Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Sep. 30, 2013 | Nov. 01, 2013 | |
Document Information [Line Items] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-13 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Trading Symbol | 'FIO | ' |
Entity Registrant Name | 'FUSION-IO, INC. | ' |
Entity Central Index Key | '0001383729 | ' |
Current Fiscal Year End Date | '--06-30 | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 105,480,908 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (Unaudited) (USD $) | Sep. 30, 2013 | Jun. 30, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $225,265 | $238,351 |
Accounts receivable, net of allowances of $1,990 and $1,806 as of June 30, 2013 and September 30, 2013, respectively | 63,912 | 69,107 |
Inventories | 74,115 | 71,160 |
Prepaid expenses and other current assets | 11,416 | 9,530 |
Total current assets | 374,708 | 388,148 |
Property and equipment, net | 34,989 | 35,272 |
Restricted cash | 1,587 | 4,860 |
Intangible assets, net | 26,018 | 28,268 |
Goodwill | 149,467 | 149,467 |
Other assets | 1,428 | 1,433 |
Total assets | 588,197 | 607,448 |
Current liabilities: | ' | ' |
Accounts payable | 11,691 | 14,170 |
Accrued and other current liabilities | 39,039 | 44,425 |
Deferred revenue | 22,533 | 24,848 |
Total current liabilities | 73,263 | 83,443 |
Deferred revenue, less current portion | 14,643 | 14,167 |
Other liabilities | 19,157 | 19,421 |
Commitments and contingencies | ' | ' |
Stockholders' equity: | ' | ' |
Preferred stock | ' | ' |
Common stock | 20 | 20 |
Additional paid-in capital | 618,165 | 599,292 |
Accumulated other comprehensive loss | -370 | -110 |
Accumulated deficit | -136,681 | -108,785 |
Total stockholders' equity | 481,134 | 490,417 |
Total liabilities and stockholders' equity | $588,197 | $607,448 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $) | Sep. 30, 2013 | Jun. 30, 2013 |
In Thousands, unless otherwise specified | ||
Accounts receivable, allowances for doubtful accounts | $1,806 | $1,990 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (Unaudited) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Revenue | $86,293 | $118,115 |
Cost of revenue | 36,540 | 48,065 |
Gross profit | 49,753 | 70,050 |
Operating expenses: | ' | ' |
Sales and marketing | 34,798 | 25,587 |
Research and development | 29,468 | 22,173 |
General and administrative | 13,291 | 13,841 |
Total operating expenses | 77,557 | 61,601 |
Income (loss) from operations | -27,804 | 8,449 |
Other income (expense): | ' | ' |
Interest income | 35 | 114 |
Interest expense | -51 | -30 |
Other (expense) income, net | 186 | -29 |
Income (loss) before income taxes | -27,634 | 8,504 |
Income tax expense | -262 | -4,571 |
Net income (loss) | ($27,896) | $3,933 |
Net income (loss) per common share: | ' | ' |
Basic | ($0.28) | $0.04 |
Diluted | ($0.28) | $0.04 |
Weighted-average number of shares: | ' | ' |
Basic | 99,903 | 94,221 |
Diluted | 99,903 | 108,425 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Net income (loss) | ($27,896) | $3,933 |
Foreign currency translation adjustment | -260 | 23 |
Comprehensive income (loss) | ($28,156) | $3,956 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Operating activities: | ' | ' |
Net income (loss) | ($27,896) | $3,933 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ' | ' |
Depreciation and amortization | 5,838 | 3,188 |
Stock-based compensation | 14,215 | 13,889 |
Excess tax benefit from stock-based awards | -3 | -4,385 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable, net | 5,195 | -8,951 |
Inventories | -2,955 | -7,746 |
Prepaid expenses and other assets | -1,881 | 457 |
Accounts payable | -2,479 | 14,014 |
Accrued and other liabilities | -5,341 | 8,658 |
Deferred revenue | -1,839 | 5,610 |
Net cash provided by (used in) operating activities | -17,146 | 28,667 |
Investing activities: | ' | ' |
Purchases of property and equipment | -3,281 | -5,175 |
Net cash used in investing activities | -3,281 | -5,175 |
Financing activities: | ' | ' |
Proceeds from exercises of stock options | 3,206 | 4,279 |
Issuance of restricted awards and restricted stock units, net of repurchases | -702 | -1,055 |
Proceeds from issuance of common stock under employee stock purchase plan | 1,569 | 1,459 |
Excess tax benefit from stock option exercises | 3 | 4,385 |
Change in restricted cash | 3,273 | ' |
Net cash provided by financing activities | 7,349 | 9,068 |
Effect of exchange rate changes on cash and cash equivalents | -8 | 94 |
Net increase (decrease) in cash and cash equivalents | -13,086 | 32,654 |
Cash and cash equivalents at the beginning of period | 238,351 | 321,239 |
Cash and cash equivalents at the end of period | $225,265 | $353,893 |
Description_of_Business_and_Su
Description of Business and Summary of Significant Accounting Policies | 3 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Description of Business and Summary of Significant Accounting Policies | ' | ||||||||
1. Description of Business and Summary of Significant Accounting Policies | |||||||||
Fusion-io, Inc. (the “Company” or “Fusion-io”) provides an enterprise storage class memory platform and storage solution portfolio, based on the Company’s ioMemory technology with virtual storage layer (“VSL”) software and direct acceleration, shared acceleration, and virtualization acceleration products. The Company sells its products and services through its global direct sales force, original equipment manufacturers (“OEMs”), and other channel partners. | |||||||||
Basis of Presentation | |||||||||
The accompanying condensed consolidated balance sheets and the condensed consolidated statements of operations, comprehensive income (loss), and cash flows are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments (all of which are considered of a normal recurring nature) considered necessary to present fairly the Company’s financial position, results of operations, and cash flows. The results of operations for the three months ended September 30, 2013 are not necessarily indicative of the results that may be expected for the full fiscal year ending June 30, 2014 or any other period. | |||||||||
These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2013 (the “2013 Annual Report”) filed with the Securities and Exchange Commission (the “SEC”). | |||||||||
The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in the unaudited condensed consolidated financial statements. | |||||||||
Segment and Geographic Information | |||||||||
Operating segments are defined in accounting standards as components of an enterprise about which separate financial information is available and is regularly evaluated by management, namely the chief operating decision maker of an organization, in order to make operating and resource allocation decisions. The Company has concluded it operates in one business segment, which is the development, marketing, and sale of storage memory solutions. Substantially all of the Company’s revenue for all periods presented in the accompanying condensed consolidated statements of operations has been from sales of the ioMemory based product lines and related customer support services. The Company’s headquarters and most of its operations are located in the United States; however, it conducts sales activities through sales offices in Europe and Asia. Revenue recognized from sales with a ship-to location outside of the United States was 38% and 40% of revenue for the three months ended September 30, 2012 and 2013, respectively. Revenue recognized from sales to customers with a ship-to address in Germany was 19% of revenue for the three months ended September 30, 2012 and revenue recognized from sales to customers with a ship-to address in China was 11% of revenue for the three months ended September 30, 2013. No other country outside of the United States accounted for 10% or more of revenue for all periods presented. Long-lived tangible assets located outside of the United States were not material for all periods for which a condensed consolidated balance sheet is presented. | |||||||||
Reclassification | |||||||||
Certain expense amounts previously reported in the condensed consolidated statements of operations for the three months ended September 30, 2012 have been reclassified to reflect an adjustment to the method in which the Company allocates information technology and facility costs and to conform to fiscal 2014 presentation. As a result of the reclassifications, cost of revenue increased by $71,000, sales and marketing expenses increased by $567,000, research and development expenses increased by $605,000, and general and administrative expenses decreased by $1,243,000 for the three months ended September 30, 2012. The net effect of these reclassifications did not impact the amounts previously reported as income from operations and net income. | |||||||||
Use of Estimates | |||||||||
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets 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. On an on-going basis, the Company evaluates its significant estimates, including those related to revenue recognition, sales returns, accounting for business combinations and impairment of long-lived and intangible assets including goodwill, determination of fair value of stock options, valuation of inventory, product warranty, and income taxes. The Company also uses estimates in determining the useful lives of property and equipment and intangible assets and provisions for doubtful accounts. Actual results could differ from those estimates. | |||||||||
Significant Customers | |||||||||
Customers that accounted for 10% or more of the Company’s revenue represented 70% and 57% of revenue for the three months ended September 30, 2012 and 2013, respectively. As a consequence of the concentration of the Company’s customers, and typically a small number of large purchases by these customers, revenue, gross margin, and operating results may fluctuate significantly from period to period. | |||||||||
Product Warranty | |||||||||
The Company provides its customers a standard limited product warranty of up to five years. The standard warranty requires the Company to repair or replace defective products at no cost to the customer during such warranty period. The Company estimates the costs that may be incurred under its standard limited warranty and records a liability in the amount of such costs at the time product sales are recognized. Factors that affect the Company’s warranty liability include the number of installed units, identified warranty issues, historical experience, and management’s judgment regarding anticipated rates of warranty claims and cost per claim. The Company assesses the adequacy of its recorded warranty liability each period and makes adjustments to the liability as necessary based on actual experience. | |||||||||
The following table presents the changes in the product warranty liability (in thousands): | |||||||||
Total | |||||||||
Balance at June 30, 2013 | $ | 5,241 | |||||||
Warranty costs accrued | 376 | ||||||||
Warranty claims | (421 | ) | |||||||
Adjustments related to pre-existing warranties, including changes in estimates | 279 | ||||||||
Balance at September 30, 2013 | $ | 5,475 | |||||||
Restricted Cash | |||||||||
As of June 30, 2013 and September 30, 2013, the Company had restricted cash of approximately $4,860,000 and $1,587,000, respectively. Of the amounts restricted as of September 30, 2013, approximately $87,000 related to letters of credit for purposes of securing the Company’s obligation under a facility lease which was collateralized by a portion of the Company’s cash through the term of the lease, which ends March 2017. In addition, the Company retained $1,500,000 as partial security for indemnification obligations of shareholders as part of the acquisition of ID7 Ltd. and SCST Limited (together, the “ID7 Entities”) (see Note 4). This restricted cash amount, less any indemnification claims, will be paid in September 2014. | |||||||||
Net Income (Loss) Per Share | |||||||||
Basic net income (loss) per share is computed using the weighted-average number of common shares outstanding during the period, less weighted-average common shares subject to repurchase. Diluted net income (loss) per share is computed using the weighted-average number of common shares outstanding and potentially dilutive common shares outstanding during the period that have a dilutive effect on net income (loss) per share. Potentially dilutive common shares result from the assumed exercise of outstanding stock options, assumed vesting of outstanding restricted stock subject to vesting provisions, restricted stock awards (“RSAs”), and restricted stock units (“RSUs”). In a net loss position, diluted net loss per share is computed using only the weighted-average number of common shares outstanding during the period, less weighted-average common shares subject to repurchase, as any additional common shares would be anti-dilutive. | |||||||||
The following table presents the reconciliation of the numerator and denominator used in the calculation of basic and diluted net income (loss) per share (in thousands): | |||||||||
Three Months Ended | |||||||||
September 30, | |||||||||
2012 | 2013 | ||||||||
Numerator: | |||||||||
Net income (loss) | $ | 3,933 | $ | (27,896 | ) | ||||
Denominator: | |||||||||
Weighted-average common shares outstanding | 94,432 | 100,376 | |||||||
Less weighted-average common shares outstanding subject to repurchase | (211 | ) | (473 | ) | |||||
Weighted-average shares, basic | 94,221 | 99,903 | |||||||
Effect of dilutive securities | 14,204 | — | |||||||
Weighted-average shares, diluted | 108,425 | 99,903 | |||||||
The following weighted-average common stock equivalents were anti-dilutive and therefore were excluded from the calculation of diluted net income (loss) per share (in thousands): | |||||||||
Three Months Ended | |||||||||
September 30, | |||||||||
2012 | 2013 | ||||||||
Stock options | 4,664 | 8,200 | |||||||
Restricted stock units and restricted stock awards | 1,841 | 114 | |||||||
Total | 6,505 | 8,314 | |||||||
Recently Issued and Adopted Accounting Pronouncements | |||||||||
In February 2013, the Financial Accounting Standards Board (the “FASB”) issued an Accounting Standards Update (“ASU”) requiring an entity to report information, either on the face of the statement where net income is presented or in the notes, about the amounts reclassified out of accumulated other comprehensive income by component and to report significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income. The ASU has been adopted by the Company effective for the first quarter of fiscal 2014. Other than requiring additional disclosures, the adoption of this new guidance did not have a material impact on the Company’s consolidated financial statements. | |||||||||
In July 2013, the FASB issued an ASU providing presentation requirements for unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a similar tax credit carryforward exists. This accounting standard update will be effective for the Company beginning in its first quarter of fiscal 2015 and is not expected to have a significant impact on its consolidated financial statements. |
Balance_Sheet_Components
Balance Sheet Components | 3 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Balance Sheet Components | ' | ||||||||||||||||
2. Balance Sheet Components | |||||||||||||||||
Cash and Cash Equivalents | |||||||||||||||||
Cash and cash equivalents were as follows (in thousands): | |||||||||||||||||
June 30, 2013 | |||||||||||||||||
Amortized | Unrealized | Unrealized | Estimated | ||||||||||||||
Cost | Gains | Losses | Fair Value | ||||||||||||||
Cash and cash equivalents: | |||||||||||||||||
Cash | $ | 36,107 | $ | — | $ | — | $ | 36,107 | |||||||||
Money market funds | 202,244 | — | — | 202,244 | |||||||||||||
Total cash and cash equivalents | $ | 238,351 | $ | — | $ | — | $ | 238,351 | |||||||||
Restricted cash: | |||||||||||||||||
Cash | $ | 4,860 | $ | — | $ | — | $ | 4,860 | |||||||||
September 30, 2013 | |||||||||||||||||
Amortized | Unrealized | Unrealized | Estimated | ||||||||||||||
Cost | Gains | Losses | Fair Value | ||||||||||||||
Cash and cash equivalents: | |||||||||||||||||
Cash | $ | 22,991 | $ | — | $ | — | $ | 22,991 | |||||||||
Money market funds | 202,274 | — | — | 202,274 | |||||||||||||
Total cash and cash equivalents | $ | 225,265 | $ | — | $ | — | $ | 225,265 | |||||||||
Restricted cash: | |||||||||||||||||
Cash | $ | 1,587 | $ | — | $ | — | $ | 1,587 | |||||||||
Inventories | |||||||||||||||||
Inventories consisted of the following (in thousands): | |||||||||||||||||
June 30, | September 30, | ||||||||||||||||
2013 | 2013 | ||||||||||||||||
Raw materials | $ | 32,067 | $ | 40,699 | |||||||||||||
Work in progress | 25,497 | 22,117 | |||||||||||||||
Finished goods | 13,596 | 11,299 | |||||||||||||||
$ | 71,160 | $ | 74,115 | ||||||||||||||
Property and Equipment, net | |||||||||||||||||
Property and equipment consisted of the following (in thousands): | |||||||||||||||||
June 30, | September 30, | ||||||||||||||||
2013 | 2013 | ||||||||||||||||
Computer equipment | $ | 21,866 | $ | 23,395 | |||||||||||||
Software | 4,674 | 4,802 | |||||||||||||||
Property and equipment | 10,625 | 11,881 | |||||||||||||||
Furniture and fixtures | 4,294 | 4,427 | |||||||||||||||
Leasehold improvements | 15,446 | 15,597 | |||||||||||||||
Construction in progress | 203 | 310 | |||||||||||||||
57,108 | 60,412 | ||||||||||||||||
Less accumulated depreciation and amortization | (21,836 | ) | (25,423 | ) | |||||||||||||
$ | 35,272 | $ | 34,989 | ||||||||||||||
Depreciation expense (including amortization of leasehold improvements) was $2,532,000 and $3,587,000 for the three months ended September 30, 2012 and 2013, respectively. | |||||||||||||||||
Accrued and Other Current Liabilities | |||||||||||||||||
Accrued and other current liabilities consisted of the following (in thousands): | |||||||||||||||||
June 30, | September 30, | ||||||||||||||||
2013 | 2013 | ||||||||||||||||
Accrued compensation | $ | 25,146 | $ | 21,000 | |||||||||||||
Accrued warranty expense | 5,241 | 5,475 | |||||||||||||||
Accrued other liabilities | 14,038 | 12,564 | |||||||||||||||
$ | 44,425 | $ | 39,039 | ||||||||||||||
Long-term Other Liabilities | |||||||||||||||||
Long-term other liabilities consisted of the following (in thousands): | |||||||||||||||||
June 30, | September 30, | ||||||||||||||||
2013 | 2013 | ||||||||||||||||
Long-term deferred tax liability | $ | 4,900 | $ | 4,816 | |||||||||||||
Long-term deferred rent | 9,209 | 9,029 | |||||||||||||||
Long-term other liabilities | 5,312 | 5,312 | |||||||||||||||
$ | 19,421 | $ | 19,157 | ||||||||||||||
Fair_Value_Measurements
Fair Value Measurements | 3 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||
3. Fair Value Measurements | |||||||||||||||||
Assets Measured and Recorded at Fair Value on a Recurring Basis | |||||||||||||||||
The Company measures and records certain financial assets at fair value on a recurring basis. Fair value is based on 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. | |||||||||||||||||
The Company’s financial instruments that are measured at fair value on a recurring basis consist of money market funds. The following three levels of inputs are used to measure the fair value of financial instruments: | |||||||||||||||||
Level 1: | Quoted prices in active markets for identical assets or liabilities. The Company classifies its money market funds as Level 1 instruments as they are traded in active markets with sufficient volume and frequency of transactions. | ||||||||||||||||
Level 2: | Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. | ||||||||||||||||
Level 3: | Unobservable inputs are used when little or no market data is available. | ||||||||||||||||
The fair value of the Company’s money market funds was as follows (in thousands): | |||||||||||||||||
Fair Value Measurements at June 30, 2013 | |||||||||||||||||
Description | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Cash equivalents: | |||||||||||||||||
Money market funds | $ | 202,244 | $ | — | $ | — | $ | 202,244 | |||||||||
Fair Value Measurements at September 30, 2013 | |||||||||||||||||
Description | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Cash equivalents: | |||||||||||||||||
Money market funds | $ | 202,274 | $ | — | $ | — | $ | 202,274 | |||||||||
Fair Value of Other Financial Instruments | |||||||||||||||||
The carrying amounts of the Company’s accounts receivable, accounts payable, accrued liabilities, and other liabilities approximate their fair values due to the short maturities of these assets and liabilities. |
Acquisitions
Acquisitions | 3 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Acquisitions | ' | ||||||||
4. Acquisitions | |||||||||
NexGen Storage, Inc. | |||||||||
On April 24, 2013, the Company acquired 100% of the stock of NexGen Storage, Inc., (“NexGen”), a developer of hybrid storage systems based in Louisville, Colorado, pursuant to the Merger Agreement dated April 24, 2013. The consideration transferred was $110,737,000, consisting of (i) $108,973,000 in cash, (ii) $1,418,000 in assumed stock options, and (iii) $346,000 related to the elimination of intercompany balances. Of the cash consideration, $17,854,000 of cash was deposited in escrow as partial security for the indemnification obligations of the NexGen stockholders pursuant to the Merger Agreement. This amount, less any indemnification claims, will be distributed promptly following April 24, 2014. | |||||||||
In addition, the Company agreed to pay $5,000,000 in cash to one of the selling stockholders in 12 equal quarterly installments and issue 339,627 in shares of the Company’s common stock to another selling stockholder, which is subject to a repurchase right that lapses in 12 equal quarterly installments. The quarterly installments for both the cash and restricted stock amounts are subject to ongoing employment requirements. | |||||||||
The Company also assumed NexGen’s options and restricted stock units that were unvested at the time of the merger that were converted into unvested options to purchase 822,927 shares of the Company’s common stock and 84,808 of the Company’s restricted stock units. The fair value of the assumed options was estimated using the Black-Scholes-Merton option pricing model with market assumptions. Option pricing models require the use of highly subjective market assumptions, including expected stock price volatility, which if changed, can materially affect fair value estimates. The more significant assumptions used in estimating the fair value of these stock options include expected volatility of 65.0%, expected option term of between 3.9 years and 5.7 years and a risk-free interest rate of 0.70%. The fair value of the assumed restricted stock units and the common stock was $16.63 and is based on the closing trading price of the Company’s common stock on the date of acquisition. | |||||||||
Subsequent to the acquisition, the Company will recognize, over the underlying future service period, up to approximately $23,701,000 of compensation expense related to the fair value of the cash, restricted stock, and the assumed stock-based awards. | |||||||||
Allocation of Consideration Transferred | |||||||||
Pursuant to the Company’s business combinations accounting policy, the total consideration transferred for NexGen was allocated to the net tangible and intangible assets based upon their fair values as set forth below. The acquisition of NexGen adds to the Company’s software solutions and expands the Company’s reach into small to medium enterprise markets. These factors contributed to consideration transferred in excess of the fair value of the NexGen net tangible and intangible assets acquired, and as a result, the Company has recorded goodwill in connection with this transaction. | |||||||||
The Company’s allocation of consideration transferred for NexGen is as follows (in thousands): | |||||||||
Total assets | $ | 3,777 | |||||||
Total liabilities | (1,973 | ) | |||||||
Net acquired tangible assets | $ | 1,804 | |||||||
Developed technology (weighted-average useful life of 4 years) | 15,000 | ||||||||
Trade names (weighted-average useful life of 2 years) | 520 | ||||||||
Customer relationships (weighted-average useful life of 6 years) | 390 | ||||||||
Total identifiable intangible assets | $ | 15,910 | |||||||
Goodwill | 93,023 | ||||||||
Total fair value of consideration transferred | $ | 110,737 | |||||||
For the three months ended September 30, 2013, the Company recorded revenue associated with NexGen of approximately $1,248,000. Operating expenses associated with NexGen for the three months ended September 30, 2013 were approximately $6,350,000, of which approximately $2,141,000 related to stock-based compensation expense. | |||||||||
ID7 Entities | |||||||||
On March 13, 2013, the Company acquired 100% of the stock of the ID7 Entities for total cash consideration of approximately $5,869,000. The ID7 Entities, located in England and Wales, are the primary developers of the SCST storage subsystem enabling enhanced shared storage software functionality for any Linux server or appliance. Accordingly, the assets, liabilities, and operating results of the ID7 Entities are reflected in the Company’s consolidated financial statements following the date of acquisition. Of the cash consideration, the Company retained $1,500,000 as partial security for indemnification obligations of shareholders as part of this acquisition. This restricted cash amount, less any indemnification claims, will be paid in September 2014. In connection with the acquisition, the Company issued 135,131 shares of its common stock to the former shareholders of the ID7 Entities, which is subject to a repurchase right, that lapse 25% after one year and the remaining 75% in 12 equal quarterly installments thereafter. Subsequent to the acquisition, the Company will recognize over the underlying future service period up to approximately $2,367,000 of stock-based compensation expense related to the fair value of the restricted stock awards. The fair value of the common stock was $17.52 and is based on the closing trading price of the Company’s common stock on the date of acquisition. | |||||||||
Allocation of Consideration Transferred | |||||||||
Pursuant to the Company’s business combinations accounting policy, the total consideration transferred for ID7 Entities was allocated to the net liabilities assumed and intangible assets acquired based upon their fair values as set forth below. The acquisition of the ID7 Entities is an important part of the Company’s strategy as they are the primary developers of the SCST storage subsystem enabling enhanced shared storage software functionality for any Linux server or appliance. These factors contributed to consideration transferred in excess of the fair value of the net liabilities assumed and intangible assets acquired, and as a result, the Company has recorded goodwill in connection with this transaction. | |||||||||
The Company’s allocation of consideration transferred for ID7 Entities is as follows (in thousands): | |||||||||
Total assets | $ | 76 | |||||||
Total liabilities | (645 | ) | |||||||
Net assumed liabilities | $ | (569 | ) | ||||||
Developed technology (weighted-average useful life of 4 years) | 5,900 | ||||||||
Goodwill | 1,667 | ||||||||
Deferred income tax liability | (1,129 | ) | |||||||
Total fair value of consideration transferred | $ | 5,869 | |||||||
The Company assumed notes payable of approximately $623,000 as part of the acquisition of the ID7 Entities, which were paid in full in March 2013. | |||||||||
Operating results of the ID7 Entities subsequent to the date of acquisition are not separately disclosed as the results were not material to the Company’s consolidated statements of operations. | |||||||||
Unaudited pro forma financial information | |||||||||
Unaudited Pro forma information related to the acquisition of the ID7 Entities has not been included as it was not material to the Company’s consolidated statements of operations. The following unaudited pro forma financial information is based on the combined historical financial statements of the Company and NexGen after giving effect to the Company’s acquisition of NexGen as if it had occurred as of July 1, 2012 and includes pro forma adjustments related to the amortization of acquired intangible assets, stock-based compensation expense, and depreciation expense (in thousands, except per share data): | |||||||||
Three Months Ended September 30, | |||||||||
2012 | 2013 | ||||||||
Revenue | $ | 118,245 | $ | 86,293 | |||||
Net income (loss) from operations | 2,863 | (27,804 | ) | ||||||
Net loss | (828 | ) | (27,896 | ) | |||||
Net loss per share, basic | $ | (0.01 | ) | $ | (0.28 | ) | |||
Net loss per share, diluted | $ | (0.01 | ) | $ | (0.28 | ) | |||
Acquisition related expenses | |||||||||
Acquisition related expenses totaled approximately $0 and $36,000 for the three months ended September 30, 2012 and 2013, respectively, and were recorded in general and administrative expenses. |
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 3 Months Ended | ||||||||||||||
Sep. 30, 2013 | |||||||||||||||
Goodwill and Intangible Assets | ' | ||||||||||||||
5. Goodwill and Intangible Assets: | |||||||||||||||
Changes in the carrying amount of Goodwill consisted of the following (in thousands): | |||||||||||||||
Total | |||||||||||||||
Balance as of June 30, 2013 | $ | 149,467 | |||||||||||||
Current period acquisitions | — | ||||||||||||||
Balance as of September 30, 2013 | $ | 149,467 | |||||||||||||
The Company’s goodwill related to the acquisition of NexGen is not deductible for income tax purposes. The Company’s goodwill related to the acquisition of the ID7 Entities is deductible for income tax purposes. | |||||||||||||||
The Company’s intangible assets and related accumulated amortization consisted of the following as of September 30, 2013 (in thousands): | |||||||||||||||
Weighted-Average | Cost | Accumulated | Net | ||||||||||||
Useful Life | Amortization | ||||||||||||||
Developed technology | 4 years | $ | 31,400 | $ | (8,070 | ) | $ | 23,330 | |||||||
Licensed technology | 3 years | 2,784 | (864 | ) | 1,920 | ||||||||||
Trade names | 2 years | 520 | (114 | ) | 406 | ||||||||||
Customer relationships | 6 years | 390 | (28 | ) | 362 | ||||||||||
Total intangible assets | 4 years | $ | 35,094 | $ | (9,076 | ) | $ | 26,018 | |||||||
Amortization expense related to intangible assets for the three months ended September 30, 2012 and 2013 was approximately $656,000 and $2,251,000, respectively. Estimated amortization expense in future periods for intangible assets subject to amortization is as follows (in thousands): | |||||||||||||||
Fiscal Year Ending June 30, | Total | ||||||||||||||
Remaining 2014 | $ | 6,639 | |||||||||||||
2015 | 8,804 | ||||||||||||||
2016 | 6,257 | ||||||||||||||
2017 | 4,200 | ||||||||||||||
2018 | 65 | ||||||||||||||
Thereafter | 53 | ||||||||||||||
$ | 26,018 | ||||||||||||||
Longterm_Obligations
Long-term Obligations | 3 Months Ended | |||
Sep. 30, 2013 | ||||
Long-term Obligations | ' | |||
6. Long-term Obligations | ||||
Revolving Line of Credit | ||||
In September 2013, the Company entered into a credit agreement (the “Revolving Line of Credit”) with Silicon Valley Bank. The Revolving Line of Credit allows the Company to borrow up to a limit of $25,000,000, with a $25,000,000 letter of credit sub-facility. The Revolving Line of Credit contains an option to increase the lending commitments, subject to certain requirements, with Silicon Valley Bank and/or new lenders to provide up to an aggregate of $75,000,000 in additional lending commitments. Loan proceeds may be used for general corporate purposes, and the Company may prepay and/or reborrow revolving loans under the Revolving Line of Credit in whole or in part at any time without premium or penalty. As of September 30, 2013, the Company had no outstanding revolving loans under the credit agreement and an aggregate face amount of $3,183,000 in undrawn letters of credit under the Revolving Line of Credit. | ||||
The revolving loans bear interest, at the Company’s option, at (i) a base rate determined in accordance with the Revolving Line of Credit, minus 0.75%, or (ii) a LIBOR rate determined in accordance with the credit agreement, plus 1.25%. The base rate means the highest of (i) the prime rate published by the Wall Street Journal and (ii) the federal funds rate plus a margin equal to 0.50%. Interest is due and payable in arrears monthly for base rate loans and at the end of an interest period (or at each three month interval in the case of loans with interest periods greater than three months) for LIBOR rate loans. Principal, together with all accrued and unpaid interest, is due and payable on September 13, 2016. | ||||
The Company is also obligated to pay a quarterly unused commitment fee equal to 0.10% multiplied by the average unused portion of the total revolving commitments, a quarterly fee of 1.25% on the daily amount available to be drawn under each letter of credit, and other customary fees for a facility of this size and type. | ||||
Upon an event of default, the lender(s) may terminate their commitments to make further revolving loans and declare the outstanding revolving loans and all accrued and unpaid interest under the Revolving Line of Credit to be immediately due and payable. The events of default under the Revolving Line of Credit include, among others, payment defaults, covenant defaults, inaccuracy of representations and warranties, cross-defaults to other material indebtedness, bankruptcy and insolvency defaults, ERISA defaults, judgment defaults, a change of control default, and a material adverse effect default. | ||||
Under the terms of the Revolving Line of Credit, the Company is required to maintain the following minimum financial covenants on a consolidated basis: | ||||
• | A ratio of current assets to the sum of (i) current liabilities plus, without duplication, (ii) the aggregate amount of outstanding revolving loans and undrawn or unreimbursed letters of credit under the Revolving Line of Credit, of at least 2.00 to 1.00. | |||
• | A tangible net worth of at least the sum of (i) $200,000,000, plus (ii) an amount equal to 50% of net income earned in each fiscal quarter ending after March 30, 2013, plus (ii) an amount equal to 25% of the aggregate increases in shareholders’ equity resulting from certain specified transactions. | |||
As of September 30, 2013, the Company was in compliance with all covenants. |
Income_Taxes
Income Taxes | 3 Months Ended | ||||
Sep. 30, 2013 | |||||
Income Taxes | ' | ||||
7. Income Taxes | |||||
In order to determine the quarterly provision for income taxes, the Company considers the estimated annual effective tax rate, which is based on expected annual income and statutory tax rates in the various jurisdictions in which the Company operates. To the extent that application of the estimated annual effective tax rate is not representative of the quarterly portion of actual tax expense expected to be recorded for the year, the Company determines the quarterly provision for income taxes based on actual year-to-date income. Certain significant or unusual items are separately recognized in the quarter during which they occur and can be a source of variability in the effective tax rates from quarter to quarter. | |||||
The components of the Company’s income tax expense or benefit include state income taxes, foreign income taxes, U.S. federal alternative minimum tax, and effects of stock-based awards. Income tax expense was approximately $4,571,000 and $262,000 for the three months ended September 30, 2012 and 2013, respectively, or approximately 54% and 1% of income (loss) before income taxes, respectively. The Company’s effective tax rate for the three months ended September 30, 2013 is lower when compared to the same period in the prior year primarily due to the operating loss incurred in the current period. The effective tax rate for the three months ended September 30, 2013 differs from the U.S. federal statutory rate of 35% primarily due to the Company’s full valuation allowance against its net deferred tax assets. | |||||
The Company files U.S., state, and foreign income tax returns in jurisdictions with various statutes of limitations. The Company’s consolidated federal tax return and any significant state or foreign tax returns are not currently under examination. | |||||
The Company is subject to income taxes in various U.S. and foreign jurisdictions and to continual examination by tax authorities. Significant judgment is required in evaluating the Company’s uncertain tax positions and determining its provision for income taxes. During the three months ended September 30, 2013, the aggregate change in the total gross amount of unrecognized tax benefits was as follows (in thousands): | |||||
Total | |||||
Balance at June 30, 2013 | $ | 6,047 | |||
Increase in unrecognized tax benefits related to current year | 626 | ||||
Balance at September 30, 2013 | $ | 6,673 | |||
The Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense. The Company did not incur any material interest or penalties related to income taxes in any of the periods presented. The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate is approximately $1,166,000. The Company does not anticipate any significant change of its uncertain tax positions within fiscal 2014, and the Company does not anticipate any events which could cause a change to these uncertainties. | |||||
As of September 30, 2013, the Company had federal net operating loss carryforwards of $314,847,000, of which $285,261,000 relate to stock option deductions claimed for tax purposes greater than the deductions claimed for book purposes. As of September 30, 2013, the Company had state net operating loss carryforwards of $254,949,000, of which $202,305,000 relate to stock option deductions claimed for tax purposes greater than the deductions claimed for book purposes. Additionally, the Company had federal research and development tax credit carryforwards of $7,172,000, and state research and development tax credit carryforwards of $3,706,000, of which $537,000 related to stock option deductions claimed for tax purposes greater than the deductions claimed for book purposes. In the future, the Company intends to utilize any carryforwards available to reduce its tax payments. | |||||
The Company recorded directly to equity a tax benefit for the three months ended September 30, 2013 of approximately $3,000 related to certain tax deductions for stock-based awards. |
Stockholders_Equity
Stockholders' Equity | 3 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Stockholders' Equity | ' | ||||||||||||||||
8. Stockholders’ Equity | |||||||||||||||||
Equity Incentive Plans | |||||||||||||||||
On July 1, 2013, the number of authorized shares of common stock available for issuance under the 2011 Equity Incentive Plan (the “2011 Plan”) was increased by 4,952,076 shares in accordance with the provisions of the 2011 Plan. At September 30, 2013, a total of 13,589,193 shares of common stock were available for grant under the Company’s equity incentive plans. | |||||||||||||||||
Stock option activity for all the Equity Incentive Plans for the three months ended September 30, 2013 was as follows: | |||||||||||||||||
Number of | Weighted- | Weighted- | Aggregate | ||||||||||||||
Shares | Average | Average | Intrinsic Value (1) | ||||||||||||||
Subject to | Exercise | Contractual | |||||||||||||||
Outstanding | Price Per | Term (in | |||||||||||||||
Options | Share | Years) | |||||||||||||||
(in thousands) | |||||||||||||||||
Outstanding as of June 30, 2013 | 17,265,304 | $ | 6.92 | ||||||||||||||
Granted | 156,600 | 11.04 | |||||||||||||||
Exercised | (2,812,590 | ) | 1.14 | ||||||||||||||
Canceled | (254,423 | ) | 10.16 | ||||||||||||||
Outstanding as of September 30, 2013 | 14,354,891 | $ | 8.04 | 7.4 | $ | 76,733 | |||||||||||
Vested and expected to vest as of September 30, 2013 | 13,539,655 | $ | 7.85 | 7.4 | $ | 74,980 | |||||||||||
Vested and exercisable as of September 30, 2013 | 8,046,293 | $ | 6.46 | 6.9 | $ | 55,759 | |||||||||||
-1 | The aggregate intrinsic value is equal to the difference between the exercise price of the underlying stock option awards and the fair value of the Company’s common stock as of September 30, 2013. | ||||||||||||||||
Employee Stock Options | |||||||||||||||||
Additional per share information related to stock options granted to employees was as follows: | |||||||||||||||||
Three Months Ended | |||||||||||||||||
September 30, | |||||||||||||||||
2012 | 2013 | ||||||||||||||||
Weighted-average grant date fair value — granted | $ | 15.42 | $ | 5.56 | |||||||||||||
Weighted-average grant date fair value — forfeited | 11.06 | 9.57 | |||||||||||||||
The aggregate intrinsic value of stock options exercised during the three months ended September 30, 2012 and 2013 was approximately $41,576,000 and $31,115,000, respectively, which reflected the difference between the exercise prices of the underlying stock option awards and the fair value of the Company’s common stock on the date of exercise. | |||||||||||||||||
The Company recorded stock-based compensation expense related to employee stock options of approximately $5,093,000 and $4,408,000 for the three months ended September 30, 2012 and 2013, respectively. As of September 30, 2013, there was approximately $39,115,000 of total unrecognized compensation expense related to unvested stock options, which is expected to be recognized over a weighted-average service period of 2.2 years. | |||||||||||||||||
The Company estimates the fair value of stock options granted to employees using the Black-Scholes-Merton pricing model and a single option award approach, which requires the input of several highly subjective and complex assumptions. The risk-free interest rate for the expected term of the option is based on the yield available on United States Treasury Zero Coupon issues with an equivalent expected term. The expected option term used in the Black-Scholes-Merton pricing model is calculated using the simplified method. The simplified method defines the expected term as the average of the option’s contractual term and the option’s weighted-average vesting period. The Company utilizes this method as it has limited historical stock option data that is sufficient to derive a reasonable estimate of the expected stock option term. The computation of estimated expected volatility is based on the volatility of comparable companies from a representative peer group selected based on industry data. | |||||||||||||||||
The following table presents the assumptions used in the Black-Scholes-Merton pricing model related to employee stock options: | |||||||||||||||||
Three Months Ended September 30, | |||||||||||||||||
2012 | 2013 | ||||||||||||||||
Expected volatility | 61.4 – 63.1% | 61.4 – 62.0% | |||||||||||||||
Expected term (in years) | 4.5 – 5.4 | 4.4 – 4.5 | |||||||||||||||
Risk-free interest rate | 0.6 – 0.7% | 1.4 – 1.7% | |||||||||||||||
Expected dividends | — | — | |||||||||||||||
Non-employee Stock Options | |||||||||||||||||
The Company from time to time grants options to purchase common stock to non-employees for advisory and consulting services. The Company estimates the fair value of these stock options using the Black-Scholes-Merton option pricing formula at each balance sheet date and records expense ratably over the vesting period of each stock option award. The Company recorded stock-based compensation expense related to these non-employee stock options of approximately $2,748,000 and $2,257,000 for the three months ended September 30, 2012 and 2013, respectively. | |||||||||||||||||
In May 2013, the Company entered into separation agreements with its former Chief Executive Officer and Chief Marketing Officer in that they will provide advisory services to the Company for the 12-month period following the date of their respective resignation. In conjunction with their continued services, the vesting of their awards has been modified such that all awards will be vested in full at the completion of the12-month period, subject to their executing (and not revoking) a supplemental release at the end of the 12-month term. As a result, the Company modified the vesting of 1,176,249 stock options and 267,500 RSUs. For the three months ended September 30, 2013, the Company recognized approximately $2,255,000 of stock-based compensation expense, and as of September 30, 2013, there was approximately $6,455,000 of unrecognized compensation expense related to the modified awards, which is expected to be recognized ratably through May 2014. | |||||||||||||||||
The following table presents the assumptions used in the Black-Scholes-Merton pricing model related to non-employee stock options: | |||||||||||||||||
Three Months Ended September 30, | |||||||||||||||||
2012 | 2013 | ||||||||||||||||
Expected volatility | 61.2 – 61.8% | 52.5 – 65.3% | |||||||||||||||
Expected term (in years) | 6.1 – 8.7 | 0.9 – 7.3 | |||||||||||||||
Risk-free interest rate | 1.3 – 1.7% | 0.1 – 2.0% | |||||||||||||||
Expected dividends | — | — | |||||||||||||||
Restricted Stock Units and Restricted Stock Awards | |||||||||||||||||
The following table summarizes activity during the three months ended September 30, 2013 related to RSUs and RSAs: | |||||||||||||||||
Number of Shares | Weighted-Average | ||||||||||||||||
Grant-Date Fair | |||||||||||||||||
Value | |||||||||||||||||
Unvested RSUs and RSAs at June 30, 2013 | 4,137,846 | $ | 20.78 | ||||||||||||||
Granted | 1,604,460 | 11.25 | |||||||||||||||
Vested | (311,046 | ) | 22.86 | ||||||||||||||
Forfeited | (5,735 | ) | 24.76 | ||||||||||||||
Canceled | (212,392 | ) | 23.3 | ||||||||||||||
Unvested RSUs and RSAs at September 30, 2013 | 5,213,133 | $ | 17.62 | ||||||||||||||
The Company recorded stock-based compensation expense related to RSUs and RSAs of approximately $5,344,000 and $6,466,000 for the three months ended September 30, 2012 and 2013, respectively. At September 30, 2013, there was approximately $75,767,000 of total unrecognized compensation cost related to unvested RSUs and RSAs. This unrecognized compensation cost is equal to the fair value of RSUs and RSAs expected to vest and will be recognized over a weighted-average period of 3.2 years. | |||||||||||||||||
Repurchases of Vested Restricted Stock Units | |||||||||||||||||
The Company is required to withhold minimum statutory taxes related to the vesting of RSUs, including the forfeiting of a portion of the newly vested award that has a current value equal to the withholding obligation. The Company is then required to remit the amount of taxes owed by the employee to the appropriate taxing authority. As a result of such forfeitures, the Company effectively repurchased a total of 43,392 and 64,949 shares of common stock related to employee tax withholding obligations during the three months ended September 30, 2012 and 2013, respectively. The Company recorded approximately $1,055,000 and $702,000 as a financing activity for these forfeitures in the condensed consolidated statement of cash flows for the three months ended September 30, 2012 and 2013, respectively. | |||||||||||||||||
Employee Stock Purchase Plan | |||||||||||||||||
On July 1, 2013, the number of authorized shares available for issuance under the 2011 Employee Stock Purchase Plan (“ESPP”) was increased by 990,415 shares in accordance with the provisions of the ESPP. During the three months ended September 30, 2013, the Company issued 311,137 shares of common stock under the ESPP. At September 30, 2013, a total of 1,543,157 shares of common stock were reserved for future issuance under the ESPP. The Company recorded stock-based compensation expense related to its 2011 ESPP of approximately $704,000 and $1,084,000 for the three months ended September 30, 2012 and 2013, respectively. | |||||||||||||||||
Stock-based Compensation Expense | |||||||||||||||||
Total stock-based compensation expense was classified as follows in the accompanying condensed consolidated statement of operations (in thousands): | |||||||||||||||||
Three Months Ended September 30, | |||||||||||||||||
2012 | 2013 | ||||||||||||||||
Cost of revenue | $ | 113 | $ | 157 | |||||||||||||
Sales and marketing | 2,169 | 2,923 | |||||||||||||||
Research and development | 4,464 | 5,598 | |||||||||||||||
General and administrative | 7,143 | 5,537 | |||||||||||||||
Total stock-based compensation | $ | 13,889 | $ | 14,215 | |||||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended | ||||
Sep. 30, 2013 | |||||
Commitments and Contingencies | ' | ||||
9. Commitments and Contingencies | |||||
Letters of Credit | |||||
As of June 30, 2013 and September 30, 2013, the Company had a total of $3,360,000 and $3,270,000, respectively, in letters of credit outstanding with financial institutions. These outstanding letters of credit were issued for purposes of securing the Company’s obligations under facility leases. For the periods presented, the letters of credit were collateralized by a portion of the Company’s cash. This is reflected as restricted cash of $3,360,000 and $87,000 on the condensed consolidated balance sheet as of June 30, 2013 and September 30, 2013, respectively. | |||||
Leases | |||||
Future minimum lease payments under non-cancelable operating leases were as follows (in thousands): | |||||
Fiscal Year Ending June 30, | Total | ||||
Remaining 2014 | $ | 5,251 | |||
2015 | 6,765 | ||||
2016 | 6,827 | ||||
2017 | 6,769 | ||||
2018 | 6,754 | ||||
Thereafter | 17,868 | ||||
Total | $ | 50,234 | |||
Operating lease payments primarily relate to the Company’s leases of office space with various expiration dates through 2021. The terms of these leases often include tenant improvement allowances, periods of free rent, and increasing rental rates over time. The Company recognizes rent expense on a straight-line basis over the lease period and has accrued for rent expense recorded but not paid. | |||||
The Company also leases certain equipment under operating leases that expire at various dates through 2018. These equipment leases typically include provisions that allow the Company at the end of the initial lease term to renew the lease, purchase the underlying equipment at the then fair market value, or return the equipment to the lessor. | |||||
Rent expense was $1,741,000 and $1,980,000 for the three months ended September 30, 2012 and 2013, respectively. | |||||
Indemnification | |||||
The Company has agreed to indemnify its officers and directors for certain events or occurrences, while the officer or director is or was serving at the Company’s request in such capacity. The maximum amount of potential future indemnification is unlimited; however, the Company has a director and officer insurance policy that provides corporate reimbursement coverage that limits its exposure and enables it to recover a portion of any future amounts paid. The Company is unable to reasonably estimate the maximum amount that could be payable under these arrangements since these obligations are not capped but are conditional to the unique facts and circumstances involved. Accordingly, the Company has no liabilities recorded for these agreements as of June 30, 2013 and September 30, 2013. | |||||
Many of the Company’s agreements with customers and channel partners, including OEMs and resellers, generally include certain provisions for indemnifying the channel partners and customers against liabilities if the Company’s products infringe a third party’s intellectual property rights. To date, the Company has not incurred any material costs as a result of such indemnification provisions and has not accrued any liabilities related to such obligations in the consolidated financial statements. | |||||
Employee Agreements | |||||
The Company has various agreements with selected employees pursuant to which if their employment is terminated by the Company without cause or by the employees for good reason, or following a change of control of the Company, the employees are entitled to receive certain benefits, including severance payments, accelerated vesting of stock and stock options, and certain insurance benefits. | |||||
Legal Matters | |||||
On February 7, 2012, Entorian Technologies L.P. (“Entorian Technologies”), filed a lawsuit in the U.S. District Court for the District of Utah against the Company. The complaint alleged that memory stacks included in some of the Company’s products infringe U.S. Patent No. 5,420,751, or the ‘751 patent, which expired in May 2012. Polystak, Inc. is the Company’s third-party supplier of the accused memory stack component. On March 1, 2012, Polystak filed a lawsuit against Entorian Technologies in the U.S. District Court for the Northern District of California. The complaint alleges that the ‘751 patent is invalid, and that Polystak’s memory stacks do not infringe the ‘751 patent. On March 8, 2012, Entorian Technologies dismissed the lawsuit against the Company in Utah. On March 9, 2012, Entorian Technologies filed a counterclaim against the Company and Polystak in the Northern District of California lawsuit. The counterclaim alleges that the Company and Polystak infringe the ‘751 patent and seeks damages, but it does not seek an injunction. On September 4, 2012, the Court stayed this lawsuit pending reexamination of the ‘751 patent by the U.S. Patent Office. Polystak has agreed to indemnify and defend the Company with respect to these lawsuits. | |||||
On May 18, 2011, Internet Machines LLC (“Internet Machines”) filed a lawsuit in U.S. District Court for the Eastern District of Texas against the Company and 20 other companies. The complaint alleges that the Company’s products infringe U.S. Patent Nos. 7,454,552; 7,421,532; 7,814,259; and 7,945,722. On August 26, 2011, Internet Machines MC LLC amended its prior complaint filed in the U.S. District Court for the Eastern District of Texas against PLX Technology, Inc. to add the Company and several other companies as defendants. This complaint alleges that the Company’s products infringe U.S. Patent No. 7,539,190. These complaints seek both damages and a permanent injunction against the Company. The specific infringement allegations appear to focus on a PCI switch component that, while used in some of the Company’s products, is manufactured by a third-party supplier. This third-party supplier was found to infringe the above identified U.S. Patent Nos. 7,454,552 and 7,421,532 by a jury in a prior case. The judge has stayed the lawsuits against the Company pending the entry of a final non-appealable judgment in the prior case between the third-party supplier and Internet Machines. The third-party supplier has agreed to indemnify and defend the Company with respect to these lawsuits. | |||||
Based on the Company’s preliminary investigations of the patents identified in the Entorian Technologies and Internet Machines complaints, the Company does not believe that its products infringe any valid or enforceable claim of the patents at issue in those complaints. With respect to these matters, the Company’s third-party suppliers have agreed to indemnify and defend the Company. As of September 30, 2013, the Company did not record a liability related to these matters as it determined that an unfavorable resolution is either not currently probable or that an amount or relevant range is not reasonably estimable. However, litigation is inherently unpredictable and it is possible that losses may occur. Any unfavorable resolution of any of these matters could materially affect the Company’s consolidated financial position, cash flows, or results of operations. All legal costs associated with litigation are expensed as incurred. |
Description_of_Business_and_Su1
Description of Business and Summary of Significant Accounting Policies (Policies) | 3 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Basis of Presentation | ' | ||||||||
Basis of Presentation | |||||||||
The accompanying condensed consolidated balance sheets and the condensed consolidated statements of operations, comprehensive income (loss), and cash flows are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments (all of which are considered of a normal recurring nature) considered necessary to present fairly the Company’s financial position, results of operations, and cash flows. The results of operations for the three months ended September 30, 2013 are not necessarily indicative of the results that may be expected for the full fiscal year ending June 30, 2014 or any other period. | |||||||||
These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2013 (the “2013 Annual Report”) filed with the Securities and Exchange Commission (the “SEC”). | |||||||||
The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in the unaudited condensed consolidated financial statements. | |||||||||
Segment and Geographic Information | ' | ||||||||
Segment and Geographic Information | |||||||||
Operating segments are defined in accounting standards as components of an enterprise about which separate financial information is available and is regularly evaluated by management, namely the chief operating decision maker of an organization, in order to make operating and resource allocation decisions. The Company has concluded it operates in one business segment, which is the development, marketing, and sale of storage memory solutions. Substantially all of the Company’s revenue for all periods presented in the accompanying condensed consolidated statements of operations has been from sales of the ioMemory based product lines and related customer support services. The Company’s headquarters and most of its operations are located in the United States; however, it conducts sales activities through sales offices in Europe and Asia. Revenue recognized from sales with a ship-to location outside of the United States was 38% and 40% of revenue for the three months ended September 30, 2012 and 2013, respectively. Revenue recognized from sales to customers with a ship-to address in Germany was 19% of revenue for the three months ended September 30, 2012 and revenue recognized from sales to customers with a ship-to address in China was 11% of revenue for the three months ended September 30, 2013. No other country outside of the United States accounted for 10% or more of revenue for all periods presented. Long-lived tangible assets located outside of the United States were not material for all periods for which a condensed consolidated balance sheet is presented. | |||||||||
Reclassification | ' | ||||||||
Reclassification | |||||||||
Certain expense amounts previously reported in the condensed consolidated statements of operations for the three months ended September 30, 2012 have been reclassified to reflect an adjustment to the method in which the Company allocates information technology and facility costs and to conform to fiscal 2014 presentation. As a result of the reclassifications, cost of revenue increased by $71,000, sales and marketing expenses increased by $567,000, research and development expenses increased by $605,000, and general and administrative expenses decreased by $1,243,000 for the three months ended September 30, 2012. The net effect of these reclassifications did not impact the amounts previously reported as income from operations and net income. | |||||||||
Use of Estimates | ' | ||||||||
Use of Estimates | |||||||||
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets 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. On an on-going basis, the Company evaluates its significant estimates, including those related to revenue recognition, sales returns, accounting for business combinations and impairment of long-lived and intangible assets including goodwill, determination of fair value of stock options, valuation of inventory, product warranty, and income taxes. The Company also uses estimates in determining the useful lives of property and equipment and intangible assets and provisions for doubtful accounts. Actual results could differ from those estimates. | |||||||||
Significant Customers | ' | ||||||||
Significant Customers | |||||||||
Customers that accounted for 10% or more of the Company’s revenue represented 70% and 57% of revenue for the three months ended September 30, 2012 and 2013, respectively. As a consequence of the concentration of the Company’s customers, and typically a small number of large purchases by these customers, revenue, gross margin, and operating results may fluctuate significantly from period to period. | |||||||||
Product Warranty | ' | ||||||||
Product Warranty | |||||||||
The Company provides its customers a standard limited product warranty of up to five years. The standard warranty requires the Company to repair or replace defective products at no cost to the customer during such warranty period. The Company estimates the costs that may be incurred under its standard limited warranty and records a liability in the amount of such costs at the time product sales are recognized. Factors that affect the Company’s warranty liability include the number of installed units, identified warranty issues, historical experience, and management’s judgment regarding anticipated rates of warranty claims and cost per claim. The Company assesses the adequacy of its recorded warranty liability each period and makes adjustments to the liability as necessary based on actual experience. | |||||||||
The following table presents the changes in the product warranty liability (in thousands): | |||||||||
Total | |||||||||
Balance at June 30, 2013 | $ | 5,241 | |||||||
Warranty costs accrued | 376 | ||||||||
Warranty claims | (421 | ) | |||||||
Adjustments related to pre-existing warranties, including changes in estimates | 279 | ||||||||
Balance at September 30, 2013 | $ | 5,475 | |||||||
Restricted Cash | ' | ||||||||
Restricted Cash | |||||||||
As of June 30, 2013 and September 30, 2013, the Company had restricted cash of approximately $4,860,000 and $1,587,000, respectively. Of the amounts restricted as of September 30, 2013, approximately $87,000 related to letters of credit for purposes of securing the Company’s obligation under a facility lease which was collateralized by a portion of the Company’s cash through the term of the lease, which ends March 2017. In addition, the Company retained $1,500,000 as partial security for indemnification obligations of shareholders as part of the acquisition of ID7 Ltd. and SCST Limited (together, the “ID7 Entities”) (see Note 4). This restricted cash amount, less any indemnification claims, will be paid in September 2014. | |||||||||
Net Income (Loss) Per Share | ' | ||||||||
Net Income (Loss) Per Share | |||||||||
Basic net income (loss) per share is computed using the weighted-average number of common shares outstanding during the period, less weighted-average common shares subject to repurchase. Diluted net income (loss) per share is computed using the weighted-average number of common shares outstanding and potentially dilutive common shares outstanding during the period that have a dilutive effect on net income (loss) per share. Potentially dilutive common shares result from the assumed exercise of outstanding stock options, assumed vesting of outstanding restricted stock subject to vesting provisions, restricted stock awards (“RSAs”), and restricted stock units (“RSUs”). In a net loss position, diluted net loss per share is computed using only the weighted-average number of common shares outstanding during the period, less weighted-average common shares subject to repurchase, as any additional common shares would be anti-dilutive. | |||||||||
The following table presents the reconciliation of the numerator and denominator used in the calculation of basic and diluted net income (loss) per share (in thousands): | |||||||||
Three Months Ended | |||||||||
September 30, | |||||||||
2012 | 2013 | ||||||||
Numerator: | |||||||||
Net income (loss) | $ | 3,933 | $ | (27,896 | ) | ||||
Denominator: | |||||||||
Weighted-average common shares outstanding | 94,432 | 100,376 | |||||||
Less weighted-average common shares outstanding subject to repurchase | (211 | ) | (473 | ) | |||||
Weighted-average shares, basic | 94,221 | 99,903 | |||||||
Effect of dilutive securities | 14,204 | — | |||||||
Weighted-average shares, diluted | 108,425 | 99,903 | |||||||
The following weighted-average common stock equivalents were anti-dilutive and therefore were excluded from the calculation of diluted net income (loss) per share (in thousands): | |||||||||
Three Months Ended | |||||||||
September 30, | |||||||||
2012 | 2013 | ||||||||
Stock options | 4,664 | 8,200 | |||||||
Restricted stock units and restricted stock awards | 1,841 | 114 | |||||||
Total | 6,505 | 8,314 | |||||||
Recently Issued and Adopted Accounting Pronouncements | ' | ||||||||
Recently Issued and Adopted Accounting Pronouncements | |||||||||
In February 2013, the Financial Accounting Standards Board (the “FASB”) issued an Accounting Standards Update (“ASU”) requiring an entity to report information, either on the face of the statement where net income is presented or in the notes, about the amounts reclassified out of accumulated other comprehensive income by component and to report significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income. The ASU has been adopted by the Company effective for the first quarter of fiscal 2014. Other than requiring additional disclosures, the adoption of this new guidance did not have a material impact on the Company’s consolidated financial statements. | |||||||||
In July 2013, the FASB issued an ASU providing presentation requirements for unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a similar tax credit carryforward exists. This accounting standard update will be effective for the Company beginning in its first quarter of fiscal 2015 and is not expected to have a significant impact on its consolidated financial statements. |
Description_of_Business_and_Su2
Description of Business and Summary of Significant Accounting Policies (Tables) | 3 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Changes in Product Warranty Liability | ' | ||||||||
The following table presents the changes in the product warranty liability (in thousands): | |||||||||
Total | |||||||||
Balance at June 30, 2013 | $ | 5,241 | |||||||
Warranty costs accrued | 376 | ||||||||
Warranty claims | (421 | ) | |||||||
Adjustments related to pre-existing warranties, including changes in estimates | 279 | ||||||||
Balance at September 30, 2013 | $ | 5,475 | |||||||
Reconciliation of Numerator and Denominator Used in Calculation of Basic and Diluted Net Income (Loss) Per Share | ' | ||||||||
The following table presents the reconciliation of the numerator and denominator used in the calculation of basic and diluted net income (loss) per share (in thousands): | |||||||||
Three Months Ended | |||||||||
September 30, | |||||||||
2012 | 2013 | ||||||||
Numerator: | |||||||||
Net income (loss) | $ | 3,933 | $ | (27,896 | ) | ||||
Denominator: | |||||||||
Weighted-average common shares outstanding | 94,432 | 100,376 | |||||||
Less weighted-average common shares outstanding subject to repurchase | (211 | ) | (473 | ) | |||||
Weighted-average shares, basic | 94,221 | 99,903 | |||||||
Effect of dilutive securities | 14,204 | — | |||||||
Weighted-average shares, diluted | 108,425 | 99,903 | |||||||
Weighted-Average Common Stock Equivalents, Anti-Dilutive | ' | ||||||||
The following weighted-average common stock equivalents were anti-dilutive and therefore were excluded from the calculation of diluted net income (loss) per share (in thousands): | |||||||||
Three Months Ended | |||||||||
September 30, | |||||||||
2012 | 2013 | ||||||||
Stock options | 4,664 | 8,200 | |||||||
Restricted stock units and restricted stock awards | 1,841 | 114 | |||||||
Total | 6,505 | 8,314 | |||||||
Balance_Sheet_Components_Table
Balance Sheet Components (Tables) | 3 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Cash and Cash Equivalents | ' | ||||||||||||||||
Cash and cash equivalents were as follows (in thousands): | |||||||||||||||||
June 30, 2013 | |||||||||||||||||
Amortized | Unrealized | Unrealized | Estimated | ||||||||||||||
Cost | Gains | Losses | Fair Value | ||||||||||||||
Cash and cash equivalents: | |||||||||||||||||
Cash | $ | 36,107 | $ | — | $ | — | $ | 36,107 | |||||||||
Money market funds | 202,244 | — | — | 202,244 | |||||||||||||
Total cash and cash equivalents | $ | 238,351 | $ | — | $ | — | $ | 238,351 | |||||||||
Restricted cash: | |||||||||||||||||
Cash | $ | 4,860 | $ | — | $ | — | $ | 4,860 | |||||||||
September 30, 2013 | |||||||||||||||||
Amortized | Unrealized | Unrealized | Estimated | ||||||||||||||
Cost | Gains | Losses | Fair Value | ||||||||||||||
Cash and cash equivalents: | |||||||||||||||||
Cash | $ | 22,991 | $ | — | $ | — | $ | 22,991 | |||||||||
Money market funds | 202,274 | — | — | 202,274 | |||||||||||||
Total cash and cash equivalents | $ | 225,265 | $ | — | $ | — | $ | 225,265 | |||||||||
Restricted cash: | |||||||||||||||||
Cash | $ | 1,587 | $ | — | $ | — | $ | 1,587 | |||||||||
Inventories | ' | ||||||||||||||||
Inventories consisted of the following (in thousands): | |||||||||||||||||
June 30, | September 30, | ||||||||||||||||
2013 | 2013 | ||||||||||||||||
Raw materials | $ | 32,067 | $ | 40,699 | |||||||||||||
Work in progress | 25,497 | 22,117 | |||||||||||||||
Finished goods | 13,596 | 11,299 | |||||||||||||||
$ | 71,160 | $ | 74,115 | ||||||||||||||
Property and Equipment, net | ' | ||||||||||||||||
Property and equipment consisted of the following (in thousands): | |||||||||||||||||
June 30, | September 30, | ||||||||||||||||
2013 | 2013 | ||||||||||||||||
Computer equipment | $ | 21,866 | $ | 23,395 | |||||||||||||
Software | 4,674 | 4,802 | |||||||||||||||
Property and equipment | 10,625 | 11,881 | |||||||||||||||
Furniture and fixtures | 4,294 | 4,427 | |||||||||||||||
Leasehold improvements | 15,446 | 15,597 | |||||||||||||||
Construction in progress | 203 | 310 | |||||||||||||||
57,108 | 60,412 | ||||||||||||||||
Less accumulated depreciation and amortization | (21,836 | ) | (25,423 | ) | |||||||||||||
$ | 35,272 | $ | 34,989 | ||||||||||||||
Accrued and Other Current Liabilities | ' | ||||||||||||||||
Accrued and other current liabilities consisted of the following (in thousands): | |||||||||||||||||
June 30, | September 30, | ||||||||||||||||
2013 | 2013 | ||||||||||||||||
Accrued compensation | $ | 25,146 | $ | 21,000 | |||||||||||||
Accrued warranty expense | 5,241 | 5,475 | |||||||||||||||
Accrued other liabilities | 14,038 | 12,564 | |||||||||||||||
$ | 44,425 | $ | 39,039 | ||||||||||||||
Long-term Other Liabilities | ' | ||||||||||||||||
Long-term other liabilities consisted of the following (in thousands): | |||||||||||||||||
June 30, | September 30, | ||||||||||||||||
2013 | 2013 | ||||||||||||||||
Long-term deferred tax liability | $ | 4,900 | $ | 4,816 | |||||||||||||
Long-term deferred rent | 9,209 | 9,029 | |||||||||||||||
Long-term other liabilities | 5,312 | 5,312 | |||||||||||||||
$ | 19,421 | $ | 19,157 | ||||||||||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 3 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Fair Value of Financial Assets | ' | ||||||||||||||||
The fair value of the Company’s money market funds was as follows (in thousands): | |||||||||||||||||
Fair Value Measurements at June 30, 2013 | |||||||||||||||||
Description | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Cash equivalents: | |||||||||||||||||
Money market funds | $ | 202,244 | $ | — | $ | — | $ | 202,244 | |||||||||
Fair Value Measurements at September 30, 2013 | |||||||||||||||||
Description | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Cash equivalents: | |||||||||||||||||
Money market funds | $ | 202,274 | $ | — | $ | — | $ | 202,274 |
Acquisitions_Tables
Acquisitions (Tables) | 3 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Pro Forma Financial Information | ' | ||||||||
The following unaudited pro forma financial information is based on the combined historical financial statements of the Company and NexGen after giving effect to the Company’s acquisition of NexGen as if it had occurred as of July 1, 2012 and includes pro forma adjustments related to the amortization of acquired intangible assets, stock-based compensation expense, and depreciation expense (in thousands, except per share data): | |||||||||
Three Months Ended September 30, | |||||||||
2012 | 2013 | ||||||||
Revenue | $ | 118,245 | $ | 86,293 | |||||
Net income (loss) from operations | 2,863 | (27,804 | ) | ||||||
Net loss | (828 | ) | (27,896 | ) | |||||
Net loss per share, basic | $ | (0.01 | ) | $ | (0.28 | ) | |||
Net loss per share, diluted | $ | (0.01 | ) | $ | (0.28 | ) | |||
Nexgen | ' | ||||||||
Business Acquisition, Purchase Price Allocation | ' | ||||||||
The Company’s allocation of consideration transferred for NexGen is as follows (in thousands): | |||||||||
Total assets | $ | 3,777 | |||||||
Total liabilities | (1,973 | ) | |||||||
Net acquired tangible assets | $ | 1,804 | |||||||
Developed technology (weighted-average useful life of 4 years) | 15,000 | ||||||||
Trade names (weighted-average useful life of 2 years) | 520 | ||||||||
Customer relationships (weighted-average useful life of 6 years) | 390 | ||||||||
Total identifiable intangible assets | $ | 15,910 | |||||||
Goodwill | 93,023 | ||||||||
Total fair value of consideration transferred | $ | 110,737 | |||||||
ID7 Acquisition | ' | ||||||||
Business Acquisition, Purchase Price Allocation | ' | ||||||||
The Company’s allocation of consideration transferred for ID7 Entities is as follows (in thousands): | |||||||||
Total assets | $ | 76 | |||||||
Total liabilities | (645 | ) | |||||||
Net assumed liabilities | $ | (569 | ) | ||||||
Developed technology (weighted-average useful life of 4 years) | 5,900 | ||||||||
Goodwill | 1,667 | ||||||||
Deferred income tax liability | (1,129 | ) | |||||||
Total fair value of consideration transferred | $ | 5,869 | |||||||
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 3 Months Ended | ||||||||||||||
Sep. 30, 2013 | |||||||||||||||
Changes in Carrying Amount of Goodwill | ' | ||||||||||||||
Changes in the carrying amount of Goodwill consisted of the following (in thousands): | |||||||||||||||
Total | |||||||||||||||
Balance as of June 30, 2013 | $ | 149,467 | |||||||||||||
Current period acquisitions | — | ||||||||||||||
Balance as of September 30, 2013 | $ | 149,467 | |||||||||||||
Company's Intangible Assets and Related Accumulated Amortization | ' | ||||||||||||||
The Company’s intangible assets and related accumulated amortization consisted of the following as of September 30, 2013 (in thousands): | |||||||||||||||
Weighted-Average | Cost | Accumulated | Net | ||||||||||||
Useful Life | Amortization | ||||||||||||||
Developed technology | 4 years | $ | 31,400 | $ | (8,070 | ) | $ | 23,330 | |||||||
Licensed technology | 3 years | 2,784 | (864 | ) | 1,920 | ||||||||||
Trade names | 2 years | 520 | (114 | ) | 406 | ||||||||||
Customer relationships | 6 years | 390 | (28 | ) | 362 | ||||||||||
Total intangible assets | 4 years | $ | 35,094 | $ | (9,076 | ) | $ | 26,018 | |||||||
Estimated Amortization Expenses | ' | ||||||||||||||
Estimated amortization expense in future periods for intangible assets subject to amortization is as follows (in thousands): | |||||||||||||||
Fiscal Year Ending June 30, | Total | ||||||||||||||
Remaining 2014 | $ | 6,639 | |||||||||||||
2015 | 8,804 | ||||||||||||||
2016 | 6,257 | ||||||||||||||
2017 | 4,200 | ||||||||||||||
2018 | 65 | ||||||||||||||
Thereafter | 53 | ||||||||||||||
$ | 26,018 | ||||||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 3 Months Ended | ||||
Sep. 30, 2013 | |||||
Aggregate Changes in Total Gross Amount of Unrecognized Tax Benefits | ' | ||||
During the three months ended September 30, 2013, the aggregate change in the total gross amount of unrecognized tax benefits was as follows (in thousands): | |||||
Total | |||||
Balance at June 30, 2013 | $ | 6,047 | |||
Increase in unrecognized tax benefits related to current year | 626 | ||||
Balance at September 30, 2013 | $ | 6,673 | |||
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 3 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Stock Option Activity | ' | ||||||||||||||||
Stock option activity for all the Equity Incentive Plans for the three months ended September 30, 2013 was as follows: | |||||||||||||||||
Number of | Weighted- | Weighted- | Aggregate | ||||||||||||||
Shares | Average | Average | Intrinsic Value (1) | ||||||||||||||
Subject to | Exercise | Contractual | |||||||||||||||
Outstanding | Price Per | Term (in | |||||||||||||||
Options | Share | Years) | |||||||||||||||
(in thousands) | |||||||||||||||||
Outstanding as of June 30, 2013 | 17,265,304 | $ | 6.92 | ||||||||||||||
Granted | 156,600 | 11.04 | |||||||||||||||
Exercised | (2,812,590 | ) | 1.14 | ||||||||||||||
Canceled | (254,423 | ) | 10.16 | ||||||||||||||
Outstanding as of September 30, 2013 | 14,354,891 | $ | 8.04 | 7.4 | $ | 76,733 | |||||||||||
Vested and expected to vest as of September 30, 2013 | 13,539,655 | $ | 7.85 | 7.4 | $ | 74,980 | |||||||||||
Vested and exercisable as of September 30, 2013 | 8,046,293 | $ | 6.46 | 6.9 | $ | 55,759 | |||||||||||
-1 | The aggregate intrinsic value is equal to the difference between the exercise price of the underlying stock option awards and the fair value of the Company’s common stock as of September 30, 2013. | ||||||||||||||||
Activity Related to Restricted Stock Units and Restricted Stock Awards | ' | ||||||||||||||||
The following table summarizes activity during the three months ended September 30, 2013 related to RSUs and RSAs: | |||||||||||||||||
Number of Shares | Weighted-Average | ||||||||||||||||
Grant-Date Fair | |||||||||||||||||
Value | |||||||||||||||||
Unvested RSUs and RSAs at June 30, 2013 | 4,137,846 | $ | 20.78 | ||||||||||||||
Granted | 1,604,460 | 11.25 | |||||||||||||||
Vested | (311,046 | ) | 22.86 | ||||||||||||||
Forfeited | (5,735 | ) | 24.76 | ||||||||||||||
Canceled | (212,392 | ) | 23.3 | ||||||||||||||
Unvested RSUs and RSAs at September 30, 2013 | 5,213,133 | $ | 17.62 | ||||||||||||||
Total Stock-Based Compensation Expense | ' | ||||||||||||||||
Total stock-based compensation expense was classified as follows in the accompanying condensed consolidated statement of operations (in thousands): | |||||||||||||||||
Three Months Ended September 30, | |||||||||||||||||
2012 | 2013 | ||||||||||||||||
Cost of revenue | $ | 113 | $ | 157 | |||||||||||||
Sales and marketing | 2,169 | 2,923 | |||||||||||||||
Research and development | 4,464 | 5,598 | |||||||||||||||
General and administrative | 7,143 | 5,537 | |||||||||||||||
Total stock-based compensation | $ | 13,889 | $ | 14,215 | |||||||||||||
Stock options | ' | ||||||||||||||||
Stock Option Activity | ' | ||||||||||||||||
Additional per share information related to stock options granted to employees was as follows: | |||||||||||||||||
Three Months Ended | |||||||||||||||||
September 30, | |||||||||||||||||
2012 | 2013 | ||||||||||||||||
Weighted-average grant date fair value — granted | $ | 15.42 | $ | 5.56 | |||||||||||||
Weighted-average grant date fair value — forfeited | 11.06 | 9.57 | |||||||||||||||
Assumptions Used in Black-Scholes-Merton Pricing Model Related to Stock Options | ' | ||||||||||||||||
The following table presents the assumptions used in the Black-Scholes-Merton pricing model related to employee stock options: | |||||||||||||||||
Three Months Ended September 30, | |||||||||||||||||
2012 | 2013 | ||||||||||||||||
Expected volatility | 61.4 – 63.1% | 61.4 – 62.0% | |||||||||||||||
Expected term (in years) | 4.5 – 5.4 | 4.4 – 4.5 | |||||||||||||||
Risk-free interest rate | 0.6 – 0.7% | 1.4 – 1.7% | |||||||||||||||
Expected dividends | — | — | |||||||||||||||
Non-employee stock options | ' | ||||||||||||||||
Assumptions Used in Black-Scholes-Merton Pricing Model Related to Stock Options | ' | ||||||||||||||||
The following table presents the assumptions used in the Black-Scholes-Merton pricing model related to non-employee stock options: | |||||||||||||||||
Three Months Ended September 30, | |||||||||||||||||
2012 | 2013 | ||||||||||||||||
Expected volatility | 61.2 – 61.8% | 52.5 – 65.3% | |||||||||||||||
Expected term (in years) | 6.1 – 8.7 | 0.9 – 7.3 | |||||||||||||||
Risk-free interest rate | 1.3 – 1.7% | 0.1 – 2.0% | |||||||||||||||
Expected dividends | — | — |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 3 Months Ended | ||||
Sep. 30, 2013 | |||||
Future Minimum Lease Payments under Non-Cancelable Operating Leases | ' | ||||
Future minimum lease payments under non-cancelable operating leases were as follows (in thousands): | |||||
Fiscal Year Ending June 30, | Total | ||||
Remaining 2014 | $ | 5,251 | |||
2015 | 6,765 | ||||
2016 | 6,827 | ||||
2017 | 6,769 | ||||
2018 | 6,754 | ||||
Thereafter | 17,868 | ||||
Total | $ | 50,234 | |||
Description_of_Business_and_Su3
Description of Business and Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 3 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Jun. 30, 2013 | |
Segment | Segment | ||
Significant Accounting Policies [Line Items] | ' | ' | ' |
Number of business segment | 1 | 1 | ' |
Product warranty period | '5 years | ' | ' |
Restricted cash | $1,587,000 | ' | $4,860,000 |
Lease expiration period | '2017-03 | ' | ' |
Restricted cash expiration period | '2014-09 | ' | ' |
Letter of credit | ' | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' | ' |
Restricted cash | 87,000 | ' | 3,360,000 |
Indemnification Agreement | ' | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' | ' |
Restricted cash | 1,500,000 | ' | ' |
Reclassifications | ' | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' | ' |
Increase in cost of revenue | ' | 71,000 | ' |
Increase in sales and marketing | ' | 567,000 | ' |
Increase in research and development | ' | 605,000 | ' |
Decrease in general and administrative | ' | -1,243,000 | ' |
Revenues | External Customer | ' | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' | ' |
Concentration risk | 40.00% | 38.00% | ' |
Revenues | External Customer | Germany | ' | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' | ' |
Concentration risk | ' | 19.00% | ' |
Revenues | External Customer | China | ' | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' | ' |
Concentration risk | 11.00% | ' | ' |
Sales | ' | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' | ' |
Concentration risk | 57.00% | 70.00% | ' |
Changes_in_Product_Warranty_Li
Changes in Product Warranty Liability (Detail) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 |
Guarantor Obligations [Line Items] | ' |
Balance at beginning of period | $5,241 |
Warranty costs accrued | 376 |
Warranty claims | -421 |
Adjustments related to pre-existing warranties, including changes in estimates | 279 |
Balance at end of period | $5,475 |
Reconciliation_of_Numerator_an
Reconciliation of Numerator and Denominator Used in Calculation of Basic and Diluted Net Income (Loss) Per Share (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Numerator: | ' | ' |
Net income (loss) | ($27,896) | $3,933 |
Denominator: | ' | ' |
Weighted-average common shares outstanding | 100,376 | 94,432 |
Less weighted-average common shares outstanding subject to repurchase | -473 | -211 |
Weighted-average shares, basic | 99,903 | 94,221 |
Effect of dilutive securities | ' | 14,204 |
Weighted-average shares, diluted | 99,903 | 108,425 |
WeightedAverage_Common_Stock_E
Weighted-Average Common Stock Equivalents, Anti-Dilutive (Detail) | 3 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Common stock equivalents | 8,314 | 6,505 |
Stock options | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Common stock equivalents | 8,200 | 4,664 |
Restricted stock units and restricted stock awards | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Common stock equivalents | 114 | 1,841 |
Cash_and_Cash_Equivalents_Deta
Cash and Cash Equivalents (Detail) (USD $) | Sep. 30, 2013 | Jun. 30, 2013 | Sep. 30, 2012 | Jun. 30, 2012 |
In Thousands, unless otherwise specified | ||||
Cash and Cash Equivalents [Line Items] | ' | ' | ' | ' |
Cash and cash equivalents, amortized cost | $225,265 | $238,351 | $353,893 | $321,239 |
Cash and Cash Equivalents | ' | ' | ' | ' |
Cash and Cash Equivalents [Line Items] | ' | ' | ' | ' |
Cash and cash equivalents, amortized cost | 225,265 | 238,351 | ' | ' |
Cash and cash equivalents, unrealized gains | ' | ' | ' | ' |
Cash and cash equivalents, unrealized losses | ' | ' | ' | ' |
Cash and cash equivalents, estimated fair value | 225,265 | 238,351 | ' | ' |
Cash and Cash Equivalents | Cash | ' | ' | ' | ' |
Cash and Cash Equivalents [Line Items] | ' | ' | ' | ' |
Cash and cash equivalents, amortized cost | 22,991 | 36,107 | ' | ' |
Cash and cash equivalents, unrealized gains | ' | ' | ' | ' |
Cash and cash equivalents, unrealized losses | ' | ' | ' | ' |
Cash and cash equivalents, estimated fair value | 22,991 | 36,107 | ' | ' |
Cash and Cash Equivalents | Money market funds | ' | ' | ' | ' |
Cash and Cash Equivalents [Line Items] | ' | ' | ' | ' |
Cash and cash equivalents, amortized cost | 202,274 | 202,244 | ' | ' |
Cash and cash equivalents, unrealized gains | ' | ' | ' | ' |
Cash and cash equivalents, unrealized losses | ' | ' | ' | ' |
Cash and cash equivalents, estimated fair value | 202,274 | 202,244 | ' | ' |
Restricted Cash | Cash | ' | ' | ' | ' |
Cash and Cash Equivalents [Line Items] | ' | ' | ' | ' |
Cash and cash equivalents, amortized cost | 1,587 | 4,860 | ' | ' |
Cash and cash equivalents, unrealized gains | ' | ' | ' | ' |
Cash and cash equivalents, unrealized losses | ' | ' | ' | ' |
Cash and cash equivalents, estimated fair value | $1,587 | $4,860 | ' | ' |
Inventories_Detail
Inventories (Detail) (USD $) | Sep. 30, 2013 | Jun. 30, 2013 |
In Thousands, unless otherwise specified | ||
Inventory [Line Items] | ' | ' |
Raw materials | $40,699 | $32,067 |
Work in progress | 22,117 | 25,497 |
Finished goods | 11,299 | 13,596 |
Inventories | $74,115 | $71,160 |
Property_and_Equipment_net_Det
Property and Equipment, net (Detail) (USD $) | Sep. 30, 2013 | Jun. 30, 2013 |
In Thousands, unless otherwise specified | ||
Property, Plant and Equipment [Line Items] | ' | ' |
Property and Equipment, Gross | $60,412 | $57,108 |
Less accumulated depreciation and amortization | -25,423 | -21,836 |
Property and Equipment, Net | 34,989 | 35,272 |
Computer equipment | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and Equipment, Gross | 23,395 | 21,866 |
Software | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and Equipment, Gross | 4,802 | 4,674 |
Property and equipment | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and Equipment, Gross | 11,881 | 10,625 |
Furniture and fixtures | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and Equipment, Gross | 4,427 | 4,294 |
Leasehold improvements | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and Equipment, Gross | 15,597 | 15,446 |
Construction in progress | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and Equipment, Gross | $310 | $203 |
Balance_Sheet_Components_Addit
Balance Sheet Components - Additional Information (Detail) (USD $) | 3 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Balance Sheet Components [Line Items] | ' | ' |
Depreciation expense including amortization of leasehold improvements | $3,587,000 | $2,532,000 |
Accrued_and_Other_Current_Liab
Accrued and Other Current Liabilities (Detail) (USD $) | Sep. 30, 2013 | Jun. 30, 2013 |
In Thousands, unless otherwise specified | ||
Schedule of Accrued Liabilities [Line Items] | ' | ' |
Accrued compensation | $21,000 | $25,146 |
Accrued warranty expense | 5,475 | 5,241 |
Accrued other liabilities | 12,564 | 14,038 |
Accrued and other current liabilities | $39,039 | $44,425 |
Longterm_Other_Liabilities_Det
Long-term Other Liabilities (Detail) (USD $) | Sep. 30, 2013 | Jun. 30, 2013 |
In Thousands, unless otherwise specified | ||
Schedule of Accrued Liabilities [Line Items] | ' | ' |
Long-term deferred tax liability | $4,816 | $4,900 |
Long-term deferred rent | 9,029 | 9,209 |
Long-term other liabilities | 5,312 | 5,312 |
Other liabilities | $19,157 | $19,421 |
Fair_Value_of_Financial_Assets
Fair Value of Financial Assets (Detail) (Money market funds, USD $) | Sep. 30, 2013 | Jun. 30, 2013 |
In Thousands, unless otherwise specified | ||
Cash equivalents: | ' | ' |
Cash and cash equivalents | $202,274 | $202,244 |
Level 1 | ' | ' |
Cash equivalents: | ' | ' |
Cash and cash equivalents | $202,274 | $202,244 |
Acquisitions_Additional_Inform
Acquisitions - Additional Information (Detail) (USD $) | 3 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | ||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Jun. 30, 2013 | Sep. 30, 2013 | Apr. 24, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Apr. 24, 2013 | Apr. 24, 2013 | Mar. 13, 2013 | Mar. 31, 2013 | Mar. 13, 2013 | |
Indemnification Agreement | Nexgen | Nexgen | Nexgen | Nexgen | Nexgen | ID7 Acquisition | ID7 Acquisition | ID7 Acquisition | ||||
Fair value of cash, restricted stock, and assumed stock-based awards | Minimum | Maximum | Indemnification Agreement | |||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business combination, percentage of ownership acquired | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | 100.00% | ' | ' |
Business combination, total fair value of purchase price | ' | ' | ' | ' | $110,737,000 | ' | ' | ' | ' | $5,869,000 | ' | ' |
Business combination, cash consideration transferred | ' | ' | ' | ' | 108,973,000 | ' | ' | ' | ' | ' | ' | ' |
Business combination, stock option assumed | ' | ' | ' | ' | 1,418,000 | ' | ' | ' | ' | ' | ' | ' |
Business combination, elimination of inter company balances | ' | ' | ' | ' | 346,000 | ' | ' | ' | ' | ' | ' | ' |
Business acquisition, cash deposited in escrow | ' | ' | ' | ' | 17,854,000 | ' | ' | ' | ' | ' | ' | ' |
Business combination, additional contingent cash payment to stockholders | ' | ' | ' | ' | 5,000,000 | ' | ' | ' | ' | ' | ' | ' |
Business combination, shares to be issued in connection with acquisition | ' | ' | ' | ' | 339,627 | ' | ' | ' | ' | ' | ' | ' |
Business combination, Unvested option | ' | ' | ' | ' | 822,927 | ' | ' | ' | ' | ' | ' | ' |
Business combination, Unvested Restricted Stock Units assumed | ' | ' | ' | ' | 84,808 | ' | ' | ' | ' | ' | ' | ' |
Expected volatility | ' | ' | ' | ' | 65.00% | ' | ' | ' | ' | ' | ' | ' |
Expected option term | ' | ' | ' | ' | ' | ' | ' | '3 years 10 months 24 days | '5 years 8 months 12 days | ' | ' | ' |
Risk-free interest rate | ' | ' | ' | ' | 0.70% | ' | ' | ' | ' | ' | ' | ' |
Fair value of assumed restricted stock units | ' | ' | ' | ' | $16.63 | ' | ' | ' | ' | ' | ' | ' |
Compensation expense related to the fair value of the cash, restricted stock, and the assumed stock-based awards | $11.25 | ' | ' | ' | ' | ' | $23,701,000 | ' | ' | ' | ' | ' |
Operating expenses | 77,557,000 | 61,601,000 | ' | ' | ' | 6,350,000 | ' | ' | ' | ' | ' | ' |
Stock based compensation expense | 14,215,000 | 13,889,000 | ' | ' | ' | 2,141,000 | ' | ' | ' | ' | ' | ' |
Revenue | 86,293,000 | 118,115,000 | ' | ' | ' | 1,248,000 | ' | ' | ' | ' | ' | ' |
Business combination, restricted cash retained | 1,587,000 | ' | 4,860,000 | 1,500,000 | ' | ' | ' | ' | ' | ' | ' | 1,500,000 |
Common stock shares issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | 135,131 | ' | ' |
Business Acquisition stock issued description | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'In connection with the acquisition, the Company issued 135,131 shares of its common stock to the former shareholders of the ID7 Entities, which is subject to a repurchase right, that lapse 25% after one year and the remaining 75% in 12 equal quarterly installments thereafter. | ' | ' |
Fair value of assumed restricted stock units | ' | ' | ' | ' | ' | ' | ' | ' | ' | $17.52 | ' | ' |
Business Combination, Notes payable assumed | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 623,000 | ' |
Acquisition related expenses | $36,000 | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business_Acquisition_Purchase_
Business Acquisition, Purchase Price Allocation (Detail) (USD $) | Sep. 30, 2013 | Jun. 30, 2013 | Apr. 24, 2013 | Apr. 24, 2013 | Apr. 24, 2013 | Apr. 24, 2013 | Mar. 13, 2013 | Mar. 13, 2013 |
In Thousands, unless otherwise specified | Nexgen | Nexgen | Nexgen | Nexgen | ID7 Acquisition | ID7 Acquisition | ||
Developed technology | Trade names | Customer relationships | Developed technology | |||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Total assets | ' | ' | $3,777 | ' | ' | ' | $76 | ' |
Total liabilities | ' | ' | -1,973 | ' | ' | ' | -645 | ' |
Net acquired tangible assets | ' | ' | 1,804 | ' | ' | ' | -569 | ' |
Identifiable intangible assets | ' | ' | 15,910 | 15,000 | 520 | 390 | ' | 5,900 |
Goodwill | 149,467 | 149,467 | 93,023 | ' | ' | ' | 1,667 | ' |
Deferred income tax liability | ' | ' | ' | ' | ' | ' | -1,129 | ' |
Total fair value of consideration transferred | ' | ' | $110,737 | ' | ' | ' | $5,869 | ' |
Business_Acquisition_Purchase_1
Business Acquisition, Purchase Price Allocation (Parenthetical) (Detail) | 1 Months Ended | |||
Apr. 24, 2013 | Apr. 24, 2013 | Apr. 24, 2013 | Mar. 13, 2013 | |
Nexgen | Nexgen | Nexgen | ID7 Acquisition | |
Developed technology | Trade names | Customer relationships | Developed technology | |
Business Acquisition [Line Items] | ' | ' | ' | ' |
Identifiable intangible assets, weighted-average useful life | '4 years | '2 years | '6 years | '4 years |
Pro_Forma_Financial_Informatio
Pro Forma Financial Information (Detail) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ' | ' |
Revenue | $86,293 | $118,245 |
Net income (loss) from operations | -27,804 | 2,863 |
Net loss | ($27,896) | ($828) |
Net loss per share, basic | ($0.28) | ($0.01) |
Net loss per share, diluted | ($0.28) | ($0.01) |
Changes_In_Carrying_Amount_of_
Changes In Carrying Amount of Goodwill (Detail) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 |
Goodwill [Line Items] | ' |
Balance at beginning of period | $149,467 |
Current period acquisitions | ' |
Balance at end of period | $149,467 |
Intangible_Assets_and_Related_
Intangible Assets and Related Accumulated Amortization (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Jun. 30, 2013 |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Intangible assets, weighted-average useful life | '4 years | ' |
Intangible assets, cost | $35,094 | ' |
Intangible assets, accumulated amortization | -9,076 | ' |
Intangible assets, net | 26,018 | 28,268 |
Developed technology | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Intangible assets, weighted-average useful life | '4 years | ' |
Intangible assets, cost | 31,400 | ' |
Intangible assets, accumulated amortization | -8,070 | ' |
Intangible assets, net | 23,330 | ' |
Licensed technology | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Intangible assets, weighted-average useful life | '3 years | ' |
Intangible assets, cost | 2,784 | ' |
Intangible assets, accumulated amortization | -864 | ' |
Intangible assets, net | 1,920 | ' |
Trade names | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Intangible assets, weighted-average useful life | '2 years | ' |
Intangible assets, cost | 520 | ' |
Intangible assets, accumulated amortization | -114 | ' |
Intangible assets, net | 406 | ' |
Customer relationships | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Intangible assets, weighted-average useful life | '6 years | ' |
Intangible assets, cost | 390 | ' |
Intangible assets, accumulated amortization | -28 | ' |
Intangible assets, net | $362 | ' |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets - Additional Information (Detail) (USD $) | 3 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Goodwill And Intangible Assets [Line Items] | ' | ' |
Amortization expense related to intangible assets | $2,251,000 | $656,000 |
Estimated_Amortization_Expense
Estimated Amortization Expense (Detail) (USD $) | Sep. 30, 2013 | Jun. 30, 2013 |
In Thousands, unless otherwise specified | ||
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Remaining 2014 | $6,639 | ' |
2015 | 8,804 | ' |
2016 | 6,257 | ' |
2017 | 4,200 | ' |
2018 | 65 | ' |
Thereafter | 53 | ' |
Intangible assets, net | $26,018 | $28,268 |
Longterm_Obligations_Additiona
Long-term Obligations - Additional Information (Detail) (USD $) | 3 Months Ended |
Sep. 30, 2013 | |
Revolving Line of Credit | ' |
Line of Credit Facility [Line Items] | ' |
Current borrowing capacity | $25,000,000 |
Maximum borrowing capacity | 75,000,000 |
Borrowing outstanding | 0 |
Credit facility due date | 13-Sep-16 |
Percentage of unused commitment fee | 0.10% |
Ratio of current assets to current liabilities | 2 |
Minimum tangible net worth | 200,000,000 |
Percentage of net income | 50.00% |
Percentage of the aggregate increases in shareholders' equity | 25.00% |
Revolving Line of Credit | Base rate | ' |
Line of Credit Facility [Line Items] | ' |
Percentage spread on variable rate | 0.75% |
Revolving Line of Credit | LIBOR | ' |
Line of Credit Facility [Line Items] | ' |
Percentage spread on variable rate | 1.25% |
Revolving Line of Credit | Federal funds rate | ' |
Line of Credit Facility [Line Items] | ' |
Percentage spread on variable rate | 0.50% |
Letter of credit | ' |
Line of Credit Facility [Line Items] | ' |
Current borrowing capacity | 25,000,000 |
Borrowing outstanding | $3,183,000 |
Percentage of unused commitment fee | 1.25% |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 3 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Income Taxes [Line Items] | ' | ' |
Income tax expense | $262,000 | $4,571,000 |
Income tax expense as percentage of income (loss) before income taxes | 1.00% | 54.00% |
Effective tax rate | 35.00% | ' |
Total amount of unrecognized tax benefits affecting the effective tax rate | 1,166,000 | ' |
Federal net operating loss carryforwards | 314,847,000 | ' |
State net operating loss carryforwards | 254,949,000 | ' |
Federal research and development tax credit carryforwards | 7,172,000 | ' |
State research and development tax credit carryforwards | 3,706,000 | ' |
Tax benefit related to certain tax deductions for stock-based awards | 3,000 | ' |
Stock options | ' | ' |
Income Taxes [Line Items] | ' | ' |
Federal net operating loss carryforwards | 285,261,000 | ' |
State net operating loss carryforwards | 202,305,000 | ' |
State research and development tax credit carryforwards | $537,000 | ' |
Aggregate_Changes_in_Total_Gro
Aggregate Changes in Total Gross Amount of Unrecognized Tax Benefits (Detail) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 |
Reconciliation of Unrecognized Tax Benefits [Line Items] | ' |
Balance at June 30, 2013 | $6,047 |
Increase in unrecognized tax benefits related to current year | 626 |
Balance at September 30, 2013 | $6,673 |
Stockholders_Equity_Additional
Stockholders' Equity - Additional Information (Detail) (USD $) | 3 Months Ended | 1 Months Ended | 3 Months Ended | 3 Months Ended | ||||||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Jul. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | 30-May-13 | 30-May-13 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Jul. 30, 2013 | |
2011 Plan | 2011 Plan | Stock options | Stock options | Non-employee stock options | Non-employee stock options | Stock option | Restricted Stock Units | Stock Options and Restricted Stock Units (RSUs) | Restricted Stock Units and Restricted Stock Awards | Restricted Stock Units and Restricted Stock Awards | ESPP | ESPP | ESPP | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional number of shares authorized under 2011 Plan | ' | ' | 4,952,076 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares available for issuance under 2011 Plan | ' | ' | ' | 13,589,193 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate intrinsic value of stock options exercised | $31,115,000 | $41,576,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock-based compensation | 14,215,000 | 13,889,000 | ' | ' | 4,408,000 | 5,093,000 | 2,257,000 | 2,748,000 | ' | ' | ' | 6,466,000 | 5,344,000 | 1,084,000 | 704,000 | ' |
Total unrecognized compensation expense | ' | ' | ' | ' | 39,115,000 | ' | ' | ' | ' | ' | ' | 75,767,000 | ' | ' | ' | ' |
Stock expense expected to be recognized over a weighted-average service period | ' | ' | ' | ' | '2 years 2 months 12 days | ' | ' | ' | ' | ' | ' | '3 years 2 months 12 days | ' | ' | ' | ' |
Vesting of Shares | ' | ' | ' | ' | ' | ' | ' | ' | 1,176,249 | 267,500 | ' | ' | ' | ' | ' | ' |
Employee related stock-based compensation expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,255,000 | ' | ' | ' | ' | ' |
Unrecognized stock based compensation expense | 6,455,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Repurchase of common stock related to employee tax withholding obligations | 64,949 | 43,392 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of restricted stock awards and restricted stock units, net of repurchases | $702,000 | $1,055,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Increase in the number of shares available for issuance | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 990,415 |
Common stock issued under the ESPP | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 311,137 | ' | ' |
Common stock reserved for future issuance under ESPP | 1,543,157 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock_Option_Activity_Detail
Stock Option Activity (Detail) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | |
Options Outstanding - Number of Shares | ' | |
Outstanding, Beginning | 17,265,304 | |
Granted | 156,600 | |
Exercised | -2,812,590 | |
Canceled | -254,423 | |
Outstanding, Ending | 14,354,891 | |
Vested and expected to vest, Ending | 13,539,655 | |
Vested and exercisable, Ending | 8,046,293 | |
Options Outstanding - Weighted-Average Exercise Price | ' | |
Outstanding, Beginning | $6.92 | |
Granted | $11.04 | |
Exercised | $1.14 | |
Canceled | $10.16 | |
Outstanding, Ending | $8.04 | |
Vested and expected to vest, Ending | $7.85 | |
Vested and exercisable, Ending | $6.46 | |
Options Outstanding - Weighted-Average Contractual Term (In Years) | ' | |
Outstanding, Ending | '7 years 4 months 24 days | |
Vested and expected to vest, Ending | '7 years 4 months 24 days | |
Vested and exercisable, Ending | '6 years 10 months 24 days | |
Options Outstanding - Aggregate Intrinsic Value | ' | |
Outstanding, Ending | $76,733 | [1] |
Vested and expected to vest, Ending | 74,980 | [1] |
Vested and exercisable, Ending | $55,759 | [1] |
[1] | The aggregate intrinsic value is equal to the difference between the exercise price of the underlying stock option awards and the fair value of the Company's common stock as of September 30, 2013. |
Employee_Stock_Options_Detail
Employee Stock Options (Detail) (USD $) | 3 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Weighted-average grant date fair value - granted | $5.56 | $15.42 |
Weighted-average grant date fair value - forfeited | $9.57 | $11.06 |
Assumptions_Used_in_BlackSchol
Assumptions Used in Black-Scholes-Merton Pricing Model Related to Employee and Non-Employee Stock Options (Detail) | 3 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Stock options | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Expected volatility, Maximum | 62.00% | 63.10% |
Expected volatility, Minimum | 61.40% | 61.40% |
Risk-free interest rate, Maximum | 1.70% | 0.70% |
Risk-free interest rate, Minimum | 1.40% | 0.60% |
Expected dividends | ' | ' |
Stock options | Maximum | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Expected term | '4 years 6 months | '5 years 4 months 24 days |
Stock options | Minimum | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Expected term | '4 years 4 months 24 days | '4 years 6 months |
Non-employee stock options | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Expected volatility, Maximum | 65.30% | 61.80% |
Expected volatility, Minimum | 52.50% | 61.20% |
Risk-free interest rate, Maximum | 2.00% | 1.70% |
Risk-free interest rate, Minimum | 0.10% | 1.30% |
Expected dividends | ' | ' |
Non-employee stock options | Maximum | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Expected term | '7 years 3 months 18 days | '8 years 8 months 12 days |
Non-employee stock options | Minimum | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Expected term | '10 months 24 days | '6 years 1 month 6 days |
Activity_Related_to_Restricted
Activity Related to Restricted Stock Units and Restricted Stock Awards (Detail) (USD $) | 3 Months Ended |
Sep. 30, 2013 | |
Number of Shares | ' |
Unvested, Beginning | 4,137,846 |
Granted | 1,604,460 |
Vested | -311,046 |
Forfeited | -5,735 |
Canceled | -212,392 |
Unvested, Ending | 5,213,133 |
Weighted Average Grant Date Fair Value | ' |
Unvested, Beginning | $20.78 |
Granted | $11.25 |
Vested | $22.86 |
Forfeited | $24.76 |
Canceled | $23.30 |
Unvested, Ending | $17.62 |
Total_StockBased_Compensation_
Total Stock-Based Compensation Expense (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Allocated stock-based compensation expense | $14,215 | $13,889 |
Cost of Revenue | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Allocated stock-based compensation expense | 157 | 113 |
Sales and Marketing | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Allocated stock-based compensation expense | 2,923 | 2,169 |
Research and Development | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Allocated stock-based compensation expense | 5,598 | 4,464 |
General and Administrative | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Allocated stock-based compensation expense | $5,537 | $7,143 |
Commitments_and_Contingencies_1
Commitments and Contingencies - Additional Information (Detail) (USD $) | 3 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Jun. 30, 2013 | |
Commitments and Contingencies [Line Items] | ' | ' | ' |
Letters of credit outstanding | $3,270,000 | ' | $3,360,000 |
Restricted cash | 1,587,000 | ' | 4,860,000 |
Expiry date of office space operating leases | '2021 | ' | ' |
Expiry date of equipment operating leases | '2018 | ' | ' |
Maximum Rent expense | 1,980,000 | 1,741,000 | ' |
Letter of credit | ' | ' | ' |
Commitments and Contingencies [Line Items] | ' | ' | ' |
Restricted cash | $87,000 | ' | $3,360,000 |
Future_Minimum_Lease_Payments_
Future Minimum Lease Payments Under Non-Cancelable Operating Leases (Detail) (USD $) | Sep. 30, 2013 |
In Thousands, unless otherwise specified | |
Operating Leases, Future Minimum Payments Due | ' |
Remaining 2014 | $5,251 |
2015 | 6,765 |
2016 | 6,827 |
2017 | 6,769 |
2018 | 6,754 |
Thereafter | 17,868 |
Total | $50,234 |