Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Feb. 14, 2014 | Aug. 02, 2013 |
Document and Entity Information | ' | ' | ' |
Entity Registrant Name | 'Control4 Corp | ' | ' |
Entity Central Index Key | '0001259515 | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Amendment Flag | 'false | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Filer Category | 'Non-accelerated Filer | ' | ' |
Entity Public Float | ' | ' | $199.70 |
Entity Common Stock, Shares Outstanding | ' | 22,901,986 | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $84,546 | $18,695 |
Accounts receivable, net | 15,064 | 13,078 |
Inventories | 15,312 | 12,515 |
Prepaid expenses and other current assets | 1,773 | 1,871 |
Total current assets | 116,695 | 46,159 |
Property and equipment, net | 3,943 | 2,666 |
Intangible assets, net | 928 | 926 |
Other assets | 1,120 | 887 |
Total assets | 122,686 | 50,638 |
Current liabilities: | ' | ' |
Accounts payable | 13,314 | 14,435 |
Accrued liabilities | 6,821 | 6,571 |
Deferred revenue | 644 | 542 |
Current portion of notes payable | 1,138 | 1,321 |
Total current liabilities | 21,917 | 22,869 |
Notes payable | 1,828 | 1,838 |
Warrant liability | ' | 601 |
Other long-term liabilities | 467 | 1,620 |
Total liabilities | 24,212 | 26,928 |
Commitments and contingencies | ' | ' |
Redeemable convertible preferred stock, $0.0001 par value; 83,163,408 and no shares authorized; 15,293,960 and no shares issued and outstanding at December 31, 2012 and December 31, 2013, respectively; aggregate liquidation preference of $118,150 and $0 at December 31, 2012 and December 31, 2013, respectively | ' | 116,313 |
Stockholders' equity (deficit): | ' | ' |
Preferred stock, $0.0001 par value, no and 25,000,000 shares authorized; no shares issued and outstanding at December 31, 2012 and December 31, 2013, respectively | ' | ' |
Common stock, $0.0001 par value; 127,836,592 and 500,000,000 shares authorized; 2,490,870 and 22,785,104 shares issued and outstanding at December 31, 2012 and December 31, 2013, respectively | 2 | ' |
Additional paid-in capital | 200,545 | 12,988 |
Accumulated deficit | -102,084 | -105,587 |
Accumulated other comprehensive income (loss) | 11 | -4 |
Total stockholders' equity (deficit) | 98,474 | -92,603 |
Total liabilities, redeemable convertible preferred stock and stockholders' equity (deficit) | $122,686 | $50,638 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, except Share data, unless otherwise specified | ||
CONSOLIDATED BALANCE SHEETS | ' | ' |
Redeemable convertible preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Redeemable convertible preferred stock, shares authorized | 0 | 83,163,408 |
Redeemable convertible preferred stock, shares issued | 0 | 15,293,960 |
Redeemable convertible preferred stock, shares outstanding | 0 | 15,293,960 |
Redeemable convertible preferred stock, aggregate liquidation preference value (in dollars) | $0 | $118,150 |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 25,000,000 | 0 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 500,000,000 | 127,836,592 |
Common stock, shares issued | 22,785,104 | 2,490,870 |
Common stock, shares outstanding | 22,785,104 | 2,490,870 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
CONSOLIDATED STATEMENTS OF OPERATIONS | ' | ' | ' |
Revenue | $128,511 | $109,512 | $93,376 |
Cost of revenue | 64,234 | 57,225 | 50,534 |
Cost of revenue - inventory purchase commitment | -380 | 1,840 | ' |
Gross margin | 64,657 | 50,447 | 42,842 |
Operating expenses: | ' | ' | ' |
Research and development | 24,979 | 20,310 | 19,211 |
Sales and marketing | 21,975 | 20,182 | 17,546 |
General and administrative | 12,329 | 10,150 | 9,805 |
Litigation settlement | 440 | 2,869 | ' |
Total operating expenses | 59,723 | 53,511 | 46,562 |
Income (loss) from operations | 4,934 | -3,064 | -3,720 |
Other income (expense): | ' | ' | ' |
Interest income | 16 | 13 | 4 |
Interest expense | -470 | -277 | -396 |
Other income (expense) | -729 | -254 | 227 |
Total other income (expense) | -1,183 | -518 | -165 |
Income (loss) before income taxes | 3,751 | -3,582 | -3,885 |
Income tax expense | -248 | -141 | ' |
Net income (loss) | $3,503 | ($3,723) | ($3,885) |
Net income (loss) per common share: | ' | ' | ' |
Basic (in dollars per share) | $0.33 | ($1.58) | ($2.02) |
Diluted (in dollars per share) | $0.16 | ($1.58) | ($2.02) |
Weighted-average number of shares: | ' | ' | ' |
Basic (in shares) | 10,609 | 2,360 | 1,923 |
Diluted (in shares) | 22,263 | 2,360 | 1,923 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ' | ' | ' |
Net income (loss) | $3,503 | ($3,723) | ($3,885) |
Other comprehensive income (loss): | ' | ' | ' |
Foreign currency translation adjustment | 15 | -28 | -10 |
Total other comprehensive income (loss) | 15 | -28 | -10 |
Comprehensive income (loss) | $3,518 | ($3,751) | ($3,895) |
CONSOLIDATED_STATEMENTS_OF_RED
CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) (USD $) | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive (Loss) Income |
In Thousands, except Share data, unless otherwise specified | |||||
Balance at Dec. 31, 2010 | ($92,974) | ' | $4,971 | ($97,979) | $34 |
Balance (in shares) at Dec. 31, 2010 | ' | 1,664,044 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' |
Net income (loss) | -3,885 | ' | ' | -3,885 | ' |
Other comprehensive income (loss) | -10 | ' | ' | ' | -10 |
Issuance of common stock warrants | 1,146 | ' | 1,146 | ' | ' |
Stock-based compensation | 1,988 | ' | 1,988 | ' | ' |
Issuance of common stock upon exercise of stock options | 1,204 | ' | 1,204 | ' | ' |
Issuance of common stock upon exercise of stock options (in shares) | ' | 577,437 | ' | ' | ' |
Issuance of common stock in exchange for services | 25 | ' | 25 | ' | ' |
Issuance of common stock in exchange for services (in shares) | ' | 4,040 | ' | ' | ' |
Balance at Dec. 31, 2011 | -92,506 | ' | 9,334 | -101,864 | 24 |
Balance (in shares) at Dec. 31, 2011 | ' | 2,245,521 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' |
Net income (loss) | -3,723 | ' | ' | -3,723 | ' |
Other comprehensive income (loss) | -28 | ' | ' | ' | -28 |
Stock-based compensation | 2,869 | ' | 2,869 | ' | ' |
Issuance of common stock upon exercise of stock options | 785 | ' | 785 | ' | ' |
Issuance of common stock upon exercise of stock options (in shares) | ' | 245,349 | ' | ' | ' |
Balance at Dec. 31, 2012 | -92,603 | ' | 12,988 | -105,587 | -4 |
Balance (in shares) at Dec. 31, 2012 | ' | 2,490,870 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' |
Net income (loss) | 3,503 | ' | ' | 3,503 | ' |
Other comprehensive income (loss) | 15 | ' | ' | ' | 15 |
Stock-based compensation | 3,760 | ' | 3,760 | ' | ' |
Issuance of common stock options in connection with a business acquisition | 174 | ' | 174 | ' | ' |
Conversion of redeemable convertible preferred stock into common stock | 116,313 | 2 | 116,311 | ' | ' |
Conversion of redeemable convertible preferred stock into common stock (in shares) | ' | 15,293,960 | ' | ' | ' |
Issuance of common stock, net of issuance costs | 65,556 | ' | 65,556 | ' | ' |
Issuance of common stock, net of issuance costs (in shares) | ' | 4,600,000 | ' | ' | ' |
Issuance of common stock upon net exercise of common stock warrants (in shares) | ' | 293,232 | ' | ' | ' |
Reclassification of redeemable convertible preferred stock warrant liability upon conversion to preferred stock | 1,310 | ' | 1,310 | ' | ' |
Issuance of common stock upon exercise of stock options | 446 | ' | 446 | ' | ' |
Issuance of common stock upon exercise of stock options (in shares) | ' | 107,042 | ' | ' | ' |
Balance at Dec. 31, 2013 | $98,474 | $2 | $200,545 | ($102,084) | $11 |
Balance (in shares) at Dec. 31, 2013 | ' | 22,785,104 | ' | ' | ' |
CONSOLIDATED_STATEMENTS_OF_RED1
CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) (Temporary Equity) (USD $) | Total | Redeemable Convertible Preferred Stock |
In Thousands, except Share data, unless otherwise specified | ||
Balance at Dec. 31, 2010 | ' | $97,670 |
Balance (in shares) at Dec. 31, 2010 | ' | 13,279,319 |
Increase (Decrease) in Stockholders' Equity | ' | ' |
Issuance of Series H redeemable convertible preferred stock for cash in February 2011, net of issuance costs of $211 | ' | 18,643 |
Issuance of Series H redeemable convertible preferred stock for cash in February 2011, net of issuance costs of $211 (in shares) | ' | 2,014,641 |
Balance at Dec. 31, 2011 | ' | 116,313 |
Balance (in shares) at Dec. 31, 2011 | ' | 15,293,960 |
Balance at Dec. 31, 2012 | 116,313 | 116,313 |
Balance (in shares) at Dec. 31, 2012 | 15,293,960 | 15,293,960 |
Increase (Decrease) in Stockholders' Equity | ' | ' |
Conversion of redeemable convertible preferred stock into common stock | $116,313 | ($116,313) |
Conversion of redeemable convertible preferred stock into common stock (in shares) | ' | -15,293,960 |
Balance (in shares) at Dec. 31, 2013 | 0 | ' |
CONSOLIDATED_STATEMENTS_OF_RED2
CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) (Parenthetical) (USD $) | 1 Months Ended |
In Thousands, unless otherwise specified | Feb. 28, 2011 |
CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) | ' |
Issuance of Series H redeemable convertible preferred stock for cash in February 2011, issuance costs | $211 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Operating activities | ' | ' | ' |
Net income (loss) | $3,503 | ($3,723) | ($3,885) |
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | ' | ' | ' |
Depreciation expense | 2,201 | 1,714 | 1,615 |
Amortization of intangible assets | 319 | 271 | 139 |
Provision for doubtful accounts | 159 | 184 | 283 |
Loss (gain) on inventory purchase commitment | -380 | 1,840 | ' |
Loss on disposal of property and equipment | ' | 107 | ' |
Stock-based compensation | 3,760 | 2,869 | 2,013 |
Warrant liability expense | 709 | 254 | -227 |
Changes in assets and liabilities: | ' | ' | ' |
Accounts receivable | -2,104 | -2,600 | -2,645 |
Inventories | -2,723 | -4,858 | 2,323 |
Prepaid expenses and other current assets | 111 | -352 | 396 |
Other assets | -233 | -823 | 155 |
Accounts payable | -1,221 | 4,622 | -975 |
Accrued liabilities | 620 | 2,117 | 882 |
Deferred revenue | 102 | -10 | -95 |
Other long-term liabilities | -1,155 | -621 | -565 |
Net cash (used in) provided by operating activities | 3,668 | 991 | -586 |
Investing activities | ' | ' | ' |
Purchases of property and equipment | -3,470 | -2,360 | -1,264 |
Business acquisition | -147 | ' | -725 |
Net cash used in investing activities | -3,617 | -2,360 | -1,989 |
Financing activities | ' | ' | ' |
Net proceeds from issuance of redeemable convertible preferred stock and common stock warrants | ' | ' | 19,789 |
Proceeds from issuance of common stock, net of issuance costs | 65,556 | ' | ' |
Proceeds from exercise of options for common stock | 446 | 785 | 1,204 |
Net repayment of revolving line of credit | ' | ' | -6,314 |
Proceeds from notes payable | 1,145 | 1,876 | 1,064 |
Repayment of notes payable | -1,338 | -1,037 | -744 |
Net cash provided by financing activities | 65,809 | 1,624 | 14,999 |
Effect of exchange rate changes on cash and cash equivalents | -9 | -28 | -10 |
Net increase in cash and cash equivalents | 65,851 | 227 | 12,414 |
Cash and cash equivalents at beginning of period | 18,695 | 18,468 | 6,054 |
Cash and cash equivalents at end of period | 84,546 | 18,695 | 18,468 |
Supplemental disclosure of cash flow information | ' | ' | ' |
Cash paid for interest | 461 | 278 | 396 |
Cash paid for taxes | 153 | 26 | ' |
Supplemental schedule of non-cash investing and financing activities | ' | ' | ' |
Options for common stock granted in connection with a business acquisition | 174 | ' | ' |
Elimination of liability upon net exercise of warrants to purchase preferred stock | 1,310 | ' | ' |
Conversion of redeemable convertible preferred stock to common stock | $116,313 | ' | ' |
Description_of_Business_and_Su
Description of Business and Summary of Significant Accounting Policies | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Description of Business and Summary of Significant Accounting Policies | ' | ||||||||||
Description of Business and Summary of Significant Accounting Policies | ' | ||||||||||
1. Description of Business and Summary of Significant Accounting Policies | |||||||||||
Control4 Corporation ("Control4" or the "Company") is a leading provider of automation and control solutions for the connected home. The Company unlocks the potential of connected devices, making entertainment systems easier to use, homes more comfortable, appliances more energy efficient, and families more secure. The Company was incorporated in the state of Delaware on March 27, 2003. | |||||||||||
Reclassifications | |||||||||||
Certain prior-year amounts have been reclassified in order to conform to the current-year presentation. The reclassification is related to gains or losses on inventory purchase commitments from accrued liabilities into the applicable caption on the statements of cash flows. This reclassification had no effect on the previously reported net cash (used in) provided by operating activities. | |||||||||||
Basis of Presentation | |||||||||||
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in the consolidated financial statements. | |||||||||||
Initial Public Offering | |||||||||||
On August 7, 2013, the Company completed its initial public offering ("IPO") of common stock in which the Company sold and issued 4,600,000 shares of common stock at a price of $16.00 per share. As a result of the IPO, the Company raised a total of $73.6 million in gross proceeds, or approximately $65.6 million in net proceeds after deducting underwriting discounts and commissions of $5.2 million and offering expenses of approximately $2.8 million. | |||||||||||
Stock Split | |||||||||||
In July 2013, the Company's board of directors and stockholders approved an amendment to the Company's amended and restated certificate of incorporation. The amendment provided for a 1-for-5.2 reverse stock split of the outstanding common stock and outstanding convertible preferred stock (collectively, "Capital Stock"), which became effective on July 18, 2013. Accordingly, (i) every 5.2 shares of Capital Stock have been combined into one share of Capital Stock, (ii) the number of shares of Capital Stock into which each outstanding option or warrant to purchase Capital Stock is exercisable, as the case may be, have been proportionately decreased on a 5.2-for-1 basis, and (iii) the exercise price for each such outstanding option or warrant to purchase Capital Stock has been proportionately increased on a 1-for-5.2 basis. All of the share numbers, share prices, and exercise prices have been adjusted within these financial statements, on a retroactive basis, to reflect this 1-for-5.2 reverse stock split. | |||||||||||
Segment Reporting | |||||||||||
Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker, the Chief Executive Officer, in making decisions regarding resource allocation and accessing performance. To date, the Company has viewed its operations and manages its business as one operating segment. | |||||||||||
Concentrations of Risk | |||||||||||
The Company's accounts receivable are derived from revenue earned from dealers and distributors primarily located in the United States and Canada. The Company's sales to dealers and distributors located outside the United States are generally denominated in United States dollars, except for sales to dealers and distributors located in the United Kingdom, which are denominated in pounds sterling. There were no individual account balances greater than 10% of total accounts receivable at December 31, 2012 and December 31, 2013. | |||||||||||
No dealer or distributor accounted for more than 10% of total revenue for the years ended December 31, 2011, 2012 and 2013. | |||||||||||
The Company relies on a limited number of suppliers for its contract manufacturing. A significant disruption in the operations of these manufacturers would impact the production of the Company's products for a substantial period of time, which could have a material adverse effect on the Company's business, financial condition and results of operations. | |||||||||||
Geographic Information | |||||||||||
The Company's revenue includes amounts earned through sales to dealers and distributors located outside of the United States. With the exception of Canada, no single foreign country accounted for more than 10% of total revenue for the years ended December 31, 2011, 2012 and 2013. The following table sets forth revenue from the U.S., Canadian and all other international dealers and distributors combined (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
Revenue-United States | $ | 63,625 | $ | 69,957 | $ | 85,525 | |||||
Revenue-Canada | 10,480 | 12,453 | 14,079 | ||||||||
Revenue-all other international sources | 19,271 | 27,102 | 28,907 | ||||||||
| | | | | | | | | | | |
Total revenue | $ | 93,376 | $ | 109,512 | $ | 128,511 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
International revenue (excluding Canada) as a percent of total revenue | 21 | % | 25 | % | 22 | % | |||||
Use of Accounting Estimates | |||||||||||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates including those related to revenue recognition, sales returns, provisions for doubtful accounts, product warranty, inventory obsolescence, litigation, determination of fair value of stock options, deferred tax asset valuation allowances and income taxes. Actual results may differ from those estimates. | |||||||||||
Product Warranty | |||||||||||
The Company provides its customers a limited product warranty of two years, which requires the Company to repair or replace (at its option) defective products during the warranty period at no cost to the customer. The Company estimates the costs that may be incurred to replace or repair defective products and records a reserve at the time revenue is recognized. Factors that affect the Company's warranty liability include the number of installed systems, the Company's historical experience and management's judgment regarding anticipated rates of product warranty returns, net of refurbished products. The Company assesses the adequacy of its recorded warranty liability each period and makes adjustments to the liability as necessary. Warranty costs accrued includes amounts accrued for products at the time of shipment, adjustments for changes in estimated costs for warranties on products shipped in the period, and changes in estimated costs for warranties on products shipped in prior periods. It is not practicable for the Company to determine the amounts applicable to each of these components. | |||||||||||
The following table presents the changes in the product warranty liability (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
Balance at the beginning of the period | $ | 775 | $ | 1,030 | $ | 1,155 | |||||
Warranty costs accrued | 727 | 1,050 | 1,025 | ||||||||
Warranty claims | (472 | ) | (925 | ) | (967 | ) | |||||
| | | | | | | | | | | |
Balance at the end of the period | $ | 1,030 | $ | 1,155 | $ | 1,213 | |||||
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| | | | | | | | | | | |
Fair Value of Financial Instruments | |||||||||||
The carrying amounts reported in the accompanying consolidated financial statements for cash and cash equivalents, accounts payable and accrued liabilities approximate their fair value because of the short-term nature of the accounts. The fair value of the notes payable approximates its carrying value based on the variable nature of interest rates and current market rates available to the Company. | |||||||||||
Net Income (Loss) Per Share | |||||||||||
Basic net income (loss) per share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share is computed using the weighted-average number of common shares outstanding and potentially dilutive common shares outstanding during the period that have a dilutive effect on net income per share. Potentially dilutive common shares result from the assumed exercise of outstanding stock options and the assumed conversion of outstanding convertible preferred stock and warrants using the if-converted method. In a net loss position, diluted net loss per share is computed using only the weighted-average number of common shares outstanding during the period, as any additional common shares would be anti-dilutive. | |||||||||||
The following table presents the reconciliation of the numerator and denominator used in the calculation of basic and diluted net income (loss) per share (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
Numerator: | |||||||||||
Net income (loss) | $ | (3,885 | ) | $ | (3,723 | ) | $ | 3,503 | |||
| | | | | | | | | | | |
| | | | | | | | | | | |
Denominator: | |||||||||||
Weighted average common stock outstanding for basic net income (loss) per common share | 1,923 | 2,360 | 10,609 | ||||||||
Effect of dilutive securities—stock options, convertible preferred stock, and warrants to purchase common stock and preferred stock | — | — | 11,654 | ||||||||
| | | | | | | | | | | |
Weighted average common shares and dilutive securities outstanding | 1,923 | 2,360 | 22,263 | ||||||||
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| | | | | | | | | | | |
The following weighted-average common stock equivalents were anti-dilutive and therefore were excluded from the calculation of diluted net income (loss) per share (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
Convertible preferred stock | 15,257 | 15,294 | — | ||||||||
Options to purchase common stock | 3,953 | 4,317 | 356 | ||||||||
Warrants to purchase common stock | 510 | 541 | 1 | ||||||||
Warrants to purchase preferred stock | 194 | 194 | — | ||||||||
| | | | | | | | | | | |
Total | 19,914 | 20,346 | 357 | ||||||||
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Revenue Recognition | |||||||||||
The Company sells its products through a network of independent dealers, regional and national retailers and distributors. These dealers, retailers and distributors generally sell the Company's products to the end consumer as part of a bundled sale, which typically includes other third-party products and related services, project design and installation services and on-going support. | |||||||||||
The Company's products include embedded software that is essential to the functionality of the hardware. Accordingly, the hardware and embedded software are accounted for as a single deliverable. In 2013, the Company began bundling MyHome software licenses with its new controllers. These software licenses do not include acceptance provisions, rights to updates (e.g., when-and-if-available enhancements or upgrades to the functionality of the software) or post-contract customer support such as technical support. When a software license and controller are sold together, a multiple element arrangement exists and revenue is allocated to each deliverable based on relative selling prices. Typically, delivery of both the product and the software license occurs at the same time. The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collection is reasonably assured. Product or licensed software is considered delivered once it has been shipped and title and risk of loss have been transferred. For most of the Company's product sales, these criteria are met at the time the product is shipped. | |||||||||||
The Company records estimated reductions to revenue for dealer, retailer and distributor incentives, primarily comprised of volume rebates, at the time of the initial sale. The estimated reductions to revenue for rebates are based on the sales terms and the Company's historical experience and trend analysis. The most common incentive relates to amounts paid or credited to dealers and distributors for achieving defined volume levels or growth objectives. | |||||||||||
Software license revenue represents fees earned from activating applications which allow end consumers to manage and control their automation systems using tablets, smartphones and other third-party devices. Software products such as Composer Home and Media Editions are sold on a limited basis and do not constitute a significant portion of revenue. The Company's perpetual software licenses do not include acceptance provisions, rights to updates or upgrades or post-contract customer support such as technical support; the Company generally recognizes revenue at the time the software license is provided. | |||||||||||
The Company offers a subscription service that allows consumers to control and monitor their homes remotely and allows the Company's dealers to perform remote diagnostic services. Subscription revenue is deferred at the time of payment and recognized on a straight-line basis over the period the service is provided. | |||||||||||
Total revenue for subscription services represents less than 10% of total revenue for all periods presented. | |||||||||||
The Company recognizes revenue net of cost of revenue for third-party products sold through the Company's online ordering system. While the Company assumes credit risk on sales to its dealers and distributors for third-party products, the Company does not determine the product selling price, does not retain associated inventory risks and is not the primary obligor to the end consumer. | |||||||||||
The Company's agreements with dealers and distributors generally do not include rights of return or acceptance provisions. Even though contractual agreements do not provide return privileges, there are circumstances in which the Company will accept returns. In addition, agreements with certain retail distributors contain price protection and limited rights of return. The Company maintains a reserve for such returns based on the Company's historical return experience. | |||||||||||
Shipping charges billed to dealers and distributors are included in revenue and related shipping costs are included in cost of revenue. | |||||||||||
Cost of Revenue | |||||||||||
Cost of revenue includes the following: the cost of inventory sold during the period, inventory write-down costs, payroll and other direct installation services costs, purchasing costs, royalty obligations, shipping expenses to dealers and distributors and warehousing costs, which include inbound freight costs from manufacturers, rent and payroll and benefit costs. | |||||||||||
Cash and Cash Equivalents | |||||||||||
The Company considers all highly liquid short-term investments with original maturities of three months or less at the time of purchase to be cash equivalents. Cash equivalents consist primarily of money market funds. | |||||||||||
Allowance for Doubtful Accounts | |||||||||||
The Company extends credit to the majority of its dealers and distributors, which consist primarily of small, local businesses. Issuance of credit is based on ongoing credit evaluations by the Company of dealers' and distributors' financial condition and generally requires no collateral. Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company maintains an allowance for doubtful accounts to reserve for potential uncollectible receivables. The allowance is based upon the creditworthiness of the Company's dealers and distributors, the dealers' and distributors' historical payment experience, the age of the receivables and current market and economic conditions. Provisions for potentially uncollectible accounts are recorded in sales and marketing expenses. The Company writes off accounts receivable balances to the allowance for doubtful accounts when it becomes likely that they will not be collected. | |||||||||||
The following table presents the changes in the allowance for doubtful accounts (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
Balance at beginning of period | $ | 619 | $ | 651 | $ | 643 | |||||
Provision | 283 | 184 | 159 | ||||||||
Deductions | (251 | ) | (192 | ) | (197 | ) | |||||
| | | | | | | | | | | |
Balance at end of period | $ | 651 | $ | 643 | $ | 605 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Inventories | |||||||||||
Inventories consist of hardware and related component parts and are stated at the lower of cost or market using the first-in, first-out method. The Company periodically assesses the recoverability of its inventory and reduces the carrying value of the inventory when items are determined to be obsolete, defective or in excess of forecasted sales requirements. Inventory write-downs for excess, defective and obsolete inventory are recorded as a cost of revenue and totaled $1.3 million, $1.5 million, and $2.3 million for the years ended December 31, 2011, 2012 and 2013, respectively. | |||||||||||
In December 2012, the Company finalized termination of a sales contract and, as a result of the contract termination, recorded a $1.8 million expense associated with an anticipated loss on firm purchase commitments for components that would have been required to meet the Company's obligations under the terminated contract. The $1.8 million charge has been recorded as Cost of Revenue—Inventory Purchase Commitment in the accompanying consolidated statement of operations during the year ended December 31, 2012. | |||||||||||
In 2013, the Company recorded a gain related to inventory purchase commitments of approximately $0.4 million, as the proceeds from liquidating the underlying inventory and the Company's ability to consume common components exceeded original estimates. | |||||||||||
Property and Equipment | |||||||||||
Property and equipment are recorded at historical cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the following estimated useful lives: | |||||||||||
Furniture and fixtures | 2 - 5 years | ||||||||||
Manufacturing tooling and test equipment | 2 - 3 years | ||||||||||
Lab and warehouse equipment | 2 - 4 years | ||||||||||
Computer equipment and software | 3 - 4 years | ||||||||||
Marketing equipment | 2 - 3 years | ||||||||||
Maintenance and repairs that do not extend the life of or improve the asset are expensed in the year incurred. Leasehold improvements are depreciated over the estimated useful life (usually 3-5 years) or the life of the associated lease, whichever is less. | |||||||||||
Intangible Assets | |||||||||||
Intangible assets primarily consist of acquired technology. The Company amortizes, to cost of revenue, definite-lived intangible assets on a straight-line basis over the life of the technology. | |||||||||||
Impairment of Long-Lived Assets | |||||||||||
The carrying value of long-lived assets is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. An impairment loss is recognized when the carrying amount of an asset exceeds the estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition. The amount of the impairment loss to be recorded is calculated by the excess of the asset's carrying value over its fair value. Fair value is generally determined using a discounted cash flow analysis. | |||||||||||
Redeemable Convertible Preferred Stock Warrant | |||||||||||
Freestanding warrants and other similar instruments related to shares that are redeemable are accounted for in accordance with ASC 480, "Distinguishing Liabilities and Equity." Under ASC 480, freestanding warrants that relate to the Company's redeemable convertible preferred stock are classified as a liability on the balance sheet. The warrant to purchase Series G-1 redeemable convertible preferred stock was subject to re-measurement at each balance sheet date and any change in fair value was recognized as a component of other income or expense. Fair value was measured using the Black-Scholes option pricing model. The Company continued to adjust the liability for changes in fair value until the closing of its initial public offering, at which time the redeemable convertible preferred stock warrants were exercised and converted into common stock and, accordingly, the liability was reclassified to equity. | |||||||||||
Foreign Currency Translation | |||||||||||
The functional currency of the Company's subsidiaries in England, China, Hong Kong and India are the pound sterling, the Chinese Yuan, the Hong Kong Dollar and the Indian Rupee, respectively. The subsidiary's assets and liabilities have been translated to U.S. dollars using the exchange rates in effect at the balance sheet dates. Statements of operations amounts have been translated using the average exchange rate for each year. Resulting gains or losses from translating foreign currency financial statements are recorded as other comprehensive income (loss). Foreign currency transaction gains (losses) resulting from exchange rate fluctuations on transactions denominated in a currency other than the local currency are included in earnings and have not been material for the years ended December 31, 2011, 2012 or 2013. | |||||||||||
Stock-Based Compensation | |||||||||||
The Company recognizes compensation expense for all stock-based awards issued to employees and directors based on estimated grant date fair values. The Company selected the Black-Scholes option-pricing model to determine the estimated fair value at the date of grant for stock options. The Company elected to amortize compensation expense using the straight-line attribution method, under which stock-based compensation expense is recognized on a straight-line basis over the period the employee performs the related services, generally the vesting period of four years, net of estimated forfeitures. The Company has estimated forfeiture rates based on its historical experience and will update the rates, as necessary, in subsequent periods if actual forfeitures differ from initial estimates. | |||||||||||
The Black-Scholes option-pricing model requires management assumptions regarding various factors that require extensive use of accounting judgment and financial estimates. The Company estimates the expected term for options using the simplified method, which utilizes the weighted average expected life of each tranche of the stock option, determined based on the sum of each tranche's vesting period plus one-half of the period from the vesting date of each tranche to the stock option's expiration, because the Company's options are considered "plain vanilla." The Company computed the expected volatility using multiple peer companies for a period approximating the expected term. The risk-free interest rate was determined using the implied yield on U.S. Treasury issues with a remaining term within the expected life of the award. | |||||||||||
The Company accounts for stock-based instruments and awards issued to non-employees at fair value using the Black-Scholes option-pricing model. Management believes that the fair value of the stock-based awards is more reliably measured than the fair value of the services received. The fair value of each non-employee award is re-measured each period until a commitment date is reached, which is generally the vesting date. | |||||||||||
Income Taxes | |||||||||||
The Company recognizes deferred tax assets and liabilities for the future tax consequences attributable to the differences between the financial statement carrying value of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the fiscal year in which those temporary differences are expected to be recovered or settled. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. | |||||||||||
The Company operates in various tax jurisdictions and is subject to audit by various tax authorities. The Company provides for tax contingencies whenever it is deemed probable that a tax asset has been impaired or a tax liability has been incurred for events such as tax claims or changes in tax laws. Tax contingencies are based upon their technical merits, relative tax law and the specific facts and circumstances as of each reporting period. Changes in facts and circumstances could result in material changes to the amounts recorded for such tax contingencies. | |||||||||||
The Company recognizes uncertain income tax positions taken on income tax returns at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. | |||||||||||
The Company's policy for recording interest and penalties associated with uncertain tax positions is to record such items as a component of its income tax provision. During the years ended December 31, 2011, 2012 and 2013, we did not record any material interest income, interest expense or penalties related to uncertain tax positions or the settlement of audits for prior periods. | |||||||||||
Presentation of Certain Taxes | |||||||||||
The Company collects various taxes from dealers and distributors and remits these amounts to the applicable taxing authorities. The Company's accounting policy is to exclude these taxes from revenue and cost of revenue. | |||||||||||
Research and Development | |||||||||||
Research and development expenses consist primarily of personnel costs, including incentive compensation, depreciation associated with research and development equipment, contract labor and consulting services, facilities-related costs, and travel-related costs. Research and development costs are expensed as incurred. | |||||||||||
Recent Accounting Pronouncements | |||||||||||
In February 2013, the FASB issued ASU 2013-02, "Comprehensive Income: Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income." The amended guidance requires an entity to present the effects on the line items of net income of significant reclassifications out of accumulated other comprehensive income if the amount being reclassified is required under U.S. generally accepted accounting principles to be reclassified in its entirety to net income in the same reporting period. The guidance is effective prospectively for the reporting periods beginning after December 15, 2012. This new guidance was effective for the Company beginning January 1, 2013. The adoption of this guidance did not have an impact on the Company's results of operations, financial position, or cash flows as it relates only to financial statement presentation. | |||||||||||
Balance_Sheet_Components
Balance Sheet Components | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Balance Sheet Components | ' | |||||||
Balance Sheet Components | ' | |||||||
2. Balance Sheet Components | ||||||||
Inventories consisted of the following (in thousands): | ||||||||
December 31, | December 31, | |||||||
2012 | 2013 | |||||||
Finished goods | $ | 12,306 | $ | 14,061 | ||||
Component parts | 209 | 1,251 | ||||||
| | | | | | | | |
$ | 12,515 | $ | 15,312 | |||||
| | | | | | | | |
| | | | | | | | |
Property and equipment, net consisted of the following (in thousands): | ||||||||
December 31, | December 31, | |||||||
2012 | 2013 | |||||||
Computer equipment and software | $ | 3,518 | $ | 4,152 | ||||
Manufacturing tooling and test equipment | 2,731 | 2,652 | ||||||
Furniture and fixtures | 1,801 | 2,046 | ||||||
Lab and warehouse equipment | 1,974 | 2,374 | ||||||
Marketing equipment | 419 | 604 | ||||||
Leasehold improvements | 803 | 1,450 | ||||||
| | | | | | | | |
11,246 | 13,278 | |||||||
Less: accumulated depreciation | (8,580 | ) | (9,335 | ) | ||||
| | | | | | | | |
$ | 2,666 | $ | 3,943 | |||||
| | | | | | | | |
| | | | | | | | |
Intangible assets, net consisted of the following (in thousands): | ||||||||
December 31, | December 31, | |||||||
2012 | 2013 | |||||||
Acquired technology | $ | 1,357 | $ | 1,678 | ||||
Less: accumulated amortization | (431 | ) | (750 | ) | ||||
| | | | | | | | |
$ | 926 | $ | 928 | |||||
| | | | | | | | |
| | | | | | | | |
Other assets consisted of the following (in thousands): | ||||||||
December 31, | December 31, | |||||||
2012 | 2013 | |||||||
Prepaid licensing | $ | 700 | $ | 716 | ||||
Deposits | 187 | 404 | ||||||
| | | | | | | | |
$ | 887 | $ | 1,120 | |||||
| | | | | | | | |
| | | | | | | | |
Accrued liabilities consisted of the following (in thousands): | ||||||||
December 31, | December 31, | |||||||
2012 | 2013 | |||||||
Current portion of settlement obligations (see Note 6) | $ | 2,229 | $ | 907 | ||||
Sales returns and warranty accruals | 2,045 | 2,137 | ||||||
Compensation accruals | 1,495 | 3,233 | ||||||
Other accrued liabilities | 802 | 544 | ||||||
| | | | | | | | |
$ | 6,571 | $ | 6,821 | |||||
| | | | | | | | |
| | | | | | | | |
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Fair Value Measurements | ' | |||||||||||||
Fair Value Measurements | ' | |||||||||||||
3. Fair Value Measurements | ||||||||||||||
The Company's financial instruments that are measured at fair value on a recurring basis consist of money market funds and redeemable preferred stock warrants. The following three levels of inputs are used to measure the fair value of financial instruments: | ||||||||||||||
Level 1: Quoted prices in active markets for identical assets or liabilities. The Company classifies its money market funds as Level 1 instruments as they are traded in active markets with sufficient volume and frequency of transactions. | ||||||||||||||
Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. The Company did not have any Level 2 instruments during the reported periods. | ||||||||||||||
Level 3: Unobservable inputs are used when little or no market data is available. The Company utilized a Black-Scholes option-pricing model in order to determine the fair value of the redeemable preferred stock warrant, with such value determined on an as-converted basis. Certain inputs used in the model are unobservable. | ||||||||||||||
The fair market value of the Company's common stock was used to value the warrant liability. The fair value of the warrants was calculated using the income approach and is based on the following assumptions: | ||||||||||||||
December 31, | ||||||||||||||
2012 | ||||||||||||||
Dividend yield | 0 | % | ||||||||||||
Expected volatility | 54 | % | ||||||||||||
Risk-free interest rate | 0.16 | % | ||||||||||||
Remaining contractual term (in years) | 1.5 | |||||||||||||
The fair values of these financial assets and the redeemable preferred stock warrants were as follows (in thousands): | ||||||||||||||
Fair value measurements at | ||||||||||||||
December 31, 2012 using | ||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||
Cash equivalents: | ||||||||||||||
Money market funds | $ | 15,554 | $ | — | $ | — | $ | 15,554 | ||||||
Other liabilities: | ||||||||||||||
Redeemable preferred stock warrants | — | — | 601 | 601 | ||||||||||
Fair value measurements at | ||||||||||||||
December 31, 2013 using | ||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||
Cash equivalents: | ||||||||||||||
Money market funds | $ | 79,013 | $ | — | $ | — | $ | 79,013 | ||||||
Other liabilities: | ||||||||||||||
Redeemable preferred stock warrants | — | — | — | — | ||||||||||
During the years ended December 31, 2012 and 2013, the change in fair value for the redeemable preferred stock warrant liability of $0.3 million and $0.7 million were recorded to other expense. Upon the closing of the Company's initial public offering, the warrants to purchase shares of the Company's redeemable convertible preferred stock were net exercised. The then-current aggregate fair value of the warrant liability of $1.3 million was reclassified from long-term liabilities to additional paid-in capital, a component of stockholders' equity, and the Company ceased to record any further periodic fair value adjustments relating to the warrant liability. | ||||||||||||||
Acquisition
Acquisition | 12 Months Ended |
Dec. 31, 2013 | |
Acquisition | ' |
Acquisition | ' |
4. Acquisition | |
On June 21, 2013, the Company acquired the assets of a technology company, which constitute a business. The fair value of the consideration to purchase the business was approximately $259,000, which consisted of cash payments and options to purchase shares of common stock with an exercise price of $11.28. The estimated fair value of separately identifiable intangible assets will be amortized over an estimated useful life of two to three years. As a result, future amortization expense related to the acquisition will be $96,000, $88,000, and $40,000 for the years ending December 31, 2014, 2015, and 2016, respectively. | |
Intangible_Assets
Intangible Assets | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Intangible Assets | ' | ||||
Intangible Assets | ' | ||||
5. Intangible Assets | |||||
In 2011, the Company entered into a purchase agreement to acquire software technology to be used in certain software applications. The total purchase price was determined based on a revenue-sharing formula for software licenses sold with the acquired technology between December 2011 and November 2012. The purchase agreement included a minimum purchase price of $0.7 million and a maximum purchase price of $2.0 million. In 2011, the Company recorded a finite-lived intangible asset and corresponding obligation for the minimum purchase price of $0.7 million, based on estimated future license sales under the agreement. Based on sales during that period, the final purchase price was $0.7 million. The asset is being amortized and expensed to cost of revenue on a straight-line basis over the estimated life of the associated technology, which was determined to be five years. | |||||
In 2010, the Company completed the acquisition of software technology to be used in certain software applications for a total purchase price that consisted of a cash payment of approximately $0.3 million and the issuance of a warrant to purchase 71,153 shares of the Company's common stock at a fair value of $0.3 million. The total purchase price of approximately $0.6 million was recorded as a finite-lived intangible asset and is being amortized and expensed to cost of revenue on a straight-line basis over the estimated life of the associated technology which was determined to be five years. | |||||
Amortization of finite-lived intangible assets as of December 31, 2013 is as follows for the next three years: | |||||
2014 | $ | 392 | |||
2015 | 363 | ||||
2016 | 173 | ||||
| | | | | |
$ | 928 | ||||
| | | | | |
| | | | | |
LongTerm_Obligations
Long-Term Obligations | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Long-Term Obligations | ' | ||||
Long-Term Obligations | ' | ||||
6. Long-Term Obligations | |||||
Loan and Security Agreement | |||||
In June 2013, the Company entered into an Amended and Restated Loan and Security Agreement with Silicon Valley Bank (the "SVB Agreement"), which consists of a revolving credit facility of $13.0 million (subject to certain borrowing base restrictions) and term borrowings to fund purchases of property and equipment. All borrowings under the SVB Agreement are collateralized by the general assets of the Company. The credit facility has a variable rate of interest of prime (as published in the Wall Street Journal) or LIBOR plus 2.50%, as selected by the Company. The rate was 3.25% at December 31, 2013. In addition, the Company pays an annual commitment fee of $20,000 and a quarterly unused line fee of 0.375% based on the difference between the borrowing commitment of $13.0 million and the then-current balance. The SVB Agreement provided for an additional $2.75 million in term borrowings to fund purchase of property and equipment through May 2014, of which $2.0 million was available at December 31, 2013. Term borrowings are payable in 36 equal monthly payments of principal plus interest and bear interest at prime plus 0.50%, which was 3.75% at December 31, 2013. | |||||
Borrowing under the revolving credit facility is subject to certain collateral restrictions relating primarily to the Company's accounts receivable and inventory levels. As of December 31, 2013, the total borrowing capacity was approximately $13.0 million, and no borrowings were outstanding. The revolving credit facility has a maturity date of May 29, 2015. | |||||
The SVB Agreement contains various restrictive and financial covenants and the Company was in compliance with each of these covenants as of December 31, 2013. | |||||
Future principal payments on outstanding term borrowings as of December 31, 2013 are as follows (in thousands): | |||||
2014 | $ | 1,138 | |||
2015 | 915 | ||||
2016 | 727 | ||||
2017 | 186 | ||||
| | | | | |
$ | 2,966 | ||||
| | | | | |
| | | | | |
Settlement Obligation | |||||
The Company has entered into various settlement agreements relating to alleged patent infringements, which included future payments under non-interest bearing, unsecured notes payable. The carrying values of the notes payable have been discounted using an implied interest rate of 3.75% and are included in accrued and other long-term liabilities in the accompanying consolidated balance sheets. | |||||
Upon closing of the Company's initial public offering, the balance due on one of the settlement obligations was accelerated and became immediately due and payable. As a result, the Company made a final payment on this obligation of $2.1 million on August 12, 2013. The difference between the carrying value of the note and the payment was recorded as a $0.2 million charge to interest expense. | |||||
Future annual payments on the settlement obligations as of December 31, 2013 are shown in the table below (in thousands): | |||||
2014 | $ | 940 | |||
2015 | 20 | ||||
2016 | 20 | ||||
| | | | | |
980 | |||||
Less amount representing interest | (33 | ) | |||
| | | | | |
Present value of settlement obligations | 947 | ||||
Less current portion of settlement obligations | (907 | ) | |||
| | | | | |
Long-term portion of settlement obligations | $ | 40 | |||
| | | | | |
| | | | | |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Income Taxes | ' | ||||||||||
Income Taxes | ' | ||||||||||
7. Income Taxes | |||||||||||
The domestic and foreign components of net income (loss) before income tax expense consists of the following for the periods shown below (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
Income (loss) before income taxes: | |||||||||||
Domestic | $ | (4,697 | ) | $ | (4,055 | ) | $ | 3,633 | |||
Foreign | 812 | 473 | 118 | ||||||||
| | | | | | | | | | | |
Total income (loss) before income taxes | $ | (3,885 | ) | $ | (3,582 | ) | $ | 3,751 | |||
| | | | | | | | | | | |
| | | | | | | | | | | |
The provision for income taxes consisted of the following components (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
Current: | |||||||||||
Domestic | |||||||||||
Federal | $ | — | $ | 15 | $ | 64 | |||||
State | — | 57 | 53 | ||||||||
Foreign | — | 69 | 147 | ||||||||
| | | | | | | | | | | |
Total current tax expense | — | 141 | 264 | ||||||||
| | | | | | | | | | | |
Deferred: | |||||||||||
Domestic | |||||||||||
Federal | (1,773 | ) | (710 | ) | 1,572 | ||||||
State | (280 | ) | (65 | ) | 44 | ||||||
Foreign | 251 | 88 | (16 | ) | |||||||
Valuation allowance | 1,802 | 687 | (1,616 | ) | |||||||
| | | | | | | | | | | |
Total deferred tax benefit | — | — | (16 | ) | |||||||
| | | | | | | | | | | |
Total income tax expense | $ | — | $ | 141 | $ | 248 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
A reconciliation from the U.S. statutory federal income tax rate to the effective income tax rate follows: | |||||||||||
Years Ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
Federal income tax rate | (34.0 | )% | (34.0 | )% | 34 | % | |||||
State taxes, net of federal benefit | (4.1 | ) | 1.1 | 1.1 | |||||||
Stock-based compensation | 9.1 | 15 | 22.7 | ||||||||
Stock warrant | — | — | 6.4 | ||||||||
Research and development credits | (16.0 | ) | — | (18.3 | ) | ||||||
Change in valuation allowance | 46.4 | 17.3 | (42.0 | ) | |||||||
Other, net | (1.4 | ) | 4.5 | 2.7 | |||||||
| | | | | | | | | | | |
Effective income tax rate | 0 | % | 3.9 | % | 6.6 | % | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Deferred tax assets and (liabilities) are comprised of the following (in thousands): | |||||||||||
December 31, | |||||||||||
2012 | 2013 | ||||||||||
Deferred Tax Assets: | |||||||||||
Reserves and accruals | $ | 3,396 | $ | 2,146 | |||||||
Inventories | 606 | 1,059 | |||||||||
Net operating loss carryforwards | 30,165 | 27,865 | |||||||||
Property, plant and equipment | 1,054 | 1,327 | |||||||||
Stock-based compensation | 783 | 1,233 | |||||||||
Research and development credit carryforwards | 3,254 | 4,091 | |||||||||
Other | 204 | 163 | |||||||||
| | | | | | | | ||||
Total deferred tax assets | 39,462 | 37,884 | |||||||||
Valuation allowance | (39,462 | ) | (37,842 | ) | |||||||
| | | | | | | | ||||
Total deferred tax assets | $ | — | $ | 42 | |||||||
Deferred Tax Liabilities: | |||||||||||
Undistributed earnings of foreign subsidiaries | — | $ | (15 | ) | |||||||
Property and equipment | — | (11 | ) | ||||||||
| | | | | | | | ||||
Total deferred tax liabilities | $ | — | $ | (26 | ) | ||||||
| | | | | | | | ||||
Net deferred tax asset | $ | — | $ | 16 | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
During the year ended December 31, 2012, the Company reversed the valuation allowance for deferred tax assets related to its subsidiary operating in the UK totaling $92,000. This subsidiary had a history of generating income and used its remaining net operating loss carryforwards in the year ended December 31, 2012. | |||||||||||
At December 31, 2012 and 2013, the Company had a full valuation allowance against the deferred tax assets of its domestic operations as it believes it is more likely than not that these benefits will not be realized. Significant judgment is required in making this assessment, and it is very difficult to predict when, if ever, the assessment may conclude that the remaining portion of the deferred tax assets are realizable. The net valuation allowance increased by approximately $0.7 million and decreased by approximately $1.6 million during the years ended December 31, 2012 and 2013, respectively. | |||||||||||
Net operating loss and tax credit carryforwards as of December 31, 2013 are as follows (in thousands): | |||||||||||
Amount | Expiration Years | ||||||||||
Net operating losses, federal | $ | 77,435 | 2023 - 2031 | ||||||||
Net operating losses, state | 75,640 | 2018 - 2031 | |||||||||
Tax credit carryforwards, federal | 3,158 | 2023 - 2033 | |||||||||
Tax credit carryforwards, state | 1,413 | 2018 - 2028 | |||||||||
Net operating losses, foreign | 21 | None | |||||||||
Approximately $2.7 million of the net operating losses reported above represents unrecorded tax benefits for stock-based compensation, which will be recorded in additional paid in capital when realized. Utilization of the net operating loss carryforwards and credits may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended (the "IRC"), and similar state provisions. The Company has not performed a detailed analysis to determine whether an ownership change under Section 382 of the IRC has occurred or will occur. The effect of an ownership change would be the imposition of an annual limitation on the use of net operating loss carryforwards attributable to periods before the change. | |||||||||||
The following is a reconciliation of the changes in the gross balance of unrecognized tax benefits, excluding interest and penalties (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
Balance at the beginning of the period | $ | 1,862 | $ | 2,318 | $ | 2,318 | |||||
Current year additions | 456 | — | 625 | ||||||||
| | | | | | | | | | | |
Balance at the end of the period | $ | 2,318 | $ | 2,318 | $ | 2,943 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
The Company does not believe there will be any material changes in its unrecognized tax benefits over the next 12 months. As of December 31, 2013, the amount of unrecognized tax benefits that would, if recognized, impact the Company's effective income tax rate is approximately $2.9 million. | |||||||||||
The Company files income tax returns in the United States, including various state and local jurisdictions. The Company's subsidiaries file income tax returns in the United Kingdom, Hong Kong, China and India. The Company is subject to examination in the United States, the United Kingdom, Hong Kong, China, and India as well as various state jurisdictions. As of December 31, 2013, the Company was not under examination by any tax authorities. Tax years beginning in 2008 are subject to examination by taxing United States tax authorities, although net operating loss and credit carryforwards from all years are subject to examinations and adjustments for at least three years following the year in which the attributes are used. Tax years beginning in 2009 are subject to examination by the taxing authorities in the United Kingdom. | |||||||||||
At December 31, 2013, the Company had undistributed foreign earnings of $0.8 million, which the Company intends to permanently reinvest in the foreign subsidiary. Unrecognized deferred tax liabilities of $0.3 million from temporary differences related to the investment in this foreign subsidiary would have been taxable if the Company repatriated the foreign earnings. The Company anticipates that future overseas earnings will also be reinvested indefinitely. In accordance with the indefinite reversal criteria, the foreign currency gains recorded in other comprehensive income related to foreign currency translation have not been tax effected. | |||||||||||
Redeemable_Convertible_Preferr
Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) | ' | ||||||||||||||||
Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) | ' | ||||||||||||||||
8. Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) | |||||||||||||||||
Redeemable Convertible Preferred Stock | |||||||||||||||||
Upon closing of the Company's initial public offering, the 15,293,960 shares of issued and outstanding redeemable convertible preferred stock were converted into common stock. Each share of redeemable convertible preferred stock, shown as issued and outstanding in the table below, was converted into one share of common stock. The carrying value of the redeemable preferred stock at August 7, 2013 of $116.3 million was reclassified to common stock and additional paid-in capital. | |||||||||||||||||
Redeemable convertible preferred stock consisted of the following at December 31, 2012 and August 7, 2013 (in thousands, except share data): | |||||||||||||||||
Shares | Shares | Aggregate | |||||||||||||||
Authorized | Issued and | Liquidation | |||||||||||||||
Outstanding | Preference | ||||||||||||||||
Series A | 8,150,000 | 1,567,306 | $ | 4,075 | |||||||||||||
Series B | 18,124,230 | 3,485,425 | 14,735 | ||||||||||||||
Series C | 14,215,791 | 2,726,476 | 15,000 | ||||||||||||||
Series D | 7,789,215 | 1,497,921 | 15,890 | ||||||||||||||
Series E | 5,045,662 | 965,927 | 11,000 | ||||||||||||||
Series F | 5,988,024 | 1,151,542 | 20,000 | ||||||||||||||
Series G | 8,677,338 | 1,668,707 | 15,450 | ||||||||||||||
Series G-1 | 2,073,148 | 216,015 | 2,000 | ||||||||||||||
Series H | 13,100,000 | 2,014,641 | 20,000 | ||||||||||||||
| | | | | | | | | | | |||||||
83,163,408 | 15,293,960 | $ | 118,150 | ||||||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
Prior to their conversion, the Series A, Series B, Series C, Series D, Series E, Series F, Series G, Series G-1 and Series H redeemable convertible preferred stockholders were entitled to receive, when, as and if declared by the Company's Board of Directors, dividends at a rate of $0.21, $0.34, $0.44, $0.85, $0.91, $1.39, $0.74, $0.74, and $0.79 per share per year, respectively. To the extent that additional dividends were declared by the Board of Directors, those amounts would have been distributed equally among the Preferred Stockholders and common stockholders. As of December 31, 2013, no dividends had been declared by the Board of Directors. | |||||||||||||||||
Warrants to Purchase Stock and Preferred Stock Warrant Liability | |||||||||||||||||
Warrants to purchase common and preferred stock are summarized in the following table: | |||||||||||||||||
Number of Shares Subject to Warrant | |||||||||||||||||
December 31, | December 31, | Exercise Price | |||||||||||||||
2012 | 2013 | ||||||||||||||||
Warrants to purchase shares of common stock | 71,153 | — | $ | 7.49 | |||||||||||||
Warrants to purchase shares of common stock | 470,082 | — | 9.93 | ||||||||||||||
Warrants to purchase Series C redeemable convertible preferred stock(1) | 7,325 | — | 5.5 | ||||||||||||||
Warrants to purchase Series E redeemable convertible preferred stock(1) | 4,390 | — | 11.39 | ||||||||||||||
Warrants to purchase shares of common stock(1) | — | 7,325 | 5.5 | ||||||||||||||
Warrants to purchase shares of common stock(1) | — | 4,390 | 11.39 | ||||||||||||||
Warrants to purchase Series G-1 redeemable convertible preferred stock | 182,666 | — | 9.26 | ||||||||||||||
| | | | | | | | | | | |||||||
735,616 | 11,715 | ||||||||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
-1 | |||||||||||||||||
Warrants to purchase Series C and Series E redeemable convertible preferred stock were converted into warrants to purchase shares of common stock upon the closing of the Company's initial public offering. | |||||||||||||||||
Upon the closing of the Company's initial public offering, warrants to purchase 723,901 shares of the Company's common and preferred stock were net exercised, and the Company issued 293,232 shares of common stock to the holders of the warrants. | |||||||||||||||||
In 2009, the Series G-1 investors received warrants to purchase 182,666 shares of Series G-1 redeemable convertible preferred stock at a price of $9.26 per share. The warrants became immediately exercisable upon the closing of the Series G-1 financing and the fair value of $0.4 million was recorded as a liability with the offsetting charge to expense. Because the holders of the preferred stock were able to elect to redeem the shares for cash, the Company's outstanding preferred stock warrants were classified as liabilities and were revalued at the end of each reporting period using the Black-Scholes option-pricing valuation model. Changes in fair value were reflected in the Company's statements of operations as other income or expense. Upon the effective date of the Company's initial public offering, the Company adjusted the liability based upon the offering price of $16.00 per share. During the years ended December 31, 2012 and 2013, the change in fair value for the redeemable preferred stock warrant liability of $0.3 million and $0.7 million were recorded to other expense. | |||||||||||||||||
As discussed above, upon the closing of the Company's initial public offering, the warrants to purchase shares of the Company's redeemable convertible preferred stock were net exercised. Of the 293,232 shares issued, the Company issued 76,964 shares of common stock to the warrant holder of Series G-1 redeemable convertible preferred stock. The then-current aggregate fair value of the warrant liability of $1.3 million was reclassified from long-term liabilities to additional paid-in capital, a component of stockholders' equity, and the Company ceased to record any further periodic fair value adjustments relating to the warrant liability. | |||||||||||||||||
Stock Options | |||||||||||||||||
In 2003, the Board of Directors adopted the 2003 Equity Incentive Plan (the "2003 Plan"), which provided for the granting of nonqualified and incentive stock options, stock appreciation rights, stock awards and restricted stock. Under the 2003 Plan, the Company was able to grant nonqualified and incentive stock options to directors, employees and non-employees providing services to the Company. On June 11, 2013, the Company's Board of Directors adopted the 2013 Stock Option and Incentive Plan (the "2013 Plan"), which was subsequently approved by the Company's stockholders. The 2013 Plan became effective as of the closing of the Company's initial public offering. To the extent that any awards outstanding under the 2003 Plan are forfeited or lapse unexercised subsequent to August 1, 2013, the shares of common stock subject to such awards will become available for issuance under the 2013 Plan. The 2013 Plan provides for annual increases in the number of reserved shares of up to 5% of the outstanding number of shares of the Company's Common Stock. | |||||||||||||||||
A summary of stock option activity for the years ended December 31, 2011, 2012 and 2013 is presented below: | |||||||||||||||||
Shares Subject | Weighted | Weighted | Weighted | ||||||||||||||
to Options | Average | Average | Average | ||||||||||||||
Outstanding | Grant Date | Exercise Price | Remaining | ||||||||||||||
Fair Value | Contractual | ||||||||||||||||
Life (Years) | |||||||||||||||||
Balance at December 31, 2010 | 3,373,112 | 2.02 | 3.51 | 6.9 | |||||||||||||
Granted | 1,988,044 | 3.94 | 6.19 | ||||||||||||||
Exercised | (577,437 | ) | 1.2 | 2.08 | |||||||||||||
Expired | (186,736 | ) | 2.39 | 4.33 | |||||||||||||
Forfeited | (244,279 | ) | 3.22 | 5.3 | |||||||||||||
| | | | | | | | | | | | | | ||||
Balance at December 31, 2011 | 4,352,704 | 2.93 | 4.79 | 7.6 | |||||||||||||
Granted | 715,205 | 5.31 | 9.45 | ||||||||||||||
Exercised | (245,349 | ) | 1.92 | 3.2 | |||||||||||||
Expired | (14,148 | ) | 2.97 | 4.91 | |||||||||||||
Forfeited | (159,174 | ) | 3.63 | 5.71 | |||||||||||||
| | | | | | | | | | | | | | ||||
Balance at December 31, 2012 | 4,649,238 | 3.33 | 5.56 | 7.2 | |||||||||||||
Granted | 480,698 | 10.08 | 13.2 | ||||||||||||||
Exercised | (107,042 | ) | 2.36 | 4.17 | |||||||||||||
Expired | (27,772 | ) | 3.43 | 5.79 | |||||||||||||
Forfeited | (89,908 | ) | 4.44 | 7.14 | |||||||||||||
| | | | | | | | | | | | | | ||||
Balance at December 31, 2013 | 4,905,214 | $ | 3.95 | $ | 6.31 | 6.4 | |||||||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
Exercisable options at December 31, 2012 | 2,640,278 | $ | 2.5 | $ | 4.26 | 5.8 | |||||||||||
Vested during the year ended December 31, 2012 | 824,083 | 3.69 | 5.93 | ||||||||||||||
Vested and expected to vest at December 31, 2012 | 4,280,084 | 3.22 | 5.41 | ||||||||||||||
Non-vested options at December 31, 2012 | 2,009,505 | 4.37 | 7.28 | ||||||||||||||
Exercisable options at December 31, 2013 | 3,285,695 | 2.91 | 4.88 | 5.5 | |||||||||||||
Vested during the year ended December 31, 2013 | 845,965 | 4.08 | 6.97 | ||||||||||||||
Vested and expected to vest at December 31, 2013 | 4,544,942 | 3.82 | 6.15 | ||||||||||||||
Non-vested options at December 31, 2013 | 1,619,517 | 6.11 | 9.22 | ||||||||||||||
The following table summarizes information about stock options outstanding and exercisable at December 31, 2013: | |||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||
Range of Exercise Prices | Weighted | Number of | Weighted- | Number of | Weighted- | ||||||||||||
Average | Underlying | Average | Underlying | Average | |||||||||||||
Exercise | Shares | Remaining | Shares | Remaining | |||||||||||||
Price | Contractual | Contractual | |||||||||||||||
Life (in years) | Life (in years) | ||||||||||||||||
$0.26 - 1.30 | $ | 0.57 | 187,284 | 1 | 187,284 | 1 | |||||||||||
1.35 - 2.60 | 2.18 | 473,347 | 2.5 | 473,347 | 2.5 | ||||||||||||
2.65 - 3.90 | 3.23 | 325,523 | 3.6 | 325,523 | 3.6 | ||||||||||||
3.95 - 5.20 | 4.87 | 941,827 | 5.2 | 937,785 | 5.2 | ||||||||||||
5.25 - 6.50 | 6.19 | 1,686,513 | 7.7 | 1,033,886 | 7.7 | ||||||||||||
6.55 - 7.80 | 7.49 | 118,947 | 6.5 | 100,620 | 6.5 | ||||||||||||
7.85 - 9.10 | 8.84 | 238,451 | 8.5 | 94,534 | 8.5 | ||||||||||||
9.15 - 22.77 | 11.54 | 933,322 | 8.7 | 132,716 | 8.9 | ||||||||||||
| | | | | | | | | | | | | | | | | |
4,905,214 | 3,285,695 | ||||||||||||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
The following table summarizes the aggregate intrinsic-value of options exercised, outstanding and exercisable (in thousands): | |||||||||||||||||
For the Years Ended and as of | |||||||||||||||||
December 31, | |||||||||||||||||
2011 | 2012 | 2013 | |||||||||||||||
Options Exercised | $ | 2,400 | $ | 1,310 | $ | 1,315 | |||||||||||
Options Outstanding | 9,110 | 23,480 | 56,197 | ||||||||||||||
Options Exercisable | 7,100 | 16,800 | 42,116 | ||||||||||||||
The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions: | |||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2011 | 2012 | 2013 | |||||||||||||||
Expected volatility | 71 - 73% | 59 - 63% | 56 - 59% | ||||||||||||||
Expected dividends | 0% | 0% | 0% | ||||||||||||||
Expected terms (in years) | 5.0 - 6.1 | 5.0 - 6.1 | 3.3 - 7.2 | ||||||||||||||
Risk-free rate | 1.1 - 2.5% | 0.7 - 1.0% | 0.8 - 1.7% | ||||||||||||||
Forfeiture rate | 11.60% | 7.90% | 7.20% | ||||||||||||||
Total stock-based compensation expense has been classified as follows in the accompanying statements of operations (in thousands): | |||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2011 | 2012 | 2013 | |||||||||||||||
Cost of revenue | $ | 49 | $ | 78 | $ | 63 | |||||||||||
Research and development | 492 | 704 | 1,414 | ||||||||||||||
Sales and marketing | 523 | 580 | 743 | ||||||||||||||
General and administrative | 949 | 1,507 | 1,540 | ||||||||||||||
| | | | | | | | | | | |||||||
Total stock-based compensation expense | $ | 2,013 | $ | 2,869 | $ | 3,760 | |||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
At December 31, 2013, there was $7.2 million of total unrecognized compensation cost related to non-vested stock option awards that will be recognized over a weighted-average period of 2.9 years. | |||||||||||||||||
Related_Party_Transactions
Related Party Transactions | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Related Party Transactions | ' | ||||||||||
Related Party Transactions | ' | ||||||||||
9. Related Party Transactions | |||||||||||
The Company has entered into sales agreements with certain of its investors. The following table sets forth revenue from product sales to companies affiliated with these investors (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
Company 1 | $ | 995 | $ | 2,142 | $ | 2,889 | |||||
Company 2 | 2,134 | 1,290 | 950 | ||||||||
Company 3 | 478 | 791 | 426 | ||||||||
Company 4 | — | 1,807 | 129 | ||||||||
| | | | | | | | | | | |
$ | 3,607 | $ | 6,030 | $ | 4,394 | ||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
As of December 31, 2012 and 2013, the Company had accounts receivable from these companies totaling $1.5 million and $0.6 million, respectively. Purchase and payment terms with these related parties are consistent with other non-affiliated companies. | |||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and Contingencies | ' | ||||
Commitments and Contingencies | ' | ||||
10. Commitments and Contingencies | |||||
Operating Leases | |||||
The Company leases office and warehouse space under operating leases that expire between 2014 and 2018. The terms of the leases include periods of free rent, options for the Company to extend the leases (three to five years) and increasing rental rates over time. The Company recognizes rental expense under these operating leases on a straight-line basis over the lives of the leases and has accrued for rental expense recorded but not paid. | |||||
Rental expense was approximately $1.0 million, $1.1 million and $1.4 million for the years ended December 31, 2011, 2012 and 2013, respectively. | |||||
Future minimum rental payments required under non-cancelable operating leases with initial or remaining terms in excess of one year consist of the following as of December 31, 2013 (in thousands): | |||||
2014 | $ | 1,613 | |||
2015 | 1,620 | ||||
2016 | 1,504 | ||||
2017 | 1,283 | ||||
2018 | 697 | ||||
Thereafter | — | ||||
| | | | | |
$ | 6,717 | ||||
| | | | | |
| | | | | |
Purchase Commitments | |||||
The Company had non-cancellable purchase commitments for the purchase of inventory, which extend through May 2014 totaling approximately $22.6 million at December 31, 2013. | |||||
Indemnification | |||||
The Company has agreed to indemnify its officers and directors for certain events or occurrences, while the officer or director is or was serving at the Company's request in such capacity. The maximum amount of potential future indemnification is unlimited; however, the Company has a director and officer insurance policy that provides corporate reimbursement coverage that limits its exposure and enables it to recover a portion of any future amounts paid. The Company is unable to reasonably estimate the maximum amount that could be payable under these arrangements since these obligations are not capped but are conditional to the unique facts and circumstances involved. Accordingly, the Company has no liabilities recorded for these agreements as of December 31, 2013. | |||||
Employment Agreements | |||||
The Company has signed employment agreements with certain executive officers who are entitled to receive certain benefits if their employment is terminated by the Company, including severance payments, accelerated vesting of stock options and continuation of certain insurance benefits. | |||||
Legal Matters | |||||
The Company is subject to various lawsuits and other claims that arise from time to time in the ordinary course of business. These actions may be based on alleged patent infringement or other matters. The Company intends to defend itself vigorously against any such actions. The Company establishes reserves for specific liabilities in connection with legal actions that it deems to be probable and estimable. | |||||
In management's opinion, the Company is not currently involved in any legal proceedings that, individually or in the aggregate, could have a material effect on the Company's financial condition, operations, or cash flows. | |||||
Description_of_Business_and_Su1
Description of Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Description of Business and Summary of Significant Accounting Policies | ' | ||||||||||
Reclassifications | ' | ||||||||||
Reclassifications | |||||||||||
Certain prior-year amounts have been reclassified in order to conform to the current-year presentation. The reclassification is related to gains or losses on inventory purchase commitments from accrued liabilities into the applicable caption on the statements of cash flows. This reclassification had no effect on the previously reported net cash (used in) provided by operating activities. | |||||||||||
Basis of Presentation | ' | ||||||||||
Basis of Presentation | |||||||||||
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in the consolidated financial statements. | |||||||||||
Initial Public Offering | ' | ||||||||||
Initial Public Offering | |||||||||||
On August 7, 2013, the Company completed its initial public offering ("IPO") of common stock in which the Company sold and issued 4,600,000 shares of common stock at a price of $16.00 per share. As a result of the IPO, the Company raised a total of $73.6 million in gross proceeds, or approximately $65.6 million in net proceeds after deducting underwriting discounts and commissions of $5.2 million and offering expenses of approximately $2.8 million. | |||||||||||
Stock Split | ' | ||||||||||
Stock Split | |||||||||||
In July 2013, the Company's board of directors and stockholders approved an amendment to the Company's amended and restated certificate of incorporation. The amendment provided for a 1-for-5.2 reverse stock split of the outstanding common stock and outstanding convertible preferred stock (collectively, "Capital Stock"), which became effective on July 18, 2013. Accordingly, (i) every 5.2 shares of Capital Stock have been combined into one share of Capital Stock, (ii) the number of shares of Capital Stock into which each outstanding option or warrant to purchase Capital Stock is exercisable, as the case may be, have been proportionately decreased on a 5.2-for-1 basis, and (iii) the exercise price for each such outstanding option or warrant to purchase Capital Stock has been proportionately increased on a 1-for-5.2 basis. All of the share numbers, share prices, and exercise prices have been adjusted within these financial statements, on a retroactive basis, to reflect this 1-for-5.2 reverse stock split. | |||||||||||
Segment Reporting | ' | ||||||||||
Segment Reporting | |||||||||||
Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker, the Chief Executive Officer, in making decisions regarding resource allocation and accessing performance. To date, the Company has viewed its operations and manages its business as one operating segment. | |||||||||||
Concentrations of Risk | ' | ||||||||||
Concentrations of Risk | |||||||||||
The Company's accounts receivable are derived from revenue earned from dealers and distributors primarily located in the United States and Canada. The Company's sales to dealers and distributors located outside the United States are generally denominated in United States dollars, except for sales to dealers and distributors located in the United Kingdom, which are denominated in pounds sterling. There were no individual account balances greater than 10% of total accounts receivable at December 31, 2012 and December 31, 2013. | |||||||||||
No dealer or distributor accounted for more than 10% of total revenue for the years ended December 31, 2011, 2012 and 2013. | |||||||||||
The Company relies on a limited number of suppliers for its contract manufacturing. A significant disruption in the operations of these manufacturers would impact the production of the Company's products for a substantial period of time, which could have a material adverse effect on the Company's business, financial condition and results of operations. | |||||||||||
Geographic Information | ' | ||||||||||
Geographic Information | |||||||||||
The Company's revenue includes amounts earned through sales to dealers and distributors located outside of the United States. With the exception of Canada, no single foreign country accounted for more than 10% of total revenue for the years ended December 31, 2011, 2012 and 2013. The following table sets forth revenue from the U.S., Canadian and all other international dealers and distributors combined (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
Revenue-United States | $ | 63,625 | $ | 69,957 | $ | 85,525 | |||||
Revenue-Canada | 10,480 | 12,453 | 14,079 | ||||||||
Revenue-all other international sources | 19,271 | 27,102 | 28,907 | ||||||||
| | | | | | | | | | | |
Total revenue | $ | 93,376 | $ | 109,512 | $ | 128,511 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
International revenue (excluding Canada) as a percent of total revenue | 21 | % | 25 | % | 22 | % | |||||
Use of Accounting Estimates | ' | ||||||||||
Use of Accounting Estimates | |||||||||||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates including those related to revenue recognition, sales returns, provisions for doubtful accounts, product warranty, inventory obsolescence, litigation, determination of fair value of stock options, deferred tax asset valuation allowances and income taxes. Actual results may differ from those estimates. | |||||||||||
Product Warranty | ' | ||||||||||
Product Warranty | |||||||||||
The Company provides its customers a limited product warranty of two years, which requires the Company to repair or replace (at its option) defective products during the warranty period at no cost to the customer. The Company estimates the costs that may be incurred to replace or repair defective products and records a reserve at the time revenue is recognized. Factors that affect the Company's warranty liability include the number of installed systems, the Company's historical experience and management's judgment regarding anticipated rates of product warranty returns, net of refurbished products. The Company assesses the adequacy of its recorded warranty liability each period and makes adjustments to the liability as necessary. Warranty costs accrued includes amounts accrued for products at the time of shipment, adjustments for changes in estimated costs for warranties on products shipped in the period, and changes in estimated costs for warranties on products shipped in prior periods. It is not practicable for the Company to determine the amounts applicable to each of these components. | |||||||||||
The following table presents the changes in the product warranty liability (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
Balance at the beginning of the period | $ | 775 | $ | 1,030 | $ | 1,155 | |||||
Warranty costs accrued | 727 | 1,050 | 1,025 | ||||||||
Warranty claims | (472 | ) | (925 | ) | (967 | ) | |||||
| | | | | | | | | | | |
Balance at the end of the period | $ | 1,030 | $ | 1,155 | $ | 1,213 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Fair Value of Financial Instruments | ' | ||||||||||
Fair Value of Financial Instruments | |||||||||||
The carrying amounts reported in the accompanying consolidated financial statements for cash and cash equivalents, accounts payable and accrued liabilities approximate their fair value because of the short-term nature of the accounts. The fair value of the notes payable approximates its carrying value based on the variable nature of interest rates and current market rates available to the Company. | |||||||||||
Net Income (Loss) Per Share | ' | ||||||||||
Net Income (Loss) Per Share | |||||||||||
Basic net income (loss) per share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share is computed using the weighted-average number of common shares outstanding and potentially dilutive common shares outstanding during the period that have a dilutive effect on net income per share. Potentially dilutive common shares result from the assumed exercise of outstanding stock options and the assumed conversion of outstanding convertible preferred stock and warrants using the if-converted method. In a net loss position, diluted net loss per share is computed using only the weighted-average number of common shares outstanding during the period, as any additional common shares would be anti-dilutive. | |||||||||||
The following table presents the reconciliation of the numerator and denominator used in the calculation of basic and diluted net income (loss) per share (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
Numerator: | |||||||||||
Net income (loss) | $ | (3,885 | ) | $ | (3,723 | ) | $ | 3,503 | |||
| | | | | | | | | | | |
| | | | | | | | | | | |
Denominator: | |||||||||||
Weighted average common stock outstanding for basic net income (loss) per common share | 1,923 | 2,360 | 10,609 | ||||||||
Effect of dilutive securities—stock options, convertible preferred stock, and warrants to purchase common stock and preferred stock | — | — | 11,654 | ||||||||
| | | | | | | | | | | |
Weighted average common shares and dilutive securities outstanding | 1,923 | 2,360 | 22,263 | ||||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
The following weighted-average common stock equivalents were anti-dilutive and therefore were excluded from the calculation of diluted net income (loss) per share (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
Convertible preferred stock | 15,257 | 15,294 | — | ||||||||
Options to purchase common stock | 3,953 | 4,317 | 356 | ||||||||
Warrants to purchase common stock | 510 | 541 | 1 | ||||||||
Warrants to purchase preferred stock | 194 | 194 | — | ||||||||
| | | | | | | | | | | |
Total | 19,914 | 20,346 | 357 | ||||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Revenue Recognition | ' | ||||||||||
Revenue Recognition | |||||||||||
The Company sells its products through a network of independent dealers, regional and national retailers and distributors. These dealers, retailers and distributors generally sell the Company's products to the end consumer as part of a bundled sale, which typically includes other third-party products and related services, project design and installation services and on-going support. | |||||||||||
The Company's products include embedded software that is essential to the functionality of the hardware. Accordingly, the hardware and embedded software are accounted for as a single deliverable. In 2013, the Company began bundling MyHome software licenses with its new controllers. These software licenses do not include acceptance provisions, rights to updates (e.g., when-and-if-available enhancements or upgrades to the functionality of the software) or post-contract customer support such as technical support. When a software license and controller are sold together, a multiple element arrangement exists and revenue is allocated to each deliverable based on relative selling prices. Typically, delivery of both the product and the software license occurs at the same time. The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collection is reasonably assured. Product or licensed software is considered delivered once it has been shipped and title and risk of loss have been transferred. For most of the Company's product sales, these criteria are met at the time the product is shipped. | |||||||||||
The Company records estimated reductions to revenue for dealer, retailer and distributor incentives, primarily comprised of volume rebates, at the time of the initial sale. The estimated reductions to revenue for rebates are based on the sales terms and the Company's historical experience and trend analysis. The most common incentive relates to amounts paid or credited to dealers and distributors for achieving defined volume levels or growth objectives. | |||||||||||
Software license revenue represents fees earned from activating applications which allow end consumers to manage and control their automation systems using tablets, smartphones and other third-party devices. Software products such as Composer Home and Media Editions are sold on a limited basis and do not constitute a significant portion of revenue. The Company's perpetual software licenses do not include acceptance provisions, rights to updates or upgrades or post-contract customer support such as technical support; the Company generally recognizes revenue at the time the software license is provided. | |||||||||||
The Company offers a subscription service that allows consumers to control and monitor their homes remotely and allows the Company's dealers to perform remote diagnostic services. Subscription revenue is deferred at the time of payment and recognized on a straight-line basis over the period the service is provided. | |||||||||||
Total revenue for subscription services represents less than 10% of total revenue for all periods presented. | |||||||||||
The Company recognizes revenue net of cost of revenue for third-party products sold through the Company's online ordering system. While the Company assumes credit risk on sales to its dealers and distributors for third-party products, the Company does not determine the product selling price, does not retain associated inventory risks and is not the primary obligor to the end consumer. | |||||||||||
The Company's agreements with dealers and distributors generally do not include rights of return or acceptance provisions. Even though contractual agreements do not provide return privileges, there are circumstances in which the Company will accept returns. In addition, agreements with certain retail distributors contain price protection and limited rights of return. The Company maintains a reserve for such returns based on the Company's historical return experience. | |||||||||||
Shipping charges billed to dealers and distributors are included in revenue and related shipping costs are included in cost of revenue. | |||||||||||
Cost of Revenue | ' | ||||||||||
Cost of Revenue | |||||||||||
Cost of revenue includes the following: the cost of inventory sold during the period, inventory write-down costs, payroll and other direct installation services costs, purchasing costs, royalty obligations, shipping expenses to dealers and distributors and warehousing costs, which include inbound freight costs from manufacturers, rent and payroll and benefit costs. | |||||||||||
Cash and Cash Equivalents | ' | ||||||||||
Cash and Cash Equivalents | |||||||||||
The Company considers all highly liquid short-term investments with original maturities of three months or less at the time of purchase to be cash equivalents. Cash equivalents consist primarily of money market funds. | |||||||||||
Allowance for Doubtful Accounts | ' | ||||||||||
Allowance for Doubtful Accounts | |||||||||||
The Company extends credit to the majority of its dealers and distributors, which consist primarily of small, local businesses. Issuance of credit is based on ongoing credit evaluations by the Company of dealers' and distributors' financial condition and generally requires no collateral. Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company maintains an allowance for doubtful accounts to reserve for potential uncollectible receivables. The allowance is based upon the creditworthiness of the Company's dealers and distributors, the dealers' and distributors' historical payment experience, the age of the receivables and current market and economic conditions. Provisions for potentially uncollectible accounts are recorded in sales and marketing expenses. The Company writes off accounts receivable balances to the allowance for doubtful accounts when it becomes likely that they will not be collected. | |||||||||||
The following table presents the changes in the allowance for doubtful accounts (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
Balance at beginning of period | $ | 619 | $ | 651 | $ | 643 | |||||
Provision | 283 | 184 | 159 | ||||||||
Deductions | (251 | ) | (192 | ) | (197 | ) | |||||
| | | | | | | | | | | |
Balance at end of period | $ | 651 | $ | 643 | $ | 605 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Inventories | ' | ||||||||||
Inventories | |||||||||||
Inventories consist of hardware and related component parts and are stated at the lower of cost or market using the first-in, first-out method. The Company periodically assesses the recoverability of its inventory and reduces the carrying value of the inventory when items are determined to be obsolete, defective or in excess of forecasted sales requirements. Inventory write-downs for excess, defective and obsolete inventory are recorded as a cost of revenue and totaled $1.3 million, $1.5 million, and $2.3 million for the years ended December 31, 2011, 2012 and 2013, respectively. | |||||||||||
In December 2012, the Company finalized termination of a sales contract and, as a result of the contract termination, recorded a $1.8 million expense associated with an anticipated loss on firm purchase commitments for components that would have been required to meet the Company's obligations under the terminated contract. The $1.8 million charge has been recorded as Cost of Revenue—Inventory Purchase Commitment in the accompanying consolidated statement of operations during the year ended December 31, 2012. | |||||||||||
In 2013, the Company recorded a gain related to inventory purchase commitments of approximately $0.4 million, as the proceeds from liquidating the underlying inventory and the Company's ability to consume common components exceeded original estimates. | |||||||||||
Property and Equipment | ' | ||||||||||
Property and Equipment | |||||||||||
Property and equipment are recorded at historical cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the following estimated useful lives: | |||||||||||
Furniture and fixtures | 2 - 5 years | ||||||||||
Manufacturing tooling and test equipment | 2 - 3 years | ||||||||||
Lab and warehouse equipment | 2 - 4 years | ||||||||||
Computer equipment and software | 3 - 4 years | ||||||||||
Marketing equipment | 2 - 3 years | ||||||||||
Maintenance and repairs that do not extend the life of or improve the asset are expensed in the year incurred. Leasehold improvements are depreciated over the estimated useful life (usually 3-5 years) or the life of the associated lease, whichever is less. | |||||||||||
Intangible Assets | ' | ||||||||||
Intangible Assets | |||||||||||
Intangible assets primarily consist of acquired technology. The Company amortizes, to cost of revenue, definite-lived intangible assets on a straight-line basis over the life of the technology. | |||||||||||
Impairment of Long-Lived Assets | ' | ||||||||||
Impairment of Long-Lived Assets | |||||||||||
The carrying value of long-lived assets is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. An impairment loss is recognized when the carrying amount of an asset exceeds the estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition. The amount of the impairment loss to be recorded is calculated by the excess of the asset's carrying value over its fair value. Fair value is generally determined using a discounted cash flow analysis. | |||||||||||
Redeemable Convertible Preferred Stock Warrant | ' | ||||||||||
Redeemable Convertible Preferred Stock Warrant | |||||||||||
Freestanding warrants and other similar instruments related to shares that are redeemable are accounted for in accordance with ASC 480, "Distinguishing Liabilities and Equity." Under ASC 480, freestanding warrants that relate to the Company's redeemable convertible preferred stock are classified as a liability on the balance sheet. The warrant to purchase Series G-1 redeemable convertible preferred stock was subject to re-measurement at each balance sheet date and any change in fair value was recognized as a component of other income or expense. Fair value was measured using the Black-Scholes option pricing model. The Company continued to adjust the liability for changes in fair value until the closing of its initial public offering, at which time the redeemable convertible preferred stock warrants were exercised and converted into common stock and, accordingly, the liability was reclassified to equity. | |||||||||||
Foreign Currency Translation | ' | ||||||||||
Foreign Currency Translation | |||||||||||
The functional currency of the Company's subsidiaries in England, China, Hong Kong and India are the pound sterling, the Chinese Yuan, the Hong Kong Dollar and the Indian Rupee, respectively. The subsidiary's assets and liabilities have been translated to U.S. dollars using the exchange rates in effect at the balance sheet dates. Statements of operations amounts have been translated using the average exchange rate for each year. Resulting gains or losses from translating foreign currency financial statements are recorded as other comprehensive income (loss). Foreign currency transaction gains (losses) resulting from exchange rate fluctuations on transactions denominated in a currency other than the local currency are included in earnings and have not been material for the years ended December 31, 2011, 2012 or 2013. | |||||||||||
Stock-Based Compensation | ' | ||||||||||
Stock-Based Compensation | |||||||||||
The Company recognizes compensation expense for all stock-based awards issued to employees and directors based on estimated grant date fair values. The Company selected the Black-Scholes option-pricing model to determine the estimated fair value at the date of grant for stock options. The Company elected to amortize compensation expense using the straight-line attribution method, under which stock-based compensation expense is recognized on a straight-line basis over the period the employee performs the related services, generally the vesting period of four years, net of estimated forfeitures. The Company has estimated forfeiture rates based on its historical experience and will update the rates, as necessary, in subsequent periods if actual forfeitures differ from initial estimates. | |||||||||||
The Black-Scholes option-pricing model requires management assumptions regarding various factors that require extensive use of accounting judgment and financial estimates. The Company estimates the expected term for options using the simplified method, which utilizes the weighted average expected life of each tranche of the stock option, determined based on the sum of each tranche's vesting period plus one-half of the period from the vesting date of each tranche to the stock option's expiration, because the Company's options are considered "plain vanilla." The Company computed the expected volatility using multiple peer companies for a period approximating the expected term. The risk-free interest rate was determined using the implied yield on U.S. Treasury issues with a remaining term within the expected life of the award. | |||||||||||
The Company accounts for stock-based instruments and awards issued to non-employees at fair value using the Black-Scholes option-pricing model. Management believes that the fair value of the stock-based awards is more reliably measured than the fair value of the services received. The fair value of each non-employee award is re-measured each period until a commitment date is reached, which is generally the vesting date. | |||||||||||
Income Taxes | ' | ||||||||||
Income Taxes | |||||||||||
The Company recognizes deferred tax assets and liabilities for the future tax consequences attributable to the differences between the financial statement carrying value of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the fiscal year in which those temporary differences are expected to be recovered or settled. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. | |||||||||||
The Company operates in various tax jurisdictions and is subject to audit by various tax authorities. The Company provides for tax contingencies whenever it is deemed probable that a tax asset has been impaired or a tax liability has been incurred for events such as tax claims or changes in tax laws. Tax contingencies are based upon their technical merits, relative tax law and the specific facts and circumstances as of each reporting period. Changes in facts and circumstances could result in material changes to the amounts recorded for such tax contingencies. | |||||||||||
The Company recognizes uncertain income tax positions taken on income tax returns at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. | |||||||||||
The Company's policy for recording interest and penalties associated with uncertain tax positions is to record such items as a component of its income tax provision. During the years ended December 31, 2011, 2012 and 2013, we did not record any material interest income, interest expense or penalties related to uncertain tax positions or the settlement of audits for prior periods. | |||||||||||
Presentation of Certain Taxes | ' | ||||||||||
Presentation of Certain Taxes | |||||||||||
The Company collects various taxes from dealers and distributors and remits these amounts to the applicable taxing authorities. The Company's accounting policy is to exclude these taxes from revenue and cost of revenue. | |||||||||||
Research and Development | ' | ||||||||||
Research and Development | |||||||||||
Research and development expenses consist primarily of personnel costs, including incentive compensation, depreciation associated with research and development equipment, contract labor and consulting services, facilities-related costs, and travel-related costs. Research and development costs are expensed as incurred. | |||||||||||
Recent Accounting Pronouncements | ' | ||||||||||
Recent Accounting Pronouncements | |||||||||||
In February 2013, the FASB issued ASU 2013-02, "Comprehensive Income: Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income." The amended guidance requires an entity to present the effects on the line items of net income of significant reclassifications out of accumulated other comprehensive income if the amount being reclassified is required under U.S. generally accepted accounting principles to be reclassified in its entirety to net income in the same reporting period. The guidance is effective prospectively for the reporting periods beginning after December 15, 2012. This new guidance was effective for the Company beginning January 1, 2013. The adoption of this guidance did not have an impact on the Company's results of operations, financial position, or cash flows as it relates only to financial statement presentation. | |||||||||||
Description_of_Business_and_Su2
Description of Business and Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Description of Business and Summary of Significant Accounting Policies | ' | ||||||||||
Schedule of revenue from U.S., Canadian and all other international dealers and distributors combined | ' | ||||||||||
The following table sets forth revenue from the U.S., Canadian and all other international dealers and distributors combined (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
Revenue-United States | $ | 63,625 | $ | 69,957 | $ | 85,525 | |||||
Revenue-Canada | 10,480 | 12,453 | 14,079 | ||||||||
Revenue-all other international sources | 19,271 | 27,102 | 28,907 | ||||||||
| | | | | | | | | | | |
Total revenue | $ | 93,376 | $ | 109,512 | $ | 128,511 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
International revenue (excluding Canada) as a percent of total revenue | 21 | % | 25 | % | 22 | % | |||||
Schedule of changes in the product warranty liability | ' | ||||||||||
The following table presents the changes in the product warranty liability (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
Balance at the beginning of the period | $ | 775 | $ | 1,030 | $ | 1,155 | |||||
Warranty costs accrued | 727 | 1,050 | 1,025 | ||||||||
Warranty claims | (472 | ) | (925 | ) | (967 | ) | |||||
| | | | | | | | | | | |
Balance at the end of the period | $ | 1,030 | $ | 1,155 | $ | 1,213 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of reconciliation of the numerator and denominator used in the calculation of basic and diluted net income (loss) per share | ' | ||||||||||
The following table presents the reconciliation of the numerator and denominator used in the calculation of basic and diluted net income (loss) per share (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
Numerator: | |||||||||||
Net income (loss) | $ | (3,885 | ) | $ | (3,723 | ) | $ | 3,503 | |||
| | | | | | | | | | | |
| | | | | | | | | | | |
Denominator: | |||||||||||
Weighted average common stock outstanding for basic net income (loss) per common share | 1,923 | 2,360 | 10,609 | ||||||||
Effect of dilutive securities—stock options, convertible preferred stock, and warrants to purchase common stock and preferred stock | — | — | 11,654 | ||||||||
| | | | | | | | | | | |
Weighted average common shares and dilutive securities outstanding | 1,923 | 2,360 | 22,263 | ||||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of anti-dilutive weighted-average common stock equivalents excluded from the calculation of diluted net income (loss) per share | ' | ||||||||||
The following weighted-average common stock equivalents were anti-dilutive and therefore were excluded from the calculation of diluted net income (loss) per share (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
Convertible preferred stock | 15,257 | 15,294 | — | ||||||||
Options to purchase common stock | 3,953 | 4,317 | 356 | ||||||||
Warrants to purchase common stock | 510 | 541 | 1 | ||||||||
Warrants to purchase preferred stock | 194 | 194 | — | ||||||||
| | | | | | | | | | | |
Total | 19,914 | 20,346 | 357 | ||||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of changes in the allowance for doubtful accounts | ' | ||||||||||
The following table presents the changes in the allowance for doubtful accounts (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
Balance at beginning of period | $ | 619 | $ | 651 | $ | 643 | |||||
Provision | 283 | 184 | 159 | ||||||||
Deductions | (251 | ) | (192 | ) | (197 | ) | |||||
| | | | | | | | | | | |
Balance at end of period | $ | 651 | $ | 643 | $ | 605 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of estimated useful lives of property and equipment | ' | ||||||||||
Furniture and fixtures | 2 - 5 years | ||||||||||
Manufacturing tooling and test equipment | 2 - 3 years | ||||||||||
Lab and warehouse equipment | 2 - 4 years | ||||||||||
Computer equipment and software | 3 - 4 years | ||||||||||
Marketing equipment | 2 - 3 years |
Balance_Sheet_Components_Table
Balance Sheet Components (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Balance Sheet Components | ' | |||||||
Schedule of inventories | ' | |||||||
Inventories consisted of the following (in thousands): | ||||||||
December 31, | December 31, | |||||||
2012 | 2013 | |||||||
Finished goods | $ | 12,306 | $ | 14,061 | ||||
Component parts | 209 | 1,251 | ||||||
| | | | | | | | |
$ | 12,515 | $ | 15,312 | |||||
| | | | | | | | |
| | | | | | | | |
Schedule of property and equipment, net | ' | |||||||
Property and equipment, net consisted of the following (in thousands): | ||||||||
December 31, | December 31, | |||||||
2012 | 2013 | |||||||
Computer equipment and software | $ | 3,518 | $ | 4,152 | ||||
Manufacturing tooling and test equipment | 2,731 | 2,652 | ||||||
Furniture and fixtures | 1,801 | 2,046 | ||||||
Lab and warehouse equipment | 1,974 | 2,374 | ||||||
Marketing equipment | 419 | 604 | ||||||
Leasehold improvements | 803 | 1,450 | ||||||
| | | | | | | | |
11,246 | 13,278 | |||||||
Less: accumulated depreciation | (8,580 | ) | (9,335 | ) | ||||
| | | | | | | | |
$ | 2,666 | $ | 3,943 | |||||
| | | | | | | | |
| | | | | | | | |
Schedule of intangible assets, net | ' | |||||||
Intangible assets, net consisted of the following (in thousands): | ||||||||
December 31, | December 31, | |||||||
2012 | 2013 | |||||||
Acquired technology | $ | 1,357 | $ | 1,678 | ||||
Less: accumulated amortization | (431 | ) | (750 | ) | ||||
| | | | | | | | |
$ | 926 | $ | 928 | |||||
| | | | | | | | |
| | | | | | | | |
Schedule of other assets | ' | |||||||
Other assets consisted of the following (in thousands): | ||||||||
December 31, | December 31, | |||||||
2012 | 2013 | |||||||
Prepaid licensing | $ | 700 | $ | 716 | ||||
Deposits | 187 | 404 | ||||||
| | | | | | | | |
$ | 887 | $ | 1,120 | |||||
| | | | | | | | |
| | | | | | | | |
Schedule of accrued liabilities | ' | |||||||
Accrued liabilities consisted of the following (in thousands): | ||||||||
December 31, | December 31, | |||||||
2012 | 2013 | |||||||
Current portion of settlement obligations (see Note 6) | $ | 2,229 | $ | 907 | ||||
Sales returns and warranty accruals | 2,045 | 2,137 | ||||||
Compensation accruals | 1,495 | 3,233 | ||||||
Other accrued liabilities | 802 | 544 | ||||||
| | | | | | | | |
$ | 6,571 | $ | 6,821 | |||||
| | | | | | | | |
| | | | | | | | |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Fair Value Measurements | ' | |||||||||||||
Schedule of assumptions used to calculate fair value of the warrants | ' | |||||||||||||
December 31, | ||||||||||||||
2012 | ||||||||||||||
Dividend yield | 0 | % | ||||||||||||
Expected volatility | 54 | % | ||||||||||||
Risk-free interest rate | 0.16 | % | ||||||||||||
Remaining contractual term (in years) | 1.5 | |||||||||||||
Schedule of fair value of financial instruments measured on a recurring basis | ' | |||||||||||||
The fair values of these financial assets and the redeemable preferred stock warrants were as follows (in thousands): | ||||||||||||||
Fair value measurements at | ||||||||||||||
December 31, 2012 using | ||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||
Cash equivalents: | ||||||||||||||
Money market funds | $ | 15,554 | $ | — | $ | — | $ | 15,554 | ||||||
Other liabilities: | ||||||||||||||
Redeemable preferred stock warrants | — | — | 601 | 601 | ||||||||||
Fair value measurements at | ||||||||||||||
December 31, 2013 using | ||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||
Cash equivalents: | ||||||||||||||
Money market funds | $ | 79,013 | $ | — | $ | — | $ | 79,013 | ||||||
Other liabilities: | ||||||||||||||
Redeemable preferred stock warrants | — | — | — | — |
Intangible_Assets_Tables
Intangible Assets (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Intangible Assets | ' | ||||
Schedule of amortization of finite-lived intangible assets | ' | ||||
2014 | $ | 392 | |||
2015 | 363 | ||||
2016 | 173 | ||||
| | | | | |
$ | 928 | ||||
| | | | | |
| | | | | |
LongTerm_Obligations_Tables
Long-Term Obligations (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Long-Term Obligations | ' | ||||
Schedule of future principal payments on outstanding term borrowings | ' | ||||
Future principal payments on outstanding term borrowings as of December 31, 2013 are as follows (in thousands): | |||||
2014 | $ | 1,138 | |||
2015 | 915 | ||||
2016 | 727 | ||||
2017 | 186 | ||||
| | | | | |
$ | 2,966 | ||||
| | | | | |
| | | | | |
Schedule of future annual payments on the settlement obligations | ' | ||||
Future annual payments on the settlement obligations as of December 31, 2013 are shown in the table below (in thousands): | |||||
2014 | $ | 940 | |||
2015 | 20 | ||||
2016 | 20 | ||||
| | | | | |
980 | |||||
Less amount representing interest | (33 | ) | |||
| | | | | |
Present value of settlement obligations | 947 | ||||
Less current portion of settlement obligations | (907 | ) | |||
| | | | | |
Long-term portion of settlement obligations | $ | 40 | |||
| | | | | |
| | | | | |
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Income Taxes | ' | ||||||||||
Schedule of domestic and foreign components of net income (loss) before income tax expense | ' | ||||||||||
The domestic and foreign components of net income (loss) before income tax expense consists of the following for the periods shown below (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
Income (loss) before income taxes: | |||||||||||
Domestic | $ | (4,697 | ) | $ | (4,055 | ) | $ | 3,633 | |||
Foreign | 812 | 473 | 118 | ||||||||
| | | | | | | | | | | |
Total income (loss) before income taxes | $ | (3,885 | ) | $ | (3,582 | ) | $ | 3,751 | |||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of components of provision for income taxes | ' | ||||||||||
The provision for income taxes consisted of the following components (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
Current: | |||||||||||
Domestic | |||||||||||
Federal | $ | — | $ | 15 | $ | 64 | |||||
State | — | 57 | 53 | ||||||||
Foreign | — | 69 | 147 | ||||||||
| | | | | | | | | | | |
Total current tax expense | — | 141 | 264 | ||||||||
| | | | | | | | | | | |
Deferred: | |||||||||||
Domestic | |||||||||||
Federal | (1,773 | ) | (710 | ) | 1,572 | ||||||
State | (280 | ) | (65 | ) | 44 | ||||||
Foreign | 251 | 88 | (16 | ) | |||||||
Valuation allowance | 1,802 | 687 | (1,616 | ) | |||||||
| | | | | | | | | | | |
Total deferred tax benefit | — | — | (16 | ) | |||||||
| | | | | | | | | | | |
Total income tax expense | $ | — | $ | 141 | $ | 248 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of reconciliation from the U.S. statutory federal income tax rate to the effective income tax rate | ' | ||||||||||
A reconciliation from the U.S. statutory federal income tax rate to the effective income tax rate follows: | |||||||||||
Years Ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
Federal income tax rate | (34.0 | )% | (34.0 | )% | 34 | % | |||||
State taxes, net of federal benefit | (4.1 | ) | 1.1 | 1.1 | |||||||
Stock-based compensation | 9.1 | 15 | 22.7 | ||||||||
Stock warrant | — | — | 6.4 | ||||||||
Research and development credits | (16.0 | ) | — | (18.3 | ) | ||||||
Change in valuation allowance | 46.4 | 17.3 | (42.0 | ) | |||||||
Other, net | (1.4 | ) | 4.5 | 2.7 | |||||||
| | | | | | | | | | | |
Effective income tax rate | 0 | % | 3.9 | % | 6.6 | % | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of deferred tax assets and (liabilities) | ' | ||||||||||
Deferred tax assets and (liabilities) are comprised of the following (in thousands): | |||||||||||
December 31, | |||||||||||
2012 | 2013 | ||||||||||
Deferred Tax Assets: | |||||||||||
Reserves and accruals | $ | 3,396 | $ | 2,146 | |||||||
Inventories | 606 | 1,059 | |||||||||
Net operating loss carryforwards | 30,165 | 27,865 | |||||||||
Property, plant and equipment | 1,054 | 1,327 | |||||||||
Stock-based compensation | 783 | 1,233 | |||||||||
Research and development credit carryforwards | 3,254 | 4,091 | |||||||||
Other | 204 | 163 | |||||||||
| | | | | | | | ||||
Total deferred tax assets | 39,462 | 37,884 | |||||||||
Valuation allowance | (39,462 | ) | (37,842 | ) | |||||||
| | | | | | | | ||||
Total deferred tax assets | $ | — | $ | 42 | |||||||
Deferred Tax Liabilities: | |||||||||||
Undistributed earnings of foreign subsidiaries | — | $ | (15 | ) | |||||||
Property and equipment | — | (11 | ) | ||||||||
| | | | | | | | ||||
Total deferred tax liabilities | $ | — | $ | (26 | ) | ||||||
| | | | | | | | ||||
Net deferred tax asset | $ | — | $ | 16 | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
Schedule of net operating loss and tax credit carryforwards | ' | ||||||||||
Net operating loss and tax credit carryforwards as of December 31, 2013 are as follows (in thousands): | |||||||||||
Amount | Expiration Years | ||||||||||
Net operating losses, federal | $ | 77,435 | 2023 - 2031 | ||||||||
Net operating losses, state | 75,640 | 2018 - 2031 | |||||||||
Tax credit carryforwards, federal | 3,158 | 2023 - 2033 | |||||||||
Tax credit carryforwards, state | 1,413 | 2018 - 2028 | |||||||||
Net operating losses, foreign | 21 | None | |||||||||
Schedule of reconciliation of the changes in the gross balance of unrecognized tax benefits, excluding interest and penalties | ' | ||||||||||
The following is a reconciliation of the changes in the gross balance of unrecognized tax benefits, excluding interest and penalties (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
Balance at the beginning of the period | $ | 1,862 | $ | 2,318 | $ | 2,318 | |||||
Current year additions | 456 | — | 625 | ||||||||
| | | | | | | | | | | |
Balance at the end of the period | $ | 2,318 | $ | 2,318 | $ | 2,943 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Redeemable_Convertible_Preferr1
Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) | ' | ||||||||||||||||
Schedule of redeemable convertible preferred stock | ' | ||||||||||||||||
Redeemable convertible preferred stock consisted of the following at December 31, 2012 and August 7, 2013 (in thousands, except share data): | |||||||||||||||||
Shares | Shares | Aggregate | |||||||||||||||
Authorized | Issued and | Liquidation | |||||||||||||||
Outstanding | Preference | ||||||||||||||||
Series A | 8,150,000 | 1,567,306 | $ | 4,075 | |||||||||||||
Series B | 18,124,230 | 3,485,425 | 14,735 | ||||||||||||||
Series C | 14,215,791 | 2,726,476 | 15,000 | ||||||||||||||
Series D | 7,789,215 | 1,497,921 | 15,890 | ||||||||||||||
Series E | 5,045,662 | 965,927 | 11,000 | ||||||||||||||
Series F | 5,988,024 | 1,151,542 | 20,000 | ||||||||||||||
Series G | 8,677,338 | 1,668,707 | 15,450 | ||||||||||||||
Series G-1 | 2,073,148 | 216,015 | 2,000 | ||||||||||||||
Series H | 13,100,000 | 2,014,641 | 20,000 | ||||||||||||||
| | | | | | | | | | | |||||||
83,163,408 | 15,293,960 | $ | 118,150 | ||||||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
Summary of warrants to purchase common and preferred stock | ' | ||||||||||||||||
Number of Shares Subject to Warrant | |||||||||||||||||
December 31, | December 31, | Exercise Price | |||||||||||||||
2012 | 2013 | ||||||||||||||||
Warrants to purchase shares of common stock | 71,153 | — | $ | 7.49 | |||||||||||||
Warrants to purchase shares of common stock | 470,082 | — | 9.93 | ||||||||||||||
Warrants to purchase Series C redeemable convertible preferred stock(1) | 7,325 | — | 5.5 | ||||||||||||||
Warrants to purchase Series E redeemable convertible preferred stock(1) | 4,390 | — | 11.39 | ||||||||||||||
Warrants to purchase shares of common stock(1) | — | 7,325 | 5.5 | ||||||||||||||
Warrants to purchase shares of common stock(1) | — | 4,390 | 11.39 | ||||||||||||||
Warrants to purchase Series G-1 redeemable convertible preferred stock | 182,666 | — | 9.26 | ||||||||||||||
| | | | | | | | | | | |||||||
735,616 | 11,715 | ||||||||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
-1 | |||||||||||||||||
Warrants to purchase Series C and Series E redeemable convertible preferred stock were converted into warrants to purchase shares of common stock upon the closing of the Company's initial public offering. | |||||||||||||||||
Summary of stock option activity | ' | ||||||||||||||||
Shares Subject | Weighted | Weighted | Weighted | ||||||||||||||
to Options | Average | Average | Average | ||||||||||||||
Outstanding | Grant Date | Exercise Price | Remaining | ||||||||||||||
Fair Value | Contractual | ||||||||||||||||
Life (Years) | |||||||||||||||||
Balance at December 31, 2010 | 3,373,112 | 2.02 | 3.51 | 6.9 | |||||||||||||
Granted | 1,988,044 | 3.94 | 6.19 | ||||||||||||||
Exercised | (577,437 | ) | 1.2 | 2.08 | |||||||||||||
Expired | (186,736 | ) | 2.39 | 4.33 | |||||||||||||
Forfeited | (244,279 | ) | 3.22 | 5.3 | |||||||||||||
| | | | | | | | | | | | | | ||||
Balance at December 31, 2011 | 4,352,704 | 2.93 | 4.79 | 7.6 | |||||||||||||
Granted | 715,205 | 5.31 | 9.45 | ||||||||||||||
Exercised | (245,349 | ) | 1.92 | 3.2 | |||||||||||||
Expired | (14,148 | ) | 2.97 | 4.91 | |||||||||||||
Forfeited | (159,174 | ) | 3.63 | 5.71 | |||||||||||||
| | | | | | | | | | | | | | ||||
Balance at December 31, 2012 | 4,649,238 | 3.33 | 5.56 | 7.2 | |||||||||||||
Granted | 480,698 | 10.08 | 13.2 | ||||||||||||||
Exercised | (107,042 | ) | 2.36 | 4.17 | |||||||||||||
Expired | (27,772 | ) | 3.43 | 5.79 | |||||||||||||
Forfeited | (89,908 | ) | 4.44 | 7.14 | |||||||||||||
| | | | | | | | | | | | | | ||||
Balance at December 31, 2013 | 4,905,214 | $ | 3.95 | $ | 6.31 | 6.4 | |||||||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
Exercisable options at December 31, 2012 | 2,640,278 | $ | 2.5 | $ | 4.26 | 5.8 | |||||||||||
Vested during the year ended December 31, 2012 | 824,083 | 3.69 | 5.93 | ||||||||||||||
Vested and expected to vest at December 31, 2012 | 4,280,084 | 3.22 | 5.41 | ||||||||||||||
Non-vested options at December 31, 2012 | 2,009,505 | 4.37 | 7.28 | ||||||||||||||
Exercisable options at December 31, 2013 | 3,285,695 | 2.91 | 4.88 | 5.5 | |||||||||||||
Vested during the year ended December 31, 2013 | 845,965 | 4.08 | 6.97 | ||||||||||||||
Vested and expected to vest at December 31, 2013 | 4,544,942 | 3.82 | 6.15 | ||||||||||||||
Non-vested options at December 31, 2013 | 1,619,517 | 6.11 | 9.22 | ||||||||||||||
Summary of stock options outstanding and exercisable | ' | ||||||||||||||||
The following table summarizes information about stock options outstanding and exercisable at December 31, 2013: | |||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||
Range of Exercise Prices | Weighted | Number of | Weighted- | Number of | Weighted- | ||||||||||||
Average | Underlying | Average | Underlying | Average | |||||||||||||
Exercise | Shares | Remaining | Shares | Remaining | |||||||||||||
Price | Contractual | Contractual | |||||||||||||||
Life (in years) | Life (in years) | ||||||||||||||||
$0.26 - 1.30 | $ | 0.57 | 187,284 | 1 | 187,284 | 1 | |||||||||||
1.35 - 2.60 | 2.18 | 473,347 | 2.5 | 473,347 | 2.5 | ||||||||||||
2.65 - 3.90 | 3.23 | 325,523 | 3.6 | 325,523 | 3.6 | ||||||||||||
3.95 - 5.20 | 4.87 | 941,827 | 5.2 | 937,785 | 5.2 | ||||||||||||
5.25 - 6.50 | 6.19 | 1,686,513 | 7.7 | 1,033,886 | 7.7 | ||||||||||||
6.55 - 7.80 | 7.49 | 118,947 | 6.5 | 100,620 | 6.5 | ||||||||||||
7.85 - 9.10 | 8.84 | 238,451 | 8.5 | 94,534 | 8.5 | ||||||||||||
9.15 - 22.77 | 11.54 | 933,322 | 8.7 | 132,716 | 8.9 | ||||||||||||
| | | | | | | | | | | | | | | | | |
4,905,214 | 3,285,695 | ||||||||||||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Summary of aggregate intrinsic-value of options exercised, outstanding and exercisable | ' | ||||||||||||||||
The following table summarizes the aggregate intrinsic-value of options exercised, outstanding and exercisable (in thousands): | |||||||||||||||||
For the Years Ended and as of | |||||||||||||||||
December 31, | |||||||||||||||||
2011 | 2012 | 2013 | |||||||||||||||
Options Exercised | $ | 2,400 | $ | 1,310 | $ | 1,315 | |||||||||||
Options Outstanding | 9,110 | 23,480 | 56,197 | ||||||||||||||
Options Exercisable | 7,100 | 16,800 | 42,116 | ||||||||||||||
Schedule of assumptions used to estimate fair value of option awards | ' | ||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2011 | 2012 | 2013 | |||||||||||||||
Expected volatility | 71 - 73% | 59 - 63% | 56 - 59% | ||||||||||||||
Expected dividends | 0% | 0% | 0% | ||||||||||||||
Expected terms (in years) | 5.0 - 6.1 | 5.0 - 6.1 | 3.3 - 7.2 | ||||||||||||||
Risk-free rate | 1.1 - 2.5% | 0.7 - 1.0% | 0.8 - 1.7% | ||||||||||||||
Forfeiture rate | 11.60% | 7.90% | 7.20% | ||||||||||||||
Schedule of total stock-based compensation expense classified in statements of operations | ' | ||||||||||||||||
Total stock-based compensation expense has been classified as follows in the accompanying statements of operations (in thousands): | |||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2011 | 2012 | 2013 | |||||||||||||||
Cost of revenue | $ | 49 | $ | 78 | $ | 63 | |||||||||||
Research and development | 492 | 704 | 1,414 | ||||||||||||||
Sales and marketing | 523 | 580 | 743 | ||||||||||||||
General and administrative | 949 | 1,507 | 1,540 | ||||||||||||||
| | | | | | | | | | | |||||||
Total stock-based compensation expense | $ | 2,013 | $ | 2,869 | $ | 3,760 | |||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
Related_Party_Transactions_Tab
Related Party Transactions (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Related Party Transactions | ' | ||||||||||
Schedule of revenue from product sales to companies affiliated with investors | ' | ||||||||||
The following table sets forth revenue from product sales to companies affiliated with these investors (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
Company 1 | $ | 995 | $ | 2,142 | $ | 2,889 | |||||
Company 2 | 2,134 | 1,290 | 950 | ||||||||
Company 3 | 478 | 791 | 426 | ||||||||
Company 4 | — | 1,807 | 129 | ||||||||
| | | | | | | | | | | |
$ | 3,607 | $ | 6,030 | $ | 4,394 | ||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and Contingencies | ' | ||||
Schedule of future minimum rental payments required under non-cancelable operating leases | ' | ||||
Future minimum rental payments required under non-cancelable operating leases with initial or remaining terms in excess of one year consist of the following as of December 31, 2013 (in thousands): | |||||
2014 | $ | 1,613 | |||
2015 | 1,620 | ||||
2016 | 1,504 | ||||
2017 | 1,283 | ||||
2018 | 697 | ||||
Thereafter | — | ||||
| | | | | |
$ | 6,717 | ||||
| | | | | |
| | | | | |
Description_of_Business_and_Su3
Description of Business and Summary of Significant Accounting Policies (Details) (USD $) | 0 Months Ended | 12 Months Ended | |
Aug. 07, 2013 | Jul. 18, 2013 | Dec. 31, 2013 | |
item | |||
IPO | ' | ' | ' |
Common stock sold and issued in IPO (in shares) | 4,600,000 | ' | ' |
Common stock price (in dollars per share) | $16 | ' | ' |
Gross proceeds from the IPO | $73,600,000 | ' | ' |
Net proceeds from IPO | 65,600,000 | ' | 65,556,000 |
Underwriting discounts and commissions | 5,200,000 | ' | ' |
Offering expenses | $2,800,000 | ' | ' |
Stock Split | ' | ' | ' |
Reverse stock split of outstanding common stock | ' | 0.1923 | ' |
Segment Reporting | ' | ' | ' |
Number of operating segments | ' | ' | 1 |
Description_of_Business_and_Su4
Description of Business and Summary of Significant Accounting Policies (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Revenue from U.S., Canadian and all other international dealers and distributors combined | ' | ' | ' |
Total revenue | $128,511 | $109,512 | $93,376 |
International revenue (excluding Canada) as a percent of total revenue | 22.00% | 25.00% | 21.00% |
United States | ' | ' | ' |
Revenue from U.S., Canadian and all other international dealers and distributors combined | ' | ' | ' |
Total revenue | 85,525 | 69,957 | 63,625 |
Canada | ' | ' | ' |
Revenue from U.S., Canadian and all other international dealers and distributors combined | ' | ' | ' |
Total revenue | 14,079 | 12,453 | 10,480 |
All other international sources | ' | ' | ' |
Revenue from U.S., Canadian and all other international dealers and distributors combined | ' | ' | ' |
Total revenue | $28,907 | $27,102 | $19,271 |
Description_of_Business_and_Su5
Description of Business and Summary of Significant Accounting Policies (Details 3) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Product Warranty | ' | ' | ' |
Product warranty period | '2 years | ' | ' |
Changes in the product warranty liability | ' | ' | ' |
Balance at beginning of period | $1,155 | $1,030 | $775 |
Warranty costs accrued | 1,025 | 1,050 | 727 |
Warranty claims | -967 | -925 | -472 |
Balance at end of period | $1,213 | $1,155 | $1,030 |
Description_of_Business_and_Su6
Description of Business and Summary of Significant Accounting Policies (Details 4) (USD $) | 12 Months Ended | ||
Share data in Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Numerator: | ' | ' | ' |
Net income (loss) | $3,503,000 | ($3,723,000) | ($3,885,000) |
Denominator: | ' | ' | ' |
Weighted average common stock outstanding for basic net income (loss) per common share (in shares) | 10,609 | 2,360 | 1,923 |
Effect of dilutive securities-stock options, convertible preferred stock, and warrants to purchase common stock and preferred stock (in shares) | 11,654 | ' | ' |
Weighted average common shares and dilutive securities outstanding | 22,263 | 2,360 | 1,923 |
Anti-dilutive weighted-average common stock equivalents excluded from the calculation of diluted net income (loss) per share | ' | ' | ' |
Total (in shares) | 357 | 20,346 | 19,914 |
Changes in the allowance for doubtful accounts | ' | ' | ' |
Balance at beginning of period | 643,000 | 651,000 | 619,000 |
Provision | 159,000 | 184,000 | 283,000 |
Deductions | -197,000 | -192,000 | -251,000 |
Balance at end of period | 605,000 | 643,000 | 651,000 |
Inventories | ' | ' | ' |
Inventory write-downs | 2,300,000 | 1,500,000 | 1,300,000 |
Anticipated loss on firm purchase commitments for components | ' | 1,800,000 | ' |
Gain related to inventory purchase commitments | $380,000 | ($1,840,000) | ' |
Convertible preferred stock | ' | ' | ' |
Anti-dilutive weighted-average common stock equivalents excluded from the calculation of diluted net income (loss) per share | ' | ' | ' |
Total (in shares) | ' | 15,294 | 15,257 |
Options to purchase common stock | ' | ' | ' |
Anti-dilutive weighted-average common stock equivalents excluded from the calculation of diluted net income (loss) per share | ' | ' | ' |
Total (in shares) | 356 | 4,317 | 3,953 |
Warrants to purchase common stock | ' | ' | ' |
Anti-dilutive weighted-average common stock equivalents excluded from the calculation of diluted net income (loss) per share | ' | ' | ' |
Total (in shares) | 1 | 541 | 510 |
Warrants to purchase preferred stock | ' | ' | ' |
Anti-dilutive weighted-average common stock equivalents excluded from the calculation of diluted net income (loss) per share | ' | ' | ' |
Total (in shares) | ' | 194 | 194 |
Description_of_Business_and_Su7
Description of Business and Summary of Significant Accounting Policies (Details 5) | 12 Months Ended |
Dec. 31, 2013 | |
Furniture and fixtures | Minimum | ' |
Property and equipment | ' |
Estimated useful lives | '2 years |
Furniture and fixtures | Maximum | ' |
Property and equipment | ' |
Estimated useful lives | '5 years |
Manufacturing tooling and test equipment | Minimum | ' |
Property and equipment | ' |
Estimated useful lives | '2 years |
Manufacturing tooling and test equipment | Maximum | ' |
Property and equipment | ' |
Estimated useful lives | '3 years |
Lab and warehouse equipment | Minimum | ' |
Property and equipment | ' |
Estimated useful lives | '2 years |
Lab and warehouse equipment | Maximum | ' |
Property and equipment | ' |
Estimated useful lives | '4 years |
Computer equipment and software | Minimum | ' |
Property and equipment | ' |
Estimated useful lives | '3 years |
Computer equipment and software | Maximum | ' |
Property and equipment | ' |
Estimated useful lives | '4 years |
Marketing equipment | Minimum | ' |
Property and equipment | ' |
Estimated useful lives | '2 years |
Marketing equipment | Maximum | ' |
Property and equipment | ' |
Estimated useful lives | '3 years |
Leasehold improvements | Minimum | ' |
Property and equipment | ' |
Estimated useful lives | '3 years |
Leasehold improvements | Maximum | ' |
Property and equipment | ' |
Estimated useful lives | '5 years |
Description_of_Business_and_Su8
Description of Business and Summary of Significant Accounting Policies (Details 6) | 12 Months Ended |
Dec. 31, 2013 | |
Stock-Based Compensation | ' |
Vesting period | '4 years |
Percentage of period from the vesting date added for determination of weighted average expected life | 50.00% |
Balance_Sheet_Components_Detai
Balance Sheet Components (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Inventories | ' | ' |
Finished goods | $14,061 | $12,306 |
Component parts | 1,251 | 209 |
Total inventories | 15,312 | 12,515 |
Property and equipment, net | ' | ' |
Property and equipment, gross | 13,278 | 11,246 |
Less: accumulated depreciation | -9,335 | -8,580 |
Property and equipment, net | 3,943 | 2,666 |
Computer equipment and software | ' | ' |
Property and equipment, net | ' | ' |
Property and equipment, gross | 4,152 | 3,518 |
Manufacturing tooling and test equipment | ' | ' |
Property and equipment, net | ' | ' |
Property and equipment, gross | 2,652 | 2,731 |
Furniture and fixtures | ' | ' |
Property and equipment, net | ' | ' |
Property and equipment, gross | 2,046 | 1,801 |
Lab and warehouse equipment | ' | ' |
Property and equipment, net | ' | ' |
Property and equipment, gross | 2,374 | 1,974 |
Marketing equipment | ' | ' |
Property and equipment, net | ' | ' |
Property and equipment, gross | 604 | 419 |
Leasehold improvements | ' | ' |
Property and equipment, net | ' | ' |
Property and equipment, gross | $1,450 | $803 |
Balance_Sheet_Components_Detai1
Balance Sheet Components (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Intangible assets, net | ' | ' |
Intangible assets, net | $928 | $926 |
Other assets | ' | ' |
Prepaid licensing | 716 | 700 |
Deposits | 404 | 187 |
Other assets total | 1,120 | 887 |
Accrued liabilities | ' | ' |
Current portion of settlement obligations | 907 | 2,229 |
Sales returns and warranty accruals | 2,137 | 2,045 |
Compensation accruals | 3,233 | 1,495 |
Other accrued liabilities | 544 | 802 |
Total accrued liabilities | 6,821 | 6,571 |
Acquired technology | ' | ' |
Intangible assets, net | ' | ' |
Intangible assets, gross | 1,678 | 1,357 |
Less: accumulated amortization | -750 | -431 |
Intangible assets, net | $928 | $926 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | 12 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 07, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | |
Preferred stock warrants | Preferred stock warrants | Preferred stock warrants | Redeemable preferred stock warrants | Measured on a recurring basis | Measured on a recurring basis | Measured on a recurring basis | Measured on a recurring basis | Measured on a recurring basis | Measured on a recurring basis | ||||
Level 1 | Level 1 | Level 3 | Total | Total | Total | ||||||||
Money market funds | Money market funds | Redeemable preferred stock warrants | Redeemable preferred stock warrants | Money market funds | Money market funds | ||||||||
Assumptions used for calculation of fair value of the warrant | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Dividend yield (as a percent) | ' | ' | ' | ' | ' | ' | 0.00% | ' | ' | ' | ' | ' | ' |
Expected volatility (as a percent) | ' | ' | ' | ' | ' | ' | 54.00% | ' | ' | ' | ' | ' | ' |
Risk-free interest rate (as a percent) | ' | ' | ' | ' | ' | ' | 0.16% | ' | ' | ' | ' | ' | ' |
Remaining contractual term | ' | ' | ' | ' | ' | ' | '1 year 6 months | ' | ' | ' | ' | ' | ' |
Fair value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash equivalents | ' | ' | ' | ' | ' | ' | ' | $79,013,000 | $15,554,000 | ' | ' | $79,013,000 | $15,554,000 |
Other liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | 601,000 | 601,000 | ' | ' |
Change in fair value of warrant liability recorded in other expense | 709,000 | 254,000 | -227,000 | 300,000 | 700,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate fair value of warrant liability | ' | ' | ' | ' | ' | $1,300,000 | ' | ' | ' | ' | ' | ' | ' |
Acquisition_Details
Acquisition (Details) (Technology company, USD $) | 0 Months Ended |
Jun. 21, 2013 | |
Acquisition | ' |
Purchase consideration | $259,000 |
Exercise price of options to purchase shares of common stock (in dollars per share) | $11.28 |
Future amortization expense of acquired identifiable intangible assets | ' |
2014 | 96,000 |
2015 | 88,000 |
2016 | $40,000 |
Minimum | ' |
Acquisition | ' |
Estimated useful life of identifiable intangible assets | '2 years |
Maximum | ' |
Acquisition | ' |
Estimated useful life of identifiable intangible assets | '3 years |
Intangible_Assets_Details
Intangible Assets (Details) (USD $) | 12 Months Ended | |||
Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2013 | Dec. 31, 2012 | |
Intangible assets | ' | ' | ' | ' |
Number of shares of common stock called by warrant | ' | ' | 11,715 | 735,616 |
Fair value of warrant | ' | ' | ' | $601,000 |
Amortization of finite-lived intangible assets | ' | ' | ' | ' |
Intangible assets, net | ' | ' | 928,000 | 926,000 |
Acquired software technology | ' | ' | ' | ' |
Intangible assets | ' | ' | ' | ' |
Final purchase price of acquired intangible assets | 700,000 | 600,000 | ' | ' |
Estimated life of intangible assets | '5 years | '5 years | ' | ' |
Cash payment for acquisition of intangible assets | ' | 300,000 | ' | ' |
Fair value of warrant | ' | 300,000 | ' | ' |
Finite-lived intangible asset acquired | 700,000 | 600,000 | ' | ' |
Amortization of finite-lived intangible assets | ' | ' | ' | ' |
2014 | ' | ' | 392,000 | ' |
2015 | ' | ' | 363,000 | ' |
2016 | ' | ' | 173,000 | ' |
Intangible assets, net | ' | ' | 928,000 | 926,000 |
Acquired software technology | Common stock warrants | ' | ' | ' | ' |
Intangible assets | ' | ' | ' | ' |
Number of shares of common stock called by warrant | ' | 71,153 | ' | ' |
Acquired software technology | Minimum | ' | ' | ' | ' |
Intangible assets | ' | ' | ' | ' |
Purchase price per agreement | 700,000 | ' | ' | ' |
Acquired software technology | Maximum | ' | ' | ' | ' |
Intangible assets | ' | ' | ' | ' |
Purchase price per agreement | $2,000,000 | ' | ' | ' |
LongTerm_Obligations_Details
Long-Term Obligations (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2013 | Dec. 31, 2013 | Jun. 30, 2013 | Jun. 30, 2013 | Dec. 31, 2013 | Jun. 30, 2013 | Jun. 30, 2013 | Aug. 12, 2013 | Dec. 31, 2013 |
Revolving credit facility | Revolving credit facility | Revolving credit facility | Revolving credit facility | Term borrowings | Term borrowings | Term borrowings | Unsecured notes payable | Unsecured notes payable | |||
LIBOR | Prime rate | item | Prime rate | item | |||||||
Long-Term Obligations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum borrowing capacity | ' | ' | $13,000,000 | ' | ' | ' | ' | $2,750,000 | ' | ' | ' |
Variable interest rate basis | ' | ' | ' | ' | 'LIBOR | 'prime | ' | ' | 'prime | ' | ' |
Basis spread on variable rate (as a percent) | ' | ' | ' | ' | 2.50% | ' | ' | ' | 0.50% | ' | ' |
Interest rate at the end of period (as a percent) | ' | ' | ' | 3.25% | ' | ' | 3.75% | ' | ' | ' | ' |
Annual commitment fee | ' | ' | 20,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Commitment fee for quarterly unused capacity (as a percent) | ' | ' | 0.38% | ' | ' | ' | ' | ' | ' | ' | ' |
Number of equal monthly payments of principal plus interest | ' | ' | ' | ' | ' | ' | 36 | ' | ' | ' | ' |
Current borrowing capacity | ' | ' | ' | 13,000,000 | ' | ' | 2,000,000 | ' | ' | ' | ' |
Borrowings outstanding | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' |
Future principal payments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2014 | 1,138,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2015 | 915,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2016 | 727,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2017 | 186,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total | 2,966,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Settlement Obligation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Implied interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.75% |
Number of settlement obligations accelerated and became due and payable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 |
Final payment of obligation | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,100,000 | ' |
Interest expense recorded | ' | ' | ' | ' | ' | ' | ' | ' | ' | 200,000 | ' |
Future annual payments on the settlement obligations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2014 | 940,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2015 | 20,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2016 | 20,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total | 980,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Less amount representing interest | -33,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Present value of settlement obligations | 947,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Less current portion of settlement obligations | -907,000 | -2,229,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term portion of settlement obligations | $40,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Income (loss) before income taxes: | ' | ' | ' |
Domestic | $3,633,000 | ($4,055,000) | ($4,697,000) |
Foreign | 118,000 | 473,000 | 812,000 |
Income (loss) before income taxes | 3,751,000 | -3,582,000 | -3,885,000 |
Domestic | ' | ' | ' |
Federal | 64,000 | 15,000 | ' |
State | 53,000 | 57,000 | ' |
Foreign | 147,000 | 69,000 | ' |
Total current tax expense | 264,000 | 141,000 | ' |
Domestic | ' | ' | ' |
Federal | 1,572,000 | -710,000 | -1,773,000 |
State | 44,000 | -65,000 | -280,000 |
Foreign | -16,000 | 88,000 | 251,000 |
Valuation allowance | -1,616,000 | 687,000 | 1,802,000 |
Total deferred tax benefit | -16,000 | ' | ' |
Total income tax expense | 248,000 | 141,000 | ' |
Reconciliation from the U.S. statutory federal income tax rate to the effective income tax rate | ' | ' | ' |
Federal income tax rate (as a percent) | 34.00% | -34.00% | -34.00% |
State taxes, net of federal benefit (as a percent) | 1.10% | 1.10% | -4.10% |
Stock-based compensation (as a percent) | 22.70% | 15.00% | 9.10% |
Stock warrant (as a percent) | 6.40% | ' | ' |
Research and development credits (as a percent) | -18.30% | ' | -16.00% |
Change in valuation allowance (as a percent) | -42.00% | 17.30% | 46.40% |
Other, net (as a percent) | 2.70% | 4.50% | -1.40% |
Effective income tax rate (as a percent) | 6.60% | 3.90% | 0.00% |
Deferred Tax Assets: | ' | ' | ' |
Reserves and accruals | 2,146,000 | 3,396,000 | ' |
Inventories | 1,059,000 | 606,000 | ' |
Net operating loss carryforwards | 27,865,000 | 30,165,000 | ' |
Property, plant and equipment | 1,327,000 | 1,054,000 | ' |
Stock-based compensation | 1,233,000 | 783,000 | ' |
Research and development credit carryforwards | 4,091,000 | 3,254,000 | ' |
Other | 163,000 | 204,000 | ' |
Total deferred tax assets | 37,884,000 | 39,462,000 | ' |
Valuation allowance | -37,842,000 | -39,462,000 | ' |
Total deferred tax assets, net | 42,000 | ' | ' |
Deferred Tax Liabilities: | ' | ' | ' |
Undistributed earnings of foreign subsidiaries | -15,000 | ' | ' |
Property and equipment | -11,000 | ' | ' |
Total deferred tax liabilities | -26,000 | ' | ' |
Net deferred tax asset | 16,000 | ' | ' |
Reversal of valuation allowance for deferred tax assets | ' | 92,000 | ' |
Increase (decrease) in net valuation allowance | ($1,600,000) | $700,000 | ' |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2011 | |
Net operating loss and tax credit carryforwards | ' | ' |
Unrecorded tax benefits for stock-based compensation | $2,700,000 | ' |
Reconciliation of the changes in the gross balance of unrecognized tax benefits, excluding interest and penalties | ' | ' |
Balance at the beginning of the period | 2,318,000 | 1,862,000 |
Current year additions | 625,000 | 456,000 |
Balance at the end of the period | 2,943,000 | 2,318,000 |
Unrecognized tax benefits that would, if recognized, impact the Company's effective income tax rate | 2,900,000 | ' |
Minimum period for which net operating loss and credit carryforwards are subject to examinations and adjustments | '3 years | ' |
Undistributed foreign earning | 800,000 | ' |
Unrecognized deferred tax liabilities from temporary differences related to the investment in foreign subsidiary that would have been taxable if the Company repatriated the foreign earnings | 300,000 | ' |
Federal | ' | ' |
Net operating loss and tax credit carryforwards | ' | ' |
Net operating losses | 77,435,000 | ' |
Tax credit carryforwards | 3,158,000 | ' |
State | ' | ' |
Net operating loss and tax credit carryforwards | ' | ' |
Net operating losses | 75,640,000 | ' |
Tax credit carryforwards | 1,413,000 | ' |
Foreign | ' | ' |
Net operating loss and tax credit carryforwards | ' | ' |
Net operating losses | $21,000 | ' |
Redeemable_Convertible_Preferr2
Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) (Details) (USD $) | 12 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | |||||||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 07, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Aug. 07, 2013 | Dec. 31, 2012 | Aug. 07, 2013 | Dec. 31, 2012 | Aug. 07, 2013 | Dec. 31, 2012 | Aug. 07, 2013 | Dec. 31, 2012 | Aug. 07, 2013 | Dec. 31, 2012 | Aug. 07, 2013 | Dec. 31, 2012 | Aug. 07, 2013 | Dec. 31, 2012 | Aug. 07, 2013 | Dec. 31, 2012 | Aug. 07, 2013 | Dec. 31, 2012 |
Redeemable convertible preferred stock | Redeemable convertible preferred stock | Redeemable convertible preferred stock | Redeemable convertible preferred stock | Series A | Series A | Series B | Series B | Series C | Series C | Series D | Series D | Series E | Series E | Series F | Series F | Series G | Series G | Series G - 1 | Series G - 1 | Series H | Series H | |||
Redeemable Convertible Preferred Stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares converted | ' | ' | 15,293,960 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion of shares to common stock | $116,313 | ' | $116,300 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Converted into one share of common stock | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Carrying value of redeemable preferred stock | ' | 116,313 | 116,300 | 116,313 | 116,313 | 97,670 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares Authorized | 0 | 83,163,408 | 83,163,408 | ' | ' | ' | 8,150,000 | 8,150,000 | 18,124,230 | 18,124,230 | 14,215,791 | 14,215,791 | 7,789,215 | 7,789,215 | 5,045,662 | 5,045,662 | 5,988,024 | 5,988,024 | 8,677,338 | 8,677,338 | 2,073,148 | 2,073,148 | 13,100,000 | 13,100,000 |
Shares Issued | 0 | 15,293,960 | 15,293,960 | 15,293,960 | 15,293,960 | 13,279,319 | 1,567,306 | 1,567,306 | 3,485,425 | 3,485,425 | 2,726,476 | 2,726,476 | 1,497,921 | 1,497,921 | 965,927 | 965,927 | 1,151,542 | 1,151,542 | 1,668,707 | 1,668,707 | 216,015 | 216,015 | 2,014,641 | 2,014,641 |
Shares Outstanding | 0 | 15,293,960 | 15,293,960 | ' | ' | ' | 1,567,306 | 1,567,306 | 3,485,425 | 3,485,425 | 2,726,476 | 2,726,476 | 1,497,921 | 1,497,921 | 965,927 | 965,927 | 1,151,542 | 1,151,542 | 1,668,707 | 1,668,707 | 216,015 | 216,015 | 2,014,641 | 2,014,641 |
Aggregate Liquidation Preference | $0 | $118,150 | $118,150 | ' | ' | ' | $4,075 | $4,075 | $14,735 | $14,735 | $15,000 | $15,000 | $15,890 | $15,890 | $11,000 | $11,000 | $20,000 | $20,000 | $15,450 | $15,450 | $2,000 | $2,000 | $20,000 | $20,000 |
Dividend rate per share per year (in dollars per share) | ' | ' | ' | ' | ' | ' | $0.21 | ' | $0.34 | ' | $0.44 | ' | $0.85 | ' | $0.91 | ' | $1.39 | ' | $0.74 | ' | $0.74 | ' | $0.79 | ' |
Preferred stock dividend declared (in dollars per share) | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Redeemable_Convertible_Preferr3
Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) (Details 2) (USD $) | 0 Months Ended | 12 Months Ended | 12 Months Ended | 0 Months Ended | |||||||||||
In Thousands, except Share data, unless otherwise specified | Aug. 07, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Aug. 07, 2013 | Dec. 31, 2012 | Dec. 31, 2009 |
Common stock warrants | Common stock warrants | Common stock warrants | Common stock warrants | Preferred stock warrants | Preferred stock warrants | Preferred stock warrants | Preferred stock warrants | Preferred stock warrants | Preferred stock warrants | Preferred stock warrants | |||||
Transaction 1 | Transaction 2 | Transaction 3 | Transaction 4 | Series C redeemable convertible preferred stock | Series E redeemable convertible preferred stock | Series G-1 redeemable convertible preferred stock | Series G-1 redeemable convertible preferred stock | Series G-1 redeemable convertible preferred stock | |||||||
Warrants to purchase stock and preferred stock warrant liability | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of Shares Subject to Warrant | ' | 11,715 | 735,616 | ' | 71,153 | 470,082 | 7,325 | 4,390 | ' | ' | 7,325 | 4,390 | ' | 182,666 | 182,666 |
Exercise Price (in dollars per share) | ' | ' | ' | ' | $7.49 | $9.93 | $5.50 | $11.39 | ' | ' | $5.50 | $11.39 | ' | $9.26 | $9.26 |
Number of warrants exercised to purchase shares of common and preferred stock (in shares) | 723,901 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, shares issued to warrant holders upon net exercise | 293,232 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 76,964 | ' | ' |
Fair value of warrant | ' | ' | $601 | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1,300 | ' | $400 |
Offering price (in dollars per share) | $16 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Change in fair value of warrant liability recorded in other expense | ' | $709 | $254 | ($227) | ' | ' | ' | ' | $300 | $700 | ' | ' | ' | ' | ' |
Redeemable_Convertible_Preferr4
Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) (Details 3) (Stock options, USD $) | 12 Months Ended | ||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Aug. 07, 2013 | |
2013 Plan | |||||
Stock options | ' | ' | ' | ' | ' |
Annual increase in shares authorized for issuance as a percentage of shares outstanding | ' | ' | ' | ' | 5.00% |
Shares Subject to Options Outstanding | ' | ' | ' | ' | ' |
Balance at the beginning of the period (in shares) | 4,649,238 | 4,352,704 | 3,373,112 | ' | ' |
Granted (in shares) | 480,698 | 715,205 | 1,988,044 | ' | ' |
Exercised (in shares) | -107,042 | -245,349 | -577,437 | ' | ' |
Expired (in shares) | -27,772 | -14,148 | -186,736 | ' | ' |
Forfeited (in shares) | -89,908 | -159,174 | -244,279 | ' | ' |
Balance at the end of the period (in shares) | 4,905,214 | 4,649,238 | 4,352,704 | 3,373,112 | ' |
Exercisable options (in shares) | 3,285,695 | 2,640,278 | ' | ' | ' |
Vested during the period (in shares) | 845,965 | 824,083 | ' | ' | ' |
Vested and expected to vest at the end of the period (in shares) | 4,544,942 | 4,280,084 | ' | ' | ' |
Non-vested options (in shares) | 1,619,517 | 2,009,505 | ' | ' | ' |
Weighted Average Grant Date Fair Value | ' | ' | ' | ' | ' |
Balance at the beginning of the period (in dollars per share) | $3.33 | $2.93 | $2.02 | ' | ' |
Granted (in dollars per share) | $10.08 | $5.31 | $3.94 | ' | ' |
Exercised (in dollars per share) | $2.36 | $1.92 | $1.20 | ' | ' |
Expired (in dollars per share) | $3.43 | $2.97 | $2.39 | ' | ' |
Forfeited (in dollars per share) | $4.44 | $3.63 | $3.22 | ' | ' |
Balance at the end of the period (in dollars per share) | $3.95 | $3.33 | $2.93 | $2.02 | ' |
Exercisable options (in dollars per share) | $2.91 | $2.50 | ' | ' | ' |
Vested during the period (in dollars per share) | $4.08 | $3.69 | ' | ' | ' |
Vested and expected to vest (in dollars per share) | $3.82 | $3.22 | ' | ' | ' |
Non-vested options (in dollars per share) | $6.11 | $4.37 | ' | ' | ' |
Weighted Average Exercise Price | ' | ' | ' | ' | ' |
Balance at the beginning of the period (in dollars per share) | $5.56 | $4.79 | $3.51 | ' | ' |
Granted (in dollars per share) | $13.20 | $9.45 | $6.19 | ' | ' |
Exercised (in dollars per share) | $4.17 | $3.20 | $2.08 | ' | ' |
Expired (in dollars per share) | $5.79 | $4.91 | $4.33 | ' | ' |
Forfeited (in dollars per share) | $7.14 | $5.71 | $5.30 | ' | ' |
Balance at the end of the period (in dollars per share) | $6.31 | $5.56 | $4.79 | $3.51 | ' |
Exercisable options at the end of the period (in dollars per share) | $4.88 | $4.26 | ' | ' | ' |
Vested during the period (in dollars per share) | $6.97 | $5.93 | ' | ' | ' |
Vested and expected to vest (in dollars per share) | $6.15 | $5.41 | ' | ' | ' |
Non-vested options (in dollars per share) | $9.22 | $7.28 | ' | ' | ' |
Weighted-Average Remaining Contractual Life | ' | ' | ' | ' | ' |
Outstanding options | '6 years 4 months 24 days | '7 years 2 months 12 days | '7 years 7 months 6 days | '6 years 10 months 24 days | ' |
Exercisable options | '5 years 6 months | '5 years 9 months 18 days | ' | ' | ' |
Redeemable_Convertible_Preferr5
Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) (Details 4) (Stock Options, USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Options Outstanding | ' |
Number of Underlying Shares | 4,905,214 |
Options Exercisable | ' |
Number of Underlying Shares | 3,285,695 |
0.26-1.30 | ' |
Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) | ' |
Range of Exercise Price, low end of range (in dollars per share) | $0.26 |
Range of Exercise Price, high end of range (in dollars per share) | $1.30 |
Options Outstanding | ' |
Weighted Average Exercise Price (in dollars per share) | $0.57 |
Number of Underlying Shares | 187,284 |
Weighted-Average Remaining Contractual Life | '1 year |
Options Exercisable | ' |
Number of Underlying Shares | 187,284 |
Weighted-Average Remaining Contractual Life | '1 year |
1.35-2.60 | ' |
Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) | ' |
Range of Exercise Price, low end of range (in dollars per share) | $1.35 |
Range of Exercise Price, high end of range (in dollars per share) | $2.60 |
Options Outstanding | ' |
Weighted Average Exercise Price (in dollars per share) | $2.18 |
Number of Underlying Shares | 473,347 |
Weighted-Average Remaining Contractual Life | '2 years 6 months |
Options Exercisable | ' |
Number of Underlying Shares | 473,347 |
Weighted-Average Remaining Contractual Life | '2 years 6 months |
2.65-3.90 | ' |
Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) | ' |
Range of Exercise Price, low end of range (in dollars per share) | $2.65 |
Range of Exercise Price, high end of range (in dollars per share) | $3.90 |
Options Outstanding | ' |
Weighted Average Exercise Price (in dollars per share) | $3.23 |
Number of Underlying Shares | 325,523 |
Weighted-Average Remaining Contractual Life | '3 years 7 months 6 days |
Options Exercisable | ' |
Number of Underlying Shares | 325,523 |
Weighted-Average Remaining Contractual Life | '3 years 7 months 6 days |
3.95-5.20 | ' |
Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) | ' |
Range of Exercise Price, low end of range (in dollars per share) | $3.95 |
Range of Exercise Price, high end of range (in dollars per share) | $5.20 |
Options Outstanding | ' |
Weighted Average Exercise Price (in dollars per share) | $4.87 |
Number of Underlying Shares | 941,827 |
Weighted-Average Remaining Contractual Life | '5 years 2 months 12 days |
Options Exercisable | ' |
Number of Underlying Shares | 937,785 |
Weighted-Average Remaining Contractual Life | '5 years 2 months 12 days |
5.25-6.50 | ' |
Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) | ' |
Range of Exercise Price, low end of range (in dollars per share) | $5.25 |
Range of Exercise Price, high end of range (in dollars per share) | $6.50 |
Options Outstanding | ' |
Weighted Average Exercise Price (in dollars per share) | $6.19 |
Number of Underlying Shares | 1,686,513 |
Weighted-Average Remaining Contractual Life | '7 years 8 months 12 days |
Options Exercisable | ' |
Number of Underlying Shares | 1,033,886 |
Weighted-Average Remaining Contractual Life | '7 years 8 months 12 days |
6.55-7.80 | ' |
Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) | ' |
Range of Exercise Price, low end of range (in dollars per share) | $6.55 |
Range of Exercise Price, high end of range (in dollars per share) | $7.80 |
Options Outstanding | ' |
Weighted Average Exercise Price (in dollars per share) | $7.49 |
Number of Underlying Shares | 118,947 |
Weighted-Average Remaining Contractual Life | '6 years 6 months |
Options Exercisable | ' |
Number of Underlying Shares | 100,620 |
Weighted-Average Remaining Contractual Life | '6 years 6 months |
7.85-9.10 | ' |
Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) | ' |
Range of Exercise Price, low end of range (in dollars per share) | $7.85 |
Range of Exercise Price, high end of range (in dollars per share) | $9.10 |
Options Outstanding | ' |
Weighted Average Exercise Price (in dollars per share) | $8.84 |
Number of Underlying Shares | 238,451 |
Weighted-Average Remaining Contractual Life | '8 years 6 months |
Options Exercisable | ' |
Number of Underlying Shares | 94,534 |
Weighted-Average Remaining Contractual Life | '8 years 6 months |
9.15-22.77 | ' |
Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) | ' |
Range of Exercise Price, low end of range (in dollars per share) | $9.15 |
Range of Exercise Price, high end of range (in dollars per share) | $22.77 |
Options Outstanding | ' |
Weighted Average Exercise Price (in dollars per share) | $11.54 |
Number of Underlying Shares | 933,322 |
Weighted-Average Remaining Contractual Life | '8 years 8 months 12 days |
Options Exercisable | ' |
Number of Underlying Shares | 132,716 |
Weighted-Average Remaining Contractual Life | '8 years 10 months 24 days |
Redeemable_Convertible_Preferr6
Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) (Details 5) (Stock options, USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Intrinsic-value | ' | ' | ' |
Options Exercised | $1,315 | $1,310 | $2,400 |
Options Outstanding | 56,197 | 23,480 | 9,110 |
Options Exercisable | $42,116 | $16,800 | $7,100 |
Assumptions used to estimate fair value of stock options | ' | ' | ' |
Expected volatility, minimum (as a percent) | 56.00% | 59.00% | 71.00% |
Expected volatility, maximum (as a percent) | 59.00% | 63.00% | 73.00% |
Expected dividends (as a percent) | 0.00% | 0.00% | 0.00% |
Risk-free rate, minimum (as a percent) | 0.80% | 0.70% | 1.10% |
Risk-free rate, maximum (as a percent) | 1.70% | 1.00% | 2.50% |
Forfeiture rate (as a percent) | 7.20% | 7.90% | 11.60% |
Minimum | ' | ' | ' |
Assumptions used to estimate fair value of stock options | ' | ' | ' |
Expected term | '3 years 3 months 18 days | '5 years | '5 years |
Maximum | ' | ' | ' |
Assumptions used to estimate fair value of stock options | ' | ' | ' |
Expected term | '7 years 2 months 12 days | '6 years 1 month 6 days | '6 years 1 month 6 days |
Redeemable_Convertible_Preferr7
Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) (Details 6) (Stock options, USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Total stock-based compensation expense | ' | ' | ' |
Total stock-based compensation expense | $3,760,000 | $2,869,000 | $2,013,000 |
Total unrecognized compensation cost related to non-vested stock option awards | 7,200,000 | ' | ' |
Weighted-average period over which unrecognized compensation cost will be recognized | '2 years 10 months 24 days | ' | ' |
Cost of revenue | ' | ' | ' |
Total stock-based compensation expense | ' | ' | ' |
Total stock-based compensation expense | 63,000 | 78,000 | 49,000 |
Research and development | ' | ' | ' |
Total stock-based compensation expense | ' | ' | ' |
Total stock-based compensation expense | 1,414,000 | 704,000 | 492,000 |
Sales and marketing | ' | ' | ' |
Total stock-based compensation expense | ' | ' | ' |
Total stock-based compensation expense | 743,000 | 580,000 | 523,000 |
General and administrative | ' | ' | ' |
Total stock-based compensation expense | ' | ' | ' |
Total stock-based compensation expense | $1,540,000 | $1,507,000 | $949,000 |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Related Party Transactions | ' | ' | ' |
Revenue from product sales | $4,394,000 | $6,030,000 | $3,607,000 |
Accounts receivable | 600,000 | 1,500,000 | ' |
Investors | Company 1 | ' | ' | ' |
Related Party Transactions | ' | ' | ' |
Revenue from product sales | 2,889,000 | 2,142,000 | 995,000 |
Investors | Company 2 | ' | ' | ' |
Related Party Transactions | ' | ' | ' |
Revenue from product sales | 950,000 | 1,290,000 | 2,134,000 |
Investors | Company 3 | ' | ' | ' |
Related Party Transactions | ' | ' | ' |
Revenue from product sales | 426,000 | 791,000 | 478,000 |
Investors | Company 4 | ' | ' | ' |
Related Party Transactions | ' | ' | ' |
Revenue from product sales | $129,000 | $1,807,000 | ' |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Operating Leases | ' | ' | ' |
Rental expense | $1,400,000 | $1,100,000 | $1,000,000 |
Future minimum rental payments | ' | ' | ' |
2014 | 1,613,000 | ' | ' |
2015 | 1,620,000 | ' | ' |
2016 | 1,504,000 | ' | ' |
2017 | 1,283,000 | ' | ' |
2018 | 697,000 | ' | ' |
Total | 6,717,000 | ' | ' |
Purchase Commitments | ' | ' | ' |
Non-cancellable purchase commitments | $22,600,000 | ' | ' |
Minimum | ' | ' | ' |
Operating Leases | ' | ' | ' |
Extension term of leases | '3 years | ' | ' |
Maximum | ' | ' | ' |
Operating Leases | ' | ' | ' |
Extension term of leases | '5 years | ' | ' |