized Cost | 3,002 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (11) | |
Fair Value | $ 2,991 |
Fair Value Measurements - Equit
Fair Value Measurements - Equity Investment (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2018 | Dec. 30, 2017 | Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | ||||
Purchase of equity method investment | $ 7,000,000 | |||
Equity method investment | $ 5,100,000 | $ 5,100,000 | $ 5,100,000 | |
Impairment charge on equity method investments | $ 0 | $ 0 | ||
Impairment charge on cost-method investments | $ 1,900,000 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Dec. 30, 2017 | Jun. 30, 2018 | Jul. 01, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale investments | 15 months | |||
Cash, cash equivalents and short-term investments | $ 122,200 | $ 122,200 | ||
Cash and cash equivalents held by foreign subsidiaries | 63,308 | $ 116,345 | 63,308 | $ 119,820 |
Foreign Subsidiary | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash and cash equivalents held by foreign subsidiaries | 32,600 | 32,600 | ||
Operating Expenses | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Facilities | $ 47 | $ 7,300 | $ (1,037) |
Derivative Instruments - Narrat
Derivative Instruments - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jul. 01, 2017 | Jun. 30, 2018 | Jul. 01, 2017 | Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||
Posted collateral | $ 0.9 | ||||
Before-tax effect of foreign currency exchange forward contracts not designated as hedging instruments, gain (loss) | $ 1.2 | $ (1.5) | $ 0.5 | $ (1.8) |
Derivative Instruments - Fair V
Derivative Instruments - Fair Value of Derivative Instruments Not Designated as Hedging Activities (Details) - Not designated as hedging instrument - USD ($) | Jun. 30, 2018 | Dec. 30, 2017 |
Derivative [Line Items] | ||
Other Accrued Liabilities | $ (167,000) | $ (204,000) |
Related to euro denominated receivables | ||
Derivative [Line Items] | ||
Gross Notional | 16,157,000 | 24,794,000 |
Other Accrued Liabilities | (165,000) | (202,000) |
Related to euro denominated restricted cash | ||
Derivative [Line Items] | ||
Gross Notional | 245,000 | 252,000 |
Other Accrued Liabilities | $ (2,000) | $ (2,000) |
Goodwill and Intangible Asset49
Goodwill and Intangible Assets - Goodwill Roll Forward (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Goodwill [Roll Forward] | |
Balance as of December 30, 2017 | $ 195,615 |
Foreign currency translation adjustments | (16,450) |
Balance as of June 30, 2018 | $ 179,165 |
Goodwill and Intangible Asset50
Goodwill and Intangible Assets - Purchased Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 30, 2017 | |
Intangible assets with finite lives: | ||
Gross Carrying Amount | $ 142,649 | $ 155,758 |
Accumulated Amortization | (70,854) | (63,570) |
Net Carrying Amount | $ 71,795 | $ 92,188 |
Weighted average remaining useful life (in years) | 3 years 5 months 11 days | 3 years 10 months 8 days |
Customer relationships | ||
Intangible assets with finite lives: | ||
Gross Carrying Amount | $ 46,754 | $ 51,050 |
Accumulated Amortization | (16,666) | (15,007) |
Net Carrying Amount | $ 30,088 | $ 36,043 |
Weighted average remaining useful life (in years) | 5 years 1 month 20 days | 5 years 7 months 20 days |
Developed technology | ||
Intangible assets with finite lives: | ||
Gross Carrying Amount | $ 95,895 | $ 104,708 |
Accumulated Amortization | (54,188) | (48,563) |
Net Carrying Amount | $ 41,707 | $ 56,145 |
Weighted average remaining useful life (in years) | 2 years 2 months 22 days | 2 years 8 months 15 days |
Goodwill and Intangible Asset51
Goodwill and Intangible Assets - Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2018 | Jul. 01, 2017 | Apr. 01, 2017 | Jun. 30, 2018 | Jul. 01, 2017 | Dec. 30, 2017 | |
Intangible assets with finite lives: | ||||||
Goodwill impairment | $ 0 | |||||
Amortization expense | $ 6,500 | $ 6,600 | 13,400 | $ 12,900 | ||
Impairment charge | $ 0 | $ 252 | ||||
Other intangible assets | ||||||
Intangible assets with finite lives: | ||||||
Impairment charge | $ 300 | |||||
Developed technology | ||||||
Intangible assets with finite lives: | ||||||
Finite-lived intangible assets, period increase (decrease) | $ 300 | |||||
Finite-lived intangible asset, useful life | 5 years |
Goodwill and Intangible Asset52
Goodwill and Intangible Assets - Future Amortization Expense (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 30, 2017 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Net Carrying Amount | $ 71,795 | $ 92,188 |
Remainder of 2018 | 12,634 | |
2,019 | 24,699 | |
2,020 | 18,024 | |
2,021 | 6,589 | |
2,022 | 6,016 | |
2023 and Thereafter | $ 3,833 |
Balance Sheet Details (Details)
Balance Sheet Details (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | Dec. 30, 2017 |
Inventory | |||
Raw materials | $ 30,503 | $ 27,568 | |
Work in process | 61,648 | 59,662 | |
Finished goods | 127,192 | 127,474 | |
Total inventory | 219,343 | $ 214,465 | 214,704 |
Property, plant and equipment, net | |||
Property, plant and equipment, gross | 398,752 | 385,894 | |
Less accumulated depreciation and amortization | (261,983) | (249,952) | |
Total property, plant and equipment, net | 136,769 | 135,942 | |
Accrued expenses | |||
Loss contingency related to non-cancelable purchase commitments | 7,017 | 6,379 | |
Professional and other consulting fees | 5,451 | 5,305 | |
Taxes payable | 3,589 | 3,707 | |
Royalties | 5,526 | 5,404 | |
Restructuring accrual | 3,425 | 5,490 | |
Right of return | 11,427 | 0 | |
Other accrued expenses | 11,745 | 13,497 | |
Total accrued expenses | 48,180 | $ 55,427 | 39,782 |
Computer hardware | |||
Property, plant and equipment, net | |||
Property, plant and equipment, gross | 14,703 | 13,881 | |
Computer software | |||
Property, plant and equipment, net | |||
Property, plant and equipment, gross | 32,835 | 32,521 | |
Laboratory and manufacturing equipment | |||
Property, plant and equipment, net | |||
Property, plant and equipment, gross | 259,756 | 246,380 | |
Land and building | |||
Property, plant and equipment, net | |||
Property, plant and equipment, gross | 12,347 | 12,347 | |
Furniture and fixtures | |||
Property, plant and equipment, net | |||
Property, plant and equipment, gross | 2,517 | 2,474 | |
Leasehold and building improvements | |||
Property, plant and equipment, net | |||
Property, plant and equipment, gross | 43,163 | 43,475 | |
Construction in progress | |||
Property, plant and equipment, net | |||
Property, plant and equipment, gross | 33,431 | 34,816 | |
Enterprise resource planning systems | |||
Property, plant and equipment, net | |||
Property, plant and equipment, gross | 11,400 | 11,400 | |
Total property, plant and equipment, net | $ 3,800 | $ 4,700 |
Restructuring and Related Cos54
Restructuring and Related Costs - Restructuring and Other Related Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2018 | Dec. 30, 2017 | Jun. 30, 2018 | |
Restructuring Cost and Reserve [Line Items] | |||
Total | $ 1,560 | ||
Cost of Revenue | |||
Restructuring Cost and Reserve [Line Items] | |||
Severance and related expenses | $ 26 | 43 | |
Facilities | 0 | 0 | |
Asset impairment | 0 | 0 | |
Total | 26 | 43 | |
Operating Expenses | |||
Restructuring Cost and Reserve [Line Items] | |||
Severance and related expenses | 900 | 1,845 | |
Facilities | 47 | $ 7,300 | (1,037) |
Asset impairment | (50) | (74) | |
Total | 1,680 | 1,517 | |
Licensing Agreements | Cost of Revenue | |||
Restructuring Cost and Reserve [Line Items] | |||
Asset impairment | 0 | 0 | |
Licensing Agreements | Operating Expenses | |||
Restructuring Cost and Reserve [Line Items] | |||
Asset impairment | $ 783 | $ 783 |
Restructuring and Related Cos55
Restructuring and Related Costs - Schedule of Restructuring Reserve by Type of Cost (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | $ 10,619 |
Charges (Credits) | 1,560 |
Cash | (5,027) |
Non-cash Settlements and Other | (62) |
Ending balance | 7,090 |
Severance and related expenses | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | 3,672 |
Charges (Credits) | 1,888 |
Cash | (4,029) |
Non-cash Settlements and Other | 0 |
Ending balance | 1,531 |
Facilities | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | 6,947 |
Charges (Credits) | (1,037) |
Cash | (998) |
Non-cash Settlements and Other | (40) |
Ending balance | 4,872 |
Asset impairment | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | 0 |
Charges (Credits) | (74) |
Cash | 0 |
Non-cash Settlements and Other | 74 |
Ending balance | 0 |
License impairment | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | 0 |
Charges (Credits) | 783 |
Cash | 0 |
Non-cash Settlements and Other | (96) |
Ending balance | $ 687 |
Restructuring and Related Cos56
Restructuring and Related Costs - Narrative (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Dec. 30, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $ 1,560 | |
Restructuring liability | 7,090 | $ 10,619 |
License impairment | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 783 | |
Restructuring liability | 687 | 0 |
Facility closures | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | (1,037) | |
Restructuring liability | 4,872 | 6,947 |
Severance and related expenses | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 1,888 | |
Restructuring liability | $ 1,531 | $ 3,672 |
Accumulated Other Comprehensi57
Accumulated Other Comprehensive Income (Loss) (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Beginning balance | $ (879) |
Beginning balance | 6,254 |
Net current-period other comprehensive loss | (26) |
Net current-period other comprehensive loss | (28,238) |
Ending balance | (905) |
Ending balance | (21,984) |
Unrealized Loss on Other Available-for-Sale Securities | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Beginning balance | (418) |
Net current-period other comprehensive loss | 99 |
Ending balance | (319) |
Foreign Currency Translation | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Beginning balance | 7,551 |
Net current-period other comprehensive loss | (28,311) |
Ending balance | $ (20,760) |
Basic and Diluted Net Loss Pe58
Basic and Diluted Net Loss Per Common Share - Antidilutive Shares (Details) - USD ($) shares in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2018 | Jul. 01, 2017 | Jun. 30, 2018 | Jul. 01, 2017 | May 31, 2018 | Dec. 30, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Antidilutive securities excluded from earnings per share computation (in shares) | 9,939 | 10,263 | 12,180 | 11,020 | ||
Stock options | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Antidilutive securities excluded from earnings per share computation (in shares) | 1,118 | 1,407 | 1,153 | 1,521 | ||
RSUs | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Antidilutive securities excluded from earnings per share computation (in shares) | 7,579 | 6,500 | 8,509 | 7,137 | ||
PSUs | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Antidilutive securities excluded from earnings per share computation (in shares) | 1,242 | 1,464 | 1,394 | 1,439 | ||
ESPP shares | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Antidilutive securities excluded from earnings per share computation (in shares) | 0 | 892 | 1,124 | 923 | ||
1.75% Convertible Senior Notes Due June 1, 2018 | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Principal amount | $ 150,000,000 | $ 150,000,000 | ||||
Debt instrument interest percentage | 1.75% | 1.75% | 1.75% | 1.75% | 1.75% |
Basic and Diluted Net Loss Pe59
Basic and Diluted Net Loss Per Common Share - Computation of EPS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jul. 01, 2017 | Jun. 30, 2018 | Jul. 01, 2017 | |
Earnings Per Share [Abstract] | ||||
Net loss | $ (21,938) | $ (42,839) | $ (48,218) | $ (83,290) |
Weighted average common shares outstanding - basic and diluted (in shares) | 152,259 | 147,538 | 151,296 | 146,662 |
Net loss per common share - basic and diluted (in dollars per share) | $ (0.14) | $ (0.29) | $ (0.32) | $ (0.57) |
Convertible Senior Notes - Narr
Convertible Senior Notes - Narrative (Details) - USD ($) $ in Millions | Jun. 01, 2018 | Jun. 30, 2018 | May 31, 2018 | Dec. 30, 2017 | Jul. 01, 2017 |
Long-term debt | Accounting Standards Update 2015-03 | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Debt issuance cost increase (decrease) | $ 2.1 | ||||
1.75% Convertible Senior Notes Due June 1, 2018 | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Repayment of debt | $ 150 | ||||
Repayment of final coupon interest | $ 1.3 | ||||
Net equity component carrying amount | $ 43.3 | ||||
Debt instrument interest percentage | 1.75% | 1.75% | 1.75% | ||
Additional effective rate of interest to be used on amortized carrying value | 10.23% | 10.23% |
Convertible Senior Notes - Comp
Convertible Senior Notes - Components of Convertible Senior Notes (Details) - 1.75% Convertible Senior Notes Due June 1, 2018 - USD ($) | May 31, 2018 | Dec. 30, 2017 |
Debt Instrument [Line Items] | ||
Principal amount | $ 150,000,000 | $ 150,000,000 |
Unamortized discount | (4,670,000) | |
Unamortized issuance cost | (402,000) | |
Net carrying amount | $ 144,928,000 |
Convertible Senior Notes - Inte
Convertible Senior Notes - Interest Expense Recognized Related to Notes Prior to Capitalization of Interest (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jul. 01, 2017 | Jun. 30, 2018 | Jul. 01, 2017 | |
Debt Disclosure [Abstract] | ||||
Contractual interest expense | $ 438 | $ 656 | $ 1,094 | $ 1,313 |
Amortization of debt issuance costs | 163 | 222 | 402 | 437 |
Amortization of debt discount | 1,892 | 2,577 | 4,671 | 5,091 |
Total interest expense | $ 2,493 | $ 3,455 | $ 6,167 | $ 6,841 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2018USD ($)shares | Jul. 01, 2017USD ($) | Jun. 30, 2018USD ($)shares | Jul. 01, 2017USD ($) | Jun. 29, 2018$ / shares | May 31, 2017shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Closing price of common stock (in usd per share) | $ / shares | $ 9.93 | |||||
Restricted stock units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of units granted (in shares) | 200,000 | 3,344,000 | ||||
Amortization of stock-based compensation | $ | $ 8 | $ 15.4 | $ 8.4 | $ 16 | ||
PSUs | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of units granted (in shares) | 505,000 | |||||
Performance stock unit grants | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Amortization of stock-based compensation | $ | $ 2.6 | $ 4.7 | $ 2.8 | $ 4.6 | ||
2016 Equity Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Increase in shares authorized (in shares) | 1,500,000 | |||||
Reserved common stock for issuance of options (in shares) | 15,400,000 | 15,400,000 | ||||
2016 Plan maximum term | 10 years | |||||
2016 Equity Incentive Plan | PSUs | Minimum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Ranges of number of shares issued on vesting of PSUs | 0 | |||||
2016 Equity Incentive Plan | PSUs | Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Ranges of number of shares issued on vesting of PSUs | 2 | |||||
2016 Equity Incentive Plan | PSUs | Existing employees | Vesting 1 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Duration of grants based on shareholder return of common stock price versus designated index | 1 year | |||||
2016 Equity Incentive Plan | PSUs | Existing employees | Vesting 2 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Duration of grants based on shareholder return of common stock price versus designated index | 2 years | |||||
2016 Equity Incentive Plan | PSUs | Existing employees | Vesting 3 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Duration of grants based on shareholder return of common stock price versus designated index | 3 years | |||||
2007 Equity Incentive Plan | PSUs | Minimum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Ranges of number of shares issued on vesting of PSUs | 0 | |||||
2007 Equity Incentive Plan | PSUs | Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Ranges of number of shares issued on vesting of PSUs | 2 | |||||
2007 Equity Incentive Plan | PSUs | Existing employees | Vesting 1 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Duration of grants based on shareholder return of common stock price versus designated index | 1 year | |||||
2007 Equity Incentive Plan | PSUs | Existing employees | Vesting 2 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Duration of grants based on shareholder return of common stock price versus designated index | 2 years | |||||
2007 Equity Incentive Plan | PSUs | Existing employees | Vesting 3 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Duration of grants based on shareholder return of common stock price versus designated index | 3 years |
Stockholders' Equity - Equity A
Stockholders' Equity - Equity Award Activity - Options (Details) - Stock options $ / shares in Units, shares in Thousands, $ in Thousands | 6 Months Ended |
Jun. 30, 2018USD ($)$ / sharesshares | |
Number of Stock Options | |
Stock options, beginning balance (in shares) | shares | 1,397 |
Stock options, granted (in shares) | shares | 0 |
Stock options, exercised (in shares) | shares | (226) |
Stock options, canceled (in shares) | shares | (53) |
Stock options, ending balance (in shares) | shares | 1,118 |
Stock options, exercisable (in shares) | shares | 1,118 |
Weighted-Average Exercise Price Per Share | |
Weighted-average exercise price per share, beginning balance (in usd per share) | $ / shares | $ 8.11 |
Weighted-average exercise per share, options granted (in usd per share) | $ / shares | 0 |
Weighted-average exercise price per share, options exercised (in usd per share) | $ / shares | 7.44 |
Weighted-average exercise price per share, options canceled (in usd per share) | $ / shares | 11.57 |
Weighted-average exercise price per share, ending balance (in usd per share) | $ / shares | 8.08 |
Average exercise price per share, exercisable (in usd per share) | $ / shares | $ 8.08 |
Aggregate Intrinsic Value | |
Aggregate intrinsic value, beginning balance | $ | $ 1 |
Aggregate intrinsic value, options exercised | $ | 489 |
Aggregate intrinsic value, ending balance | $ | 2,062 |
Aggregate intrinsic value, exercisable | $ | $ 2,062 |
Stockholders' Equity - Equity65
Stockholders' Equity - Equity Award Activity - RSUs (Details) - Restricted stock units - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2018 | Jun. 30, 2018 | |
Number of Restricted Stock Units | ||
Number of units, beginning balance (in shares) | 6,791 | |
Number of units granted (in shares) | 200 | 3,344 |
Number of units released (in shares) | (2,021) | |
Number units canceled (in shares) | (535) | |
Number of units, ending balance (in shares) | 7,579 | 7,579 |
Weighted- Average Grant Date Fair Value Per Share | ||
Weighted-average grant date fair value per share, beginning balance (in usd per share) | $ 11.55 | |
Weighted-average grant date fair value per share, granted (in usd per share) | 10.92 | |
Weighted-average grant date fair value per share, released (in usd per share) | 13.12 | |
Weighted-average grant date fair value per share, canceled (in usd per share) | 11.32 | |
Weighted-average grant date fair value per share, ending balance (in usd per share) | $ 10.87 | $ 10.87 |
Aggregate Intrinsic Value | ||
Aggregate intrinsic value, beginning balance | $ 42,988 | |
Aggregate intrinsic value, RSUs released | 22,849 | |
Aggregate intrinsic value, ending balance | $ 75,257 | $ 75,257 |
Stockholders' Equity - Equity66
Stockholders' Equity - Equity Award Activity - PSUs (Details) - PSUs - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 6 Months Ended |
Jun. 30, 2018 | |
Number of Performance Stock Units | |
Number of units, beginning balance (in shares) | 1,367 |
Number of units granted (in shares) | 505 |
Number of units released (in shares) | (28) |
Number units canceled (in shares) | (602) |
Number of units, ending balance (in shares) | 1,242 |
Number of restricted stock units, expected to vest (in shares) | 1,054 |
Weighted- Average Grant Date Fair Value Per Share | |
Weighted-average grant date fair value per share, beginning balance (in usd per share) | $ 16.28 |
Weighted-average grant date fair value per share, granted (in usd per share) | 15.87 |
Weighted-average grant date fair value per share, released (in usd per share) | 15.93 |
Weighted-average grant date fair value per share, canceled (in usd per share) | 15.98 |
Weighted-average grant date fair value per share, ending balance (in usd per share) | $ 16.26 |
Aggregate Intrinsic Value | |
Aggregate intrinsic value, beginning balance | $ 8,651 |
Aggregate Intrinsic Value, PSUs released | 273 |
Aggregate intrinsic value, ending balance | 12,334 |
Aggregate intrinsic value, expected to vest | $ 10,466 |
Stockholders' Equity - Total St
Stockholders' Equity - Total Stock Based Compensation Cost for Instruments Granted but Not Yet Amortized (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2018USD ($) | |
RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation expense, net | $ 71,263 |
Weighted-average period | 2 years 9 months 26 days |
PSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation expense, net | $ 11,423 |
Weighted-average period | 1 year 8 months 12 days |
Stockholders' Equity - Estimate
Stockholders' Equity - Estimated Fair Value of ESPP, Valuation Assumptions (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jul. 01, 2017 | Jun. 30, 2018 | Jul. 01, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 12,044 | $ 12,380 | $ 23,027 | $ 23,257 |
ESPP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Volatility | 62.00% | 51.00% | 62.00% | 51.00% |
Risk-free interest rate | 1.90% | 0.81% | 1.90% | 0.81% |
Expected life | 6 months | 6 months | 6 months | 6 months |
Estimated fair value (in usd per share) | $ 3.13 | $ 3.46 | $ 3.13 | $ 3.46 |
Total stock-based compensation expense | $ 1,337 | $ 1,392 | $ 2,892 | $ 3,073 |
Stockholders' Equity - Valuatio
Stockholders' Equity - Valuation Assumptions (Details) - PSUs | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018$ / shares | Dec. 30, 2017$ / shares | Dec. 31, 2016$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Index volatility | 33.00% | 18.00% | |
Infinera volatility | 58.00% | 55.00% | |
Volatility minimum | 55.00% | ||
Volatility maximum | 59.00% | 56.00% | |
Risk-free interest rate minimum | 2.37% | 1.41% | 0.95% |
Risk-free interest rate maximum | 2.40% | 1.63% | 1.07% |
Estimated fair value (in dollars per share) | $ 15.87 | ||
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Index volatility | 33.00% | ||
Correlation with index/index component | 0.04 | 0.10 | 0.58 |
Estimated fair value (in dollars per share) | $ 14.99 | $ 15.23 | $ 10.31 |
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Index volatility | 34.00% | ||
Correlation with index/index component | 0.48 | 0.49 | 0.59 |
Estimated fair value (in dollars per share) | $ 19.46 | $ 17.35 | $ 16.62 |
Stockholders' Equity - Nonveste
Stockholders' Equity - Nonvested Performance Based Units Activity By Grant Year (Details) - PSUs shares in Thousands | 6 Months Ended |
Jun. 30, 2018shares | |
Number of Performance Stock Units | |
Number of units, beginning balance (in shares) | 1,367 |
Number of units granted (in shares) | 505 |
Number of units released (in shares) | (28) |
Number units canceled (in shares) | (602) |
Number of units, ending balance (in shares) | 1,242 |
2,015 | |
Number of Performance Stock Units | |
Number of units, beginning balance (in shares) | 77 |
Number of units granted (in shares) | 0 |
Number of units released (in shares) | 0 |
Number units canceled (in shares) | (77) |
Number of units, ending balance (in shares) | 0 |
2,016 | |
Number of Performance Stock Units | |
Number of units, beginning balance (in shares) | 420 |
Number of units granted (in shares) | 0 |
Number of units released (in shares) | (28) |
Number units canceled (in shares) | (194) |
Number of units, ending balance (in shares) | 198 |
2,017 | |
Number of Performance Stock Units | |
Number of units, beginning balance (in shares) | 869 |
Number of units granted (in shares) | 0 |
Number of units released (in shares) | 0 |
Number units canceled (in shares) | (331) |
Number of units, ending balance (in shares) | 538 |
2,018 | |
Number of Performance Stock Units | |
Number of units, beginning balance (in shares) | 0 |
Number of units granted (in shares) | 505 |
Number of units released (in shares) | 0 |
Number units canceled (in shares) | 0 |
Number of units, ending balance (in shares) | 505 |
Stockholders' Equity - Balance
Stockholders' Equity - Balance Sheet and Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jul. 01, 2017 | Jun. 30, 2018 | Jul. 01, 2017 | Dec. 30, 2017 | |
Effects Of Stock Based Compensation [Line Items] | |||||
Stock-based compensation effects included in net loss before income taxes | $ 10,629 | $ 11,143 | $ 20,496 | $ 20,913 | |
Cost of revenue – amortization from balance sheet | 1,415 | 1,237 | 2,531 | 2,344 | |
Total stock-based compensation expense | 12,044 | 12,380 | 23,027 | 23,257 | |
Cost of revenue | |||||
Effects Of Stock Based Compensation [Line Items] | |||||
Stock-based compensation effects included in net loss before income taxes | 624 | 834 | 502 | 1,558 | |
Research and development | |||||
Effects Of Stock Based Compensation [Line Items] | |||||
Stock-based compensation effects included in net loss before income taxes | 4,192 | 4,184 | 8,516 | 7,964 | |
Sales and marketing | |||||
Effects Of Stock Based Compensation [Line Items] | |||||
Stock-based compensation effects included in net loss before income taxes | 3,046 | 3,273 | 5,944 | 5,999 | |
General and administration | |||||
Effects Of Stock Based Compensation [Line Items] | |||||
Stock-based compensation effects included in net loss before income taxes | 2,767 | $ 2,852 | 5,534 | $ 5,392 | |
Stock-based compensation effects in inventory | |||||
Effects Of Stock Based Compensation [Line Items] | |||||
Stock-based compensation effects in inventory | $ 5,222 | $ 5,222 | $ 5,255 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jul. 01, 2017 | Jun. 30, 2018 | Jul. 01, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Provision (benefit) for income taxes | $ (124) | $ (512) | $ (802) | $ (670) |
Pre-tax income (loss) | (22,062) | $ (43,351) | (49,020) | $ (83,960) |
Income tax benefit increase | $ 400 | |||
Decrease in provision for income taxes | $ 100 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018USD ($)segment | Dec. 30, 2017USD ($) | |
Geographic Information For Property Plant And Equipment [Line Items] | ||
Number of business activities | segment | 1 | |
Number of reporting segments | segment | 1 | |
Total property, plant and equipment, net | $ 136,769 | $ 135,942 |
United States | ||
Geographic Information For Property Plant And Equipment [Line Items] | ||
Total property, plant and equipment, net | 129,632 | 128,582 |
Other Americas | ||
Geographic Information For Property Plant And Equipment [Line Items] | ||
Total property, plant and equipment, net | 1,237 | 661 |
Europe, Middle East and Africa | ||
Geographic Information For Property Plant And Equipment [Line Items] | ||
Total property, plant and equipment, net | 3,235 | 3,527 |
Asia Pacific | ||
Geographic Information For Property Plant And Equipment [Line Items] | ||
Total property, plant and equipment, net | $ 2,665 | $ 3,172 |
Guarantees - Activity Related t
Guarantees - Activity Related to Warranty (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jul. 01, 2017 | Apr. 01, 2017 | Jun. 30, 2018 | Jul. 01, 2017 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | |||||
Beginning balance | $ 30,848 | $ 35,980 | $ 40,342 | $ 30,909 | $ 40,342 |
Charges to operations | 5,166 | 5,022 | 9,523 | 9,681 | |
Utilization | (4,067) | (3,901) | (8,505) | (7,289) | |
Change in estimate | (1,710) | (4,701) | (1,690) | (10,334) | |
Balance at the end of the period | $ 30,237 | $ 32,400 | 35,980 | $ 30,237 | $ 32,400 |
Product Quality Improvements | |||||
Movement in Standard Product Warranty Accrual [Roll Forward] | |||||
Change in estimate | $ (2,200) |
Guarantees - Narrative (Details
Guarantees - Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 30, 2017 | |
Guarantor Obligations [Line Items] | ||
Outstanding standby letters of credit | $ 3.8 | $ 4.2 |
Debt instrument, collateral amount | 5 | 5.2 |
Banker's guarantees or performance bonds | ||
Guarantor Obligations [Line Items] | ||
Line of credit facility, remaining borrowing capacity | 1.6 | 1.6 |
Proceeds from lines of credit | 0 | 0 |
Letter of credit | ||
Guarantor Obligations [Line Items] | ||
Customer performance guarantee | 1.9 | 2.2 |
Value added tax license | 1.2 | 1.3 |
Property leases | $ 0.7 | $ 0.7 |
Subsequent Events (Details)
Subsequent Events (Details) - Coriant - Subsequent event shares in Millions, $ in Millions | Jul. 23, 2018USD ($)shares |
Subsequent Event [Line Items] | |
Cash payment | $ 150 |
Additional payment in two quarters post closing | 25 |
Additional payment over period of years | $ 55 |
Number of shares issued in acquisition (in shares) | shares | 21 |
Total consideration | $ 430 |