Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Oct. 31, 2016 | |
Document Information [Line Items] | ||
Entity Registrant Name | FORTINET INC | |
Entity Central Index Key | 1,262,039 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 173,039,498 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 647,513 | $ 543,277 |
Short-term investments | 382,909 | 348,074 |
Accounts receivable—net of reserves for sales returns and doubtful accounts of $14,582 and $6,228 at September 30, 2016 and December 31, 2015, respectively | 238,988 | 259,563 |
Inventory | 93,731 | 83,868 |
Prepaid expenses and other current assets | 31,732 | 35,761 |
Total current assets | 1,394,873 | 1,270,543 |
LONG-TERM INVESTMENTS | 240,228 | 272,959 |
DEFERRED TAX ASSETS | 189,434 | 119,216 |
PROPERTY AND EQUIPMENT—net | 126,109 | 91,067 |
OTHER INTANGIBLE ASSETS—net | 27,849 | 17,640 |
GOODWILL | 14,553 | 4,692 |
OTHER ASSETS | 17,114 | 14,393 |
TOTAL ASSETS | 2,010,160 | 1,790,510 |
CURRENT LIABILITIES: | ||
Accounts payable | 57,530 | 61,500 |
Accrued liabilities | 37,280 | 33,028 |
Accrued payroll and compensation | 65,610 | 61,111 |
Income taxes payable | 7,795 | 8,379 |
Deferred revenue | 582,145 | 514,652 |
Total current liabilities | 750,360 | 678,670 |
DEFERRED REVENUE | 352,647 | 276,651 |
INCOME TAX LIABILITIES | 67,996 | 60,624 |
OTHER LIABILITIES | 16,069 | 19,188 |
Total liabilities | 1,187,072 | 1,035,133 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS’ EQUITY: | ||
Common stock, $0.001 par value—300,000 shares authorized; 173,513 and 171,399 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively | 173 | 171 |
Additional paid-in capital | 779,669 | 687,658 |
Accumulated other comprehensive income (loss) | 153 | (933) |
Retained earnings | 43,093 | 68,481 |
Total stockholders’ equity | 823,088 | 755,377 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 2,010,160 | $ 1,790,510 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) Parenthetical - USD ($) shares in Thousands, $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Reserves for sales returns and doubtful accounts | $ 14,582 | $ 6,228 |
Common Stock, par value (dollars per share) | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 300,000 | 300,000 |
Common Stock, shares issued | 173,513 | 171,399 |
Common Stock, shares outstanding | 173,513 | 171,399 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
REVENUE: | ||||
Product | $ 127,972 | $ 119,737 | $ 389,185 | $ 332,023 |
Service | 188,674 | 140,331 | 523,428 | 380,716 |
Total revenue | 316,646 | 260,068 | 912,613 | 712,739 |
COST OF REVENUE: | ||||
Product | 50,267 | 46,167 | 152,368 | 134,932 |
Service | 34,532 | 25,534 | 94,578 | 69,869 |
Total cost of revenue | 84,799 | 71,701 | 246,946 | 204,801 |
GROSS PROFIT: | ||||
Product | 77,705 | 73,570 | 236,817 | 197,091 |
Service | 154,142 | 114,797 | 428,850 | 310,847 |
Total gross profit | 231,847 | 188,367 | 665,667 | 507,938 |
OPERATING EXPENSES: | ||||
Research and development | 47,239 | 42,110 | 137,495 | 115,315 |
Sales and marketing | 154,831 | 120,994 | 463,628 | 333,531 |
General and administrative | 22,006 | 21,220 | 63,629 | 51,199 |
Restructuring charges | 2,283 | 5,883 | 3,164 | 5,883 |
Total operating expenses | 226,359 | 190,207 | 667,916 | 505,928 |
OPERATING INCOME (LOSS) | 5,488 | (1,840) | (2,249) | 2,010 |
INTEREST INCOME | 1,888 | 1,333 | 5,339 | 4,119 |
OTHER EXPENSE—net | (787) | (653) | (3,449) | (2,160) |
INCOME (LOSS) BEFORE INCOME TAXES | 6,589 | (1,160) | (359) | 3,969 |
PROVISION FOR (BENEFIT FROM) INCOME TAXES | 298 | (9,329) | (7,380) | (6,552) |
NET INCOME | $ 6,291 | $ 8,169 | $ 7,021 | $ 10,521 |
Net income per share | ||||
Basic (in dollars per share) | $ 0.04 | $ 0.05 | $ 0.04 | $ 0.06 |
Diluted (in dollars per share) | $ 0.04 | $ 0.05 | $ 0.04 | $ 0.06 |
Weighted-average shares outstanding: | ||||
Basic (in shares) | 173,335 | 171,648 | 172,212 | 169,898 |
Diluted (in shares) | 177,938 | 177,897 | 176,046 | 175,963 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Consolidated Statements of Comprehensive Income [Abstract] | ||||
Net income | $ 6,291 | $ 8,169 | $ 7,021 | $ 10,521 |
Other comprehensive income (loss): | ||||
Unrealized gains (losses) on investments | (879) | 337 | 1,670 | 400 |
Tax provision (benefit) | (308) | 118 | 584 | 141 |
Other comprehensive income (loss)—net of taxes | (571) | 219 | 1,086 | 259 |
Comprehensive income | $ 5,720 | $ 8,388 | $ 8,107 | $ 10,780 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 7,021 | $ 10,521 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 34,896 | 22,206 |
Amortization of investment premiums | 3,828 | 5,770 |
Stock-based compensation | 90,342 | 67,001 |
Other non-cash items—net | 4,846 | 2,681 |
Changes in operating assets and liabilities: | ||
Accounts receivable—net | 12,788 | 20,923 |
Inventory | (24,555) | (12,427) |
Deferred tax assets | (35,005) | (28,297) |
Prepaid expenses and other current assets | 4,301 | (7,806) |
Other assets | (2,595) | (264) |
Accounts payable | (1,584) | (9,842) |
Accrued liabilities | 598 | (3,296) |
Accrued payroll and compensation | 3,253 | (1,895) |
Other liabilities | (3,119) | (1,232) |
Deferred revenue | 142,867 | 136,193 |
Income taxes payable | 6,789 | 13,753 |
Net cash provided by operating activities | 244,671 | 213,989 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of investments | (370,573) | (329,687) |
Sales of investments | 21,805 | 35,384 |
Maturities of investments | 344,959 | 364,256 |
Purchases of property and equipment | (50,319) | (29,013) |
Payments made in connection with business acquisition, net of cash acquired | (22,087) | (38,025) |
Net cash provided by (used in) investing activities | (76,215) | 2,915 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of common stock | 42,292 | 63,543 |
Taxes paid related to net share settlement of equity awards | (29,886) | (22,989) |
Repurchase and retirement of common stock | (75,000) | 0 |
Payments of debt assumed in connection with business acquisition | (1,626) | 0 |
Net cash provided by (used in) financing activities | (64,220) | 40,554 |
NET INCREASE IN CASH AND CASH EQUIVALENTS | 104,236 | 257,458 |
CASH AND CASH EQUIVALENTS—Beginning of period | 543,277 | 283,254 |
CASH AND CASH EQUIVALENTS—End of period | 647,513 | 540,712 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||
Cash paid for income taxes—net of refunds | 20,534 | 15,272 |
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Transfers of evaluation units from inventory to property and equipment | 15,627 | 13,695 |
Liability for purchase of property and equipment and asset retirement obligations | 8,325 | 2,243 |
Equity awards assumed in connection with business acquisition | $ 0 | $ 471 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Preparation —The unaudited condensed consolidated financial statements of Fortinet, Inc. and its wholly-owned subsidiaries (collectively, “we,” “us” or “our”) have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information, as well as the instructions to Form 10-Q pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements, and should be read in conjunction with our audited consolidated financial statements as of and for the year ended December 31, 2015, contained in our Annual Report on Form 10-K (the “Form 10-K”) filed with the SEC on February 26, 2016. In the opinion of management, all adjustments, which includes normal recurring adjustments, considered necessary for a fair presentation have been included. All intercompany balances, transactions and cash flows have been eliminated. The results of operations for the three and nine months ended September 30, 2016 are not necessarily indicative of the results for the full year or for any future periods. The condensed consolidated balance sheet as of December 31, 2015 is derived from the audited consolidated financial statements for the year ended December 31, 2015. The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. There have been no material changes to our significant accounting policies as of and for the three and nine months ended September 30, 2016 , except for changes to our policy related to stock-based compensation expense. For more information, refer to the “Recently Adopted Accounting Standards.” Recently Adopted Accounting Standards In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09—Compensation—Stock Compensation—Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”). The new guidance changes the accounting for certain aspects of stock-based payments to employees and requires excess tax benefits and tax deficiencies to be recorded in the income statement when the awards vest or are settled. In addition, cash flows related to excess tax benefits will no longer be separately classified as a financing activity apart from other income tax cash flows. The standard also allows us to repurchase more of an employee’s shares for tax withholding purposes without triggering liability accounting, clarifies that all cash payments made on an employee’s behalf for withheld shares should be presented as a financing activity on our cash flows statement, and provides an accounting policy election to account for forfeitures as they occur. We elected to early adopt the new guidance in the second quarter of 2016. The primary impact of the adoption was the recognition of excess tax benefits in our provision for income taxes rather than paid-in capital, as well as the adjustment in stock-based compensation expense as a result of our change in forfeiture policy. The new guidance eliminates the requirement to delay the recognition of excess tax benefits until it reduces current taxes payable. We adopted this change on a modified retrospective basis, and recorded unrecognized excess tax benefits of $32.4 million as a cumulative-effect adjustment, which increased retained earnings on January 1, 2016. The new guidance also requires us to record, subsequent to the adoption, excess tax benefits and tax deficiencies in the period these arise. As a result, our provision for income taxes decreased by $3.6 million during the first quarter of 2016. Under the new guidance, we have elected to change our policy and have started to recognize forfeitures of awards as they occur. The change in forfeiture policy was adopted using a modified retrospective transition method. We recorded a cumulative-effect adjustment to decrease retained earnings by $0.8 million upon transition on January 1, 2016 and a retrospective decrease of stock-based compensation of $2.0 million during the first quarter of 2016. The amendment to the minimum statutory withholding tax requirements was adopted on a modified retrospective basis. The adoption had no impact on the January 1, 2016 retained earnings. In addition, we adopted the presentation of taxes paid related to net share settlement of equity awards as a financing activity on the statement of cash flows on a retrospective basis. Our adoption had no impact to any of the periods presented in our consolidated cash flows statements since such cash flows have historically been presented as a financing activity. The adoption of ASU 2016-09 impacted our previously reported quarterly results for the three months ended March 31, 2016, as well as our weighted average shares outstanding—diluted, as follows (in thousands, except for earnings per share): Three Months Ended March 31, 2016 As Reported As Adjusted Statements of Operations: Stock-based compensation expense $ 30,881 $ 28,901 Benefit from income taxes $ (1,809 ) $ (5,376 ) Net income (loss) $ (3,429 ) $ 2,118 Net income (loss) per share—Basic $ (0.02 ) $ 0.01 Net income (loss) per share—Diluted $ (0.02 ) $ 0.01 Weighted-average shares outstanding—Diluted 171,745 174,421 March 31, 2016 As Reported As Adjusted Balance Sheets: Deferred tax assets $ 131,696 $ 167,625 Additional paid-in capital $ 718,849 $ 717,671 Retained earnings $ 23,089 $ 60,196 In September 2015, the FASB issued ASU 2015-16—Business Combinations—Simplifying the Accounting for Measurement-Period Adjustments, which eliminates the requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively. Instead, acquirers must recognize measurement-period adjustments during the period in which they determine the amounts, including the effect on earnings of any amounts they would have recorded in previous periods if the accounting had been completed at the acquisition date. We adopted ASU 2015-16 on January 1, 2016. The adoption of ASU 2015-16 has not had any impact on our consolidated financial statements. Recent Accounting Standards Not Yet Effective In October 2016, the FASB issued ASU 2016-16—Income Taxes —Intra-Entity Transfer of Assets Other Than Inventory, which requires the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. ASU 2016-06 will be effective for us beginning on January 1, 2018. We are currently evaluating the impact of adopting ASU 2016-16 on our consolidated financial statements. In August 2016, the FASB issued ASU 2016-15—Statement of Cash Flows—Classification of Certain Cash Receipts and Cash Payments, which clarifies how companies present and classify certain cash receipts and cash payments in the statement of cash flows. ASU 2016-15 is effective for us beginning on January 1, 2018. Early adoption is permitted, including adoption in an interim period. We are currently evaluating the impact of adopting ASU 2016-15 on our consolidated financial statements. In June 2016, the FASB issued ASU 2016-13—Financial Instruments—Credit Losses—Measurement of Credit Losses on Financial Instruments, which requires measurement and recognition of expected credit losses for financial assets held. ASU 2016-13 is effective for us beginning on January 1, 2020, with the option to adopt early on January 1, 2019. We are currently evaluating the impact of ASU 2016-13 will have on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02—Leases, which amends lease accounting requirements to begin recording assets and liabilities arising from leases on the balance sheet. The new guidance will also require significant additional disclosures about the amount, timing and uncertainty of cash flows from leases. This new guidance will be effective for us beginning on January 1, 2019 using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply. We expect our assets and liabilities to increase as a result of the adoption of this standard. We are currently evaluating the impact of adopting ASU 2016-02 on our consolidated financial statements. In May 2014, the FASB issued ASU 2014-09—Revenue from Contracts with Customers, which creates a single, joint revenue standard that is consistent across all industries and markets for companies that prepare their financial statements in accordance with GAAP. Under ASU 2014-09, an entity is required to recognize revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to receive in exchange for those goods or services. In July 2015, the FASB decided to delay the effective date of the new revenue standard by one year. In March 2016, the FASB issued ASU 2016-08, which clarifies the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU 2016-10, which clarifies the implementation guidance on identifying performance obligations and licensing. In May 2016, the FASB issued ASU 2016-12—Revenue from Contracts with Customers—Narrow-scope Improvements and Practical Expedients, which amends the guidance on collectability, noncash consideration, presentation of sales tax and transition. These standards will be effective for us beginning on January 1, 2018. We are currently evaluating the impact of these new standards on our consolidated financial statements. |
Financial Instruments and Fair
Financial Instruments and Fair Value | 9 Months Ended |
Sep. 30, 2016 | |
Financial Instruments and Fair Value [Abstract] | |
FINANCIAL INSTRUMENTS AND FAIR VALUE | FINANCIAL INSTRUMENTS AND FAIR VALUE Our investments as of September 30, 2016 and December 31, 2015 were (in thousands): September 30, 2016 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Corporate debt securities $ 385,016 $ 425 $ (211 ) $ 385,230 Commercial paper 127,059 18 (43 ) 127,034 Municipal bonds 53,821 14 (36 ) 53,799 Certificates of deposit and term deposits (1) 4,322 — — 4,322 U.S. government and agency securities 52,686 72 (6 ) 52,752 Total available-for-sale securities $ 622,904 $ 529 $ (296 ) $ 623,137 December 31, 2015 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Corporate debt securities $ 438,533 $ 30 $ (1,369 ) $ 437,194 Commercial paper 66,263 3 (34 ) 66,232 Municipal bonds 61,050 12 (40 ) 61,022 Certificates of deposit and term deposits (1) 14,897 — — 14,897 U.S. government and agency securities 41,727 3 (42 ) 41,688 Total available-for-sale securities $ 622,470 $ 48 $ (1,485 ) $ 621,033 (1) The majority of our certificates of deposit and term deposits are foreign deposits. The gross unrealized losses and the related fair values of our investments that have been in a continuous unrealized loss position as of September 30, 2016 and December 31, 2015 were (in thousands): September 30, 2016 Less Than 12 Months 12 Months or Greater Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Corporate debt securities $ 157,390 $ (188 ) $ 37,548 $ (22 ) $ 194,938 $ (210 ) Commercial paper 19,320 (43 ) — — 19,320 (43 ) Municipal bonds 36,163 (37 ) — — 36,163 (37 ) U.S. government and agency securities 5,492 (6 ) — — 5,492 (6 ) Total available-for-sale securities $ 218,365 $ (274 ) $ 37,548 $ (22 ) $ 255,913 $ (296 ) December 31, 2015 Less Than 12 Months 12 Months or Greater Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Corporate debt securities $ 348,534 $ (1,187 ) $ 42,033 $ (182 ) $ 390,567 $ (1,369 ) Commercial paper 31,977 (34 ) — — 31,977 (34 ) Municipal bonds 41,677 (36 ) 1,008 (4 ) 42,685 (40 ) U.S. government and agency securities 34,703 (42 ) — — 34,703 (42 ) Total available-for-sale securities $ 456,891 $ (1,299 ) $ 43,041 $ (186 ) $ 499,932 $ (1,485 ) The contractual maturities of our investments as of September 30, 2016 and December 31, 2015 were (in thousands): September 30, December 31, Due within one year $ 382,909 $ 348,074 Due within one to three years 240,228 272,959 Total $ 623,137 $ 621,033 Available-for-sale securities are reported at fair value, with unrealized gains and losses, net of tax, included as a separate component of stockholders’ equity and in total comprehensive income. Realized gains and losses on available-for-sale securities are insignificant in the periods presented and are included in Other expense—net in our condensed consolidated statements of operations. We use the specific identification method to determine the cost basis of investments sold. The unrealized losses on our available-for-sale securities were caused by fluctuations in market value and interest rates as a result of the economic environment. As the decline in market value are attributable to changes in market conditions and not credit quality, and because we have concluded currently that we neither intend to sell nor is it more likely than not that we will be required to sell these investments prior to a recovery of par value, we do not consider these investments to be other-than temporarily impaired as of September 30, 2016 . Fair Value Accounting—We apply the following fair value hierarchy for disclosure of the inputs used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows: Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities. Level 2—Inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the assets or liabilities, either directly or indirectly through market corroboration, for substantially the full term of the financial instruments. Level 3—Unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value. The inputs require significant management judgment or estimation. We measure the fair value of money market funds and certain U.S. government and agency securities using quoted prices in active markets for identical assets. The fair value of all other financial instruments was based on quoted prices for similar assets in active markets, or model driven valuations using significant inputs derived from or corroborated by observable market data. We classify investments within Level 1 if quoted prices are available in active markets for identical securities. We classify items within Level 2 if the investments are valued using model driven valuations using observable inputs such as quoted market prices, benchmark yields, reported trades, broker/dealer quotes or alternative pricing sources with reasonable levels of price transparency. Investments are held by custodians who obtain investment prices from a third-party pricing provider that incorporates standard inputs in various asset price models. Fair Value of Financial Instruments Assets Measured at Fair Value on a Recurring Basis The fair values of our financial assets measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015 were (in thousands): September 30, 2016 December 31, 2015 Aggregate Fair Value Quoted Prices in Active Markets For Identical Assets Significant Other Observable Remaining Inputs Significant Other Unobservable Remaining Inputs Aggregate Fair Value Quoted Prices in Active Markets For Identical Assets Significant Other Observable Remaining Inputs Significant Other Unobservable Remaining Inputs (Level 1) (Level 2) (Level 3) (Level 1) (Level 2) (Level 3) Assets: Corporate debt securities $ 385,230 $ — $ 385,230 $ — $ 437,194 $ — $ 437,194 $ — Commercial paper 132,033 — 132,033 — 69,231 — 69,231 — Municipal bonds 53,799 — 53,799 — 61,022 — 61,022 — Certificates of deposit and term deposits 4,322 — 4,322 — 14,897 — 14,897 — Money market funds 21,886 21,886 — — 50,030 50,030 — — U.S. government and agency securities 52,752 42,243 10,509 — 41,688 25,693 15,995 — Total $ 650,022 $ 64,129 $ 585,893 $ — $ 674,062 $ 75,723 $ 598,339 $ — Reported as: Cash equivalents $ 26,885 $ 53,029 Short-term investments 382,909 348,074 Long-term investments 240,228 272,959 Total $ 650,022 $ 674,062 There were no transfers between Level 1 and Level 2 of the fair value hierarchy during the nine months ended September 30, 2016 . |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2016 | |
Inventory Disclosure [Abstract] | |
INVENTORY | INVENTORY Our inventory as of September 30, 2016 and December 31, 2015 consisted of (in thousands): September 30, December 31, Raw materials $ 19,690 $ 15,425 Finished goods 74,041 68,443 Inventory $ 93,731 $ 83,868 Inventory includes finished goods held by distributors where revenue is recognized on a sell-through basis of $1.4 million and $1.1 million as of September 30, 2016 and December 31, 2015 , respectively. Inventory also includes materials at contract manufacturers of $6.3 million and $4.9 million as of September 30, 2016 and December 31, 2015 , respectively. |
Property and Equipment_Net
Property and Equipment—Net | 9 Months Ended |
Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT—Net | PROPERTY AND EQUIPMENT—net Our property and equipment—net as of September 30, 2016 and December 31, 2015 consisted of (in thousands): September 30, December 31, Land $ 31,251 $ 21,683 Building and building improvements 44,513 28,841 Evaluation units 17,633 15,784 Computer equipment and software 62,585 45,632 Furniture and fixtures 13,127 8,901 Construction-in-progress 4,365 8,106 Leasehold improvements 16,501 11,179 Total property and equipment 189,975 140,126 Less: accumulated depreciation (63,866 ) (49,059 ) Property and equipment—net $ 126,109 $ 91,067 Depreciation expense was $10.2 million and $7.5 million during the three months ended September 30, 2016 and September 30, 2015 , respectively. Depreciation expense was $28.6 million and $20.3 million during the nine months ended September 30, 2016 and September 30, 2015 , respectively. |
Investments in Privately-Held C
Investments in Privately-Held Companies | 9 Months Ended |
Sep. 30, 2016 | |
Investments, All Other Investments [Abstract] | |
INVESTMENTS IN PRIVATELY-HELD COMPANIES | INVESTMENTS IN PRIVATELY-HELD COMPANIES Our investments in the equity securities of three privately-held companies totaled $10.3 million as of September 30, 2016 and December 31, 2015 . Each of these investments are accounted for as cost-basis investments, as we own less than 20% of the voting securities and do not have the ability to exercise significant influence over operating and financial policies of the respective entities. These investments are carried at historical cost and are recorded as Other assets on our condensed consolidated balance sheet and would be measured at fair value if indicators of impairment exist. As of September 30, 2016 , no events have occurred that would adversely affect the carrying value of these investments. We determined that we had a variable interest in these privately-held companies. However, we determined that we were not the primary beneficiary as we did not have the power to direct their activities that most significantly affect their economic performance. The variable interest entities were not required to be consolidated in our condensed consolidated financial statements. |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS AccelOps, Inc. On June 7, 2016, we completed our acquisition of AccelOps, Inc. (“AccelOps”), a provider of network security monitoring and analytics solutions for total cash consideration of $22.1 million , net of cash received. We believe this acquisition will extend the Fortinet Security Fabric (as defined below) by enhancing our network security visibility, security data analytics, and threat intelligence across multi-vendor solutions. The acquisition of AccelOps is accounted as a business combination in accordance with the Accounting Standards Codification Topic 805 “Business Combinations” (“ASC 805”) issued by the FASB. We use our best estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. We included acquisition-related costs of $0.3 million in general and administrative expenses. The total purchase price was allocated to AccelOps’ identifiable tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. The acquisition also included a contingent obligation for up to $4.0 million in future earn out payments to certain former stockholders of AccelOps if specified future financial targets are met for the three and six months period ended June 30, 2016 and December 31, 2016, respectively. The financial target for the three months period ended June 30, 2016 was not met. As of September 30, 2016, no fair value was assigned to the contingent consideration based on the estimated probability of attainment of the remaining target. We will remeasure the contingent consideration during the contingency period for the remaining target, with changes in fair value to be recorded in our consolidated statements of operations. Total allocation of the purchase price was (in thousands): Cash and cash equivalents $ 171 Accounts receivable 1,126 Prepaid expenses and other assets 430 Property and equipment 203 Deferred tax assets 3,435 Finite-lived intangible assets 14,900 Indefinite-lived intangible assets in process research and development 1,600 Goodwill 9,861 Total assets acquired 31,726 Deferred revenue 4,400 Accounts payable and accrued liabilities 3,348 Other liabilities 1,694 Total liabilities assumed 9,442 Total purchase price allocation $ 22,284 Finite-lived intangible assets consist of developed technology, customer relationships, and other intangible assets. AccelOps’ technology provides a software solution to manage security, performance and compliance from a single platform. The acquired developed technologies include software patents, know-how, process and designs. The value of customer relationships is attributable to the generation of a consistent income source and the avoidance of costs associated with creating new customer relationships. The estimated useful life and fair values of the acquired finite-lived intangible assets were as follows (in thousands, except for estimated useful life): Estimated Useful Life (in years) Fair Values Developed technologies 4 $ 12,400 Customer relationships 3 2,300 Other 2 200 Total $ 14,900 The developed technologies and other are amortized on a straight-line basis. The amortization expense of developed technologies and other intangibles are recorded in cost of service revenue. The amortization expense of customer relationships is amortized on an accelerated basis and is recorded in sales and marketing expenses. Indefinite-lived intangible assets consist of in-process research and development, which will begin to be amortized upon completion of development. The goodwill of $9.9 million represents the amount of the purchase price in excess of the fair value of the net tangible liabilities assumed and intangible assets acquired, including AccelOps’ assembled workforce. The goodwill recorded as part of the AccelOps acquisition is not deductible for U.S. federal income tax purposes. The financial results of this acquisition are considered immaterial for purposes of pro forma financial disclosures. Meru Networks, Inc. On July 8, 2015, we completed our acquisition of Meru Networks, Inc. (“Meru”), a provider of Wi-Fi networking products and services. In connection with the acquisition, we paid $41.8 million , comprised of cash consideration of $40.9 million , withholding tax liability of $0.4 million and $0.5 million in estimated fair value associated with restricted stock units (“RSUs”) of Meru that were converted for 53,401 shares of our common stock. We accounted for this transaction as a business combination. During the three and nine months ended September 30, 2015, we included acquisition-related costs of $1.7 million in general and administrative expenses. The total purchase price was allocated to Meru’s identifiable tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. Total allocation of the purchase price was as follows (in thousands): Cash and cash equivalents $ 3,268 Accounts receivable 8,191 Inventory 11,610 Prepaid expenses and other assets 2,409 Property and equipment 920 Deferred tax assets 18,585 Finite-lived intangible assets 19,600 Goodwill 1,868 Total assets acquired 66,451 Deferred revenue 9,800 Accounts payable and accrued liabilities 14,887 Total liabilities assumed 24,687 Total purchase price allocation $ 41,764 The goodwill of $1.9 million represents the premium we paid over the fair value of the net tangible liabilities assumed and identified intangible assets acquired, due primarily to Meru’s assembled workforce. The goodwill recorded as part of the Meru acquisition is not deductible for U.S. federal income tax purposes. Intangible assets consist primarily of customer relationships and developed technologies. Customer relationships represent Meru’s installed base and the ability to sell existing, in-process and future versions of our products and services to its existing customers. Developed technologies represent the virtualized wireless local area network solutions offering centralized coordination and control of various access points on the network. This includes patented and unpatented technology, know-how, processes, designs and computer software. The estimated useful life and fair values of the acquired identifiable intangible assets were as follows (in thousands, except for estimated useful life): Estimated Useful Life (in years) Fair Values Customer relationships 5 $ 12,200 Developed technologies 4 7,200 Trade name 0.5 200 Total $ 19,600 Customer relationships and trade name are amortized and the amortization expense is recorded in sales and marketing expenses in the condensed consolidated statement of operations. Developed technologies are amortized and the amortization expense is recorded in cost of product revenue in the condensed consolidated statement of operations. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets - Net | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS - Net | GOODWILL AND OTHER INTANGIBLE ASSETS—net Goodwill Changes in the carrying amount of goodwill were (in thousands): Amount Balance—December 31, 2015 $ 4,692 Addition due to business acquisition 9,861 Balance—September 30, 2016 $ 14,553 There were no impairments to goodwill during the three and nine months ended September 30, 2016 . Other Intangible Assets—net Other intangible assets—net as of September 30, 2016 and December 31, 2015 were (in thousands): September 30, 2016 Weighted-Average Useful Life (in Years) Gross Accumulated Amortization Net Other intangible assets—net: Finite-lived intangible assets: Customer relationships 4.7 $ 14,500 $ 4,735 $ 9,765 Developed technologies and other 3.8 23,984 7,500 16,484 38,484 12,235 26,249 Indefinite-lived intangible assets: In-process research and development 1,600 — 1,600 Total other intangible assets—net $ 40,084 $ 12,235 $ 27,849 December 31, 2015 Weighted-Average Useful Life (in Years) Gross Accumulated Amortization Net Other intangible assets—net: Customer relationships 5.0 $ 12,200 $ 1,220 $ 10,980 Developed technologies and other 3.6 11,384 4,724 6,660 Total other intangible assets—net $ 23,584 $ 5,944 $ 17,640 Amortization expense was $2.8 million and $1.3 million during the three months ended September 30, 2016 and September 30, 2015 , respectively. Amortization expense was $6.3 million and $1.9 million during the nine months ended September 30, 2016 and September 30, 2015 , respectively. The following table summarizes estimated future amortization expense of Other intangible assets—net with finite lives (in thousands): Amount Years: 2016 (remainder) $ 2,798 2017 8,450 2018 7,098 2019 5,540 2020 2,363 Total $ 26,249 |
Net Income Per Share
Net Income Per Share | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
NET INCOME PER SHARE | NET INCOME PER SHARE Basic net income per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding during the period. Diluted net income per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding, plus the dilutive effects of stock options, RSUs including performance stock units (“PSUs”), and our employee stock purchase plan (“ESPP”). Dilutive shares of common stock are determined by applying the treasury stock method. A reconciliation of the numerator and denominator used in the calculation of basic and diluted net income per share is as follows (in thousands, except per share amounts): Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Numerator: Net income $ 6,291 $ 8,169 $ 7,021 $ 10,521 Denominator: Basic shares: Weighted-average common stock outstanding-basic 173,335 171,648 172,212 169,898 Diluted shares: Weighted-average common stock outstanding-basic 173,335 171,648 172,212 169,898 Effect of potentially dilutive securities: Stock options 2,009 3,451 1,867 3,669 RSUs (including PSUs) 2,513 2,742 1,891 2,335 ESPP 81 56 76 61 Weighted-average shares used to compute diluted net income per share 177,938 177,897 176,046 175,963 Net income per share: Basic $ 0.04 $ 0.05 $ 0.04 $ 0.06 Diluted $ 0.04 $ 0.05 $ 0.04 $ 0.06 The following potentially dilutive shares of common stock were excluded from the computation of diluted net income per share for the periods presented, as their effect would have been antidilutive (in thousands): Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Stock options 836 265 1,067 271 RSUs (including PSUs) 2,409 1,331 3,946 1,026 ESPP 353 209 211 126 3,598 1,805 5,224 1,423 |
Restructuring Charges
Restructuring Charges | 9 Months Ended |
Sep. 30, 2016 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING CHARGES | RESTRUCTURING CHARGES The following table provides a summary of restructuring activity for the nine months ended September 30, 2016 (in thousands): Employee Severance and Other Benefits Contract Terminations and Other Charges Total Balance as of December 31, 2015 $ 3,689 $ 229 $ 3,918 Costs incurred 3,120 44 3,164 Less cash payments (5,060 ) (273 ) (5,333 ) Less non-cash charges (89 ) — (89 ) Balance as of September 30, 2016 $ 1,660 $ — $ 1,660 2015 Meru Restructuring In connection with the acquisition of Meru, we initiated planned cost reduction and restructuring activities to improve our cost structure and operational efficiencies starting in the third quarter of 2015. To date, we have incurred $7.9 million of charges related to this restructuring. These charges are primarily related to severance payments to be paid in cash and are included in operating expense in the condensed consolidated statements of operations of the period when incurred. We incurred $0.1 million and $0.3 million of charges related to this restructuring during the three and nine months ended September 30, 2016, respectively, and these charges are included in operating expense in the condensed consolidated statements of operations. We do not anticipate incurring additional charges related to this restructuring. The remaining restructuring reserve of $1.1 million is included in accrued liabilities on the condensed consolidated balance sheet as of September 30, 2016 and is expected to be paid within one year. 2016 Restructuring In the second and third quarter of 2016, we implemented a plan to restructure and further improve efficiencies in our operations due to the acquisition of AccelOps and certain other activities. We estimate that we will incur approximately $4.1 million of restructuring charges, primarily consisting of severance and other benefits, of which $2.2 million and $2.9 million were incurred during the three and nine months ended September 30, 2016 , respectively, and are included in operating expense in the condensed consolidated statements of operations. We expect to incur the remaining charges in the fourth quarter of 2016. The remaining restructuring reserve of $0.6 million is included in accrued liabilities on the condensed consolidated balance sheet as of September 30, 2016 and is expected to be paid within one year. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Our future principal contractual obligations as of September 30, 2016 were (in thousands): Total 2016 (remainder) 2017 2018 2019 2020 Thereafter Operating lease commitments $ 74,107 $ 5,756 $ 17,678 $ 14,653 $ 12,359 $ 10,497 $ 13,164 Inventory purchase commitments 116,494 90,169 26,325 — — — — Other contractual commitments and open purchase orders 48,864 33,805 11,466 2,451 855 287 — Total $ 239,465 $ 129,730 $ 55,469 $ 17,104 $ 13,214 $ 10,784 $ 13,164 Operating Leases —We lease certain facilities under various non-cancelable operating leases, which expire through 2026. Certain leases require us to pay variable costs such as taxes, maintenance, and insurance. The terms of certain operating leases also provide for renewal options and escalation clauses. Rent expense was $6.1 million and $3.7 million during the three months ended September 30, 2016 and September 30, 2015 , respectively. Rent expense was $14.7 million and $9.7 million during the nine months ended September 30, 2016 and September 30, 2015 , respectively. Rent expense is recognized using the straight-line method over the term of the lease. Inventory Purchase Commitments —Our independent contract manufacturers procure components and build our products based on our forecasts. These forecasts are based on estimates of future demand for our products, which are in turn based on historical trends and an analysis from our sales and marketing organizations, adjusted for overall market conditions. In order to reduce manufacturing lead times and plan for adequate component supply, we may issue purchase orders to some of our independent contract manufacturers which may not be cancelable. As of September 30, 2016 , we had $116.5 million of open purchase orders with our independent contract manufacturers that may not be cancelable. Other Contractual Commitments and Open Purchase Orders —In addition to commitments with contract manufacturers, we have open purchase orders and contractual obligations in the ordinary course of business for which we have not received goods or services. As of September 30, 2016 , we had $48.9 million in other contractual commitments that may not be cancelable. Warranties —Accrued warranty activities are summarized as follows (in thousands): Nine Months Ended September 30, September 30, Accrued warranty balance—beginning of the period $ 3,144 $ 4,269 Warranty costs incurred (2,260 ) (3,413 ) Provision for warranty for the period 925 3,638 Adjustment related to pre-existing warranties (279 ) (94 ) Accrued warranty balance—end of the period $ 1,530 $ 4,400 Litigation —We are involved in disputes, litigation, and other legal actions. For lawsuits where we are the defendant, we are in the process of defending these litigation matters, and while there can be no assurances and the outcome of these matters is currently not determinable, we currently believe that there are no existing claims or proceedings that are likely to have a material adverse effect on our financial position. There are many uncertainties associated with any litigation and these actions or other third-party claims against us may cause us to incur costly litigation fees, including contingent legal fees, costs and substantial settlement charges, and possibly subject us to damages and other penalties. In addition, the resolution of any intellectual property litigation may require us to make royalty payments, which could adversely affect our gross margins in future periods. If any of those events were to occur, our business, financial condition, results of operations, and cash flows could be adversely affected. The actual liability in any such matters may be materially different from our estimates, if any, which could result in the need to adjust the liability and record additional expenses. We have not recorded any significant accrual for loss contingencies associated with such legal proceedings; determined that a significant unfavorable outcome is probable or reasonably possible; or determined that the amount or range of any possible significant loss is reasonably estimable. Indemnification —Under the indemnification provisions of our standard sales contracts, we agree to defend our customers against third-party claims asserting various allegations such as product defects and infringement of certain intellectual property rights, which may include patents, copyrights, trademarks or trade secrets, and to pay judgments entered on such claims. In some contracts, our exposure under these indemnification provisions is limited by the terms of the contracts to certain defined limits, such as the total amount paid by our customer under the agreement. However, certain agreements include covenants, penalties and indemnification provisions including and beyond indemnification for third-party claims of intellectual property infringement and that could potentially expose us to losses in excess of the amount received under the agreement, and in some instances to potential liability that is not contractually limited. To date, there have been no material awards under such indemnification provisions. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY Stock-Based Compensation Plans We have stock-based compensation plans pursuant to which we have granted stock options and RSUs and PSUs. We also have an ESPP for all eligible employees. As of September 30, 2016 , there were a total of 44,406,659 shares of common stock available for grant under our stock-based compensation plans. Restricted Stock Units The activity and related information for RSUs, including PSUs, was (in thousands, except per share amounts): Restricted Stock Units Outstanding Number of Shares Weighted-Average Grant Date Fair Value per Share Balance—December 31, 2015 9,257 $ 32.97 Granted 4,867 27.54 Forfeited (1,270 ) 32.12 Vested (2,864 ) 30.37 Balance—September 30, 2016 9,990 $ 30.99 As of September 30, 2016 , total compensation expense related to unvested RSUs, including PSUs, that were granted to employees and non-employees, but not yet recognized, was $273.0 million . This expense is expected to be amortized on a straight-line basis over a weighted-average vesting period of 2.85 years. We did not grant any PSUs during the three and nine months ended September 30, 2016 . The stock-based compensation expense related to PSU awards is not material. RSUs settle into shares of common stock upon vesting. Upon the vesting of the RSUs, we net-settle the RSUs and withhold a portion of the shares to satisfy minimum statutory employee withholding taxes. Total payment for the employees’ tax obligations to the taxing authorities is reflected as a financing activity within the condensed consolidated statements of cash flows. The number of shares and amount withheld for employee taxes were (in thousands): Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Shares withheld for taxes 347 245 937 590 Amount withheld for taxes $ 12,528 $ 11,628 $ 29,886 $ 22,989 Employee Stock Options The weighted-average assumptions relating to our employee stock options were: Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Expected term in years 4.3 4.3 4.3 4.3 Volatility 38 % 37 % 42 % 38 % Risk-free interest rate 1.1 % 1.6 % 1.1 % 1.5 % Dividend rate — % — % — % — % The stock option activity and related information was (in thousands, except exercise prices and contractual life): Options Outstanding Number of Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Balance—December 31, 2015 6,968 $ 20.03 Granted 1,405 $ 25.39 Forfeited (221 ) $ 34.91 Exercised (1,750 ) $ 10.37 Balance—September 30, 2016 6,402 $ 23.33 3.22 $ 89,714 Options exercisable—September 30, 2016 4,469 $ 21.26 1.99 $ 70,864 The aggregate intrinsic value represents the pre-tax difference between the exercise price of stock options and the quoted market price of our common stock on September 30, 2016 , for all in-the-money options. As of September 30, 2016 , total compensation expense related to unvested stock options granted to employees but not yet recognized was $16.8 million . This expense is expected to be amortized on a straight-line basis over a weighted-average period of 3.0 years. Additional information related to our stock options is summarized below (in thousands, except per share amounts): Three Months Ended Nine Months Ended September 30, 2016 September 30, 2015 September 30, 2016 September 30, 2015 Weighted-average fair value per share granted $ 10.62 $ 15.89 $ 9.08 $ 13.60 Intrinsic value of options exercised $ 9,340 $ 40,132 $ 35,593 $ 103,170 Fair value of options vested $ 1,706 $ 2,491 $ 4,583 $ 9,001 Employee Stock Purchase Plan In determining the fair value of our ESPP, we use the Black-Scholes option pricing model that employs the following weighted-average assumptions: Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Expected term in years 0.5 0.5 0.5 0.5 Volatility 34 % 32 % 39 % 31 % Risk-free interest rate 0.5 % 0.2 % 0.4 % 0.1 % Dividend rate — % — % — % — % Additional information related to the ESPP is provided below (in thousands, except per share amounts): Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Weighted-average fair value per share granted $ 8.07 $ 11.42 $ 7.68 $ 8.23 Shares issued under the ESPP 537 337 1,151 764 Weighted-average price per share issued $ 21.61 $ 28.05 $ 21.01 $ 24.30 Stock-based Compensation Expense Stock-based compensation expense is included in costs and expenses as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Cost of product revenue $ 309 $ 291 $ 887 $ 641 Cost of service revenue 2,238 1,849 6,495 5,141 Research and development 7,648 6,663 22,249 17,361 Sales and marketing 17,378 13,904 50,183 34,482 General and administrative 3,520 3,612 10,528 9,376 Total stock-based compensation expense $ 31,093 $ 26,319 $ 90,342 $ 67,001 The stock-based compensation expense by award type was (in thousands): Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, RSUs $ 27,342 $ 21,996 $ 79,244 $ 53,674 Stock options 1,516 2,669 5,062 9,141 ESPP 2,235 1,654 6,036 4,186 Total stock-based compensation expense $ 31,093 $ 26,319 $ 90,342 $ 67,001 Total income tax benefit associated with stock-based compensation that is recognized in the consolidated statements of operations is as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Income tax benefit associated with stock-based compensation $ 8,223 $ 5,224 $ 22,961 $ 12,867 Share Repurchase Program In January 2016, our board of directors approved a new Share Repurchase Program (the “Program”), which authorizes the repurchase of up to $200.0 million of our outstanding common stock through December 31, 2017. Under the Program, share repurchases may be made by us from time to time in privately negotiated transactions or in open market transactions. The Program does not require us to purchase a minimum number of shares, and may be suspended, modified or discontinued at any time without prior notice. During the three and nine months ended September 30, 2016 , we repurchased 0.7 million and 2.7 million shares of common stock under the Program, respectively, in open market transactions at an average price of $36.04 and $27.82 per share, respectively, for an aggregate purchase price of $25.0 million and $75.0 million , respectively. As of September 30, 2016 , $125.0 million remained available for future share repurchases under the Program. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Our effective tax rate was 5% for the three months ended September 30, 2016 , compared to an effective tax rate of 804% for the same period last year. The effective tax rate was 2,053% for the nine months ended September 30, 2016 , compared to an effective tax rate of -165% for the same period last year. The effective tax rate for the periods presented was comprised of U.S. federal and state taxes, foreign withholding taxes and foreign income taxes. The changes in the tax provision for the periods presented were primarily due to the tax benefit from the adoption of the new accounting guidance relating to stock-based compensation. The effective tax rate for the three months ended September 30, 2016 was an expense as compared to a benefit for the same period last year. The increase in effective tax rate for the nine months ended September 30, 2016 was primarily due to additional tax benefits from the adoption of the new accounting guidance relating to stock-based compensation. As a result of the early adoption of the new guidance on stock-based compensation, we recorded income tax benefit of $2.5 million and $8.7 million during the three and nine months ended September 30, 2016, respectively. As of September 30, 2016 and December 31, 2015, unrecognized tax benefits were $64.9 million and $59.7 million , respectively. The total amount of $63.5 million in unrecognized tax benefits, if recognized, would favorably impact the effective tax rate. It is our policy to classify accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes. As of September 30, 2016 , we had accrued $8.8 million for estimated interest related to uncertain tax positions. We file income tax returns in the U.S. federal jurisdiction, and various U.S. state and foreign jurisdictions. The statute of limitations is open for years that generated state net operating loss carryforwards and after 2009 for state jurisdictions. Additionally, we have foreign net operating losses that have an indefinite life. Generally, we are no longer subject to non-U.S. income tax examinations by tax authorities for tax years prior to 2009. We are no longer subject to examination by U.S. federal tax authorities for tax years prior to 2012. We are currently under examination by U.S federal income tax authorities for the tax years 2012, 2013, and 2014. In addition, the tax authorities in France are examining the inter-company relationship between Fortinet, Inc., Fortinet France and Fortinet Singapore. We are in the early stages of this inquiry and as of yet no official audit has been opened. We are also under audit by the Japanese tax authorities for the years 2013, 2014 and 2015. We do not expect any material adjustments as a result of this audit. |
Defined Contribution Plans
Defined Contribution Plans | 9 Months Ended |
Sep. 30, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
DEFINED CONTRIBUTION PLANS | DEFINED CONTRIBUTION PLANS Our tax-deferred savings plan under our 401(k) Plan, permits participating employees to defer a portion of their pre-tax earnings. In Canada, we have a Group Registered Retirement Savings Plan program (the “RRSP”), which permits participants to make tax deductible contributions. Our board of directors approved 50% matching contributions on employee contributions up to 4% of each employee’s eligible earnings. Our matching contributions to the 401(k) Plan and RRSP for the three months ended September 30, 2016 and September 30, 2015 were $1.2 million and $0.9 million , respectively. Our matching contributions to the 401(k) Plan and RRSP during the nine months ended September 30, 2016 and September 30, 2015 were $3.4 million and $2.7 million , respectively. |
Segment and Significant Custome
Segment and Significant Customer Information | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
SEGMENT AND SIGNIFICANT CUSTOMER INFORMATION | SEGMENT AND SIGNIFICANT CUSTOMER INFORMATION Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Our chief operating decision maker is our chief executive officer. Our chief executive officer reviews financial information presented on a consolidated basis, accompanied by information about revenue by geographic region for purposes of allocating resources and evaluating financial performance. We have one business activity, and there are no segment managers who are held accountable for operations, operating results and plans for levels or components below the consolidated unit level. Accordingly, we have determined that we have one operating segment, and therefore, one reportable segment. Revenue by geographic region is based on the billing address of the customer. The following tables set forth revenue and property and equipment—net by geographic region (in thousands): Three Months Ended Nine Months Ended Revenue September 30, September 30, September 30, September 30, Americas: United States $ 83,049 $ 72,767 $ 239,417 $ 202,491 Canada 35,211 26,027 100,299 72,676 Other Americas 15,614 14,371 46,850 38,151 Total Americas 133,874 113,165 386,566 313,318 Europe, Middle East, and Africa (“EMEA”) 116,967 91,740 336,911 250,808 Asia Pacific (“APAC”) 65,805 55,163 189,136 148,613 Total revenue $ 316,646 $ 260,068 $ 912,613 $ 712,739 Property and Equipment — net September 30, December 31, Americas: United States $ 92,096 $ 61,064 Other Americas 9,872 8,972 Total Americas 101,968 70,036 EMEA: France 13,649 13,201 Other EMEA 6,199 3,977 Total EMEA 19,848 17,178 APAC 4,293 3,853 Total property and equipment—net $ 126,109 $ 91,067 The following customers, each of which is a distributor, accounted for 10% or more of our revenue: Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Exclusive Networks Group 19 % 17 % 19 % 17 % Ingram Micro 10 % * * * * Represents less than 10% The following customers, each of which is a distributor, accounted for 10% or more of net accounts receivable: September 30, December 31, Exclusive Networks Group 20 % 23 % Fine Tec Computers 12 % * Ingram 10 % * * Represents less than 10% |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2016 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The changes in accumulated balances of other comprehensive income or loss were (in thousands): September 30, 2016 Unrealized Gains/Losses on Investments Tax benefit (provision) related to items of other comprehensive income or loss Total Beginning balance at December 31, 2015 $ (1,437 ) $ 504 $ (933 ) Other comprehensive income (loss) before reclassifications 1,668 (583 ) 1,085 Amounts reclassified from accumulated other comprehensive income (loss) 2 (1 ) 1 Net current-period other comprehensive income (loss) 1,670 (584 ) 1,086 Ending balance at September 30, 2016 $ 233 $ (80 ) $ 153 The details of reclassification out of accumulated other comprehensive income (loss) were (in thousands): Nine Months Ended September 30, 2016 Details about Accumulated Other Comprehensive Income Components Amount Reclassified from Accumulated Other Comprehensive Income (Loss) Affected Line Item in the Statement Where Net Income is Presented Unrealized losses on investments $ 2 Other expense—net Tax benefit related to items of other comprehensive loss (1 ) Provision for income taxes Total reclassification for the period $ 1 |
Foreign Currency Derivatives
Foreign Currency Derivatives | 9 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
FOREIGN CURRENCY DERIVATIVES | FOREIGN CURRENCY DERIVATIVES Our sales contracts are primarily denominated in U.S. dollars and therefore substantially all of our revenue is not subject to foreign currency translation risk. However, a substantial portion of our operating expenses incurred outside the United States is denominated in foreign currencies and is subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the Canadian dollar (“CAD”), Euro (“EUR”), Great British pound (“GBP”), and Chinese yen (“CNY”). To help protect against significant fluctuations in value and the volatility of future cash flows caused by changes in currency exchange rates, we engage in foreign currency risk management activities to hedge balance sheet items denominated in CAD. We do not use these contracts for speculative or trading purposes. All of the derivative instruments are with high quality financial institutions and we monitor the creditworthiness of these parties. These contracts typically have maturities between one and three months. Changes in the fair value of forward exchange contracts related to balance sheet accounts are insignificant and are included in Other expense—net in the condensed consolidated statement of operations. As of September 30, 2016 , the fair value of the forward exchange contracts was not material. Additionally, independent of any hedging activities, fluctuations in foreign currency exchange rates may cause us to recognize transaction gains and losses in our condensed consolidated statements of operations. Our hedging activities are intended to reduce, but not eliminate, the impact of currency exchange rate movements. As our hedging activities are relatively short-term in nature and are focused on the CAD, long-term material changes in the value of the U.S. dollar against other foreign currencies, such as the EUR, GBP and CNY could adversely impact our operating expenses in the future. The notional amount of forward exchange contracts to hedge balance sheet accounts as of September 30, 2016 and December 31, 2015 were (in thousands): Buy/Sell Notional Balance Sheet Contracts: Currency—As of September 30, 2016 CAD Sell $ 4,520 Currency—As of December 31, 2015 CAD Sell $ 7,011 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS The son of one member of our board of directors is a partner of an outside law firm that we utilize for certain complex litigation matters. Expenses for legal services provided by the law firm related to matters that arose subsequent to the member joining our board of directors were not material during the three months ended September 30, 2016 and $0.9 million during the three months ended September 30, 2015 . No contingent fees were incurred during the three months ended September 30, 2016 and September 30, 2015. Expenses for legal services provided by the law firm related to matters that arose subsequent to the member joining our board of directors were $0.3 million and $3.7 million during the nine months ended September 30, 2016 and September 30, 2015 , respectively. Of such amounts, $0.5 million were incurred under contingent fee arrangements during the nine months ended September 30, 2015 . No contingent fees were incurred during the nine months ended September 30, 2016. Amounts due and payable to the law firm were $0.1 million and $5.3 million as of September 30, 2016 and December 31, 2015 , respectively. |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Event | SUBSEQUENT EVENT Share Repurchase Program In October 2016, our board of directors authorized the repurchase of up to $100.0 million of shares of our common stock under the Program, increasing our current authorization to $300.0 million through December 2017. |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Preparation | Basis of Presentation and Preparation —The unaudited condensed consolidated financial statements of Fortinet, Inc. and its wholly-owned subsidiaries (collectively, “we,” “us” or “our”) have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information, as well as the instructions to Form 10-Q pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements, and should be read in conjunction with our audited consolidated financial statements as of and for the year ended December 31, 2015, contained in our Annual Report on Form 10-K (the “Form 10-K”) filed with the SEC on February 26, 2016. In the opinion of management, all adjustments, which includes normal recurring adjustments, considered necessary for a fair presentation have been included. All intercompany balances, transactions and cash flows have been eliminated. The results of operations for the three and nine months ended September 30, 2016 are not necessarily indicative of the results for the full year or for any future periods. The condensed consolidated balance sheet as of December 31, 2015 is derived from the audited consolidated financial statements for the year ended December 31, 2015. The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. There have been no material changes to our significant accounting policies as of and for the three and nine months ended September 30, 2016 , except for changes to our policy related to stock-based compensation expense. For more information, refer to the “Recently Adopted Accounting Standards.” |
Recent Accounting Pronouncements | Recently Adopted Accounting Standards In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09—Compensation—Stock Compensation—Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”). The new guidance changes the accounting for certain aspects of stock-based payments to employees and requires excess tax benefits and tax deficiencies to be recorded in the income statement when the awards vest or are settled. In addition, cash flows related to excess tax benefits will no longer be separately classified as a financing activity apart from other income tax cash flows. The standard also allows us to repurchase more of an employee’s shares for tax withholding purposes without triggering liability accounting, clarifies that all cash payments made on an employee’s behalf for withheld shares should be presented as a financing activity on our cash flows statement, and provides an accounting policy election to account for forfeitures as they occur. We elected to early adopt the new guidance in the second quarter of 2016. The primary impact of the adoption was the recognition of excess tax benefits in our provision for income taxes rather than paid-in capital, as well as the adjustment in stock-based compensation expense as a result of our change in forfeiture policy. The new guidance eliminates the requirement to delay the recognition of excess tax benefits until it reduces current taxes payable. We adopted this change on a modified retrospective basis, and recorded unrecognized excess tax benefits of $32.4 million as a cumulative-effect adjustment, which increased retained earnings on January 1, 2016. The new guidance also requires us to record, subsequent to the adoption, excess tax benefits and tax deficiencies in the period these arise. As a result, our provision for income taxes decreased by $3.6 million during the first quarter of 2016. Under the new guidance, we have elected to change our policy and have started to recognize forfeitures of awards as they occur. The change in forfeiture policy was adopted using a modified retrospective transition method. We recorded a cumulative-effect adjustment to decrease retained earnings by $0.8 million upon transition on January 1, 2016 and a retrospective decrease of stock-based compensation of $2.0 million during the first quarter of 2016. The amendment to the minimum statutory withholding tax requirements was adopted on a modified retrospective basis. The adoption had no impact on the January 1, 2016 retained earnings. In addition, we adopted the presentation of taxes paid related to net share settlement of equity awards as a financing activity on the statement of cash flows on a retrospective basis. Our adoption had no impact to any of the periods presented in our consolidated cash flows statements since such cash flows have historically been presented as a financing activity. The adoption of ASU 2016-09 impacted our previously reported quarterly results for the three months ended March 31, 2016, as well as our weighted average shares outstanding—diluted, as follows (in thousands, except for earnings per share): Three Months Ended March 31, 2016 As Reported As Adjusted Statements of Operations: Stock-based compensation expense $ 30,881 $ 28,901 Benefit from income taxes $ (1,809 ) $ (5,376 ) Net income (loss) $ (3,429 ) $ 2,118 Net income (loss) per share—Basic $ (0.02 ) $ 0.01 Net income (loss) per share—Diluted $ (0.02 ) $ 0.01 Weighted-average shares outstanding—Diluted 171,745 174,421 March 31, 2016 As Reported As Adjusted Balance Sheets: Deferred tax assets $ 131,696 $ 167,625 Additional paid-in capital $ 718,849 $ 717,671 Retained earnings $ 23,089 $ 60,196 In September 2015, the FASB issued ASU 2015-16—Business Combinations—Simplifying the Accounting for Measurement-Period Adjustments, which eliminates the requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively. Instead, acquirers must recognize measurement-period adjustments during the period in which they determine the amounts, including the effect on earnings of any amounts they would have recorded in previous periods if the accounting had been completed at the acquisition date. We adopted ASU 2015-16 on January 1, 2016. The adoption of ASU 2015-16 has not had any impact on our consolidated financial statements. Recent Accounting Standards Not Yet Effective In October 2016, the FASB issued ASU 2016-16—Income Taxes —Intra-Entity Transfer of Assets Other Than Inventory, which requires the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. ASU 2016-06 will be effective for us beginning on January 1, 2018. We are currently evaluating the impact of adopting ASU 2016-16 on our consolidated financial statements. In August 2016, the FASB issued ASU 2016-15—Statement of Cash Flows—Classification of Certain Cash Receipts and Cash Payments, which clarifies how companies present and classify certain cash receipts and cash payments in the statement of cash flows. ASU 2016-15 is effective for us beginning on January 1, 2018. Early adoption is permitted, including adoption in an interim period. We are currently evaluating the impact of adopting ASU 2016-15 on our consolidated financial statements. In June 2016, the FASB issued ASU 2016-13—Financial Instruments—Credit Losses—Measurement of Credit Losses on Financial Instruments, which requires measurement and recognition of expected credit losses for financial assets held. ASU 2016-13 is effective for us beginning on January 1, 2020, with the option to adopt early on January 1, 2019. We are currently evaluating the impact of ASU 2016-13 will have on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02—Leases, which amends lease accounting requirements to begin recording assets and liabilities arising from leases on the balance sheet. The new guidance will also require significant additional disclosures about the amount, timing and uncertainty of cash flows from leases. This new guidance will be effective for us beginning on January 1, 2019 using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply. We expect our assets and liabilities to increase as a result of the adoption of this standard. We are currently evaluating the impact of adopting ASU 2016-02 on our consolidated financial statements. In May 2014, the FASB issued ASU 2014-09—Revenue from Contracts with Customers, which creates a single, joint revenue standard that is consistent across all industries and markets for companies that prepare their financial statements in accordance with GAAP. Under ASU 2014-09, an entity is required to recognize revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to receive in exchange for those goods or services. In July 2015, the FASB decided to delay the effective date of the new revenue standard by one year. In March 2016, the FASB issued ASU 2016-08, which clarifies the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU 2016-10, which clarifies the implementation guidance on identifying performance obligations and licensing. In May 2016, the FASB issued ASU 2016-12—Revenue from Contracts with Customers—Narrow-scope Improvements and Practical Expedients, which amends the guidance on collectability, noncash consideration, presentation of sales tax and transition. These standards will be effective for us beginning on January 1, 2018. We are currently evaluating the impact of these new standards on our consolidated financial statements. |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Effects of Adoption of New Accounting Pronouncement | The adoption of ASU 2016-09 impacted our previously reported quarterly results for the three months ended March 31, 2016, as well as our weighted average shares outstanding—diluted, as follows (in thousands, except for earnings per share): Three Months Ended March 31, 2016 As Reported As Adjusted Statements of Operations: Stock-based compensation expense $ 30,881 $ 28,901 Benefit from income taxes $ (1,809 ) $ (5,376 ) Net income (loss) $ (3,429 ) $ 2,118 Net income (loss) per share—Basic $ (0.02 ) $ 0.01 Net income (loss) per share—Diluted $ (0.02 ) $ 0.01 Weighted-average shares outstanding—Diluted 171,745 174,421 March 31, 2016 As Reported As Adjusted Balance Sheets: Deferred tax assets $ 131,696 $ 167,625 Additional paid-in capital $ 718,849 $ 717,671 Retained earnings $ 23,089 $ 60,196 |
Financial Instruments and Fai27
Financial Instruments and Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Financial Instruments and Fair Value [Abstract] | |
Summary of Investments | Our investments as of September 30, 2016 and December 31, 2015 were (in thousands): September 30, 2016 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Corporate debt securities $ 385,016 $ 425 $ (211 ) $ 385,230 Commercial paper 127,059 18 (43 ) 127,034 Municipal bonds 53,821 14 (36 ) 53,799 Certificates of deposit and term deposits (1) 4,322 — — 4,322 U.S. government and agency securities 52,686 72 (6 ) 52,752 Total available-for-sale securities $ 622,904 $ 529 $ (296 ) $ 623,137 December 31, 2015 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Corporate debt securities $ 438,533 $ 30 $ (1,369 ) $ 437,194 Commercial paper 66,263 3 (34 ) 66,232 Municipal bonds 61,050 12 (40 ) 61,022 Certificates of deposit and term deposits (1) 14,897 — — 14,897 U.S. government and agency securities 41,727 3 (42 ) 41,688 Total available-for-sale securities $ 622,470 $ 48 $ (1,485 ) $ 621,033 (1) The majority of our certificates of deposit and term deposits are foreign deposits. |
Schedule of Unrealized Loss on Investments | The gross unrealized losses and the related fair values of our investments that have been in a continuous unrealized loss position as of September 30, 2016 and December 31, 2015 were (in thousands): September 30, 2016 Less Than 12 Months 12 Months or Greater Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Corporate debt securities $ 157,390 $ (188 ) $ 37,548 $ (22 ) $ 194,938 $ (210 ) Commercial paper 19,320 (43 ) — — 19,320 (43 ) Municipal bonds 36,163 (37 ) — — 36,163 (37 ) U.S. government and agency securities 5,492 (6 ) — — 5,492 (6 ) Total available-for-sale securities $ 218,365 $ (274 ) $ 37,548 $ (22 ) $ 255,913 $ (296 ) December 31, 2015 Less Than 12 Months 12 Months or Greater Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Corporate debt securities $ 348,534 $ (1,187 ) $ 42,033 $ (182 ) $ 390,567 $ (1,369 ) Commercial paper 31,977 (34 ) — — 31,977 (34 ) Municipal bonds 41,677 (36 ) 1,008 (4 ) 42,685 (40 ) U.S. government and agency securities 34,703 (42 ) — — 34,703 (42 ) Total available-for-sale securities $ 456,891 $ (1,299 ) $ 43,041 $ (186 ) $ 499,932 $ (1,485 ) |
Investments Classified by Contractual Maturity Date | The contractual maturities of our investments as of September 30, 2016 and December 31, 2015 were (in thousands): September 30, December 31, Due within one year $ 382,909 $ 348,074 Due within one to three years 240,228 272,959 Total $ 623,137 $ 621,033 |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The fair values of our financial assets measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015 were (in thousands): September 30, 2016 December 31, 2015 Aggregate Fair Value Quoted Prices in Active Markets For Identical Assets Significant Other Observable Remaining Inputs Significant Other Unobservable Remaining Inputs Aggregate Fair Value Quoted Prices in Active Markets For Identical Assets Significant Other Observable Remaining Inputs Significant Other Unobservable Remaining Inputs (Level 1) (Level 2) (Level 3) (Level 1) (Level 2) (Level 3) Assets: Corporate debt securities $ 385,230 $ — $ 385,230 $ — $ 437,194 $ — $ 437,194 $ — Commercial paper 132,033 — 132,033 — 69,231 — 69,231 — Municipal bonds 53,799 — 53,799 — 61,022 — 61,022 — Certificates of deposit and term deposits 4,322 — 4,322 — 14,897 — 14,897 — Money market funds 21,886 21,886 — — 50,030 50,030 — — U.S. government and agency securities 52,752 42,243 10,509 — 41,688 25,693 15,995 — Total $ 650,022 $ 64,129 $ 585,893 $ — $ 674,062 $ 75,723 $ 598,339 $ — Reported as: Cash equivalents $ 26,885 $ 53,029 Short-term investments 382,909 348,074 Long-term investments 240,228 272,959 Total $ 650,022 $ 674,062 |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Inventory | Our inventory as of September 30, 2016 and December 31, 2015 consisted of (in thousands): September 30, December 31, Raw materials $ 19,690 $ 15,425 Finished goods 74,041 68,443 Inventory $ 93,731 $ 83,868 |
Property and Equipment_Net (Tab
Property and Equipment—Net (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Our property and equipment—net as of September 30, 2016 and December 31, 2015 consisted of (in thousands): September 30, December 31, Land $ 31,251 $ 21,683 Building and building improvements 44,513 28,841 Evaluation units 17,633 15,784 Computer equipment and software 62,585 45,632 Furniture and fixtures 13,127 8,901 Construction-in-progress 4,365 8,106 Leasehold improvements 16,501 11,179 Total property and equipment 189,975 140,126 Less: accumulated depreciation (63,866 ) (49,059 ) Property and equipment—net $ 126,109 $ 91,067 |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
AccelOps, Inc. [Member] | |
Business Acquisition [Line Items] | |
Schedule of Purchase Price Allocation | Total allocation of the purchase price was (in thousands): Cash and cash equivalents $ 171 Accounts receivable 1,126 Prepaid expenses and other assets 430 Property and equipment 203 Deferred tax assets 3,435 Finite-lived intangible assets 14,900 Indefinite-lived intangible assets in process research and development 1,600 Goodwill 9,861 Total assets acquired 31,726 Deferred revenue 4,400 Accounts payable and accrued liabilities 3,348 Other liabilities 1,694 Total liabilities assumed 9,442 Total purchase price allocation $ 22,284 |
Schedule of Acquired Intangible Assets | The estimated useful life and fair values of the acquired finite-lived intangible assets were as follows (in thousands, except for estimated useful life): Estimated Useful Life (in years) Fair Values Developed technologies 4 $ 12,400 Customer relationships 3 2,300 Other 2 200 Total $ 14,900 |
Meru Networks, Inc. [Member] | |
Business Acquisition [Line Items] | |
Schedule of Purchase Price Allocation | Total allocation of the purchase price was as follows (in thousands): Cash and cash equivalents $ 3,268 Accounts receivable 8,191 Inventory 11,610 Prepaid expenses and other assets 2,409 Property and equipment 920 Deferred tax assets 18,585 Finite-lived intangible assets 19,600 Goodwill 1,868 Total assets acquired 66,451 Deferred revenue 9,800 Accounts payable and accrued liabilities 14,887 Total liabilities assumed 24,687 Total purchase price allocation $ 41,764 |
Schedule of Acquired Intangible Assets | The estimated useful life and fair values of the acquired identifiable intangible assets were as follows (in thousands, except for estimated useful life): Estimated Useful Life (in years) Fair Values Customer relationships 5 $ 12,200 Developed technologies 4 7,200 Trade name 0.5 200 Total $ 19,600 |
Goodwill and Other Intangible31
Goodwill and Other Intangible Assets - Net (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Changes in the carrying amount of goodwill were (in thousands): Amount Balance—December 31, 2015 $ 4,692 Addition due to business acquisition 9,861 Balance—September 30, 2016 $ 14,553 |
Schedule of Finite-lived Intangible Assets | Other intangible assets—net as of September 30, 2016 and December 31, 2015 were (in thousands): September 30, 2016 Weighted-Average Useful Life (in Years) Gross Accumulated Amortization Net Other intangible assets—net: Finite-lived intangible assets: Customer relationships 4.7 $ 14,500 $ 4,735 $ 9,765 Developed technologies and other 3.8 23,984 7,500 16,484 38,484 12,235 26,249 Indefinite-lived intangible assets: In-process research and development 1,600 — 1,600 Total other intangible assets—net $ 40,084 $ 12,235 $ 27,849 December 31, 2015 Weighted-Average Useful Life (in Years) Gross Accumulated Amortization Net Other intangible assets—net: Customer relationships 5.0 $ 12,200 $ 1,220 $ 10,980 Developed technologies and other 3.6 11,384 4,724 6,660 Total other intangible assets—net $ 23,584 $ 5,944 $ 17,640 |
Schedule of Indefinite-lived Intangible Assets | Other intangible assets—net as of September 30, 2016 and December 31, 2015 were (in thousands): September 30, 2016 Weighted-Average Useful Life (in Years) Gross Accumulated Amortization Net Other intangible assets—net: Finite-lived intangible assets: Customer relationships 4.7 $ 14,500 $ 4,735 $ 9,765 Developed technologies and other 3.8 23,984 7,500 16,484 38,484 12,235 26,249 Indefinite-lived intangible assets: In-process research and development 1,600 — 1,600 Total other intangible assets—net $ 40,084 $ 12,235 $ 27,849 December 31, 2015 Weighted-Average Useful Life (in Years) Gross Accumulated Amortization Net Other intangible assets—net: Customer relationships 5.0 $ 12,200 $ 1,220 $ 10,980 Developed technologies and other 3.6 11,384 4,724 6,660 Total other intangible assets—net $ 23,584 $ 5,944 $ 17,640 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The following table summarizes estimated future amortization expense of Other intangible assets—net with finite lives (in thousands): Amount Years: 2016 (remainder) $ 2,798 2017 8,450 2018 7,098 2019 5,540 2020 2,363 Total $ 26,249 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | A reconciliation of the numerator and denominator used in the calculation of basic and diluted net income per share is as follows (in thousands, except per share amounts): Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Numerator: Net income $ 6,291 $ 8,169 $ 7,021 $ 10,521 Denominator: Basic shares: Weighted-average common stock outstanding-basic 173,335 171,648 172,212 169,898 Diluted shares: Weighted-average common stock outstanding-basic 173,335 171,648 172,212 169,898 Effect of potentially dilutive securities: Stock options 2,009 3,451 1,867 3,669 RSUs (including PSUs) 2,513 2,742 1,891 2,335 ESPP 81 56 76 61 Weighted-average shares used to compute diluted net income per share 177,938 177,897 176,046 175,963 Net income per share: Basic $ 0.04 $ 0.05 $ 0.04 $ 0.06 Diluted $ 0.04 $ 0.05 $ 0.04 $ 0.06 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following potentially dilutive shares of common stock were excluded from the computation of diluted net income per share for the periods presented, as their effect would have been antidilutive (in thousands): Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Stock options 836 265 1,067 271 RSUs (including PSUs) 2,409 1,331 3,946 1,026 ESPP 353 209 211 126 3,598 1,805 5,224 1,423 |
Restructuring Charges (Tables)
Restructuring Charges (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Restructuring and Related Activities [Abstract] | |
Summary of Restructuring Activity | The following table provides a summary of restructuring activity for the nine months ended September 30, 2016 (in thousands): Employee Severance and Other Benefits Contract Terminations and Other Charges Total Balance as of December 31, 2015 $ 3,689 $ 229 $ 3,918 Costs incurred 3,120 44 3,164 Less cash payments (5,060 ) (273 ) (5,333 ) Less non-cash charges (89 ) — (89 ) Balance as of September 30, 2016 $ 1,660 $ — $ 1,660 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contractual Obligation, Fiscal Year Maturity Schedule | Our future principal contractual obligations as of September 30, 2016 were (in thousands): Total 2016 (remainder) 2017 2018 2019 2020 Thereafter Operating lease commitments $ 74,107 $ 5,756 $ 17,678 $ 14,653 $ 12,359 $ 10,497 $ 13,164 Inventory purchase commitments 116,494 90,169 26,325 — — — — Other contractual commitments and open purchase orders 48,864 33,805 11,466 2,451 855 287 — Total $ 239,465 $ 129,730 $ 55,469 $ 17,104 $ 13,214 $ 10,784 $ 13,164 |
Schedule of Product Warranty Liability | Accrued warranty activities are summarized as follows (in thousands): Nine Months Ended September 30, September 30, Accrued warranty balance—beginning of the period $ 3,144 $ 4,269 Warranty costs incurred (2,260 ) (3,413 ) Provision for warranty for the period 925 3,638 Adjustment related to pre-existing warranties (279 ) (94 ) Accrued warranty balance—end of the period $ 1,530 $ 4,400 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share-based Compensation, Restricted Stock Units Award Activity | The activity and related information for RSUs, including PSUs, was (in thousands, except per share amounts): Restricted Stock Units Outstanding Number of Shares Weighted-Average Grant Date Fair Value per Share Balance—December 31, 2015 9,257 $ 32.97 Granted 4,867 27.54 Forfeited (1,270 ) 32.12 Vested (2,864 ) 30.37 Balance—September 30, 2016 9,990 $ 30.99 |
Schedule of Share-based Compensation, Shares Withheld for Taxes | The number of shares and amount withheld for employee taxes were (in thousands): Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Shares withheld for taxes 347 245 937 590 Amount withheld for taxes $ 12,528 $ 11,628 $ 29,886 $ 22,989 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The weighted-average assumptions relating to our employee stock options were: Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Expected term in years 4.3 4.3 4.3 4.3 Volatility 38 % 37 % 42 % 38 % Risk-free interest rate 1.1 % 1.6 % 1.1 % 1.5 % Dividend rate — % — % — % — % |
Schedule of Share-based Compensation, Stock Options, Activity | The stock option activity and related information was (in thousands, except exercise prices and contractual life): Options Outstanding Number of Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Balance—December 31, 2015 6,968 $ 20.03 Granted 1,405 $ 25.39 Forfeited (221 ) $ 34.91 Exercised (1,750 ) $ 10.37 Balance—September 30, 2016 6,402 $ 23.33 3.22 $ 89,714 Options exercisable—September 30, 2016 4,469 $ 21.26 1.99 $ 70,864 |
Schedule of Share-based Compensation, Stock Options, Activity, Additional Information | Additional information related to our stock options is summarized below (in thousands, except per share amounts): Three Months Ended Nine Months Ended September 30, 2016 September 30, 2015 September 30, 2016 September 30, 2015 Weighted-average fair value per share granted $ 10.62 $ 15.89 $ 9.08 $ 13.60 Intrinsic value of options exercised $ 9,340 $ 40,132 $ 35,593 $ 103,170 Fair value of options vested $ 1,706 $ 2,491 $ 4,583 $ 9,001 |
Schedule of Share-based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions | In determining the fair value of our ESPP, we use the Black-Scholes option pricing model that employs the following weighted-average assumptions: Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Expected term in years 0.5 0.5 0.5 0.5 Volatility 34 % 32 % 39 % 31 % Risk-free interest rate 0.5 % 0.2 % 0.4 % 0.1 % Dividend rate — % — % — % — % |
Schedule of Share-based Payment Award Employee Stock Purchase Plan Additional Information | Additional information related to the ESPP is provided below (in thousands, except per share amounts): Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Weighted-average fair value per share granted $ 8.07 $ 11.42 $ 7.68 $ 8.23 Shares issued under the ESPP 537 337 1,151 764 Weighted-average price per share issued $ 21.61 $ 28.05 $ 21.01 $ 24.30 |
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs | Stock-based compensation expense is included in costs and expenses as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Cost of product revenue $ 309 $ 291 $ 887 $ 641 Cost of service revenue 2,238 1,849 6,495 5,141 Research and development 7,648 6,663 22,249 17,361 Sales and marketing 17,378 13,904 50,183 34,482 General and administrative 3,520 3,612 10,528 9,376 Total stock-based compensation expense $ 31,093 $ 26,319 $ 90,342 $ 67,001 |
Schedule of Employee Service Share based Compensation Allocation of Recognized Period Costs by Award Type | The stock-based compensation expense by award type was (in thousands): Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, RSUs $ 27,342 $ 21,996 $ 79,244 $ 53,674 Stock options 1,516 2,669 5,062 9,141 ESPP 2,235 1,654 6,036 4,186 Total stock-based compensation expense $ 31,093 $ 26,319 $ 90,342 $ 67,001 |
Income Tax Benefit from Stock Option Plans | Total income tax benefit associated with stock-based compensation that is recognized in the consolidated statements of operations is as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Income tax benefit associated with stock-based compensation $ 8,223 $ 5,224 $ 22,961 $ 12,867 |
Segment and Significant Custo36
Segment and Significant Customer Information (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Revenue from external customers by geographic region | Three Months Ended Nine Months Ended Revenue September 30, September 30, September 30, September 30, Americas: United States $ 83,049 $ 72,767 $ 239,417 $ 202,491 Canada 35,211 26,027 100,299 72,676 Other Americas 15,614 14,371 46,850 38,151 Total Americas 133,874 113,165 386,566 313,318 Europe, Middle East, and Africa (“EMEA”) 116,967 91,740 336,911 250,808 Asia Pacific (“APAC”) 65,805 55,163 189,136 148,613 Total revenue $ 316,646 $ 260,068 $ 912,613 $ 712,739 |
Property and equipment by geographic region | Property and Equipment — net September 30, December 31, Americas: United States $ 92,096 $ 61,064 Other Americas 9,872 8,972 Total Americas 101,968 70,036 EMEA: France 13,649 13,201 Other EMEA 6,199 3,977 Total EMEA 19,848 17,178 APAC 4,293 3,853 Total property and equipment—net $ 126,109 $ 91,067 |
Schedule of Revenue by Major Customers | The following customers, each of which is a distributor, accounted for 10% or more of our revenue: Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Exclusive Networks Group 19 % 17 % 19 % 17 % Ingram Micro 10 % * * * |
Schedule of Accounts Receivable by Major Customers | The following customers, each of which is a distributor, accounted for 10% or more of net accounts receivable: September 30, December 31, Exclusive Networks Group 20 % 23 % Fine Tec Computers 12 % * Ingram 10 % * * Represents less than 10% |
Accumulated Other Comprehensi37
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The changes in accumulated balances of other comprehensive income or loss were (in thousands): September 30, 2016 Unrealized Gains/Losses on Investments Tax benefit (provision) related to items of other comprehensive income or loss Total Beginning balance at December 31, 2015 $ (1,437 ) $ 504 $ (933 ) Other comprehensive income (loss) before reclassifications 1,668 (583 ) 1,085 Amounts reclassified from accumulated other comprehensive income (loss) 2 (1 ) 1 Net current-period other comprehensive income (loss) 1,670 (584 ) 1,086 Ending balance at September 30, 2016 $ 233 $ (80 ) $ 153 |
Reclassification out of Accumulated Other Comprehensive Income (Loss) | The details of reclassification out of accumulated other comprehensive income (loss) were (in thousands): Nine Months Ended September 30, 2016 Details about Accumulated Other Comprehensive Income Components Amount Reclassified from Accumulated Other Comprehensive Income (Loss) Affected Line Item in the Statement Where Net Income is Presented Unrealized losses on investments $ 2 Other expense—net Tax benefit related to items of other comprehensive loss (1 ) Provision for income taxes Total reclassification for the period $ 1 |
Foreign Currency Derivatives (T
Foreign Currency Derivatives (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Notional Amounts of Outstanding Derivative Positions | The notional amount of forward exchange contracts to hedge balance sheet accounts as of September 30, 2016 and December 31, 2015 were (in thousands): Buy/Sell Notional Balance Sheet Contracts: Currency—As of September 30, 2016 CAD Sell $ 4,520 Currency—As of December 31, 2015 CAD Sell $ 7,011 |
Summary of Significant Accoun39
Summary of Significant Accounting Policies - Impact of Adoption of New Accounting Standard (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Jan. 01, 2016 | Dec. 31, 2015 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Stock-based compensation expense | $ 31,093 | $ 26,319 | $ 90,342 | $ 67,001 | |||
Benefit from income taxes | 298 | (9,329) | (7,380) | (6,552) | |||
Net income (loss) | $ 6,291 | $ 8,169 | $ 7,021 | $ 10,521 | |||
Basic income (loss) per share (in dollars per share) | $ 0.04 | $ 0.05 | $ 0.04 | $ 0.06 | |||
Diluted earnings per share (in dollars per share) | $ 0.04 | $ 0.05 | $ 0.04 | $ 0.06 | |||
Weighted-average shares used to compute diluted net income per share (in shares) | 177,938 | 177,897 | 176,046 | 175,963 | |||
Deferred Tax Assets, Net, Noncurrent | $ 189,434 | $ 189,434 | $ 119,216 | ||||
Additional paid-in capital | 779,669 | 779,669 | 687,658 | ||||
Retained earnings | 43,093 | 43,093 | $ 68,481 | ||||
Accounting Standards Update 2016-09 [Member] | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Decrease in income tax provision | $ 2,500 | $ 3,600 | $ 8,700 | ||||
Stock-based compensation expense | 28,901 | ||||||
Benefit from income taxes | (5,376) | ||||||
Net income (loss) | $ 2,118 | ||||||
Basic income (loss) per share (in dollars per share) | $ 0.01 | ||||||
Diluted earnings per share (in dollars per share) | $ 0.01 | ||||||
Weighted-average shares used to compute diluted net income per share (in shares) | 174,421 | ||||||
Deferred Tax Assets, Net, Noncurrent | $ 167,625 | ||||||
Additional paid-in capital | 717,671 | ||||||
Retained earnings | 60,196 | ||||||
Accounting Standards Update 2016-09 [Member] | Decrease [Member] | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Stock-based compensation expense | (2,000) | ||||||
Accounting Standards Update 2016-09 [Member] | As Reported [Member] | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Stock-based compensation expense | 30,881 | ||||||
Benefit from income taxes | (1,809) | ||||||
Net income (loss) | $ (3,429) | ||||||
Basic income (loss) per share (in dollars per share) | $ (0.02) | ||||||
Diluted earnings per share (in dollars per share) | $ (0.02) | ||||||
Weighted-average shares used to compute diluted net income per share (in shares) | 171,745 | ||||||
Deferred Tax Assets, Net, Noncurrent | $ 131,696 | ||||||
Additional paid-in capital | 718,849 | ||||||
Retained earnings | $ 23,089 | ||||||
Retained Earnings [Member] | Accounting Standards Update 2016-09 [Member] | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Cumulative-effect adjustment to retained earnings | $ 32,400 | ||||||
Retained Earnings [Member] | Accounting Standards Update 2016-09 [Member] | Decrease [Member] | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Cumulative-effect adjustment to retained earnings | $ 800 |
Financial Instruments and Fai40
Financial Instruments and Fair Value , Investments (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 622,904 | $ 622,470 |
Unrealized Gains | 529 | 48 |
Unrealized Losses | (296) | (1,485) |
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Less Than 12 Months, Fair Value | 218,365 | 456,891 |
Less Than 12 Months, Unrealized Losses | (274) | (1,299) |
12 Months or Greater, Fair Value | 37,548 | 43,041 |
12 Months or Greater, Unrealized Losses | (22) | (186) |
Total, Fair Value | 255,913 | 499,932 |
Total, Unrealized Losses | (296) | (1,485) |
Available-for-sale Securities, Debt Maturities, Fair Value [Abstract] | ||
Due within one year | 382,909 | 348,074 |
Due within one to three years | 240,228 | 272,959 |
Fair Value | 623,137 | 621,033 |
Corporate debt securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 385,016 | 438,533 |
Unrealized Gains | 425 | 30 |
Unrealized Losses | (211) | (1,369) |
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Less Than 12 Months, Fair Value | 157,390 | 348,534 |
Less Than 12 Months, Unrealized Losses | (188) | (1,187) |
12 Months or Greater, Fair Value | 37,548 | 42,033 |
12 Months or Greater, Unrealized Losses | (22) | (182) |
Total, Fair Value | 194,938 | 390,567 |
Total, Unrealized Losses | (210) | (1,369) |
Available-for-sale Securities, Debt Maturities, Fair Value [Abstract] | ||
Fair Value | 385,230 | 437,194 |
Commercial paper [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 127,059 | 66,263 |
Unrealized Gains | 18 | 3 |
Unrealized Losses | (43) | (34) |
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Less Than 12 Months, Fair Value | 19,320 | 31,977 |
Less Than 12 Months, Unrealized Losses | (43) | (34) |
12 Months or Greater, Fair Value | 0 | 0 |
12 Months or Greater, Unrealized Losses | 0 | 0 |
Total, Fair Value | 19,320 | 31,977 |
Total, Unrealized Losses | (43) | (34) |
Available-for-sale Securities, Debt Maturities, Fair Value [Abstract] | ||
Fair Value | 127,034 | 66,232 |
Municipal bonds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 53,821 | 61,050 |
Unrealized Gains | 14 | 12 |
Unrealized Losses | (36) | (40) |
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Less Than 12 Months, Fair Value | 36,163 | 41,677 |
Less Than 12 Months, Unrealized Losses | (37) | (36) |
12 Months or Greater, Fair Value | 0 | 1,008 |
12 Months or Greater, Unrealized Losses | 0 | (4) |
Total, Fair Value | 36,163 | 42,685 |
Total, Unrealized Losses | (37) | (40) |
Available-for-sale Securities, Debt Maturities, Fair Value [Abstract] | ||
Fair Value | 53,799 | 61,022 |
Certificates of deposit and term deposits [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 4,322 | 14,897 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Available-for-sale Securities, Debt Maturities, Fair Value [Abstract] | ||
Fair Value | 4,322 | 14,897 |
U.S. government and agency securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 52,686 | 41,727 |
Unrealized Gains | 72 | 3 |
Unrealized Losses | (6) | (42) |
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract] | ||
Less Than 12 Months, Fair Value | 5,492 | 34,703 |
Less Than 12 Months, Unrealized Losses | (6) | (42) |
12 Months or Greater, Fair Value | 0 | 0 |
12 Months or Greater, Unrealized Losses | 0 | 0 |
Total, Fair Value | 5,492 | 34,703 |
Total, Unrealized Losses | (6) | (42) |
Available-for-sale Securities, Debt Maturities, Fair Value [Abstract] | ||
Fair Value | $ 52,752 | $ 41,688 |
Financial Instruments and Fai41
Financial Instruments and Fair Value , Fair Value Measurements (Details) - Recurring [Member] - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Estimate of Fair Value [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets, Fair Value Disclosure | $ 650,022 | $ 674,062 |
Estimate of Fair Value [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets, Fair Value Disclosure | 64,129 | 75,723 |
Estimate of Fair Value [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets, Fair Value Disclosure | 585,893 | 598,339 |
Estimate of Fair Value [Member] | Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets, Fair Value Disclosure | 0 | 0 |
Estimate of Fair Value [Member] | Corporate debt securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, Fair Value Disclosure | 385,230 | 437,194 |
Estimate of Fair Value [Member] | Corporate debt securities [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, Fair Value Disclosure | 0 | 0 |
Estimate of Fair Value [Member] | Corporate debt securities [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, Fair Value Disclosure | 385,230 | 437,194 |
Estimate of Fair Value [Member] | Corporate debt securities [Member] | Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, Fair Value Disclosure | 0 | 0 |
Estimate of Fair Value [Member] | Commercial paper [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, Fair Value Disclosure | 132,033 | 69,231 |
Estimate of Fair Value [Member] | Commercial paper [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, Fair Value Disclosure | 0 | 0 |
Estimate of Fair Value [Member] | Commercial paper [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, Fair Value Disclosure | 132,033 | 69,231 |
Estimate of Fair Value [Member] | Commercial paper [Member] | Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, Fair Value Disclosure | 0 | 0 |
Estimate of Fair Value [Member] | Municipal bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, Fair Value Disclosure | 53,799 | 61,022 |
Estimate of Fair Value [Member] | Municipal bonds [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, Fair Value Disclosure | 0 | 0 |
Estimate of Fair Value [Member] | Municipal bonds [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, Fair Value Disclosure | 53,799 | 61,022 |
Estimate of Fair Value [Member] | Municipal bonds [Member] | Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, Fair Value Disclosure | 0 | 0 |
Estimate of Fair Value [Member] | Certificates of deposit and term deposits [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, Fair Value Disclosure | 4,322 | 14,897 |
Estimate of Fair Value [Member] | Certificates of deposit and term deposits [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, Fair Value Disclosure | 0 | 0 |
Estimate of Fair Value [Member] | Certificates of deposit and term deposits [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, Fair Value Disclosure | 4,322 | 14,897 |
Estimate of Fair Value [Member] | Certificates of deposit and term deposits [Member] | Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, Fair Value Disclosure | 0 | 0 |
Estimate of Fair Value [Member] | Money market funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, Fair Value Disclosure | 21,886 | 50,030 |
Estimate of Fair Value [Member] | Money market funds [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, Fair Value Disclosure | 21,886 | 50,030 |
Estimate of Fair Value [Member] | Money market funds [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, Fair Value Disclosure | 0 | 0 |
Estimate of Fair Value [Member] | Money market funds [Member] | Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, Fair Value Disclosure | 0 | 0 |
Estimate of Fair Value [Member] | U.S. government and agency securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, Fair Value Disclosure | 52,752 | 41,688 |
Estimate of Fair Value [Member] | U.S. government and agency securities [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, Fair Value Disclosure | 42,243 | 25,693 |
Estimate of Fair Value [Member] | U.S. government and agency securities [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, Fair Value Disclosure | 10,509 | 15,995 |
Estimate of Fair Value [Member] | U.S. government and agency securities [Member] | Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, Fair Value Disclosure | 0 | 0 |
Reported as [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total Assets, Fair Value Disclosure | 650,022 | 674,062 |
Reported as [Member] | Cash equivalents [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, Fair Value Disclosure | 26,885 | 53,029 |
Reported as [Member] | Short-term investments [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, Fair Value Disclosure | 382,909 | 348,074 |
Reported as [Member] | Long-term investments [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, Fair Value Disclosure | $ 240,228 | $ 272,959 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Inventory, Net [Abstract] | ||
Raw materials | $ 19,690 | $ 15,425 |
Finished goods | 74,041 | 68,443 |
Inventory | 93,731 | 83,868 |
Finished goods held by distributors | 1,400 | 1,100 |
Materials at contract manufacturers | $ 6,300 | $ 4,900 |
Property and Equipment_Net (Det
Property and Equipment—Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Property, Plant and Equipment, Net, by Type [Abstract] | |||||
Total property and equipment | $ 189,975 | $ 189,975 | $ 140,126 | ||
Less: accumulated depreciation | (63,866) | (63,866) | (49,059) | ||
Property and equipment—net | 126,109 | 126,109 | 91,067 | ||
Depreciation expense | 10,200 | $ 7,500 | 28,600 | $ 20,300 | |
Land [Member] | |||||
Property, Plant and Equipment, Net, by Type [Abstract] | |||||
Total property and equipment | 31,251 | 31,251 | 21,683 | ||
Building and building improvements [Member] | |||||
Property, Plant and Equipment, Net, by Type [Abstract] | |||||
Total property and equipment | 44,513 | 44,513 | 28,841 | ||
Evaluation units [Member] | |||||
Property, Plant and Equipment, Net, by Type [Abstract] | |||||
Total property and equipment | 17,633 | 17,633 | 15,784 | ||
Computer equipment and software [Member] | |||||
Property, Plant and Equipment, Net, by Type [Abstract] | |||||
Total property and equipment | 62,585 | 62,585 | 45,632 | ||
Furniture and fixtures [Member] | |||||
Property, Plant and Equipment, Net, by Type [Abstract] | |||||
Total property and equipment | 13,127 | 13,127 | 8,901 | ||
Construction-in-progress [Member] | |||||
Property, Plant and Equipment, Net, by Type [Abstract] | |||||
Total property and equipment | 4,365 | 4,365 | 8,106 | ||
Leasehold improvements [Member] | |||||
Property, Plant and Equipment, Net, by Type [Abstract] | |||||
Total property and equipment | $ 16,501 | $ 16,501 | $ 11,179 |
Investments in Privately-Held44
Investments in Privately-Held Companies (Details) $ in Millions | Sep. 30, 2016USD ($)privately_held_company | Dec. 31, 2015USD ($)privately_held_company |
Investments, All Other Investments [Abstract] | ||
Number of privately-held companies | privately_held_company | 3 | 3 |
Investments in equity securities of privately-held companies | $ | $ 10.3 | $ 10.3 |
Business Combinations , Additio
Business Combinations , Additional Information (Details) - USD ($) $ in Thousands | Jun. 07, 2016 | Jul. 08, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 |
Business Acquisition [Line Items] | |||||
Cash consideration paid, net of cash received | $ 22,087 | $ 38,025 | |||
Goodwill | $ 14,553 | $ 4,692 | |||
AccelOps, Inc. [Member] | |||||
Business Acquisition [Line Items] | |||||
Total cash consideration | $ 22,100 | ||||
Total purchase price | 22,284 | ||||
Contingent obligation (up to) | 4,000 | ||||
Goodwill | 9,861 | ||||
Meru Networks, Inc. [Member] | |||||
Business Acquisition [Line Items] | |||||
Cash consideration paid, net of cash received | $ 40,900 | ||||
Total purchase price | 41,764 | ||||
Withholding tax liability | 400 | ||||
Estimated fair value of earned equity awards assumed by Fortinet | 500 | ||||
Goodwill | 1,868 | ||||
General and administrative [Member] | AccelOps, Inc. [Member] | |||||
Business Acquisition [Line Items] | |||||
Acquisition-related costs | $ 300 | ||||
General and administrative [Member] | Meru Networks, Inc. [Member] | |||||
Business Acquisition [Line Items] | |||||
Acquisition-related costs | $ 1,700 | ||||
Restricted Stock Units (RSUs) [Member] | Meru Networks, Inc. [Member] | |||||
Business Acquisition [Line Items] | |||||
Fortinet RSUs issued for conversion of Meru RSUs (shares) | 53,401 |
Business Combinations , Purchas
Business Combinations , Purchase Price Allocations (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Jun. 07, 2016 | Dec. 31, 2015 | Jul. 08, 2015 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 14,553 | $ 4,692 | ||
AccelOps, Inc. [Member] | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | $ 171 | |||
Accounts receivable | 1,126 | |||
Prepaid expenses and other assets | 430 | |||
Property and equipment | 203 | |||
Deferred tax assets | 3,435 | |||
Finite-lived intangible assets | 14,900 | |||
Indefinite-lived intangible assets in process research and development | 1,600 | |||
Goodwill | 9,861 | |||
Total assets acquired | 31,726 | |||
Deferred revenue | 4,400 | |||
Accounts payable and accrued liabilities | 3,348 | |||
Other liabilities | 1,694 | |||
Total liabilities assumed | 9,442 | |||
Total purchase price allocation | $ 22,284 | |||
Meru Networks, Inc. [Member] | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | $ 3,268 | |||
Accounts receivable | 8,191 | |||
Inventory | 11,610 | |||
Prepaid expenses and other assets | 2,409 | |||
Property and equipment | 920 | |||
Deferred tax assets | 18,585 | |||
Finite-lived intangible assets | 19,600 | |||
Goodwill | 1,868 | |||
Total assets acquired | 66,451 | |||
Deferred revenue | 9,800 | |||
Accounts payable and accrued liabilities | 14,887 | |||
Total liabilities assumed | 24,687 | |||
Total purchase price allocation | $ 41,764 |
Business Combinations , Intangi
Business Combinations , Intangible Assets Acquired (Details) - USD ($) $ in Thousands | Jun. 07, 2016 | Jul. 08, 2015 |
AccelOps, Inc. [Member] | ||
Business Acquisition [Line Items] | ||
Fair values | $ 14,900 | |
Meru Networks, Inc. [Member] | ||
Business Acquisition [Line Items] | ||
Fair values | $ 19,600 | |
Developed Technologies [Member] | AccelOps, Inc. [Member] | ||
Business Acquisition [Line Items] | ||
Estimated useful life | 4 years | |
Fair values | $ 12,400 | |
Developed Technologies [Member] | Meru Networks, Inc. [Member] | ||
Business Acquisition [Line Items] | ||
Estimated useful life | 4 years | |
Fair values | $ 7,200 | |
Customer Relationships [Member] | AccelOps, Inc. [Member] | ||
Business Acquisition [Line Items] | ||
Estimated useful life | 3 years | |
Fair values | $ 2,300 | |
Customer Relationships [Member] | Meru Networks, Inc. [Member] | ||
Business Acquisition [Line Items] | ||
Estimated useful life | 5 years | |
Fair values | $ 12,200 | |
Other Intangible Assets [Member] | AccelOps, Inc. [Member] | ||
Business Acquisition [Line Items] | ||
Estimated useful life | 2 years | |
Fair values | $ 200 | |
Trade Name [Member] | Meru Networks, Inc. [Member] | ||
Business Acquisition [Line Items] | ||
Estimated useful life | 6 months | |
Fair values | $ 200 |
Goodwill and Other Intangible48
Goodwill and Other Intangible Assets - Net - Changes in Carrying Amount of Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Goodwill [Roll Forward] | |
Balance—December 31, 2015 | $ 4,692 |
Addition due to business acquisition | 9,861 |
Balance—September 30, 2016 | $ 14,553 |
Goodwill and Other Intangible49
Goodwill and Other Intangible Assets - Net (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Intangible Assets [Line Items] | |||||
Goodwill | $ 14,553,000 | $ 14,553,000 | $ 4,692,000 | ||
Impairments to goodwill | 0 | 0 | |||
Intangible Assets [Abstract] | |||||
Gross | 38,484,000 | 38,484,000 | 23,584,000 | ||
Accumulated Amortization | 12,235,000 | 12,235,000 | 5,944,000 | ||
Total | 26,249,000 | 26,249,000 | 17,640,000 | ||
Intangible Assets [Abstract] | |||||
Total other intangible assets - gross | 40,084,000 | 40,084,000 | |||
Total other intangible assets - net | 27,849,000 | 27,849,000 | $ 17,640,000 | ||
Amortization expense | 2,800,000 | $ 1,300,000 | $ 6,300,000 | $ 1,900,000 | |
Customer Relationships [Member] | |||||
Intangible Assets [Line Items] | |||||
Weighted average useful life | 4 years 8 months 5 days | 5 years | |||
Intangible Assets [Abstract] | |||||
Gross | 14,500,000 | $ 14,500,000 | $ 12,200,000 | ||
Accumulated Amortization | 4,735,000 | 4,735,000 | 1,220,000 | ||
Total | 9,765,000 | $ 9,765,000 | $ 10,980,000 | ||
Developed Technology [Member] | |||||
Intangible Assets [Line Items] | |||||
Weighted average useful life | 3 years 9 months 11 days | 3 years 7 months 21 days | |||
Intangible Assets [Abstract] | |||||
Gross | 23,984,000 | $ 23,984,000 | $ 11,384,000 | ||
Accumulated Amortization | 7,500,000 | 7,500,000 | 4,724,000 | ||
Total | 16,484,000 | 16,484,000 | $ 6,660,000 | ||
In-process Research and Development [Member] | |||||
Intangible Assets [Abstract] | |||||
Indefinite-Lived Intangible Assets (Excluding Goodwill) | $ 1,600,000 | $ 1,600,000 |
Goodwill and Other Intangible50
Goodwill and Other Intangible Assets - Net - Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Fiscal Years: | ||
2016 (remainder) | $ 2,798 | |
2,017 | 8,450 | |
2,018 | 7,098 | |
2,019 | 5,540 | |
2,020 | 2,363 | |
Total | $ 26,249 | $ 17,640 |
Net Income Per Share , Calculat
Net Income Per Share , Calculation of Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Earnings Per Share [Line Items] | ||||
Net income | $ 6,291 | $ 8,169 | $ 7,021 | $ 10,521 |
Basic shares: | ||||
Weighted-average common shares outstanding-basic (in shares) | 173,335 | 171,648 | 172,212 | 169,898 |
Diluted shares: | ||||
Weighted-average common shares outstanding-basic (in shares) | 173,335 | 171,648 | 172,212 | 169,898 |
Effect of potentially dilutive securities: | ||||
Weighted-average shares used to compute diluted net income per share (in shares) | 177,938 | 177,897 | 176,046 | 175,963 |
Net income per share: | ||||
Basic (in dollars per share) | $ 0.04 | $ 0.05 | $ 0.04 | $ 0.06 |
Diluted (in dollars per share) | $ 0.04 | $ 0.05 | $ 0.04 | $ 0.06 |
Stock Options [Member] | ||||
Effect of potentially dilutive securities: | ||||
Potentially dilutive securities (in shares) | 2,009 | 3,451 | 1,867 | 3,669 |
RSUs (including PSUs) [Member] | ||||
Effect of potentially dilutive securities: | ||||
Potentially dilutive securities (in shares) | 2,513 | 2,742 | 1,891 | 2,335 |
ESPP [Member] | ||||
Effect of potentially dilutive securities: | ||||
Potentially dilutive securities (in shares) | 81 | 56 | 76 | 61 |
Net Income Per Share , Anti Dil
Net Income Per Share , Anti Dilutive Securities (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities (in shares) | 3,598 | 1,805 | 5,224 | 1,423 |
Stock Options [Member] | Stock Compensation Plan [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities (in shares) | 836 | 265 | 1,067 | 271 |
RSUs (including PSUs) [Member] | Stock Compensation Plan [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities (in shares) | 2,409 | 1,331 | 3,946 | 1,026 |
ESPP [Member] | Stock Compensation Plan [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities (in shares) | 353 | 209 | 211 | 126 |
Restructuring Charges , Restruc
Restructuring Charges , Restructuring Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Restructuring Cost and Reserve [Line Items] | ||||
Balance, beginning | $ 3,918 | |||
Costs incurred | $ 2,283 | $ 5,883 | 3,164 | $ 5,883 |
Less cash payments | (5,333) | |||
Less non-cash charges | (89) | |||
Balance, ending | 1,660 | 1,660 | ||
Employee Severance and Other Benefits [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Balance, beginning | 3,689 | |||
Costs incurred | 3,120 | |||
Less cash payments | (5,060) | |||
Less non-cash charges | (89) | |||
Balance, ending | 1,660 | 1,660 | ||
Contract Terminations and Other Charges [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Balance, beginning | 229 | |||
Costs incurred | 44 | |||
Less cash payments | (273) | |||
Less non-cash charges | 0 | |||
Balance, ending | $ 0 | $ 0 |
Restructuring Charges , Additio
Restructuring Charges , Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring reserve | $ 1,660 | $ 1,660 | $ 3,918 | ||
Costs incurred | 2,283 | $ 5,883 | 3,164 | $ 5,883 | |
2015 Meru Restructuring [Member] | Accrued Liabilities [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring reserve | 1,100 | 1,100 | |||
2015 Meru Restructuring [Member] | Meru Networks, Inc. [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges incurred to date | 7,900 | 7,900 | |||
Costs incurred | 100 | 300 | |||
2016 Restructuring [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges expected | 4,100 | 4,100 | |||
Costs incurred | 2,200 | 2,900 | |||
2016 Restructuring [Member] | Accrued Liabilities [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring reserve | $ 600 | $ 600 |
Commitments and Contingencies55
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Rent expense | $ 6,100 | $ 3,700 | $ 14,700 | $ 9,700 |
Inventory purchase commitments | 116,494 | 116,494 | ||
Other contractual commitments and open purchase orders | $ 48,864 | $ 48,864 |
Commitments and Contingencies M
Commitments and Contingencies Minimum Operating Lease Payments (Details) $ in Thousands | Sep. 30, 2016USD ($) |
Operating Lease Commitments: | |
Operating lease commitments, 2016 (remainder) | $ 5,756 |
Operating lease commitments, 2017 | 17,678 |
Operating lease commitments, 2018 | 14,653 |
Operating lease commitments, 2019 | 12,359 |
Operating lease commitments, 2020 | 10,497 |
Operating lease commitments, Thereafter | 13,164 |
Operating lease commitments | 74,107 |
Inventory purchase commitments: | |
Inventory purchase commitments, 2016 (remainder) | 90,169 |
Inventory purchase commitments, 2017 | 26,325 |
Inventory purchase commitments, 2018 | 0 |
Inventory purchase commitments, 2019 | 0 |
Inventory purchase commitments, 2020 | 0 |
Inventory purchase commitments, Thereafter | 0 |
Inventory purchase commitments | 116,494 |
Other contractual commitments and open purchase orders: | |
Other contractual commitments and open purchase orders, 2016 (remainder) | 33,805 |
Other contractual commitments and open purchase orders, 2017 | 11,466 |
Other contractual commitments and open purchase orders, 2018 | 2,451 |
Other contractual commitments and open purchase orders, 2019 | 855 |
Other contractual commitments and open purchase orders, 2020 | 287 |
Other contractual commitments and open purchase orders, Thereafter | 0 |
Other contractual commitments and open purchase orders | 48,864 |
Contractual Obligation, 2016 (remainder) | 129,730 |
Contractual Obligation, 2017 | 55,469 |
Contractual Obligation, 2018 | 17,104 |
Contractual Obligation, 2019 | 13,214 |
Contractual Obligation, 2020 | 10,784 |
Contractual Obligation, Thereafter | 13,164 |
Contractual Obligation | $ 239,465 |
Commitments and Contingencies -
Commitments and Contingencies - Warranties (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Accrued warranty balance—beginning of the period | $ 3,144 | $ 4,269 |
Warranty costs incurred | (2,260) | (3,413) |
Provision for warranty for the period | 925 | 3,638 |
Adjustment related to pre-existing warranties | (279) | (94) |
Accrued warranty balance—end of the period | $ 1,530 | $ 4,400 |
Stockholders' Equity - Stock-ba
Stockholders' Equity - Stock-based Compensation Plan (Details) | Sep. 30, 2016shares |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Remaining shares available for grant under the plans | 44,406,659 |
Stockholders' Equity - Restrict
Stockholders' Equity - Restricted Stock Units Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ||||
Amount withheld for taxes | $ 29,886 | $ 22,989 | ||
Restricted Stock Units (RSUs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||
Balance, beginning | 9,257,000 | |||
Granted | 4,867,000 | |||
Forfeited | (1,270,000) | |||
Vested | (2,864,000) | |||
Balance, ending | 9,990,000 | 9,990,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ||||
Balance, weighted-average grant-date fair value per share (in dollars per share)—beginning | $ 32.97 | |||
Granted, weighted-average grant-date fair value per share (in dollars per share) | 27.54 | |||
Forfeited, weighted-average grant-date fair value per share (in dollars per share) | 32.12 | |||
Vested, weighted-average grant-date fair value per share (in dollars per share) | 30.37 | |||
Balance, weighted-average grant-date fair value per share (in dollars per share)—ending | $ 30.99 | $ 30.99 | ||
Compensation cost not yet recognized | $ 273,000 | $ 273,000 | ||
Compensation cost not yet recognized period of recognition | 2 years 10 months 6 days | |||
Shares withheld for taxes | 347,000 | 245,000 | 937,000 | 590,000 |
Amount withheld for taxes | $ 12,528 | $ 11,628 | $ 29,886 | $ 22,989 |
Performance Stock Units (PSUs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||
Granted | 0 | 0 |
Stockholders' Equity - Employee
Stockholders' Equity - Employee Stock Options Activity (Details) - Stock Options [Member] - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||||
Expected term in years | 4 years 3 months 29 days | 4 years 3 months 18 days | 4 years 3 months 29 days | 4 years 3 months 18 days |
Volatility | 38.00% | 37.00% | 42.00% | 38.00% |
Risk-free interest rate | 1.10% | 1.60% | 1.10% | 1.50% |
Dividend rate | 0.00% | 0.00% | 0.00% | 0.00% |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||||
Balance - Beginning (in shares) | 6,968 | |||
Granted (in shares) | 1,405 | |||
Forfeited (in shares) | (221) | |||
Exercised (in shares) | (1,750) | |||
Balance - Ending (in shares) | 6,402 | 6,402 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||||
Balance - Beginning (in dollars per share) | $ 20.03 | |||
Granted (in dollars per share) | 25.39 | |||
Forfeited (in dollars per share) | 34.91 | |||
Exercised (in dollars per share) | 10.37 | |||
Balance - Ending (in dollars per share) | $ 23.33 | $ 23.33 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||||
Options outstanding, Weighted average remaining contractual life (in years) | 3 years 2 months 19 days | |||
Options outstanding, Aggregate intrinsic value | $ 89,714 | $ 89,714 | ||
Options exercisable, Outstanding (in shares) | 4,469 | 4,469 | ||
Options exercisable, Weighted average exercise price (in dollars per share) | $ 21.26 | $ 21.26 | ||
Options exercisable, Weighted average remaining contractual life (in years) | 1 year 11 months 27 days | |||
Options exercisable, Aggregate intrinsic value | $ 70,864 | $ 70,864 | ||
Compensation cost not yet recognized | $ 16,800 | $ 16,800 | ||
Compensation cost not yet recognized period of recognition | 2 years 11 months 30 days | |||
Weighted-average fair value per share granted | $ 10.62 | $ 15.89 | $ 9.08 | $ 13.60 |
Intrinsic value of options exercised | $ 9,340 | $ 40,132 | $ 35,593 | $ 103,170 |
Total fair value of awards vested | $ 1,706 | $ 2,491 | $ 4,583 | $ 9,001 |
Stockholders' Equity - ESPP Inf
Stockholders' Equity - ESPP Information (Details) - Employee Stock Purchase Plan [Member] - $ / shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected term in years | 6 months | 6 months | 6 months | 6 months |
Volatility | 34.00% | 32.00% | 39.00% | 31.00% |
Risk-free interest rate | 0.50% | 0.20% | 0.40% | 0.10% |
Dividend rate | 0.00% | 0.00% | 0.00% | 0.00% |
Weighted-average fair value per share granted (in dollars per share) | $ 8.07 | $ 11.42 | $ 7.68 | $ 8.23 |
Shares issued under the ESPP (in shares) | 537 | 337 | 1,151 | 764 |
Weighted-average price per share issued (in dollars per share) | $ 21.61 | $ 28.05 | $ 21.01 | $ 24.30 |
Stockholders' Equity - Allocati
Stockholders' Equity - Allocation of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | $ 31,093 | $ 26,319 | $ 90,342 | $ 67,001 |
Income tax benefit associated with stock-based compensation | 8,223 | 5,224 | 22,961 | 12,867 |
Cost of product revenue [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 309 | 291 | 887 | 641 |
Cost of service revenue [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 2,238 | 1,849 | 6,495 | 5,141 |
Research and development [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 7,648 | 6,663 | 22,249 | 17,361 |
Selling and marketing [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 17,378 | 13,904 | 50,183 | 34,482 |
General and administrative [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 3,520 | 3,612 | 10,528 | 9,376 |
RSUs [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 27,342 | 21,996 | 79,244 | 53,674 |
Stock Options [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 1,516 | 2,669 | 5,062 | 9,141 |
ESPP [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | $ 2,235 | $ 1,654 | $ 6,036 | $ 4,186 |
Stockholders' Equity - Share Re
Stockholders' Equity - Share Repurchase Program (Details) - Share Repurchase Program [Member] - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2016 | Jan. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock repurchase program, authorized amount | $ 200,000,000 | ||
Stock repurchased in the period, shares | 693,000 | 2,700,000 | |
Stock repurchased in the period, average price, per share (in dollars per share) | $ 36.04 | $ 27.82 | |
Stock repurchased in the period, value | $ 25,000,000 | $ 75,000,000 | |
Stock repurchase program, unused balance | $ 125,000,000 | $ 125,000,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Effective income tax rate (percent) | 5.00% | 804.00% | 2053.00% | (165.00%) | ||
Unrecognized tax benefits | $ 64.9 | $ 64.9 | $ 59.7 | |||
Unrecognized tax benefits that would favoraby affect effective tax rate | 63.5 | 63.5 | ||||
Accrued estimated interest related to uncertain tax positions | 8.8 | 8.8 | ||||
Accounting Standards Update 2016-09 [Member] | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Decrease in income tax provision | $ 2.5 | $ 3.6 | $ 8.7 |
Defined Contribution Plans (Det
Defined Contribution Plans (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Compensation and Retirement Disclosure [Abstract] | ||||
Matching contribution on employee contributions, Percent | 50.00% | 50.00% | 50.00% | 50.00% |
Maximum contribution percentage of each employee's eligible earnings, Percent | 4.00% | 4.00% | 4.00% | 4.00% |
Matching contributions to the 401(k) and RRSP Plans | $ 1.2 | $ 0.9 | $ 3.4 | $ 2.7 |
Segment and Significant Custo66
Segment and Significant Customer Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)Segment_Managersbusiness_activityoperating_segmentreportable_segment | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($) | |
Segment Reporting Information [Line Items] | |||||
Business activity (in business activities) | business_activity | 1 | ||||
Segment managers responsible for operations (in segment managers) | Segment_Managers | 0 | ||||
Number of operating segments (in operating segments) | operating_segment | 1 | ||||
Number of reportable segments (in reportable segments) | reportable_segment | 1 | ||||
Revenue | $ 316,646 | $ 260,068 | $ 912,613 | $ 712,739 | |
Property and equipment - net | 126,109 | 126,109 | $ 91,067 | ||
Americas [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 133,874 | 113,165 | 386,566 | 313,318 | |
Property and equipment - net | 101,968 | 101,968 | 70,036 | ||
United States | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 83,049 | 72,767 | 239,417 | 202,491 | |
Property and equipment - net | 92,096 | 92,096 | 61,064 | ||
Canada [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 35,211 | 26,027 | 100,299 | 72,676 | |
Other Americas [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 15,614 | 14,371 | 46,850 | 38,151 | |
Property and equipment - net | 9,872 | 9,872 | 8,972 | ||
EMEA [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 116,967 | 91,740 | 336,911 | 250,808 | |
Property and equipment - net | 19,848 | 19,848 | 17,178 | ||
France [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Property and equipment - net | 13,649 | 13,649 | 13,201 | ||
Other EMEA [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Property and equipment - net | 6,199 | 6,199 | 3,977 | ||
APAC [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 65,805 | $ 55,163 | 189,136 | $ 148,613 | |
Property and equipment - net | $ 4,293 | $ 4,293 | $ 3,853 |
Segment and Significant Custo67
Segment and Significant Customer Information , Significant Customers (Details) - Customer Concentration Risk [Member] | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Exclusive Networks Group [Member] | Revenue [Member] | ||||
Customer Concentration [Line Items] | ||||
Concentration Risk, Percentage | 19.00% | 17.00% | 19.00% | 17.00% |
Exclusive Networks Group [Member] | Accounts Receivable [Member] | ||||
Customer Concentration [Line Items] | ||||
Concentration Risk, Percentage | 20.00% | 23.00% | ||
FineTec Computers [Member] | Accounts Receivable [Member] | ||||
Customer Concentration [Line Items] | ||||
Concentration Risk, Percentage | 12.00% | |||
Ingram [Member] | Revenue [Member] | ||||
Customer Concentration [Line Items] | ||||
Concentration Risk, Percentage | 10.00% | |||
Ingram [Member] | Accounts Receivable [Member] | ||||
Customer Concentration [Line Items] | ||||
Concentration Risk, Percentage | 10.00% |
Accumulated Other Comprehensi68
Accumulated Other Comprehensive Income (Loss) (Changes in Accumulated Balances of Other Comprehensive Income)(Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Accumulated Other Comprehensive (Loss) Income [Roll Forward] | |
Beginning balance at December 31, 2015 | $ (933) |
Other comprehensive income (loss) before reclassifications | 1,085 |
Amounts reclassified from accumulated other comprehensive income (loss) | 1 |
Net current-period other comprehensive income (loss) | 1,086 |
Ending balance at September 30, 2016 | 153 |
Tax Benefit (Provision) Related to Items of Other Comprehensive Income (Loss) [Roll Forward] | |
Beginning balance at December 31, 2015, tax | 504 |
Other comprehensive income before reclassifications, tax | (583) |
Amounts reclassified from accumulated other comprehensive income, tax | (1) |
Net current-period other comprehensive income, tax | (584) |
Ending balance at September 30, 2016, tax | (80) |
Unrealized Gains and Losses on Investments [Member] | |
Accumulated Other Comprehensive (Loss) Income [Roll Forward] | |
Beginning balance at December 31, 2015 | (1,437) |
Other comprehensive income (loss) before reclassifications | 1,668 |
Amounts reclassified from accumulated other comprehensive income (loss) | 2 |
Net current-period other comprehensive income (loss) | 1,670 |
Ending balance at September 30, 2016 | $ 233 |
Accumulated Other Comprehensi69
Accumulated Other Comprehensive Income (Loss) (Reclassification Out of Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
OTHER EXPENSE—net | $ (787) | $ (653) | $ (3,449) | $ (2,160) |
Provision for income taxes | (298) | 9,329 | 7,380 | 6,552 |
Net income (loss) | $ 6,291 | $ 8,169 | 7,021 | $ 10,521 |
Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Provision for income taxes | (1) | |||
Net income (loss) | 1 | |||
Unrealized losses on investments [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
OTHER EXPENSE—net | $ 2 |
Foreign Currency Derivatives (D
Foreign Currency Derivatives (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
CAD [Member] | Sell [Member] | ||
Derivative [Line Items] | ||
Notional amount of foreign exchange contracts | $ 4,520 | $ 7,011 |
Minimum [Member] | ||
Derivative [Line Items] | ||
Derivative, term of contract | 1 month | |
Maximum [Member] | ||
Derivative [Line Items] | ||
Derivative, term of contract | 3 months |
Related Party Transactions (Det
Related Party Transactions (Details) - Law Firm where Board Member's Son is a Partner [Member] - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | |||||
Expenses for legal services | $ 900,000 | $ 300,000 | $ 3,700,000 | ||
Amounts due and payable to the law firm | $ 100,000 | 100,000 | $ 5,300,000 | ||
Contingency Fee Arrangement [Member] | |||||
Related Party Transaction [Line Items] | |||||
Expenses for legal services | $ 0 | $ 0 | $ 0 | $ 500,000 |
Subsequent Event (Details)
Subsequent Event (Details) - Share Repurchase Program [Member] - USD ($) | Oct. 31, 2016 | Jan. 31, 2016 |
Subsequent Event [Line Items] | ||
Stock repurchase program, authorized amount | $ 200,000,000 | |
Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Stock repurchase program, additional authorized amount | $ 100,000,000 | |
Stock repurchase program, authorized amount | $ 300,000,000 |