Control4 (CTRL) 10-Q 30 Oct 15 2015 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Oct. 22, 2015
Document and Entity Information
Entity Registrant Name	Control4 Corp
Entity Central Index Key	1,259,515
Document Type	10-Q
Document Period End Date	Sep. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		23,990,447
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q3

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 18,737	$ 29,187
Restricted cash	303	311
Short-term investments	43,977	53,523
Accounts receivable, net	22,292	20,155
Inventories	18,057	14,212
Prepaid expenses and other current assets	2,953	2,075
Total current assets	106,319	119,463
Property and equipment, net	6,471	5,089
Long-term investments	21,662	14,509
Intangible assets, net	4,737	1,409
Goodwill	2,648	231
Other assets	1,625	1,329
Total assets	143,462	142,030
Current liabilities:
Accounts payable	17,009	15,016
Accrued liabilities	4,933	4,750
Deferred revenue	1,188	843
Current portion of notes payable	774	915
Total current liabilities	23,904	21,524
Notes payable	332	913
Other long-term liabilities	1,130	1,291
Total liabilities	25,366	23,728
Stockholders' equity:
Common stock, $0.0001 par value; 500,000,000 shares authorized; 24,305,381 and 24,545,107 shares issued; 24,305,381 and 23,987,446 shares outstanding at December 31, 2014 and September 30, 2015 (unaudited), respectively	2	2
Treasury stock, at cost; 0 and 557,661 shares at December 31, 2014 and September 30, 2015 (unaudited), respectively	(4,942)
Additional paid-in capital	218,851	212,388
Accumulated deficit	(94,927)	(93,928)
Accumulated other comprehensive loss	(888)	(160)
Total stockholders' equity	118,096	118,302
Total liabilities and stockholders' equity	$ 143,462	$ 142,030

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2015	Dec. 31, 2014
CONSOLIDATED BALANCE SHEETS
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	24,545,107	24,305,381
Common stock, shares outstanding	23,987,446	24,305,381
Treasury stock, shares	557,661	0

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
CONSOLIDATED STATEMENTS OF OPERATIONS
Revenue	$ 43,558	$ 39,120	$ 120,282	$ 107,636
Cost of revenue	21,748	18,847	60,532	52,160
Gross margin	21,810	20,273	59,750	55,476
Operating expenses:
Research and development	8,191	6,647	24,308	20,519
Sales and marketing	8,489	6,876	23,668	19,541
General and administrative	4,220	3,530	13,129	10,658
Litigation settlement		10		45
Total operating expenses	20,900	17,063	61,105	50,763
Income (loss) from operations	910	3,210	(1,355)	4,713
Other income (expense):
Interest, net	79	24	142	25
Other income (expense)	(112)	(221)	(452)	(150)
Total other income (expense)	(33)	(197)	(310)	(125)
Income (loss) before income taxes	877	3,013	(1,665)	4,588
Income tax expense (benefit)	(314)	250	(666)	353
Net income (loss)	$ 1,191	$ 2,763	$ (999)	$ 4,235
Net income (loss) per common share:
Basic (in dollars per share)	$ 0.05	$ 0.12	$ (0.04)	$ 0.18
Diluted (in dollars per share)	$ 0.05	$ 0.11	$ (0.04)	$ 0.16
Weighted-average number of shares:
Basic (in shares)	24,129	23,840	24,260	23,559
Diluted (in shares)	24,856	25,590	24,260	25,671

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
Net income (loss)	$ 1,191	$ 2,763	$ (999)	$ 4,235
Other comprehensive income (loss):
Foreign currency translation adjustment, net of tax	(547)	(53)	(793)	(35)
Net unrealized gains (losses) on available-for-sale investments, net of tax	37	(46)	65	(46)
Total other comprehensive income (loss)	(510)	(99)	(728)	(81)
Comprehensive income (loss)	$ 681	$ 2,664	$ (1,727)	$ 4,154

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Operating activities
Net income (loss)	$ (999)	$ 4,235
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation expense	2,146	1,880
Amortization of intangible assets	1,113	330
Provision for doubtful accounts	281	271
Stock-based compensation	5,336	3,994
Excess tax benefit from exercise of options for common stock		(18)
Changes in assets and liabilities:
Accounts receivable	(2,097)	(4,338)
Inventories	(1,779)	(175)
Restricted cash		(334)
Prepaid expenses and other current assets	(566)	(402)
Other assets	(247)	(24)
Accounts payable	342	956
Accrued liabilities	(622)	(2,072)
Deferred revenue	347	99
Other long-term liabilities	(298)	(26)
Net cash provided by operating activities	2,957	4,376
Investing activities
Purchases of available-for-sale investments	(49,095)	(86,765)
Proceeds from sales of available-for-sale investments	2,018	2,850
Proceeds from maturities of available-for-sale investments	49,535	11,915
Purchases of property and equipment	(2,917)	(2,148)
Business acquisitions, net of cash acquired	(8,380)	(1,116)
Net cash used in investing activities	(8,839)	(75,264)
Financing activities
Proceeds from exercise of options for common stock	1,127	4,630
Excess tax benefit from exercise of options for common stock		18
Repurchase of common stock	(4,942)
Repayment of notes payable	(722)	(847)
Net cash provided by (used in) financing activities	(4,537)	3,801
Effect of exchange rate changes on cash and cash equivalents	(31)	(9)
Net decrease in cash and cash equivalents	(10,450)	(67,096)
Cash and cash equivalents at beginning of period	29,187	84,546
Cash and cash equivalents at end of period	18,737	17,450
Supplemental disclosure of cash flow information
Cash paid for interest	85	150
Cash paid for taxes	431	227
Supplemental schedule of non-cash investing and financing activities
Net unrealized losses on available-for-sale investments	$ 65	$ 46

Description of Business and Sum

Description of Business and Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2015
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. Unaudited Interim Financial Statements The accompanying condensed consolidated balance sheets and the condensed consolidated statements of operations, comprehensive income (loss), and cash flows are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (‘‘GAAP’’) on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting of only normal recurring adjustments, considered necessary to present fairly the Company’s financial position, results of operations and cash flows. The results of operations for the three and nine months ended September 30 , 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015, or any other future interim or annual period. These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 20, 2015. The December 31, 2014 consolidated balance sheet included herein was derived from the audited financial statements as of that date. Basis of Presentation The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in the unaudited condensed consolidated financial statements. 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 assessing 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 its worldwide network of independent dealers and distributors. 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 and the European Union, which are generally denominated in pounds sterling and the euro, respectively. There were no individual account balances greater than 10% of total accounts receivable at December 31, 2014 and September 30 , 2015. No dealer or distributor accounted for more than 10% of total revenue for the three and nine months ended September 30, 2014 and 2015. 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 three and nine months ended September 30, 2014 and 2015. The following table sets forth revenue from the U.S., Canadian and all other international dealers and distributors combined (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2014 2015 2014 2015 Revenue-United States $ $ $ $ Revenue-Canada Revenue-all other international sources Total revenue $ $ $ $ International revenue (excluding Canada) as a percent of total revenue % % % % 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, at its option, to repair or replace defective products during the warranty period at no cost to the customer or refund the purchase price. The Company estimates the costs that may be incurred to replace, repair or issue a refund for 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): Warranty Liability Balance at December 31, 2014 $ Warranty costs accrued Warranty claims Balance at September 30, 2015 $ 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 settlement of restricted stock units . 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): Three Months Ended Nine Months Ended September 30, September 30, 2014 2015 2014 2015 Numerator: Net income (loss) $ $ $ $ Denominator: Weighted average common stock outstanding for basic net income (loss) per common share Effect of dilutive securities—stock options and restricted stock units — Weighted average common shares and dilutive securities outstanding 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 as they would decrease the loss per share. Potentially dilutive securities, including common equivalent shares, in which the assumed proceeds exceed the average market price of common stock for the applicable period, were not included in the calculation of diluted net income per share as their impact would be anti-dilutive. 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): Three Months Ended Nine Months Ended September 30, September 30, 2014 2015 2014 2015 Options to purchase common stock Restricted stock units — — — Total Recent Accounting Pronouncements In May 2014, the FASB issued ASU 201 4-09, “Revenue from Contracts with Customers (Topic 606),” which amends the guidance in ASC 605, “Revenue Recognition.” The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14, defer ring the effective date of this standard for one year, and is now effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The deferred standard allows early adoption of the standard on the original effective date of December 15, 2016. The Company is still evaluating the impact of adopting this guidance as well as whether the Company will apply the amendments retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of applying this update at the date of initial application. In August 2014, the FASB issued ASU 2014-15, ‘‘Presentation of Financial Statements — Going Concern (Subtopic 205-40).’’ The amended guidance requires an entity to prepare financial statements under the liquidation basis of accounting in accordance with Subtopic 205-30, Presentation of Financial Statements—Liquidation Basis of Accounting, if liquidation of the entity becomes imminent. The guidance is effective for the annual period ending on December 31, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company early adopted this guidance, and the adoption of this guidance did not have an impact on the Company’s results of operations, financial position, or cash flows. In April 2015, the FASB issued ASU 2015-05, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40) – Customers Accounting for Fees Paid in a Cloud Computing Arrangement.” This update provides guidance regarding the accounting for fees paid by a customer in cloud computing arrangements. If a cloud computing arrangement includes a software license, the p ayment of fees should be accounted for in the same manner as the acquisition of other software licenses. If there is no software license, the fees should be accounted for as a service contract. The guidance is effective in fiscal years beginning after December 15, 2015 and early adoption is permitted. An entity can elect to adopt the amendments either (1) prospectively to all arrangements entered into or materially modified after the effective date or ( 2) retrospectively. The Company adopted this guidance early and will apply the guidance prospectively. The adoption of this guidance did not have an impact on the Company’s results of operations, financial position, or cash flows . In July 2015, the FASB issued ASU 2015-11, “Inventory (Subtopic 330) – Simplifying the Measurement of Inventory.” This update requires that inventory within the scope of the guidance be measured at the lower of cost and net realizable value. Inventory measured using last-in, first-out (LIFO) and the retail inventory method (RIM) are not impacted by the new guidance. The guidance is effective in fiscal years beginning after December 15, 2016, including interim periods within those years. Prospective application is required. Early adoption is permitted as of the beginning of an interim or annual reporting period. The Company is evaluating the impact of adopting this guidance. In September 2015, the FASB issued ASU 2015-16, “Business Combinations (Topic 805) – Simplifying the Accounting for Measurement-Period Adjustments.” This update eliminates the requirement to restate prior period financial statements for measurement period adjustments. The new guidance requires that the cumulative impact of a measurement period adjustment (including the impact on prior periods) be recognized in the reporting period in which the adjustment is identified. The new standard should be applied prospectively to measurement period adjustments that occur after the effective date. T he new standard is effective for interim and annual periods beginning after December 15, 2015 and e arly adoption is permitted. The Company adopted this guidance early , and the adoption of this guidance did not have an impact on the Company’s results of operations, financial position, or cash flows , other than the measurement period adjustment discussed in Note 4 .

Balance Sheet Components

Balance Sheet Components	9 Months Ended
	Sep. 30, 2015
Balance Sheet Components
Balance Sheet Components	2. Balance Sheet Components Inventories consisted of the following (in thousands): December 31, September 30, 2014 2015 Finished goods $ $ Work-in-process — Component parts $ $ Property and equipment, net consisted of the following (in thousands): December 31, September 30, 2014 2015 Computer equipment and software $ $ Manufacturing tooling and test equipment Lab and warehouse equipment Leasehold improvements Furniture and fixtures Marketing equipment Less: accumulated depreciation $ $ Other assets consisted of the following (in thousands): December 31, September 30, 2014 2015 Deposits $ $ Prepaid licensing $ $ Accrued liabilities consisted of the following (in thousands): December 31, September 30, 2014 2015 Sales returns and warranty accruals $ $ Compensation accruals Other accrued liabilities $ $

Financial Instruments

Financial Instruments	9 Months Ended
	Sep. 30, 2015
Fair Value Measurements
Financial Instruments	3. Financial Instruments Fair Value Measurements The Company’s financial assets that are measured at fair value on a recurring basis consist of money market funds and available-for-sale investments. 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. Level 2: Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3: Unobservable inputs are used when little or no market data is available. The fair values for substantially all of the Company’s financial assets are based on quoted prices in active markets or observable inputs. For Level 2 securities, the Company uses a third-party pricing service which provides documentation on an ongoing basis that includes, among other things, pricing information with respect to reference data, methodology, inputs summarized by asset class, pricing application and corroborative information. Cash, Cash Equivalents and Marketable Securities The Company determines realized gains or losses on the sale of marketable securities on a specific identification method. During the three and nine months ended September 30, 2015 , the Company did not record significant realized gains or losses on the sales of available-for-sale investments. The following tables show the Company’s cash and available-for-sale investments’ adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category recorded as cash and cash equivalents or short- or long-term investments as of December 31, 2014 and September 30 , 2015 (in thousands): December 31, 2014 Cash and Adjusted Unrealized Unrealized Cash Short-term Long-term Cost Gains Losses Fair Value Equivalents Investments Investments Cash $ $ — $ — $ $ $ — $ — Level 1: Money market funds — — — — Subtotal — — — — Level 2: Asset-backed securities — — — Corporate bonds — Commercial paper — — — — U.S. agency securities — — — — Subtotal — Total $ $ $ $ $ $ $ September 30, 2015 Cash and Adjusted Unrealized Unrealized Cash Short-term Long-term Cost Gains Losses Fair Value Equivalents Investments Investments Cash $ $ — $ — $ $ $ — $ — Level 1: Money market funds — — — — U.S. government notes — — — Subtotal — — Level 2: Asset-backed securities — — — Corporate bonds — Commercial paper — — — U.S. agency securities — — Subtotal Total $ $ $ $ $ $ $ As of September 30, 2015, the Company considers the declines in market value of its investment portfolio to be temporary in nature and does not consider any of its investments other-than-temporarily impaired. During the three and nine months ended September 30, 2015, the Company did not recognize any significant impairment charges. The Company typically invests in highly-rated securities, and its investment policy generally limits the amount of credit exposure to any one issuer. The policy requires investments generally to be investment grade, with the primary objective of minimizing the potential risk of principal loss. Fair values were determined for each individual security in the investment portfolio. The maturities of the Company’s long-term investments range from one to two years. When evaluating an investment for other-than-temporary impairment the Company reviews factors such as the length of time and extent to which fair value has been below its cost basis, the financial condition of the issuer and any changes thereto, changes in market interest rates, and the Company’s intent to sell, as well as the fact it is not more likely than not that the Company will be required to sell the investment before recovery of the investment’s cost basis, which may be maturity. Fair Value of Other Financial Instruments The carrying amounts reported in the accompanying consolidated financial statements for cash and cash equivalents, restricted cash, 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 (see Note 5). As a result, the balance of the notes payable is categorized within the Level 2 fair value hierarchy. Derivative Financial Instruments The Company has foreign currency exposure related to the operations in the United Kingdom, Australia, as well as other foreign locations. The Company has entered into forward contracts to help offset the exposure to movements in foreign currency exchange rates in relation to certain U.S. dollar denominated balance sheet accounts of its subsidiaries in the United Kingdom and Australia. The foreign currency derivatives are not designated as accounting hedges. The Company recognizes these derivative instruments as either assets or liabilities in the accompanying Condensed Consolidated Balance Sheets at fair value. The Company records changes in the fair value (i.e. gains or losses) of these derivative instruments in the accompanying Condensed Consolidated Statements of Operations as Other income (expense), net. The Company settles its foreign exchange contracts on the last day of every month and enters into a new forward contract for the next month. As a result, there are no a ssets or liabilities recorded in the accompanying Condensed Consolidated Balance Sheets related to derivative instrumen ts as of September 30, 2015. However, the notional principal of foreign exchange contracts for October 2015 was $6.9 million as of September 30, 2015. The Company did not enter into foreign currency forward contracts during 2014. The following table shows the pre-tax gains (losses) of the Company’s derivative instruments not designated as hedging instruments (in thousands): Three Months Ended Nine Months Ended September 30, September 30, Income Statement Location 2014 2015 2014 2015 Foreign exchange contracts Other income (expense), net $ — $ $ — $

Goodwill and Intangible Assets

Goodwill and Intangible Assets	9 Months Ended
	Sep. 30, 2015
Goodwill and Intangible Assets
Goodwill and Intangible Assets	4. Goodwill and Intangible Assets On January 30, 2015, the Company, through its newly-formed, wholly-owned subsidiary, Control4 Australia Pty Ltd (“Control4 Australia”), completed the acquisition of Nexus Technologies Pty Ltd (“Nexus”), an Australia-based provider of audio/video distribution products (under the brand of “Leaf”), pursuant to a Share Sale Agreement dated January 30, 2015, by and among Control4 Australia and all of the shareholders of Nexus, under which Control4 Australia purchased all of the issued and outstanding shares of Nexus from its shareholders and Nexus became a wholly-owned subsidiary of Control4 Australia. The total consideration transferred was $8.5 million in cash. Of the cash consideration, $750,000 of cash was deposited in escrow as partial security for the indemnification obligations of the Nexus shareholders pursuant to the Share Sale Agreement, which will be released to the Nexus shareholders one year from the acquisition date, provided that there are no claims made against the escrow amount. Additionally, the Company incurred approximately $0.6 million in acquisition-related expenses accounted for in general and administrative expenses. The Company had previously sold select Leaf products to its North American dealer network. Through this acquisition, the Company believes it now offers a complete array of video distribution solutions under the Control4 brand to Control4 customers worldwide, will gain market share in the growing audio and video (A/V) category, and will leverage Leaf’s valuable engineering expertise to develop new and innovative A/V solutions. The Company determined the Nexus acquisition was not a significant acquisition under Rule 3-05 of Regulation S-X. Total consideration transferred was allocated to tangible and identifiable intangible assets acquired and liabilities assumed based on their fair values at the acquisition date as set forth below. Management estimated the fair values of tangible and intangible assets and liabilities in accordance with the applicable accounting guidance for business combinations. The preliminary allocation of consideration transferred is subject to potential adjustments to acquired deferred tax assets and liabilities as these tax estimates are pending the completion of tax returns for the acquired entity. These adjustments could have a material impact on the consolidated financial statements. The Company expects the allocation of the consideration transferred to be final within the measurement period (up to one year from the acquisition date). Due to new information obtained related to warranty and tax liabilities based on facts that existed at the acquisition date , the Company recorded measurement period adjustments to other assets acquired, goodwill, and other liabilities assumed. The net change to goodwill was an increase of $0.2 million. Had these adjustments been recorded as of the acquisition date, the Company’s cost of revenue would have decreased $0.1 million for the three months ended March 31, 2015, decreased $0.1 million for the three months ended June 30, 2015, and increased $0.2 million for the three months ended September 30, 2015, respectively. The Company’s preliminary allocation of consideration transferred for Nexus is as follows (in thousands): Estimated Fair Value Cash $ Inventory Other assets acquired Intangible assets Goodwill Total assets acquired Accounts payable Warranty liability Other liabilities assumed Total net assets acquired $ Amortizable Intangible Assets The Company’s intangible assets and related accumulated amortization consisted of the following as of December 31, 2014 and September 30, 2015 (in thousands): December 31, 2014 Gross Carrying Accumulated Amount Amortization Net Developed technology $ $ $ Non-competition agreements Total intangible assets $ $ $ September 30, 2015 Gross Carrying Accumulated Amount Amortization Net Developed technology $ $ $ Customer relationships Non-competition agreements Total intangible assets $ $ $ The weighted average amortization period for acquired technology, customer relationships and non-competition agreements is 4.8 years, 5.0 years, and 2.0 years, respectively; and 4.8 years for all amortizable intangible assets in total. The Company recorded amortization expense during the respective periods for these intangible assets as follows: (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2014 2015 2014 2015 Amortization of intangible assets $ $ $ $ Amortization of finite lived intangible assets as of September 30, 2015 for the next five years is as follows (in thousands): Amount 2015 $ 2016 2017 2018 2019 2020 $ Goodwill Changes in the carrying amount of goodwill consisted of the following (in thousands): Amount Balance at December 31, 2014 $ Current period acquisitions Foreign currency translation adjustment Balance at September 30, 2015 $ Goodwill represents the excess of consideration transferred over the fair value of assets acquired and liabilities assumed and is attributable to assembled workforces as well as the benefits expected from combining the Company’s research and engineering operations with the acquired company’s. The Company’s goodwill associated with Nexus has tax basis but is not currently deductible for income tax purposes, due to Australian tax laws. The Company’s remaining goodwill does not have tax basis and, therefore, is not deductible for income tax purposes.

Long-Term Obligations

Long-Term Obligations	9 Months Ended
	Sep. 30, 2015
Long-Term Obligations
Long-Term Obligations	5. 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. Term borrowings are payable in 42 equal monthly payments of principal plus interest and bear interest at prime plus 0.50% , which was 3.75% at September 30, 2015. The Company believes that it has sufficient working capital to fund its operating and investing activities and accordingly did not renew the revolving credit facility upon maturity in May 2015. The SVB Agreement contains various restrictive and financial covenants and the Company was in compliance with each of these covenants as of September 30, 2015.

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2015
Income Taxes
Income Taxes	6. Income Taxes In order to determine the quarterly provision for income taxes, the Company considers the estimated annual effective tax rate, which is based on expected annual taxable income and statutory tax rates in the various jurisdictions in which the Company operates. Certain significant or unusual items are separately recognized in the quarter during which they occur and can be a source of variability in the effective tax rates from quarter to quarter. Income tax expense was $0.3 million and the income tax benefit was $0.3 million for the three months ended September 30, 2014 and 2015, respectively, or approximately 8% and 36% of income (loss) before income taxes, respectively. Income tax expense was $0.4 million and income tax benefit was $0.7 million for the nine months ended September 30, 2014 and 2015, respectively, or approximately 8% and 40% of income (loss) before income taxes, respectively. The effective tax rate for the three and nine months ended September 30, 2015 differs from the U.S. federal statutory rate of 34% primarily due to the domestic valuation allowance offsetting most of the statutory rate. The rate is increased by foreign income taxes, minimum state income taxes or taxes in states for which net operating loss carryforwards are not available, the U.S. federal alternative minimum tax and the impact of incentive stock options as well as other permanent differences. As of December 31, 2014, our net operating loss (“NOL”) carryforward amounts for U.S. federal income and state tax purposes were $85.6 million and $86.1 million, respectively. In addition to the NOL carryforwards, as of December 31, 2014, we had U.S. federal and state research and development credit carryforwards of $3.8 million and $2.8 million, respectively. Significant judgment is required in determining the provision for income taxes, recording valuation allowances against deferred tax assets and evaluating uncertain tax positions. In evaluating the Company’s ability to recover deferred tax assets, in full or in part, the Company considers all available positive and negative evidence, including past operating results, the forecast of future market growth, forecasted earnings, future taxable income and prudent and feasible tax planning strategies. Due to historical net losses incurred and the uncertainty of realizing the deferred tax assets, for all the periods presented, the Company has a full valuation allowance against all U.S. deferred tax assets. To the extent that the Company generates positive income and expects, with reasonable certainty, to continue to generate positive domestic income, the Company may release all or a portion of the valuation allowance in a future period. This release would result in the recognition of certain deferred tax assets and a decrease to income tax expense for the period such release is made. In addition, the effective tax rate in subsequent periods would increase, and more closely approximate the federal statutory rate of 34%, excluding state income taxes, foreign income taxes and the effect of incentive stock options and permanent differences. 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, Australia, Hong Kong, China, Germany, and India. The Company is subject to examination in the United States, the United Kingdom, Australia, Hong Kong, China, Germany, and India as well as various state jurisdictions. As of September 30, 2015, the Company was not under examination by any tax authorities. Tax years beginning in 2012 are subject to examination by tax authorities in the United States and in some states tax years as early as 2011 are subject to examination by 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 2011 are subject to examination by the taxing authorities in Australia and Hong Kong. Tax years beginning in 2012 are subject to examination by the taxing authorities in China, Hong Kong, and India. Tax years beginning in 2013 are subject to examination by the taxing authorities in the United Kingdom. Tax years beginning in 2015 are subject to examination by the taxing authorities in Germany.

Equity Compensation

Equity Compensation	9 Months Ended
	Sep. 30, 2015
Equity Compensation
Equity Compensation	7. Equity Compensation 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 as of the preceding December 31. On January 1, 2015, the number of reserved shares was increased by 1,215,269 shares in accordance with the provisions of the 2013 Plan. A summary of stock option activity for the nine months ended September 30, 2015 is presented below: Weighted Weighted Average Shares Subject Average Weighted Remaining to Options Grant Date Average Contractual Outstanding Fair Value Exercise Price Life (Years) Balance at December 31, 2014 $ Granted $ Exercised Expired Forfeited Balance at September 30, 2015 Exercisable options at September 30, 2015 Vested and expected to vest at September 30, 2015 The following table summarizes information about stock options outstanding and exercisable at September 30, 2015: Options Outstanding Options Exercisable Weighted- Weighted- Weighted Average Average Average Number of Remaining Number of Remaining Exercise Underlying Contractual Underlying Contractual Range of Exercise Prices Price Shares Life (in years) Shares Life (in years) $ - $ - $ - $ - $ - For the stock option awards vested during the three and nine months ended September 30, 2015, the total fair value was $1.7 million and $6.0 million, respectively. The following table summarizes the aggregate intrinsic-value of options exercised, exercisable and vested and expected to vest (in thousands): For the Nine Months Ended and as of September 30, 2014 2015 Options Exercised $ $ Options Exercisable Options Vested and Expected to Vest 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: Three Months Ended Nine Months Ended September 30, September 30, 2014 2015 2014 2015 Expected volatility 57 - 58 % 53 % 56 - 60 % 53 - 55 % Expected dividends — % — % — % — % Expected terms (in years) 6.1 5.3 - 6.1 3.8 - 6.1 5.3 - 6.1 Risk-free rate 1.8 - 1.9 % 1.5 - 1.8 % 1.1 - 2.0 % 1.3 - 1.8 % Restricted stock units A summary of restricted stock unit activity for the nine months ended September 30, 2015 is presented below: Number of Weighted Average Shares Grant Date Fair Value Non-vested balance at December 31, 2014 — Awarded $ Vested — Forfeited — Non-vested balance at September 30, 2015 There were no restricted stock units vested during the three and nine months ended September 30, 2015. Stock-based compensation expense Total stock-based compensation expense has been classified as follows in the accompanying statements of operations (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2014 2015 2014 2015 Cost of revenue $ $ $ $ Research and development Sales and marketing General and administrative Total stock-based compensation expense $ $ $ $ At September 30, 2015, there was $13.6 million of total unrecognized compensation cost related to non-vested stock option awards that will be recognized over a weighted-average period of 2.6 years. At September 30, 2015, there was $3.1 million of total unrecognized compensation cost related to non-vested restricted stock units that will be recognized over a weighted-average period of 3.9 years.

Share Repurchases

Share Repurchases	9 Months Ended
	Sep. 30, 2015
Share Repurchases
Share Repurchases	8. Share Repurchases In May 2015, the Company’s Board of Directors authorized the repurchase of up to $20 million in Control4 common stock from time to time on the open market. The authorization by the Board of Directors will expire after one year, or when terminated earlier. During the three and nine months ended September 30, 2015, the Company repurchased 330,386 shares and 557,661 share s for $2.8 million and $4.9 million, r espectively, and is shown in the accompanying Condensed Consolidated Balance Sheets as a reduction of Stockholders’ Equity. As of September 30, 2015, we have $15.1 million remaining to repurchase shares of common stock under this share repurchase program.

Related Party Transactions

Related Party Transactions	9 Months Ended
	Sep. 30, 2015
Related Party Transactions
Related Party Transactions	9. Related Party Transactions The former owner of Nexus, who is now an employee of the Company, owned and operated a Control4 authorized distributorship in Dubai until September 13, 2015, when he sold the distributorship to an unrelated third party. Revenue from product sales to that distributor for the period from the acquisition date of January 30, 2015 through September 13, 2015 was $0.4 million. Revenue from product sales to that distributor from July 1, 2015 through September 13, 2015 was $0.1 million.

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2015
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 2015 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 $0.5 million and $0.5 million for the three months ended September 30, 2014 and 2015, respectively, and $1.3 million and $1.4 million for the nine months ended September 30, 2014 and 2015, 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 September 30, 2015 (in thousands): 2015 $ 2016 2017 2018 $ Purchase Commitments The Company had non-cancellable purchase commitments for the purchase of inventory, which extend through April 2016 totaling approximately $32.1 million at September 30, 2015. 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 directors’ and officers’ 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 September 30, 2015. Legal Matters On April 15, 2015, Intuitive Building Controls, Inc. (“IBC”), a corporation organized under the laws of Texas, filed a Complaint against the Company in the Eastern District of Texas, and the Company filed its Answer on June 10, 2015. During April 2015, IBC filed similar complaints against many other companies. IBC’s Complaint asserts that the Company’s lighting control systems, specifically including its controllers and in-wall touch screens, infringe three United States patents that IBC owns by assignment: U.S. Patent Nos. 6,118,230 (the “’230 patent”), 6,160,359 (the “’359 patent”) and 5,945,993 (the “’993 patent ” ). The Complaint seeks injunctive relief and monetary damages. Based on the Company’s preliminary investigation of the patents at issue, the Company does not believe its products infringe any valid or enforceable claim of these patents. Accordingly, the Company is vigorously defending the lawsuit. On April 28, 2015, the Company received a letter from Certified Measurement, LLC ("Certified Measurement"), alleging that some of the Company's products infringe three patents owned by assignment by Certified Measurement because they acquire physical measurements (such as motion, temperature, lighting, etc.), time-stamp the measurement data, and then perform cryptographic operations. Certified Measurement is a wholly-owned subsidiary of Patent Properties, Inc. ("Patent Properties"). The Company is conducting an investigation of the claims made by Certified Measurement regarding its three patents. Certified Measurement has not initiated litigation against the Company, but the Company believes that Certified Measurement may do so. The Company intends to defend itself vigorously with respect to this and any other related claims or litigation. Since no complaint has been filed and the outcome of any potential legal proceedings related to these claims is uncertain at this time, the Company cannot estimate the amount of liability, if any, which could result from an adverse resolution of this matter. 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 other than specifically identified above, that individually or in the aggregate, could have a material effect on the Company’s financial condition, operations, or cash flows. Currently, a range of loss associated with any individual material legal proceeding cannot be reasonably estimated .

Description of Business and S17

Description of Business and Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2015
Description of Business and Summary of Significant Accounting Policies
Unaudited Interim Financial Statements	Unaudited Interim Financial Statements The accompanying condensed consolidated balance sheets and the condensed consolidated statements of operations, comprehensive income (loss), and cash flows are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (‘‘GAAP’’) on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting of only normal recurring adjustments, considered necessary to present fairly the Company’s financial position, results of operations and cash flows. The results of operations for the three and nine months ended September 30 , 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015, or any other future interim or annual period. These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 20, 2015. The December 31, 2014 consolidated balance sheet included herein was derived from the audited financial statements as of that date.
Basis of Presentation	Basis of Presentation The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in the unaudited condensed consolidated financial statements.
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 assessing 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 its worldwide network of independent dealers and distributors. 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 and the European Union, which are generally denominated in pounds sterling and the euro, respectively. There were no individual account balances greater than 10% of total accounts receivable at December 31, 2014 and September 30 , 2015. No dealer or distributor accounted for more than 10% of total revenue for the three and nine months ended September 30, 2014 and 2015. 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 three and nine months ended September 30, 2014 and 2015. The following table sets forth revenue from the U.S., Canadian and all other international dealers and distributors combined (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2014 2015 2014 2015 Revenue-United States $ $ $ $ Revenue-Canada Revenue-all other international sources Total revenue $ $ $ $ International revenue (excluding Canada) as a percent of total revenue % % % %
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, at its option, to repair or replace defective products during the warranty period at no cost to the customer or refund the purchase price. The Company estimates the costs that may be incurred to replace, repair or issue a refund for 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): Warranty Liability Balance at December 31, 2014 $ Warranty costs accrued Warranty claims Balance at September 30, 2015 $
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 settlement of restricted stock units . 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): Three Months Ended Nine Months Ended September 30, September 30, 2014 2015 2014 2015 Numerator: Net income (loss) $ $ $ $ Denominator: Weighted average common stock outstanding for basic net income (loss) per common share Effect of dilutive securities—stock options and restricted stock units — Weighted average common shares and dilutive securities outstanding 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 as they would decrease the loss per share. Potentially dilutive securities, including common equivalent shares, in which the assumed proceeds exceed the average market price of common stock for the applicable period, were not included in the calculation of diluted net income per share as their impact would be anti-dilutive. 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): Three Months Ended Nine Months Ended September 30, September 30, 2014 2015 2014 2015 Options to purchase common stock Restricted stock units — — — Total
Recent Accounting Pronouncements	Recent Accounting Pronouncements In May 2014, the FASB issued ASU 201 4-09, “Revenue from Contracts with Customers (Topic 606),” which amends the guidance in ASC 605, “Revenue Recognition.” The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14, defer ring the effective date of this standard for one year, and is now effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The deferred standard allows early adoption of the standard on the original effective date of December 15, 2016. The Company is still evaluating the impact of adopting this guidance as well as whether the Company will apply the amendments retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of applying this update at the date of initial application. In August 2014, the FASB issued ASU 2014-15, ‘‘Presentation of Financial Statements — Going Concern (Subtopic 205-40).’’ The amended guidance requires an entity to prepare financial statements under the liquidation basis of accounting in accordance with Subtopic 205-30, Presentation of Financial Statements—Liquidation Basis of Accounting, if liquidation of the entity becomes imminent. The guidance is effective for the annual period ending on December 31, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company early adopted this guidance, and the adoption of this guidance did not have an impact on the Company’s results of operations, financial position, or cash flows. In April 2015, the FASB issued ASU 2015-05, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40) – Customers Accounting for Fees Paid in a Cloud Computing Arrangement.” This update provides guidance regarding the accounting for fees paid by a customer in cloud computing arrangements. If a cloud computing arrangement includes a software license, the p ayment of fees should be accounted for in the same manner as the acquisition of other software licenses. If there is no software license, the fees should be accounted for as a service contract. The guidance is effective in fiscal years beginning after December 15, 2015 and early adoption is permitted. An entity can elect to adopt the amendments either (1) prospectively to all arrangements entered into or materially modified after the effective date or ( 2) retrospectively. The Company adopted this guidance early and will apply the guidance prospectively. The adoption of this guidance did not have an impact on the Company’s results of operations, financial position, or cash flows . In July 2015, the FASB issued ASU 2015-11, “Inventory (Subtopic 330) – Simplifying the Measurement of Inventory.” This update requires that inventory within the scope of the guidance be measured at the lower of cost and net realizable value. Inventory measured using last-in, first-out (LIFO) and the retail inventory method (RIM) are not impacted by the new guidance. The guidance is effective in fiscal years beginning after December 15, 2016, including interim periods within those years. Prospective application is required. Early adoption is permitted as of the beginning of an interim or annual reporting period. The Company is evaluating the impact of adopting this guidance. In September 2015, the FASB issued ASU 2015-16, “Business Combinations (Topic 805) – Simplifying the Accounting for Measurement-Period Adjustments.” This update eliminates the requirement to restate prior period financial statements for measurement period adjustments. The new guidance requires that the cumulative impact of a measurement period adjustment (including the impact on prior periods) be recognized in the reporting period in which the adjustment is identified. The new standard should be applied prospectively to measurement period adjustments that occur after the effective date. T he new standard is effective for interim and annual periods beginning after December 15, 2015 and e arly adoption is permitted. The Company adopted this guidance early , and the adoption of this guidance did not have an impact on the Company’s results of operations, financial position, or cash flows , other than the measurement period adjustment discussed in Note 4 .

Description of Business and S18

Description of Business and Summary of Significant Accounting Policies (Tables)	9 Months Ended
	Sep. 30, 2015
Description of Business and Summary of Significant Accounting Policies
Schedule of revenue from United States, Canada 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): Three Months Ended Nine Months Ended September 30, September 30, 2014 2015 2014 2015 Revenue-United States $ $ $ $ Revenue-Canada Revenue-all other international sources Total revenue $ $ $ $ International revenue (excluding Canada) as a percent of total revenue % % % %
Schedule of changes in the product warranty liability	The following table presents the changes in the product warranty liability (in thousands): Warranty Liability Balance at December 31, 2014 $ Warranty costs accrued Warranty claims Balance at September 30, 2015 $
Schedule of reconciliation of the numerator and denominator used in the calculation of basic and diluted net 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): Three Months Ended Nine Months Ended September 30, September 30, 2014 2015 2014 2015 Numerator: Net income (loss) $ $ $ $ Denominator: Weighted average common stock outstanding for basic net income (loss) per common share Effect of dilutive securities—stock options and restricted stock units — Weighted average common shares and dilutive securities outstanding
Schedule of anti-dilutive weighted-average common stock equivalents excluded from the calculation of diluted net 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): Three Months Ended Nine Months Ended September 30, September 30, 2014 2015 2014 2015 Options to purchase common stock Restricted stock units — — — Total

Balance Sheet Components (Table

Balance Sheet Components (Tables)	9 Months Ended
	Sep. 30, 2015
Balance Sheet Components
Schedule of inventories	Inventories consisted of the following (in thousands): December 31, September 30, 2014 2015 Finished goods $ $ Work-in-process — Component parts $ $
Schedule of property and equipment, net	Property and equipment, net consisted of the following (in thousands): December 31, September 30, 2014 2015 Computer equipment and software $ $ Manufacturing tooling and test equipment Lab and warehouse equipment Leasehold improvements Furniture and fixtures Marketing equipment Less: accumulated depreciation $ $
Schedule of other assets	Other assets consisted of the following (in thousands): December 31, September 30, 2014 2015 Deposits $ $ Prepaid licensing $ $
Schedule of accrued liabilities	Accrued liabilities consisted of the following (in thousands): December 31, September 30, 2014 2015 Sales returns and warranty accruals $ $ Compensation accruals Other accrued liabilities $ $

Financial Instruments (Tables)

Financial Instruments (Tables)	9 Months Ended
	Sep. 30, 2015
Fair Value Measurements
Schedule of cash and available-for-sale investments' adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category recorded as cash and cash equivalents or short- or long-term investments	The following tables show the Company’s cash and available-for-sale investments’ adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category recorded as cash and cash equivalents or short- or long-term investments as of December 31, 2014 and September 30 , 2015 (in thousands): December 31, 2014 Cash and Adjusted Unrealized Unrealized Cash Short-term Long-term Cost Gains Losses Fair Value Equivalents Investments Investments Cash $ $ — $ — $ $ $ — $ — Level 1: Money market funds — — — — Subtotal — — — — Level 2: Asset-backed securities — — — Corporate bonds — Commercial paper — — — — U.S. agency securities — — — — Subtotal — Total $ $ $ $ $ $ $ September 30, 2015 Cash and Adjusted Unrealized Unrealized Cash Short-term Long-term Cost Gains Losses Fair Value Equivalents Investments Investments Cash $ $ — $ — $ $ $ — $ — Level 1: Money market funds — — — — U.S. government notes — — — Subtotal — — Level 2: Asset-backed securities — — — Corporate bonds — Commercial paper — — — U.S. agency securities — — Subtotal Total $ $ $ $ $ $ $
Schedule of pre-tax gains (losses) not designated as hedging instruments	The following table shows the pre-tax gains (losses) of the Company’s derivative instruments not designated as hedging instruments (in thousands): Three Months Ended Nine Months Ended September 30, September 30, Income Statement Location 2014 2015 2014 2015 Foreign exchange contracts Other income (expense), net $ — $ $ — $

Goodwill and Intangible Assets

Goodwill and Intangible Assets (Tables)	9 Months Ended
	Sep. 30, 2015
Goodwill and Intangible Assets
Schedule of preliminary allocation of consideration transferred	The Company’s preliminary allocation of consideration transferred for Nexus is as follows (in thousands): Estimated Fair Value Cash $ Inventory Other assets acquired Intangible assets Goodwill Total assets acquired Accounts payable Warranty liability Other liabilities assumed Total net assets acquired $
Schedule of company's intangible assets and related accumulated amortization	The Company’s intangible assets and related accumulated amortization consisted of the following as of December 31, 2014 and September 30, 2015 (in thousands): December 31, 2014 Gross Carrying Accumulated Amount Amortization Net Developed technology $ $ $ Non-competition agreements Total intangible assets $ $ $ September 30, 2015 Gross Carrying Accumulated Amount Amortization Net Developed technology $ $ $ Customer relationships Non-competition agreements Total intangible assets $ $ $
Schedule of amortization expense during the respective periods	The Company recorded amortization expense during the respective periods for these intangible assets as follows: (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2014 2015 2014 2015 Amortization of intangible assets $ $ $ $
Schedule of amortization of finite-lived intangible assets	Amortization of finite lived intangible assets as of September 30, 2015 for the next five years is as follows (in thousands): Amount 2015 $ 2016 2017 2018 2019 2020 $
Schedule of changes in carrying amount of goodwill	Changes in the carrying amount of goodwill consisted of the following (in thousands): Amount Balance at December 31, 2014 $ Current period acquisitions Foreign currency translation adjustment Balance at September 30, 2015 $

Equity Compensation (Tables)

Equity Compensation (Tables)	9 Months Ended
	Sep. 30, 2015
Equity Compensation
Summary of stock option activity	Weighted Weighted Average Shares Subject Average Weighted Remaining to Options Grant Date Average Contractual Outstanding Fair Value Exercise Price Life (Years) Balance at December 31, 2014 $ Granted $ Exercised Expired Forfeited Balance at September 30, 2015 Exercisable options at September 30, 2015 Vested and expected to vest at September 30, 2015
Summary of stock options outstanding and exercisable	Options Outstanding Options Exercisable Weighted- Weighted- Weighted Average Average Average Number of Remaining Number of Remaining Exercise Underlying Contractual Underlying Contractual Range of Exercise Prices Price Shares Life (in years) Shares Life (in years) $ - $ - $ - $ - $ -
Summary of aggregate intrinsic-value of options exercised, exercisable, and vested and expected to vest	The following table summarizes the aggregate intrinsic-value of options exercised, exercisable and vested and expected to vest (in thousands): For the Nine Months Ended and as of September 30, 2014 2015 Options Exercised $ $ Options Exercisable Options Vested and Expected to Vest
Summary of restricted stock unit activity	Number of Weighted Average Shares Grant Date Fair Value Non-vested balance at December 31, 2014 — Awarded $ Vested — Forfeited — Non-vested balance at September 30, 2015
Schedule of assumptions used to estimate fair value of option awards	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: Three Months Ended Nine Months Ended September 30, September 30, 2014 2015 2014 2015 Expected volatility 57 - 58 % 53 % 56 - 60 % 53 - 55 % Expected dividends — % — % — % — % Expected terms (in years) 6.1 5.3 - 6.1 3.8 - 6.1 5.3 - 6.1 Risk-free rate 1.8 - 1.9 % 1.5 - 1.8 % 1.1 - 2.0 % 1.3 - 1.8 %
Schedule of total stock-based compensation expense classified in statements of operations	Three Months Ended Nine Months Ended September 30, September 30, 2014 2015 2014 2015 Cost of revenue $ $ $ $ Research and development Sales and marketing General and administrative Total stock-based compensation expense $ $ $ $

Commitments and Contingencies (

Commitments and Contingencies (Tables)	9 Months Ended
	Sep. 30, 2015
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 September 30, 2015 (in thousands): 2015 $ 2016 2017 2018 $

Description of Business and S24

Description of Business and Summary of Significant Accounting Policies (Concentration) (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015USD ($)	Sep. 30, 2014USD ($)	Sep. 30, 2015USD ($)item	Sep. 30, 2014USD ($)
Revenue from U.S., Canadian and all other international dealers and distributors combined
Total revenue	$ 43,558	$ 39,120	$ 120,282	$ 107,636
International revenue (excluding Canada) as a percent of total revenue	24.00%	24.00%	24.00%	24.00%
Number of operating segments | item			1
United States
Revenue from U.S., Canadian and all other international dealers and distributors combined
Total revenue	$ 29,300	$ 25,517	$ 80,571	$ 71,211
Canada
Revenue from U.S., Canadian and all other international dealers and distributors combined
Total revenue	3,702	4,140	10,910	10,802
All other international sources
Revenue from U.S., Canadian and all other international dealers and distributors combined
Total revenue	$ 10,556	$ 9,463	$ 28,801	$ 25,623

Description of Business and S25

Description of Business and Summary of Significant Accounting Policies (Warranty) (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2015USD ($)
Product Warranty
Product warranty period	2 years
Changes in the product warranty liability
Balance at beginning of period	$ 1,191
Warranty costs accrued	1,524
Warranty claims	(1,271)
Balance at end of period	$ 1,444

Description of Business and S26

Description of Business and Summary of Significant Accounting Policies (EPS) (Details) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Numerator:
Net income (loss)	$ 1,191	$ 2,763	$ (999)	$ 4,235
Denominator:
Weighted average common stock outstanding for basic net income (loss) per common share (in shares)	24,129	23,840	24,260	23,559
Effect of dilutive securities-stock options and restricted stock units	727	1,750		2,112
Weighted average common shares and dilutive securities outstanding	24,856	25,590	24,260	25,671

Description of Business and S27

Description of Business and Summary of Significant Accounting Policies (AntiDilutive) (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Anti-dilutive weighted-average common stock equivalents excluded from the calculation of diluted net income per share
Total (in shares)	2,687	1,245	4,883	912
Options to purchase common stock
Anti-dilutive weighted-average common stock equivalents excluded from the calculation of diluted net income per share
Total (in shares)	2,687	1,245	4,796	912
Restricted stock units
Anti-dilutive weighted-average common stock equivalents excluded from the calculation of diluted net income per share
Total (in shares)			87

Balance Sheet Components (Detai

Balance Sheet Components (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Inventories
Finished goods	$ 14,694	$ 13,324
Work-in-process	379
Component parts	2,984	888
Total inventories	18,057	14,212
Property and equipment, net
Property and equipment, gross	18,140	15,136
Less: accumulated depreciation	(11,669)	(10,047)
Property and equipment, net	6,471	5,089
Computer equipment and software
Property and equipment, net
Property and equipment, gross	4,602	4,390
Manufacturing tooling and test equipment
Property and equipment, net
Property and equipment, gross	4,030	2,777
Lab and warehouse equipment
Property and equipment, net
Property and equipment, gross	3,186	2,652
Leasehold improvements
Property and equipment, net
Property and equipment, gross	2,929	2,357
Furniture and fixtures
Property and equipment, net
Property and equipment, gross	2,834	2,298
Marketing equipment
Property and equipment, net
Property and equipment, gross	$ 559	$ 662

Balance Sheet Components (Other

Balance Sheet Components (Other) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Other assets
Prepaid licensing	$ 1,062	$ 697
Deposits	563	632
Other assets total	1,625	1,329
Accrued liabilities
Sales returns and warranty accruals	2,622	2,019
Compensation accruals	2,002	1,614
Other accrued liabilities	309	1,117
Total accrued liabilities	$ 4,933	$ 4,750

Financial Instruments (Details)

Financial Instruments (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2015	Dec. 31, 2014
Foreign Exchange Contract
Fair Value Measurements
Assets related to derivative instruments	$ 0	$ 0
Liabilities related to derivative instruments	0	0
Notional principal amount of foreign exchange contracts	6,900	6,900
Foreign Exchange Contract | Other Income Expense | Not Designated as Hedging Instrument
Fair Value Measurements
Foreign exchange contracts	418	$ 318
Minimum
Fair Value Measurements
Maturity period of long-term investments		1 year
Maximum
Fair Value Measurements
Maturity period of long-term investments		2 years
Level 1
Fair Value Measurements
Assets, Adjusted Cost	7,081	$ 7,081
Assets, Unrealized Gains	3	3
Assets, Fair Value	7,084	7,084
Level 1 | Cash and Cash Equivalents
Fair Value Measurements
Assets, Fair Value	6,083	6,083
Level 1 | Long-term investments
Fair Value Measurements
Assets, Fair Value	1,001	1,001
Level 1 | Money market funds
Fair Value Measurements
Assets, Adjusted Cost	6,083	6,083
Assets, Fair Value	6,083	6,083
Level 1 | Money market funds | Cash and Cash Equivalents
Fair Value Measurements
Assets, Fair Value	6,083	6,083
Level 1 | U.S. government notes
Fair Value Measurements
Adjusted cost, Available-for-sale investments	998	998
Unrealized Gains, available-for-sale investments	3	3
Fair value, Available-for-sale investments	1,001	1,001
Level 1 | U.S. government notes | Long-term investments
Fair Value Measurements
Fair value, Available-for-sale investments	1,001	1,001
Level 2 | Available-for-sale investments
Fair Value Measurements
Adjusted cost, Available-for-sale investments	66,323	66,323
Unrealized Gains, available-for-sale investments	29	29
Unrealized Losses, available-for-sale investments	(14)	(14)
Fair value, Available-for-sale investments	66,338	66,338
Level 2 | Available-for-sale investments | Cash and Cash Equivalents
Fair Value Measurements
Fair value, Available-for-sale investments	1,700	1,700
Level 2 | Available-for-sale investments | Short-term investments
Fair Value Measurements
Fair value, Available-for-sale investments	43,977	43,977
Level 2 | Available-for-sale investments | Long-term investments
Fair Value Measurements
Fair value, Available-for-sale investments	20,661	20,661
Level 2 | Asset-backed securities
Fair Value Measurements
Adjusted cost, Available-for-sale investments	8,099	8,099
Unrealized Gains, available-for-sale investments	8	8
Fair value, Available-for-sale investments	8,107	8,107
Level 2 | Asset-backed securities | Long-term investments
Fair Value Measurements
Fair value, Available-for-sale investments	8,107	8,107
Level 2 | Corporate bonds
Fair Value Measurements
Adjusted cost, Available-for-sale investments	49,368	49,368
Unrealized Gains, available-for-sale investments	17	17
Unrealized Losses, available-for-sale investments	(14)	(14)
Fair value, Available-for-sale investments	49,371	49,371
Level 2 | Corporate bonds | Short-term investments
Fair Value Measurements
Fair value, Available-for-sale investments	37,825	37,825
Level 2 | Corporate bonds | Long-term investments
Fair Value Measurements
Fair value, Available-for-sale investments	11,546	11,546
Level 2 | Commercial paper
Fair Value Measurements
Adjusted cost, Available-for-sale investments	5,349	5,349
Fair value, Available-for-sale investments	5,349	5,349
Level 2 | Commercial paper | Cash and Cash Equivalents
Fair Value Measurements
Fair value, Available-for-sale investments	1,700	1,700
Level 2 | Commercial paper | Short-term investments
Fair Value Measurements
Fair value, Available-for-sale investments	3,649	3,649
Level 2 | U.S. agency securities
Fair Value Measurements
Adjusted cost, Available-for-sale investments	3,507	3,507
Unrealized Gains, available-for-sale investments	4	4
Fair value, Available-for-sale investments	3,511	3,511
Level 2 | U.S. agency securities | Short-term investments
Fair Value Measurements
Fair value, Available-for-sale investments	2,503	2,503
Level 2 | U.S. agency securities | Long-term investments
Fair Value Measurements
Fair value, Available-for-sale investments	1,008	1,008
Measured on a recurring basis
Fair Value Measurements
Assets, Adjusted Cost	84,358	84,358	$ 97,266
Assets, Unrealized Gains	32	32	2
Assets, Unrealized Losses	(14)	(14)	(49)
Assets, Fair Value	84,376	84,376	97,219
Measured on a recurring basis | Cash and Cash Equivalents
Fair Value Measurements
Assets, Fair Value	18,737	18,737	29,187
Measured on a recurring basis | Short-term investments
Fair Value Measurements
Assets, Fair Value	43,977	43,977	53,523
Measured on a recurring basis | Long-term investments
Fair Value Measurements
Assets, Fair Value	21,662	21,662	14,509
Measured on a recurring basis | Cash
Fair Value Measurements
Assets, Adjusted Cost	10,954	10,954	13,077
Assets, Fair Value	10,954	10,954	13,077
Measured on a recurring basis | Cash | Cash and Cash Equivalents
Fair Value Measurements
Assets, Fair Value	$ 10,954	$ 10,954	13,077
Measured on a recurring basis | Level 1
Fair Value Measurements
Assets, Adjusted Cost			16,110
Assets, Fair Value			16,110
Measured on a recurring basis | Level 1 | Cash and Cash Equivalents
Fair Value Measurements
Assets, Fair Value			16,110
Measured on a recurring basis | Level 1 | Money market funds
Fair Value Measurements
Assets, Adjusted Cost			16,110
Assets, Fair Value			16,110
Measured on a recurring basis | Level 1 | Money market funds | Cash and Cash Equivalents
Fair Value Measurements
Assets, Fair Value			16,110
Measured on a recurring basis | Level 2
Fair Value Measurements
Assets, Adjusted Cost			68,079
Assets, Unrealized Gains			2
Assets, Unrealized Losses			(49)
Assets, Fair Value			68,032
Measured on a recurring basis | Level 2 | Short-term investments
Fair Value Measurements
Assets, Fair Value			53,523
Measured on a recurring basis | Level 2 | Long-term investments
Fair Value Measurements
Assets, Fair Value			14,509
Measured on a recurring basis | Level 2 | Asset-backed securities
Fair Value Measurements
Assets, Adjusted Cost			4,458
Assets, Unrealized Losses			(3)
Assets, Fair Value			4,455
Measured on a recurring basis | Level 2 | Asset-backed securities | Long-term investments
Fair Value Measurements
Assets, Fair Value			4,455
Measured on a recurring basis | Level 2 | Corporate bonds
Fair Value Measurements
Assets, Adjusted Cost			54,321
Assets, Unrealized Gains			2
Assets, Unrealized Losses			(46)
Assets, Fair Value			54,277
Measured on a recurring basis | Level 2 | Corporate bonds | Short-term investments
Fair Value Measurements
Assets, Fair Value			46,726
Measured on a recurring basis | Level 2 | Corporate bonds | Long-term investments
Fair Value Measurements
Assets, Fair Value			7,551
Measured on a recurring basis | Level 2 | Commercial paper
Fair Value Measurements
Assets, Adjusted Cost			6,797
Assets, Fair Value			6,797
Measured on a recurring basis | Level 2 | Commercial paper | Short-term investments
Fair Value Measurements
Assets, Fair Value			6,797
Measured on a recurring basis | Level 2 | U.S. agency securities
Fair Value Measurements
Assets, Adjusted Cost			2,503
Assets, Fair Value			2,503
Measured on a recurring basis | Level 2 | U.S. agency securities | Long-term investments
Fair Value Measurements
Assets, Fair Value			$ 2,503

Goodwill and Intangible Asset31

Goodwill and Intangible Assets (Nexus acquisition) (Details) - USD ($)	9 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Preliminary allocation of consideration
Goodwill	$ 2,648,000	$ 231,000
Nexus
Preliminary allocation of consideration
Cash	121,000
Inventory	2,346,000
Other assets acquired	1,589,000
Intangible assets	5,030,000
Goodwill	2,780,000
Total assets acquired	11,866,000
Accounts payable	2,273,000
Warranty liability	480,000
Other liabilities assumed	613,000
Net assets acquired	8,500,000
Total Consideration	8,500,000
Escrow Deposit	750,000
Acquisition related costs associated with Nexus	$ 600,000

Goodwill and Intangible Asset32

Goodwill and Intangible Assets (Nexus acquisition) (Details 2) - Nexus - USD ($) $ in Millions	Sep. 30, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015
Measurement Period Adjustments
ProForma increase (decrease) in cost of revenue		$ 0.2	$ (0.1)	$ (0.1)
Net change to goodwill	$ 0.2

Goodwill and Intangible Asset33

Goodwill and Intangible Assets (Intangible assets) (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Intangible assets
Gross Carrying Amount	$ 7,091	$ 2,650
Accumulated Amortization	(2,354)	(1,241)
Intangible assets, net	$ 4,737	1,409
Weighted average amortization period	4 years 9 months 18 days
Developed technology
Intangible assets
Gross Carrying Amount	$ 6,712	2,597
Accumulated Amortization	(2,272)	(1,214)
Intangible assets, net	$ 4,440	1,383
Weighted average amortization period	4 years 9 months 18 days
Customer Relationships
Intangible assets
Gross Carrying Amount	$ 326
Accumulated Amortization	(47)
Intangible assets, net	$ 279
Weighted average amortization period	5 years
Non-competition agreement
Intangible assets
Gross Carrying Amount	$ 53	53
Accumulated Amortization	(35)	(27)
Intangible assets, net	$ 18	$ 26
Weighted average amortization period	2 years

Goodwill and Intangible Asset34

Goodwill and Intangible Assets (Amortization expense) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Amortization expense
Amortization of intangible assets	$ 385	$ 134	$ 1,113	$ 330

Goodwill and Intangible Asset35

Goodwill and Intangible Assets (Amortization) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Amortization of finite-lived intangible assets
2,015	$ 354
2,016	1,296
2,017	1,115
2,018	1,021
2,019	878
2,020	73
Intangible assets, net	$ 4,737	$ 1,409

Goodwill and Intangible Asset36

Goodwill and Intangible Assets (Goodwill) (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2015USD ($)
Business Combination - Goodwill
Balance at beginning of the period	$ 231
Current period acquisitions	2,780
Foreign currency translation adjustment	(363)
Balance at end of the period	$ 2,648

Long-Term Obligations (Details)

Long-Term Obligations (Details) $ in Millions	1 Months Ended
	Jun. 30, 2013USD ($)item	Sep. 30, 2015
Revolving credit facility
Long-Term Obligations
Maximum borrowing capacity | $	$ 13
Term borrowings
Long-Term Obligations
Interest rate at the end of period (as a percent)		3.75%
Number of equal monthly payments of principal plus interest	42
Term borrowings | Prime rate
Long-Term Obligations
Basis spread on variable rate (as a percent)	0.50%

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Income tax expense (benefit)	$ (314)	$ 250	$ (666)	$ 353
Effective income tax rate (as a percent)	36.00%	8.00%	40.00%	8.00%
U.S. federal statutory rate (as a percent)			34.00%
Minimum period for which net operating loss and credit carryforwards are subject to examinations and adjustments			3 years
State
Net operating losses					$ 86,100
Tax credit carryforwards					2,800
Federal
Net operating losses					85,600
Tax credit carryforwards					$ 3,800

Equity Compensation (Activity)

Equity Compensation (Activity) (Details) - Stock options - $ / shares	Jan. 01, 2015	Sep. 30, 2015	Jun. 11, 2013
Shares Subject to Options Outstanding
Balance at the beginning of the period (in shares)	4,851,221	4,851,221
Awarded (in shares)		212,616
Exercised (in shares)		(239,726)
Expired (in shares)		(13,651)
Forfeited (in shares)		(109,170)
Balance at the end of the period (in shares)		4,701,290
Exercisable options (in shares)		3,001,261
Vested and expected to vest at the end of the period (in shares)		4,570,238
Weighted Average Grant Date Fair Value
Granted (in dollars per share)		$ 5.53
Weighted Average Exercise Price
Balance at the beginning of the period (in dollars per share)	$ 10.57	10.57
Granted (in dollars per share)		10.95
Exercised (in dollars per share)		4.82
Expired (in dollars per share)		12.33
Forfeited (in dollars per share)		15.37
Balance at the end of the period (in dollars per share)		10.76
Exercisable options at the end of the period (in dollars per share)		8.28
Vested and expected to vest (in dollars per share)		$ 10.63
Weighted-Average Remaining Contractual Life
Exercisable options		5 years 2 months 12 days
Vested and expected to vest		6 years 3 months 18 days
2013 Plan
Stock options
Annual increase in shares authorized for issuance as a percentage of shares outstanding as of the preceding December 31			5.00%
Increase in number of shares authorized for issuance	1,215,269

Equity Compensation (Range) (De

Equity Compensation (Range) (Details)	9 Months Ended
	Sep. 30, 2015$ / sharesshares
Options Outstanding
Number of Underlying Shares | shares	4,701,290
Options Exercisable
Number of Underlying Shares | shares	3,001,261
1.71-2.66
Equity compensation
Range of Exercise Price, low end of range (in dollars per share)	$ 1.71
Range of Exercise Price, high end of range (in dollars per share)	2.66
Options Outstanding
Weighted Average Exercise Price (in dollars per share)	$ 2.47
Number of Underlying Shares | shares	211,587
Weighted-Average Remaining Contractual Life	1 year 1 month 6 days
Options Exercisable
Number of Underlying Shares | shares	211,587
Weighted-Average Remaining Contractual Life	1 year 1 month 6 days
3.38-6.14
Equity compensation
Range of Exercise Price, low end of range (in dollars per share)	$ 3.38
Range of Exercise Price, high end of range (in dollars per share)	6.14
Options Outstanding
Weighted Average Exercise Price (in dollars per share)	$ 5.64
Number of Underlying Shares | shares	1,437,561
Weighted-Average Remaining Contractual Life	4 years 7 months 6 days
Options Exercisable
Number of Underlying Shares | shares	1,428,774
Weighted-Average Remaining Contractual Life	4 years 7 months 6 days
6.34-9.94
Equity compensation
Range of Exercise Price, low end of range (in dollars per share)	$ 6.34
Range of Exercise Price, high end of range (in dollars per share)	9.94
Options Outstanding
Weighted Average Exercise Price (in dollars per share)	$ 8.34
Number of Underlying Shares | shares	1,013,900
Weighted-Average Remaining Contractual Life	6 years 6 months
Options Exercisable
Number of Underlying Shares | shares	769,963
Weighted-Average Remaining Contractual Life	6 years
11.28-16.97
Equity compensation
Range of Exercise Price, low end of range (in dollars per share)	$ 11.28
Range of Exercise Price, high end of range (in dollars per share)	16.97
Options Outstanding
Weighted Average Exercise Price (in dollars per share)	$ 13.71
Number of Underlying Shares | shares	1,272,685
Weighted-Average Remaining Contractual Life	8 years 3 months 18 days
Options Exercisable
Number of Underlying Shares | shares	279,527
Weighted-Average Remaining Contractual Life	6 years 3 months 18 days
17.66-22.92
Equity compensation
Range of Exercise Price, low end of range (in dollars per share)	$ 17.66
Range of Exercise Price, high end of range (in dollars per share)	22.92
Options Outstanding
Weighted Average Exercise Price (in dollars per share)	$ 20.99
Number of Underlying Shares | shares	765,557
Weighted-Average Remaining Contractual Life	8 years 2 months 12 days
Options Exercisable
Number of Underlying Shares | shares	311,410
Weighted-Average Remaining Contractual Life	7 years 9 months 18 days

Equity Compensation (Fair Value

Equity Compensation (Fair Value) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Stock options
Total fair value for the awards vested during the period	$ 1,700		$ 6,000
Stock options
Intrinsic-value
Options Exercised			1,327	$ 17,856
Options Exercisable	5,333	$ 19,883	5,333	19,883
Options Vested and Expected to Vest	$ 5,389	$ 23,644	$ 5,389	$ 23,644
Assumptions used to estimate fair value of stock options
Expected volatility, minimum (as a percent)		57.00%	53.00%	56.00%
Expected volatility, maximum (as a percent)		58.00%	55.00%	60.00%
Expected volatility (as a percent)	53.00%
Expected term		6 years 1 month 6 days
Risk-free rate, minimum (as a percent)	1.50%	1.80%	1.30%	1.10%
Risk-free rate, maximum (as a percent)	1.80%	1.90%	1.80%	2.00%
Stock options | Minimum
Assumptions used to estimate fair value of stock options
Expected term	5 years 3 months 18 days		5 years 3 months 18 days	3 years 9 months 18 days
Stock options | Maximum
Assumptions used to estimate fair value of stock options
Expected term	6 years 1 month 6 days		6 years 1 month 6 days	6 years 1 month 6 days
Restricted stock units
Restricted stock units
Awarded			388,000
Vested	0		0
Non-vested balance at end of period (in shares)	388,000		388,000
Weighted Average Grant Date Fair Value
Awarded (in dollars per share)			$ 8.30

Equity Compensation (Expense) (

Equity Compensation (Expense) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Total stock-based compensation expense
Total stock-based compensation expense	$ 1,808	$ 1,339	$ 5,336	$ 3,994
Cost of revenue
Total stock-based compensation expense
Total stock-based compensation expense	40	29	126	77
Research and development
Total stock-based compensation expense
Total stock-based compensation expense	706	562	2,145	1,682
Sales and marketing
Total stock-based compensation expense
Total stock-based compensation expense	457	296	1,298	810
General and administrative
Total stock-based compensation expense
Total stock-based compensation expense	605	$ 452	1,767	$ 1,425
Stock options
Total stock-based compensation expense
Total unrecognized compensation cost related to non-vested stock option awards	13,600		$ 13,600
Weighted-average period over which unrecognized compensation cost will be recognized			2 years 7 months 6 days
Restricted stock units
Total stock-based compensation expense
Total unrecognized compensation cost related to non-vested stock option awards	$ 3,100		$ 3,100
Weighted-average period over which unrecognized compensation cost will be recognized			3 years 10 months 24 days

Share Repurchases (Details)

Share Repurchases (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended	9 Months Ended
	May. 31, 2015	Sep. 30, 2015	Sep. 30, 2015
Common stock authorized for repurchase		$ 15,100	$ 15,100
Period of authorization by the Board of Directors will expire	1 year
Treasury Stock, Shares		330,386	557,661
Treasury Stock, Value		$ 2,800	$ 4,942
Maximum
Common stock authorized for repurchase	$ 20,000

Related Party Transactions (Det

Related Party Transactions (Details) - USD ($) $ in Millions	3 Months Ended	8 Months Ended
	Sep. 30, 2015	Sep. 30, 2015
Dubai authorized distributor
Related Party Transactions
Revenue from product sales	$ 0.1	$ 0.4

Commitments and Contingencies45

Commitments and Contingencies (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Operating Leases
Rental expense	$ 500	$ 500	$ 1,400	$ 1,300
Future minimum rental payments
2,015	549		549
2,016	2,140		2,140
2,017	1,960		1,960
2,018	1,042		1,042
Total	5,691		5,691
Purchase Commitments
Non-cancellable purchase commitments	$ 32,100		$ 32,100
Minimum
Operating Leases
Extension term of leases			3 years
Maximum
Operating Leases
Extension term of leases			5 years