Penumbra (PEN) 10-Q 9 May 16 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information Document - shares	3 Months Ended
	Mar. 31, 2016	Apr. 15, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	Penumbra Inc
Entity Central Index Key	1,321,732
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Document Type	10-Q
Document Period End Date	Mar. 31, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding		30,701,971

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 17,606	$ 19,547
Marketable investments	126,813	129,257
Accounts receivable, net of doubtful accounts of $600 and $589 at March 31, 2016 and December 31, 2015, respectively	31,156	29,444
Inventories	66,564	56,761
Prepaid expenses and other current assets	11,512	9,352
Total current assets	253,651	244,361
Property and equipment, net	9,717	8,951
Deferred taxes	11,318	10,143
Other non-current assets	435	393
Total assets	275,121	263,848
Current Liabilities:
Accounts payable	4,022	2,567
Accrued liabilities	29,957	25,581
Total current liabilities	33,979	28,148
Other non-current liabilities	3,094	3,178
Total liabilities	$ 37,073	$ 31,326
Commitments and contingencies
Stockholders’ Equity:
Common stock	$ 30	$ 30
Additional paid-in capital	255,499	252,087
Notes receivable from stockholders	0	(5)
Accumulated other comprehensive loss	(786)	(2,115)
Accumulated deficit	(16,695)	(17,475)
Total stockholders’ equity	238,048	232,522
Total liabilities and stockholders’ equity	$ 275,121	$ 263,848

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 600	$ 589	$ 602

Condensed Consolidated Statemen

Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Statement [Abstract]
Revenue	$ 57,919	$ 38,952
Cost of revenue	18,014	12,224
Gross profit	39,905	26,728
Operating expenses:
Research and development	5,001	3,191
Sales, general and administrative	33,069	19,547
Total operating expenses	38,070	22,738
Income from operations	1,835	3,990
Interest income (expense), net	510	208
Other income (expense), net	(224)	44
Income before provision for income taxes	2,121	4,242
Provision for income taxes	1,341	1,740
Net income	780	2,502
Foreign currency translation adjustments, net of tax	1,048	(916)
Unrealized gains on available-for-sale securities, net of tax	281	27
Comprehensive income	2,109	1,613
Net income attributable to common stockholders	$ 780	$ 503
Net income per share attributable to common stockholders — Basic (in dollars per share)	$ 0.03	$ 0.10
Net income per share attributable to common stockholders — Diluted (in dollars per share)	$ 0.02	$ 0.07
Weighted average shares used to compute net income per share attributable to common stockholders — Basic (in shares)	29,990,006	4,903,535
Weighted average shares used to compute net income attributable to common stockholders —Diluted (in shares)	32,486,516	7,193,452

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 780	$ 2,502
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization	538	338
Amortization of premium on marketable investments	189	0
Stock-based compensation	3,015	355
Excess tax benefit from stock-based compensation	(1,510)	0
Provision for doubtful accounts	11	(151)
Inventory write downs	317	0
Write off of note receivable	0	85
Provision for sales returns	262	44
Loss on disposal of property and equipment	11	0
Provision (release) for product warranty	(215)	61
Deferred taxes	1,329	(82)
Changes in operating assets and liabilities:
Accounts receivable	(1,343)	(2,933)
Inventories	(9,083)	(7,057)
Prepaid expenses and other current and non-current assets	(3,248)	923
Accounts payable	1,350	1,644
Accrued expenses and other non-current liabilities	4,013	1,609
Net cash used in operating activities	(3,584)	(2,662)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of marketable investments	(9,531)	(2,411)
Proceeds from sales of marketable investments	500	11,249
Proceeds from maturities of marketable investments	11,750	0
Purchases of property and equipment	(1,115)	(1,298)
Net cash provided by investing activities	1,604	7,540
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercises of stock options	129	326
Excess tax benefit from stock-based compensation	1,510	0
Payment of employee taxes related to vested restricted stock	(1,642)	0
Net cash provided by (used in) financing activities	(3)	326
Effect of foreign exchange rate changes on cash and cash equivalents	42	(362)
Net Increase (Decrease) In Cash And Cash Equivalents	(1,941)	4,842
CASH AND CASH EQUIVALENTS—Beginning of period	19,547	3,290
CASH AND CASH EQUIVALENTS—End of period	17,606	8,132
NONCASH INVESTING AND FINANCING ACTIVITIES:
Purchase of property and equipment funded through accounts payable and accrued liabilities	$ 334	$ 685

Organization and Description of

Organization and Description of Business	3 Months Ended
	Mar. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization and Description of Business	Organization and Description of Business Penumbra, Inc. (the “Company”) is a global interventional therapies company that designs, develops, manufactures and markets innovative medical devices. The Company has a broad portfolio of products that addresses challenging medical conditions and significant clinical needs across two major markets, neuro and peripheral vascular. The conditions that the Company’s products address include, among others, ischemic stroke, hemorrhagic stroke and various peripheral vascular conditions that can be treated through thrombectomy and embolization procedures.

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2016
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Summary of Significant Accounting Policies Basis of Presentation and Consolidation The accompanying condensed consolidated balance sheet as of March 31, 2016 , the condensed consolidated statements of income for the three months ended March 31, 2016 and 2015 , and the condensed consolidated statements of cash flows for the three months ended March 31, 2016 and 2015 are unaudited. The unaudited condensed consolidated financial statements included herein have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. The December 31, 2015 condensed consolidated balance sheet was derived from the audited financial statements as of that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to state fairly the Company’s financial position as of March 31, 2016 , the results of its operations for the three months ended March 31, 2016 and 2015 , and the cash flows for the three months ended March 31, 2016 and 2015 . The results for the three months ended March 31, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016 or for any other future annual or interim period. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2015 included in the Company ’ s Annual Report on Form 10-K. There have been no changes to the Company’s critical accounting policies during the three months ended March 31, 2016, as compared to the critical accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 . The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and equity accounts; disclosure of contingent assets and liabilities at the date of the financial statements; and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates, including those related to marketable investments, provisions for doubtful accounts, sales return reserve, warranty reserves, valuation of inventories, useful lives of property and equipment, income taxes, and contingencies, among others. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other data. Actual results could differ from those estimates. Segments The Company determined its operating segment on the same basis that it uses to evaluate its performance internally. The Company has one business activity: the design, development, manufacturing and marketing of innovative medical devices, and operates as one operating segment. The Company’s chief operating decision-maker, its Chief Executive Officer, reviews its operating results for the purpose of allocating resources and evaluating financial performance. The Company determines revenue by geographic area, based on the destination to which it ships its products. Recently Issued Accounting Standards In May 2014, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers , which outlines a comprehensive new revenue recognition model designed to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers — Principal versus Agent Considerations (Reporting Revenue Gross versus Net) , which further clarifies the implementation guidance on principal versus agent considerations contained in ASU 2014-09. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers — Identifying Performance Obligations and Licensing , which further clarifies the implementation guidance relating to identifying performance obligations and the licensing implementation guidance. These standards, pursuant to ASU No. 2015-14, Revenue from Contracts with Customers — Deferral of the Effective Date issued by the FASB in August 2015, will be effective for the Company in the first quarter of 2018. The Company is currently evaluating the impact of adopting these standards. In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory , which requires an entity to measure most inventory at the lower of cost and net realizable value, thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market. The accounting standard is effective prospectively for annual periods beginning after December 15, 2016, and interim periods therein. Early adoption is permitted as of the beginning of an interim or annual reporting period. The Company is currently evaluating the impact of adopting this standard. In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities , which addresses certain aspects of recognition, measurement, presentation and disclosure of financial instruments . The new standard is effective for annual periods and interim periods beginning after December 15, 2017, and upon adoption, an entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. Early adoption is not permitted except for the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income. The Company is currently evaluating the impact of adopting this standard. In February 2016, the FASB issued ASU 2016-02, Leases , which amends the existing accounting standards for leases. Under the new guidance, a lessee will be required to recognize a lease liability and right-of-use asset for all leases with terms in excess of twelve months. The new guidance also modifies the classification criteria and accounting for sales-type and direct financing leases, and requires additional disclosures to enable users of financial statements to understand the amount, timing, and uncertainty of cash flows arising from leases. Consistent with current guidance, a lessee’s recognition, measurement, and presentation of expenses and cash flows arising from a lease will continue to depend primarily on its classification. The accounting standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and must be applied using a modified retrospective approach. Early adoption is permitted. The Company is currently evaluating the impact of adopting this standard. In March 2016, the FASB issued ASU No. 2016-09, Stock Compensation — Improvements to Employee Share-Based Payment Accounting , which simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The accounting standard is effective for annual periods beginning after December 15, 2016, including interim periods within those annual periods. Early adoption is permitted in any interim or annual period. The Company is currently evaluating the impact of adopting this standard.

Fair Value of Financial Instrum

Fair Value of Financial Instruments	3 Months Ended
	Mar. 31, 2016
Fair Value Disclosures [Abstract]
Fair Value of Financial Instruments	Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The categorization of a financial instrument within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company classifies its cash equivalents and marketable investments within Level 1 and Level 2, as it uses quoted market prices or alternative pricing sources and models utilizing market observable inputs. The Company determined the fair value of its Level 1 financial instruments, which are traded in active markets, using quoted market prices for identical instruments. Marketable investments classified within Level 2 of the fair value hierarchy are valued based on other observable inputs, including broker or dealer quotations or alternative pricing sources. When quoted prices in active markets for identical assets or liabilities are not available, the Company relies on non-binding quotes from its investment managers, which are based on proprietary valuation models of independent pricing services. These models generally use inputs such as observable market data, quoted market prices for similar instruments, historical pricing trends of a security relative to its peers and internal assumptions of the independent pricing services. To validate the fair value determination provided by its investment managers, the Company reviews the pricing movement in the context of overall market trends and trading information from its investment managers. In addition, the Company assesses the inputs and methods used in determining the fair value in order to determine the classification of securities in the fair value hierarchy. The Company did not own any Level 3 financial assets or liabilities as of March 31, 2016 or December 31, 2015 . During the three months ended March 31, 2016 and 2015 , the Company did not record impairment charges related to its marketable investments, and the Company did not have any transfers between Level 1, Level 2 or Level 3 of the fair value hierarchy. The Company did not have any financial assets and liabilities measured at fair value on a non-recurring basis as of March 31, 2016 or December 31, 2015 . The following table sets forth the Company’s financial assets and liabilities measured at fair value by level within the fair value hierarchy (in thousands): As of March 31, 2016 Level 1 Level 2 Level 3 Fair Value Financial Assets Cash equivalents: Money market funds $ 4,314 $ — $ — $ 4,314 Marketable investments: Commercial paper — 16,218 — 16,218 U.S. Treasury 15,494 — — 15,494 U.S. agency securities — 19,520 — 19,520 U.S. states and municipalities — 2,057 — 2,057 Corporate bonds — 66,639 — 66,639 Non-U.S. government debt securities — 6,885 — 6,885 Total $ 19,808 $ 111,319 $ — $ 131,127 As of December 31, 2015 Level 1 Level 2 Level 3 Fair Value Financial Assets Cash equivalents: Commercial paper $ — $ 9,850 $ — $ 9,850 Money market funds 252 — — 252 Marketable investments: Commercial paper — 22,332 — 22,332 U.S. Treasury 15,436 — — 15,436 U.S. agency securities — 21,464 — 21,464 U.S. states and municipalities — 2,084 — 2,084 Corporate bonds — 61,002 — 61,002 Non-U.S. government debt securities — 6,939 — 6,939 Total $ 15,688 $ 123,671 $ — $ 139,359

Balance Sheet Components

Balance Sheet Components	3 Months Ended
	Mar. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Balance Sheet Components	Balance Sheet Components Cash and Cash Equivalents The majority of the Company’s cash is held by one financial institution in the United States in excess of federally insured limits. The Company maintained investments in money market funds that were not federally insured during the periods presented and held cash in foreign banks of approximately $2.3 million and $1.9 million at March 31, 2016 and December 31, 2015 , respectively, that were not federally insured. The Company has not experienced any losses on its deposits of cash and cash equivalents. Accounts Receivable, Net The Company’s allowance for doubtful accounts comprised of the following (in thousands): Allowance for Doubtful Accounts March 31, December 31, Balance at the beginning of the period $ 589 $ 602 Charged to costs and expenses 11 (13 ) Deductions — — Balance at the end of the period $ 600 $ 589 One customer (a distributor) accounted for 11% of the Company’s revenue for each of the three months ended March 31, 2016 and 2015 . No customer accounted for greater than 10% of the Company’s accounts receivable balance as of March 31, 2016 or December 31, 2015 . Prepaid Expenses and Other Current Assets The Company’s prepaid expenses and other current assets comprised of the following (in thousands): March 31, December 31, Prepaid expenses $ 9,462 $ 7,442 Income tax receivable 667 606 Other current assets 1,383 1,304 Prepaid expenses and other current assets $ 11,512 $ 9,352 Marketable Investments The Company’s marketable investments as of March 31, 2016 and December 31, 2015 were as follows (in thousands): March 31, 2016 Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Commercial paper $ 16,211 $ 7 $ — $ 16,218 U.S. Treasury 15,469 25 — 15,494 U.S. agency securities 19,494 26 — 19,520 U.S. states and municipalities 2,054 3 — 2,057 Corporate bonds 66,513 140 (14 ) 66,639 Non-U.S. government debt securities 6,886 3 (4 ) 6,885 Total $ 126,627 $ 204 $ (18 ) $ 126,813 December 31, 2015 Cost Gross Gross Fair Value Commercial paper $ 22,328 $ 5 $ (1 ) $ 22,332 U.S. Treasury 15,459 4 (27 ) 15,436 U.S. agency securities 21,497 1 (34 ) 21,464 U.S. states and municipalities 2,086 — (2 ) 2,084 Corporate bonds 61,188 3 (189 ) 61,002 Non-U.S. government debt securities 6,954 1 (16 ) 6,939 Total $ 129,512 $ 14 $ (269 ) $ 129,257 The following tables present the gross unrealized losses and the fair value for those marketable investments that were in an unrealized loss position for less than twelve months as of March 31, 2016 and December 31, 2015 (in thousands): March 31, 2016 Fair Value Gross Unrealized Losses Corporate bonds 14,033 (14 ) Non-U.S. government debt securities 4,596 (4 ) Total $ 18,629 $ (18 ) December 31, 2015 Fair Value Gross Unrealized Losses Commercial paper $ 4,746 $ (1 ) US Treasury 12,453 (27 ) US agency securities 13,475 (34 ) US states and municipalities 2,084 (2 ) Corporate bonds 59,163 (189 ) Non-U.S. government debt securities 5,881 (16 ) Total $ 97,802 $ (269 ) As of March 31, 2016 and December 31, 2015 , there were no securities that had been in a loss position for more than twelve months. The contractual maturities of the Company’s marketable investments as of March 31, 2016 and December 31, 2015 were as follows (in thousands): March 31, 2016 December 31, 2015 Fair Value Due in one year $ 109,420 $ 62,983 Due in one to five years 17,393 66,274 Total $ 126,813 $ 129,257 Inventories Inventories are stated at the lower of cost (determined under the first-in first-out method) or market. Inventory quantities are reviewed in consideration of actual loss experience, projected future demand and remaining shelf life to record a provision for excess and obsolete inventory when appropriate. The components of inventories consisted of the following (in thousands): March 31, December 31, Raw materials $ 10,160 $ 9,176 Work in process 2,493 2,746 Finished goods 53,911 44,839 Inventories $ 66,564 $ 56,761 Property and Equipment, Net Property and equipment, net consisted of the following (in thousands): March 31, December 31, Machinery and equipment $ 8,779 $ 8,559 Furniture and fixtures 2,273 2,091 Leasehold improvements 1,713 1,564 Software 927 666 Computers 640 565 Construction in progress 981 577 Total property and equipment 15,313 14,022 Less: Accumulated depreciation and amortization (5,596 ) (5,071 ) Property and equipment, net $ 9,717 $ 8,951 Depreciation and amortization expense was $0.5 million and $0.3 million for the three months ended March 31, 2016 and 2015 , respectively. Accrued Liabilities The following table shows the components of accrued liabilities (in thousands): March 31, December 31, Payroll and employee-related expenses $ 17,593 $ 13,653 Sales return reserve 3,508 3,247 Preclinical and clinical trial cost 1,528 1,330 Deferred revenue 528 526 Product warranty 498 713 Sales tax payable 356 531 Income tax payable 361 308 Other accrued liabilities 5,585 5,273 Total accrued liabilities $ 29,957 $ 25,581 The estimated product warranty accrual was as follows (in thousands): March 31, December 31, Balance at the beginning of the period $ 713 $ 314 Provision (release) for product warranty (101 ) 752 Settlements of product warranty claims (114 ) (353 ) Balance at the end of the period $ 498 $ 713

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2016
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Lease Commitments The Company leases its offices and other equipment under non-cancelable operating leases that expire at various dates from 2029 to 2031. Rent expense for non-cancelable operating leases with scheduled rent increases is recognized on a straight-line basis over the lease term. Rent expense for the three months ended March 31, 2016 and 2015 was $1.1 million and $0.6 million , respectively. Royalty Obligations In March 2005, the Company entered into a license agreement that requires the Company to make minimum royalty payments to the licensor on a quarterly basis. As of both March 31, 2016 and December 31, 2015 , the license agreement required minimum annual royalty payments of $0.1 million in equal quarterly installments. On each January 1, the quarterly calendar year minimum royalty will be adjusted to equal the prior year’s minimum royalty adjusted by a percentage equal to the percentage change in the “consumer price index for all urban consumers” for the prior calendar year as reported by the U.S. Department of Labor. Unless terminated earlier, the term of the license agreement will continue until the expiration of the last to expire patent that covers that licensed product or 2022, whichever is longer. In April 2012, the Company entered into an agreement that requires the Company to pay a 5% royalty on sales of products covered under applicable patents, on a quarterly basis. Unless terminated earlier, the royalty term for each applicable product will continue until the expirations of the applicable patent covering such product or 2029. In April 2015, the Company entered into a royalty agreement that requires the Company to pay a 2% royalty on sales of certain products covered by the agreement, on a quarterly basis. Unless terminated earlier, the royalty term for each covered product shall continue until 2035. Royalty expense included in cost of sales for the three months ended March 31, 2016 and 2015 was $0.7 million and $0.4 million , respectively. Contingencies From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of business. The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. Indemnification The Company enters into standard indemnification arrangements in the ordinary course of business. Pursuant to these arrangements, the Company indemnifies, holds harmless, and agrees to reimburse the indemnified parties for losses suffered or incurred by the indemnified party, in connection with any trade secret, copyright, patent or other intellectual property infringement claim by any third-party with respect to the Company’s technology. The term of these indemnification agreements is generally perpetual. The maximum potential amount of future payments the Company could be required to make under these agreements is not determinable because it involves claims that may be made against the Company in the future, but have not yet been made. The Company has entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers, other than liabilities arising from willful misconduct of the individual. The Company has not incurred costs to defend lawsuits or settle claims related to these indemnification agreements. No liability associated with such indemnifications has been recorded to date. Litigation The Company was contacted in 2015 by the attorney for a potential product liability claimant who allegedly suffered injuries as a result of aneurysm procedures in which the Penumbra Coil 400 was used. On February 19, 2016, a complaint for damages was filed on behalf of this claimant against the Company and the hospital involved in the procedure ( Montgomery v. Penumbra, Inc., et al., Case No. 16-2-04050-1 SEA, Superior Court of the State of Washington, King County) . The suit alleges liability primarily under the Washington Product Liability Act and seeks both compensatory and punitive damages without a specific damages claim. Counsel for the claimant previously indicated that he expects that a jury could award $35 million in damages were this matter to go to trial. This amount is substantially in excess of the Company’s insurance coverage. The hospital defendant has requested indemnification from the Company. As the litigation has been filed recently and the Company has a pending preliminary motion to dismiss certain claims in the complaint, the Company is unable to assess the merits of the plaintiff’s case. The Company intends to vigorously defend the litigation, as the Company believes there will be substantial questions regarding causation, liability and damages. From time to time, the Company is subject to claims and assessments in the ordinary course of business. The Company is not currently a party to any litigation matter that, individually or in the aggregate, is expected to have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows.

Stock-based Compensation

Stock-based Compensation	3 Months Ended
	Mar. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock-based Compensation	Stock-Based Compensation Activity of stock options under the Penumbra, Inc. 2005 Stock Plan (the “2005 Plan”), Penumbra, Inc. 2011 Equity Incentive Plan (the “2011 Plan”) and the Penumbra, Inc. 2014 Equity Incentive Plan (as amended and restated, the “2014 Plan”) is set forth below: Number of Shares Weighted- Average Exercise Price Balance at December 31, 2015 3,755,345 $ 12.13 Options exercised (45,490 ) 2.36 Options canceled (1,762 ) 19.22 Balance at March 31, 2016 3,708,093 12.24 The following table summarizes the activity of unvested restricted stock and restricted stock units during the three months ended March 31, 2016 : Number of Shares Weighted Average Grant Date Fair Value Unvested at December 31, 2015 849,571 $ 15.12 Granted 103,600 44.33 Vested (106,400 ) 11.25 Unvested and expected to vest at March 31, 2016 846,771 19.18 As of March 31, 2016 , total unrecognized compensation cost was $29.2 million related to unvested share-based compensation arrangements which is expected to be recognized over a weighted average period of 2.0 years. The total stock-based compensation cost capitalized in inventory was $0.4 million and $0.3 million as of March 31, 2016 and December 31, 2015 , respectively. The following table sets forth the stock-based compensation expense included in the condensed consolidated statements of operations (in thousands): Three Months Ended March 31, 2016 2015 Cost of sales $ 9 $ 59 Research and development 258 22 Sales, general and administrative 2,748 274 $ 3,015 $ 355

Accumulated Other Comprehensive

Accumulated Other Comprehensive Income	3 Months Ended
	Mar. 31, 2016
Equity [Abstract]
Accumulated Other Comprehensive Income	Accumulated Other Comprehensive Income Other comprehensive income consists of two components: unrealized gains or losses on the Company’s available-for-sale marketable investments, and gains or losses from foreign currency translation adjustments. Until realized and reported as a component of net income, these comprehensive income items accumulate and are included within accumulated other comprehensive income. Unrealized gains and losses on the Company’s marketable investments are reclassified from accumulated other comprehensive income into earnings when realized upon sale, and are determined based on specific identification of securities sold. Gains and losses from the translation of assets and liabilities denominated in non-U.S. dollar functional currencies are included in accumulated other comprehensive income. The following table summarizes the changes in the accumulated balances during the period, and includes information regarding the manner in which the reclassifications out of accumulated other comprehensive income into earnings affect the Company’s condensed consolidated statements of operations (in thousands): Three Months Ended March 31, 2016 Three Months Ended March 31, 2015 Marketable Currency Translation Total Marketable Currency Translation Total Balance at beginning of the period $ (163 ) $ (1,952 ) $ (2,115 ) $ (220 ) $ (644 ) $ (864 ) Other comprehensive income before reclassifications: Unrealized gains—marketable investments 441 — 441 17 — 17 Foreign currency translation gains (losses) — 1,043 1,043 — (1,028 ) (1,028 ) Income tax effect—benefit (expense) (160 ) 5 (155 ) (8 ) 112 104 Net of tax 281 1,048 1,329 9 (916 ) (907 ) Amounts reclassified from accumulated other comprehensive income to earnings: Realized losses—marketable investments — — — 30 — 30 Income tax effect—benefit — — — (12 ) — (12 ) Net of tax — — — 18 — 18 Net current-year other comprehensive income (loss) 281 1,048 1,329 27 (916 ) (889 ) Balance at end of the period $ 118 $ (904 ) $ (786 ) $ (193 ) $ (1,560 ) $ (1,753 )

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2016
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes The Company’s income tax expense, deferred tax assets and liabilities, and reserves for unrecognized tax benefits reflect management’s best assessment of estimated current and future taxes to be paid. The Company is subject to income taxes in both the United States and foreign jurisdictions. Significant judgments and estimates are required in determining the consolidated income tax expense. The Company’s effective tax rate increased to 63.2% for the three months ended March 31, 2016 , compared to 41.0% for the three months ended March 31, 2015 . The effective tax rate is based on a projection of the Company’s full year results. The higher effective tax rate for the three months ended March 31, 2016 was primarily due to the impact of certain nondeductible stock-based compensation charges.

Net Income per Share of Common

Net Income per Share of Common Stock attributable to Common Stockholders	3 Months Ended
	Mar. 31, 2016
Earnings Per Share [Abstract]
Net Income per Share of Common Stock attributable to Common Stockholders	Net Income per Share of Common Stock attributable to Common Stockholders The Company calculated its basic and diluted net income per share attributable to common stockholders in conformity with the two-class method required for companies with participating securities for the three months ended March 31, 2015. Under the two-class method, the Company determined whether it had net income attributable to common stockholders, which included the results of operations less current period preferred stock non-cumulative dividends. If it was determined that the Company did have net income attributable to common stockholders during a period, the related undistributed earnings were then allocated between common stock and the preferred stock based on the weighted average number of shares outstanding during the period to determine the numerator for the basic net income per share attributable to common stockholders. In computing diluted net income attributable to common stockholders, undistributed earnings were re-allocated to reflect the potential impact of dilutive securities to determine the numerator for the diluted net income per share attributable to common stockholders. The Company’s basic net income per share attributable to common stockholders is calculated by dividing the net income by the weighted average number of shares of common stock outstanding for the period. The diluted net income per share attributable to common stockholders is computed by giving effect to all potential dilutive common stock equivalents outstanding for the period. For purposes of this calculation, options to purchase common stock, restricted stock and common stock warrants are considered common stock equivalents. A reconciliation of the numerator and denominator used in the calculation of the basic and diluted net income per share attributable to common stockholders is as follows (in thousands except share and per share amounts): Three Months Ended March 31, 2016 2015 Net income per share: Numerator Net income $ 780 $ 2,502 Less: Undistributed income attributable to preferred stockholders — (1,999 ) Net income attributable to common stockholders—basic and diluted $ 780 $ 503 Denominator Weighted average shares used to compute net income attributable to common stockholders —Basic 29,990,006 4,903,535 Potential dilutive options, as calculated using treasury stock method 2,136,087 2,198,734 Potential dilutive restricted stock and restricted stock units, as calculated using treasury stock method 360,423 91,183 Weighted average shares used to compute net income attributable to common stockholders —Diluted 32,486,516 7,193,452 Net income per share attributable to common stockholders —Basic $ 0.03 $ 0.10 —Diluted $ 0.02 $ 0.07 The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net income per share of common stock for the periods presented, because the effect of including them would have been anti-dilutive: Three Months Ended March 31, 2016 2015 Options to purchase common stock — 438,800 Restricted stock and restricted stock units 12,500 50,000 Total 12,500 488,800

Geographic Areas and Product Sa

Geographic Areas and Product Sales	3 Months Ended
	Mar. 31, 2016
Segment Reporting [Abstract]
Geographic Areas and Product Sales	Geographic Areas and Product Sales The Company’s revenue by geographic area, based on the destination to which the Company ships its products, was as follows (in thousands): Three Months Ended March 31, 2016 2015 United States $ 39,412 $ 26,351 Japan 6,161 4,458 Other International 12,346 8,143 Total $ 57,919 $ 38,952 The following table sets forth revenue by product category (in thousands): Three Months Ended March 31, 2016 2015 Neuro $ 41,284 $ 31,654 Peripheral Vascular 16,635 7,298 Total $ 57,919 $ 38,952 The Company does not have significant long-lived assets outside the U.S.

Summary of Significant Accoun16

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2016
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation and Consolidation The accompanying condensed consolidated balance sheet as of March 31, 2016 , the condensed consolidated statements of income for the three months ended March 31, 2016 and 2015 , and the condensed consolidated statements of cash flows for the three months ended March 31, 2016 and 2015 are unaudited. The unaudited condensed consolidated financial statements included herein have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. The December 31, 2015 condensed consolidated balance sheet was derived from the audited financial statements as of that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to state fairly the Company’s financial position as of March 31, 2016 , the results of its operations for the three months ended March 31, 2016 and 2015 , and the cash flows for the three months ended March 31, 2016 and 2015 . The results for the three months ended March 31, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016 or for any other future annual or interim period. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2015 included in the Company ’ s Annual Report on Form 10-K. There have been no changes to the Company’s critical accounting policies during the three months ended March 31, 2016, as compared to the critical accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 . The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and equity accounts; disclosure of contingent assets and liabilities at the date of the financial statements; and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates, including those related to marketable investments, provisions for doubtful accounts, sales return reserve, warranty reserves, valuation of inventories, useful lives of property and equipment, income taxes, and contingencies, among others. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other data. Actual results could differ from those estimates.
Segments	Segments The Company determined its operating segment on the same basis that it uses to evaluate its performance internally. The Company has one business activity: the design, development, manufacturing and marketing of innovative medical devices, and operates as one operating segment. The Company’s chief operating decision-maker, its Chief Executive Officer, reviews its operating results for the purpose of allocating resources and evaluating financial performance. The Company determines revenue by geographic area, based on the destination to which it ships its products.
Recently Issued Accounting Standards	Recently Issued Accounting Standards In May 2014, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers , which outlines a comprehensive new revenue recognition model designed to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers — Principal versus Agent Considerations (Reporting Revenue Gross versus Net) , which further clarifies the implementation guidance on principal versus agent considerations contained in ASU 2014-09. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers — Identifying Performance Obligations and Licensing , which further clarifies the implementation guidance relating to identifying performance obligations and the licensing implementation guidance. These standards, pursuant to ASU No. 2015-14, Revenue from Contracts with Customers — Deferral of the Effective Date issued by the FASB in August 2015, will be effective for the Company in the first quarter of 2018. The Company is currently evaluating the impact of adopting these standards. In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory , which requires an entity to measure most inventory at the lower of cost and net realizable value, thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market. The accounting standard is effective prospectively for annual periods beginning after December 15, 2016, and interim periods therein. Early adoption is permitted as of the beginning of an interim or annual reporting period. The Company is currently evaluating the impact of adopting this standard. In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities , which addresses certain aspects of recognition, measurement, presentation and disclosure of financial instruments . The new standard is effective for annual periods and interim periods beginning after December 15, 2017, and upon adoption, an entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. Early adoption is not permitted except for the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income. The Company is currently evaluating the impact of adopting this standard. In February 2016, the FASB issued ASU 2016-02, Leases , which amends the existing accounting standards for leases. Under the new guidance, a lessee will be required to recognize a lease liability and right-of-use asset for all leases with terms in excess of twelve months. The new guidance also modifies the classification criteria and accounting for sales-type and direct financing leases, and requires additional disclosures to enable users of financial statements to understand the amount, timing, and uncertainty of cash flows arising from leases. Consistent with current guidance, a lessee’s recognition, measurement, and presentation of expenses and cash flows arising from a lease will continue to depend primarily on its classification. The accounting standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and must be applied using a modified retrospective approach. Early adoption is permitted. The Company is currently evaluating the impact of adopting this standard. In March 2016, the FASB issued ASU No. 2016-09, Stock Compensation — Improvements to Employee Share-Based Payment Accounting , which simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The accounting standard is effective for annual periods beginning after December 15, 2016, including interim periods within those annual periods. Early adoption is permitted in any interim or annual period. The Company is currently evaluating the impact of adopting this standard.

Fair Value of Financial Instr17

Fair Value of Financial Instruments (Tables)	3 Months Ended
	Mar. 31, 2016
Fair Value Disclosures [Abstract]
Schedule of Fair Value of Assets and Liabilities	The following table sets forth the Company’s financial assets and liabilities measured at fair value by level within the fair value hierarchy (in thousands): As of March 31, 2016 Level 1 Level 2 Level 3 Fair Value Financial Assets Cash equivalents: Money market funds $ 4,314 $ — $ — $ 4,314 Marketable investments: Commercial paper — 16,218 — 16,218 U.S. Treasury 15,494 — — 15,494 U.S. agency securities — 19,520 — 19,520 U.S. states and municipalities — 2,057 — 2,057 Corporate bonds — 66,639 — 66,639 Non-U.S. government debt securities — 6,885 — 6,885 Total $ 19,808 $ 111,319 $ — $ 131,127 As of December 31, 2015 Level 1 Level 2 Level 3 Fair Value Financial Assets Cash equivalents: Commercial paper $ — $ 9,850 $ — $ 9,850 Money market funds 252 — — 252 Marketable investments: Commercial paper — 22,332 — 22,332 U.S. Treasury 15,436 — — 15,436 U.S. agency securities — 21,464 — 21,464 U.S. states and municipalities — 2,084 — 2,084 Corporate bonds — 61,002 — 61,002 Non-U.S. government debt securities — 6,939 — 6,939 Total $ 15,688 $ 123,671 $ — $ 139,359

Balance Sheet Components (Table

Balance Sheet Components (Tables)	3 Months Ended
	Mar. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Schedule of Allowance for Doubtful Accounts	The Company’s allowance for doubtful accounts comprised of the following (in thousands): Allowance for Doubtful Accounts March 31, December 31, Balance at the beginning of the period $ 589 $ 602 Charged to costs and expenses 11 (13 ) Deductions — — Balance at the end of the period $ 600 $ 589
Schedule of Prepaid Expenses and Other Current Assets	The Company’s prepaid expenses and other current assets comprised of the following (in thousands): March 31, December 31, Prepaid expenses $ 9,462 $ 7,442 Income tax receivable 667 606 Other current assets 1,383 1,304 Prepaid expenses and other current assets $ 11,512 $ 9,352
Schedule of Marketable Investments	The Company’s marketable investments as of March 31, 2016 and December 31, 2015 were as follows (in thousands): March 31, 2016 Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Commercial paper $ 16,211 $ 7 $ — $ 16,218 U.S. Treasury 15,469 25 — 15,494 U.S. agency securities 19,494 26 — 19,520 U.S. states and municipalities 2,054 3 — 2,057 Corporate bonds 66,513 140 (14 ) 66,639 Non-U.S. government debt securities 6,886 3 (4 ) 6,885 Total $ 126,627 $ 204 $ (18 ) $ 126,813 December 31, 2015 Cost Gross Gross Fair Value Commercial paper $ 22,328 $ 5 $ (1 ) $ 22,332 U.S. Treasury 15,459 4 (27 ) 15,436 U.S. agency securities 21,497 1 (34 ) 21,464 U.S. states and municipalities 2,086 — (2 ) 2,084 Corporate bonds 61,188 3 (189 ) 61,002 Non-U.S. government debt securities 6,954 1 (16 ) 6,939 Total $ 129,512 $ 14 $ (269 ) $ 129,257
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value	The following tables present the gross unrealized losses and the fair value for those marketable investments that were in an unrealized loss position for less than twelve months as of March 31, 2016 and December 31, 2015 (in thousands): March 31, 2016 Fair Value Gross Unrealized Losses Corporate bonds 14,033 (14 ) Non-U.S. government debt securities 4,596 (4 ) Total $ 18,629 $ (18 ) December 31, 2015 Fair Value Gross Unrealized Losses Commercial paper $ 4,746 $ (1 ) US Treasury 12,453 (27 ) US agency securities 13,475 (34 ) US states and municipalities 2,084 (2 ) Corporate bonds 59,163 (189 ) Non-U.S. government debt securities 5,881 (16 ) Total $ 97,802 $ (269 )
Schedule of Contractual Maturities of Marketable Investments	The contractual maturities of the Company’s marketable investments as of March 31, 2016 and December 31, 2015 were as follows (in thousands): March 31, 2016 December 31, 2015 Fair Value Due in one year $ 109,420 $ 62,983 Due in one to five years 17,393 66,274 Total $ 126,813 $ 129,257
Schedule of Inventories	The components of inventories consisted of the following (in thousands): March 31, December 31, Raw materials $ 10,160 $ 9,176 Work in process 2,493 2,746 Finished goods 53,911 44,839 Inventories $ 66,564 $ 56,761
Schedule of Property and Equipment, Net	Property and equipment, net consisted of the following (in thousands): March 31, December 31, Machinery and equipment $ 8,779 $ 8,559 Furniture and fixtures 2,273 2,091 Leasehold improvements 1,713 1,564 Software 927 666 Computers 640 565 Construction in progress 981 577 Total property and equipment 15,313 14,022 Less: Accumulated depreciation and amortization (5,596 ) (5,071 ) Property and equipment, net $ 9,717 $ 8,951
Schedule of Accrued Liabilities	The following table shows the components of accrued liabilities (in thousands): March 31, December 31, Payroll and employee-related expenses $ 17,593 $ 13,653 Sales return reserve 3,508 3,247 Preclinical and clinical trial cost 1,528 1,330 Deferred revenue 528 526 Product warranty 498 713 Sales tax payable 356 531 Income tax payable 361 308 Other accrued liabilities 5,585 5,273 Total accrued liabilities $ 29,957 $ 25,581
Schedule of Estimated Product Warranty Accrual	The estimated product warranty accrual was as follows (in thousands): March 31, December 31, Balance at the beginning of the period $ 713 $ 314 Provision (release) for product warranty (101 ) 752 Settlements of product warranty claims (114 ) (353 ) Balance at the end of the period $ 498 $ 713

Stock-based Compensation (Table

Stock-based Compensation (Tables)	3 Months Ended
	Mar. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Summary of Stock Option Activity	Activity of stock options under the Penumbra, Inc. 2005 Stock Plan (the “2005 Plan”), Penumbra, Inc. 2011 Equity Incentive Plan (the “2011 Plan”) and the Penumbra, Inc. 2014 Equity Incentive Plan (as amended and restated, the “2014 Plan”) is set forth below: Number of Shares Weighted- Average Exercise Price Balance at December 31, 2015 3,755,345 $ 12.13 Options exercised (45,490 ) 2.36 Options canceled (1,762 ) 19.22 Balance at March 31, 2016 3,708,093 12.24
Summary of Unvested Restricted Stock Activity	The following table summarizes the activity of unvested restricted stock and restricted stock units during the three months ended March 31, 2016 : Number of Shares Weighted Average Grant Date Fair Value Unvested at December 31, 2015 849,571 $ 15.12 Granted 103,600 44.33 Vested (106,400 ) 11.25 Unvested and expected to vest at March 31, 2016 846,771 19.18
Schedule of Stock-based Compensation Expense	The following table sets forth the stock-based compensation expense included in the condensed consolidated statements of operations (in thousands): Three Months Ended March 31, 2016 2015 Cost of sales $ 9 $ 59 Research and development 258 22 Sales, general and administrative 2,748 274 $ 3,015 $ 355

Accumulated Other Comprehensi20

Accumulated Other Comprehensive Income (Tables)	3 Months Ended
	Mar. 31, 2016
Equity [Abstract]
Schedule of Accumulated Other Comprehensive Income	The following table summarizes the changes in the accumulated balances during the period, and includes information regarding the manner in which the reclassifications out of accumulated other comprehensive income into earnings affect the Company’s condensed consolidated statements of operations (in thousands): Three Months Ended March 31, 2016 Three Months Ended March 31, 2015 Marketable Currency Translation Total Marketable Currency Translation Total Balance at beginning of the period $ (163 ) $ (1,952 ) $ (2,115 ) $ (220 ) $ (644 ) $ (864 ) Other comprehensive income before reclassifications: Unrealized gains—marketable investments 441 — 441 17 — 17 Foreign currency translation gains (losses) — 1,043 1,043 — (1,028 ) (1,028 ) Income tax effect—benefit (expense) (160 ) 5 (155 ) (8 ) 112 104 Net of tax 281 1,048 1,329 9 (916 ) (907 ) Amounts reclassified from accumulated other comprehensive income to earnings: Realized losses—marketable investments — — — 30 — 30 Income tax effect—benefit — — — (12 ) — (12 ) Net of tax — — — 18 — 18 Net current-year other comprehensive income (loss) 281 1,048 1,329 27 (916 ) (889 ) Balance at end of the period $ 118 $ (904 ) $ (786 ) $ (193 ) $ (1,560 ) $ (1,753 )

Net Income per Share of Commo21

Net Income per Share of Common Stock attributable to Common Stockholders (Tables)	3 Months Ended
	Mar. 31, 2016
Earnings Per Share [Abstract]
Reconciliation of the Numerator and Denominator used in the Calculation of the Basic and Diluted Earnings per Share	A reconciliation of the numerator and denominator used in the calculation of the basic and diluted net income per share attributable to common stockholders is as follows (in thousands except share and per share amounts): Three Months Ended March 31, 2016 2015 Net income per share: Numerator Net income $ 780 $ 2,502 Less: Undistributed income attributable to preferred stockholders — (1,999 ) Net income attributable to common stockholders—basic and diluted $ 780 $ 503 Denominator Weighted average shares used to compute net income attributable to common stockholders —Basic 29,990,006 4,903,535 Potential dilutive options, as calculated using treasury stock method 2,136,087 2,198,734 Potential dilutive restricted stock and restricted stock units, as calculated using treasury stock method 360,423 91,183 Weighted average shares used to compute net income attributable to common stockholders —Diluted 32,486,516 7,193,452 Net income per share attributable to common stockholders —Basic $ 0.03 $ 0.10 —Diluted $ 0.02 $ 0.07
Schedule of Antidilutive Securities Excluded from Computation of Earnings per Share	The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net income per share of common stock for the periods presented, because the effect of including them would have been anti-dilutive: Three Months Ended March 31, 2016 2015 Options to purchase common stock — 438,800 Restricted stock and restricted stock units 12,500 50,000 Total 12,500 488,800

Geographic Areas and Product 22

Geographic Areas and Product Sales (Tables)	3 Months Ended
	Mar. 31, 2016
Segment Reporting [Abstract]
Revenue by Geographic Area	The Company’s revenue by geographic area, based on the destination to which the Company ships its products, was as follows (in thousands): Three Months Ended March 31, 2016 2015 United States $ 39,412 $ 26,351 Japan 6,161 4,458 Other International 12,346 8,143 Total $ 57,919 $ 38,952
Revenue by Product Category	The following table sets forth revenue by product category (in thousands): Three Months Ended March 31, 2016 2015 Neuro $ 41,284 $ 31,654 Peripheral Vascular 16,635 7,298 Total $ 57,919 $ 38,952

Organization and Description 23

Organization and Description of Business (Details)	3 Months Ended
	Mar. 31, 2016market
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of major markets	2

Summary of Significant Accoun24

Summary of Significant Accounting Policies - Additional Disclosures (Details)	3 Months Ended
	Mar. 31, 2016segmentactivity
Accounting Policies [Abstract]
Number of business activities | activity	1
Number of operating segments | segment	1

Fair Value of Financial Instr25

Fair Value of Financial Instruments (Details) - Recurring - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Financial Assets
Total	$ 131,127	$ 139,359
Commercial paper
Financial Assets
Marketable investments	16,218	22,332
U.S. Treasury
Financial Assets
Marketable investments	15,494	15,436
U.S. agency securities
Financial Assets
Marketable investments	19,520	21,464
U.S. states and municipalities
Financial Assets
Marketable investments	2,057	2,084
Corporate bonds
Financial Assets
Marketable investments	66,639	61,002
Non-U.S. government debt securities
Financial Assets
Marketable investments	6,885	6,939
Commercial paper
Financial Assets
Cash equivalents		9,850
Money market funds
Financial Assets
Cash equivalents	4,314	252
Level 1
Financial Assets
Total	19,808	15,688
Level 1 | Commercial paper
Financial Assets
Marketable investments	0	0
Level 1 | U.S. Treasury
Financial Assets
Marketable investments	15,494	15,436
Level 1 | U.S. agency securities
Financial Assets
Marketable investments	0	0
Level 1 | U.S. states and municipalities
Financial Assets
Marketable investments	0	0
Level 1 | Corporate bonds
Financial Assets
Marketable investments	0	0
Level 1 | Non-U.S. government debt securities
Financial Assets
Marketable investments	0	0
Level 1 | Commercial paper
Financial Assets
Cash equivalents		0
Level 1 | Money market funds
Financial Assets
Cash equivalents	4,314	252
Level 2
Financial Assets
Total	111,319	123,671
Level 2 | Commercial paper
Financial Assets
Marketable investments	16,218	22,332
Level 2 | U.S. Treasury
Financial Assets
Marketable investments	0	0
Level 2 | U.S. agency securities
Financial Assets
Marketable investments	19,520	21,464
Level 2 | U.S. states and municipalities
Financial Assets
Marketable investments	2,057	2,084
Level 2 | Corporate bonds
Financial Assets
Marketable investments	66,639	61,002
Level 2 | Non-U.S. government debt securities
Financial Assets
Marketable investments	6,885	6,939
Level 2 | Commercial paper
Financial Assets
Cash equivalents		9,850
Level 2 | Money market funds
Financial Assets
Cash equivalents	0	0
Level 3
Financial Assets
Total	0	0
Level 3 | Commercial paper
Financial Assets
Marketable investments	0	0
Level 3 | U.S. Treasury
Financial Assets
Marketable investments	0	0
Level 3 | U.S. agency securities
Financial Assets
Marketable investments	0	0
Level 3 | U.S. states and municipalities
Financial Assets
Marketable investments	0	0
Level 3 | Corporate bonds
Financial Assets
Marketable investments	0	0
Level 3 | Non-U.S. government debt securities
Financial Assets
Marketable investments	0	0
Level 3 | Commercial paper
Financial Assets
Cash equivalents		0
Level 3 | Money market funds
Financial Assets
Cash equivalents	$ 0	$ 0

Balance Sheet Components Cash a

Balance Sheet Components Cash and Cash Equivalents Narrative (Details) - United States $ in Millions	3 Months Ended
	Mar. 31, 2016USD ($)financial_instituion	Dec. 31, 2015USD ($)
Concentration Risk [Line Items]
Number of financial institutions holding cash in excess of federally insured limits | financial_instituion	1
Cash, uninsured amount | $	$ 2.3	$ 1.9

Balance Sheet Components - Acco

Balance Sheet Components - Accounts Receivable, Net (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Allowance for Doubtful Accounts Receivable [Roll Forward]
Balance at Beginning of Period	$ 589	$ 602	$ 602
Charged to Costs and Expenses	11	$ (151)	(13)
Deductions	0		0
Balance at End of Period	$ 600		$ 589

Balance Sheet Components - Ac28

Balance Sheet Components - Accounts Receivable Narrative (Details) - Customer Concentration Risk - customer	3 Months Ended		12 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Accounts Receivable
Concentration Risk [Line Items]
Concentration risk, number of customers that accounted for greater than a specified benchmark	0		0
Concentration risk, percentage	10.00%		10.00%
One Major Customer | Sales Revenue, Net
Concentration Risk [Line Items]
Concentration risk, number of customers that accounted for greater than a specified benchmark	1	1	1,000
Concentration risk, percentage	11.00%		11.00%
One Major Customer | Accounts Receivable
Concentration Risk [Line Items]
Concentration risk, number of customers that accounted for greater than a specified benchmark		0
Concentration risk, percentage		10.00%

Balance Sheet Components - Prep

Balance Sheet Components - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Prepaid expenses	$ 9,462	$ 7,442
Income tax receivable	667	606
Other current assets	1,383	1,304
Prepaid expenses and other current assets	$ 11,512	$ 9,352

Balance Sheet Components - Gain

Balance Sheet Components - Gains and Losses of Marketable Investments (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
Cost	$ 126,627	$ 129,512
Gross Unrealized Gains	204	14
Gross Unrealized Losses	(18)	(269)
Fair Value	126,813	129,257
Commercial paper
Schedule of Available-for-sale Securities [Line Items]
Cost	16,211	22,328
Gross Unrealized Gains	7	5
Gross Unrealized Losses	0	(1)
Fair Value	16,218	22,332
U.S. Treasury
Schedule of Available-for-sale Securities [Line Items]
Cost	15,469	15,459
Gross Unrealized Gains	25	4
Gross Unrealized Losses	0	(27)
Fair Value	15,494	15,436
U.S. agency securities
Schedule of Available-for-sale Securities [Line Items]
Cost	19,494	21,497
Gross Unrealized Gains	26	1
Gross Unrealized Losses	0	(34)
Fair Value	19,520	21,464
U.S. states and municipalities
Schedule of Available-for-sale Securities [Line Items]
Cost	2,054	2,086
Gross Unrealized Gains	3	0
Gross Unrealized Losses	0	(2)
Fair Value	2,057	2,084
Corporate bonds
Schedule of Available-for-sale Securities [Line Items]
Cost	66,513	61,188
Gross Unrealized Gains	140	3
Gross Unrealized Losses	(14)	(189)
Fair Value	66,639	61,002
Non-U.S. government debt securities
Schedule of Available-for-sale Securities [Line Items]
Cost	6,886	6,954
Gross Unrealized Gains	3	1
Gross Unrealized Losses	(4)	(16)
Fair Value	$ 6,885	$ 6,939

Balance Sheet Components - Mark

Balance Sheet Components - Marketable Securities in an Unrealized Loss Position (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
Fair Value	$ 18,629,000	$ 97,802,000
Gross Unrealized Losses, less than 12 months	(18,000)	(269,000)
Gross Unrealized losses, greater than 12 months	0	0
Commercial paper
Schedule of Available-for-sale Securities [Line Items]
Fair Value		4,746,000
Gross Unrealized Losses, less than 12 months		(1,000)
U.S. Treasury
Schedule of Available-for-sale Securities [Line Items]
Fair Value		12,453,000
Gross Unrealized Losses, less than 12 months		(27,000)
U.S. agency securities
Schedule of Available-for-sale Securities [Line Items]
Fair Value		13,475,000
Gross Unrealized Losses, less than 12 months		(34,000)
U.S. states and municipalities
Schedule of Available-for-sale Securities [Line Items]
Fair Value		2,084,000
Gross Unrealized Losses, less than 12 months		(2,000)
Corporate bonds
Schedule of Available-for-sale Securities [Line Items]
Fair Value	14,033,000	59,163,000
Gross Unrealized Losses, less than 12 months	(14,000)	(189,000)
Non-U.S. government debt securities
Schedule of Available-for-sale Securities [Line Items]
Fair Value	4,596,000	5,881,000
Gross Unrealized Losses, less than 12 months	$ (4,000)	$ (16,000)

Balance Sheet Components - Cont

Balance Sheet Components - Contractual Maturities of Marketable Investments (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Due in one year	$ 109,420	$ 62,983
Due in one to five years	17,393	66,274
Total	$ 126,813	$ 129,257

Balance Sheet Components - Inve

Balance Sheet Components - Inventories (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Raw materials	$ 10,160	$ 9,176
Work in process	2,493	2,746
Finished goods	53,911	44,839
Inventories	$ 66,564	$ 56,761

Balance Sheet Components - Prop

Balance Sheet Components - Property and Equipment, Net (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 15,313		$ 14,022
Less: Accumulated depreciation and amortization	(5,596)		(5,071)
Property and equipment, net	9,717		8,951
Depreciation and amortization expense	538	$ 338
Machinery and equipment
Property, Plant and Equipment [Line Items]
Total property and equipment	8,779		8,559
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Total property and equipment	2,273		2,091
Leasehold improvements
Property, Plant and Equipment [Line Items]
Total property and equipment	1,713		1,564
Software
Property, Plant and Equipment [Line Items]
Total property and equipment	927		666
Computers
Property, Plant and Equipment [Line Items]
Total property and equipment	640		565
Construction in progress
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 981		$ 577

Balance Sheet Components - Accr

Balance Sheet Components - Accrued Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Payroll and employee-related expenses	$ 17,593	$ 13,653
Sales return reserve	3,508	3,247
Preclinical and clinical trial cost	1,528	1,330
Deferred revenue	528	526
Product warranty	498	713
Sales tax payable	356	531
Income tax payable	361	308
Other accrued liabilities	5,585	5,273
Total accrued liabilities	$ 29,957	$ 25,581

Balance Sheet Components - Prod

Balance Sheet Components - Product Warranty (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Product Warranty, Increase (Decrease) [Roll Forward]
Balance at the beginning of the period	$ 713	$ 314
Provision (release) for product warranty	(101)	752
Settlements of product warranty claims	(114)	(353)
Balance at the end of the period	$ 498	$ 713

Commitments and Contingencies -

Commitments and Contingencies - Lease and Purchase Commitments (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Commitments and Contingencies Disclosure [Abstract]
Rent expense	$ 1.1	$ 0.6

Commitments and Contingencies38

Commitments and Contingencies - Royalty Obligations (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Cost of Sales
Other Commitments [Line Items]
Royalty expense	$ 0.7	$ 0.4
Royalty Agreement, March 2005
Other Commitments [Line Items]
Minimum annual royalty payments	$ 0.1		$ 0.1
Royalty Agreement, April 2012
Other Commitments [Line Items]
Royalty as a percent of sales	5.00%
Royalty Agreement, April 2015
Other Commitments [Line Items]
Royalty as a percent of sales	2.00%

Commitments and Contingencies39

Commitments and Contingencies - Litigation (Details) $ in Millions	3 Months Ended
	Mar. 31, 2016USD ($)
Damages from Product
Loss Contingencies [Line Items]
Damages sought, value	$ 35

Stock-based Compensation - Stoc

Stock-based Compensation - Stock Option Activity (Details)	3 Months Ended
	Mar. 31, 2016$ / sharesshares
Number of Shares
Beginning balance (shares) | shares	3,755,345
Options exercised (shares) | shares	(45,490)
Options cancelled (shares) | shares	(1,762)
Ending balance (shares) | shares	3,708,093
Weighted- Average Exercise Price
Beginning balance (in dollars per share) | $ / shares	$ 12.13
Options exercised (in dollars per share) | $ / shares	2.36
Options cancelled (in dollars per share) | $ / shares	19.22
Ending balance (in dollars per share) | $ / shares	$ 12.24

Stock-based Compensation - Rest

Stock-based Compensation - Restricted Stock Activity (Details) - Restricted Stock	3 Months Ended
	Mar. 31, 2016$ / sharesshares
Number of Shares
Unvested beginning balance (shares) | shares	849,571
Granted (shares) | shares	103,600
Vested (shares) | shares	(106,400)
Unvested and expected to vest ending balance (shares) | shares	846,771
Weighted Average Grant Date Fair Value
Unvested beginning balance (in dollars per share) | $ / shares	$ 15.12
Granted (in dollars per share) | $ / shares	44.33
Vested (in dollars per share) | $ / shares	11.25
Unvested and expected to vest ending balance (in dollars per share) | $ / shares	$ 19.18

Stock-based Compensation - St42

Stock-based Compensation - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Unrecognized compensation cost related to unvested share-based compensation arrangements	$ 29,200
Unrecognized compensation cost, expected recognition period	2 years
Share-based compensation expense, capitalized in inventory	$ 400		$ 300
Stock-based compensation expense	3,015	$ 355
Cost of sales
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	9	59
Research and development
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	258	22
Sales, general and administrative
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 2,748	$ 274

Accumulated Other Comprehensi43

Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Beginning balance	$ 232,522
Amounts reclassified from accumulated other comprehensive income to earnings:
Ending balance	238,048
Marketable Investments
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Beginning balance	(163)	$ (220)
Other comprehensive income before reclassifications:
Other comprehensive income before reclassifications	441	17
Income tax effect—benefit (expense)	(160)	(8)
Net of tax	281	9
Amounts reclassified from accumulated other comprehensive income to earnings:
Realized losses—marketable investments	0	30
Income tax effect—benefit	0	(12)
Net of tax	0	18
Net current-year other comprehensive income (loss)	281	27
Ending balance	118	(193)
Currency Translation Adjustments
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Beginning balance	(1,952)	(644)
Other comprehensive income before reclassifications:
Other comprehensive income before reclassifications	1,043	(1,028)
Income tax effect—benefit (expense)	5	112
Net of tax	1,048	(916)
Amounts reclassified from accumulated other comprehensive income to earnings:
Realized losses—marketable investments	0	0
Income tax effect—benefit	0	0
Net of tax	0	0
Net current-year other comprehensive income (loss)	1,048	(916)
Ending balance	(904)	(1,560)
Total
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Beginning balance	(2,115)	(864)
Other comprehensive income before reclassifications:
Income tax effect—benefit (expense)	(155)	104
Net of tax	1,329	(907)
Amounts reclassified from accumulated other comprehensive income to earnings:
Realized losses—marketable investments	0	30
Income tax effect—benefit	0	(12)
Net of tax	0	18
Net current-year other comprehensive income (loss)	1,329	(889)
Ending balance	$ (786)	$ (1,753)

Income Taxes (Details)

Income Taxes (Details)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Tax Disclosure [Abstract]
Effective tax rate	63.20%	41.00%

Net Income per Share of Commo45

Net Income per Share of Common Stock attributable to Common Stockholders - Basic and Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Numerator
Net income	$ 780	$ 2,502
Less: Undistributed income attributable to preferred stockholders, basic	0	(1,999)
Less: Undistributed income attributable to preferred stockholders, diluted	0	(1,999)
Net income attributable to common stockholders—basic	780	503
Net income attributable to common stockholders—diluted	$ 780	$ 503
Denominator
Weighted average shares used to compute net income per share attributable to common stockholders — Basic (in shares)	29,990,006	4,903,535
Weighted average shares used to compute net income attributable to common stockholders —Diluted (in shares)	32,486,516	7,193,452
Net income (loss) per share attributable to common stockholders — Basic (in dollars per share)	$ 0.03	$ 0.10
Net income (loss) per share attributable to common stockholders — Diluted (in dollars per share)	$ 0.02	$ 0.07
Stock Options
Denominator
Potential dilutive options, as calculated using treasury stock method (in shares)	2,136,087	2,198,734
Restricted stock and restricted stock units
Denominator
Potential dilutive options, as calculated using treasury stock method (in shares)	360,423	91,183

Net Income per Share of Commo46

Net Income per Share of Common Stock attributable to Common Stockholders - Antidilutive Securities (Details) - shares	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from the computation of earnings per share	12,500	488,800
Options to purchase common stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from the computation of earnings per share	0	438,800
Restricted stock and restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from the computation of earnings per share	12,500	50,000

Geographic Areas and Product 47

Geographic Areas and Product Sales - Revenue by Geographic Area (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	$ 57,919	$ 38,952
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	39,412	26,351
Japan
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	6,161	4,458
Other International
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	$ 12,346	$ 8,143

Geographic Areas and Product 48

Geographic Areas and Product Sales - Revenue by Product Category (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Revenue from External Customer [Line Items]
Revenue	$ 57,919	$ 38,952
Neuro
Revenue from External Customer [Line Items]
Revenue	41,284	31,654
Peripheral Vascular
Revenue from External Customer [Line Items]
Revenue	$ 16,635	$ 7,298