Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block] | NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Operations and Principles of Consolidation Cutera, Inc. (“Cutera” or the “Company”) provides energy-based aesthetic systems for practitioners worldwide. The Company designs, develops, manufactures, distributes and markets energy-based product platforms for use by physicians and other qualified practitioners, enabling them to offer safe and effective aesthetic treatments to their customers. The Company currently markets the following system platforms: excel, enlighten, Juliet, Secret RF, truSculpt xeo truSculpt iD truSculpt flex Juliet Secret RF third Titan truSculpt 3D truSculpt iD truSculpt flex Headquartered in Brisbane, California, the Company operates wholly-owned subsidiaries in Australia, Belgium, Canada, France, Germany, Hong Kong, Japan, Spain, Switzerland and the United Kingdom. The Company’s wholly owned subsidiary in Italy is currently dormant. These active subsidiaries market, sell and service the Company’s products outside of the United States. The Consolidated Financial Statements include the accounts of the Company and its subsidiaries. All inter-company transactions and balances have been eliminated. Use of Estimates The preparation of Consolidated Financial Statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the amounts reported of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the accompanying notes, and the reported amounts of revenue and expenses during the reported periods. Actual results could differ materially from those estimates. On an ongoing basis, management evaluates its estimates, including those related to warranty obligations, sales commission, accounts receivable and allowance for credit losses, valuation of inventories, fair value of goodwill, useful lives of property and equipment, incremental borrowing rates related to the Company’s leases, assumptions regarding variables used in calculating the fair value of the Company's equity awards, expected achievement of performance based vesting criteria, management performance bonuses, fair value of investments, the standalone selling price of the Company's products and services, the period of benefit used to capitalize and amortize contracts acquisition costs, variable consideration, contingent liabilities, recoverability of deferred tax assets, and effective income tax rates. Management bases estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Risks and Uncertainties The Company's future results of operations involve a number of risks and uncertainties. Factors that could affect the Company's future operating results and cause actual results to vary materially from expectations include, but are not Comparability The Company adopted the new revenue standard effective January 1, 2018, not December 31, 2019 2018 December 31, 2017 December 31, 2019 2018 not December 31, 2017. The Company adopted the new lease standard effective January 1, 2019, not December 31, 2019 December 31, 2018 2017 December 31, 2019 not December 31, 2018, December 31,2019 not December 31, 2018 December 31, 2017. Recently Adopted Accounting Pronouncements In May 2014, 2014 09, 606, December 15, 2017. 606, January 1, 2018, not January 1, 2018. January 1, 2018 606, not 606. Upon adoption of ASC Topic 606, $3.8 January 1, 2018 first 2018: ● $237,000 ● $151,000 one ● $210,000 ● $4.7 2.5 ● $1.2 606 The following table summarizes the effects of adopting ASC Topic 606 December 31, 2018: As reported under ASC Topic 606 Adjustments Balances under Prior GAAP (In thousands) Other long-term assets $ 5,971 $ (5,217 ) $ 754 Deferred revenue 12,566 (106 ) 12,460 Retained earnings (deficit) (24,010 ) 4,610 (19,400 ) The following table summarizes the effects of adopting ASC Topic 606 December 31, 2018: As reported under Topic 606 Adjustments Balances under Prior GAAP (In thousands) Products revenue $ 142,535 $ 274 $ 142,261 Service revenue 20,185 280 19,905 Sales and marketing 58,420 540 58,960 Interest and other income, net* (123 ) 297 174 * Included in interest and other income, net, is the estimated interest expense for advance payment related to service contracts under the new revenue standard. Adoption of the standard had no As part of the Company's adoption of ASC Topic 606, not one one not not In February 2018, No. 2018 02, 220 January 1, 2019 first 2019, no In July 2018, 2018 09, 220 10, 470 50, 480 10, 718 740, 805 740, 815 10, 820 10, 940 405, 962 325, not December 15, 2018, 718 740 820 10 first 2019. no In February 2016, 2016 02, 842 July 2018, 2018 11, 2016 02 2018 2018 11 not July 2018, 2018 10, 842, 2016 02. The Company adopted ASU 2016 02, January 1, 2019, not not The adoption of the new standard resulted in the recording of additional lease assets and lease liabilities of $10.2 $10.1 January 1, 2019, no See below and Note 11 842. Effect of Adoption of the New Lease Standard (ASC Topic 842 The following table summarizes the effects of adopting Topic 842 January 1, 2019 ( As reported under Topic 842 Adjustments Balances under Prior GAAP Operating lease right-of-use assets $ 10,049 $ (10,049 ) $ — Operating lease liabilities (2,430 ) 2,430 — Other long-term liabilities* — 140 140 Operating lease liabilities, net of current portion (7,759 ) 7,759 — *Deferred rent included in other long-term liabilities In June 2016, No. 2016 13, 326 2016 13 December 15, 2019, 2020, The Company adopted ASU 2016 13 January 1, 2020 On January 26, 2017, No. 2017 04,” 350 one not 2 two The amendment is effective for the Company for its fiscal years beginning after December 15, 2019. January 1, 2017. 2017 04—Intangibles—Goodwill 350 October 1, 2018. no See “Goodwill and Other Intangible Assets” in Note 3 In June 2018, No. 2018 07, 718 1 2 3 606. December 15, 2018, no 606. January 1, 2019 no In August 2018, No. 2018 15, 350 No. 2018 15 350 April 1, 2019, no No. 2018 15 350 Recently Issued Accounting Pronouncements Not In August 2018, No. 2018 13, 820 3 1 2 3 2020, not In December 2019, No. 2019 12 740 2021, not Revenue recognition Effective January 1, 2018, 606. 13% 12%, December 31, 2019 2018. The Company has certain system sale arrangements that contain multiple products and services. For these bundled sale arrangements, the Company accounts for individual products and services as separate performance obligations if they are distinct. The Company’s products and services are distinct if a customer can benefit from the product or service on its own or with other resources that are readily available to the customer, and if the Company’s promise to transfer the products or service to the customer is separately identifiable from other promises in the sale arrangements. The Company’s system sale arrangements can include all or a combination of the following performance obligations: the system and software license (considered as one For the Company’s system sale arrangements that include an extended service contract, the period of service commences at the expiration of the Company’s standard warranty offered at the time of the system sale. The Company considers the extended service contracts terms in the arrangements that are legally enforceable to be performance obligations. Other than extended service contracts and marketing services, which are satisfied over time, the Company generally satisfies all performance obligations at a point in time. Systems, system accessories (hand pieces), service contracts, training, and time and materials services are also sold on a stand-alone basis, and these performance obligations are satisfied at a point in time. For contracts with multiple performance obligations, the Company allocates the transaction price of the contract to each performance obligation on a relative standalone selling price basis. Nature of Products and Services Systems Systems revenue is generated from the sale of systems and from the sale of upgrades to existing systems. A system consists of a console that incorporates a universal graphic user interface, a laser or other energy based module, control system software and high voltage electronics, as well as one Pearl Pearl Fractional The Company offers customers the ability to select the system that best fits their practice at the time of purchase and then to cost-effectively add applications to their system as their practice grows. This provides customers the flexibility to upgrade their systems whenever they choose and provides the Company with a source of additional Systems revenue. The system or upgrade and the right to use the embedded software represent a single performance obligation as the software license is integral to the functionality of the system or upgrade. The Company does not enlighten enlighten enlighten For systems sold directly to end-customers that are credit approved, revenue is recognized when the Company transfers control to the end-customer, which occurs when the product is shipped to the customer or when the customer receives the product, depending on the nature of the arrangement. When collectability is not The Company typically receives payment for its system consoles and other accessories within 30 Skincare products The Company sells third third third Consumables (Other accessories) The Company classifies its customers' purchases of replacement cycles for truSculpt iD and truSculpt flex, as well as replacement Titan and truSculpt 3D third Extended contract services The Company offers post-warranty services to its customers through extended service contracts that cover parts and labor for a term of one, two, or three Training Sales of systems to customers include training on the use of the system to be provided within 180 not Customer Marketing Support In North America, the Company offers marketing and consulting phone support to its customers across all system platforms. These customer marketing support services include a practice development model and marketing training, performed remotely with ongoing phone consultations for six six Significant Judgments The determination of whether two one may While the Company’s purchase agreements do not The Company determines standalone selling price ("SSP") for each performance obligation as follows: ● Systems: The SSPs for systems are based on directly observable sales in similar circumstances to similar customers ● Training: SSP is based on observable price when sold on a standalone basis. ● Extended warranty/Service contracts: SSP is based on observable price when sold on a standalone basis (by customer type). ● Customer Marketing Support: SSP is estimated based on cost plus a margin. ● Set-up /Installation: SSP is based on observable price when sold on a standalone basis. The calibration and installation service of the enlighten system are treated as separate performance obligations because the Company regularly sells enlighten systems without the calibration and installation service. Loyalty Program The Company launched a customer loyalty program during the third 2018 fifth December 31, 2019, $0.2 Revenue recognition- Period before January 1, 2018 - 606 The Company recognized revenue under ASC Topic 605 606 January 1 2018. 605, ● Persuasive evidence of an arrangement exists; ● The price is fixed or determinable; ● Delivery has occurred or services have been rendered; and ● Collectability is reasonably assured. Transfer of title and risk of ownership occurs when the product is shipped to the customer or when the customer receives the product, depending on the nature of the arrangement. Revenue is recorded net of customer and distributor discounts. When collectability is not not Multiple-element Arrangements A multiple-element arrangement includes the sale of one one For multiple-element arrangements, judgments are required as to the allocation of the proceeds received from an arrangement to the multiple elements of the arrangement. For multiple element arrangements the Company allocates revenue to all deliverables based on their relative selling prices in accordance with the FASB Accounting Standards Codification (“ASC”) 605 25. third not With respect to the sale of its earlier generation of the truSculpt product, the Company includes unlimited refills as part of the truSculpt standard warranty and the Company does not truSculpt truSculpt Customer Marketing Arrangements The Company has a customer marketing and incentive program called “Cutera Bucks” for its North America customers through which it offers various sales incentives and discounts and pays or reimburses customers for qualifying expenses associated with practice set-up, advertising procedures related to the system purchased, and other expenses. The Company records such incentives as a reduction of revenue at the time when the sale of the system is recorded. Service Revenue The Company also offers customers extended service contracts. Revenue under service contracts is recognized on a straight-line basis over the period of the applicable service contract. Revenue from services performed in the absence of a service contract, including installation and training revenue, is recognized when the related services are performed and collectability is reasonably assured. Service revenue billed on a time and material basis, from customers whose systems are not December 31, 2017 $18.8 Bill and Hold Arrangement Under ASC 605 2017 one third no $938,000 2017. Deferred Sales Commissions Incremental costs of obtaining a contract, which consist primarily of commissions and related payroll taxes, are capitalized and amortized on a straight-line basis over the expected period of benefit, except for costs that are recognized when product is sold. The Company uses the portfolio method to recognize the amortization expense related to these capitalized costs related to initial contracts and such expense is recognized over a period associated with the revenue of the related portfolio, which is generally two three Total capitalized costs for the year ended December 31, 2019 December 31, 2018 $4.6 $5.2 $2.9 $1.8 twelve December 31, 2019 December 31, 2018 Cash Equivalents, and Marketable Investments The Company invests its cash primarily in money market funds, U.S. Treasury bills and in highly liquid debt instruments of U.S. federal and municipal governments and their agencies, commercial paper and corporate debt securities. All highly liquid investments with stated maturities of three three The Company determines the appropriate classification of its investments in marketable securities at the time of purchase and re-evaluates such designation at each balance sheet date. The Company’s marketable securities are classified and accounted for as available-for-sale securities. Investments with remaining maturities of more than one Fair Value of Financial Instruments Fair value is an exit price representing the amount that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy contains three may 820, ● Level 1: ● Level 2: 1 not not third ● Level 3: no 3 In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value. Impairment of Marketable Investments After determining the fair value of available-for-sales debt instruments, gains or losses on these securities are recorded to other comprehensive income, until either the security is sold or the Company determines that the decline in value is other-than-temporary. The primary differentiating factors that the Company considers in classifying impairments as either temporary or other-than-temporary impairments are the Company’s intent and ability to retain the investment in the issuer for a period of time sufficient to allow for any anticipated recovery in market value or the maturity of the investment, the length of the time and the extent to which the market value of the investment has been less than cost and the financial condition and near-term prospects of the issuer. There were no December 31, 2019, 2018, 2017. Allowance for Sales Returns and Doubtful Accounts The allowance for sales returns is based on the Company’s estimates of potential future product returns and other allowances related to current period product revenue. The Company analyzes historical returns, current economic trends and changes in customer demand and acceptance of the Company's products. In cases where the Company is aware of circumstances that may Concentration of Credit Risk and Other Risks and Uncertainties The Company operates in markets that are highly competitive and rapidly changing. Significant technological changes, shifting customer needs, the emergence of competitive products or services with new capabilities and other factors could negatively impact the Company’s operating results. The Company is also subject to risks related to changes in the value of the Company’s significant balance of financial instruments. Financial instruments that potentially subject the Company to concentrations of risk consist principally of cash, cash equivalents, marketable investments and accounts receivable. The Company’s cash and cash equivalents are primarily invested in deposits and money market accounts with three may not The Company invests in debt instruments, including bonds of the U.S. Government, its agencies and municipalities. The Company has also invested in other high grade investments such as commercial paper and corporate debt securities. The Company has established guidelines relative to credit ratings, diversification and maturities that seek to maintain safety and liquidity. By policy, the Company restricts its exposure to any single issuer by imposing concentration limits. To minimize the exposure due to adverse shifts in interest rates, the Company maintains investments at an average maturity of generally less than twelve Accounts receivable are recorded net of an allowance for doubtful accounts, and are typically unsecured and are derived from revenue earned from worldwide customers. The Company controls credit risk through credit approvals, credit limits, and monitoring procedures. The Company performs credit evaluations of its customers and maintains reserves for potential credit losses. As of December 31, 2019 2018, no 10% December 31, 2019, 2018, 2017, 58%, 62%, 62%, 42%, 38%, 38%,respectively, No 10% December 31, 2019, 2018, 2017. Supplier concentration The Company relies on third third may one Secret Inventories Inventories are stated at the lower of cost and net realizable value, cost being determined on a standard cost basis which approximates actual cost on a first first The Company includes demonstration units within inventories. Demonstration units are carried at cost and amortized over an estimated economic life of two As of December 31, 2019 2018, $4.1 $2.9 Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation. Depreciation expense recognized is on a straight-line basis over the estimated useful lives of the assets, generally as follows: Useful Lives Leasehold improvements Lesser of useful life or term of lease Office equipment and furniture (in years) 3 Machinery and equipment (in years) 3 Upon sale or retirement of property and equipment, the costs and related accumulated depreciation and amortization are removed from the balance sheet and the resulting gain or loss is reflected in operating expenses. Maintenance and repairs are charged to operations as incurred. Depreciation expense related to property and equipment for 2019, 2018 2017, $1.5 $1.2 $1.0 Capitalized Cloud Computing Set-up Cost The Company capitalizes certain set-up costs for the Company’s cloud computing arrangements. The capitalized implementation costs are then amortized over the term of the cloud computing arrangement inclusive of expected contract renewals, which are generally three five Goodwill and Intangible Assets Goodwill and intangible assets with indefinite useful lives are not fourth may no The Company continues to operate in one December 31, 2019, no December 31, 2019. Warranty Obligations The Company offers post-warranty services to its customers through extended service contracts that cover replacement parts and labor for a term of one, two, or three 14 16 The Company also offers services on a time-and-materials basis for detachable hand piece replacements, parts and labor. Leases Policy from January 1, 2019 Effective January 1, 2019, 842, 12 12 not Policy before January 1, 2019 For periods prior to the Company’s adoption of ASC 842 January 1, 2019, no one Cost of Revenue Cost of revenue consists primarily of material, finished and semi-finished products purchased from third The Company's system sales include a control console, universal graphic user interface, control system software, high voltage electronics and a combination of applications (referred to as “hand pieces”). Hand pieces are programmed to have a limited number of uses to ensure the safety of the device to patients. The Company sells refurbished hand pieces, or "refills," of its Titan and truSculpt 3D Research and Development Expenditures Research and development costs are expensed as incurred and include costs related to research, design, development, testing of products, salaries, benefits and other headcount related costs, facilities, material, third Advertising Costs Advertising costs are included as part of sales and marketing expense and are expensed as incurred. Advertising expenses for 2019, 2018 2017 $2.8 $2.8 $1.8 Stock-based Compensation The Company accounts for share-based employee compensation plans using the fair value recognition and measurement provisions under U.S. GAAP. The Company’s share-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized as expense on a straight- line basis over the requisite service period. The Company estimates expected forfeitures at the time of grant and revises, if necessary, in subsequent periods if actual forfeitures differ from those estimated. Expected Term Expected Volatility 50 50 Forfeitures: 718 Risk-Free Interest Rate: The fair value of stock options ("options") on the grant date is estimated using the Black-Scholes option-pricing model using the single-option approach. The Black-Scholes option pricing model requires the use of highly subjective and complex assumptions, including the option's expected term and the price volatility of the underlying stock, to determine the fair value of award. The Company recognizes the expense associated with options using a single award approach over the requisite service period. The Company accounts for all stock options awarded to non-employees at the fair value of the award issued on the day of the grant. The fair value of restricted stock units (“RSUs”) granted are measured on the grant date using the closing price of the Company's common shares on the grant date. The quantity of the RSUs units granted is calculated by dividing a fixed award amount determined by the Board on the grant date by the average closing price of the Company’s common stock over the 50 The fair value of Performance Stock Units (“PSUs”) that have operational measurement goals, are measured on the grant date using the closing price of the Company's common shares on the grant date. The quantity of the PSUs units granted is calculated by dividing a fixed award amount determined by the Board on the grant date by the average closing price of the Company’s common stock over the 50 See Note 6 Income Taxes The Company is subject to income taxes in the United States and several foreign jurisdictions. Significant judgment is required in determining our provision (benefit) for income taxes and income tax assets and liabilities, including evaluating uncertainties in the application of accounting principles and complex tax laws. The Company records a provision (benefit) for income taxes for the anticipated tax consequences of the reported results of operations using the asset and liability method. Under this method, we recognize deferred income tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, as well as for loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled. We recognize the deferred income tax effects of a change in tax rates in the period of enactment. We record a valuation allowance to reduce our deferred tax assets to the net amount that we believe is more likely than not The Company recognizes tax benefits from uncertain tax positions if we believe that it is more likely than not no not may The Company’s effective tax rates have differed from the statutory rate primarily due to changes in the valuation allowance, foreign operations, research and development tax credits, state taxes, and certain benefits realized related to stock option activity. The Company’s current effective tax rate does not Undistributed earnings of the Company’s foreign subsidiaries at December 31, 2019 no 2017 not not Computation of Net Income (Loss) per Share Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding. Diluted net income per share is computed by dividing net income by the weighted average number of common shares and the dilutive effect of potential future issuances of common stock from outstanding stock options, RSUs, PSUs and employee stock purchase plan contributions for the period outstanding determined by applying the treasury stock method. In accordance with ASC 718, Diluted earnings per share is the same as basic earnings per share for the periods in which the Company had a net loss because the inclusion of outstanding common stock equivalents would be anti-dilutive. Comprehensive Income (Loss) Comprehensive income (loss) includes all changes in stockholders’ equity except those resulting from investments or contributions by stockholders. For the periods presented, the accumulated other comprehensive income (loss) consisted solely of the unrealized gains or losses on the Company's available for- sale investments, net of tax. Foreign Currency The financial statements of the Company’s foreign subsidiaries are translated in accordance with ASC 830, three December 31, 2019. three December 31, 2019. Segments The Company operates in one 280, one not December 31, 2019, 2018, 89.3% 89.0% 13 |