Control4 (CTRL) 10-Q 3 Aug 18 2018 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Jul. 27, 2018
Document and Entity Information
Entity Registrant Name	Control4 Corp
Entity Central Index Key	1,259,515
Document Type	10-Q
Document Period End Date	Jun. 30, 2018
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		26,095,635
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q2

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 27,229	$ 29,761
Restricted cash	267	273
Short-term investments	53,317	44,057
Accounts receivable, net	29,806	29,925
Inventories	41,713	37,171
Prepaid expenses and other current assets	5,445	4,369
Total current assets	157,777	145,556
Property and equipment, net	7,872	7,337
Long-term investments	2,557	12,038
Intangible assets, net	23,315	26,081
Goodwill	21,672	21,867
Other assets	1,491	1,618
Total assets	214,684	214,497
Current liabilities:
Accounts payable	26,141	25,654
Accrued liabilities	8,296	10,835
Current portion of deferred revenue	4,990	4,538
Total current liabilities	39,427	41,027
Other long-term liabilities	4,164	3,942
Total liabilities	43,591	44,969
Commitments and contingencies (Note 11)
Stockholders' equity:
Common stock, $0.0001 par value; 500,000,000 shares authorized; 26,086,642 and 25,832,895 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively	3	3
Additional paid-in capital	236,434	242,281
Accumulated deficit	(64,620)	(72,225)
Accumulated other comprehensive loss	(724)	(531)
Total stockholders' equity	171,093	169,528
Total liabilities and stockholders' equity	$ 214,684	$ 214,497

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2018	Dec. 31, 2017
CONDENSED 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	26,086,642	25,832,895
Common stock, shares outstanding	26,086,642	25,832,895

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Revenue	$ 69,228	$ 61,252	$ 128,377	$ 111,460
Cost of revenue	32,866	29,993	61,276	55,052
Gross margin	36,362	31,259	67,101	56,408
Operating expenses:
Research and development	10,511	10,055	21,451	19,899
Sales and marketing	12,553	11,943	25,088	23,390
General and administrative	6,328	5,587	12,621	11,304
Total operating expenses	29,392	27,585	59,160	54,593
Income from operations	6,970	3,674	7,941	1,815
Other income (expense), net:
Interest, net	256	61	492	99
Other income (expense), net	(425)	248	(782)	104
Total other income (expense), net	(169)	309	(290)	203
Income before income taxes	6,801	3,983	7,651	2,018
Income tax expense (benefit)	161	242	45	(2,544)
Net income	$ 6,640	$ 3,741	$ 7,606	$ 4,562
Net income per common share:
Basic (in dollars per share)	$ 0.25	$ 0.15	$ 0.29	$ 0.19
Diluted (in dollars per share)	$ 0.24	$ 0.14	$ 0.28	$ 0.18
Weighted-average number of shares:
Basic (in shares)	26,041	24,587	25,973	24,298
Diluted (in shares)	27,267	26,388	27,396	26,024

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$ 6,640	$ 3,741	$ 7,606	$ 4,562
Other comprehensive income (loss):
Foreign currency translation adjustment, net of tax	(107)	(87)	(158)	362
Net unrealized gain (losses) on available-for-sale investments, net of tax	29	1	(35)	(3)
Total other comprehensive income (loss)	(78)	(86)	(193)	359
Comprehensive income	$ 6,562	$ 3,655	$ 7,413	$ 4,921

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS $ in Thousands	6 Months Ended
	Jun. 30, 2018USD ($)	Jun. 30, 2017USD ($)
Operating activities
Net income	$ 7,606	$ 4,562
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense	1,853	1,762
Amortization of intangible assets	2,885	2,551
Loss on disposal of fixed assets	10
Provision for doubtful accounts	286	264
Investment discount and premium amortization	(192)	(23)
Stock-based compensation	6,656	6,163
Tax benefit from business acquisition		(2,415)
Changes in assets and liabilities:
Accounts receivable, net	(374)	(1,186)
Inventories	(4,942)	(3,369)
Prepaid expenses and other current assets	(1,081)	1,198
Other assets	161	(601)
Accounts payable	550	875
Accrued liabilities	(2,090)	(1,653)
Deferred revenue	421	412
Other long-term liabilities	295	252
Net cash provided by operating activities	12,044	8,792
Investing activities
Purchases of available-for-sale investments	(32,372)	(28,933)
Proceeds from sales of available-for-sale investments	1,000	950
Proceeds from maturities of available-for-sale investments	31,750	20,268
Purchases of property and equipment	(1,851)	(1,618)
Business acquisitions, net of cash acquired	(343)	(7,881)
Net cash used in investing activities	(1,816)	(17,214)
Financing activities
Proceeds from exercise of options for common stock	3,155	7,775
Payments for taxes related to net share settlement of equity awards	(4,608)	(2,596)
Repurchase of common stock	(11,050)	(1,821)
Payment of debt issuance costs	(113)
Net cash (used in) provided by financing activities	(12,616)	3,358
Effect of exchange rate changes on cash and cash equivalents	(150)	330
Net change in cash and cash equivalents	(2,538)	(4,734)
Unrestricted and restricted cash and cash equivalents at beginning of period	30,034	35,060
Unrestricted and restricted cash and cash equivalents at end of period	27,496	30,326
Supplemental disclosure of cash flow information
Cash paid for interest	66	63
Cash paid for taxes	685	834
Supplemental schedule of non-cash investing and financing activities
Business acquisitions holdback liability		1,068
Purchases of property and equipment financed by accounts payable	584	178
Net unrealized losses on available-for-sale investments	$ (35)	$ (3)

Description of Business and Sum

Description of Business and Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2018
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 smart home and business solutions that are designed to personalize and enhance how consumers engage with an ever-changing connected world. Our entertainment, smart lighting, comfort and convenience, safety and security, and networking solutions unlock the potential of connected devices, making entertainment systems easier to use and more accessible, homes and businesses more comfortable and energy efficient, and individuals more secure . The Company was incorporated in the state of Delaware on March 27, 2003. Unaudited Interim Financial Statements The accompanying condensed consolidated financial statements are unaudited. These unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and, in the opinion of management, reflect all adjustments, consisting only of 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 six months ended June 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018, 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 SEC on February 15, 2018. The December 31, 2017 condensed 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 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 U.S. dollars, except for sales to dealers and distributors located in the United Kingdom, Canada, Australia, and the European Union, which are generally denominated in pounds sterling, Canadian dollars, Australian dollars, and euros, respectively. There were no individual account balances greater than 10% of total accounts receivable as of June 30, 2018 and December 31, 2017. No dealer or distributor accounted for more than 10% of total revenue for the three and six months ended June 30, 2018 and 2017. While the Company partners with many manufacturers, generally one manufacturer is our sole source for a particular product or product family. A significant disruption in the operations of one 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. Use of Accounting Estimates The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles (“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. Limited Product Warranties The Company provides its customers a limited product warranty of two, three, or ten years depending on product type and brand. The limited product warranties require 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 cost of the products sold, 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 include 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 for the six months ended June 30, 2018 (in thousands): Warranty Liability Balance at December 31, 2017 $ 2,032 Warranty costs accrued 1,110 Warranty claims (937) Balance at June 30, 2018 $ 2,205 Net Income Per Share Basic net income per share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income 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 per share (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Numerator: Net income $ 6,640 $ 3,741 $ 7,606 $ 4,562 Denominator: Weighted average common stock outstanding for basic net income per common share 26,041 24,587 25,973 24,298 Effect of dilutive securities—stock options and restricted stock units 1,226 1,801 1,423 1,726 Weighted average common shares and dilutive securities outstanding 27,267 26,388 27,396 26,024 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 per share (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Options to purchase common stock — 1,096 - 1,310 Restricted stock units 192 15 179 9 Total 192 1,111 179 1,319 Restricted Cash Restricted cash as of June 30, 2018 and December 31, 2017 is composed of a guarantee made by the Company’s subsidiary in the United Kingdom to HM Revenue & Customs related to a customs duty deferment account. Recent Accounting Pronouncements In June 2018, the FASB issued ASU 2018-07, “Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting,” which expands the scope of Topic 718 to include all share-based payment transactions for acquiring goods and services from non-employees. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. The Company elected to early-adopt this standard in the current period; the adoption of this standard did not impact the consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, “ Statement of Cash Flows (Topic 230): Restricted Cash ,” which provides amendments to current guidance to address the classifications and presentation of changes in restricted cash in the statement of cash flows. The effective date for the standard is for fiscal years beginning after December 15, 2017. The Company adopted the standard effective January 1, 2018; the adoption of this standard did not have a material impact on the consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, “ Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory .” The amendments in this update will require recognition of current and deferred income taxes resulting from an intra-entity transfer of an asset other than inventory when the transfer occurs. This update is effective for annual and interim periods beginning after December 15, 2017. The Company adopted the standard effective January 1, 2018; the adoption of this standard did not have a material impact on the consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326)” which introduces new guidance for the accounting for credit losses on instruments within its scope. The new guidance introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments. For trade receivables, the Company will be required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which reflects losses that are probable. Credit losses relating to available-for-sale debt securities will also be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. The guidance is effective for fiscal years beginning after December 31, 2019, including interim periods within those years. Early application of the guidance is permitted for all entities for fiscal years beginning after December 15, 2018, including the interim periods within those fiscal years. Application of the amendments is through a cumulative-effect adjustment to retained earnings as of the effective date. The Company is currently evaluating the impact of this update on the consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, “ Leases (Topic 842 ) ,” which supersedes the guidance in ASC 840, “Leases .” The purpose of the new standard is to improve transparency and comparability related to the accounting and reporting of leasing arrangements. The guidance will require balance sheet recognition for assets and liabilities associated with rights and obligations created by leases with terms greater than twelve months. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those years. Modified retrospective application is required. Early adoption is permitted. The Company expects the standard will have a material impact on the Company’s consolidated balance sheets but will not have a material impact on the consolidated statements of operations. The most significant impact will be the recognition of right of use assets and lease liabilities for operating leases. The Company is in the process of calculating the right of use assets and lease liabilities and implementing internal controls to enable the preparation of financial statements upon adoption of this standard.

Balance Sheet Components

Balance Sheet Components	6 Months Ended
	Jun. 30, 2018
Balance Sheet Components
Balance Sheet Components	2. Balance Sheet Components Inventories consisted of the following (in thousands): June 30, December 31, 2018 2017 Finished goods $ 37,105 $ 33,050 Component parts 4,531 4,025 Work-in-process 77 96 $ 41,713 $ 37,171 Property and equipment, net consisted of the following (in thousands): June 30, December 31, 2018 2017 Computer equipment and software $ 4,885 $ 5,030 Manufacturing tooling and test equipment 4,226 4,894 Lab and warehouse equipment 5,259 4,869 Leasehold improvements 4,105 3,960 Furniture and fixtures 4,481 3,698 Other 1,086 1,086 24,042 23,537 Less: accumulated depreciation (16,170) (16,200) $ 7,872 $ 7,337 Accrued liabilities consisted of the following (in thousands): June 30, December 31, 2018 2017 Sales returns and current portion of warranty liability $ 2,382 $ 2,872 Compensation accruals 4,131 5,241 Other accrued liabilities 1,783 2,722 $ 8,296 $ 10,835 Other long-term liabilities consisted of the following (in thousands): June 30, December 31, 2018 2017 Deferred revenue $ 3,087 $ 3,143 Warranty 720 600 Other 357 199 $ 4,164 $ 3,942

Financial Instruments

Financial Instruments	6 Months Ended
	Jun. 30, 2018
Financial Instruments
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; and 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 six months ended June 30, 2018 and 2017, 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 June 30, 2018 and December 31, 2017 (in thousands): June 30, 2018 Cash and Adjusted Unrealized Unrealized Cash Short-term Long-term Cost Gains Losses Fair Value Equivalents Investments Investments Cash $ 21,145 $ — $ — $ 21,145 $ 21,145 $ — $ — Level 1: Money market funds 5,085 — — 5,085 5,085 — — U.S. government notes 8,937 — (32) 8,905 — 7,430 1,475 Subtotal 14,022 — (32) 13,990 5,085 7,430 1,475 Level 2: Corporate bonds 26,951 1 (65) 26,887 — 25,805 1,082 Commercial paper 21,081 — — 21,081 999 20,082 — Subtotal 48,032 1 (65) 47,968 999 45,887 1,082 Total $ 83,199 $ 1 $ (97) $ 83,103 $ 27,229 $ 53,317 $ 2,557 December 31, 2017 Cash and Adjusted Unrealized Unrealized Cash Short-term Long-term Cost Gains Losses Fair Value Equivalents Investments Investments Cash $ 24,367 $ — $ — $ 24,367 $ 24,367 $ — $ — Level 1: Money market funds 5,394 — — 5,394 5,394 — — U.S. government notes 9,060 — (13) 9,047 — 4,098 4,949 Subtotal 14,454 — (13) 14,441 5,394 4,098 4,949 Level 2: Corporate bonds 24,943 — (49) 24,894 — 17,805 7,089 Commercial paper 22,154 — — 22,154 — 22,154 — Subtotal 47,097 — (49) 47,048 — 39,959 7,089 Total $ 85,918 $ — $ (62) $ 85,856 $ 29,761 $ 44,057 $ 12,038 As of June 30, 2018, 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 six months ended June 30, 2018 and 2017, the Company did not recognize any significant impairment charges. The Company invests in highly-rated securities, and its investment policy limits the amount of credit exposure to any one issuer. The policy requires investments 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 condensed consolidated financial statements for restricted cash, accounts payable and accrued liabilities approximate their fair value because of the short-term nature of the accounts. Derivative Financial Instruments The Company has foreign currency exposure related to the operations in the United Kingdom, Canada, Australia, the European Union, 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 assets or liabilities recorded in the accompanying Condensed Consolidated Balance Sheets related to derivative instruments as of June 30, 2018. However, the notional principal of foreign exchange contracts for July 2018 was $10.5 million as of June 30, 2018. The following table shows the pre-tax income (losses) of the Company’s derivative instruments not designated as hedging instruments (in thousands): Three Months Ended Six Months Ended June 30, June 30, Income Statement Location 2018 2017 2018 2017 Foreign exchange forward contracts Other income (expense), net $ 494 $ (405) $ (54) $ (932)

Acquisitions

Acquisitions	6 Months Ended
	Jun. 30, 2018
Acquisitions
Acquisitions	4. Acquisitions ihiji Acquisition On December 22, 2017, the Company acquired the intellectual property and key operating assets of ihiji, a provider of remote management services for technical integrators servicing connected home customers. Total consideration transferred for this acquisition was immaterial. The majority of the consideration transferred was allocated to a developed technology intangible asset. In accordance with the purchase agreement, a portion of the purchase price was withheld at the acquisition date to cover any of the sellers’ post-closing obligations and was subsequently distributed to the shareholders during the second quarter. Acquisition of Triad Holdings, Inc. On February 27, 2017, the Company entered into a definitive agreement to acquire Triad Holdings, Inc., (“Triad Holdings”), along with its wholly owned subsidiary Triad Speakers, Inc. (“Triad Speakers” and together with Triad Holdings “Triad”) through the purchase of all the outstanding shares of common stock of Triad for a purchase price of $9.2 million, which included cash acquired of $0.3 million. In accordance with the purchase agreement, $1.4 million of the purchase price was to be held for up to 18 months from the acquisition date to cover any of the sellers’ post-closing obligations, including without limitation any indemnification obligations that may arise (the “Holdback”). Due to customary working capital adjustments after the acquisition date, the Holdback was reduced to $1.1 million. The Company has classified the $1.1 million Holdback in other current liabilities. The Company determined the Triad acquisition was not a significant acquisition under Rule 3-05 of Regulation S‑X.

Goodwill and Intangible Assets

Goodwill and Intangible Assets	6 Months Ended
	Jun. 30, 2018
Goodwill and Intangible Assets
Goodwill and Intangible Assets	5. Goodwill and Intangible Assets Goodwill Changes in the carrying amount of goodwill consisted of the following (in thousands): Amount Balance at December 31, 2017 $ 21,867 Measurement period adjustments (37) Foreign currency translation adjustment (158) Balance at June 30, 2018 $ 21,672 Goodwill represents the excess of consideration transferred over the fair value of assets acquired and liabilities assumed. Amortizable Intangible Assets The Company’s intangible assets and related accumulated amortization consisted of the following as of June 30, 2018 and December 31, 2017 (in thousands): June 30, 2018 Gross Carrying Accumulated Amount Amortization Net Developed technology $ 17,378 $ (8,394) $ 8,984 Customer relationships 12,008 (3,303) 8,705 Trademark/trade name 6,776 (1,150) 5,626 Non-competition agreements 295 (295) — Total intangible assets $ 36,457 $ (13,142) $ 23,315 December 31, 2017 Gross Carrying Accumulated Amount Amortization Net Developed technology $ 19,626 $ (8,914) $ 10,712 Customer relationships 12,009 (2,556) 9,453 Trademark/trade name 6,776 (869) 5,907 Non-competition agreements 295 (286) 9 Total intangible assets $ 38,706 $ (12,625) $ 26,081 The weighted average amortization period for developed technology, customer relationships, and trademarks/trade names is 6.9 years, 8.4 years, and 12.0 years, respectively; and 7.3 years for all amortizable intangible assets in total. The Company recorded amortization expense during the three and six month periods ended June 30, 2018 and 2017 for these intangible assets as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Cost of revenue $ 924 $ 791 $ 1,845 $ 1,565 Research and development 18 47 46 95 Sales and marketing 497 483 994 891 Total amortization of intangible assets $ 1,439 $ 1,321 $ 2,885 $ 2,551 Amortization of finite lived intangible assets as of June 30, 2018 for the next five years is as follows (in thousands): Amount Remainder of 2018 $ 2,759 2019 5,556 2020 4,608 2021 2,256 2022 2,093 Thereafter 6,043 $ 23,315

Long-Term Obligations

Long-Term Obligations	6 Months Ended
	Jun. 30, 2018
Long-Term Obligations
Long-Term Obligations	6. Long-Term Obligations Loan and Security Agreement On February 6, 2018, Control4 entered into the 2018 Loan Amendment with SVB, which amends the 2013 Loan Agreement. In the 2018 Loan Amendment, Control4 increased the revolving credit facility from $30.0 million to $40.0 million under the terms of the 2013 Loan Agreement (the “New Credit Facility”). All borrowings under the New Credit Facility are collateralized by the general assets of the Company. Amounts borrowed under the New Credit Facility are due and payable in full on the maturity date, which is January 29, 2020. Advances made pursuant to the New Credit Facility depend on Control4’s leverage ratio and are either: (i) Prime Rate Advances, which bear interest at the Prime Rate plus a Prime Rate Margin of either 0% or 0.25%, or (ii) LIBOR Rate Advances, which bear interest at the LIBOR Rate plus a LIBOR Rate Margin of either 2.50% or 2.75%. Control4 will be assessed an unused revolving line facility fee of 0.25% in any quarter wherein the amount of advances under the New Credit Facility is less than $15.0 million. As of June 30, 2018, Control4 had no outstanding borrowings under the revolving credit facility. The 2018 Loan Amendment contains various restrictive and financial covenants, and the Company was in compliance with each of these covenants as of June 30, 2018.

Revenue Recognition

Revenue Recognition	6 Months Ended
	Jun. 30, 2018
Revenue Recognition
Revenue Recognition	7. Revenue Recognition ASC 606 Adoption On January 1, 2018, the Company adopted “Revenue from Contracts with Customers (Topic 606),” (“ASC 606”) utilizing the full retrospective method of transition, which required a retrospective adjustment of each prior reporting period presented. The Company applied the new standard using a practical expedient where the consideration allocated to the remaining performance obligations or an explanation of when the Company expects to recognize that amount as revenue for all reporting periods presented before the date of the initial application is not disclosed. Upon adoption of ASC 606, t he Company implemented internal controls over revenue recognition and related financial statement disclosures. Adoption of ASC 606 did not have a significant impact on the Company’s financial statements, however, while preparing for the adoption of ASC 606, the Company evaluated the accounting for technical support and unspecified upgrade rights, which the Company considered inconsequential under ASC 605. While the Company determined that these services are immaterial in the context of the contract under ASC 606, the Company believes that as product offerings continue to mature these services will become more material over time. Accordingly, under ASC 606, the Company will account for technical support and unspecified upgrade rights as a performance obligation, distinct from the hardware product and embedded software, with the associated revenue satisfied over time. The adoption of ASC 606 impacted the Company’s previously reported results as follows (in thousands, except share data): Three Months Ended Six Months Ended June 30, June 30, 2017 2017 As previously reported ASC 606 adjustment As As previously reported ASC 606 adjustment As Revenue $ 61,409 $ (157) $ 61,252 $ 111,644 $ (184) $ 111,460 Income tax expense (benefit) 247 (5) 242 (2,534) (10) (2,544) Net income 3,893 (152) 3,741 4,736 (174) 4,562 Basic earnings per share $ 0.16 $ (0.01) $ 0.15 $ 0.19 $ — $ 0.19 Diluted earnings per share $ 0.15 $ (0.01) $ 0.14 $ 0.18 $ — $ 0.18 December 31, 2017 As previously reported ASC 606 adjustment As Other assets $ 1,576 $ 42 $ 1,618 Current portion of deferred revenue 2,311 2,227 4,538 Other long-term liabilities 882 3,060 3,942 Stockholders’ equity 174,773 (5,245) 169,528 Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration expected to be received in exchange for those products or services. Revenue is recognized net of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental authorities. Shipping charges billed to dealers and distributors are included in product revenue and related shipping costs are included in cost of revenue. The Company has elected to account for shipping and handling activities performed after control has been transferred to the customer as a fulfillment cost and accrues for these costs if revenue is recognized before contractually agreed-upon shipping and handling occurs. Solution Products Revenue The Company sells its solution products through a network of independent dealers, distributors and retailers. These dealers, distributors and retailers generally sell the Company’s products as part of a bundled sale, which typically includes other third‑party products and related services, project design, installation services and on‑going support. The Company’s products are generally highly dependent on, and interrelated with, the underlying operating system and cannot function without the operating system. In these cases, the hardware and software license are accounted for as a single performance obligation and revenue is recognized at the point in time when ownership is transferred to dealers, distributors, and retailers, which is typically at the time the product is shipped. In cases where revenue is allocated to software updates and technical support, primarily because the updates and technical support are provided at no additional charge, revenue is recognized as the updates and technical support are provided, which is ratably over the estimated life of the related device. Certain customers may receive cash-based incentives or credits; which are accounted for as variable consideration. The Company records estimated reductions to revenue for dealer incentives at the time of the initial sale. The estimated reductions to revenue are based on the sales terms and the Company’s historical experience and trend analysis. The most common incentive relates to amounts paid or credited to dealers for achieving defined volume levels or growth objectives. Subscription Service Revenue The Company offers a subscription service that allows consumers to control and monitor their homes remotely and allows the consumer’s respective Control4 dealer to perform remote diagnostic services. Subscription revenue is deferred at the time of payment and recognized ratably over the contract period which is typically one year. Third-Party Product Revenue The Company recognizes revenue net of cost of revenue for non-inventoried, third‑party products sold through the Company’s online ordering system. The Company’s primary role is to arrange for another entity to provide the goods or services and the Company does not control the promised good or service before it is transferred to the customer. Significant Judgments The Company’s contracts with dealers, distributors, and retailers can include promises to transfer multiple products and services. Determining whether multiple products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Judgment is required to determine the stand-alone selling price (“SSP”) for each distinct performance obligation. The Company uses a single amount to estimate SSP for items that are not sold separately, including software updates and technical support provided at no additional charge. In instances where SSP is not directly observable, such as when the Company does not sell the product or service separately, the SSP is determined using information that may include market conditions and other observable inputs. The Company’s products are generally sold with a limited right of return and the Company may provide other credits or incentives, which are accounted for as variable consideration when estimating the amount of revenue to recognize. Disaggregated Revenue The Company’s revenue includes amounts earned through sales to dealers and distributors located outside of the United States. There was no single foreign country that accounted for more than 10% of total revenue for the three and six months ended June 30, 2018 and 2017. The following table sets forth revenue from U.S., Canada and all other international dealers and distributors combined (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Revenue-United States $ 48,101 $ 42,851 $ 89,065 $ 78,023 Revenue-Canada 5,814 5,249 11,078 9,496 Revenue-all other international sources 15,313 13,152 28,234 23,941 Total revenue $ 69,228 $ 61,252 $ 128,377 $ 111,460 International revenue (excluding Canada) as a percent of total revenue % % % % Contract Balances As of June 30, 2018 and December 31, 2017, accounts receivable, net of allowance for doubtful accounts, were $29.8 million and $29.9 million, respectively. The Company extends credit to the majority of its dealers and distributors, which consist primarily of small, local businesses. Issuance of credit is based on ongoing credit evaluations by the Company of dealers’ and distributors’ financial condition and generally requires no collateral. Trade accounts receivable are recorded at the invoiced amount and do not generally bear interest. The Company maintains an allowance for doubtful accounts to reserve for potential uncollectible receivables. The allowance is based upon the creditworthiness of the Company’s dealers and distributors, the dealers’ and distributors’ historical payment experience, the age of the receivables and current market and economic conditions. Provisions for potentially uncollectible receivables are recorded in sales and marketing expenses. The Company writes off accounts receivable balances to the allowance for doubtful accounts when it becomes likely that they will not be collected. The following table presents the changes in the allowance for doubtful accounts (in thousands): Allowance Balance at December 31, 2017 $ 1,147 Provision 286 Write-offs (104) Balance at June 30, 2018 $ 1,329 Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 days. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined the contracts generally do not include a significant financing component. The primary purpose of invoicing terms is to provide customers with simplified and predictable ways of purchasing products and services, not to receive financing from customers, such as invoicing at the beginning of a subscription term with revenue recognized ratably over the contract period. Deferred revenue is comprised mainly of unearned revenue related to subscription services as well as revenue deferred on the sale of solution products for software updates and technical support. The following table presents the changes in deferred revenue for the six months ended June 30, 2018 (in thousands): Deferred Revenue Balance at December 31, 2017 $ 7,682 Deferred revenue 4,266 Recognition of deferred revenue (3,871) Balance at June 30, 2018 $ 8,077 Revenue allocated to remaining performance obligations represent contracted revenue that has not yet been recognized (“contracted not recognized”), which includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods. Contracted but not recognized revenue was $9.5 million as of June 30, 2018, of which the Company expects to recognize approximately 44% of the revenue over the next 12 months and the remainder over a period of three to four years. Assets Recognized from the Costs to Obtain a Contract with a Customer The Company has elected to immediately expense contract acquisition costs that would be amortized in one year or less. The Company recognizes an asset for the incremental costs of obtaining a contract with a customer if the benefit of those costs is expected to be longer than one year; these incremental costs were immaterial during both periods presented.

Equity Compensation

Equity Compensation	6 Months Ended
	Jun. 30, 2018
Equity Compensation
Equity Compensation	8. 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, restricted stock units and restricted stock awards. 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 after 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 5% of the outstanding number of shares of the Company’s Common Stock as of the preceding December 31. On January 1, 2018, the number of reserved shares was increased by 1,291,644 in accordance with the provisions of the 2013 Plan. A summary of stock option activity for the six months ended June 30, 2018 is presented below: Weighted Average Shares Subject Weighted Remaining to Options Average Contractual Outstanding Exercise Price Life (Years) Balance at December 31, 2017 2,069,802 12.13 Exercised (279,012) 11.31 Expired (2,809) 5.72 Forfeited (3,587) 13.65 Balance at June 30, 2018 1,784,394 12.27 Exercisable options at June 30, 2018 1,649,277 12.30 4.7 Vested and expected to vest at June 30, 2018 1,784,394 12.27 4.8 The following table summarizes information about stock options outstanding and exercisable at June 30, 2018: 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) $ - 6.09 655,341 3.1 647,967 3.0 $ - 10.52 380,848 5.6 305,478 5.3 $ - 15.60 344,008 6.4 291,635 6.4 $ - 21.08 404,197 5.6 404,197 5.6 1,784,394 1,649,277 For the stock option awards vested during the three and six months ended June 30, 2018, the total fair value was $0.5 million and $1.2 million, respectively. The following table summarizes the aggregate intrinsic-value of options exercised, exercisable and vested and expected to vest (in thousands): For the Six Months Ended and as of June 30, 2018 2017 Options Exercised $ 3,693 $ 6,734 Options Exercisable 19,801 19,345 Options Vested and Expected to Vest 21,492 21,817 Restricted stock units A summary of restricted stock unit activity for the six months ended June 30, 2018 is presented below: Number of Weighted Average Shares Grant Date Fair Value Non-vested balance at December 31, 2017 1,290,660 $ 9.75 Awarded 436,750 28.15 Vested (581,886) 10.28 Forfeited (34,250) 9.54 Non-vested balance at June 30, 2018 1,111,274 16.72 During the six months ended June 30, 2018, 581,886 restricted stock units vested of which 187,633 shares were withheld for tax purposes resulting in the issuance of 394,253 shares of common stock. Company Matching Contribution to our 401(k) Plan The Company offers a 401(k) Plan and in November 2016, the Company’s Board of Directors authorized a matching contribution by the Company starting in 2017. Matching contributions are as follows: the Company will match 100% of the first 1% of salary contributed by a participant, and 50% of the next 5% of salary contributed by a participant, for a maximum matching contribution of 3.5% of the salary of a participant up to the limit on contributions imposed by the IRS . Currently, the Company funds its match in contribution with shares of Control4’s common stock. During the six months ended June 30, 2018, the Company contributed 30,482 shares of stock to employees under this plan and recorded $0.8 million of expenses associated with this contribution. Stock-based compensation expense Total stock-based compensation expense has been classified as follows in the accompanying Condensed Consolidated Statements of Operations (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Cost of revenue $ 55 $ 61 $ 123 $ 119 Research and development 1,034 1,050 2,118 2,179 Sales and marketing 977 884 1,936 1,948 General and administrative 1,255 914 2,479 1,917 Total stock-based compensation expense $ 3,321 $ 2,909 $ 6,656 $ 6,163 At June 30, 2018, there was $1.3 million of total unrecognized compensation cost related to non-vested stock option awards that will be recognized over a weighted-average period of 0.7 years. At June 30, 2018, there was $15.6 million of total unrecognized compensation cost related to non-vested restricted stock units that will be recognized over a weighted-average period of 1.9 years if all vesting conditions are met.

Share Repurchases

Share Repurchases	6 Months Ended
	Jun. 30, 2018
Share Repurchases
Share Repurchases	9. Share Repurchases In February 2018, the Company’s Board of Directors authorized the repurchase of up to $20.0 million in Control4 common stock from time to time on the open market until June 2019. During the six months ended June 30, 2018, the Company repurchased 450,000 shares for $11.1 million compared to 119,007 shares for $1.8 million in the same period in 2017. As of June 30, 2018, the Company has $8.9 million remaining under this share repurchase program.

Income Taxes

Income Taxes	6 Months Ended
	Jun. 30, 2018
Income Taxes
Income Taxes	10. Income Taxes On December 22, 2017, the United States enacted tax reform legislation commonly referred to as the Tax Cuts and Jobs Act (“the Tax Act”). The Tax Act makes broad and complex changes to the U.S. tax code, including, but not limited to, a one-time mandatory transition tax on accumulated foreign earnings and a reduction of the corporate income tax rate to 21% effective January 1, 2018. The Company is required to recognize the effect of the tax law changes in the period of enactment. In order to calculate this effect, the Company must determine the transition tax amount and remeasure U.S. deferred tax assets and liabilities. In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”), which allows the Company to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. Where the Company has been able to make reasonable estimates of the effects of the Tax Act for which its analysis is not yet complete, the Company has recorded provisional amounts in accordance with SAB 118. Where the Company has not yet been able to make reasonable estimates of the impact of certain elements of the Tax Act, the Company has not recorded any amounts related to those elements and has continued accounting for them in accordance with the tax laws in effect immediately prior to the enactment of the Tax Act. Although the accounting for the Tax Act is incomplete, the Company was able to make reasonable estimates of certain effects of the Tax Act and record provisional amounts at December 31, 2017. The Tax Act reduces the U.S. federal corporate tax rate from 34% to 21% for tax years beginning after December 31, 2017. The Company evaluated the decrease in the tax rate and in 2017 recorded a provisional, one-time tax expense of approximately $9.0 million. This expense was offset by an equal change in the valuation allowance, resulting in a net tax expense or benefit of $0. The Company also recorded a one-time tax benefit and corresponding reduction to the valuation allowance of $0.4 million related to Alternative Minimum Tax credit carryforwards that are expected to be refundable; the Tax Act contributed to $0.2 million of this tax benefit. During the three and six months ended June 30, 2018, the Company completed its accounting for the federal income tax impact of the one-time mandatory transition tax on unrepatriated foreign earnings resulting in a one-time deferred tax expense of $0.4 million. As anticipated, the Company fully offset the one-time deferred tax expense with a corresponding reduction to the valuation allowance of $0.4 million. This reduced the Company’s net operating loss (“NOL”) carryforwards for U.S. federal income tax purposes by $2.1 million, from $66.7 million to $64.6 million at December 31, 2017. The financial statements for the three and six months ended June 30, 2018 do not reflect the impact of certain aspects of the Tax Act as the Company did not have the necessary information available, prepared, or analyzed in sufficient detail to determine an actual or provisional amount for the tax effects of the Tax Act. Although the Company completed its accounting for the federal income tax impact of the one-time tax on unrepatriated foreign earnings as of June 30, 2018, it was not able to complete the accounting for state income tax items related to this one-time tax. As a result, no provisional amounts have been recorded for the state tax impact of the one-time tax. Additionally, the Company is still evaluating the unrecognized deferred tax liability related to investment in foreign subsidiaries that will remain indefinitely reinvested subsequent to the one-time transition tax. The Company anticipates that this will not impact tax expense, as the Company intends to continue indefinitely reinvesting its unremitted foreign earnings in Australia and the U.K. The Tax Act also creates a new requirement on global intangible low-taxed income (“GILTI”) earned by foreign subsidiaries. The GILTI provisions require foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary’s assets to be included in the Company’s U.S. income tax return. Under U.S. GAAP, the Company is permitted to make an accounting policy election to either treat taxes due on future inclusions in U.S. taxable income related to GILTI as a current-period expense when incurred or to factor such amounts into the Company's measurement of its deferred taxes. The Company is estimating a taxable income inclusion related to GILTI for the three and six months ended June 30, 2018 and has made the election to account for GILTI as a component of current taxes incurred rather than as a component of deferred 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 $0.2 million for the three months ended June 30, 2018, compared to $0.2 million for the three months ended June 30, 2017, or approximately 2% and 6% of income before income taxes, respectively. Income tax expense was $45,000 for the six months ended June 30, 2018 compared to income tax benefit of $2.5 million for the six months ended June 30, 2017, or approximately 1% and 126% of income before taxes, respectively. The effective tax rate for the three and six months ended June 30, 2018 differs from the U.S. federal statutory rate of 21% primarily due to the domestic valuation allowance offsetting most of the statutory rate. The rate is increased by foreign income taxes, state income taxes or taxes in states for which net operating loss carryforwards are not available, and the impact of incentive stock options as well as other permanent differences. As of December 31, 2017, the Company’s NOL carryforward amounts for U.S. federal income and state tax purposes were $64.6 million and $67.8 million, respectively. The NOL carryforwards will expire between 2020 and 2037. In addition to the NOL carryforwards, as of December 31, 2017, the Company had U.S. federal and state research and development credit carryforwards of $6.6 million and $2.8 million, respectively, which will expire between 2018 and 2034. Significant judgment is required in determining the Company’s provision for income taxes, recording valuation allowances against deferred tax assets and evaluating the Company’s uncertain tax positions. In evaluating the ability to recover its deferred tax assets, in full or in part, the Company considers all available positive and negative evidence, including past operating results, 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 domestic 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 the valuation allowance in a future period. This release would result in the recognition of certain deferred tax assets, resulting in 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 21%, after giving consideration to state income taxes, foreign income taxes, tax credits, the effect of stock-based compensation windfalls or shortfalls, and the exercise of incentive stock options. 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, China, Germany, India and Serbia. We are subject to federal income tax as well as income tax of multiple state and foreign jurisdictions. We are no longer subject to income tax examinations for the following jurisdictions and years: federal, for years before 2014; state and local, for years before 2013; or foreign, for years before 2012. However, federal net operating loss and credit carryforwards from all years are subject to examination and adjustments for at least three years following the year in which the attributes are used.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2018
Commitments and Contingencies
Commitments and Contingencies	11. Commitments and Contingencies Operating Leases The Company leases office and warehouse space under operating leases that expire between 2019 and 2023. 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 $0.9 million and $0.7 million for the three months ended June 30, 2018 and 2017, respectively, and $1.7 million and $1.4 million for the six months ended June 30, 2018 and 2017, 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 June 30, 2018 (in thousands): Remainder of 2018 $ 1,396 2019 3,157 2020 2,684 2021 1,258 2022 524 Thereafter 202 $ 9,221 Purchase Commitments The Company had non-cancellable purchase commitments for the purchase of inventory, which extend through July 2019 totaling approximately $53.3 million as of June 30, 2018. Indemnification of Directors and Officers 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 has no liabilities recorded for these agreements as of June 30, 2018, as there were no outstanding claims. Legal Matters From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. We are not presently a party to any legal proceedings, that if determined adversely to us, we believe would individually or in the aggregate have a material adverse effect on our business, results of operations, financial condition or cash flows.

Description of Business and S18

Description of Business and Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2018
Description of Business and Summary of Significant Accounting Policies
Unaudited Interim Financial Statements	Unaudited Interim Financial Statements The accompanying condensed consolidated financial statements are unaudited. These unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and, in the opinion of management, reflect all adjustments, consisting only of 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 six months ended June 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018, 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 SEC on February 15, 2018. The December 31, 2017 condensed 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 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 U.S. dollars, except for sales to dealers and distributors located in the United Kingdom, Canada, Australia, and the European Union, which are generally denominated in pounds sterling, Canadian dollars, Australian dollars, and euros, respectively. There were no individual account balances greater than 10% of total accounts receivable as of June 30, 2018 and December 31, 2017. No dealer or distributor accounted for more than 10% of total revenue for the three and six months ended June 30, 2018 and 2017. While the Company partners with many manufacturers, generally one manufacturer is our sole source for a particular product or product family. A significant disruption in the operations of one 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.
Use of Accounting Estimates	Use of Accounting Estimates The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles (“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.
Limited Product Warranties	Limited Product Warranties The Company provides its customers a limited product warranty of two, three, or ten years depending on product type and brand. The limited product warranties require 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 cost of the products sold, 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 include 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 for the six months ended June 30, 2018 (in thousands): Warranty Liability Balance at December 31, 2017 $ 2,032 Warranty costs accrued 1,110 Warranty claims (937) Balance at June 30, 2018 $ 2,205
Net Income Per Share	Net Income Per Share Basic net income per share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income 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 per share (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Numerator: Net income $ 6,640 $ 3,741 $ 7,606 $ 4,562 Denominator: Weighted average common stock outstanding for basic net income per common share 26,041 24,587 25,973 24,298 Effect of dilutive securities—stock options and restricted stock units 1,226 1,801 1,423 1,726 Weighted average common shares and dilutive securities outstanding 27,267 26,388 27,396 26,024 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 per share (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Options to purchase common stock — 1,096 - 1,310 Restricted stock units 192 15 179 9 Total 192 1,111 179 1,319
Restricted Cash	Restricted Cash Restricted cash as of June 30, 2018 and December 31, 2017 is composed of a guarantee made by the Company’s subsidiary in the United Kingdom to HM Revenue & Customs related to a customs duty deferment account.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In June 2018, the FASB issued ASU 2018-07, “Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting,” which expands the scope of Topic 718 to include all share-based payment transactions for acquiring goods and services from non-employees. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. The Company elected to early-adopt this standard in the current period; the adoption of this standard did not impact the consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, “ Statement of Cash Flows (Topic 230): Restricted Cash ,” which provides amendments to current guidance to address the classifications and presentation of changes in restricted cash in the statement of cash flows. The effective date for the standard is for fiscal years beginning after December 15, 2017. The Company adopted the standard effective January 1, 2018; the adoption of this standard did not have a material impact on the consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, “ Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory .” The amendments in this update will require recognition of current and deferred income taxes resulting from an intra-entity transfer of an asset other than inventory when the transfer occurs. This update is effective for annual and interim periods beginning after December 15, 2017. The Company adopted the standard effective January 1, 2018; the adoption of this standard did not have a material impact on the consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326)” which introduces new guidance for the accounting for credit losses on instruments within its scope. The new guidance introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments. For trade receivables, the Company will be required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which reflects losses that are probable. Credit losses relating to available-for-sale debt securities will also be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. The guidance is effective for fiscal years beginning after December 31, 2019, including interim periods within those years. Early application of the guidance is permitted for all entities for fiscal years beginning after December 15, 2018, including the interim periods within those fiscal years. Application of the amendments is through a cumulative-effect adjustment to retained earnings as of the effective date. The Company is currently evaluating the impact of this update on the consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, “ Leases (Topic 842 ) ,” which supersedes the guidance in ASC 840, “Leases .” The purpose of the new standard is to improve transparency and comparability related to the accounting and reporting of leasing arrangements. The guidance will require balance sheet recognition for assets and liabilities associated with rights and obligations created by leases with terms greater than twelve months. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those years. Modified retrospective application is required. Early adoption is permitted. The Company expects the standard will have a material impact on the Company’s consolidated balance sheets but will not have a material impact on the consolidated statements of operations. The most significant impact will be the recognition of right of use assets and lease liabilities for operating leases. The Company is in the process of calculating the right of use assets and lease liabilities and implementing internal controls to enable the preparation of financial statements upon adoption of this standard.

Description of Business and S19

Description of Business and Summary of Significant Accounting Policies (Tables)	6 Months Ended
	Jun. 30, 2018
Description of Business and Summary of Significant Accounting Policies
Schedule of changes in the product warranty liability	The following table presents the changes in the product warranty liability for the six months ended June 30, 2018 (in thousands): Warranty Liability Balance at December 31, 2017 $ 2,032 Warranty costs accrued 1,110 Warranty claims (937) Balance at June 30, 2018 $ 2,205
Schedule of reconciliation of the numerator and denominator used in the calculation of basic and diluted net income per share	The following table presents the reconciliation of the numerator and denominator used in the calculation of basic and diluted net income per share (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Numerator: Net income $ 6,640 $ 3,741 $ 7,606 $ 4,562 Denominator: Weighted average common stock outstanding for basic net income per common share 26,041 24,587 25,973 24,298 Effect of dilutive securities—stock options and restricted stock units 1,226 1,801 1,423 1,726 Weighted average common shares and dilutive securities outstanding 27,267 26,388 27,396 26,024
Schedule of anti-dilutive weighted-average common stock equivalents excluded from the calculation of diluted net income per share	The following weighted-average common stock equivalents were anti-dilutive and therefore were excluded from the calculation of diluted net income per share (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Options to purchase common stock — 1,096 - 1,310 Restricted stock units 192 15 179 9 Total 192 1,111 179 1,319

Balance Sheet Components (Table

Balance Sheet Components (Tables)	6 Months Ended
	Jun. 30, 2018
Balance Sheet Components
Schedule of inventories	Inventories consisted of the following (in thousands): June 30, December 31, 2018 2017 Finished goods $ 37,105 $ 33,050 Component parts 4,531 4,025 Work-in-process 77 96 $ 41,713 $ 37,171
Schedule of property and equipment, net	Property and equipment, net consisted of the following (in thousands): June 30, December 31, 2018 2017 Computer equipment and software $ 4,885 $ 5,030 Manufacturing tooling and test equipment 4,226 4,894 Lab and warehouse equipment 5,259 4,869 Leasehold improvements 4,105 3,960 Furniture and fixtures 4,481 3,698 Other 1,086 1,086 24,042 23,537 Less: accumulated depreciation (16,170) (16,200) $ 7,872 $ 7,337
Schedule of accrued liabilities	Accrued liabilities consisted of the following (in thousands): June 30, December 31, 2018 2017 Sales returns and current portion of warranty liability $ 2,382 $ 2,872 Compensation accruals 4,131 5,241 Other accrued liabilities 1,783 2,722 $ 8,296 $ 10,835
Schedule of other long-term liabilities	Other long-term liabilities consisted of the following (in thousands): June 30, December 31, 2018 2017 Deferred revenue $ 3,087 $ 3,143 Warranty 720 600 Other 357 199 $ 4,164 $ 3,942

Financial Instruments (Tables)

Financial Instruments (Tables)	6 Months Ended
	Jun. 30, 2018
Financial Instruments
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 June 30, 2018 and December 31, 2017 (in thousands): June 30, 2018 Cash and Adjusted Unrealized Unrealized Cash Short-term Long-term Cost Gains Losses Fair Value Equivalents Investments Investments Cash $ 21,145 $ — $ — $ 21,145 $ 21,145 $ — $ — Level 1: Money market funds 5,085 — — 5,085 5,085 — — U.S. government notes 8,937 — (32) 8,905 — 7,430 1,475 Subtotal 14,022 — (32) 13,990 5,085 7,430 1,475 Level 2: Corporate bonds 26,951 1 (65) 26,887 — 25,805 1,082 Commercial paper 21,081 — — 21,081 999 20,082 — Subtotal 48,032 1 (65) 47,968 999 45,887 1,082 Total $ 83,199 $ 1 $ (97) $ 83,103 $ 27,229 $ 53,317 $ 2,557 December 31, 2017 Cash and Adjusted Unrealized Unrealized Cash Short-term Long-term Cost Gains Losses Fair Value Equivalents Investments Investments Cash $ 24,367 $ — $ — $ 24,367 $ 24,367 $ — $ — Level 1: Money market funds 5,394 — — 5,394 5,394 — — U.S. government notes 9,060 — (13) 9,047 — 4,098 4,949 Subtotal 14,454 — (13) 14,441 5,394 4,098 4,949 Level 2: Corporate bonds 24,943 — (49) 24,894 — 17,805 7,089 Commercial paper 22,154 — — 22,154 — 22,154 — Subtotal 47,097 — (49) 47,048 — 39,959 7,089 Total $ 85,918 $ — $ (62) $ 85,856 $ 29,761 $ 44,057 $ 12,038
Schedule of pre-tax income (losses) not designated as hedging instruments	The following table shows the pre-tax income (losses) of the Company’s derivative instruments not designated as hedging instruments (in thousands): Three Months Ended Six Months Ended June 30, June 30, Income Statement Location 2018 2017 2018 2017 Foreign exchange forward contracts Other income (expense), net $ 494 $ (405) $ (54) $ (932)

Goodwill and Intangible Assets

Goodwill and Intangible Assets (Tables)	6 Months Ended
	Jun. 30, 2018
Goodwill and Intangible Assets
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, 2017 $ 21,867 Measurement period adjustments (37) Foreign currency translation adjustment (158) Balance at June 30, 2018 $ 21,672
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 June 30, 2018 and December 31, 2017 (in thousands): June 30, 2018 Gross Carrying Accumulated Amount Amortization Net Developed technology $ 17,378 $ (8,394) $ 8,984 Customer relationships 12,008 (3,303) 8,705 Trademark/trade name 6,776 (1,150) 5,626 Non-competition agreements 295 (295) — Total intangible assets $ 36,457 $ (13,142) $ 23,315 December 31, 2017 Gross Carrying Accumulated Amount Amortization Net Developed technology $ 19,626 $ (8,914) $ 10,712 Customer relationships 12,009 (2,556) 9,453 Trademark/trade name 6,776 (869) 5,907 Non-competition agreements 295 (286) 9 Total intangible assets $ 38,706 $ (12,625) $ 26,081
Schedule of amortization expense during the respective periods	The Company recorded amortization expense during the three and six month periods ended June 30, 2018 and 2017 for these intangible assets as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Cost of revenue $ 924 $ 791 $ 1,845 $ 1,565 Research and development 18 47 46 95 Sales and marketing 497 483 994 891 Total amortization of intangible assets $ 1,439 $ 1,321 $ 2,885 $ 2,551
Schedule of amortization of finite lived intangible assets	Amortization of finite lived intangible assets as of June 30, 2018 for the next five years is as follows (in thousands): Amount Remainder of 2018 $ 2,759 2019 5,556 2020 4,608 2021 2,256 2022 2,093 Thereafter 6,043 $ 23,315

Revenue Recognition (Tables)

Revenue Recognition (Tables)	6 Months Ended
	Jun. 30, 2018
Revenue Recognition
Schedule of adoption of ASC 606 impacted the Company’s previously reported results	The adoption of ASC 606 impacted the Company’s previously reported results as follows (in thousands, except share data): Three Months Ended Six Months Ended June 30, June 30, 2017 2017 As previously reported ASC 606 adjustment As As previously reported ASC 606 adjustment As Revenue $ 61,409 $ (157) $ 61,252 $ 111,644 $ (184) $ 111,460 Income tax expense (benefit) 247 (5) 242 (2,534) (10) (2,544) Net income 3,893 (152) 3,741 4,736 (174) 4,562 Basic earnings per share $ 0.16 $ (0.01) $ 0.15 $ 0.19 $ — $ 0.19 Diluted earnings per share $ 0.15 $ (0.01) $ 0.14 $ 0.18 $ — $ 0.18 December 31, 2017 As previously reported ASC 606 adjustment As Other assets $ 1,576 $ 42 $ 1,618 Current portion of deferred revenue 2,311 2,227 4,538 Other long-term liabilities 882 3,060 3,942 Stockholders’ equity 174,773 (5,245) 169,528
Schedule of revenue from United States, Canada and all other international dealers and distributors combined	The following table sets forth revenue from U.S., Canada and all other international dealers and distributors combined (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Revenue-United States $ 48,101 $ 42,851 $ 89,065 $ 78,023 Revenue-Canada 5,814 5,249 11,078 9,496 Revenue-all other international sources 15,313 13,152 28,234 23,941 Total revenue $ 69,228 $ 61,252 $ 128,377 $ 111,460 International revenue (excluding Canada) as a percent of total revenue % % % %
Summary of changes in the allowance for doubtful accounts	The following table presents the changes in the allowance for doubtful accounts (in thousands): Allowance Balance at December 31, 2017 $ 1,147 Provision 286 Write-offs (104) Balance at June 30, 2018 $ 1,329
Schedule of changes in deferred revenue	The following table presents the changes in deferred revenue for the six months ended June 30, 2018 (in thousands): Deferred Revenue Balance at December 31, 2017 $ 7,682 Deferred revenue 4,266 Recognition of deferred revenue (3,871) Balance at June 30, 2018 $ 8,077

Equity Compensation (Tables)

Equity Compensation (Tables)	6 Months Ended
	Jun. 30, 2018
Equity Compensation
Summary of stock option activity	Weighted Average Shares Subject Weighted Remaining to Options Average Contractual Outstanding Exercise Price Life (Years) Balance at December 31, 2017 2,069,802 12.13 Exercised (279,012) 11.31 Expired (2,809) 5.72 Forfeited (3,587) 13.65 Balance at June 30, 2018 1,784,394 12.27 Exercisable options at June 30, 2018 1,649,277 12.30 4.7 Vested and expected to vest at June 30, 2018 1,784,394 12.27 4.8
Summary of stock options outstanding and exercisable	Weighted Average Shares Subject Weighted Remaining to Options Average Contractual Outstanding Exercise Price Life (Years) Balance at December 31, 2017 2,069,802 12.13 Exercised (279,012) 11.31 Expired (2,809) 5.72 Forfeited (3,587) 13.65 Balance at June 30, 2018 1,784,394 12.27 Exercisable options at June 30, 2018 1,649,277 12.30 4.7 Vested and expected to vest at June 30, 2018 1,784,394 12.27 4.8 The following table summarizes information about stock options outstanding and exercisable at June 30, 2018: 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) $ - 6.09 655,341 3.1 647,967 3.0 $ - 10.52 380,848 5.6 305,478 5.3 $ - 15.60 344,008 6.4 291,635 6.4 $ - 21.08 404,197 5.6 404,197 5.6 1,784,394 1,649,277
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 Six Months Ended and as of June 30, 2018 2017 Options Exercised $ 3,693 $ 6,734 Options Exercisable 19,801 19,345 Options Vested and Expected to Vest 21,492 21,817
Summary of restricted stock unit activity	Number of Weighted Average Shares Grant Date Fair Value Non-vested balance at December 31, 2017 1,290,660 $ 9.75 Awarded 436,750 28.15 Vested (581,886) 10.28 Forfeited (34,250) 9.54 Non-vested balance at June 30, 2018 1,111,274 16.72
Schedule of total stock-based compensation expense classified in Statements of Operations	Total stock-based compensation expense has been classified as follows in the accompanying Condensed Consolidated Statements of Operations (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Cost of revenue $ 55 $ 61 $ 123 $ 119 Research and development 1,034 1,050 2,118 2,179 Sales and marketing 977 884 1,936 1,948 General and administrative 1,255 914 2,479 1,917 Total stock-based compensation expense $ 3,321 $ 2,909 $ 6,656 $ 6,163

Commitments and Contingencies (

Commitments and Contingencies (Tables)	6 Months Ended
	Jun. 30, 2018
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 June 30, 2018 (in thousands): Remainder of 2018 $ 1,396 2019 3,157 2020 2,684 2021 1,258 2022 524 Thereafter 202 $ 9,221

Description of Business and S26

Description of Business and Summary of Significant Accounting Policies (Segment) (Details)	6 Months Ended
	Jun. 30, 2018segment
Segment Reporting
Number of operating segments	1

Description of Business and S27

Description of Business and Summary of Significant Accounting Policies (Concentrations of Risk) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Segment Reporting
Revenue concentration	$ 0	$ 0	$ 0	$ 0
Concentration risk, percentage	10.00%	10.00%	10.00%	10.00%

Description of Business and S28

Description of Business and Summary of Significant Accounting Policies (Warranties) (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2018USD ($)
Changes in the product warranty liability
Balance at the beginning of the period	$ 2,032
Warranty costs accrued	1,110
Warranty claims	(937)
Balance at the end of the period	$ 2,205
Alternate
Product Warranty
Product warranty period	3 years
Minimum
Product Warranty
Product warranty period	2 years
Maximum
Product Warranty
Product warranty period	10 years

Description of Business and S29

Description of Business and Summary of Significant Accounting Policies (EPS) (Details) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Numerator:
Net income	$ 6,640	$ 3,741	$ 7,606	$ 4,562
Denominator:
Weighted average common stock outstanding for basic net income per common share (in shares)	26,041	24,587	25,973	24,298
Effect of dilutive securities—stock options and restricted stock units (in shares)	1,226	1,801	1,423	1,726
Weighted average common shares and dilutive securities outstanding (in shares)	27,267	26,388	27,396	26,024

Description of Business and S30

Description of Business and Summary of Significant Accounting Policies (Anti-dilutive) (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Anti-dilutive weighted-average common stock equivalents excluded from the calculation of diluted net income per share
Total (in shares)	192	1,111	179	1,319
Options | Common Stock
Anti-dilutive weighted-average common stock equivalents excluded from the calculation of diluted net income per share
Total (in shares)		1,096		1,310
Restricted stock units
Anti-dilutive weighted-average common stock equivalents excluded from the calculation of diluted net income per share
Total (in shares)	192	15	179	9

Balance Sheet Components (Inven

Balance Sheet Components (Inventories, Property and Equipment) (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Inventories
Finished goods	$ 37,105	$ 33,050
Component parts	4,531	4,025
Work-in-process	77	96
Total inventories	41,713	37,171
Property and equipment, net
Property and equipment, gross	24,042	23,537
Less: accumulated depreciation	(16,170)	(16,200)
Property and equipment, net	7,872	7,337
Computer equipment and software
Property and equipment, net
Property and equipment, gross	4,885	5,030
Manufacturing tooling and test equipment
Property and equipment, net
Property and equipment, gross	4,226	4,894
Lab and warehouse equipment
Property and equipment, net
Property and equipment, gross	5,259	4,869
Leasehold improvements
Property and equipment, net
Property and equipment, gross	4,105	3,960
Furniture and fixtures
Property and equipment, net
Property and equipment, gross	4,481	3,698
Other
Property and equipment, net
Property and equipment, gross	$ 1,086	$ 1,086

Balance Sheet Components (Accru

Balance Sheet Components (Accrued liabilities) (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Accrued liabilities
Sales returns and current portion of warranty liability	$ 2,382	$ 2,872
Compensation accruals	4,131	5,241
Other accrued liabilities	1,783	2,722
Total accrued liabilities	$ 8,296	$ 10,835

Balance Sheet Components (Other

Balance Sheet Components (Other long-term liabilities) (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Balance Sheet Components
Deferred revenue	$ 3,087	$ 3,143
Warranty	720	600
Other	357	199
Total other long-term liabilities	$ 4,164	$ 3,942

Financial Instruments (Details)

Financial Instruments (Details) - Measured on a recurring basis - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Fair Value Measurements
Adjusted Cost, assets	$ 83,199	$ 85,918
Unrealized Gains, available-for-sale securities	1
Unrealized Losses, available-for-sale securities	(97)	(62)
Fair Value, assets	83,103	85,856
Cash and Cash Equivalents
Fair Value Measurements
Fair Value, available-for-sale investments	27,229	29,761
Short-term investments
Fair Value Measurements
Fair Value, available-for-sale investments	53,317	44,057
Long-term investments
Fair Value Measurements
Fair Value, available-for-sale investments	2,557	12,038
Cash
Fair Value Measurements
Fair value, cash and cash equivalents	21,145	24,367
Cash | Cash and Cash Equivalents
Fair Value Measurements
Fair value, cash and cash equivalents	21,145	24,367
Level 1
Fair Value Measurements
Adjusted Cost, assets	14,022	14,454
Unrealized Losses, available-for-sale securities	(32)	(13)
Fair Value, assets	13,990	14,441
Level 1 | Cash and Cash Equivalents
Fair Value Measurements
Fair Value, available-for-sale investments	5,085	5,394
Level 1 | Short-term investments
Fair Value Measurements
Fair Value, available-for-sale investments	7,430	4,098
Level 1 | Long-term investments
Fair Value Measurements
Fair Value, available-for-sale investments	1,475	4,949
Level 1 | Money market funds
Fair Value Measurements
Fair value, cash and cash equivalents	5,085	5,394
Level 1 | Money market funds | Cash and Cash Equivalents
Fair Value Measurements
Fair value, cash and cash equivalents	5,085	5,394
Level 1 | U.S. government notes
Fair Value Measurements
Adjusted Cost, available-for-sale securities	8,937	9,060
Unrealized Losses, available-for-sale securities	(32)	(13)
Fair Value, available-for-sale investments	8,905	9,047
Level 1 | U.S. government notes | Short-term investments
Fair Value Measurements
Fair Value, available-for-sale investments	7,430	4,098
Level 1 | U.S. government notes | Long-term investments
Fair Value Measurements
Fair Value, available-for-sale investments	1,475	4,949
Level 2 | Available-for-sale investments
Fair Value Measurements
Adjusted Cost, available-for-sale securities	48,032	47,097
Unrealized Gains, available-for-sale securities	1
Unrealized Losses, available-for-sale securities	(65)	(49)
Fair Value, available-for-sale investments	47,968	47,048
Level 2 | Available-for-sale investments | Cash and Cash Equivalents
Fair Value Measurements
Fair Value, available-for-sale investments	999
Level 2 | Available-for-sale investments | Short-term investments
Fair Value Measurements
Fair Value, available-for-sale investments	45,887	39,959
Level 2 | Available-for-sale investments | Long-term investments
Fair Value Measurements
Fair Value, available-for-sale investments	1,082	7,089
Level 2 | Corporate bonds
Fair Value Measurements
Adjusted Cost, available-for-sale securities	26,951	24,943
Unrealized Gains, available-for-sale securities	1
Unrealized Losses, available-for-sale securities	(65)	(49)
Fair Value, available-for-sale investments	26,887	24,894
Level 2 | Corporate bonds | Short-term investments
Fair Value Measurements
Fair Value, available-for-sale investments	25,805	17,805
Level 2 | Corporate bonds | Long-term investments
Fair Value Measurements
Fair Value, available-for-sale investments	1,082	7,089
Level 2 | Commercial paper
Fair Value Measurements
Adjusted Cost, available-for-sale securities	21,081	22,154
Fair Value, available-for-sale investments	21,081	22,154
Level 2 | Commercial paper | Cash and Cash Equivalents
Fair Value Measurements
Fair Value, available-for-sale investments	999
Level 2 | Commercial paper | Short-term investments
Fair Value Measurements
Fair Value, available-for-sale investments	$ 20,082	$ 22,154

Financial Instruments (Investme

Financial Instruments (Investment and Derivative Information) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Foreign exchange contracts
Fair Value Measurements
Assets related to derivative instruments	$ 0		$ 0
Liabilities related to derivative instruments	0		0
Foreign exchange contracts | Not designated as hedging instrument
Fair Value Measurements
Notional principal amount of foreign exchange contracts	10,500		10,500
Foreign exchange contracts | Other income (expense), net | Not designated as hedging instrument
Fair Value Measurements
Foreign exchange forward contracts	$ 494	$ (405)	$ (54)	$ (932)
Minimum
Fair Value Measurements
Maturity period of long-term investments			1 year
Maximum
Fair Value Measurements
Maturity period of long-term investments			2 years

Acquisitions (Details)

Acquisitions (Details) - USD ($) $ in Thousands	Feb. 27, 2017	Jun. 30, 2018	Jun. 30, 2017
Business Acquisition [Line Items]
Business acquisitions holdback liability			$ 1,068
Triad Holdings, Inc.
Business Acquisition [Line Items]
Purchase price to acquire common stock	$ 9,200
Cash acquired in acquisition	300
Business acquisitions holdback liability	$ 1,400
Purchase agreement, portion of purchase price held, period from acquisition date (in months)	18 months
Triad Holdings, Inc. | Other long-term liabilities
Business Acquisition [Line Items]
Payments to acquire businesses modified by measurement period adjustments		$ 1,100

Goodwill and Intangible Asset37

Goodwill and Intangible Assets (Goodwill) (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2018USD ($)
Business Combination - Goodwill
Balance at beginning of the period	$ 21,867
Measurement period adjustments	(37)
Foreign currency translation adjustment	(158)
Balance at end of the period	$ 21,672

Goodwill and Intangible Asset38

Goodwill and Intangible Assets (Intangible Assets) (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Intangible assets
Gross Carrying Amount	$ 36,457	$ 38,706
Accumulated Amortization	(13,142)	(12,625)
Intangible assets, net	$ 23,315	26,081
Weighted average amortization period	7 years 3 months 18 days
Developed technology
Intangible assets
Gross Carrying Amount	$ 17,378	19,626
Accumulated Amortization	(8,394)	(8,914)
Intangible assets, net	$ 8,984	10,712
Weighted average amortization period	6 years 10 months 24 days
Customer relationships
Intangible assets
Gross Carrying Amount	$ 12,008	12,009
Accumulated Amortization	(3,303)	(2,556)
Intangible assets, net	$ 8,705	9,453
Weighted average amortization period	8 years 4 months 24 days
Trademark/trade name
Intangible assets
Gross Carrying Amount	$ 6,776	6,776
Accumulated Amortization	(1,150)	(869)
Intangible assets, net	$ 5,626	5,907
Weighted average amortization period	12 years
Non-competition agreements
Intangible assets
Gross Carrying Amount	$ 295	295
Accumulated Amortization	$ (295)	(286)
Intangible assets, net		$ 9

Goodwill and Intangible Asset39

Goodwill and Intangible Assets (Amortization Expense) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Amortization expense
Amortization of intangible assets	$ 1,439	$ 1,321	$ 2,885	$ 2,551
Cost of revenue
Amortization expense
Amortization of intangible assets	924	791	1,845	1,565
Research and development
Amortization expense
Amortization of intangible assets	18	47	46	95
Sales and marketing
Amortization expense
Amortization of intangible assets	$ 497	$ 483	$ 994	$ 891

Goodwill and Intangible Asset40

Goodwill and Intangible Assets (Amortization) (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Amortization of finite-lived intangible assets
Remainder of 2018	$ 2,759
2,019	5,556
2,020	4,608
2,021	2,256
2,022	2,093
Thereafter	6,043
Intangible assets, net	$ 23,315	$ 26,081

Long-Term Obligations (Details)

Long-Term Obligations (Details) - USD ($) $ in Millions	Feb. 06, 2018	Jun. 30, 2018	Dec. 31, 2017
Long-Term Obligations
Maximum borrowing capacity		$ 40	$ 30
Revolving credit facility
Long-Term Obligations
Outstanding borrowings		$ 0
Commitment fee for quarterly unused capacity (as a percent)	0.25%
Unused line of credit fee threshold	$ 15
Minimum | Prime Rate
Long-Term Obligations
Basis spread on variable rate (as a percent)		0.00%
Minimum | LIBOR
Long-Term Obligations
Basis spread on variable rate (as a percent)	2.50%
Maximum | Prime Rate
Long-Term Obligations
Basis spread on variable rate (as a percent)		0.25%
Maximum | LIBOR
Long-Term Obligations
Basis spread on variable rate (as a percent)	2.75%

Revenue Recognition (ASC 606 Ad

Revenue Recognition (ASC 606 Adoption) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Revenue	$ 69,228	$ 61,252	$ 128,377	$ 111,460
Income tax expense (benefit)	161	242	45	(2,544)
Net income	$ 6,640	$ 3,741	$ 7,606	$ 4,562
Basic earnings per share (in dollars per share)	$ 0.25	$ 0.15	$ 0.29	$ 0.19
Diluted earnings per share (in dollars per share)	$ 0.24	$ 0.14	$ 0.28	$ 0.18
Other assets	$ 1,491		$ 1,491		$ 1,618
Current portion of deferred revenue	4,990		4,990		4,538
Other long-term liabilities	4,164		4,164		3,942
Stockholders' equity	$ 171,093		$ 171,093		169,528
Accounting Standards Update 2014-09 | As previously reported
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Revenue		$ 61,409		$ 111,644
Income tax expense (benefit)		247		(2,534)
Net income		$ 3,893		$ 4,736
Basic earnings per share (in dollars per share)		$ 0.16		$ 0.19
Diluted earnings per share (in dollars per share)		$ 0.15		$ 0.18
Other assets					1,576
Current portion of deferred revenue					2,311
Other long-term liabilities					882
Stockholders' equity					174,773
Accounting Standards Update 2014-09 | ASC 606 adjustment
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Revenue		$ (157)		$ (184)
Income tax expense (benefit)		(5)		(10)
Net income		$ (152)		$ (174)
Basic earnings per share (in dollars per share)		$ (0.01)
Diluted earnings per share (in dollars per share)		$ (0.01)
Other assets					42
Current portion of deferred revenue					2,227
Other long-term liabilities					3,060
Stockholders' equity					$ (5,245)

Revenue Recognition (Disaggrega

Revenue Recognition (Disaggregated) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Disaggregation of Revenue [Line Items]
Revenue	$ 69,228	$ 61,252	$ 128,377	$ 111,460
International revenue (excluding Canada) as a percent of total revenue	22.00%	21.00%	22.00%	21.00%
United States
Disaggregation of Revenue [Line Items]
Revenue	$ 48,101	$ 42,851	$ 89,065	$ 78,023
Canada
Disaggregation of Revenue [Line Items]
Revenue	5,814	5,249	11,078	9,496
All other international sources
Disaggregation of Revenue [Line Items]
Revenue	$ 15,313	$ 13,152	$ 28,234	$ 23,941

Revenue Recognition (Contract B

Revenue Recognition (Contract Balances) (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Revenue Recognition
Accounts receivable, net	$ 29,806		$ 29,925
Allowance for Doubtful Accounts Receivable [Roll Forward]
Balance at the beginning of the period	1,147
Provision	286	$ 264
Write-offs	(104)
Balance at the end of the period	$ 1,329
Payment term, general requirement for payment	30 days
Balance at the beginning of the period	$ 7,682
Deferred revenue	4,266
Recognition of deferred revenue	(3,871)
Balance at the end of the period	8,077
Contracted not recognized revenue	$ 9,500

Revenue Recognition (Performanc

Revenue Recognition (Performance obligation) (Details)	6 Months Ended
	Jun. 30, 2018
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-07-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Expected timing of satisfaction	12 months
Percentage expected to be recognized	44.00%
Minimum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-07-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Expected timing of satisfaction	3 years
Maximum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-07-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Expected timing of satisfaction	4 years

Equity Compensation (Activity)

Equity Compensation (Activity) (Details) - Stock options - $ / shares	Jan. 01, 2018	Jun. 30, 2018	Jun. 11, 2013
Shares Subject to Options Outstanding
Balance at the beginning of the period (in shares)	2,069,802	2,069,802
Exercised (in shares)		(279,012)
Expired (in shares)		(2,809)
Forfeited (in shares)		(3,587)
Balance at the end of the period (in shares)		1,784,394
Exercisable options (in shares)		1,649,277
Vested and expected to vest at the end of the period (in shares)		1,784,394
Weighted Average Exercise Price
Balance at the beginning of the period (in dollars per share)	$ 12.13	$ 12.13
Exercised (in dollars per share)		11.31
Expired (in dollars per share)		5.72
Forfeited (in dollars per share)		13.65
Balance at the end of the period (in dollars per share)		12.27
Exercisable options at the end of the period (in dollars per share)		12.30
Vested and expected to vest (in dollars per share)		$ 12.27
Weighted-Average Remaining Contractual Life
Exercisable options		4 years 8 months 12 days
Vested and expected to vest		4 years 9 months 18 days
2013 Plan
Stock options
Potential 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	1,291,644

Equity Compensation (Range) (De

Equity Compensation (Range) (Details)	6 Months Ended
	Jun. 30, 2018$ / sharesshares
Options Outstanding
Number of Underlying Shares | shares	1,784,394
Options Exercisable
Number of Underlying Shares | shares	1,649,277
4.89-7.49
Equity compensation
Range of Exercise Price, low end of range (in dollars per share)	$ 4.89
Range of Exercise Price, high end of range (in dollars per share)	7.49
Options Outstanding
Weighted Average Exercise Price (in dollars per share)	$ 6.09
Number of Underlying Shares | shares	655,341
Weighted-Average Remaining Contractual Life	3 years 1 month 6 days
Options Exercisable
Number of Underlying Shares | shares	647,967
Weighted-Average Remaining Contractual Life	3 years
8.16-12.93
Equity compensation
Range of Exercise Price, low end of range (in dollars per share)	$ 8.16
Range of Exercise Price, high end of range (in dollars per share)	12.93
Options Outstanding
Weighted Average Exercise Price (in dollars per share)	$ 10.52
Number of Underlying Shares | shares	380,848
Weighted-Average Remaining Contractual Life	5 years 7 months 6 days
Options Exercisable
Number of Underlying Shares | shares	305,478
Weighted-Average Remaining Contractual Life	5 years 3 months 18 days
12.98-19.56
Equity compensation
Range of Exercise Price, low end of range (in dollars per share)	$ 12.98
Range of Exercise Price, high end of range (in dollars per share)	19.56
Options Outstanding
Weighted Average Exercise Price (in dollars per share)	$ 15.60
Number of Underlying Shares | shares	344,008
Weighted-Average Remaining Contractual Life	6 years 4 months 24 days
Options Exercisable
Number of Underlying Shares | shares	291,635
Weighted-Average Remaining Contractual Life	6 years 4 months 24 days
20.91-22.92
Equity compensation
Range of Exercise Price, low end of range (in dollars per share)	$ 20.91
Range of Exercise Price, high end of range (in dollars per share)	22.92
Options Outstanding
Weighted Average Exercise Price (in dollars per share)	$ 21.08
Number of Underlying Shares | shares	404,197
Weighted-Average Remaining Contractual Life	5 years 7 months 6 days
Options Exercisable
Number of Underlying Shares | shares	404,197
Weighted-Average Remaining Contractual Life	5 years 7 months 6 days

Equity Compensation (Fair Value

Equity Compensation (Fair Value) (Details) - Stock options - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2018	Jun. 30, 2017
Stock options
Total fair value for the awards vested during the period	$ 500	$ 1,200
Intrinsic-value
Options Exercised		3,693	$ 6,734
Options Exercisable	19,801	19,801	19,345
Options Vested and Expected to Vest	$ 21,492	$ 21,492	$ 21,817

Equity Compensation (Restricted

Equity Compensation (Restricted Stock Units) (Details) - Restricted stock units	6 Months Ended
	Jun. 30, 2018$ / sharesshares
Restricted stock units
Non-vested balance at beginning of period (in shares)	1,290,660
Awarded	436,750
Vested	(581,886)
Forfeited	(34,250)
Non-vested balance at end of period (in shares)	1,111,274
Weighted Average Grant Date Fair Value
Non-vested balance at beginning of period (in dollars per share) | $ / shares	$ 9.75
Awarded (in dollars per share) | $ / shares	28.15
Vested (in dollars per share) | $ / shares	10.28
Forfeited (in dollars per share) | $ / shares	9.54
Non-vested balance at end of period (in dollars per share) | $ / shares	$ 16.72
Shares withheld for tax purposes (in shares)	187,633
Issuance of shares net of shares withheld (in shares)	394,253

Equity Compensation (401(k) Pla

Equity Compensation (401(k) Plan) (Details) $ in Millions	6 Months Ended
	Jun. 30, 2018USD ($)
Defined Contribution Plan Disclosure [Line Items]
Maximum amount of employees' gross pay the employee may contribute (as a percent)	3.50%
Expenses associated with contribution	$ 0.8
First 1% of employees' salary
Defined Contribution Plan Disclosure [Line Items]
Employer matching contribution (as a percent)	100.00%
Employees' gross pay for which the employer contributes a matching contribution (as a percent)	1.00%
Second 5% of employees' salary
Defined Contribution Plan Disclosure [Line Items]
Employer matching contribution (as a percent)	50.00%
Employees' gross pay for which the employer contributes a matching contribution (as a percent)	5.00%

Equity Compensation (Expense) (

Equity Compensation (Expense) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Stock options
Total stock-based compensation expense
Total stock-based compensation expense	$ 3,321	$ 2,909	$ 6,656	$ 6,163
Total unrecognized compensation cost related to non-vested stock option awards	1,300		$ 1,300
Weighted-average period over which unrecognized compensation cost will be recognized			8 months 12 days
Stock options | Cost of revenue
Total stock-based compensation expense
Total stock-based compensation expense	55	61	$ 123	119
Stock options | Research and development
Total stock-based compensation expense
Total stock-based compensation expense	1,034	1,050	2,118	2,179
Stock options | Sales and marketing
Total stock-based compensation expense
Total stock-based compensation expense	977	884	1,936	1,948
Stock options | General and administrative
Total stock-based compensation expense
Total stock-based compensation expense	1,255	$ 914	2,479	$ 1,917
Restricted stock units
Total stock-based compensation expense
Total unrecognized compensation cost related to non-vested restricted stock units	$ 15,600		$ 15,600
Weighted-average period over which unrecognized compensation cost will be recognized			1 year 10 months 24 days

Share Repurchases (Details)

Share Repurchases (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Feb. 28, 2018
Equity, Class of Treasury Stock [Line Items]
Common stock authorized for repurchase	$ 8,900
Number of common stock repurchased (in shares)	450,000	119,007
Value of common stock repurchased	$ 11,050	$ 1,821
Maximum
Equity, Class of Treasury Stock [Line Items]
Common stock authorized for repurchase			$ 20,000

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Income Taxes [Line Items]
Income tax expense (benefit)	$ 161	$ 242	$ 45	$ (2,544)
Effective income tax rate (as a percent)	2.00%	6.00%	1.00%	126.00%
U.S. federal statutory rate (as a percent)	21.00%		21.00%		34.00%
One-time transition tax					$ 9,000
Valuation allowance decrease	$ 400		$ 400		9,000
Net tax expense or benefit					0
One-time transition tax, unrepatriated foreign earnings	400		400
AMT credit carryforwards, one-time tax benefit					400
AMT valuation allowance decrease					400
Tax benefit arising from Tax Act					200
Unrepatriated foreign earnings, incomplete accounting for tax effect	$ 0		$ 0
State
Income Taxes [Line Items]
Net operating losses					67,800
Tax credit carryforwards					2,800
Federal
Income Taxes [Line Items]
Net operating losses					64,600
Tax credit carryforwards					6,600
Federal | Adjustment
Income Taxes [Line Items]
Net operating losses					(2,100)
Federal | Previously reported
Income Taxes [Line Items]
Net operating losses					$ 66,700

Commitments and Contingencies54

Commitments and Contingencies (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2018USD ($)claim	Jun. 30, 2017USD ($)	Jun. 30, 2018USD ($)claim	Jun. 30, 2017USD ($)
Operating Leases
Rental expense	$ 900,000	$ 700,000	$ 1,700,000	$ 1,400,000
Future minimum rental payments
Remainder of 2018	1,396,000		1,396,000
2,019	3,157,000		3,157,000
2,020	2,684,000		2,684,000
2,021	1,258,000		1,258,000
2,022	524,000		524,000
Thereafter	202,000		202,000
Total	9,221,000		9,221,000
Purchase Commitments
Non-cancellable purchase commitments	53,300,000		53,300,000
Indemnification agreements
Indemnification
Accrued liability	$ 0		$ 0
Number of outstanding claims | claim	0		0
Minimum
Operating Leases
Extension term of leases			P3Y
Maximum
Operating Leases
Extension term of leases			P5Y