Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 21, 2017 | Jun. 30, 2016 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | FIREEYE, INC. | ||
Entity Central Index Key | 1,370,880 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 177,507,475 | ||
Entity Public Float | $ 2.5 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 223,667 | $ 402,102 |
Short-term investments | 712,058 | 767,775 |
Accounts receivable, net of allowance for doubtful accounts of $1,590 and $2,021 at December 31, 2016 and 2015, respectively | 121,150 | 172,752 |
Inventories | 5,955 | 13,747 |
Prepaid expenses and other current assets | 25,081 | 30,883 |
Total current assets | 1,087,911 | 1,387,259 |
Property and equipment, net | 61,852 | 78,368 |
Goodwill | 978,260 | 750,288 |
Intangible assets, net | 244,032 | 214,560 |
Deposits and other long-term assets | 10,910 | 10,998 |
TOTAL ASSETS | 2,382,965 | 2,441,473 |
CURRENT LIABILITIES: | ||
Accounts payable | 20,269 | 43,650 |
Accrued and other current liabilities | 22,997 | 29,820 |
Accrued compensation | 96,004 | 79,294 |
Deferred revenue, current portion | 397,118 | 305,169 |
Total current liabilities | 536,388 | 457,933 |
Convertible senior notes, net | 741,980 | 706,198 |
Deferred revenue, non-current portion | 256,398 | 221,829 |
Other long-term liabilities | 7,087 | 11,141 |
Total liabilities | 1,541,853 | 1,397,101 |
Commitments and contingencies (NOTE 9) | ||
Stockholders' equity: | ||
Common stock, par value of $0.0001 per share; 1,000,000 shares authorized, 174,596 shares and 161,643 shares issued and outstanding as of December 31, 2016 and 2015, respectively | 17 | 16 |
Additional paid-in capital | 2,682,909 | 2,403,088 |
Treasury stock, at cost; 3,333 shares as of December 31, 2016 and 2015 | (150,000) | (150,000) |
Accumulated other comprehensive loss | (1,742) | (2,225) |
Accumulated deficit | (1,690,072) | (1,206,507) |
Total stockholders’ equity | 841,112 | 1,044,372 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 2,382,965 | $ 2,441,473 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 1,590 | $ 2,021 |
Common stock, par value (usd per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 174,596,000 | 161,643,000 |
Common stock, shares outstanding (in shares) | 174,596,000 | 161,643,000 |
Treasury stock (in shares) | 3,333,000 | 3,333,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenue: | |||
Product | $ 151,926 | $ 216,632 | $ 178,246 |
Subscription and services | 562,188 | 406,335 | 247,416 |
Total revenue | 714,114 | 622,967 | 425,662 |
Cost of revenue: | |||
Product | 65,158 | 74,481 | 58,980 |
Subscription and services | 206,710 | 158,723 | 116,113 |
Total cost of revenue | 271,868 | 233,204 | 175,093 |
Total gross profit | 442,246 | 389,763 | 250,569 |
Operating expenses: | |||
Research and development | 279,594 | 279,467 | 203,187 |
Sales and marketing | 439,499 | 476,166 | 401,151 |
General and administrative | 139,839 | 141,790 | 121,099 |
Restructuring charges | 27,630 | 0 | 4,327 |
Total operating expenses | 886,562 | 897,423 | 729,764 |
Operating loss | (444,316) | (507,660) | (479,195) |
Interest income | 6,582 | 2,935 | 713 |
Interest expense | (47,869) | (27,116) | (26) |
Other expense, net | (3,247) | (3,284) | (1,936) |
Loss before income taxes | (488,850) | (535,125) | (480,444) |
Provision for (benefit from) income taxes | (8,721) | 4,090 | (36,654) |
Net loss attributable to common stockholders | $ (480,129) | $ (539,215) | $ (443,790) |
Net loss per share attributable to common stockholders, basic and diluted (usd per share) | $ (2.94) | $ (3.50) | $ (3.12) |
Weighted average shares used in computing net loss per share attributable to common stockholders, basic and diluted (in shares) | 163,211 | 154,120 | 142,176 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (480,129) | $ (539,215) | $ (443,790) |
Change in net unrealized gains (losses) on available-for-sale investments, net of tax | 483 | (1,784) | (441) |
Comprehensive loss | $ (479,646) | $ (540,999) | $ (444,231) |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity Statement - USD ($) shares in Thousands, $ in Thousands | Total | nPulse Technologies | Mandiant, Inc. | iSIGHT Security | Invotas International Corporation | Treasury Stock | Common Stock | Common StocknPulse Technologies | Common StockiSIGHT Security | Common StockInvotas International Corporation | Additional Paid-In Capital | Additional Paid-In CapitalnPulse Technologies | Additional Paid-In CapitalMandiant, Inc. | Additional Paid-In CapitaliSIGHT Security | Additional Paid-In CapitalInvotas International Corporation | Accumulated Other Comprehensive Loss | Accumulated Deficit |
Beginning balance, value at Dec. 31, 2013 | $ 1,048,102 | $ 0 | $ 14 | $ 1,271,590 | $ 0 | $ (223,502) | |||||||||||
Beginning balance (in shares) at Dec. 31, 2013 | 137,758 | ||||||||||||||||
Issuance of common stock in connection with follow-on public offering, net of offering costs, value | 444,295 | 444,295 | |||||||||||||||
Issuance of common stock in connection with follow-on public offering, net of offering costs (in shares) | 5,582 | ||||||||||||||||
Issuance of common stock for equity awards, net of repurchases and tax withholdings, value | 20,659 | $ 1 | 20,658 | ||||||||||||||
Issuance of common stock for equity awards, net of repurchases and tax withholdings (in shares) | 8,030 | ||||||||||||||||
Issuance of common stock related to nPulse Technologies, Inc. acquisition, value | $ 1,398 | $ 1,398 | |||||||||||||||
Issuance of common stock related to nPulse Technologies, Inc. acquisition (in shares) | 296 | ||||||||||||||||
Issuance of common stock related to employee stock purchase plan, value | 21,228 | 21,228 | |||||||||||||||
Issuance of common stock related to employee stock purchase plan (in shares) | 1,194 | ||||||||||||||||
Assumption of vested options related to the acquisition of Mandiant, Inc. | $ 3,135 | $ 3,135 | |||||||||||||||
Vesting of early exercise of equity awards | 4,390 | 4,390 | |||||||||||||||
Stock-based compensation | 151,852 | 151,852 | |||||||||||||||
Unrealized loss on investments | (441) | (441) | |||||||||||||||
Net loss | (443,790) | (443,790) | |||||||||||||||
Beginning balance (in shares) at Dec. 31, 2014 | 152,860 | ||||||||||||||||
Beginning balance, value at Dec. 31, 2014 | 1,250,828 | 0 | $ 15 | 1,918,546 | (441) | (667,292) | |||||||||||
Issuance of common stock for equity awards, net of repurchases and tax withholdings, value | 27,063 | $ 1 | 27,062 | ||||||||||||||
Issuance of common stock for equity awards, net of repurchases and tax withholdings (in shares) | 7,786 | ||||||||||||||||
Issuance of common stock related to employee stock purchase plan, value | 21,880 | 21,880 | |||||||||||||||
Issuance of common stock related to employee stock purchase plan (in shares) | 997 | ||||||||||||||||
Excess tax benefit on vesting of awards and options exercised | 809 | 809 | |||||||||||||||
Adjustments to Additional Paid in Capital, Equity Component of Convertible Debt | 210,401 | 210,401 | |||||||||||||||
Prepaid forward stock purchase | (150,000) | (150,000) | |||||||||||||||
Vesting of early exercise of equity awards | 2,271 | 2,271 | |||||||||||||||
Stock-based compensation | 222,119 | 222,119 | |||||||||||||||
Unrealized loss on investments | (1,784) | (1,784) | |||||||||||||||
Net loss | (539,215) | (539,215) | |||||||||||||||
Beginning balance (in shares) at Dec. 31, 2015 | 161,643 | ||||||||||||||||
Beginning balance, value at Dec. 31, 2015 | 1,044,372 | (150,000) | $ 16 | 2,403,088 | (2,225) | (1,206,507) | |||||||||||
Issuance of common stock for equity awards, net of repurchases and tax withholdings, value | 12,721 | $ 1 | 12,720 | ||||||||||||||
Issuance of common stock for equity awards, net of repurchases and tax withholdings (in shares) | 8,438 | ||||||||||||||||
Issuance of common stock related to nPulse Technologies, Inc. acquisition, value | $ 29,900 | $ 11,100 | $ 29,900 | $ 11,100 | |||||||||||||
Issuance of common stock related to nPulse Technologies, Inc. acquisition (in shares) | 1,793 | 742 | |||||||||||||||
Issuance of common stock related to employee stock purchase plan, value | 22,080 | 22,080 | |||||||||||||||
Issuance of common stock related to employee stock purchase plan (in shares) | 1,980 | ||||||||||||||||
Vesting of early exercise of equity awards | 1,519 | 1,519 | |||||||||||||||
Stock-based compensation | 199,066 | 199,066 | |||||||||||||||
Unrealized loss on investments | 483 | 483 | |||||||||||||||
Net loss | (480,129) | (480,129) | |||||||||||||||
Beginning balance (in shares) at Dec. 31, 2016 | 174,596 | ||||||||||||||||
Beginning balance, value at Dec. 31, 2016 | 841,112 | $ (150,000) | $ 17 | 2,682,909 | $ (1,742) | (1,690,072) | |||||||||||
Cumulative-effect adjustment for adoption of ASU 2016-09 | $ 0 | $ 3,436 | $ (3,436) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net loss | $ (480,129) | $ (539,215) | $ (443,790) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation and amortization | 119,267 | 111,956 | 94,136 |
Stock-based compensation | 199,066 | 222,119 | 151,852 |
Non-cash interest expense related to convertible senior notes | 35,782 | 20,069 | 0 |
Change in fair value of contingent earn-out liability | 2,356 | 0 | 0 |
Deferred income taxes | (11,926) | (1,353) | (39,869) |
Other | 9,836 | 4,672 | 2,261 |
Changes in operating assets and liabilities, net of business acquisitions: | |||
Accounts receivable | 61,785 | 19,126 | (97,165) |
Inventories | 1,415 | (7,820) | (2,024) |
Prepaid expenses and other assets | 9,344 | (675) | 1,450 |
Accounts payable | (19,093) | 7,705 | (3,193) |
Accrued liabilities | (11,154) | 7,495 | 11,403 |
Accrued transaction costs of acquiree | (7,727) | 0 | 0 |
Accrued compensation | (24,621) | 14,742 | 23,658 |
Deferred revenue | 105,431 | 174,455 | 164,728 |
Other long-term liabilities | (4,217) | 3,739 | 5,283 |
Net cash provided by (used in) operating activities | (14,585) | 37,015 | (131,270) |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchases of property and equipment and demonstration units | (36,314) | (54,549) | (67,715) |
Purchases of short-term investments | (507,073) | (769,097) | (390,360) |
Proceeds from maturities of short-term investments | 554,358 | 245,116 | 99,541 |
Proceeds from sales of short-term investments | 4,507 | 4,807 | 31,577 |
Business acquisitions, net of cash acquired | (204,926) | 0 | (55,058) |
Purchase of investment in private company | 0 | (1,800) | 0 |
Lease deposits | (248) | (1,226) | (496) |
Net cash used in investing activities | (189,696) | (576,749) | (382,511) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Net proceeds from follow-on public offering | 0 | 0 | 444,338 |
Net proceeds from issuance of convertible senior notes | 0 | 896,530 | 0 |
Prepaid forward stock purchase | 0 | (150,000) | 0 |
Repayment of debt of acquired business | (8,842) | 0 | 0 |
Payments for contingent earn-outs | (112) | 0 | 0 |
Payment related to shares withheld for taxes | (1,124) | (2,027) | (2,058) |
Proceeds from employee stock purchase plan | 22,080 | 21,880 | 21,228 |
Proceeds from exercise of equity awards | 13,844 | 29,090 | 22,718 |
Net cash provided by financing activities | 25,846 | 795,473 | 486,226 |
Net change in cash and cash equivalents | (178,435) | 255,739 | (27,555) |
Cash and cash equivalents, beginning of period | 402,102 | 146,363 | 173,918 |
Cash and cash equivalents, end of period | 223,667 | 402,102 | 146,363 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | |||
Cash paid for income taxes | 5,209 | 2,686 | 2,489 |
Cash paid for interest | 12,098 | 6,004 | 27 |
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | |||
Common stock issued in connection with acquisitions | 41,000 | 0 | 1,398 |
Contingent earn-out in connection with acquisitions | 39,088 | 0 | 0 |
Purchases of property and equipment and demonstration units in accounts payable and accrued liabilities | $ 4,035 | $ 8,604 | $ 6,716 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Summary of Significant Accounting Policies | Description of Business and Summary of Significant Accounting Policies Description of Business FireEye, Inc., with principal executive offices located in Milpitas, California, was incorporated as NetForts, Inc. on February 18, 2004, under the laws of the State of Delaware, and changed its name to FireEye, Inc. on September 7, 2005. FireEye, Inc. and its wholly owned subsidiaries (collectively, the “Company”, “we”, “us” or “our”) is a leader in stopping advanced cyber attacks that use advanced malware, zero-day exploits, and APT (“Advanced Persistent Threat”) tactics. Our solutions supplement traditional and next-generation firewalls, Intrusion Prevention Systems (“IPS”), anti-virus, and gateways, which cannot stop advanced threats, leaving security holes in networks. We offer a solution that detects and blocks attacks across Web, email, endpoint, file and mobile threat vectors, as well as latent malware resident on file shares. Our solutions address all stages of an attack lifecycle with a signature-less engine utilizing stateful attack analysis to detect zero-day threats. In February 2016, we acquired Invotas International Corporation (“Invotas”), a provider of security automation and orchestration technology. We paid upfront cash consideration of $17.7 million and issued 742,026 shares of our common stock with an estimated fair value of $11.1 million . In January 2016, we acquired iSIGHT Security, Inc. (d/b/a iSIGHT Partners, Inc.) (“iSIGHT”), one of the world’s leading providers of cyber threat intelligence for global enterprises. We paid upfront cash consideration of $192.8 million , incurred liabilities of $39.1 million contingent upon the achievement of a threat intelligence bookings target on or before the end of the second quarter of 2018, and issued 1,793,305 shares of our common stock with an estimated fair value of $29.9 million . In June 2015, we issued $460.0 million principal amount of 1.000% Convertible Senior Notes due 2035 (the “Series A Notes”) and $460.0 million principal amount of 1.625% Convertible Senior Notes due 2035 (the “Series B Notes” and together with the Series A Notes, the “Convertible Senior Notes”), in a private placement to qualified institutional purchasers pursuant to an exemption from registration provided by Section 4(a)(2) and Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). We recognized total net proceeds after the initial purchasers' discount and issuance costs of $896.5 million . In connection with the issuance of the Convertible Senior Notes, we also entered into privately negotiated prepaid forward stock purchase transactions (each a “Prepaid Forward”) with one of the initial purchasers of the Convertible Senior Notes, pursuant to which we paid approximately $150.0 million . The amount of the prepaid is equivalent to approximately 3.3 million shares which are to be settled on or around June 1, 2020 and June 1, 2022, respectively, subject to any early settlement in whole or part of each Prepaid Forward. In March 2014, we completed our follow-on public offering in which we issued and sold 5,582,215 shares of common stock at a price of $82.00 per share. We received aggregate proceeds of $446.5 million from the sale of shares of common stock, net of underwriters’ discounts and commissions of $11.2 million , but before deducting offering expenses of approximately $2.2 million . Another 8,417,785 shares were sold by certain selling stockholders, which included 796,846 shares sold pursuant to the exercise of vested outstanding options by our employees. We did not receive any of the proceeds from the sales of shares by the selling stockholders. We sell the majority of our products, subscriptions and services to end-customers through distributors, resellers, and strategic partners, with a lesser percentage of sales directly to end-customers. Basis of Presentation and Consolidation The consolidated financial statements include the accounts of FireEye, Inc. and its wholly owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Such management estimates include, but are not limited to, the best estimate of selling price for our products, subscriptions and services, commissions expense, bonus expense, future taxable income, contract manufacturer liabilities, litigation and settlement costs and other loss contingencies, fair value of our equity awards, achievement of targets for performance stock units, fair value of the liability and equity components of Convertible Senior Notes and the purchase price allocation of acquired businesses. We base our estimates on historical experience and also on assumptions that we believe are reasonable. Changes in facts or circumstances may cause us to change our assumptions and estimates in future periods, and it is possible that actual results could differ from current or revised future estimates. Concentrations Financial instruments that subject us to concentrations of credit risk consist primarily of cash and cash equivalents, short-term investments, and accounts receivable. We maintain a substantial portion of our cash and cash equivalents in money market funds invested in U.S. Treasury related obligations. Management believes that these financial institutions are financially sound and, accordingly, are subject to minimal credit risk. Deposits held with banks may exceed the amount of insurance provided on such deposits. Our short-term investments primarily consist of notes and bonds issued by corporate institutions and U.S. Government agencies. All of our investments are highly-rated by credit rating agencies and are issued by organizations with reputable credit, and therefore bear minimal credit risk. Our accounts receivables are primarily derived from a diverse set of customers across various geographical locations. We perform ongoing credit evaluations of our customers and generally do not require collateral on accounts receivable. We maintain an allowance for doubtful accounts for estimated potential credit losses. See Note 15 for information on major customers. We rely primarily on a single contract manufacturer to assemble our products. In some cases we rely on sole suppliers for a certain number of our components. Foreign Currency Translation and Transactions The functional currency of our foreign subsidiaries is the U.S. dollar. We translate all monetary assets and liabilities denominated in foreign currencies into U.S. dollars using the exchange rates in effect at the balance sheet dates and other assets and liabilities using historical exchange rates. Foreign currency denominated revenue and expenses have been re-measured using the average exchange rates in effect during each period. Foreign currency re-measurement gains and losses have been included in other income (expense) and have not been significant for the years ended December 31, 2016 , 2015 and 2014 . Cash and Cash Equivalents We consider all highly liquid investments with original maturities of three months or less at date of purchase to be cash equivalents. We determine the appropriate classification of our investments at the time of purchase, and evaluate such designation at each balance sheet date. Short-term Investments We classify our investments in debt and equity securities as available-for-sale and record these investments at fair value. Investments with an original maturity of three months or less at the date of purchase are considered cash equivalents, while all other investments are classified as short-term or long-term based on the nature of the investments, their maturities, and their availability for use in current operations. Unrealized gains and losses are reported as a component of other comprehensive loss. Realized gains and losses are determined based on the specific identification method, and are reflected in our Consolidated Statements of Operations. We regularly review our investment portfolio to identify and evaluate investments that have indicators of possible impairment. Factors considered in determining whether a loss is other-than-temporary include, but are not limited to: the length of time and extent a security’s fair value has been below its cost, the financial condition and near-term prospects of the investee, the credit quality of the security’s issuer, likelihood of recovery and our intent and ability to hold the security for a period of time sufficient to allow for any anticipated recovery in value. For our debt instruments, we also evaluate whether we have the intent to sell the security or it is more likely than not that we will be required to sell the security before recovery of its cost basis. Investments are considered to be impaired when a decline in fair value is judged to be other-than-temporary. Fair value is calculated based on publicly available market information or other estimates determined by management. If the cost of an investment exceeds its fair value, we evaluate, among other factors, general market conditions, credit quality of debt instrument issuers, the duration and extent to which the fair value is less than cost and whether we have plans to sell the security, or it is more likely than not that we will be required to sell the security, before recovery. Once a decline in fair value is determined to be other-than-temporary, an impairment charge is recorded to other income (expense) and a new cost basis in the investment is established. Fair Value of Financial Instruments We define fair value as the price that would be received from selling an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities which are required to be recorded at fair value, we consider the principal or most advantageous market in which to transact and the market-based risk. We apply fair value accounting for all financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. The carrying amounts reported in the consolidated financial statements approximate the fair value for cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities due to their short-term nature. Accounts Receivable Trade accounts receivable are recorded at the invoiced amount, net of allowances for doubtful accounts. The allowance for doubtful accounts is based on our assessment of the collectability of accounts. Management regularly reviews the adequacy of the allowance for doubtful accounts by considering the age of each outstanding invoice, each partner’s expected ability to pay and the collection history with each partner, when applicable, to determine whether a specific allowance is appropriate. Accounts receivable deemed uncollectible are charged against the allowance for doubtful accounts when identified. Inventories Inventories are stated at the lower of cost or market. Provisions have been made to reduce all slow-moving, obsolete or unusable inventories to their net realizable values. We purchase completed units from contract manufacturers. Accordingly, substantially all inventories are finished goods with an immaterial balance of replacement parts. As of December 31, 2016 and 2015 , the reserves for excess and obsolete inventories were $3.8 million and $1.4 million , respectively. Deferred Costs of Revenue Deferred cost of revenue consists of direct and incremental costs related to product revenue deferred in accordance with the Company’s revenue recognition policy. Deferred cost of revenue that will be realized within the succeeding 12 month period is classified as current, and included in prepaid expenses and other current assets on the consolidated balance sheets. The remaining balance is classified as non-current, and included in deposits and other long-term assets. Property and Equipment Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally two to five years. The estimated useful lives of property and equipment are described below: Property and Equipment Useful Life Computer equipment and software 2 to 5 years Leasehold improvements Shorter of estimated useful life or remaining lease term Furniture and fixtures 5 years Machinery and equipment 2 to 5 years Demonstration Units Product demonstration units are included in prepaid expenses and other current assets on the consolidated balance sheets. Demonstration units are recorded at cost and are amortized over the estimated useful life from the date of transfer from inventory, generally 12 months. We generally do not resell units that have been used for demonstration purposes. Impairment of Long-Lived Assets We evaluate events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances occur, we assess the recoverability of long-lived assets by determining whether or not the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future undiscounted cash flows is less than the carrying amount of an asset, we record an impairment charge for the amount by which the carrying amount of the assets exceeds the fair value of the asset. Through December 31, 2016 we have not written down any of our long-lived assets as a result of impairment. Business Combinations We have accounted for all of our acquisitions using the acquisition method. The Company allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired, based on their estimated fair values. The excess of the fair value of purchase consideration over the values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair value of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets. Critical estimates in valuing certain identifiable assets include, but are not limited to, expected long-term market growth, future expected operating expenses, costs of capital, and appropriate discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and, as a result, actual results may differ from estimates. Goodwill and Purchased Intangibles Goodwill represents the excess of the aggregate purchase price paid over the fair value of the net tangible assets acquired. Goodwill is not amortized and is tested for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The Company has determined that it operates as one reporting unit and has selected December 1 as the date to perform its annual impairment test. In the valuation of its goodwill, the Company must make assumptions regarding estimated future cash flows to be derived from the Company. If these estimates or their related assumptions change in the future, the Company may be required to record impairment for these assets. The first step of the impairment test involves comparing the fair value of the reporting unit to its net book value, including goodwill. If the net book value exceeds its fair value, then the Company would perform the second step of the goodwill impairment test to determine the amount of the impairment loss. The impairment loss would be calculated by comparing the implied fair value of the Company to its net book value. In calculating the implied fair value of the Company’s goodwill, the fair value of the Company would be allocated to all of the other assets and liabilities based on their fair values. The excess of the fair value of the Company over the amount assigned to its other assets and liabilities is the implied fair value of goodwill. An impairment loss would be recognized when the carrying amount of goodwill exceeds its implied fair value. There was no impairment of goodwill recorded for the years ended December 31, 2016 , 2015 or 2014 . Purchased intangible assets with finite lives are carried at cost, less accumulated amortization. Amortization is computed over the estimated useful lives of the respective assets. Purchased intangible assets with indefinite lives are assessed for potential impairment annually, or when events or circumstances indicate that their carrying amounts might be impaired. Warranties We generally provide a one -year warranty on hardware. We do not accrue for potential warranty claims as a component of cost of product revenue as all product warranty claims are satisfied under our support and maintenance contracts. Deferred Revenue Deferred revenue consists of amounts that have been invoiced and for which the Company has the right to bill, but that have not been recognized as revenue. Deferred revenue that will be realized during the succeeding 12 month period is recorded as current, and the remaining deferred revenue is recorded as non-current. Contract Manufacturer Liabilities We outsource most of our manufacturing, repair, and supply chain management operations to our independent contract manufacturers and payments to such manufacturers are a significant portion of our product cost of revenue. Although we could be contractually obligated to purchase manufactured products, we generally do not own the manufactured products. Product title transfers from our independent contract manufacturers to us and to our partners upon shipment. Our independent contract manufacturers assemble our products using design specifications, quality assurance programs, and standards that we establish, and they procure components and assemble our products based on our demand forecasts. These forecasts represent our estimates of future demand for our products based upon historical trends and analysis from our sales and product management functions as adjusted for overall market conditions. If the actual component usage and product demand are significantly lower than forecast, we may accrue for costs for contractual manufacturing commitments in excess of our forecasted demand, including costs for excess components or for carrying costs incurred by our contract manufacturers. To date, we have not accrued any significant costs associated with this exposure. Revenue Recognition We generate revenue from the sales of products, subscriptions, support and maintenance and professional services, primarily through our indirect relationships with our partners as well as end customers through our direct sales force. Our products include operating system software that is integrated into the appliance hardware and is deemed essential to its functionality. As a result, we account for product revenue in accordance with Accounting Standards Codification 605, Revenue Recognition, and all related interpretations, as all of our security appliance deliverables include proprietary operating system software, which together delivers the essential functionality of our products. Our professional services consist primarily of time and materials based contracts, and the revenue is recognized as costs are incurred at amounts represented by the agreed-upon billing amounts. Revenue from fixed-price professional services engagements are recognized under the proportional performance method of accounting. Revenue is recognized when all of the following criteria are met: • Persuasive Evidence of an Arrangement Exists . We rely upon non-cancelable sales agreements and purchase orders to determine the existence of an arrangement. • Delivery has Occurred . We use shipping documents or transmissions of service contract registration codes to verify delivery. • The Fee is Fixed or Determinable . We assess whether the fee is fixed or determinable based on the payment terms associated with the transaction. • Collectability is Reasonably Assured . We assess collectability based on credit analysis and payment history. Our products include principal security product families that address critical vectors of attack, including Web, email, endpoint, file and mobile. Our Network Threat Prevention, Endpoint Threat Prevention, Email Threat Prevention, File Content Security, Forensic Analysis System and Central Management System appliance and subscription services qualify as separate units of accounting. Therefore product revenue from these appliances is recognized at the time of shipment. At the time of shipment, product revenue meets the criteria for fixed or determinable fees. In addition, payment from our partners is not contingent on the partners' collection from their end-customers. Our partners do not stock products and do not have any stock rotation rights. We recognize subscription and support and maintenance service revenue ratably over the contractual service period, which is typically one or three years. Professional services revenue, including incident response and related consulting services for our customers who have experienced a cybersecurity breach or who require assistance assessing the vulnerability of their networks, and training services revenue is recognized as the services are rendered. Most of our arrangements, other than renewals of subscriptions and support and maintenance services, are multiple-element arrangements with a combination of product, subscriptions, support and maintenance, and other services. For multiple-element arrangements, we allocate revenue to each unit of accounting based on an estimated selling price at the arrangement inception. The estimated selling price for each element is based upon the following hierarchy: vendor-specific objective evidence (“VSOE”) of selling price, if available, third-party evidence (“TPE”) of selling price, if VSOE of selling price is not available, or best estimate of selling price (“BESP”), if neither VSOE of selling price nor TPE of selling price are available. The total arrangement consideration is allocated to each separate unit of accounting using the relative estimated selling prices of each unit based on the aforementioned selling price hierarchy. We limit the amount of revenue recognized for delivered elements to an amount that is not contingent upon future delivery of additional products or services or meeting of any specified performance conditions. To determine the estimated selling price in multiple-element arrangements, we seek to establish VSOE of selling price using the prices charged for a deliverable when sold separately and, for subscriptions and support and maintenance, based on the renewal rates and discounts offered to partners. If VSOE of selling price cannot be established for a deliverable, we seek to establish TPE of selling price by evaluating similar and interchangeable competitor products or services in standalone arrangements with similarly situated partners. However, as our products contain a significant element of proprietary technology and offer substantially different features and functionality from our competitors, we are unable to obtain comparable pricing of our competitors’ products with similar functionality on a standalone basis. Therefore, we have not been able to obtain reliable evidence of TPE of selling price. If neither VSOE nor TPE of selling price can be established for a deliverable, we establish BESP primarily based on historical transaction pricing. Historical transactions are segregated based on our pricing model and our go-to-market strategy, which include factors such as type of sales channel (reseller, distributor, or end-customer), the geographies in which our products and services were sold (domestic or international), offering type (products, subscriptions or services), and whether or not the opportunity was identified by our sales force or by our partners. In analyzing historical transaction pricing, we evaluate whether a majority of the prices charged for a product, as represented by a percentage of list price, fall within a reasonable range. To further support the best estimate of selling price as determined by the historical transaction pricing or when such information is unavailable, such as when there are limited sales of a new product, we consider the same factors we have established through our pricing model and go-to-market strategy. The determination of BESP is made through consultation with and approval by our management. We have established the estimated selling price of all of our deliverables using BESP. Shipping charges billed to partners are included in revenue and related costs are included in cost of revenue. Sales commissions and other incremental costs to acquire contracts are also expensed as incurred and are recorded in sales and marketing expense. After receipt of a partner order, any amounts billed in excess of revenue recognized are recorded as deferred revenue. Advertising Costs Advertising costs, which are expensed and included in sales and marketing expense when incurred, were $3.6 million , $5.1 million and $2.3 million during the years ended December 31, 2016 , 2015 and 2014 , respectively. Software Development Costs The costs to develop internal-use software are subject to capitalization and begin amortizing once the software is substantially ready for use. These costs are included in property and equipment and are generally amortized over 3 years. All other software development costs are expensed as incurred and included in research and development expense on the consolidated statements of operations. Stock-Based Compensation Compensation expense related to stock-based transactions, including employee and non-employee director awards and our 2013 Employee Stock Purchase Plan (the "ESPP"), is measured and recognized in the financial statements based on fair value. The fair value of each option award is estimated on the grant date using the Black-Scholes option-pricing model and a single option award approach. This model requires that at the date of grant we determine the fair value of the underlying common stock, the expected term of the award, the expected volatility of the price of our common stock, risk-free interest rates, and expected dividend yield of our common stock. The fair value of restricted stock awards and restricted stock units is based on the closing market price of our common stock on the date of grant. The stock-based compensation expense is recognized using a straight-line basis over the requisite service period of the entire awards, which is generally four years , unless the awards are subject to performance conditions, in which case the Company recognizes compensation expense over the requisite service period of each vesting tranche. For performance-based awards, the Company recognizes compensation expense when it becomes probable that the performance criteria set by the Board of Directors will be achieved. Beginning January 1, 2016 with the adoption of ASU 2016-09, we elected to recognize forfeitures as they occur, and no longer estimate a forfeiture rate when calculating the stock-based compensation for our equity awards. Stock-based compensation for the years ended December 31, 2015 and 2014 was calculated using an estimated forfeiture rate based on an analysis of our actual historical forfeitures. We account for stock options issued to non-employees based on the fair value of the awards determined using the Black-Scholes option-pricing model. The fair value of stock options granted to non-employees is remeasured as the stock options vest, and the resulting change in value, if any, is recognized in the statement of operations during the period the related services are rendered. Income Taxes We account for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in our financial statements or tax returns. In addition, deferred tax assets are recorded for the future benefit of utilizing net operating losses and research and development credit carry forwards. Valuation allowances are provided when necessary to reduce deferred tax assets to the amount expected to be realized. We apply the authoritative accounting guidance prescribing a threshold and measurement attribute for the financial recognition and measurement of a tax position taken or expected to be taken in a tax return. We recognize liabilities for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step requires us to estimate and measure the tax liability as the largest amount that is more likely than not to be realized upon ultimate settlement. We recognize interest and penalties related to unrecognized tax benefits within the income tax expense line in the accompanying consolidated statements of operations. Accrued interest and penalties are included within other long-term liabilities in the consolidated balance sheets. Net Loss Per Share Attributable to Common Stockholders We calculate our basic and diluted net loss per share attributable to common stockholders in conformity with the two-class method required for companies with participating securities. Under the two-class method, in periods when the Company has net income, net income attributable to common stockholders is determined by allocating undistributed earnings, calculated as net income less current period convertible preferred stock non-cumulative dividends, between common stock and the convertible preferred stock. In computing diluted net income attributable to common stockholders, undistributed earnings are re-allocated to reflect the potential impact of dilutive securities. The Company’s basic net loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period. The diluted net loss 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 are considered common stock equivalents, but have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is anti-dilutive. Convertible Senior Notes We allocated the principal amount of the Convertible Senior Notes between its liability and equity components. The carrying amount of the liability component was determined by measuring the fair value of a similar debt instrument of similar credit quality and maturity that did not have the convert feature. The carrying amount of the equity component, representing the embedded conversion option, was determined by deducting the fair value of the liability component from the principal amount of the Convertible Senior Notes as a whole. The equity component was recorded to additional paid-in capital and is not remeasured as long as it continues to meet the conditions for equity classification. The excess of the principal amount of the Convertible Senior Notes over the carrying amount of the liability component was recorded as a debt discount, and is being amortized to interest expense using the effective interest method through the first date holders have the right to require us to repurchase all or any portion of their Convertible Senior Notes; the first put date (see Note 8). We allocate the total amount of transaction costs incurred to the liability and equity components using the same proportions as the proceeds from the Convertible Senior Notes. Transaction costs attributable to the liability component were recorded as a direct deduction from the liability component of the Convertible Senior Notes, |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The accounting guidance for fair value measurements provides a framework for measuring fair value on either a recurring or nonrecurring basis, whereby the inputs used in our valuation techniques are assigned a hierarchical level. The following are the three levels of inputs to measure fair value: • Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. • Level 2: Inputs that reflect quoted prices for identical assets or liabilities in less active markets; quoted prices for similar assets or liabilities in active markets; benchmark yields, reported trades, broker/dealer quotes, inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. • Level 3: Unobservable inputs that reflect our own assumptions incorporated in valuation techniques used to measure fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. We consider an active market to be one in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis, and consider an inactive market to be one in which there are infrequent or few transactions for the asset or liability, the prices are not current, or price quotations vary substantially either over time or among market makers. Where appropriate, our own or the counterparty’s non-performance risk is considered in measuring the fair values of assets. The following table presents our assets and liabilities measured at fair value on a recurring basis using the above input categories (in thousands): As of December 31, 2016 As of December 31, 2015 Description Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets Cash equivalents: Money market funds $ 449 $ — $ — $ 449 $ 210,533 $ — $ — $ 210,533 Total cash equivalents 449 — — 449 210,533 — — 210,533 Short-term investments: Certificates of deposit — 9,569 — 9,569 — 19,124 — 19,124 Commercial paper — 29,920 — 29,920 — — — — Corporate notes and bonds — 420,684 — 420,684 — 447,267 — 447,267 U.S. Government agencies — 251,885 — 251,885 — 301,384 — 301,384 Total short-term investments — 712,058 — 712,058 — 767,775 — 767,775 Total assets measured at fair value $ 449 $ 712,058 $ — $ 712,507 $ 210,533 $ 767,775 $ — $ 978,308 Liabilities Contingent earn-out $ — $ — $ 41,332 $ 41,332 $ — $ — $ — $ — Total liabilities measured at fair value $ — $ — $ 41,332 $ 41,332 $ — $ — $ — $ — The estimated fair value of the contingent earn-out incurred in connection with our acquisition of iSIGHT is considered to be a Level 3 measurement due to the use of significant unobservable inputs. The value was determined using a discounted risk-adjusted expected (probability-weighted) cash flow methodology, by applying a real options approach model. The real options approach incorporated management's estimates of expected quarterly growth rates in bookings ( 63% on average), which could not be corroborated by observable market data, with the volatility of revenue for comparable companies ( 16.5% on average) and the correlation between comparable companies' quarterly revenue growth and that of the S&P 500 Index ( 44.7% on average), which are observable in the market, to determine the probability of achieving estimated bookings within the earn-out period of performance ( 2.5 years ). The resulting expected earn-out payment was discounted back to present value using our cost of debt (ranging from 6.3% to 7.1% ). The following is a reconciliation of the Level 3 contingent earn-out liability for the year ended December 31, 2016 (in thousands): Amount Balance at acquisition (January 14, 2016) $ 35,588 Measurement period adjustments (1) 3,500 Changes in fair value (2) 2,356 Cash payments (112 ) Balance as of December 31, 2016 $ 41,332 (1) See Note 5 Business Combinations for adjustments made to initial amounts recorded in our acquisition of iSIGHT. (2) Changes in fair value are recorded in general and administrative expenses in our consolidated statements of operations. Additionally, we have a restructuring liability related to certain real estate facilities which was calculated based on the present value of future lease payments, less estimated sublease income, discounted at a rate commensurate with our current cost of financing. This non-recurring fair value measurement is considered to be a Level 3 measurement due to the use of significant unobservable inputs. To the extent that actual sublease income or the timing of subleasing these facilities is different than initial estimates, we will adjust the restructuring liability in the period during which such information becomes known. See Note 6 Restructuring Charges for a reconciliation of this liability. We measure certain assets, including goodwill, intangible assets and our equity-method investment in a private company at fair value on a nonrecurring basis when there are identifiable events or changes in circumstances that may have a significant adverse impact on the fair value of these assets. No such events or changes occurred during the year ended December 31, 2016 . The estimated fair value of the Convertible Senior Notes as of December 31, 2016 was determined to be $844.7 million , based on quoted market prices. We consider the fair value of the Convertible Senior Notes to be a Level 2 measurement as they are not actively traded. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments Our investments consisted of the following (in thousands): As of December 31, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Short-Term Investments Certificates of deposit $ 9,560 $ 10 $ (1 ) $ 9,569 $ 9,569 Commercial paper 29,929 — (9 ) 29,920 29,920 Corporate notes and bonds 421,635 17 (968 ) 420,684 420,684 U.S. Government agencies 252,676 2 (793 ) 251,885 251,885 Total $ 713,800 $ 29 $ (1,771 ) $ 712,058 $ 712,058 As of December 31, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Short-Term Investments Certificates of deposit $ 19,160 $ — $ (36 ) $ 19,124 $ 19,124 Corporate notes and bonds 448,688 — (1,421 ) 447,267 447,267 U.S. Government agencies 302,152 2 (770 ) 301,384 301,384 Total $ 770,000 $ 2 $ (2,227 ) $ 767,775 $ 767,775 The following tables present the gross unrealized losses and related fair values of our investments that have been in a continuous unrealized loss position (in thousands): As of December 31, 2016 Less Than 12 Months Greater Than 12 Months Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss Certificates of deposit $ — $ — $ 199 $ (1 ) $ 199 $ (1 ) Commercial paper 24,925 (9 ) — — 24,925 (9 ) Corporate notes and bonds 294,818 (889 ) 99,433 (79 ) 394,251 (968 ) U.S. Government agencies 222,171 (763 ) 17,657 (30 ) 239,828 (793 ) Total $ 541,914 $ (1,661 ) $ 117,289 $ (110 ) $ 659,203 $ (1,771 ) As of December 31, 2015 Less Than 12 Months Greater Than 12 Months Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss Certificates of deposit $ 18,404 $ (36 ) $ — $ — $ 18,404 $ (36 ) Corporate notes and bonds 430,466 (1,407 ) 16,801 (15 ) 447,267 (1,422 ) U.S. Government agencies 266,541 (761 ) 8,992 (8 ) 275,533 (769 ) Total $ 715,411 $ (2,204 ) $ 25,793 $ (23 ) $ 741,204 $ (2,227 ) Unrealized losses related to these investments are due to interest rate fluctuations as opposed to credit quality. In addition, we do not intend to sell, and it is not more likely than not that we would be required to sell, these investments before recovery of their cost basis. As a result, there is no other-than-temporary impairment for these investments as of December 31, 2016 and 2015 . The following table summarizes the contractual maturities of our investments at December 31, 2016 (in thousands): Amortized Cost Fair Value Due within one year $ 383,604 $ 383,279 Due within one to two years 330,196 328,779 Total $ 713,800 $ 712,058 All available-for-sale securities have been classified as current, based on management's intent and ability to use the funds in current operations. During 2015, we invested in a privately held company, obtaining an initial 12.5% ownership interest. This investment is accounted for under the equity method based on our ability to exercise significant influence over operating and financial policies of the investee, and is classified within deposits and other long-term assets on our consolidated balance sheets. The carrying value of this investment was $0.9 million and $1.8 million as of December 31, 2016 and 2015 , respectively. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment, net consisted of the following (in thousands): As of December 31, 2016 2015 Computer equipment and software $ 144,892 $ 120,886 Leasehold improvements 41,796 41,626 Furniture and fixtures 14,499 13,470 Machinery and equipment 447 447 Total property and equipment 201,634 176,429 Less: accumulated depreciation (139,782 ) (98,061 ) Total property and equipment, net $ 61,852 $ 78,368 During the years ended December 31, 2016 and 2015 , we capitalized $8.0 million and $4.3 million , respectively, of software development costs related to our cloud subscription offerings. Software development costs incurred during the year ended December 31, 2014 were not material for capitalization. Amortization expense related to capitalized software development costs during the years ended December 31, 2016 and 2015 was $2.9 million and $0.8 million , respectively. Depreciation and amortization expense related to property and equipment and demonstration units during the years ended December 31, 2016 , 2015 and 2014 was $51.5 million , $61.2 million and $46.8 million , respectively. During the year ended December 31, 2015, we recognized $1.1 million in accelerated depreciation expense associated with changes in the estimated useful life of certain assets which were replaced in the first quarter of 2016. |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations Acquisitions in 2016 Acquisition of iSIGHT On January 14, 2016, we acquired all of the outstanding shares of privately held iSIGHT, one of the world’s leading providers of cyber threat intelligence for global enterprises. The acquisition extends our intelligence network to create an advanced and comprehensive private cyber threat intelligence operation, providing customers with higher fidelity alerts, context to prioritize threats and the strategic insights to proactively prepare for threats that might target their industry or region. In connection with this acquisition, we paid upfront cash consideration of $192.8 million , incurred liabilities of $39.1 million contingent upon the achievement of a threat intelligence bookings target on or before the end of the second quarter of 2018, and issued 1,793,305 shares of our common stock with an estimated fair value of $29.9 million ; 1,793,297 of which were released in February 2017 to former stockholders of iSIGHT once the threat intelligence bookings target was determined to have been achieved. This resulted in total purchase consideration of $261.8 million . The number of shares was fixed at the completion of the acquisition and is the maximum number of shares that can be released. The contingent earn-out liability is included in accrued compensation on the consolidated balance sheet as of December 31, 2016 , and subsequently resulted in a cash payment of $41.3 million during February 2017, once the threat intelligence bookings target was determined to have been achieved. The acquisition of iSIGHT was accounted for in accordance with the acquisition method of accounting for business combinations with FireEye as the accounting acquirer. Under the acquisition method of accounting, the total purchase consideration is allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values, using information currently available to us. During the three months ended June 30, 2016, we finalized our valuation analysis and revised our preliminary estimates of the earn-out liability and related fair value of common stock contingent upon the achievement of a threat intelligence bookings target by $3.5 million and $1.7 million , respectively, resulting in a higher purchase price of $5.2 million . As a result, we also revised our preliminary estimate of customer relationship and content intangible assets by $1.1 million and $1.2 million , respectively, resulting in an additional $0.2 million of intangible amortization. We expensed the related acquisition costs of $1.9 million in general and administrative expenses. We also assumed and paid liabilities of $7.0 million for transaction costs incurred by iSIGHT prior to acquisition, which were accounted for separate from consideration transferred. Allocation of the purchase price of $261.8 million is as follows (in thousands): Amount Net tangible liabilities assumed $ (18,248 ) Intangible assets 85,100 Deferred tax liability (11,637 ) Goodwill 206,623 Total purchase price allocation $ 261,838 The purchase price exceeded the fair value of the net tangible and identifiable intangible assets acquired, resulting in the recognition of goodwill. Goodwill is primarily attributable to expected synergies in our subscription offerings and cross-selling opportunities. None of the goodwill is expected to be deductible for U.S. federal income tax purposes. Intangible assets consist primarily of customer relationships, content, developed technology and other intangible assets. Customer relationship intangibles relate to iSIGHT's ability to sell current and future content, as well as products built around this content, to its existing customers. Content intangibles represent threat intelligence data gathered through the analysis of cyber-crimes, cyber attacks, hacking, and cyber criminals. Intangible assets attributable to developed technology include a combination of patented and unpatented technology, trade secrets, computer software and research processes that represent the foundation for the existing and planned new products to facilitate the generation of new content. The estimated useful life and fair values of the identifiable intangible assets are as follows (in thousands): Estimated Useful Life (in years) Amount Customer relationships 7 $ 33,700 Content 4 30,100 Developed technology 4-6 17,100 Trade name 5 3,100 Non-competition agreements 2 1,100 Total identifiable intangible assets $ 85,100 The value of customer relationships and content was estimated using the excess earnings method, an income approach (Level 3), which converts projected revenues and costs into cash flows. To reflect the fact that certain other assets contribute to the cash flows generated, the returns for these contributory assets were removed to arrive at estimated cash flows solely attributable to the customer relationships and content, which were discounted at rates of 15% and 14% , respectively. The value of developed technology and the trade name was estimated using the relief-from-royalty method, an income approach (Level 3), which estimates the cost savings that accrue to the owner of the intangible asset that would otherwise be payable as royalties or license fees on revenues earned through the use of the asset. A royalty rate is applied to the projected revenues associated with the intangible asset to determine the amount of savings, which is then discounted to determine the fair value. The developed technology and trade name were valued using royalty rates of 10% and 1% , respectively, and discounted at rates of 14% and 15% , respectively. The results of operations of iSIGHT have been included in our consolidated statements of operations from the acquisition date, and contributed $9.4 million to our consolidated revenues and $2.3 million to our consolidated net loss during the three months ended March 31, 2016. Subsequent to March 31, 2016, the operations of iSIGHT were integrated with the Company's operations. Pro forma results of operations have not been presented because the acquisition was not material to our results of operations. Acquisition of Invotas On February 1, 2016, we acquired all of the outstanding shares of privately held Invotas, a provider of security automation and orchestration technology. This acquisition enables us to deliver a premier security orchestration capability as part of our global threat management platform to unify cyber attack detection results, threat intelligence and incident response elements of an organization’s security program into a single console, giving enterprises the ability to respond more quickly to attacks through automation. In connection with this acquisition, we paid upfront cash consideration of $17.7 million and issued 742,026 shares of our common stock with an estimated fair value of $11.1 million . This resulted in total purchase consideration of $28.8 million . Additionally, we replaced unvested option awards with grants of 95,614 restricted stock units which will vest over the requisite service period of four years, and granted an additional 1,002,748 restricted stock units which were scheduled to vest upon the achievement of stated performance milestones over a period of approximately three years, subject to continuing service during that time. A portion of these awards have since been released following the achievement of the first milestone, while another portion of these awards were modified to vest subject only to continuing service. These awards are being recognized as operating expense over the requisite service periods as they relate to post-combination services. The acquisition of Invotas was accounted for in accordance with the acquisition method of accounting for business combinations with FireEye as the accounting acquirer. We expensed the related acquisition costs of $0.5 million in general and administrative expenses. We also assumed and paid liabilities of $0.7 million for transaction costs incurred by Invotas prior to acquisition, which were accounted for separate from consideration transferred. Under the acquisition method of accounting, the total purchase consideration is allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values. The total purchase price of $28.8 million was allocated using information currently available to us. Allocation of the purchase price is as follows (in thousands): Amount Net tangible liabilities assumed $ (306 ) Intangible assets 8,400 Deferred tax liability (688 ) Goodwill 21,349 Total purchase price allocation $ 28,755 The purchase price exceeded the fair value of the net tangible and identifiable intangible assets acquired, resulting in the recognition of goodwill. Goodwill is primarily attributable to increased selling opportunities. None of the goodwill is expected to be deductible for U.S. federal income tax purposes. Intangible assets consist primarily of developed technology, in-process research and development and other intangible assets. Developed technology intangibles include a combination of patented and unpatented technology, trade secrets, computer software and research processes that represent the foundation for the existing and planned new product offerings. The in-process research and development intangible represents the estimated fair value of acquired research projects which had not reached technological feasibility at acquisition date, but have since been developed into products. The estimated useful life and fair values of the identifiable intangible assets are as follows (in thousands): Estimated Useful Life (in years) Amount Developed technology 4 $ 4,500 In-process research and development N/A 2,800 Customer relationships 10 800 Non-competition agreements 3 300 Total identifiable intangible assets $ 8,400 The value of developed technology and in-process research and development (IPR&D) was estimated using the excess earnings method, an income approach (Level 3), which converts projected revenues and costs into cash flows. To reflect the fact that certain other assets contribute to the cash flows generated, the returns for these contributory assets were removed to arrive at estimated cash flows solely attributable to the developed technology and IPR&D, which were discounted at rates of 16% and 17% , respectively. In-process research and development of $2.8 million obtained in our acquisition of Invotas reached technological feasibility during the year ended December 31, 2016, resulting in its reclassification to developed technology. The results of operations of Invotas have been included in our consolidated statements of operations from the acquisition date, although such results did not have a material impact on our consolidated revenues or net loss during the year ended December 31, 2016 . Pro forma results of operations have not been presented because the acquisition was not material to our results of operations. Acquisitions in 2014 On May 9, 2014, we acquired all outstanding shares of privately held nPulse Technologies, Inc. (“nPulse”), a performance leader in network forensics based in Charlottesville, Virginia. The acquisition of nPulse strengthens our position as a leader in advanced threat detection and incident response management solutions. The total purchase consideration of $56.6 million consisted of $55.2 million in cash, $0.1 million of equity awards assumed, and 54,319 shares of our common stock, with a fair value of $1.3 million which will vest upon the achievement of milestones. The number of shares was fixed at the completion of the acquisition, and is the maximum number of shares that can vest over a period of approximately three and half years from the acquisition date. The acquisition of nPulse was accounted for in accordance with the acquisition method of accounting for business combinations with FireEye as the accounting acquirer. We expensed the related acquisition costs of $0.5 million in general and administrative expenses. Under the acquisition method of accounting, the total purchase consideration is allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values. The purchase price was finalized during 2015. Total allocation of the purchase price is as follows (in thousands): Amount Net tangible liabilities assumed $ (1,833 ) Intangible assets 24,700 Deferred tax asset 442 Deferred tax liability (8,368 ) Goodwill 41,671 Total purchase price allocation $ 56,612 None of the goodwill is deductible for U.S. federal income tax purposes. Intangible assets consist primarily of developed technology, customer relationships and in-process research and development. Developed technology intangible includes a combination of patented and unpatented technology, trade secrets, computer software and research processes that represent the foundation for the existing and planned new products and services. Customer relationships intangible relates to nPulse’s ability to sell existing, in-process and future products and services to its existing and potential customers. The in-process research and development intangible represents the estimated fair value of acquired research projects which have not reached technological feasibility at acquisition date, but have since been developed into products and services. The estimated useful life and fair values of the identifiable intangible assets are as follows (in thousands): Estimated Useful Life (in years) Amount Developed technology 6 $ 10,100 Customer relationships 8 8,000 In-process research and development N/A 6,600 Total $ 24,700 As of December 31, 2015 , all in-process research and development obtained in our acquisition of nPulse was completed. The results of operations of nPulse have been included in our consolidated statements of operations from the acquisition date. Pro forma results of operations have not been presented because the acquisition was not material to our results of operations. Goodwill and Purchased Intangible Assets There were no changes in the carrying amount of goodwill for the year ended December 31, 2015 . Changes in the carrying amount of goodwill for the year ended December 31, 2016 are as follows (in thousands): Amount Balance as of December 31, 2015 $ 750,288 Goodwill acquired 227,972 Balance as of December 31, 2016 $ 978,260 Purchased intangible assets consisted of the following (in thousands): As of December 31, 2016 2015 Developed technology $ 102,593 $ 78,193 Content 158,700 128,600 Customer relationships 109,800 75,300 Contract backlog 12,500 12,500 Trade names 15,500 12,400 Non-competition agreements 1,400 — Total intangible assets 400,493 306,993 Less: accumulated amortization (156,461 ) (92,433 ) Total net intangible assets $ 244,032 $ 214,560 Amortization expense of intangible assets during the years ended December 31, 2016 , 2015 and 2014 was $64.0 million , $47.1 million and $45.2 million , respectively. The expected future annual amortization expense of intangible assets as of December 31, 2016 is presented below (in thousands): Years Ending December 31, Amount 2017 $ 59,118 2018 47,433 2019 45,547 2020 31,171 2021 29,282 2022 and thereafter 31,481 Total $ 244,032 |
Restructuring Charges
Restructuring Charges | 12 Months Ended |
Dec. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Charges | Restructuring Charges In addition to our previous restructuring activities, our Board of Directors approved a restructuring plan and reduction in workforce in August 2016 designed to reduce operating expenses and align our expense structure with current growth expectations. This resulted in a 10% reduction in our workforce, the consolidation of certain real estate facilities and impairment of certain assets. The following table sets forth a summary of restructuring activities during the years ended December 31, 2016 and 2015 (in thousands): Severance and related costs Facilities costs Total costs Balance, December 31, 2014 $ — $ 765 $ 765 Provision for restructuring charges — — — Cash payments — (548 ) (548 ) Balance, December 31, 2015 $ — $ 217 $ 217 Provision for restructuring charges 21,529 1,492 23,021 Cash payments (20,308 ) (1,201 ) (21,509 ) Other adjustments — 1,738 1,738 Balance, December 31, 2016 $ 1,221 $ 2,246 $ 3,467 The total provision for restructuring charges during the year ended December 31, 2016 of $27.6 million includes $23.0 million of cash charges shown above, as well as non-cash charges of $3.5 million related to fixed asset write-offs and $1.1 million related to stock-based compensation. Other adjustments of $1.7 million primarily represent a reclassification of deferred rent liabilities related to closed facilities. The remaining restructuring balance of $3.5 million at December 31, 2016 is composed of $1.2 million of severance payments which we expect to pay during the first quarter of 2017, and $2.2 million of non-cancelable lease costs which we expect to pay over the terms of the related obligations through the third quarter of 2024, net of sublease income. |
Deferred Revenue
Deferred Revenue | 12 Months Ended |
Dec. 31, 2016 | |
Revenue Recognition [Abstract] | |
Deferred Revenue | Deferred Revenue Deferred revenue consisted of the following (in thousands): As of December 31, 2016 2015 Product, current $ 8,924 $ 8,200 Subscription and services, current 388,194 296,969 Total deferred revenue, current 397,118 305,169 Product, non-current 4,748 3,051 Subscription and services, non-current 251,650 218,778 Total deferred revenue, non-current 256,398 221,829 Total deferred revenue $ 653,516 $ 526,998 |
Convertible Senior Notes
Convertible Senior Notes | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Convertible Senior Notes | Convertible Senior Notes Convertible Senior Notes In June 2015, we issued $460.0 million principal amount of Series A Notes and $460.0 million principal amount of Series B Notes, including the full exercise of the initial purchasers' over-allotment option, in a private placement to qualified institutional purchasers pursuant to an exemption from registration provided by Section 4(a)(2) and Rule 144A under the Securities Act. The net proceeds after the initial purchasers' discount of $23.0 million and issuance costs of $0.5 million from the Convertible Senior Notes were $896.5 million . The Series A Notes and Series B Notes bear interest at 1.000% per year and 1.625% per year, respectively, payable semiannually in arrears on June 1 and December 1 of each year, beginning December 1, 2015. The Convertible Senior Notes mature on June 1, 2035, unless earlier repurchased, redeemed or converted. The Convertible Senior Notes are unsecured obligations and rank senior in right of payment to any of our indebtedness that is expressly subordinated in right of payment to the Convertible Senior Notes. They rank equally in right of payment with all of our existing and future liabilities that are not expressly subordinated to the Convertible Senior Notes and effectively rank junior in right of payment to any of our secured indebtedness to the extent of the value of the assets securing such indebtedness. They are structurally junior to all indebtedness and other liabilities (including trade payables) of our subsidiaries. The Convertible Senior Notes do not contain any financial covenants and do not restrict us from paying dividends or issuing or repurchasing our other securities. The initial conversion rate on each series of Convertible Senior Notes is 16.4572 shares of our common stock per $1,000 principal amount of Convertible Senior Notes, which is equivalent to an initial conversion price of approximately $60.76 per share of common stock. The conversion rate of each series of Convertible Senior Notes may be adjusted upon the occurrence of certain specified events, but not for accrued and unpaid interest. Holders may convert the Convertible Senior Notes at their option in multiples of $1,000 principal amount prior to March 1, 2035, excluding the period from March 1, 2020 to June 1, 2020 in the case of the Series A Notes and March 1, 2022 to June 1, 2022 in the case of the Series B Notes, only under the following circumstances: • during any calendar quarter commencing after the calendar quarter ended on September 30, 2015 (and only during such calendar quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price for the Convertible Senior Notes of the relevant series on each applicable trading day; • during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of Series A Notes or Series B Notes, as applicable, for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate for the notes of the relevant series on each such trading day; • if we call any or all of the Convertible Senior Notes of a series for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the relevant redemption date; or • upon the occurrence of specified corporate events, as specified in each indenture governing the Convertible Senior Notes. Regardless of the foregoing conditions, holders may convert their Convertible Senior Notes at their option in multiples of $1,000 principal amount at any time during the period from March 1, 2020 to June 1, 2020 in the case of the Series A Notes and during the period from March 1, 2022 to June 1, 2022 in the case of the Series B Notes, or after March 1, 2035 until maturity for either series of Convertible Senior Notes. Upon conversion, the Convertible Senior Notes can be settled in cash, shares of our common stock or any combination thereof at our option. We may be required by holders of the Convertible Senior Notes to repurchase all or any portion of their Convertible Senior Notes at 100% of the principal amount plus accrued and unpaid interest, on each of June 1, 2020, June 1, 2025 and June 1, 2030, in the case of the Series A Notes, and each of June 1, 2022, June 1, 2025 and June 1, 2030 in the case of the Series B Notes. Holders may also require us to repurchase the Convertible Senior Notes if we undergo a "fundamental change," as defined in each indenture governing the Convertible Senior Notes, at a purchase price equal to 100% of the principal amount, plus accrued and unpaid interest. Additionally, we may redeem for cash all or any portion of the Series B Notes on or after June 1, 2020 until June 1, 2022 if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending not more than three trading days immediately preceding the date we provide notice of redemption. We also may redeem for cash all or any portion of the Series A Notes on or after June 1, 2020 until maturity and all or any portion of the Series B Notes on or after June 1, 2022 until maturity, regardless of the foregoing sale price condition. In accordance with accounting for debt with conversions and other options, we allocated the principal amount of the Convertible Senior Notes into liability and equity components. We also allocated the total amount of initial purchasers' discount and transaction costs incurred to the liability and equity components using the same proportions as the proceeds from the Convertible Senior Notes. Transaction costs of $0.4 million and $0.1 million and initial purchasers' discount of $17.6 million and $5.4 million were attributable to the liability component and equity component of the Convertible Senior Notes, respectively. The liability and equity components of the Convertible Senior Notes consisted of the following (in thousands): As of December 31, 2016 2015 Series A Notes Series B Notes Series A Notes Series B Notes Liability component: Principal $ 460,000 $ 460,000 $ 460,000 $ 460,000 Less: Convertible senior notes discounts and issuance costs, net of amortization (74,126 ) (103,894 ) (93,469 ) (120,333 ) Net carrying amount $ 385,874 $ 356,106 $ 366,531 $ 339,667 Equity component, net of issuance costs $ 92,567 $ 117,834 $ 92,567 $ 117,834 The unamortized discounts and issuance costs as of December 31, 2016 will be amortized over a weighted-average remaining period of approximately 4.6 years . Interest expense for the years ended December 31, 2016 and 2015 related to the Convertible Senior Notes consisted of the following (in thousands): Year Ended December 31, 2016 2015 Series A Notes Series B Notes Series A Notes Series B Notes Coupon interest $ 4,600 $ 7,475 $ 2,683 $ 4,361 Amortization of convertible senior notes discounts and issuance costs 19,343 16,439 10,833 9,236 Total interest expense recognized $ 23,943 $ 23,914 $ 13,516 $ 13,597 Effective interest rate on the liability component 6.5 % 7.0 % 6.5 % 7.1 % Prepaid Forward Stock Purchase In connection with the issuance of the Convertible Senior Notes, we also entered into privately negotiated Prepaid Forwards with one of the initial purchasers of the Convertible Senior Notes (the “Forward Counterparty”), pursuant to which we paid approximately $150.0 million . The amount of the prepaid is equivalent to approximately 3.3 million shares which are to be settled on or around June 1, 2020 and June 1, 2022, respectively, subject to any early settlement, in whole or in part, of each Prepaid Forward. The Prepaid Forwards are intended to facilitate privately negotiated derivative transactions by which investors in the Convertible Senior Notes will be able to hedge their investment in the Convertible Senior Notes. In the event we pay any cash dividends on our common stock, the Forward Counterparty will pay an equivalent amount back to us. The related shares were accounted for as a repurchase of common stock, and are presented as Treasury Stock in the consolidated balance sheets. The 3.3 million shares of common stock purchased under the Prepaid Forwards are excluded from weighted-average shares outstanding for basic and diluted EPS purposes although they remain legally outstanding. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Leases We lease our facilities under various non-cancelable operating leases, which expire on various dates through the year ending December 31, 2027. In August 2016, we entered into a lease agreement for our new corporate headquarters, expected to commence mid-2017. Rent expense is recognized using the straight-line method over the term of the lease. Rent expense, net of sublease income, was $14.9 million , $14.4 million and $10.7 million for the years ended December 31, 2016 , 2015 and 2014 , respectively. The aggregate future non-cancelable minimum rental payments on our operating leases, as of December 31, 2016 , are as follows (in thousands): Years Ending December 31, Amount 2017 $ 15,715 2018 15,515 2019 12,173 2020 12,209 2021 10,534 2022 and thereafter 39,264 Total $ 105,410 Total future non-cancelable minimum rental payments have not been reduced by future minimum sublease rentals totaling $6.9 million . We are party to letters of credit totaling $3.1 million and $1.2 million as of December 31, 2016 and 2015 , respectively, issued in support of operating leases at several of our facilities, as well as supporting credit limits on international credit cards. These letters of credit are collateralized by a line with our bank. No amounts have been drawn against these letters of credit. Contract Manufacturer Commitments Our independent contract manufacturers procure components and assemble 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 product marketing organizations, adjusted for overall market conditions. In order to reduce manufacturing lead times and plan for adequate supply, we may issue forecasts and orders for components and products that are non-cancelable. As of December 31, 2016 and 2015 , we had non-cancelable open orders of $10.2 million and $16.9 million , respectively. We are required to record a liability for firm, non-cancelable and unconditional purchase commitments with contract manufacturers and suppliers for quantities in excess of our future demand forecasts. As of December 31, 2016 , we have not accrued any significant costs for such non-cancelable commitments. Purchase Obligations As of December 31, 2016 , we had approximately $20.7 million of non-cancelable firm purchase commitments primarily for purchases of software and services. In those situations in which we have received delivery of the goods or services as of December 31, 2016 under purchase orders outstanding as of the same date, such amounts are reflected in the consolidated balance sheet as accounts payable or accrued liabilities, and are excluded from the $20.7 million . Litigation We accrue for contingencies when we believe that a loss is probable and that we can reasonably estimate the amount of any such loss. We have made an assessment of the probability of incurring any such losses and whether or not those losses are estimable. On June 20, 2014, a purported stockholder class action lawsuit was filed in the Superior Court of California, County of Santa Clara, against the Company, current and former members of our Board of Directors, current and former officers, and the underwriters of our March 2014 follow-on public offering. On July 17, 2014, a substantially similar lawsuit was filed in the same court against the same defendants. The actions were consolidated and, on March 4, 2015, an amended complaint was filed, alleging violations of the federal securities laws on behalf of a purported class consisting of purchasers of the Company's common stock pursuant or traceable to the registration statement and prospectus for the follow-on public offering, and seeking unspecified compensatory damages and other relief. On April 20, 2015, defendants filed demurrers seeking that the amended complaint be dismissed. On August 11, 2015, the court overruled defendants' demurrers. On November 16, 2015, plaintiffs filed a motion seeking certification of the putative class, which the court granted in part and denied in part on July 11, 2016. On January 6, 2016, the Company and the individual defendants filed a motion for judgment on the pleadings seeking that the action be dismissed for lack of subject-matter jurisdiction, which the court denied on April 1, 2016. On May 19, 2016, the Company and the individual defendants filed a petition for a writ of mandate seeking the overturning of the court's denial of the motion for judgment on the pleadings. On September 8, 2016, the court of appeal denied the petition. On September 16, 2016, the Company and the individual defendants filed a petition for review with the Supreme Court of California. On November 9, 2016, the Supreme Court of California denied the petition for review. On December 8, 2016, the Company and the individual defendants filed a petition for a writ of certiorari before the United States Supreme Court. On February 6, 2017, the parties submitted to the Superior Court a stipulation of settlement. The terms of the settlement include a release and dismissal of all claims against all defendants without any liability or wrongdoing attributed to them. On February 7, 2017, plaintiffs filed an unopposed motion for preliminary approval of the settlement. The settlement, which is immaterial to the Company's consolidated financial statements, is subject to stockholder notice, court approval, and other customary conditions. On November 24, 2014, a purported stockholder class action lawsuit was filed in the United States District Court for the Northern District of California against the Company and certain of its officers. On June 29, 2015, plaintiffs filed a consolidated complaint alleging violations of the federal securities laws on behalf of a putative class of all persons who purchased or otherwise acquired the Company’s securities between January 2, 2014, and November 4, 2014. Plaintiffs sought, among other things, compensatory damages and attorneys’ fees and costs on behalf of the putative class. On August 21, 2015, defendants filed a motion to dismiss, which was heard on November 12, 2015. On November 14, 2016, the Court granted the motion to dismiss with leave to amend. The parties subsequently submitted a stipulation, which was adopted as an order of the Court on December 1, 2016, dismissing the action with prejudice as to the named plaintiffs and providing that plaintiffs would not appeal the dismissal. On January 28, 2015, certain of the Company’s officers and directors were named as defendants in a putative derivative action filed in the Superior Court of California, County of Santa Clara. On April 21, 2015, a substantially similar lawsuit was filed in the same court against the same defendants. The Company is named as a nominal defendant in both actions. The actions were consolidated and a consolidated complaint was filed on June 15, 2015, purporting to allege claims for breach of fiduciary duty and unjust enrichment. On July 15, 2015, defendants filed demurrers to the consolidated complaint. On December 4, 2015, the court sustained, with leave to amend, defendants’ demurrers on the basis that plaintiffs had failed adequately to allege derivative standing. Plaintiffs filed an amended complaint on May 3, 2016. On June 8, 2016, defendants filed demurrers to the amended complaint, which the court sustained on August 29, 2016, dismissing the case with prejudice. Plaintiffs filed a notice of appeal on October 27, 2016. Based on information currently available, the Company has determined that the amount of any possible loss or range of possible loss is not reasonably estimable. In February 2016, a lawsuit was filed in the Superior Court of California, County of Santa Clara, by one of the plaintiffs in the aforementioned putative derivative action against the Company, seeking production of certain books and records pursuant to Delaware and California law. On May 16, 2016, the court sustained the Company's demurrer to the petition, without leave to amend. Plaintiff filed a notice of appeal on October 27, 2016. We are also subject to legal proceedings, claims and litigation, including intellectual property litigation, arising in the ordinary course of business. Such matters are subject to many uncertainties and outcomes, and are not predictable with assurance. To the extent there is a reasonable possibility that a loss exceeding amounts already recognized may be incurred, and the amount of such additional loss would be material, we will either disclose the estimated additional loss or state that such an estimate cannot be made. We do not currently believe that it is reasonably possible that additional losses in connection with litigation arising in the ordinary course of business would be material. Indemnification Under the indemnification provisions of our standard sales related contracts, we agree to defend our customers against third-party claims asserting infringement of certain intellectual property rights, which may include patents, copyrights, trademarks, or trade secrets, and to pay judgments entered on such claims. Our exposure under these indemnification provisions is generally limited to the total amount paid by our customer under the agreement. However, certain agreements include indemnification provisions that could potentially expose us to losses in excess of the amount received under the agreement. In addition, we indemnify our officers, directors, and certain key employees for actions taken while they are or were serving in good faith in such capacities. Through December 31, 2016 , there have been no claims under any indemnification provisions. |
Common Shares Reserved for Issu
Common Shares Reserved for Issuance | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Common Shares Reserved for Issuance | Common Shares Reserved for Issuance Under our amended and restated certificate of incorporation, we are authorized to issue 100,000,000 shares of convertible preferred stock with a par value of $0.0001 per share, none of which were issued and outstanding as of December 31, 2016 or 2015 . Under our amended and restated certificate of incorporation, we are authorized to issue 1,000,000,000 shares of common stock with a par value of $0.0001 per share as of December 31, 2016 and 2015 . Each share of common stock outstanding is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when declared by our Board of Directors, subject to the prior rights of holders of all classes of convertible preferred stock outstanding. We had reserved shares of common stock for issuance as follows (in thousands): As of December 31, 2016 2015 Reserved under stock award plans 38,005 38,500 Convertible Senior Notes 15,141 15,141 ESPP 2,851 3,214 Total 55,997 56,855 |
Equity Award Plans
Equity Award Plans | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Equity Award Plans | Equity Award Plans We have operated under our 2013 Equity Incentive Plan ("2013 Plan") since our initial public offering ("IPO") in September 2013. Our 2013 Plan provides for the issuance of restricted stock and the granting of options, stock appreciation rights, performance shares, performance units and restricted stock units to our employees, officers, directors and consultants. Our 2013 Plan provides for annual increases in the number of shares available for issuance on the first day of each fiscal year. Awards granted under the 2013 Plan vest over the periods determined by our Board of Directors or compensation committee of our Board of Directors, generally four years , and stock options granted under the 2013 Plan expire no more than ten years after the date of grant. In the case of an incentive stock option granted to an employee who at the time of grant owns stock representing more than 10% of the total combined voting power of all classes of stock, the exercise price shall be no less than 110% of the fair value per share on the date of grant, and the award shall expire five years from the date of grant. For options granted to any other employee, the per share exercise price shall be no less than 100% of the fair value per share on the date of grant. In the case of non-statutory stock options and options granted to consultants, the per share exercise price shall be no less than 100% of the fair value per share on the date of grant. Stock that is purchased prior to vesting is subject to our right of repurchase at any time following termination of the participant's service for so long as such stock remains unvested. Approximately 10.0 million shares and 7.2 million shares of our common stock were reserved for future grants as of December 31, 2016 and 2015 , respectively, under the 2013 Plan . As of January 1, 2017, an additional 8,729,801 shares of common stock became available for future grants under our 2013 Plan pursuant to provisions thereof that automatically increase the share reserve under such plan each year. Our ESPP allows eligible employees to acquire shares of our common stock at 85% of the lower of the fair market value of our common stock on the first trading day of each offering period or on the exercise date. Our ESPP provides for annual increases in the number of shares available for issuance on the first day of each fiscal year. An aggregate of 2,850,830 shares and 3,214,287 shares of common stock were available for future issuance as of December 31, 2016 and 2015 , respectively, under our ESPP. As of January 1, 2017, an additional 1,745,960 shares of common stock became available for future issuance under our ESPP pursuant to the provisions thereof that automatically increase the share reserve under such plan each year. From time to time, we also grant restricted common stock or restricted stock awards outside of our equity incentive plans to certain employees in connection with acquisitions. Stock Option Activity A summary of the activity for our stock option changes during the reporting periods and a summary of information related to options outstanding and options exercisable are presented below (in thousands, except per share amounts and contractual life years): Options Outstanding Number of Weighted- Average Exercise Price Weighted- Weighted- Aggregate Balance — December 31, 2013 27,422 $ 5.82 Granted 676 72.60 $ 72.60 Exercised (7,642 ) 2.97 $ 271,236 Cancelled (1,941 ) 9.10 Assumed in acquisition 63 20.60 Balance — December 31, 2014 18,578 $ 9.13 Granted — — $ — Exercised (5,856 ) 4.97 211,854 Cancelled (1,228 ) 14.57 Balance — December 31, 2015 11,494 $ 10.67 Granted — — $ — Exercised (2,459 ) 5.64 23,343 Cancelled (950 ) 23.40 Balance — December 31, 2016 8,085 $ 10.70 5.4 $ 40,304 Options exercisable — December 31, 2016 7,331 $ 9.74 5.3 $ 39,097 The aggregate intrinsic value above represents the pre-tax difference between the exercise price of stock options and the quoted market price of our stock on that day for all in-the-money stock options. Restricted Stock Award (RSA) and Restricted Stock Unit (RSU) Activity A summary of the activity for our restricted common stock, RSAs and RSUs during the reporting periods and a summary of information related to unvested restricted common stock, RSAs and RSUs and those expected to vest based on the achievement of a performance condition are presented below (in thousands, except per share amounts and contractual life years): Number of Weighted- Weighted- Aggregate Unvested balance — December 31, 2013 3,602 $ 27.20 Granted 6,734 42.12 Vested (1,482 ) 16.04 Cancelled (809 ) 40.93 Granted in acquisitions 296 26.44 Unvested balance — December 31, 2014 8,341 $ 39.57 Granted 16,876 32.25 Vested (2,783 ) 35.66 Cancelled (2,380 ) 41.11 Unvested balance — December 31, 2015 20,054 $ 33.68 Granted 12,711 13.76 Vested (6,222 ) 33.99 Cancelled (6,660 ) 27.17 Unvested balance — December 31, 2016 19,883 $ 22.23 1.5 $ 236,605 Unvested awards for which the requisite service period has not been rendered but that are expected to vest based on the achievement of a performance condition — December 31, 2016 5,584 $ 20.22 2.0 $ 66,445 In connection with our acquisition of nPulse in May 2014, we issued 295,681 restricted stock awards at a value of $26.44 per share. Of these awards, 54,319 were issued to former shareholders as purchase consideration, while the other 241,362 were issued into escrow for employees continuing service with the Company. The vesting of all these awards was over a period of approximately three and a half years from the acquisition date, subject to the achievement of specified performance milestones. As of December 31, 2016, all milestones had been achieved, and therefore none of these awards remain unvested. During the year ended December 31, 2015, awards granted includes two cycles of annual refresh grants made to the general employee population. Included in the 12.7 million shares granted during the year ended December 31, 2016 are 3.6 million shares granted to employees from acquisitions consummated in 2016. During the years ended December 31, 2016 , 2015 and 2014 , we issued 3.0 million , 5.3 million and 1.7 million shares, respectively, of restricted common stock, restricted stock awards or restricted stock units to certain employees which vest upon the achievement of certain performance conditions in addition to a continued service relationship with the Company. Stock-Based Compensation We record stock-based compensation based on the fair value as determined on the date granted. We determine the fair value of stock options and shares of common stock to be issued under the ESPP using the Black-Scholes option-pricing model. The fair value of restricted stock units and restricted stock awards equals the market value of the underlying stock on the date of grant. We grant performance-based restricted stock units and restricted stock awards to certain employees which vest upon the achievement of certain performance conditions, subject to the employees’ continued service relationship with us. We assess the probability of vesting at each reporting period and adjust our compensation cost based on this probability assessment. We recognize such compensation expense on a straight-line basis over the service provider’s requisite service period. We determined valuation assumptions as follows: Fair Value of Common Stock We use the listed stock price on the date of grant as the fair value of our common stock. Risk-Free Interest Rate We base the risk-free interest rate used in the Black-Scholes option-pricing model on the implied yield available on U.S. Treasury zero-coupon issues with an equivalent expected term of the options for each option group. Expected Term The expected term represents the period that our stock-based awards are expected to be outstanding. We base the expected term assumption on our historical behavior combined with estimates of post-vesting holding periods. Volatility We determine the price volatility factor based on the historical volatilities of our peer group as we do not have sufficient trading history for our common stock. Dividend Yield The expected dividend assumption is based on our current expectations about our anticipated dividend policy. The following table summarizes the assumptions used in the Black-Scholes option-pricing model to determine the fair value of our stock options granted: Year Ended December 31, 2014 Fair value of common stock $27.89 - $75.87 Risk-free interest rate 1.8% - 2.0% Expected term (in years) 6 Volatility 51% - 53% Dividend yield —% No stock options were granted during the years ended December 31, 2016 and 2015 . The following table summarizes the assumptions used in the Black-Scholes option-pricing model to determine the fair value of our common shares under the ESPP: Year Ended December 31, 2016 2015 2014 Fair value of common stock $13.12 - $14.12 $19.10 - $35.16 $27.08 - $32.32 Risk-free interest rate 0.38% - 0.79% 0.09% - 0.50% 0.1% Expected term (in years) 0.5 - 1.0 0.5 - 1.0 0.5 - 1.0 Volatility 57% - 63% 38% - 42% 35% - 45% Dividend yield —% —% —% Stock-based compensation expense related to stock options, ESPP and restricted stock units and awards is included in the consolidated statements of operations as follows (in thousands): Year Ended December 31, 2016 2015 2014 Cost of product revenue $ 2,092 $ 1,588 $ 888 Cost of subscription and services revenue 29,811 29,435 17,037 Research and development 64,755 68,329 28,968 Sales and marketing 57,750 73,286 66,773 General and administrative 43,343 49,793 38,186 Restructuring 1,144 — — Total $ 198,895 $ 222,431 $ 151,852 As of December 31, 2016 , total compensation cost related to stock-based awards not yet recognized was $294.9 million , which is expected to be amortized on a straight-line basis over the weighted-average remaining vesting period of approximately 2.3 years . |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Loss before income taxes consisted of the following (in thousands): Year Ended December 31, 2016 2015 2014 United States $ (289,783 ) $ (324,805 ) $ (269,426 ) Foreign (199,067 ) (210,320 ) (211,018 ) Total $ (488,850 ) $ (535,125 ) $ (480,444 ) The provision for (benefit from) income taxes consisted of the following (in thousands): Year Ended December 31, 2016 2015 2014 Federal: Current $ — $ — $ 11 Deferred (10,941 ) — (36,208 ) State: Current 49 (160 ) 255 Deferred (1,384 ) — (3,263 ) Foreign: Current 3,156 5,604 2,945 Deferred 399 (1,354 ) (394 ) Total $ (8,721 ) $ 4,090 $ (36,654 ) Reconciliation of the federal statutory income tax rate to the effective tax rate is as follows: Year Ended December 31, 2016 2015 2014 Federal statutory rate 35.0 % 35.0 % 35.0 % Effect of: State taxes, net of federal tax benefit 0.3 — 0.6 Change in valuation allowance (16.3 ) (21.0 ) (11.2 ) Research and development tax credit 1.1 1.1 1.2 Stock-based compensation (2.8 ) (1.1 ) (1.9 ) Impact of foreign tax differential (14.7 ) (14.1 ) (15.6 ) Non-deductible/non-taxable items (0.8 ) (0.6 ) (0.2 ) Other, net — (0.1 ) (0.3 ) Total 1.8 % (0.8 )% 7.6 % The components of the deferred tax assets and liabilities are as follows (in thousands): As of December 31, 2016 2015 Deferred tax assets: Net operating loss carryforwards $ 216,397 $ 82,201 Accruals and reserves 15,335 16,841 Stock-based compensation 48,212 59,872 Fixed assets 14,025 12,122 Deferred revenue 64,691 43,411 Research and development credits 30,852 23,445 Other deferred tax assets 673 1,017 Gross deferred tax assets 390,185 238,909 Valuation allowance (233,783 ) (81,937 ) Total deferred tax assets 156,402 156,972 Deferred tax liabilities: Acquisition related intangibles (93,151 ) (81,621 ) Convertible senior notes (61,811 ) (73,427 ) Other deferred tax liabilities (7 ) (92 ) Total deferred tax liabilities (154,969 ) (155,140 ) Total net deferred tax assets $ 1,433 $ 1,832 A valuation allowance is provided when it is more likely than not that the deferred tax asset will not be realized. Our valuation allowance increased by approximately $151.8 million during the year ended December 31, 2016 , primarily as a result of additional deferred tax assets recorded during the year for net operating loss carryforwards. As of December 31, 2016 , we had federal and state net operating loss carry forwards of approximately $602.3 million and $705.0 million , respectively, available to reduce future taxable income, if any. If not utilized, the federal net operating loss carry forwards will expire from the years ending December 31, 2024 through 2036 while state net operating loss carry forwards will expire from the years ending December 31, 2017 through 2036. We also have federal and state research and development tax credit carry forwards of approximately $21.6 million and $13.6 million , respectively. If not utilized, the federal credit carry forwards will expire in various amounts from the years ended December 31, 2024 through 2036. The state credit will carry forward indefinitely. Utilization of the net operating loss carry forwards and credits may be subject to an annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitation may result in the expiration of net operating losses and credits before utilization. On January 1, 2016, we adopted ASU 2016-09 which changes the accounting for employee share-based payments. Under the new guidance, excess tax benefits or tax deficiencies associated with share-based payment awards will be recognized in the income statement when the awards vest or settle, rather than in stockholders' equity. As a result, the table of deferred tax assets shown above includes certain deferred tax assets as of December 31, 2016 that arose directly from tax deductions related to equity compensation greater than compensation recognized for financial reporting in the amount of $117.3 million . As of December 31, 2016 , we had $43.6 million of unrecognized tax benefits, of which if recognized, $1.8 million would affect our effective tax rate. We file income tax returns in U.S. federal, state and foreign jurisdictions. As we have net operating loss carry forwards for U.S. federal and state jurisdictions, the statute of limitations is open for all tax years. For foreign jurisdictions, the tax years open to examination include the years 2012 and forward. We do not expect the unrecognized tax benefits to change significantly over the next 12 months. We recognize both interest and penalties associated with uncertain tax positions as a component of income tax expense. During the year ended December 31, 2016 , we recognized a $31,000 decrease to interest and penalties. During the years ended December 31, 2015 and 2014 , we recognized interest and penalties of $183,000 and $115,000 , respectively. As of December 31, 2016 and 2015 , our total accrual for interest and penalties was $367,000 and $398,000 , respectively. The ultimate amount and timing of any future cash settlements cannot be predicted with reasonable certainty. A reconciliation of gross unrecognized tax benefits is as follows (in thousands): Year Ended December 31, 2016 2015 2014 Unrecognized tax benefits at the beginning of the period $ 31,902 $ 21,264 $ 10,887 Additions for tax positions related to the current year 12,435 10,614 10,452 Increases related to prior year tax positions 561 24 — Decreases related to prior year tax positions (1,213 ) — (52 ) Decreases based on settlements with taxing authorities (48 ) — — Lapse of statute of limitations — — (23 ) Unrecognized tax benefits at the end of the period $ 43,637 $ 31,902 $ 21,264 As of December 31, 2016 , we have not made any tax provision for U.S. federal and state income taxes on approximately $23.6 million of undistributed earnings in foreign subsidiaries, which we expect to reinvest outside of the U.S. indefinitely. If we were to repatriate these earnings to the U.S., we would be subject to U.S. income taxes and subject to an adjustment for foreign tax credits and foreign withholding taxes. Determination of the amount of unrecognized deferred tax liability related to these earnings is not practicable. |
Net Loss per Share
Net Loss per Share | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Net Loss per Share | Net Loss per Share Basic net loss per share is calculated by dividing net loss by the weighted average number of common shares outstanding during the period, less shares subject to repurchase, and excludes any dilutive effects of employee share based awards and warrants. Diluted net income per common share is computed giving effect to all potentially dilutive common shares, including common stock issuable upon exercise of stock options, conversion of the Convertible Senior Notes and unvested restricted common stock and stock units. As we had net losses for the years ended December 31, 2016 , 2015 and 2014 , all potential common shares were determined to be anti-dilutive. The following table sets forth the computation of net loss per common share (in thousands, except per share amounts): Year Ended December 31, 2016 2015 2014 Numerator: Net loss $ (480,129 ) $ (539,215 ) $ (443,790 ) Denominator: Weighted average number of shares outstanding—basic and diluted 163,211 154,120 142,176 Net loss per share—basic and diluted $ (2.94 ) $ (3.50 ) $ (3.12 ) The following outstanding options, unvested shares and units, ESPP shares, shares issuable upon the conversion of our Convertible Senior Notes and shares contingently issuable were excluded (as common stock equivalents) from the computation of diluted net loss per common share for the periods presented as their effect would have been anti-dilutive (in thousands): As of December 31, 2016 2015 2014 Options to purchase common stock 8,085 11,494 18,578 Unvested early exercised common shares — 936 2,382 Unvested restricted stock awards and units 19,883 20,054 8,341 Convertible senior notes 15,141 15,141 — iSIGHT earn-out contingently issuable shares 1,793 — — ESPP shares 314 210 124 In February 2017, we released 1,793,297 shares of common stock issued to former stockholders of iSIGHT as the threat intelligence bookings target associated with the release of these shares was determined to have been achieved. If all the necessary conditions for release were satisfied prior to December 31, 2016 , the release would have increased the number of weighted average shares outstanding used to compute basic net loss per share for the year ended December 31, 2016 . |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefit Plan | Employee Benefit Plan 401(k) Plan We have established a 401(k) tax-deferred savings plan (the “401(k) Plan”) which permits participants to make contributions by salary deduction pursuant to Section 401(k) of the Internal Revenue Code of 1986, as amended. All participants’ interests in their deferrals are 100% vested when contributed. We are responsible for administrative costs of the 401(k) Plan and have made no matching contributions into our 401(k) Plan since inception. Under the 401(k) Plan, pre-tax contributions are allocated to each participant’s individual account and are then invested in selected investment alternatives according to the participants’ directions. The 401(k) Plan is intended to qualify under Sections 401(a) and 501(a) of the Code. As a tax-qualified retirement plan, contributions to the 401(k) Plan and earnings on those contributions are not taxable to the employees until distributed, and all contributions are deductible by us when and if made. |
Segment and Major Customers Inf
Segment and Major Customers Information | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Segment and Major Customers Information | Segment and Major Customers Information We conduct business globally and are primarily managed on a geographic basis. Our Chief Executive Officer, who is our chief operating decision maker, 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. There are no segment managers who are held accountable for operations, operating results, and plans for levels, components, or types of products or services below the consolidated unit level. Accordingly, we are considered to be in a single reportable segment and operating unit structure. Revenue by geographic region based on the billing address is as follows (in thousands): Year Ended December 31, 2016 2015 2014 Revenue: United States $ 488,623 $ 439,205 $ 319,144 EMEA 102,288 80,960 57,721 APAC 95,285 73,009 34,284 Other 27,918 29,793 14,513 Total revenue $ 714,114 $ 622,967 $ 425,662 Long-lived assets by geographic region based on physical location is as follows (in thousands): As of December 31, 2016 2015 Property and Equipment, net: United States $ 43,214 $ 57,537 International 18,638 20,831 Total property and equipment, net $ 61,852 $ 78,368 For the years ended December 31, 2016 and 2015 , one distributor represented 19% and 17% , respectively, and one reseller represented 12% and 13% , respectively, of the Company's total revenue. For the year ended December 31, 2014 , no distributor represented 10% or greater of the Company's total revenue, and one reseller represented 11% of the Company's total revenue. As of December 31, 2016 , no customer represented 10% or more of the Company's net accounts receivable balance. As of December 31, 2015 , two distributors represented 20% and 12% , respectively, of the Company's net accounts receivable balance. |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts (Notes) | 12 Months Ended |
Dec. 31, 2016 | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule of Valuation and Qualifying Accounts Disclosure | SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS (in thousands) Allowance for doubtful accounts receivable Balance at beginning of period Charged to cost and expenses Write-offs, net of recoveries Balance at end of period Year ended December 31, 2014 $ 20 $ 566 $ — $ 586 Year ended December 31, 2015 586 1,342 93 2,021 Year ended December 31, 2016 $ 2,021 $ 1,560 $ (1,991 ) $ 1,590 |
Description of Business and S24
Description of Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The consolidated financial statements include the accounts of FireEye, Inc. and its wholly owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Such management estimates include, but are not limited to, the best estimate of selling price for our products, subscriptions and services, commissions expense, bonus expense, future taxable income, contract manufacturer liabilities, litigation and settlement costs and other loss contingencies, fair value of our equity awards, achievement of targets for performance stock units, fair value of the liability and equity components of Convertible Senior Notes and the purchase price allocation of acquired businesses. We base our estimates on historical experience and also on assumptions that we believe are reasonable. Changes in facts or circumstances may cause us to change our assumptions and estimates in future periods, and it is possible that actual results could differ from current or revised future estimates. |
Concentrations | Concentrations Financial instruments that subject us to concentrations of credit risk consist primarily of cash and cash equivalents, short-term investments, and accounts receivable. We maintain a substantial portion of our cash and cash equivalents in money market funds invested in U.S. Treasury related obligations. Management believes that these financial institutions are financially sound and, accordingly, are subject to minimal credit risk. Deposits held with banks may exceed the amount of insurance provided on such deposits. Our short-term investments primarily consist of notes and bonds issued by corporate institutions and U.S. Government agencies. All of our investments are highly-rated by credit rating agencies and are issued by organizations with reputable credit, and therefore bear minimal credit risk. Our accounts receivables are primarily derived from a diverse set of customers across various geographical locations. We perform ongoing credit evaluations of our customers and generally do not require collateral on accounts receivable. We maintain an allowance for doubtful accounts for estimated potential credit losses. See Note 15 for information on major customers. We rely primarily on a single contract manufacturer to assemble our products. In some cases we rely on sole suppliers for a certain number of our components. |
Foreign Currency Translation and Transactions | Foreign Currency Translation and Transactions The functional currency of our foreign subsidiaries is the U.S. dollar. We translate all monetary assets and liabilities denominated in foreign currencies into U.S. dollars using the exchange rates in effect at the balance sheet dates and other assets and liabilities using historical exchange rates. Foreign currency denominated revenue and expenses have been re-measured using the average exchange rates in effect during each period. |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider all highly liquid investments with original maturities of three months or less at date of purchase to be cash equivalents. We determine the appropriate classification of our investments at the time of purchase, and evaluate such designation at each balance sheet date. |
Short-term Investments | Short-term Investments We classify our investments in debt and equity securities as available-for-sale and record these investments at fair value. Investments with an original maturity of three months or less at the date of purchase are considered cash equivalents, while all other investments are classified as short-term or long-term based on the nature of the investments, their maturities, and their availability for use in current operations. Unrealized gains and losses are reported as a component of other comprehensive loss. Realized gains and losses are determined based on the specific identification method, and are reflected in our Consolidated Statements of Operations. We regularly review our investment portfolio to identify and evaluate investments that have indicators of possible impairment. Factors considered in determining whether a loss is other-than-temporary include, but are not limited to: the length of time and extent a security’s fair value has been below its cost, the financial condition and near-term prospects of the investee, the credit quality of the security’s issuer, likelihood of recovery and our intent and ability to hold the security for a period of time sufficient to allow for any anticipated recovery in value. For our debt instruments, we also evaluate whether we have the intent to sell the security or it is more likely than not that we will be required to sell the security before recovery of its cost basis. Investments are considered to be impaired when a decline in fair value is judged to be other-than-temporary. Fair value is calculated based on publicly available market information or other estimates determined by management. If the cost of an investment exceeds its fair value, we evaluate, among other factors, general market conditions, credit quality of debt instrument issuers, the duration and extent to which the fair value is less than cost and whether we have plans to sell the security, or it is more likely than not that we will be required to sell the security, before recovery. Once a decline in fair value is determined to be other-than-temporary, an impairment charge is recorded to other income (expense) and a new cost basis in the investment is established. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments We define fair value as the price that would be received from selling an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities which are required to be recorded at fair value, we consider the principal or most advantageous market in which to transact and the market-based risk. We apply fair value accounting for all financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. The carrying amounts reported in the consolidated financial statements approximate the fair value for cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities due to their short-term nature. |
Accounts Receivable | Accounts Receivable Trade accounts receivable are recorded at the invoiced amount, net of allowances for doubtful accounts. The allowance for doubtful accounts is based on our assessment of the collectability of accounts. Management regularly reviews the adequacy of the allowance for doubtful accounts by considering the age of each outstanding invoice, each partner’s expected ability to pay and the collection history with each partner, when applicable, to determine whether a specific allowance is appropriate. Accounts receivable deemed uncollectible are charged against the allowance for doubtful accounts when identified. |
Inventories | Inventories Inventories are stated at the lower of cost or market. Provisions have been made to reduce all slow-moving, obsolete or unusable inventories to their net realizable values. We purchase completed units from contract manufacturers. Accordingly, substantially all inventories are finished goods with an immaterial balance of replacement parts. |
Deferred Costs of Revenue | Deferred Costs of Revenue Deferred cost of revenue consists of direct and incremental costs related to product revenue deferred in accordance with the Company’s revenue recognition policy. Deferred cost of revenue that will be realized within the succeeding 12 month period is classified as current, and included in prepaid expenses and other current assets on the consolidated balance sheets. The remaining balance is classified as non-current, and included in deposits and other long-term assets. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally two to five years. The estimated useful lives of property and equipment are described below: Property and Equipment Useful Life Computer equipment and software 2 to 5 years Leasehold improvements Shorter of estimated useful life or remaining lease term Furniture and fixtures 5 years Machinery and equipment 2 to 5 years |
Demonstration Units | Demonstration Units Product demonstration units are included in prepaid expenses and other current assets on the consolidated balance sheets. Demonstration units are recorded at cost and are amortized over the estimated useful life from the date of transfer from inventory, generally 12 months. We generally do not resell units that have been used for demonstration purposes. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets We evaluate events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances occur, we assess the recoverability of long-lived assets by determining whether or not the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future undiscounted cash flows is less than the carrying amount of an asset, we record an impairment charge for the amount by which the carrying amount of the assets exceeds the fair value of the asset. |
Business Combinations | Business Combinations We have accounted for all of our acquisitions using the acquisition method. The Company allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired, based on their estimated fair values. The excess of the fair value of purchase consideration over the values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair value of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets. Critical estimates in valuing certain identifiable assets include, but are not limited to, expected long-term market growth, future expected operating expenses, costs of capital, and appropriate discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and, as a result, actual results may differ from estimates. |
Goodwill and Purchased Intangibles | Purchased intangible assets with finite lives are carried at cost, less accumulated amortization. Amortization is computed over the estimated useful lives of the respective assets. Purchased intangible assets with indefinite lives are assessed for potential impairment annually, or when events or circumstances indicate that their carrying amounts might be impaired. Goodwill and Purchased Intangibles Goodwill represents the excess of the aggregate purchase price paid over the fair value of the net tangible assets acquired. Goodwill is not amortized and is tested for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The Company has determined that it operates as one reporting unit and has selected December 1 as the date to perform its annual impairment test. In the valuation of its goodwill, the Company must make assumptions regarding estimated future cash flows to be derived from the Company. If these estimates or their related assumptions change in the future, the Company may be required to record impairment for these assets. The first step of the impairment test involves comparing the fair value of the reporting unit to its net book value, including goodwill. If the net book value exceeds its fair value, then the Company would perform the second step of the goodwill impairment test to determine the amount of the impairment loss. The impairment loss would be calculated by comparing the implied fair value of the Company to its net book value. In calculating the implied fair value of the Company’s goodwill, the fair value of the Company would be allocated to all of the other assets and liabilities based on their fair values. The excess of the fair value of the Company over the amount assigned to its other assets and liabilities is the implied fair value of goodwill. An impairment loss would be recognized when the carrying amount of goodwill exceeds its implied fair value. |
Warranties | Warranties We generally provide a one -year warranty on hardware. We do not accrue for potential warranty claims as a component of cost of product revenue as all product warranty claims are satisfied under our support and maintenance contracts. |
Deferred Revenue | Deferred Revenue Deferred revenue consists of amounts that have been invoiced and for which the Company has the right to bill, but that have not been recognized as revenue. Deferred revenue that will be realized during the succeeding 12 month period is recorded as current, and the remaining deferred revenue is recorded as non-current. |
Contract Manufacturer Liabilities | Contract Manufacturer Liabilities We outsource most of our manufacturing, repair, and supply chain management operations to our independent contract manufacturers and payments to such manufacturers are a significant portion of our product cost of revenue. Although we could be contractually obligated to purchase manufactured products, we generally do not own the manufactured products. Product title transfers from our independent contract manufacturers to us and to our partners upon shipment. Our independent contract manufacturers assemble our products using design specifications, quality assurance programs, and standards that we establish, and they procure components and assemble our products based on our demand forecasts. These forecasts represent our estimates of future demand for our products based upon historical trends and analysis from our sales and product management functions as adjusted for overall market conditions. If the actual component usage and product demand are significantly lower than forecast, we may accrue for costs for contractual manufacturing commitments in excess of our forecasted demand, including costs for excess components or for carrying costs incurred by our contract manufacturers. |
Revenue Recognition | Revenue Recognition We generate revenue from the sales of products, subscriptions, support and maintenance and professional services, primarily through our indirect relationships with our partners as well as end customers through our direct sales force. Our products include operating system software that is integrated into the appliance hardware and is deemed essential to its functionality. As a result, we account for product revenue in accordance with Accounting Standards Codification 605, Revenue Recognition, and all related interpretations, as all of our security appliance deliverables include proprietary operating system software, which together delivers the essential functionality of our products. Our professional services consist primarily of time and materials based contracts, and the revenue is recognized as costs are incurred at amounts represented by the agreed-upon billing amounts. Revenue from fixed-price professional services engagements are recognized under the proportional performance method of accounting. Revenue is recognized when all of the following criteria are met: • Persuasive Evidence of an Arrangement Exists . We rely upon non-cancelable sales agreements and purchase orders to determine the existence of an arrangement. • Delivery has Occurred . We use shipping documents or transmissions of service contract registration codes to verify delivery. • The Fee is Fixed or Determinable . We assess whether the fee is fixed or determinable based on the payment terms associated with the transaction. • Collectability is Reasonably Assured . We assess collectability based on credit analysis and payment history. Our products include principal security product families that address critical vectors of attack, including Web, email, endpoint, file and mobile. Our Network Threat Prevention, Endpoint Threat Prevention, Email Threat Prevention, File Content Security, Forensic Analysis System and Central Management System appliance and subscription services qualify as separate units of accounting. Therefore product revenue from these appliances is recognized at the time of shipment. At the time of shipment, product revenue meets the criteria for fixed or determinable fees. In addition, payment from our partners is not contingent on the partners' collection from their end-customers. Our partners do not stock products and do not have any stock rotation rights. We recognize subscription and support and maintenance service revenue ratably over the contractual service period, which is typically one or three years. Professional services revenue, including incident response and related consulting services for our customers who have experienced a cybersecurity breach or who require assistance assessing the vulnerability of their networks, and training services revenue is recognized as the services are rendered. Most of our arrangements, other than renewals of subscriptions and support and maintenance services, are multiple-element arrangements with a combination of product, subscriptions, support and maintenance, and other services. For multiple-element arrangements, we allocate revenue to each unit of accounting based on an estimated selling price at the arrangement inception. The estimated selling price for each element is based upon the following hierarchy: vendor-specific objective evidence (“VSOE”) of selling price, if available, third-party evidence (“TPE”) of selling price, if VSOE of selling price is not available, or best estimate of selling price (“BESP”), if neither VSOE of selling price nor TPE of selling price are available. The total arrangement consideration is allocated to each separate unit of accounting using the relative estimated selling prices of each unit based on the aforementioned selling price hierarchy. We limit the amount of revenue recognized for delivered elements to an amount that is not contingent upon future delivery of additional products or services or meeting of any specified performance conditions. To determine the estimated selling price in multiple-element arrangements, we seek to establish VSOE of selling price using the prices charged for a deliverable when sold separately and, for subscriptions and support and maintenance, based on the renewal rates and discounts offered to partners. If VSOE of selling price cannot be established for a deliverable, we seek to establish TPE of selling price by evaluating similar and interchangeable competitor products or services in standalone arrangements with similarly situated partners. However, as our products contain a significant element of proprietary technology and offer substantially different features and functionality from our competitors, we are unable to obtain comparable pricing of our competitors’ products with similar functionality on a standalone basis. Therefore, we have not been able to obtain reliable evidence of TPE of selling price. If neither VSOE nor TPE of selling price can be established for a deliverable, we establish BESP primarily based on historical transaction pricing. Historical transactions are segregated based on our pricing model and our go-to-market strategy, which include factors such as type of sales channel (reseller, distributor, or end-customer), the geographies in which our products and services were sold (domestic or international), offering type (products, subscriptions or services), and whether or not the opportunity was identified by our sales force or by our partners. In analyzing historical transaction pricing, we evaluate whether a majority of the prices charged for a product, as represented by a percentage of list price, fall within a reasonable range. To further support the best estimate of selling price as determined by the historical transaction pricing or when such information is unavailable, such as when there are limited sales of a new product, we consider the same factors we have established through our pricing model and go-to-market strategy. The determination of BESP is made through consultation with and approval by our management. We have established the estimated selling price of all of our deliverables using BESP. Shipping charges billed to partners are included in revenue and related costs are included in cost of revenue. Sales commissions and other incremental costs to acquire contracts are also expensed as incurred and are recorded in sales and marketing expense. After receipt of a partner order, any amounts billed in excess of revenue recognized are recorded as deferred revenue. |
Advertising Costs | Advertising Costs Advertising costs, which are expensed and included in sales and marketing expense when incurred, were $3.6 million , $5.1 million and $2.3 million during the years ended December 31, 2016 , 2015 and 2014 , respectively. |
Software Development Costs | Software Development Costs The costs to develop internal-use software are subject to capitalization and begin amortizing once the software is substantially ready for use. These costs are included in property and equipment and are generally amortized over 3 years. All other software development costs are expensed as incurred and included in research and development expense on the consolidated statements of operations. |
Stock-Based Compensation | Stock-Based Compensation Compensation expense related to stock-based transactions, including employee and non-employee director awards and our 2013 Employee Stock Purchase Plan (the "ESPP"), is measured and recognized in the financial statements based on fair value. The fair value of each option award is estimated on the grant date using the Black-Scholes option-pricing model and a single option award approach. This model requires that at the date of grant we determine the fair value of the underlying common stock, the expected term of the award, the expected volatility of the price of our common stock, risk-free interest rates, and expected dividend yield of our common stock. The fair value of restricted stock awards and restricted stock units is based on the closing market price of our common stock on the date of grant. The stock-based compensation expense is recognized using a straight-line basis over the requisite service period of the entire awards, which is generally four years , unless the awards are subject to performance conditions, in which case the Company recognizes compensation expense over the requisite service period of each vesting tranche. For performance-based awards, the Company recognizes compensation expense when it becomes probable that the performance criteria set by the Board of Directors will be achieved. Beginning January 1, 2016 with the adoption of ASU 2016-09, we elected to recognize forfeitures as they occur, and no longer estimate a forfeiture rate when calculating the stock-based compensation for our equity awards. Stock-based compensation for the years ended December 31, 2015 and 2014 was calculated using an estimated forfeiture rate based on an analysis of our actual historical forfeitures. We account for stock options issued to non-employees based on the fair value of the awards determined using the Black-Scholes option-pricing model. The fair value of stock options granted to non-employees is remeasured as the stock options vest, and the resulting change in value, if any, is recognized in the statement of operations during the period the related services are rendered. |
Income Taxes | Income Taxes We account for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in our financial statements or tax returns. In addition, deferred tax assets are recorded for the future benefit of utilizing net operating losses and research and development credit carry forwards. Valuation allowances are provided when necessary to reduce deferred tax assets to the amount expected to be realized. We apply the authoritative accounting guidance prescribing a threshold and measurement attribute for the financial recognition and measurement of a tax position taken or expected to be taken in a tax return. We recognize liabilities for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step requires us to estimate and measure the tax liability as the largest amount that is more likely than not to be realized upon ultimate settlement. We recognize interest and penalties related to unrecognized tax benefits within the income tax expense line in the accompanying consolidated statements of operations. Accrued interest and penalties are included within other long-term liabilities in the consolidated balance sheets. |
Net Loss Per Share Attributable to Common Stockholders | Net Loss Per Share Attributable to Common Stockholders We calculate our basic and diluted net loss per share attributable to common stockholders in conformity with the two-class method required for companies with participating securities. Under the two-class method, in periods when the Company has net income, net income attributable to common stockholders is determined by allocating undistributed earnings, calculated as net income less current period convertible preferred stock non-cumulative dividends, between common stock and the convertible preferred stock. In computing diluted net income attributable to common stockholders, undistributed earnings are re-allocated to reflect the potential impact of dilutive securities. The Company’s basic net loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period. The diluted net loss 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 are considered common stock equivalents, but have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is anti-dilutive. |
Convertible Senior Notes | Convertible Senior Notes We allocated the principal amount of the Convertible Senior Notes between its liability and equity components. The carrying amount of the liability component was determined by measuring the fair value of a similar debt instrument of similar credit quality and maturity that did not have the convert feature. The carrying amount of the equity component, representing the embedded conversion option, was determined by deducting the fair value of the liability component from the principal amount of the Convertible Senior Notes as a whole. The equity component was recorded to additional paid-in capital and is not remeasured as long as it continues to meet the conditions for equity classification. The excess of the principal amount of the Convertible Senior Notes over the carrying amount of the liability component was recorded as a debt discount, and is being amortized to interest expense using the effective interest method through the first date holders have the right to require us to repurchase all or any portion of their Convertible Senior Notes; the first put date (see Note 8). We allocate the total amount of transaction costs incurred to the liability and equity components using the same proportions as the proceeds from the Convertible Senior Notes. Transaction costs attributable to the liability component were recorded as a direct deduction from the liability component of the Convertible Senior Notes, and are being amortized to interest expense using the effective interest method through the first put date. Transaction costs attributable to the equity component were netted with the equity component of the Convertible Senior Notes in additional paid-in capital. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This standard eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge (i.e. Step 2 of the current guidance), instead measuring the impairment charge as the excess of the reporting unit's carrying amount over its fair value (i.e. Step 1 of the current guidance). The guidance is effective for us beginning in the first quarter of 2020, and should be applied prospectively. Early adoption is permitted for impairment testing dates after January 1, 2017. The adoption of this standard is not expected to have a significant impact on our consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. This standard changes the definition of a business by requiring at least one substantive process. It also states that if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, then the set of transferred assets and activities is not a business. The guidance is effective for us beginning in the first quarter of 2018, and should be applied prospectively. Early adoption is permitted. The adoption of this standard is not expected to have a significant impact on our consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force). This standard clarifies how certain cash receipts and payments should be classified in the statement of cash flows, including the cash settlement of our Convertible Senior Notes. Upon cash settlement, repayment of the principal amount will be bifurcated between cash outflows for operating activities for the portion related to accreted interest attributable to debt discounts arising from the difference between the coupon interest rate and the effective interest rate, and financing activities for the remainder. This will result in $233.9 million of accreted interest being classified as cash used in operating activities in our consolidated financial statements upon cash settlement. See Note 8 Convertible Senior Notes regarding timing of settlement. The guidance is effective for us beginning in the first quarter of 2018, and should be applied retrospectively. Early adoption is permitted. We elected to early adopt this standard in the third quarter of 2016. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This standard changes the impairment model for most financial assets and certain other instruments by introducing a current expected credit loss (CECL) model. The CECL model is a more forward-looking approach based on expected losses rather than incurred losses, requiring entities to estimate and record losses expected over the remaining contractual life of an asset. The guidance is effective for us beginning in the first quarter of 2020. Early adoption beginning in 2019 is permitted. We are currently evaluating the impact the adoption of this guidance will have on our consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. This standard simplifies various aspects related to how share-based payments are accounted for and presented in the financial statements, including income taxes, forfeitures and statutory tax withholding requirements. The guidance is effective for us beginning in the first quarter of 2017. Early adoption is permitted. We elected to early adopt this standard in the first quarter of 2016. As a result of adopting this standard, we have made an accounting policy election to account for forfeitures as they occur. This change has been applied on a modified retrospective basis, resulting in a cumulative-effect adjustment to increase accumulated deficit by $3.4 million as of January 1, 2016; the date of adoption. The adoption of this guidance also requires excess tax benefits and tax deficiencies be recorded in the income statement as opposed to additional paid-in capital when the awards vest or are settled, and has been applied on a prospective basis. As a result, the table of deferred tax assets shown in Note 12 includes certain deferred tax assets as of December 31, 2016 that arose directly from tax deductions related to equity compensation greater than compensation recognized for financial reporting in the amount of $117.3 million . The adoption of an amendment related to the accounting for minimum statutory withholding tax requirements included in this guidance has no impact on our current consolidated financial statements or on any prior period financial statements presented. This guidance also requires changes in the classification of shares withheld to pay employee taxes and excess tax benefits on the consolidated statements of cash flows. The amendments require cash paid by an employer when directly withholding shares for tax-withholding purposes be classified as a financing activity, and be applied retrospectively to all prior periods presented. As these cash flows have previously been presented as financing activities, there is no change resulting from the adoption of this amendment. The amendments also require excess tax benefits be classified as an operating activity, consistent with other income tax cash flows, and may be applied either on a retrospective or prospective basis. We have elected to apply this amendment on a prospective basis, as there is no impact to our prior period consolidated statements of cash flows. As such, prior periods have not been adjusted. In March 2016, the FASB issued ASU 2016-06, Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments (a consensus of the Emerging Issues Task Force). This standard clarifies the requirements for assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts. The guidance is effective for us beginning in the first quarter of 2017 and should be applied on a modified retrospective basis to existing debt instruments as of the beginning of the fiscal year for which the amendments are effective. Early adoption is permitted. We elected to early adopt this standard in the third quarter of 2016. As we previously assessed the embedded call (put) options associated with our Convertible Senior Notes in accordance with the requirements in this guidance, the adoption of this standard did not have any impact on our consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). This standard is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The guidance is effective for us beginning in the first quarter of 2019, and should be applied on a modified retrospective basis. Early adoption is permitted. We expect the adoption of this standard to have a material impact on our consolidated financial statements and related disclosures, as we expect to recognize material lease assets and lease liabilities from our building leases and other items. In September 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments. This standard eliminates the requirement that an acquirer in a business combination account for measurement-period adjustments retrospectively. Under this guidance, measurement-period adjustments will be recognized during the period in which they are determined. We adopted this standard in the first quarter of 2016 and the adoption did not have a material impact on our consolidated financial statements and related disclosures. See Note 5 for details of measurement-period adjustments. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). This standard provides a single model for revenue arising from contracts with customers and supersedes current revenue recognition guidance. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In July 2015, the FASB decided to defer the effective date by one year, and as a result, the guidance is effective for us beginning in the first quarter of 2018. Early adoption as of the original effective date would be permitted. The guidance permits companies to either apply the requirements retrospectively to all prior periods presented, or apply the requirements in the year of adoption, through a cumulative adjustment. The FASB has subsequently issued several clarifying standards to address stakeholder questions and implementation issues. We currently anticipate adopting the standard retrospectively to all prior periods presented. Our ability to apply the requirements retrospectively to all prior periods presented is dependent on system readiness, including software procured from third-party providers, and the completion of our analysis of information necessary to restate prior period financial statements. We anticipate this standard will have a material impact on our consolidated financial statements and related disclosures. |
Fair Value Measurements | The accounting guidance for fair value measurements provides a framework for measuring fair value on either a recurring or nonrecurring basis, whereby the inputs used in our valuation techniques are assigned a hierarchical level. The following are the three levels of inputs to measure fair value: • Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. • Level 2: Inputs that reflect quoted prices for identical assets or liabilities in less active markets; quoted prices for similar assets or liabilities in active markets; benchmark yields, reported trades, broker/dealer quotes, inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. • Level 3: Unobservable inputs that reflect our own assumptions incorporated in valuation techniques used to measure fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. We consider an active market to be one in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis, and consider an inactive market to be one in which there are infrequent or few transactions for the asset or liability, the prices are not current, or price quotations vary substantially either over time or among market makers. Where appropriate, our own or the counterparty’s non-performance risk is considered in measuring the fair values of assets. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets Measured at Fair Value on a Recurring Basis | The following table presents our assets and liabilities measured at fair value on a recurring basis using the above input categories (in thousands): As of December 31, 2016 As of December 31, 2015 Description Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets Cash equivalents: Money market funds $ 449 $ — $ — $ 449 $ 210,533 $ — $ — $ 210,533 Total cash equivalents 449 — — 449 210,533 — — 210,533 Short-term investments: Certificates of deposit — 9,569 — 9,569 — 19,124 — 19,124 Commercial paper — 29,920 — 29,920 — — — — Corporate notes and bonds — 420,684 — 420,684 — 447,267 — 447,267 U.S. Government agencies — 251,885 — 251,885 — 301,384 — 301,384 Total short-term investments — 712,058 — 712,058 — 767,775 — 767,775 Total assets measured at fair value $ 449 $ 712,058 $ — $ 712,507 $ 210,533 $ 767,775 $ — $ 978,308 Liabilities Contingent earn-out $ — $ — $ 41,332 $ 41,332 $ — $ — $ — $ — Total liabilities measured at fair value $ — $ — $ 41,332 $ 41,332 $ — $ — $ — $ — |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | The following is a reconciliation of the Level 3 contingent earn-out liability for the year ended December 31, 2016 (in thousands): Amount Balance at acquisition (January 14, 2016) $ 35,588 Measurement period adjustments (1) 3,500 Changes in fair value (2) 2,356 Cash payments (112 ) Balance as of December 31, 2016 $ 41,332 (1) See Note 5 Business Combinations for adjustments made to initial amounts recorded in our acquisition of iSIGHT. (2) Changes in fair value are recorded in general and administrative expenses in our consolidated statements of operations. |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Investments | Our investments consisted of the following (in thousands): As of December 31, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Short-Term Investments Certificates of deposit $ 9,560 $ 10 $ (1 ) $ 9,569 $ 9,569 Commercial paper 29,929 — (9 ) 29,920 29,920 Corporate notes and bonds 421,635 17 (968 ) 420,684 420,684 U.S. Government agencies 252,676 2 (793 ) 251,885 251,885 Total $ 713,800 $ 29 $ (1,771 ) $ 712,058 $ 712,058 As of December 31, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Short-Term Investments Certificates of deposit $ 19,160 $ — $ (36 ) $ 19,124 $ 19,124 Corporate notes and bonds 448,688 — (1,421 ) 447,267 447,267 U.S. Government agencies 302,152 2 (770 ) 301,384 301,384 Total $ 770,000 $ 2 $ (2,227 ) $ 767,775 $ 767,775 |
Summary of Gross Unrealized Losses and Fair Value of Investments in a Continuous Unrealized Loss Position | The following tables present the gross unrealized losses and related fair values of our investments that have been in a continuous unrealized loss position (in thousands): As of December 31, 2016 Less Than 12 Months Greater Than 12 Months Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss Certificates of deposit $ — $ — $ 199 $ (1 ) $ 199 $ (1 ) Commercial paper 24,925 (9 ) — — 24,925 (9 ) Corporate notes and bonds 294,818 (889 ) 99,433 (79 ) 394,251 (968 ) U.S. Government agencies 222,171 (763 ) 17,657 (30 ) 239,828 (793 ) Total $ 541,914 $ (1,661 ) $ 117,289 $ (110 ) $ 659,203 $ (1,771 ) As of December 31, 2015 Less Than 12 Months Greater Than 12 Months Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss Certificates of deposit $ 18,404 $ (36 ) $ — $ — $ 18,404 $ (36 ) Corporate notes and bonds 430,466 (1,407 ) 16,801 (15 ) 447,267 (1,422 ) U.S. Government agencies 266,541 (761 ) 8,992 (8 ) 275,533 (769 ) Total $ 715,411 $ (2,204 ) $ 25,793 $ (23 ) $ 741,204 $ (2,227 ) |
Summary of Contractual Maturities of Investments | The following table summarizes the contractual maturities of our investments at December 31, 2016 (in thousands): Amortized Cost Fair Value Due within one year $ 383,604 $ 383,279 Due within one to two years 330,196 328,779 Total $ 713,800 $ 712,058 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment, net consisted of the following (in thousands): As of December 31, 2016 2015 Computer equipment and software $ 144,892 $ 120,886 Leasehold improvements 41,796 41,626 Furniture and fixtures 14,499 13,470 Machinery and equipment 447 447 Total property and equipment 201,634 176,429 Less: accumulated depreciation (139,782 ) (98,061 ) Total property and equipment, net $ 61,852 $ 78,368 |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Business Acquisition [Line Items] | |
Schedule of Goodwill | Changes in the carrying amount of goodwill for the year ended December 31, 2016 are as follows (in thousands): Amount Balance as of December 31, 2015 $ 750,288 Goodwill acquired 227,972 Balance as of December 31, 2016 $ 978,260 |
Schedule of Purchased Intangible Assets | Purchased intangible assets consisted of the following (in thousands): As of December 31, 2016 2015 Developed technology $ 102,593 $ 78,193 Content 158,700 128,600 Customer relationships 109,800 75,300 Contract backlog 12,500 12,500 Trade names 15,500 12,400 Non-competition agreements 1,400 — Total intangible assets 400,493 306,993 Less: accumulated amortization (156,461 ) (92,433 ) Total net intangible assets $ 244,032 $ 214,560 |
Schedule of Expected Annual Amortization Expense of Intangible Assets | The expected future annual amortization expense of intangible assets as of December 31, 2016 is presented below (in thousands): Years Ending December 31, Amount 2017 $ 59,118 2018 47,433 2019 45,547 2020 31,171 2021 29,282 2022 and thereafter 31,481 Total $ 244,032 |
iSIGHT Security | |
Business Acquisition [Line Items] | |
Schedule of Purchase Price Allocation | Allocation of the purchase price of $261.8 million is as follows (in thousands): Amount Net tangible liabilities assumed $ (18,248 ) Intangible assets 85,100 Deferred tax liability (11,637 ) Goodwill 206,623 Total purchase price allocation $ 261,838 |
Schedule of Acquired Finite-Lived Intangible Assets by Major Class [Table Text Block] | The estimated useful life and fair values of the identifiable intangible assets are as follows (in thousands): Estimated Useful Life (in years) Amount Customer relationships 7 $ 33,700 Content 4 30,100 Developed technology 4-6 17,100 Trade name 5 3,100 Non-competition agreements 2 1,100 Total identifiable intangible assets $ 85,100 |
Invotas International Corporation | |
Business Acquisition [Line Items] | |
Schedule of Purchase Price Allocation | Allocation of the purchase price is as follows (in thousands): Amount Net tangible liabilities assumed $ (306 ) Intangible assets 8,400 Deferred tax liability (688 ) Goodwill 21,349 Total purchase price allocation $ 28,755 |
Schedule of Estimated Useful Life and Fair Values of the Identifiable Intangible Assets | The estimated useful life and fair values of the identifiable intangible assets are as follows (in thousands): Estimated Useful Life (in years) Amount Developed technology 4 $ 4,500 In-process research and development N/A 2,800 Customer relationships 10 800 Non-competition agreements 3 300 Total identifiable intangible assets $ 8,400 |
nPulse Technologies | |
Business Acquisition [Line Items] | |
Schedule of Purchase Price Allocation | Total allocation of the purchase price is as follows (in thousands): Amount Net tangible liabilities assumed $ (1,833 ) Intangible assets 24,700 Deferred tax asset 442 Deferred tax liability (8,368 ) Goodwill 41,671 Total purchase price allocation $ 56,612 |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block] | The estimated useful life and fair values of the identifiable intangible assets are as follows (in thousands): Estimated Useful Life (in years) Amount Developed technology 6 $ 10,100 Customer relationships 8 8,000 In-process research and development N/A 6,600 Total $ 24,700 |
Restructuring Charges (Tables)
Restructuring Charges (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Summary of Restructuring Activities | The following table sets forth a summary of restructuring activities during the years ended December 31, 2016 and 2015 (in thousands): Severance and related costs Facilities costs Total costs Balance, December 31, 2014 $ — $ 765 $ 765 Provision for restructuring charges — — — Cash payments — (548 ) (548 ) Balance, December 31, 2015 $ — $ 217 $ 217 Provision for restructuring charges 21,529 1,492 23,021 Cash payments (20,308 ) (1,201 ) (21,509 ) Other adjustments — 1,738 1,738 Balance, December 31, 2016 $ 1,221 $ 2,246 $ 3,467 |
Deferred Revenue (Tables)
Deferred Revenue (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Revenue Recognition [Abstract] | |
Schedule of Deferred Revenue | Deferred revenue consisted of the following (in thousands): As of December 31, 2016 2015 Product, current $ 8,924 $ 8,200 Subscription and services, current 388,194 296,969 Total deferred revenue, current 397,118 305,169 Product, non-current 4,748 3,051 Subscription and services, non-current 251,650 218,778 Total deferred revenue, non-current 256,398 221,829 Total deferred revenue $ 653,516 $ 526,998 |
Convertible Senior Notes (Table
Convertible Senior Notes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of the Liability and Equity Components of the Convertible Senior Notes | The liability and equity components of the Convertible Senior Notes consisted of the following (in thousands): As of December 31, 2016 2015 Series A Notes Series B Notes Series A Notes Series B Notes Liability component: Principal $ 460,000 $ 460,000 $ 460,000 $ 460,000 Less: Convertible senior notes discounts and issuance costs, net of amortization (74,126 ) (103,894 ) (93,469 ) (120,333 ) Net carrying amount $ 385,874 $ 356,106 $ 366,531 $ 339,667 Equity component, net of issuance costs $ 92,567 $ 117,834 $ 92,567 $ 117,834 |
Schedule of Interest Expense related to the Convertible Senior Notes | Interest expense for the years ended December 31, 2016 and 2015 related to the Convertible Senior Notes consisted of the following (in thousands): Year Ended December 31, 2016 2015 Series A Notes Series B Notes Series A Notes Series B Notes Coupon interest $ 4,600 $ 7,475 $ 2,683 $ 4,361 Amortization of convertible senior notes discounts and issuance costs 19,343 16,439 10,833 9,236 Total interest expense recognized $ 23,943 $ 23,914 $ 13,516 $ 13,597 Effective interest rate on the liability component 6.5 % 7.0 % 6.5 % 7.1 % |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Non-cancelable Minimum Rental Payments for Operating Leases | The aggregate future non-cancelable minimum rental payments on our operating leases, as of December 31, 2016 , are as follows (in thousands): Years Ending December 31, Amount 2017 $ 15,715 2018 15,515 2019 12,173 2020 12,209 2021 10,534 2022 and thereafter 39,264 Total $ 105,410 |
Common Shares Reserved for Is33
Common Shares Reserved for Issuance (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Schedule of Reserved Shares of Common Stock for Issuance | We had reserved shares of common stock for issuance as follows (in thousands): As of December 31, 2016 2015 Reserved under stock award plans 38,005 38,500 Convertible Senior Notes 15,141 15,141 ESPP 2,851 3,214 Total 55,997 56,855 |
Equity Award Plans (Tables)
Equity Award Plans (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of the Activity for Stock Option Changes and Summary of Information Related to Options Vested and Expected to Vest and Options Exercisable | A summary of the activity for our stock option changes during the reporting periods and a summary of information related to options outstanding and options exercisable are presented below (in thousands, except per share amounts and contractual life years): Options Outstanding Number of Weighted- Average Exercise Price Weighted- Weighted- Aggregate Balance — December 31, 2013 27,422 $ 5.82 Granted 676 72.60 $ 72.60 Exercised (7,642 ) 2.97 $ 271,236 Cancelled (1,941 ) 9.10 Assumed in acquisition 63 20.60 Balance — December 31, 2014 18,578 $ 9.13 Granted — — $ — Exercised (5,856 ) 4.97 211,854 Cancelled (1,228 ) 14.57 Balance — December 31, 2015 11,494 $ 10.67 Granted — — $ — Exercised (2,459 ) 5.64 23,343 Cancelled (950 ) 23.40 Balance — December 31, 2016 8,085 $ 10.70 5.4 $ 40,304 Options exercisable — December 31, 2016 7,331 $ 9.74 5.3 $ 39,097 |
Summary of Activity for Restricted Common Stock, RSAs and RSUs and Summary of Information Related to Unvested Restricted Common Stock, RSAs and RSUs and those Expected to Vest | A summary of the activity for our restricted common stock, RSAs and RSUs during the reporting periods and a summary of information related to unvested restricted common stock, RSAs and RSUs and those expected to vest based on the achievement of a performance condition are presented below (in thousands, except per share amounts and contractual life years): Number of Weighted- Weighted- Aggregate Unvested balance — December 31, 2013 3,602 $ 27.20 Granted 6,734 42.12 Vested (1,482 ) 16.04 Cancelled (809 ) 40.93 Granted in acquisitions 296 26.44 Unvested balance — December 31, 2014 8,341 $ 39.57 Granted 16,876 32.25 Vested (2,783 ) 35.66 Cancelled (2,380 ) 41.11 Unvested balance — December 31, 2015 20,054 $ 33.68 Granted 12,711 13.76 Vested (6,222 ) 33.99 Cancelled (6,660 ) 27.17 Unvested balance — December 31, 2016 19,883 $ 22.23 1.5 $ 236,605 Unvested awards for which the requisite service period has not been rendered but that are expected to vest based on the achievement of a performance condition — December 31, 2016 5,584 $ 20.22 2.0 $ 66,445 |
Schedule of Share-based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions [Table Text Block] | The following table summarizes the assumptions used in the Black-Scholes option-pricing model to determine the fair value of our common shares under the ESPP: Year Ended December 31, 2016 2015 2014 Fair value of common stock $13.12 - $14.12 $19.10 - $35.16 $27.08 - $32.32 Risk-free interest rate 0.38% - 0.79% 0.09% - 0.50% 0.1% Expected term (in years) 0.5 - 1.0 0.5 - 1.0 0.5 - 1.0 Volatility 57% - 63% 38% - 42% 35% - 45% Dividend yield —% —% —% The following table summarizes the assumptions used in the Black-Scholes option-pricing model to determine the fair value of our stock options granted: Year Ended December 31, 2014 Fair value of common stock $27.89 - $75.87 Risk-free interest rate 1.8% - 2.0% Expected term (in years) 6 Volatility 51% - 53% Dividend yield —% |
Schedule of Stock-Based Compensation Expense Related to Stock Options, ESPP and Restricted Stock Units and Awards | Stock-based compensation expense related to stock options, ESPP and restricted stock units and awards is included in the consolidated statements of operations as follows (in thousands): Year Ended December 31, 2016 2015 2014 Cost of product revenue $ 2,092 $ 1,588 $ 888 Cost of subscription and services revenue 29,811 29,435 17,037 Research and development 64,755 68,329 28,968 Sales and marketing 57,750 73,286 66,773 General and administrative 43,343 49,793 38,186 Restructuring 1,144 — — Total $ 198,895 $ 222,431 $ 151,852 |
Income Taxes Income Taxes (Tabl
Income Taxes Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Loss Before Benefit from Income Taxes | Loss before income taxes consisted of the following (in thousands): Year Ended December 31, 2016 2015 2014 United States $ (289,783 ) $ (324,805 ) $ (269,426 ) Foreign (199,067 ) (210,320 ) (211,018 ) Total $ (488,850 ) $ (535,125 ) $ (480,444 ) |
Schedule of Benefit from Income Taxes | The provision for (benefit from) income taxes consisted of the following (in thousands): Year Ended December 31, 2016 2015 2014 Federal: Current $ — $ — $ 11 Deferred (10,941 ) — (36,208 ) State: Current 49 (160 ) 255 Deferred (1,384 ) — (3,263 ) Foreign: Current 3,156 5,604 2,945 Deferred 399 (1,354 ) (394 ) Total $ (8,721 ) $ 4,090 $ (36,654 ) |
Schedule of Reconciliation of the Federal Statutory Income Tax Rate to the Effective Tax Rate | Reconciliation of the federal statutory income tax rate to the effective tax rate is as follows: Year Ended December 31, 2016 2015 2014 Federal statutory rate 35.0 % 35.0 % 35.0 % Effect of: State taxes, net of federal tax benefit 0.3 — 0.6 Change in valuation allowance (16.3 ) (21.0 ) (11.2 ) Research and development tax credit 1.1 1.1 1.2 Stock-based compensation (2.8 ) (1.1 ) (1.9 ) Impact of foreign tax differential (14.7 ) (14.1 ) (15.6 ) Non-deductible/non-taxable items (0.8 ) (0.6 ) (0.2 ) Other, net — (0.1 ) (0.3 ) Total 1.8 % (0.8 )% 7.6 % |
Schedule of Components of Deferred Tax Assets and Liabilities | The components of the deferred tax assets and liabilities are as follows (in thousands): As of December 31, 2016 2015 Deferred tax assets: Net operating loss carryforwards $ 216,397 $ 82,201 Accruals and reserves 15,335 16,841 Stock-based compensation 48,212 59,872 Fixed assets 14,025 12,122 Deferred revenue 64,691 43,411 Research and development credits 30,852 23,445 Other deferred tax assets 673 1,017 Gross deferred tax assets 390,185 238,909 Valuation allowance (233,783 ) (81,937 ) Total deferred tax assets 156,402 156,972 Deferred tax liabilities: Acquisition related intangibles (93,151 ) (81,621 ) Convertible senior notes (61,811 ) (73,427 ) Other deferred tax liabilities (7 ) (92 ) Total deferred tax liabilities (154,969 ) (155,140 ) Total net deferred tax assets $ 1,433 $ 1,832 |
Schedule of Reconciliation of Gross Unrecognized Tax Benefit | A reconciliation of gross unrecognized tax benefits is as follows (in thousands): Year Ended December 31, 2016 2015 2014 Unrecognized tax benefits at the beginning of the period $ 31,902 $ 21,264 $ 10,887 Additions for tax positions related to the current year 12,435 10,614 10,452 Increases related to prior year tax positions 561 24 — Decreases related to prior year tax positions (1,213 ) — (52 ) Decreases based on settlements with taxing authorities (48 ) — — Lapse of statute of limitations — — (23 ) Unrecognized tax benefits at the end of the period $ 43,637 $ 31,902 $ 21,264 |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Net Loss per Common Share | The following table sets forth the computation of net loss per common share (in thousands, except per share amounts): Year Ended December 31, 2016 2015 2014 Numerator: Net loss $ (480,129 ) $ (539,215 ) $ (443,790 ) Denominator: Weighted average number of shares outstanding—basic and diluted 163,211 154,120 142,176 Net loss per share—basic and diluted $ (2.94 ) $ (3.50 ) $ (3.12 ) |
Schedule of Outstanding Options and Unvested Shares Excluded from Computation of Diluted Net Loss per Share | The following outstanding options, unvested shares and units, ESPP shares, shares issuable upon the conversion of our Convertible Senior Notes and shares contingently issuable were excluded (as common stock equivalents) from the computation of diluted net loss per common share for the periods presented as their effect would have been anti-dilutive (in thousands): As of December 31, 2016 2015 2014 Options to purchase common stock 8,085 11,494 18,578 Unvested early exercised common shares — 936 2,382 Unvested restricted stock awards and units 19,883 20,054 8,341 Convertible senior notes 15,141 15,141 — iSIGHT earn-out contingently issuable shares 1,793 — — ESPP shares 314 210 124 In February 2017, we released 1,793,297 shares of common stock issued to former stockholders of iSIGHT as the threat intelligence bookings target associated with the release of these shares was determined to have been achieved. If all the necessary conditions for release were satisfied prior to December 31, 2016 , the release would have increased the number of weighted average shares outstanding used to compute basic net loss per share for the year ended December 31, 2016 . |
Segment and Major Customers I37
Segment and Major Customers Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Revenue by Geographic Region | Revenue by geographic region based on the billing address is as follows (in thousands): Year Ended December 31, 2016 2015 2014 Revenue: United States $ 488,623 $ 439,205 $ 319,144 EMEA 102,288 80,960 57,721 APAC 95,285 73,009 34,284 Other 27,918 29,793 14,513 Total revenue $ 714,114 $ 622,967 $ 425,662 |
Summary of Long lived Assets by Geographic Region Based on Physical Location | Long-lived assets by geographic region based on physical location is as follows (in thousands): As of December 31, 2016 2015 Property and Equipment, net: United States $ 43,214 $ 57,537 International 18,638 20,831 Total property and equipment, net $ 61,852 $ 78,368 |
Description of Business and S38
Description of Business and Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands | Feb. 01, 2016USD ($)shares | Jan. 14, 2016USD ($)shares | Jun. 30, 2015USD ($)shares | Dec. 31, 2016USD ($)reporting_segment | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Business Acquisition [Line Items] | ||||||
Consideration transferred, equity interests | $ 41,000 | $ 0 | $ 1,398 | |||
Liabilities incurred | 39,088 | 0 | 0 | |||
Debt Instrument [Line Items] | ||||||
Net proceeds from issuance of convertible senior notes | 0 | 896,530 | 0 | |||
Stock repurchased during period | $ 150,000 | |||||
Stock repurchase during period (in shares) | shares | 3,300,000 | |||||
Provision for excess an obsolete inventories | $ 3,800 | 1,400 | ||||
Number of reporting units | reporting_segment | 1 | |||||
Advertising costs | $ 3,600 | $ 5,100 | $ 2,300 | |||
Stock-based compensation, award requisite service period | 4 years | |||||
Convertible Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Net proceeds from issuance of convertible senior notes | $ 896,500 | |||||
Convertible Senior Notes | Series A Notes | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount | $ 460,000 | |||||
Interest rate | 1.00% | |||||
Convertible Senior Notes | Series B Notes | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount | $ 460,000 | |||||
Interest rate | 1.625% | |||||
Invotas International Corporation | ||||||
Business Acquisition [Line Items] | ||||||
Purchase consideration, cash paid | $ 17,700 | |||||
Debt Instrument [Line Items] | ||||||
Stock-based compensation, award requisite service period | 4 years | |||||
Invotas International Corporation | Common Stock | ||||||
Business Acquisition [Line Items] | ||||||
Equity interest issuable, number of shares (in shares) | shares | 742,026 | |||||
Consideration transferred, equity interests | $ 11,100 | |||||
iSIGHT Security | ||||||
Business Acquisition [Line Items] | ||||||
Purchase consideration, cash paid | $ 192,800 | |||||
Liabilities incurred | $ 39,100 | |||||
iSIGHT Security | Common Stock | ||||||
Business Acquisition [Line Items] | ||||||
Equity interest issuable, number of shares (in shares) | shares | 1,793,305 | |||||
Consideration transferred, equity interests | $ 29,900 |
Description of Business and S39
Description of Business and Summary of Significant Accounting Policies Description of Business and Summary of Significant Accounting Policies - Public Offering (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Issuance of common stock in connection with public offering, net of offering costs (in shares) | 5,582,215 | |||
Price per share (usd per share) | $ 82 | |||
Aggregated proceeds from sale of shares of common stock, net of underwriters' discounts and commissions | $ 446.5 | |||
Payments for commissions | 11.2 | |||
Offering expenses | $ 2.2 | |||
Shares sold by certain selling stockholders (in shares) | 8,417,785 | |||
Shares sold pursuant to the exercise of vested outstanding options by employees (in shares) | 796,846 | 2,459,000 | 5,856,000 | 7,642,000 |
Description of Business and S40
Description of Business and Summary of Significant Accounting Policies Description of Business and Summary of Significant Accounting Policies - Property and Equipment (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Line Items] | |||
Impairment of goodwill | $ 0 | $ 0 | $ 0 |
Warranty term on hardware | 1 year | ||
Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 2 years | ||
Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 5 years | ||
Computer equipment and software | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 2 years | ||
Computer equipment and software | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 5 years | ||
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 5 years | ||
Machinery and equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 2 years | ||
Machinery and equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 5 years | ||
Internal-Use Software | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 3 years |
Description of Business and S41
Description of Business and Summary of Significant Accounting Policies Description of Business and Summary of Significant Accounting Policies - New Accounting Pronouncements (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative-effect adjustment for adoption of ASU 2016-09 | $ 0 | ||
Deferred tax assets, not recognized, compensation cost | 117,300 | ||
Accounting Standards Update 2016-15 | Scenario, Forecast | Adjustments for New Accounting Principle, Early Adoption [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cash used in operating activities | $ 233,900 | ||
Accounting Standards Update 2016-09 | New Accounting Pronouncement, Early Adoption, Effect [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative-effect adjustment for adoption of ASU 2016-09 | $ 3,400 | ||
Accumulated Deficit | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative-effect adjustment for adoption of ASU 2016-09 | $ (3,436) |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Jan. 14, 2016 | Dec. 31, 2015 |
Fair value | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total cash equivalents | $ 449 | $ 210,533 | |
Total short-term investments | 712,058 | 767,775 | |
Total assets measured at fair value | 712,507 | 978,308 | |
Contingent earn-out | 41,332 | 0 | |
Total liabilities measured at fair value | 41,332 | 0 | |
Fair value | Certificates of deposit | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total short-term investments | 9,569 | 19,124 | |
Fair value | Commercial paper | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total short-term investments | 29,920 | 0 | |
Fair value | Corporate notes and bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total short-term investments | 420,684 | 447,267 | |
Fair value | U.S. Government agencies | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total short-term investments | 251,885 | 301,384 | |
Fair value | Money market funds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total cash equivalents | 449 | 210,533 | |
Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total cash equivalents | 449 | 210,533 | |
Total short-term investments | 0 | 0 | |
Total assets measured at fair value | 449 | 210,533 | |
Contingent earn-out | 0 | 0 | |
Total liabilities measured at fair value | 0 | 0 | |
Level 1 | Certificates of deposit | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total short-term investments | 0 | 0 | |
Level 1 | Commercial paper | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total short-term investments | 0 | 0 | |
Level 1 | Corporate notes and bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total short-term investments | 0 | 0 | |
Level 1 | U.S. Government agencies | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total short-term investments | 0 | 0 | |
Level 1 | Money market funds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total cash equivalents | 449 | 210,533 | |
Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total cash equivalents | 0 | 0 | |
Total short-term investments | 712,058 | 767,775 | |
Total assets measured at fair value | 712,058 | 767,775 | |
Contingent earn-out | 0 | 0 | |
Total liabilities measured at fair value | 0 | 0 | |
Level 2 | Certificates of deposit | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total short-term investments | 9,569 | 19,124 | |
Level 2 | Commercial paper | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total short-term investments | 29,920 | 0 | |
Level 2 | Corporate notes and bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total short-term investments | 420,684 | 447,267 | |
Level 2 | U.S. Government agencies | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total short-term investments | 251,885 | 301,384 | |
Level 2 | Money market funds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total cash equivalents | 0 | 0 | |
Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total cash equivalents | 0 | 0 | |
Total short-term investments | 0 | 0 | |
Total assets measured at fair value | 0 | 0 | |
Contingent earn-out | 41,332 | $ 35,588 | 0 |
Total liabilities measured at fair value | 41,332 | 0 | |
Level 3 | Certificates of deposit | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total short-term investments | 0 | 0 | |
Level 3 | Commercial paper | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total short-term investments | 0 | 0 | |
Level 3 | Corporate notes and bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total short-term investments | 0 | 0 | |
Level 3 | U.S. Government agencies | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total short-term investments | 0 | 0 | |
Level 3 | Money market funds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total cash equivalents | $ 0 | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Level 2 | Convertible Senior Notes | |
Debt Instrument [Line Items] | |
Fair value of debt | $ 844.7 |
iSIGHT Security | Level 3 | |
Debt Instrument [Line Items] | |
Earn-out period of performance | 2 years 6 months |
iSIGHT Security | Level 3 | Minimum | |
Debt Instrument [Line Items] | |
Expected quarterly revenue growth rates | 63.00% |
Discount rate | 6.30% |
iSIGHT Security | Level 3 | Weighted Average | |
Debt Instrument [Line Items] | |
Expected volatility | 16.50% |
Quarterly revenue growth compared to S&P 500 Index | 44.70% |
iSIGHT Security | Level 3 | Maximum | |
Debt Instrument [Line Items] | |
Discount rate | 7.10% |
Fair Value Measurements - Sch44
Fair Value Measurements - Schedule of Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Changes in fair value | $ 2,356 | $ 0 | $ 0 | |
Cash payments | (112) | 0 | $ 0 | |
Level 3 | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance at acquisition (January 14, 2016) | 0 | |||
Measurement period adjustments | $ 3,500 | |||
Changes in fair value | 2,356 | |||
Cash payments | (112) | |||
Balance as of December 31, 2016 | $ 41,332 | $ 41,332 | $ 0 |
Investments - Summary of Invest
Investments - Summary of Investments (Details) - Short-term investments - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 713,800 | $ 770,000 |
Gross Unrealized Gains | 29 | 2 |
Gross Unrealized Losses | (1,771) | (2,227) |
Estimated Fair Value | 712,058 | 767,775 |
Short-Term Investments | 712,058 | 767,775 |
Certificates of deposit | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 9,560 | 19,160 |
Gross Unrealized Gains | 10 | 0 |
Gross Unrealized Losses | (1) | (36) |
Estimated Fair Value | 9,569 | 19,124 |
Short-Term Investments | 9,569 | 19,124 |
Commercial paper | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 29,929 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (9) | |
Estimated Fair Value | 29,920 | |
Short-Term Investments | 29,920 | |
Corporate notes and bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 421,635 | 448,688 |
Gross Unrealized Gains | 17 | 0 |
Gross Unrealized Losses | (968) | (1,421) |
Estimated Fair Value | 420,684 | 447,267 |
Short-Term Investments | 420,684 | 447,267 |
U.S. Government agencies | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 252,676 | 302,152 |
Gross Unrealized Gains | 2 | 2 |
Gross Unrealized Losses | (793) | (770) |
Estimated Fair Value | 251,885 | 301,384 |
Short-Term Investments | $ 251,885 | $ 301,384 |
Investments - Summary of Gross
Investments - Summary of Gross Unrealized Losses and Fair Value of Investments in a Continuous Unrealized Loss Position (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value, Less Than 12 Months | $ 541,914 | $ 715,411 |
Unrealized Loss, Less Than 12 Months | (1,661) | (2,204) |
Fair Value, Greater Than 12 Months | 117,289 | 25,793 |
Unrealized Loss, Greater Than 12 Months | (110) | (23) |
Fair Value | 659,203 | 741,204 |
Unrealized Loss | (1,771) | (2,227) |
Certificates of deposit | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value, Less Than 12 Months | 0 | 18,404 |
Unrealized Loss, Less Than 12 Months | 0 | (36) |
Fair Value, Greater Than 12 Months | 199 | 0 |
Unrealized Loss, Greater Than 12 Months | (1) | 0 |
Fair Value | 199 | 18,404 |
Unrealized Loss | (1) | (36) |
Commercial paper | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value, Less Than 12 Months | 24,925 | |
Unrealized Loss, Less Than 12 Months | (9) | |
Fair Value, Greater Than 12 Months | 0 | |
Unrealized Loss, Greater Than 12 Months | 0 | |
Fair Value | 24,925 | |
Unrealized Loss | (9) | |
Corporate notes and bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value, Less Than 12 Months | 294,818 | 430,466 |
Unrealized Loss, Less Than 12 Months | (889) | (1,407) |
Fair Value, Greater Than 12 Months | 99,433 | 16,801 |
Unrealized Loss, Greater Than 12 Months | (79) | (15) |
Fair Value | 394,251 | 447,267 |
Unrealized Loss | (968) | (1,422) |
U.S. Government agencies | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value, Less Than 12 Months | 222,171 | 266,541 |
Unrealized Loss, Less Than 12 Months | (763) | (761) |
Fair Value, Greater Than 12 Months | 17,657 | 8,992 |
Unrealized Loss, Greater Than 12 Months | (30) | (8) |
Fair Value | 239,828 | 275,533 |
Unrealized Loss | $ (793) | $ (769) |
Investments - Narrative (Detail
Investments - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Investments, Debt and Equity Securities [Abstract] | ||
Other than temporary impairment | $ 0 | $ 0 |
Ownership percentage | 12.50% | |
Investment, carrying value | $ 900,000 | $ 1,800,000 |
Investments - Summary of Contra
Investments - Summary of Contractual Maturities of Investments (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Investments, Debt and Equity Securities [Abstract] | |
Due within one year, amortized cost | $ 383,604 |
Due within one to two years, amortized cost | 330,196 |
Amortized Cost | 713,800 |
Due within one year, fair value | 383,279 |
Due within one to two years, fair value | 328,779 |
Fair Value | $ 712,058 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 201,634 | $ 176,429 |
Less: accumulated depreciation | (139,782) | (98,061) |
Total property and equipment, net | 61,852 | 78,368 |
Computer equipment and software | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 144,892 | 120,886 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 41,796 | 41,626 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 14,499 | 13,470 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 447 | $ 447 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Line Items] | |||
Capitalized software development costs | $ 8,000,000 | $ 4,300,000 | $ 0 |
Amortization of capitalized software development costs | 2,900,000 | 800,000 | |
Depreciation and amortization | $ 51,500,000 | 61,200,000 | $ 46,800,000 |
Useful Life | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation and amortization | $ 1,100,000 |
Business Combinations - Narrati
Business Combinations - Narrative (Details) - USD ($) | Feb. 01, 2016 | Jan. 14, 2016 | May 09, 2014 | Feb. 28, 2017 | May 31, 2014 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Business Acquisition [Line Items] | ||||||||||
Contingent earn-out in connection with acquisitions | $ 39,088,000 | $ 0 | $ 0 | |||||||
Consideration transferred, equity interests | $ 41,000,000 | $ 0 | $ 1,398,000 | |||||||
Requisite service period | 4 years | |||||||||
Granted (in shares) | 12,711,000 | 16,876,000 | 6,734,000 | |||||||
Amortization of intangible assets | $ 64,000,000 | $ 47,100,000 | $ 45,200,000 | |||||||
iSIGHT Security | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Purchase consideration, cash paid | $ 192,800,000 | |||||||||
Contingent earn-out in connection with acquisitions | 39,100,000 | |||||||||
Total purchase consideration | 261,800,000 | |||||||||
Contingent earn-out | $ 41,300,000 | |||||||||
Changes in fair value of contingent earn-out liability | $ 3,500,000 | |||||||||
Increase in purchase price | 5,200,000 | |||||||||
Increase in amortization of intangible assets | 200,000 | |||||||||
Liabilities | 7,000,000 | |||||||||
Goodwill deductible for U.S. federal income tax purposes | 0 | |||||||||
Business acquisition, pro forma revenue | $ 9,400,000 | |||||||||
Business combination, pro forma net loss | $ 2,300,000 | |||||||||
Amount | 85,100,000 | |||||||||
iSIGHT Security | General and administrative | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Acquisition related costs | $ 1,900,000 | |||||||||
iSIGHT Security | Common Stock | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Equity interest issuable, number of shares (in shares) | 1,793,305 | |||||||||
Consideration transferred, equity interests | $ 29,900,000 | |||||||||
Change in fair value of contingent common stock | 1,700,000 | |||||||||
iSIGHT Security | Common Stock | Subsequent Event | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Equity interest issuable, number of shares (in shares) | 1,793,297 | |||||||||
iSIGHT Security | Customer relationships | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Change in estimate of intangible assets | 1,100,000 | |||||||||
Discount rate | 15.00% | |||||||||
Amount | $ 33,700,000 | |||||||||
iSIGHT Security | Content | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Change in estimate of intangible assets | $ 1,200,000 | |||||||||
Discount rate | 14.00% | |||||||||
Amount | $ 30,100,000 | |||||||||
iSIGHT Security | Developed technology | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Discount rate | 14.00% | |||||||||
Royalty percentage | 10.00% | |||||||||
Amount | $ 17,100,000 | |||||||||
iSIGHT Security | Trade name | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Discount rate | 15.00% | |||||||||
Royalty percentage | 1.00% | |||||||||
Amount | $ 3,100,000 | |||||||||
Invotas International Corporation | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Purchase consideration, cash paid | $ 17,700,000 | |||||||||
Total purchase consideration | 28,800,000 | |||||||||
Liabilities | 700,000 | |||||||||
Goodwill deductible for U.S. federal income tax purposes | $ 0 | |||||||||
Requisite service period | 4 years | |||||||||
Performance milestone determination period | 3 years | |||||||||
Amount | $ 8,400,000 | |||||||||
Invotas International Corporation | In-process research and development | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Discount rate | 17.00% | |||||||||
Amount | $ 2,800,000 | |||||||||
Invotas International Corporation | General and administrative | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Acquisition related costs | $ 500,000 | |||||||||
Invotas International Corporation | Restricted Stock Units (RSUs) | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Granted (in shares) | 1,002,748 | |||||||||
Invotas International Corporation | Common Stock | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Equity interest issuable, number of shares (in shares) | 742,026 | |||||||||
Consideration transferred, equity interests | $ 11,100,000 | |||||||||
Invotas International Corporation | Unvested Restricted Stock Awards And Restricted Stock Units | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Granted (in shares) | 95,614 | |||||||||
Invotas International Corporation | Customer relationships | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Amount | $ 800,000 | |||||||||
Invotas International Corporation | Developed technology | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Discount rate | 16.00% | |||||||||
Amount | $ 4,500,000 | |||||||||
nPulse Technologies | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Purchase consideration, cash paid | $ 55,200,000 | |||||||||
Contingent earn-out in connection with acquisitions | 1,300,000 | |||||||||
Total purchase consideration | 56,600,000 | |||||||||
Goodwill deductible for U.S. federal income tax purposes | 0 | |||||||||
Amount | $ 24,700,000 | |||||||||
Shares issued for acquisition (in shares) | 54,319 | 295,681 | ||||||||
nPulse Technologies | General and administrative | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Acquisition costs | $ 500,000 | |||||||||
nPulse Technologies | Unvested Stock Options and Restricted Stock [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Equity awards assumed | $ 100,000 |
Business Combinations - Schedul
Business Combinations - Schedule of Purchase Price Allocation (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Feb. 01, 2016 | Jan. 14, 2016 | Dec. 31, 2015 | May 09, 2014 |
Business Acquisition [Line Items] | |||||
Goodwill | $ 978,260 | $ 750,288 | |||
iSIGHT Security | |||||
Business Acquisition [Line Items] | |||||
Net tangible liabilities assumed | $ (18,248) | ||||
Intangible assets | 85,100 | ||||
Deferred tax liability | (11,637) | ||||
Goodwill | 206,623 | ||||
Total purchase price allocation | $ 261,838 | ||||
Invotas International Corporation | |||||
Business Acquisition [Line Items] | |||||
Net tangible liabilities assumed | $ (306) | ||||
Intangible assets | 8,400 | ||||
Deferred tax liability | (688) | ||||
Goodwill | 21,349 | ||||
Total purchase price allocation | $ 28,755 | ||||
nPulse Technologies | |||||
Business Acquisition [Line Items] | |||||
Net tangible liabilities assumed | $ (1,833) | ||||
Intangible assets | 24,700 | ||||
Deferred tax asset | 442 | ||||
Deferred tax liability | (8,368) | ||||
Goodwill | 41,671 | ||||
Total purchase price allocation | $ 56,612 |
Business Combinations - Sched53
Business Combinations - Schedule of Estimated Useful Life and Fair Values of the Identifiable Intangible Assets (Details) - USD ($) $ in Thousands | Feb. 01, 2016 | Jan. 14, 2016 | May 09, 2014 |
iSIGHT Security | |||
Business Acquisition [Line Items] | |||
Amount | $ 85,100 | ||
iSIGHT Security | Customer relationships | |||
Business Acquisition [Line Items] | |||
Estimated Useful Life (in years) | 7 years | ||
Amount | $ 33,700 | ||
iSIGHT Security | Content | |||
Business Acquisition [Line Items] | |||
Estimated Useful Life (in years) | 4 years | ||
Amount | $ 30,100 | ||
iSIGHT Security | Developed technology | |||
Business Acquisition [Line Items] | |||
Amount | $ 17,100 | ||
iSIGHT Security | Developed technology | Minimum | |||
Business Acquisition [Line Items] | |||
Estimated Useful Life (in years) | 4 years | ||
iSIGHT Security | Developed technology | Maximum | |||
Business Acquisition [Line Items] | |||
Estimated Useful Life (in years) | 6 years | ||
iSIGHT Security | Trade name | |||
Business Acquisition [Line Items] | |||
Estimated Useful Life (in years) | 5 years | ||
Amount | $ 3,100 | ||
iSIGHT Security | Non-competition agreements | |||
Business Acquisition [Line Items] | |||
Estimated Useful Life (in years) | 2 years | ||
Amount | $ 1,100 | ||
Invotas International Corporation | |||
Business Acquisition [Line Items] | |||
Amount | $ 8,400 | ||
Invotas International Corporation | Customer relationships | |||
Business Acquisition [Line Items] | |||
Estimated Useful Life (in years) | 10 years | ||
Amount | $ 800 | ||
Invotas International Corporation | Developed technology | |||
Business Acquisition [Line Items] | |||
Estimated Useful Life (in years) | 4 years | ||
Amount | $ 4,500 | ||
Invotas International Corporation | Non-competition agreements | |||
Business Acquisition [Line Items] | |||
Estimated Useful Life (in years) | 3 years | ||
Amount | $ 300 | ||
nPulse Technologies | |||
Business Acquisition [Line Items] | |||
Finite-lived intangible assets acquired | $ 24,700 | ||
Amount | 24,700 | ||
nPulse Technologies | In-process research and development | |||
Business Acquisition [Line Items] | |||
Finite-lived intangible assets acquired | 6,600 | ||
nPulse Technologies | Customer relationships | |||
Business Acquisition [Line Items] | |||
Finite-lived intangible assets acquired | $ 8,000 | ||
Estimated Useful Life (in years) | 8 years | ||
nPulse Technologies | Developed technology | |||
Business Acquisition [Line Items] | |||
Finite-lived intangible assets acquired | $ 10,100 | ||
Estimated Useful Life (in years) | 6 years |
Business Combinations - Goodwil
Business Combinations - Goodwill and Purchased Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning | $ 750,288 | |
Goodwill acquired | 227,972 | |
Goodwill, ending | 978,260 | |
Total intangible assets | 400,493 | $ 306,993 |
Less: accumulated amortization | (156,461) | (92,433) |
Total | 244,032 | 214,560 |
Developed technology | ||
Goodwill [Roll Forward] | ||
Total intangible assets | 102,593 | 78,193 |
Content | ||
Goodwill [Roll Forward] | ||
Total intangible assets | 158,700 | 128,600 |
Customer relationships | ||
Goodwill [Roll Forward] | ||
Total intangible assets | 109,800 | 75,300 |
Contract backlog | ||
Goodwill [Roll Forward] | ||
Total intangible assets | 12,500 | 12,500 |
Trade names | ||
Goodwill [Roll Forward] | ||
Total intangible assets | 15,500 | 12,400 |
Non-competition agreements | ||
Goodwill [Roll Forward] | ||
Total intangible assets | $ 1,400 | $ 0 |
Business Combinations - Sched55
Business Combinations - Schedule of Expected Annual Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Business Combinations [Abstract] | ||
2,017 | $ 59,118 | |
2,018 | 47,433 | |
2,019 | 45,547 | |
2,020 | 31,171 | |
2,021 | 29,282 | |
2022 and thereafter | 31,481 | |
Total | $ 244,032 | $ 214,560 |
Restructuring Charges - Summary
Restructuring Charges - Summary of Restructuring Activities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Restructuring Reserve [Roll Forward] | ||
Beginning balance | $ 217 | $ 765 |
Provision for restructuring charges | 23,021 | 0 |
Cash payments | (21,509) | (548) |
Other adjustments | 1,738 | |
Ending balance | 3,467 | 217 |
Severance and related costs | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 0 | 0 |
Provision for restructuring charges | 21,529 | 0 |
Cash payments | (20,308) | 0 |
Other adjustments | 0 | |
Ending balance | 1,221 | 0 |
Facilities costs | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 217 | 765 |
Provision for restructuring charges | 1,492 | 0 |
Cash payments | (1,201) | (548) |
Other adjustments | 1,738 | |
Ending balance | $ 2,246 | $ 217 |
Restructuring Charges - Narrati
Restructuring Charges - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Aug. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Restructuring Cost and Reserve [Line Items] | ||||
Percentage reduction in workforce | 10.00% | |||
Restructuring charges | $ 27,630 | $ 0 | $ 4,327 | |
Restructuring charges, excluding noncash charges | 23,021 | 0 | ||
Stock-based compensation expense | 198,895 | 222,431 | 151,852 | |
Adjustments for deferred rent | 1,738 | |||
Restructuring reserve | 3,467 | 217 | 765 | |
Severance and related costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges, excluding noncash charges | 21,529 | 0 | ||
Adjustments for deferred rent | 0 | |||
Restructuring reserve | 1,221 | 0 | 0 | |
Facilities costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges, excluding noncash charges | 1,492 | 0 | ||
Adjustments for deferred rent | 1,738 | |||
Restructuring reserve | 2,246 | 217 | 765 | |
Restructuring | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Fixed assets writeoff | 3,500 | |||
Stock-based compensation expense | $ 1,144 | $ 0 | $ 0 |
Deferred Revenue - Schedule of
Deferred Revenue - Schedule of Deferred Revenue (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred Revenue Arrangement [Line Items] | ||
Total deferred revenue, current | $ 397,118 | $ 305,169 |
Total deferred revenue, non-current | 256,398 | 221,829 |
Total deferred revenue | 653,516 | 526,998 |
Product | ||
Deferred Revenue Arrangement [Line Items] | ||
Total deferred revenue, current | 8,924 | 8,200 |
Total deferred revenue, non-current | 4,748 | 3,051 |
Subscription and services | ||
Deferred Revenue Arrangement [Line Items] | ||
Total deferred revenue, current | 388,194 | 296,969 |
Total deferred revenue, non-current | $ 251,650 | $ 218,778 |
Convertible Senior Notes - Narr
Convertible Senior Notes - Narrative - Convertible Senior Notes (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jun. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Debt Instrument [Line Items] | ||||
Net proceeds from issuance of convertible senior notes | $ 0 | $ 896,530 | $ 0 | |
Convertible Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Initial purchaser's discount | $ 23,000 | |||
Debt issuance costs | 500 | |||
Net proceeds from issuance of convertible senior notes | $ 896,500 | |||
Shares of common stock (per $1000 principal amount of notes) | 16.4572 | |||
Conversion price | $ 60.76 | |||
Threshold note trading days | 5 days | |||
Threshold consecutive note trading days | 5 days | |||
Threshold percentage of note price trigger | 98.00% | |||
Redemption price, percentage | 100.00% | |||
Redemption price triggered by fundamental change, percentage | 100.00% | |||
Remaining discount and issuance cost, weighted average amortization period | 4 years 7 months 6 days | |||
Convertible Senior Notes | Subsequent to September 30, 2015 | ||||
Debt Instrument [Line Items] | ||||
Threshold trading days | 20 | |||
Threshold consecutive trading days | 30 days | |||
Threshold percentage of stock price trigger | 130.00% | |||
Convertible Senior Notes | Series A Notes | ||||
Debt Instrument [Line Items] | ||||
Principal amount | $ 460,000 | |||
Interest rate | 1.00% | |||
Convertible Senior Notes | Series B Notes | ||||
Debt Instrument [Line Items] | ||||
Principal amount | $ 460,000 | |||
Interest rate | 1.625% | |||
Convertible Senior Notes | Series B Notes | On or after June 1, 2020 until June 1, 2022 | ||||
Debt Instrument [Line Items] | ||||
Threshold trading days | 20 | |||
Threshold consecutive trading days | 30 days | |||
Threshold percentage of stock price trigger | 130.00% | |||
Required trading days since notice of redemption, not more than | 3 days | |||
Convertible Senior Notes | Debt, Liability Component | ||||
Debt Instrument [Line Items] | ||||
Initial purchaser's discount | $ 17,600 | |||
Debt issuance costs | 400 | |||
Convertible Senior Notes | Debt, Equity Component | ||||
Debt Instrument [Line Items] | ||||
Initial purchaser's discount | 5,400 | |||
Debt issuance costs | $ 100 |
Convertible Senior Notes - Sche
Convertible Senior Notes - Schedule of the Liability and Equity Components of the Convertible Senior Notes (Details) - Convertible Senior Notes - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Series A Notes | ||
Debt Instrument [Line Items] | ||
Principal | $ 460,000 | $ 460,000 |
Less: Convertible senior notes discounts and issuance costs, net of amortization | (74,126) | (93,469) |
Net carrying amount | 385,874 | 366,531 |
Equity component, net of issuance costs | 92,567 | 92,567 |
Series B Notes | ||
Debt Instrument [Line Items] | ||
Principal | 460,000 | 460,000 |
Less: Convertible senior notes discounts and issuance costs, net of amortization | (103,894) | (120,333) |
Net carrying amount | 356,106 | 339,667 |
Equity component, net of issuance costs | $ 117,834 | $ 117,834 |
Convertible Senior Notes - Sc61
Convertible Senior Notes - Schedule of Interest Expense related to the Convertible Senior Notes (Details) - Convertible Senior Notes - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Series A Notes | ||
Debt Instrument [Line Items] | ||
Coupon interest | $ 4,600 | $ 2,683 |
Amortization of convertible senior notes discounts and issuance costs | 19,343 | 10,833 |
Total interest expense recognized | $ 23,943 | $ 13,516 |
Effective interest rate on the liability component | 6.50% | 6.50% |
Series B Notes | ||
Debt Instrument [Line Items] | ||
Coupon interest | $ 7,475 | $ 4,361 |
Amortization of convertible senior notes discounts and issuance costs | 16,439 | 9,236 |
Total interest expense recognized | $ 23,914 | $ 13,597 |
Effective interest rate on the liability component | 7.00% | 7.10% |
Convertible Senior Notes - Na62
Convertible Senior Notes - Narrative - Prepaid Forward Stock Purchase (Details) shares in Millions, $ in Millions | 1 Months Ended |
Jun. 30, 2015USD ($)shares | |
Debt Disclosure [Abstract] | |
Stock repurchased during period | $ | $ 150 |
Stock repurchase during period (in shares) | shares | 3.3 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) | 12 Months Ended | ||
Dec. 31, 2016USD ($)claim | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Long-term Purchase Commitment [Line Items] | |||
Rent expense | $ 14,900,000 | $ 14,400,000 | $ 10,700,000 |
Future minimum sublease rentals | 6,900,000 | ||
Letters of credit available | 3,100,000 | 1,200,000 | |
Amount drawn against letters of credit | 0 | ||
Non-cancellable open orders | $ 10,200,000 | $ 16,900,000 | |
Number of claims | claim | 0 | ||
Software and Services | |||
Long-term Purchase Commitment [Line Items] | |||
Non-cancellable open orders | $ 20,700,000 |
Commitments and Contingencies64
Commitments and Contingencies - Schedule of Future Non-cancelable Minimum Rental Payments for Operating Leases (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,017 | $ 15,715 |
2,018 | 15,515 |
2,019 | 12,173 |
2,020 | 12,209 |
2,021 | 10,534 |
2022 and thereafter | 39,264 |
Total | $ 105,410 |
Common Shares Reserved for Is65
Common Shares Reserved for Issuance - Narrative (Details) | 12 Months Ended | |
Dec. 31, 2016vote_per_share$ / sharesshares | Dec. 31, 2015$ / sharesshares | |
Class of Stock [Line Items] | ||
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, par value (usd per share) | $ / shares | $ 0.0001 | $ 0.0001 |
Voting right per common share | vote_per_share | 1 | |
Convertible Preferred Stock | ||
Class of Stock [Line Items] | ||
Preferred stock authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, par value (usd per share) | $ / shares | $ 0.0001 | $ 0.0001 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock outstanding (in shares) | 0 | 0 |
Common Shares Reserved for Is66
Common Shares Reserved for Issuance - Schedule of Reserved Shares of Common Stock for Issuance (Details) - shares | Dec. 31, 2016 | Dec. 31, 2015 |
Class of Stock [Line Items] | ||
Shares reserved for future issuance (in shares) | 55,997,000 | 56,855,000 |
Convertible Senior Notes | ||
Class of Stock [Line Items] | ||
Shares reserved for future issuance (in shares) | 15,141,000 | 15,141,000 |
Reserved under stock award plans | ||
Class of Stock [Line Items] | ||
Shares reserved for future issuance (in shares) | 38,005,000 | 38,500,000 |
ESPP | ||
Class of Stock [Line Items] | ||
Shares reserved for future issuance (in shares) | 2,850,830 | 3,214,287 |
Equity Award Plans - Narrative
Equity Award Plans - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | May 09, 2014 | May 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Jan. 01, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares reserved for future issuance (in shares) | 55,997,000 | 56,855,000 | ||||
Equity instruments other than options, granted (in shares) | 12,711,000 | 16,876,000 | 6,734,000 | |||
Shares granted to employees in connection with acquisitions | 3,600,000 | |||||
Stock options granted (in shares) | 0 | 0 | 676,000 | |||
Compensation cost not yet recognized | $ 294.9 | |||||
Compensation cost not yet recognized, period for recognition | 2 years 3 months 18 days | |||||
nPulse Technologies | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares issued for acquisition (in shares) | 54,319 | 295,681 | ||||
Business acquisition, share price (usd per share) | $ 26.44 | |||||
nPulse Technologies | Former Shareholders | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares issued for acquisition (in shares) | 54,319 | |||||
nPulse Technologies | Employees | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares issued for acquisition (in shares) | 241,362 | |||||
ESPP | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares reserved for future issuance (in shares) | 2,850,830 | 3,214,287 | ||||
Acquisition price at lower of fair market value, percentage | 85.00% | |||||
ESPP | Subsequent Event | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares available for grant (in shares) | 1,745,960 | |||||
Performance Shares | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Equity instruments other than options, granted (in shares) | 3,000,000 | 5,300,000 | 1,700,000 | |||
2013 Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
General vesting period | 4 years | |||||
Award expiration period from grant date | 10 years | |||||
Employee stock ownership, combined voting power of all stock | 10.00% | |||||
Minimum exercise price as a percentage of the fair value per share | 110.00% | |||||
Award expiration period, for excess voting power grants | 5 years | |||||
Shares reserved for future issuance (in shares) | 10,000,000 | 7,200,000 | ||||
2013 Plan | Subsequent Event | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares available for grant (in shares) | 8,729,801 | |||||
2013 Plan | Employee stock option | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Grant date fair value, percentage, no less than | 100.00% |
Equity Award Plans - Summary of
Equity Award Plans - Summary of the Activity for Stock Option Changes and Summary of Information Related to Options Vested and Expected to Vest and Options Exercisable (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||
Mar. 31, 2014 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||||
Beginning balance, options outstanding (in shares) | 11,494,000 | 11,494,000 | 18,578,000 | 27,422,000 | |
Granted (in shares) | 0 | 0 | 676,000 | ||
Exercised (in shares) | (796,846) | (2,459,000) | (5,856,000) | (7,642,000) | |
Cancelled (in shares) | (950,000) | (1,228,000) | (1,941,000) | ||
Assumed in acquisition (in shares) | 63,000 | ||||
Ending balance, options outstanding (in shares) | 8,085,000 | 11,494,000 | 18,578,000 | ||
Options exercisable (in shares) | 7,331,000 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |||||
Beginning balance, weighted average exercise price (usd per share) | $ 10.67 | $ 10.67 | $ 9.13 | $ 5.82 | |
Granted, weighted average exercise price (usd per share) | 0 | 0 | 72.60 | ||
Exercised, weighted average exercise price (usd per share) | 5.64 | 4.97 | 2.97 | ||
Cancelled, weighted average exercise price (usd per share) | 23.40 | 14.57 | 9.10 | ||
Assumed in acquisition, weighted average exercise price (usd per share) | 20.60 | ||||
Ending balance, weighted average exercise price (usd per share) | 10.70 | 10.67 | 9.13 | ||
Options exercisable, weighted average exercise price (usd per share) | $ 9.74 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |||||
Options weighted-average grant date fair value per share (usd per share) | $ 0 | $ 0 | $ 72.60 | ||
Balance, options outstanding, weighted average contractual life | 5 years 4 months 24 days | ||||
Options exercisable, weighted average contractual life | 5 years 3 months 18 days | ||||
Balance, options outstanding, aggregate intrinsic value | $ 40,304 | ||||
Exercised, aggregate intrinsic value | 23,343 | $ 211,854 | $ 271,236 | ||
Options exercisable, aggregate intrinsic value | $ 39,097 |
Equity Award Plans - Summary 69
Equity Award Plans - Summary of Activity for Restricted Common Stock, RSAs and RSUs and Summary of Information Related to Unvested Restricted Common Stock, RSAs and RSUs and those Expected to Vest (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |||
Unvested balance, beginning (in shares) | 20,054 | 8,341 | 3,602 |
Granted (in shares) | 12,711 | 16,876 | 6,734 |
Vested (in shares) | (6,222) | (2,783) | (1,482) |
Cancelled (in shares) | (6,660) | (2,380) | (809) |
Unvested balance, ending (in shares) | 19,883 | 20,054 | 8,341 |
Granted in acquisitions (in shares) | 296 | ||
Expected to vest (in shares) | 5,584 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||
Unvested balance, beginning, weighted average grant date fair value (usd per share) | $ 33.68 | $ 39.57 | $ 27.20 |
Weighted average grant date fair value, granted (usd per share) | 13.76 | 32.25 | 42.12 |
Weighted average grant date fair value, vested (usd per share) | 33.99 | 35.66 | 16.04 |
Weighted average grant date fair value, cancelled (usd per share) | 27.17 | 41.11 | 40.93 |
Unvested balance, ending, weighted average grant date fair value (usd per share) | 22.23 | $ 33.68 | 39.57 |
Weighted average grant date fair value, granted in acquisitions (usd per share) | $ 26.44 | ||
Weighted average grant date fair value, expected to vest (usd per share) | $ 20.22 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |||
Unvested balance, weighted-average remaining contractual term | 1 year 6 months | ||
Expected to vest, weighted-average remaining contractual term | 2 years | ||
Unvested balance, aggregate intrinsic value | $ 236,605 | ||
Expected to vest, aggregate intrinsic value | $ 66,445 |
Equity Award Plans - Summary 70
Equity Award Plans - Summary of Assumptions Used In The Black-Scholes Option-Pricing Model to Determine Fair Value (Details) - $ / shares | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value of common stock (usd per share) | $ 82 | |||
Risk-free interest rate, minimum | 1.80% | |||
Risk-free interest rate, maximum | 2.00% | |||
Expected term (in years) | 6 years | |||
Dividend yield (as a percent) | 0.00% | |||
Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value of common stock (usd per share) | $ 27.89 | |||
Volatility (as a percent) | 51.00% | |||
Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value of common stock (usd per share) | $ 75.87 | |||
Volatility (as a percent) | 53.00% | |||
ESPP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Risk-free interest rate, minimum | 0.38% | 0.09% | ||
Risk-free interest rate, maximum | 0.79% | 0.50% | ||
Risk-free interest rate | 0.10% | |||
Dividend yield (as a percent) | 0.00% | 0.00% | 0.00% | |
ESPP | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value of common stock (usd per share) | $ 13.12 | $ 19.10 | $ 27.08 | |
Expected term (in years) | 6 months | 6 months | 6 months | |
Volatility (as a percent) | 57.00% | 38.00% | 35.00% | |
ESPP | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value of common stock (usd per share) | $ 14.12 | $ 35.16 | $ 32.32 | |
Expected term (in years) | 1 year 15 days | 1 year | 1 year | |
Volatility (as a percent) | 63.00% | 42.00% | 45.00% |
Equity Award Plans - Schedule o
Equity Award Plans - Schedule of Stock-Based Compensation Expense Related to Stock Options, ESPP and Restricted Stock Units and Awards (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | $ 198,895 | $ 222,431 | $ 151,852 |
Cost of product revenue | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | 2,092 | 1,588 | 888 |
Cost of subscription and services revenue | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | 29,811 | 29,435 | 17,037 |
Research and development | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | 64,755 | 68,329 | 28,968 |
Sales and marketing | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | 57,750 | 73,286 | 66,773 |
General and administrative | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | 43,343 | 49,793 | 38,186 |
Restructuring | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | $ 1,144 | $ 0 | $ 0 |
Income Taxes Income Taxes - Sch
Income Taxes Income Taxes - Schedule of Loss Before Benefit from Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
United States | $ (289,783) | $ (324,805) | $ (269,426) |
Foreign | (199,067) | (210,320) | (211,018) |
Total | $ (488,850) | $ (535,125) | $ (480,444) |
Income Taxes Income Taxes - S73
Income Taxes Income Taxes - Schedule of Benefit from Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Federal: | |||
Current | $ 0 | $ 0 | $ 11 |
Deferred | (10,941) | 0 | (36,208) |
State: | |||
Current | 49 | (160) | 255 |
Deferred | (1,384) | 0 | (3,263) |
Foreign: | |||
Current | 3,156 | 5,604 | 2,945 |
Deferred | 399 | (1,354) | (394) |
Total | $ (8,721) | $ 4,090 | $ (36,654) |
Income Taxes Income Taxes - S74
Income Taxes Income Taxes - Schedule of Reconciliation of the Federal Statutory Income Tax Rate to the Effective Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory rate | 35.00% | 35.00% | 35.00% |
Effect of: | |||
State taxes, net of federal tax benefit | 0.30% | 0.00% | 0.60% |
Change in valuation allowance | (16.30%) | (21.00%) | (11.20%) |
Research and development tax credit | 1.10% | 1.10% | 1.20% |
Stock-based compensation | (2.80%) | (1.10%) | (1.90%) |
Stock-based compensation | (14.70%) | (14.10%) | (15.60%) |
Non-deductible/non-taxable items | (0.80%) | (0.60%) | (0.20%) |
Other, net | 0.00% | (0.10%) | (0.30%) |
Total | 1.80% | (0.80%) | 7.60% |
Income Taxes Income Taxes - S75
Income Taxes Income Taxes - Schedule of Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 216,397 | $ 82,201 |
Accruals and reserves | 15,335 | 16,841 |
Stock-based compensation | 48,212 | 59,872 |
Fixed assets | 14,025 | 12,122 |
Deferred revenue | 64,691 | 43,411 |
Research and development credits | 30,852 | 23,445 |
Other deferred tax assets | 673 | 1,017 |
Gross deferred tax assets | 390,185 | 238,909 |
Valuation allowance | (233,783) | (81,937) |
Total deferred tax assets | 156,402 | 156,972 |
Deferred Tax Liabilities, Intangible Assets | 93,151 | 81,621 |
Deferred tax liabilities: | ||
Convertible senior notes | (61,811) | (73,427) |
Convertible senior notes | (7) | (92) |
Total deferred tax liabilities | 154,969 | 155,140 |
Total net deferred tax assets | $ 1,433 | $ 1,832 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Operating Loss Carryforwards [Line Items] | ||||
Valuation allowance increase | $ (151,800) | |||
Deferred tax assets, not recognized, compensation cost | 117,300 | |||
Unrecognized tax benefits | 43,637 | $ 31,902 | $ 21,264 | $ 10,887 |
Unrecognized tax benefits that would affect income tax expense | 1,800 | |||
Interest and penalties expense | (31) | 183 | $ 115 | |
Accrual for interest and penalties | 367 | $ 398 | ||
Undistributed earnings in foreign subsidiaries | $ 23,600 | |||
Effective income tax rate | 1.80% | (0.80%) | 7.60% | |
Domestic Tax Authority | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating loss carryforward | $ 602,300 | |||
Domestic Tax Authority | Research Tax Credit Carryforward | ||||
Operating Loss Carryforwards [Line Items] | ||||
Tax credit carryforward | 21,600 | |||
State and Local Jurisdiction | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating loss carryforward | 705,000 | |||
State and Local Jurisdiction | Research Tax Credit Carryforward | ||||
Operating Loss Carryforwards [Line Items] | ||||
Tax credit carryforward | $ 13,600 |
Income Taxes Income Taxes - S77
Income Taxes Income Taxes - Schedule of Reconciliation of Gross Unrecognized Tax Benefit (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits at the beginning of the period | $ 31,902 | $ 21,264 | $ 10,887 |
Additions for tax positions related to the current year | 12,435 | 10,614 | 10,452 |
Increases related to prior year tax positions | 561 | 24 | 0 |
Decreases related to prior year tax positions | (1,213) | 0 | (52) |
Decreases based on settlements with taxing authorities | (48) | 0 | 0 |
Lapse of statute of limitations | 0 | 0 | (23) |
Unrecognized tax benefits at the end of the period | $ 43,637 | $ 31,902 | $ 21,264 |
Net Loss per Share - Schedule o
Net Loss per Share - Schedule of Computation of Net Loss per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Numerator: | |||
Net loss | $ (480,129) | $ (539,215) | $ (443,790) |
Denominator: | |||
Weighted average number of shares outstanding—basic and diluted (in shares) | 163,211 | 154,120 | 142,176 |
Net loss per share—basic and diluted (usd per share) | $ (2.94) | $ (3.50) | $ (3.12) |
Net Loss per Share - Schedule79
Net Loss per Share - Schedule of Outstanding Options and Unvested Shares Excluded from Computation of Diluted Net Loss per Share (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Options to purchase common stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from net loss per share (shares) | 8,085 | 11,494 | 18,578 |
Unvested early exercised common shares | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from net loss per share (shares) | 0 | 936 | 2,382 |
Unvested restricted stock awards and units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from net loss per share (shares) | 19,883 | 20,054 | 8,341 |
Convertible senior notes | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from net loss per share (shares) | 15,141 | 15,141 | 0 |
iSIGHT earn-out contingently issuable shares | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from net loss per share (shares) | 1,793 | 0 | 0 |
ESPP shares | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from net loss per share (shares) | 314 | 210 | 124 |
Net Loss per Share Net Loss per
Net Loss per Share Net Loss per Share - Additional Information (Details) - iSIGHT Security - Common Stock - shares | Jan. 14, 2016 | Feb. 28, 2017 |
Subsequent Event [Line Items] | ||
Equity interest issuable, number of shares (in shares) | 1,793,305 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Equity interest issuable, number of shares (in shares) | 1,793,297 |
Employee Benefit Plan - Narrati
Employee Benefit Plan - Narrative (Details) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Compensation and Retirement Disclosure [Abstract] | |
Employer contributions vested percentage | 100.00% |
Employer contributions to 401(k) | $ 0 |
Segment and Major Customers I82
Segment and Major Customers Information - Schedule of Revenue by Geographic Region (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total revenue | $ 714,114 | $ 622,967 | $ 425,662 |
United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total revenue | 488,623 | 439,205 | 319,144 |
EMEA | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total revenue | 102,288 | 80,960 | 57,721 |
APAC | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total revenue | 95,285 | 73,009 | 34,284 |
Other | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total revenue | $ 27,918 | $ 29,793 | $ 14,513 |
Segment and Major Customers I83
Segment and Major Customers Information - Summary of Long lived Assets by Geographic Region Based on Physical Location (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Entity Location [Line Items] | ||
Total property and equipment, net | $ 61,852 | $ 78,368 |
United States | ||
Entity Location [Line Items] | ||
Total property and equipment, net | 43,214 | 57,537 |
International | ||
Entity Location [Line Items] | ||
Total property and equipment, net | $ 18,638 | $ 20,831 |
Segment and Major Customers I84
Segment and Major Customers Information - Narrative (Details) - reporting_segment | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenue, Major Customer [Line Items] | |||
Number of reportable segment and operating unit structure | 1 | ||
Customer concentration risk | Sales revenue, net | Distributor One | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 19.00% | 17.00% | |
Customer concentration risk | Sales revenue, net | Reseller | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 12.00% | 13.00% | 11.00% |
Customer concentration risk | Accounts Receivable | Distributor One | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 20.00% | ||
Customer concentration risk | Accounts Receivable | Distributor Two | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 12.00% |
Schedule II - Valuation and Q85
Schedule II - Valuation and Qualifying Accounts (Details) - Allowance for Doubtful Accounts - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of period | $ 2,021 | $ 586 | $ 20 |
Charged to cost and expenses | 1,560 | 1,342 | 566 |
Write-offs, net of recoveries | (1,991) | 93 | 0 |
Balance at end of period | $ 1,590 | $ 2,021 | $ 586 |