Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 16, 2017 | Jun. 24, 2016 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | CALIX, INC | ||
Entity Central Index Key | 1,406,666 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Trading Symbol | calx | ||
Entity Common Stock, Shares Outstanding | 49,589,197 | ||
Entity Public Float | $ 278 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current Assets: | ||
Cash and cash equivalents | $ 50,359 | $ 23,626 |
Marketable securities | 27,748 | 49,964 |
Accounts receivable, net | 51,336 | 47,155 |
Inventory | 44,545 | 47,667 |
Deferred cost of revenue | 34,763 | 4,918 |
Prepaid expenses and other current assets | 10,571 | 9,470 |
Total current assets | 219,322 | 182,800 |
Property and equipment, net | 17,984 | 17,149 |
Goodwill | 116,175 | 116,175 |
Intangible assets, net | 813 | 6,618 |
Other assets | 1,181 | 1,144 |
Total assets | 355,475 | 323,886 |
Current liabilities: | ||
Accounts payable | 23,827 | 19,603 |
Accrued liabilities | 69,715 | 35,512 |
Deferred revenue | 27,854 | 12,124 |
Total current liabilities | 121,396 | 67,239 |
Long-term portion of deferred revenue | 20,237 | 19,569 |
Other long-term liabilities | 878 | 1,293 |
Total liabilities | 142,511 | 88,101 |
Commitments and contingencies (See Note 6) | ||
Stockholders' equity: | ||
Preferred stock, $0.025 par value; 5,000,000 shares authorized; no shares issued and outstanding as of December 31, 2016 and December 31, 2015 | 0 | 0 |
Common stock, $0.025 par value; 100,000,000 shares authorized; 54,722,135 shares issued and 49,392,318 shares outstanding as of December 31, 2016, and 53,049,781 shares issued and 49,509,251 shares outstanding as of December 31, 2015 | 1,368 | 1,326 |
Additional paid-in capital | 836,563 | 818,754 |
Accumulated other comprehensive loss | (656) | (195) |
Accumulated deficit | (584,325) | (556,923) |
Treasury stock, 5,329,817 shares as of December 31, 2016 and 3,540,530 shares as of December 31, 2015 | (39,986) | (27,177) |
Total stockholders' equity | 212,964 | 235,785 |
Total liabilities and stockholders' equity | $ 355,475 | $ 323,886 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.025 | $ 0.025 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.025 | $ 0.025 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 54,722,135 | 53,049,781 |
Common stock, shares outstanding | 49,392,318 | 49,509,251 |
Treasury stock, shares | 5,329,817 | 3,540,530 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Income Statement [Abstract] | ||||
Revenue | $ 458,787 | $ 407,463 | $ 401,227 | |
Cost of revenue: | ||||
Products and services | [1] | 253,465 | 208,681 | 215,085 |
Amortization of intangible assets | 4,104 | 8,353 | 8,353 | |
Total cost of revenue | 257,569 | 217,034 | 223,438 | |
Gross profit | 201,218 | 190,429 | 177,789 | |
Operating expenses: | ||||
Research and development | [1] | 106,869 | 89,714 | 80,311 |
Sales and marketing | [1] | 83,675 | 78,563 | 76,283 |
General and administrative | [1] | 41,592 | 38,454 | 31,371 |
Amortization of intangible assets | 1,701 | 10,208 | 10,208 | |
Litigation settlement gain | (4,500) | 0 | 0 | |
Total operating expenses | 229,337 | 216,939 | 198,173 | |
Loss from operations | (28,119) | (26,510) | (20,384) | |
Interest and other income (expense), net: | ||||
Interest income | 737 | 1,285 | 729 | |
Interest expense | (585) | (1,144) | (806) | |
Other income (expense), net | 912 | 571 | 228 | |
Total interest and other income (expense), net | 1,064 | 712 | 151 | |
Loss before provision for income taxes | (27,055) | (25,798) | (20,233) | |
Provision for income taxes | 347 | 535 | 581 | |
Net loss | $ (27,402) | $ (26,333) | $ (20,814) | |
Net loss per common share: | ||||
Basic and diluted (in dollars per share) | $ (0.56) | $ (0.51) | $ (0.41) | |
Weighted-average number of shares used to compute net loss per common share: | ||||
Basic and diluted (in shares) | 48,730 | 51,489 | 50,808 | |
Net loss | $ (27,402) | $ (26,333) | $ (20,814) | |
Other comprehensive income (loss), net of tax: | ||||
Unrealized losses on available-for-sale marketable securities adjustment, net | 88 | (36) | (58) | |
Foreign currency translation adjustments, net | (549) | (239) | (52) | |
Total other comprehensive income (loss), net of tax | (461) | (275) | (110) | |
Comprehensive loss | $ (27,863) | $ (26,608) | $ (20,924) | |
[1] | Includes stock-based compensation as follows (in thousands): Years Ended December 31, 2014, 2013, and 2012;Cost of revenue: $672, $709, $1,120;Research and development: $5,125, $4,797, $5,056;Sales and marketing: $4,586, $4,712, $5,601;General administrative: $3,902, $3,587, $4,240;Total: $14,285, $13,805, $16,017. |
Consolidated Statements of Com5
Consolidated Statements of Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Stock based compensation | $ 14,300 | $ 13,800 | $ 16,000 |
Cost of revenue | |||
Stock based compensation | 672 | 709 | 1,120 |
Research and development | |||
Stock based compensation | 5,125 | 4,797 | 5,056 |
Sales and marketing | |||
Stock based compensation | 4,586 | 4,712 | 5,601 |
General and administrative | |||
Stock based compensation | $ 3,902 | $ 3,587 | $ 4,240 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Treasury Stock |
Beginning Balance, shares at Dec. 31, 2013 | 50,225,000 | |||||
Balance at beginning of period at Dec. 31, 2013 | $ 273,923 | $ 1,256 | $ 782,253 | $ 190 | $ (509,776) | $ 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | 16,017 | 16,017 | ||||
Exercise of stock options, shares | 224,000 | |||||
Exercise of stock options | 1,668 | $ 6 | 1,662 | |||
Issuance of vested performance restricted stock units, net of taxes withheld, shares | 99,000 | |||||
Issuance of vested performance restricted stock units, net of taxes withheld | (533) | $ 2 | (535) | |||
Issuance of vested restricted stock units, net of taxes withheld, shares | 449,000 | |||||
Issuance of vested restricted stock units, net of taxes withheld | (1,840) | $ 11 | (1,851) | |||
Stock issued under employee stock purchase plan, shares | 683,000 | |||||
Stock issued under employee stock purchase plan | 4,627 | $ 17 | 4,610 | |||
Shares withheld for taxes for vested restricted stock awards, shares | (42,000) | |||||
Shares withheld for taxes for vested restricted stock awards | (347) | $ (1) | (346) | |||
Restricted stock awards forfeited, shares | (10,000) | |||||
Restricted stock awards forfeited | 0 | $ 0 | 0 | |||
Net loss | (20,814) | (20,814) | ||||
Other comprehensive income (loss) | (110) | (110) | ||||
Ending Balance, shares at Dec. 31, 2014 | 51,628,000 | |||||
Balance at end of period at Dec. 31, 2014 | 272,591 | $ 1,291 | 801,810 | 80 | (530,590) | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | 13,805 | 13,805 | ||||
Exercise of stock options, shares | 97,000 | |||||
Exercise of stock options | 638 | $ 2 | 636 | |||
Issuance of vested performance restricted stock units, net of taxes withheld, shares | 92,000 | |||||
Issuance of vested performance restricted stock units, net of taxes withheld | (471) | $ 2 | (473) | |||
Issuance of vested restricted stock units, net of taxes withheld, shares | 491,000 | |||||
Issuance of vested restricted stock units, net of taxes withheld | (1,721) | $ 12 | (1,733) | |||
Stock issued under employee stock purchase plan, shares | 762,000 | |||||
Stock issued under employee stock purchase plan | 4,888 | $ 19 | 4,869 | |||
Shares withheld for taxes for vested restricted stock awards, shares | (20,000) | |||||
Shares withheld for taxes for vested restricted stock awards | (160) | $ 0 | (160) | |||
Net loss | (26,333) | (26,333) | ||||
Other comprehensive income (loss) | (275) | (275) | ||||
Repurchases of common stock, shares | (3,541,000) | |||||
Repurchases of common stock | $ (27,177) | (27,177) | ||||
Ending Balance, shares at Dec. 31, 2015 | 49,509,251 | 49,509,000 | ||||
Balance at end of period at Dec. 31, 2015 | $ 235,785 | $ 1,326 | 818,754 | (195) | (556,923) | (27,177) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | $ 14,285 | 14,285 | ||||
Exercise of stock options, shares | 3,000 | 3,000 | ||||
Exercise of stock options | $ 17 | $ 0 | 17 | |||
Issuance of vested performance restricted stock units, net of taxes withheld, shares | 26,000 | |||||
Issuance of vested performance restricted stock units, net of taxes withheld | (114) | $ 1 | (115) | |||
Issuance of vested restricted stock units, net of taxes withheld, shares | 633,000 | |||||
Issuance of vested restricted stock units, net of taxes withheld | $ (1,987) | $ 16 | (2,003) | |||
Stock issued under employee stock purchase plan, shares | 1,009,911 | 1,010,000 | ||||
Stock issued under employee stock purchase plan | $ 5,650 | $ 25 | 5,625 | |||
Net loss | (27,402) | (27,402) | ||||
Other comprehensive income (loss) | (461) | (461) | ||||
Repurchases of common stock, shares | (1,789,000) | |||||
Repurchases of common stock | $ (12,809) | (12,809) | ||||
Ending Balance, shares at Dec. 31, 2016 | 49,392,318 | 49,392,000 | ||||
Balance at end of period at Dec. 31, 2016 | $ 212,964 | $ 1,368 | $ 836,563 | $ (656) | $ (584,325) | $ (39,986) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating activities: | |||
Net loss | $ (27,402) | $ (26,333) | $ (20,814) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 8,319 | 10,262 | 9,263 |
Loss on retirement of property and equipment | 0 | 24 | 50 |
Amortization of intangible assets | 5,805 | 18,561 | 18,561 |
Amortization of premiums relating to available-for-sale securities | 382 | 907 | 574 |
Gain on sale of available-for-sale securities | 0 | 0 | (1) |
Stock-based compensation | 14,285 | 13,805 | 16,017 |
Changes in operating assets and liabilities: | |||
Restricted cash | 0 | 295 | 0 |
Accounts receivable, net | (4,185) | (16,411) | 12,776 |
Inventory | 3,122 | (915) | 4,319 |
Deferred cost of revenue | (29,845) | 162 | 15,996 |
Prepaid expenses and other assets | (1,197) | 2,889 | (5,908) |
Accounts payable | 4,236 | (4,021) | 467 |
Accrued liabilities | 34,913 | (3,781) | 7,440 |
Deferred revenue | 16,398 | (422) | (21,178) |
Other long-term liabilities | (412) | (363) | 513 |
Net cash provided by (used in) operating activities | 24,419 | (5,341) | 38,075 |
Investing activities: | |||
Purchases of property and equipment | (9,839) | (7,278) | (11,961) |
Purchases of marketable securities | (16,478) | (60,002) | (67,698) |
Sales of marketable securities | 0 | 0 | 615 |
Maturities of marketable securities | 38,400 | 71,945 | 3,600 |
Net cash provided by (used in) investing activities | 12,083 | 4,665 | (75,444) |
Financing activities: | |||
Proceeds from exercise of stock options | 17 | 638 | 1,668 |
Proceeds from employee stock purchase plan | 5,650 | 4,888 | 4,627 |
Payments for repurchases of common stock | (12,809) | (27,177) | 0 |
Taxes paid for awards vested under equity incentive plans | (2,101) | (2,352) | (2,720) |
Payments for debt issuance costs | 0 | (138) | 0 |
Net cash provided by (used in) financing activities | (9,243) | (24,141) | 3,575 |
Effect of exchange rate changes on cash and cash equivalents | (526) | (386) | (124) |
Net increase (decrease) in cash and cash equivalents | 26,733 | (25,203) | (33,918) |
Cash and cash equivalents at beginning of period | 23,626 | 48,829 | 82,747 |
Cash and cash equivalents at end of period | 50,359 | 23,626 | 48,829 |
Supplemental disclosures of cash flow information | |||
Interest paid | 127 | 127 | 159 |
Income taxes paid | 965 | 483 | 72 |
Non-cash investing activities | |||
Changes in accounts payable and accrued liabilities related to purchases of property and equipment | $ (478) | $ 0 | $ 0 |
Description of Business and Sig
Description of Business and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Description of Business and Significant Accounting Policies | Description of Business and Significant Accounting Policies Company Calix, Inc. (together with its subsidiaries, "Calix," the "Company," "our," "we," or "us") was incorporated in August 1999, and is a Delaware corporation. The Company is a leading global provider of broadband communications access platforms, systems and software for fiber- and copper-based network architectures and a pioneer in software defined access that enables communications service providers ("CSPs") to transform their networks and enhance how they connect to their residential and business subscribers. The Company develops and sells carrier-class hardware and software products, referred to as the Calix portfolio that are designed to enhance and transform CSP access networks to meet the changing demands of subscribers rapidly and cost-effectively. The Company enables CSPs to provide a wide range of revenue-generating services, from basic voice and data to advanced broadband services, over legacy and next-generation access networks. The Company focuses solely on CSP access networks, the portion of the network that governs available bandwidth and determines the range and quality of services that can be offered to subscribers. Basis of Presentation The Company's fiscal year begins on January 1st and ends on December 31st. Quarterly periods are based on a 4-4-5 fiscal calendar with the first, second and third fiscal quarters ending on the 13th Saturday of each fiscal period. The accompanying consolidated financial statements, including the accounts of Calix, Inc. and its wholly owned subsidiaries, have been prepared in accordance with the requirements of the U.S. Securities and Exchange Commission ("SEC"). In the opinion of management, the consolidated financial statements include all normal and recurring adjustments that are considered necessary for the fair presentation of the Company's financial position and operating results. All significant intercompany balances and transactions have been eliminated in consolidation. Applicable Accounting Guidance Any reference in these notes to applicable accounting guidance ("guidance") is meant to refer to the authoritative U.S. generally accepted accounting principles ("GAAP") as found in the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC"). Use of Estimates The preparation of financial statements is in conformity with U.S. GAAP, which requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. For the Company, these estimates include, but are not limited to: allowances for doubtful accounts and sales returns, excess and obsolete inventory, allowances for obligations to its contract manufacturers, valuation of stock-based compensation, useful lives assigned to long-lived assets and acquired intangible assets, standard and extended warranty costs, and contingencies. Actual results could differ from those estimates, and such differences could be material to the Company's financial position and results of operations. Revenue Recognition The Company derives revenue primarily from the sale of hardware products and related software. Revenue is recognized when all of the following criteria have been met: • Persuasive evidence of an arrangement exists. The Company generally relies upon sales agreements and customer purchase orders as evidence of an arrangement. • Delivery has occurred. The Company uses the shipping terms of the arrangement or evidence of customer acceptance to verify delivery or performance. • Sales price is fixed or determinable. The Company assesses whether the sales price is fixed or determinable based on the payment terms and whether the sales price is subject to refund or adjustment. Payment terms to customers can range from net 30 to net 120 days. • Collectability is reasonably assured. The Company assesses collectability based primarily on creditworthiness of customers and their payment histories. Revenue from installation and training services is recognized as the services are completed. Post-sales software support revenue and extended warranty services revenue are deferred and recognized ratably over the period during which the services are to be performed. In instances where substantive acceptance provisions are specified in the customer agreement, revenue is deferred until all acceptance criteria have been met. From time to time, the Company offers customers sales incentives, which include volume rebates and discounts. These amounts are estimated on a quarterly basis and recorded as a reduction of revenue. The Company enters into arrangements with certain of its customers who receive government supported loans and grants from the U.S. Department of Agriculture's Rural Utility Service ("RUS") to finance capital spending. Under the terms of an RUS equipment contract that includes installation services, the customer does not take possession and control and title does not pass until formal acceptance is obtained from the customer. Under this type of arrangement, the Company does not recognize revenue until it has received formal acceptance from the customer. For RUS arrangements that do not involve installation services, the Company recognizes revenue when all of the revenue recognition criteria as described above have been met. The Company's products contain both software and non-software components that function together to deliver the products' essential functionality. When the Company enters into sales arrangements that consist of multiple deliverables of its product and service offerings, the Company allocates the total consideration of the arrangement to each separable deliverable based on its relative selling price. The Company limits the amount allocable to delivered elements to the amount that is not contingent upon the delivery of additional items or meeting specified performance conditions, and recognizes revenue on each deliverable in accordance with its revenue recognition policy. The determination of selling price for each deliverable is based on a selling price hierarchy, which is vendor-specific objective evidence ("VSOE") if available, third-party evidence ("TPE") if VSOE is not available, or estimated selling price ("ESP") if neither VSOE nor TPE is available. VSOE of selling price is based on the price charged when the element is sold separately. In determining VSOE, the Company requires that a substantial majority of the selling prices of an element fall within a narrow range when each element is sold separately. The Company has established VSOE for its training and post-sales software support services based on the normal pricing practices of these services when sold separately. TPE of selling price is established by evaluating whether there are similar competitor products or services that are sold in stand-alone sales transaction to similarly situated customers. Generally, the Company's marketing strategy differs from that of its peers and its offerings contain a significant level of customization and differentiation such that the comparable pricing of products with similar functionality cannot be obtained. Additionally, as the Company is unable to reliably determine what similar competitor products' selling prices are on a stand-alone basis, it is not typically able to determine TPE. ESP is established considering multiple factors including, but not limited to, geographies market conditions, competitive landscape, internal costs, gross margin objectives, characteristics of targeted customers and pricing practices. The determination of ESP is made through consultation with and formal approval by management, taking into consideration the go-to-market strategy. Cost of Revenue Cost of revenue consists primarily of finished goods inventory purchased from the Company's contract manufacturers, payroll and related expenses associated with managing the relationships with contract manufacturers, depreciation of manufacturing test equipment, warranty and retrofit costs, excess and obsolete inventory costs, shipping charges, and amortization of certain intangible assets. It also includes contractor and other costs of services incurred directly related to the delivery of services to customers. Warranty and Retrofit The Company offers limited warranties for its hardware products for a period of one , three or five years, depending on the product type. The Company recognizes estimated costs related to warranty activities as a component of cost of revenue upon product shipment or upon identification of a specific product failure. Under certain circumstances, the Company also provides fixes on specifically identified performance failures for products that are outside of the standard warranty period and recognizes estimated costs related to retrofit activities as a component of cost of revenue upon identification of such product failures. The Company recognizes estimated warranty and retrofit costs when it is probable that a liability has been incurred and the amount of loss is reasonably estimable. The estimates are based upon historical and projected product failure and claim rates, historical costs incurred in correcting product failures and information available related to any specifically identified product failures. Significant judgment is required in estimating costs associated with warranty and retrofit activities and the Company estimates are limited to information available to the Company at the time of such estimates. In some cases, such as when a specific product failure is first identified or a new product is introduced, the Company may initially have limited information and limited historical failure and claim rates upon which to base its estimates, and such estimates may require revision in future periods. The recorded amount is adjusted from time to time for specifically identified warranty and retrofit exposure. Actual warranty and retrofit expenses are charged against the Company's estimated warranty and retrofit liability when incurred. Factors that affect the Company's warranty and retrofit liability include the number of active installed units and historical and anticipated rates of warranty and retrofit claims and cost per claim. Stock-Based Compensation Stock-based awards are measured at fair value as of the grant date and recognized to expense over the employee's requisite service period (generally the vesting period), which the Company has elected to amortize on a straight-line basis. Stock-based compensation expense is reduced by the Company's estimated forfeitures on all unvested awards. The fair value of stock option and employee stock purchase right under the Employee Stock Purchase Plan ("ESPP") is estimated at the grant date using the Black-Scholes option valuation model. The fair value of restricted stock units and restricted stock awards is based on the closing market price of the Company's common stock on the date of grant. The fair value of performance restricted stock units ("PRSUs") with a market condition is estimated on the date of grant, using a Monte Carlo simulation model to estimate the total return ranking of the Company's stock in relation to the peer group over each performance period. Compensation cost on PRSUs with a market condition is not adjusted for subsequent changes in the Company's stock performance or the level of ultimate vesting. Research and Development Research and development costs include costs of developing new products and processes, as well as design and engineering costs. Such costs are charged to research and development expense as incurred. Development costs related to software incorporated in the Company's products incurred subsequent to the establishment of technological feasibility are capitalized and amortized over the estimated useful lives of the related products. Technological feasibility is established upon completion of a working model. Loss Contingencies From time to time, the Company is involved in legal proceedings arising from the normal course of business activities. The Company evaluates the likelihood of an unfavorable outcome of legal proceedings to which it is a party and accrues a loss contingency when the loss is probable and reasonably estimable. Assessing legal contingencies involves significant judgment and estimates and the outcome of litigation is inherently uncertain and subject to numerous factors outside the Company's control. Significant judgment is required when the Company assesses the likelihood of any adverse judgments or outcomes, including the potential range of possible losses, and whether losses are probable and reasonably estimable. Because of uncertainties related to these matters, the Company bases its estimates of whether a loss contingency is probable or reasonably possible, as well as the reasonable range of possible losses associated with each loss contingency, only on the information available at the time. As additional information becomes available, and at least quarterly, the Company reassesses the potential liability on each significant matter and may revise its estimates. These revisions could have a material impact on the Company's business, operating results or financial condition. The actual outcome of these legal proceedings may materially differ from the Company's estimates of potential liability, which could have a material adverse effect on the Company's business, operating results or financial condition. Legal Fees The Company incurs legal expenses related to disputes, litigation and other legal actions in the ordinary course of business. Legal fees, including those legal defense costs expected to be incurred in connection with a loss contingency, are expensed as incurred in the period that the related services are received. In the event the Company has insurance coverage for legal defense costs incurred and the likelihood of reimbursement is assured, legal defense costs recognized in a period are reduced by the amount recoverable from the insurance. A receivable is recognized for the portion of legal costs recoverable under the insurance at the time such legal costs are incurred and accrued. Credit Risk and Inventory Supplier Concentrations Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. Cash equivalents consist of money market funds, which are invested through financial institutions in the United States. Deposits in these financial institutions may, at times, exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company also has approximately $5.9 million of cash held by its foreign subsidiaries in Brazil, China and the United Kingdom. Management believes that the financial institutions that hold the Company's cash and cash equivalents are financially sound and, accordingly, minimal credit risk exists with respect to these cash and cash equivalents. Concentrations of credit risk in relation to customer with an accounts receivable balance of 10% or greater of total accounts receivable and customer with net revenues of 10% or greater of total revenues are presented below for the periods indicated. Percentage of Accounts Receivable Percentage of Revenue At December 31, Years Ended December 31, 2016 2015 2016 2015 2014 CenturyLink 28% 27% 21% 22% 23% Windstream 13% * 15% * * * Less than 10% of total accounts receivable or revenue. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company records a specific allowance based on an analysis of individual past-due balances. Additionally, based on its historical write-offs and collections experience, the Company records an additional allowance based on a percentage of outstanding receivables. The Company performs credit evaluations of its customers' financial condition. These evaluations require significant judgment and are based on a variety of factors including, but not limited to, current economic trends, payment history and financial review of the customer. Actual collection losses may differ from management's estimates, and such differences could be material to the Company's financial position and results of operations. The Company depends primarily on a small number of outside contract manufacturers for the bulk of its finished goods inventory. In particular, the Company relies on Flex Ltd., formerly Flextronics for the manufacture of a large percentage of its products. The Company generally purchases its products through purchase orders with its suppliers or contract manufacturers. While the Company seeks to maintain a sufficient reserve of its products, the Company's business and results of operations could be adversely affected by a stoppage or delay in receiving such products, the receipt of defective parts, an increase in price of such products or the Company's inability to obtain lower prices from its contract manufacturers and suppliers in response to competitive pressures. Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents, marketable securities, trade receivables, accounts payable, and other accrued liabilities approximate their fair value due to their relatively short-term nature. Cash, Cash Equivalents, and Marketable Securities The Company has invested its excess cash primarily in money market funds and highly liquid marketable securities such as corporate debt instruments, commercial paper and U.S. government agency securities. The Company considers all investments with maturities of three months or less when purchased to be cash equivalents. Marketable securities represent highly liquid corporate debt instruments, commercial paper and U.S. government agency securities with maturities greater than 90 days at date of purchase. Marketable securities with maturities greater than one year are classified as current because management considers all marketable securities to be available for current operations. Cash equivalents and marketable securities are stated at amounts that approximate fair value based on quoted market prices. The Company's investments have been classified and accounted for as available-for-sale. Such investments are recorded at fair value and unrealized holding gains and losses are reported as a separate component of comprehensive loss in the stockholders' equity until realized. Realized gains and losses on sales of marketable securities, if any, are determined on the specific identification method and are reclassified from accumulated other comprehensive income to results of operations as other income (expense). The Company, to date, has not determined that any of the unrealized losses on its investments are considered to be other-than-temporary. The Company reviews its investment portfolio to determine if any security is other-than-temporarily impaired, which would require the Company to record an impairment charge in the period any such determination is made. In making this judgment, the Company evaluates, among other things: the duration and extent to which the fair value of a security is less than its cost; the financial condition of the issuer and any changes thereto; and the Company's intent and ability to hold its investment for a period of time sufficient to allow for any anticipated recovery in market value, or whether the Company will more likely than not be required to sell the security before recovery of its amortized cost basis. The Company has evaluated its investments as of December 31, 2016 and has determined that no investments with unrealized losses are other-than-temporarily impaired. No investments have been in a continuous loss position greater than one year. Allowance for Doubtful Accounts The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company records a specific allowance based on an analysis of individual past-due balances. Additionally, based on historical write-offs and the Company's collection experience, the Company records an additional allowance based on a percentage of outstanding receivables. The Company performs credit evaluations of its customers' financial condition. These evaluations require significant judgment and are based on a variety of factors including, but not limited to, current economic trends, payment history and a financial review of the customer. Actual collection losses may differ from management's estimates, and such differences could be material to our financial position and results of operations. Inventory Valuation Inventory, which primarily consists of finished goods purchased from contract manufacturers, is stated at the lower of cost, determined by the first-in, first-out method, or market value. Inbound shipping costs are included in cost of inventory. In addition, the Company, from time to time, procures component inventory primarily as a result of manufacturing discontinuation of critical components by suppliers. The Company regularly monitors inventory quantities on hand and records write-downs for excess and obsolete inventories based on the Company's estimate of demand for its products, potential obsolescence of technology, product life cycles, and whether pricing trends or forecasts indicate that the carrying value of inventory exceeds its estimated selling price. These factors are impacted by market and economic conditions, technology changes, and new product introductions and require estimates that may include elements that are uncertain. Actual demand may differ from forecasted demand and may have a material effect on gross margins. If inventory is written down, a new cost basis is established that cannot be increased in future periods. Shipments from suppliers or contract manufacturers before the Company receives them are recorded as in-transit inventory when title and the significant risks and rewards of ownership have passed to the Company. Deferred Revenue and Deferred Cost of Revenue Deferred revenue results from transactions where the Company billed the customer for product shipped or services performed but not all revenue recognition criteria have been met. When the Company's products have been shipped, but the product revenue associated with the arrangement has been deferred as a result of not meeting the criteria for immediate revenue recognition, the Company also defers the related inventory costs for the delivered items until all criteria are met for revenue recognition. The Company defers tangible direct costs associated with hardware products delivered based on the inventory cost at the time of shipment. Certain costs directly related to the delivery of professional services that cannot be accounted for separately from the undelivered items included in a multiple element arrangement or have not been earned yet are also capitalized and deferred, if deemed recoverable, until all revenue recognition criteria are met. Accordingly, all cost of services incurred directly related to the delivery of an inseparable professional service item in which revenue has not yet been recognized are deferred and recorded within "Deferred cost of revenue" in the Company's Consolidated Balance Sheets. The Company evaluates deferred cost of revenue for recoverability based on multiple factors, including whether net revenues will exceed the amount of deferred cost of revenue applicable to each deliverable specified in the arrangement. To the extent that deferred cost of revenue is determined to be unrecoverable, the Company adjusts deferred cost of revenue with a charge to cost of revenue in the current period. In connection with the Company's recoverability assessments, it has incurred $2.2 million of impairment charges through December 31, 2016 . The Company did not incur significant impairment charges as of December 31, 2015. The Company recognizes deferred revenue and associated deferred cost of revenue, as revenue and cost of revenue respectively, in the Consolidated Statements of Comprehensive Loss once all revenue recognition criteria have been met. Property and Equipment Property and equipment are stated at cost, less accumulated depreciation, and are depreciated using the straight-line method over the estimated useful life of each asset. Computer equipment is depreciated over two years; purchased software is depreciated over three years; test equipment is depreciated over three years; furniture and fixtures are depreciated over seven years; and leasehold improvements are depreciated over the shorter of the respective lease term or the estimated useful life of the asset. Maintenance and repairs are charged to expense as incurred. Goodwill The Company records goodwill when consideration paid in a business acquisition exceeds the fair value of the net tangible assets and the identified intangible assets acquired. Goodwill is not amortized but instead is subject to an annual impairment test or more frequently if events or changes in circumstances indicate that it may be impaired. The Company evaluates goodwill on an annual basis as of the end of the second quarter of each fiscal year. Management has determined that it operates as a single reporting unit and, therefore, evaluates goodwill impairment at the enterprise level. In an annual impairment test, the Company first assesses qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. In assessing the qualitative factors, management considers the impact of these key factors: macro-economic conditions, industry and market environment, overall financial performance of the Company, cash flow from operating activities, market capitalization and stock price. If the Company determines as a result of the qualitative assessment that it is more likely than not (that is, a likelihood of more than 50 percent) that the fair value of a reporting unit is less than its carrying amount, then the quantitative test is required. Otherwise, no further testing is required. In a quantitative test, the Company compares its fair value to its carrying value including goodwill. The Company determines its fair value using both an income approach and a market approach. Under the income approach, the Company determines fair value based on estimated future cash flows, discounted by an estimated weighted-average cost of capital, which reflects the overall level of inherent risk of the Company and the rate of return an outside investor would expect to earn. Under the market-based approach, the Company utilizes information regarding the Company as well as publicly available industry information to determine earnings multiples that are used to value the Company. If the carrying value of the Company exceeds its fair value, the Company will determine the amount of impairment loss by comparing the implied fair value of goodwill with the carrying value of goodwill. An impairment charge is recognized for the excess of the carrying value of goodwill over its implied fair value. At the end of the second quarter of 2016 , the Company completed its annual goodwill impairment test. Based on its assessment of the above qualitative factors, management concluded that the fair value of the Company was more likely than not greater than its carrying amount as of June 25, 2016 . As such, it was not necessary to perform the two-step quantitative goodwill impairment test at the time. There have been no significant events or changes in circumstances subsequent to the 2016 annual impairment test that would more likely than not indicate that the carrying value of goodwill may have been impaired as of December 31, 2016 . Therefore, there was no impairment to the carrying value of the Company's goodwill as of December 31, 2016 . There were no impairment losses for goodwill in the years ended December 31, 2015 or 2014 . Intangible Assets and Other Long-Lived Assets Intangible assets with finite useful lives are amortized over their estimated useful life. The Company periodically evaluates long-lived assets, including intangible assets, for impairment whenever events or changes in circumstances indicate that a potential impairment may have occurred. If such events or changes in circumstances arise, the Company compares the carrying amount of the long-lived assets to the estimated future undiscounted cash flows expected to be generated by the long-lived assets. If the estimated aggregate undiscounted cash flows are less than the carrying amount of the long-lived assets, an impairment charge, calculated as the amount by which the carrying amount of the assets exceeds the fair value of the assets, is recorded. The fair value of long-lived assets is determined based on the estimated discounted cash flows expected to be generated from the assets. The Company has reviewed events and changes to its business during the year and has determined that there was no impairment to its intangible assets and other long-lived assets during 2016 . The Company did not incur any impairment losses for intangible assets and other long-lived assets in the years ended December 31, 2015 and 2014 . Income Taxes The Company evaluates its tax positions and estimates its current tax exposure along with assessing temporary differences that result from different book to tax treatment of items not currently deductible for tax purposes. These differences result in deferred tax assets and liabilities on the Company's balance sheets, which are estimated based upon the difference between the financial statement and tax bases of assets and liabilities using the enacted tax rates that will be in effect when these differences reverse. In general, deferred tax assets represent future tax benefits to be received when certain expenses previously recognized in the Company's statements of operations become deductible expenses under applicable income tax laws or loss or credit carryforwards are utilized. Accordingly, realization of the Company's deferred tax assets is dependent on future taxable income against which these deductions, losses and credits can be utilized. The Company must assess the likelihood that the Company's deferred tax assets will be recovered from future taxable income, and to the extent the Company believes that recovery is not more likely than not, the Company must establish a valuation allowance. Management judgment is required in determining the Company's provision for income taxes, the Company's deferred tax assets and liabilities and any valuation allowance recorded against the Company's net deferred tax assets. Excluding foreign operations, the Company recorded a full valuation allowance at each balance sheet date presented because, based on the available evidence, the Company believes it is more likely than not that it will not be able to utilize all of its deferred tax assets in the future. The Company intends to maintain the full valuation allowances until sufficient evidence exists to support the reversal of the valuation allowances. Foreign Currency Translation Assets and liabilities of the Company's wholly owned foreign subsidiaries are translated from their respective functional currencies at exchange rates in effect at the balance sheet date, and revenues and expenses are translated at the monthly average exchanges rates. Translation adjustments are reflected as a separate component of stockholders' equity. Realized foreign currency transaction gains and losses were not significant during the years ended December 31, 2016 , 2015 , and 2014 . Recent Accounting Pronouncements Stock-Based Compensation In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"), which simplifies several aspects of the accounting for employee share-based payment transactions for both public and nonpublic entities, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The Company adopted ASU 2016-09 in the first quarter of fiscal 2017 and will have the following impact: a. Accounting for Income Taxes — The primary impact of the adoption was the recognition of excess tax benefits and tax deficiencies through the statement of operations when the awards vest or are settled rather than through paid-in capital. The |
Cash, Cash Equivalents and Mark
Cash, Cash Equivalents and Marketable Securities | 12 Months Ended |
Dec. 31, 2016 | |
Cash and Cash Equivalents [Abstract] | |
Cash, Cash Equivalents, and Marketable Securities | Cash, Cash Equivalents and Marketable Securities Cash, cash equivalents and marketable securities consisted of the following (in thousands): December 31, December 31, Cash and cash equivalents: Cash $ 34,340 $ 13,378 Money market funds 15,020 10,248 Commercial paper 999 — Total cash and cash equivalents 50,359 23,626 Marketable securities: Corporate debt securities 17,272 35,799 Commercial paper 6,275 3,645 U.S. government agency securities 4,201 10,520 Total marketable securities 27,748 49,964 Total cash, cash equivalents and marketable securities $ 78,107 $ 73,590 The carrying amounts of our money market funds approximate their fair values due to their nature, duration and short maturities. The amortized cost and fair value of marketable securities as of December 31, 2016 were as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Corporate debt securities $ 17,279 $ 1 $ (8 ) $ 17,272 Commercial paper 6,275 — — 6,275 U.S. government agency securities 4,200 1 — 4,201 Total marketable securities $ 27,754 $ 2 $ (8 ) $ 27,748 The amortized cost and fair value of marketable securities as of December 31, 2015 were as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Corporate debt securities $ 35,869 $ 2 $ (72 ) $ 35,799 Commercial paper 3,645 — — 3,645 U.S. government agency securities 10,544 — (24 ) 10,520 Total marketable securities $ 50,058 $ 2 $ (96 ) $ 49,964 As of December 31, 2016 and December 31, 2015 , there were no marketable securities, classified and accounted for as available-for-sale securities that have been in a continuous unrealized loss position in excess of twelve months. As of December 31, 2016 , the amortized cost and fair value of marketable securities by contractual maturity were as follows (in thousands): Amortized Cost Fair Value Due in 1 year or less $ 27,754 $ 27,748 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company measures its cash equivalents and marketable securities at fair value on a recurring basis. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The Company utilizes the following three-tier value hierarchy which prioritizes the inputs used in measuring fair value: Level 1 – Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 – Observable inputs other than quoted prices included in Level 1 for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-driven valuations in which all significant inputs and significant value drivers are observable in active markets. Level 3 – Unobservable inputs to the valuation derived from fair valuation techniques in which one or more significant inputs or significant value drivers are unobservable. The fair value hierarchy also requires the Company to maximize the use of observable inputs, when available, and to minimize the use of unobservable inputs when determining inputs and determining fair value. The following table sets forth the Company's financial assets measured at fair value as of December 31, 2016 and 2015 , based on the three-tier fair value hierarchy (in thousands): As of December 31, 2016 Level 1 Level 2 Total Money market funds $ 15,020 $ — $ 15,020 Corporate debt securities — 17,272 17,272 Commercial paper — 7,274 7,274 U.S. government agency securities — 4,201 4,201 Total $ 15,020 $ 28,747 $ 43,767 As of December 31, 2015 Level 1 Level 2 Total Money market funds $ 10,248 $ — $ 10,248 Corporate debt securities — 35,799 35,799 Commercial paper — 3,645 3,645 U.S. government agency securities — 10,520 10,520 Total $ 10,248 $ 49,964 $ 60,212 The fair values of money market funds classified as Level 1 were derived from quoted market prices as active markets for these instruments exist. The fair values of corporate debt securities, commercial paper and U.S. government agency securities classified as Level 2 were derived from quoted market prices for similar instruments indexed to prevailing market yield rates. The Company has no level 3 financial assets. The Company did not have any transfers between Level 1 and Level 2 of the fair value hierarchy during the twelve months ended December 31, 2016 and 2015 . |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill Goodwill was recorded as a result of the Company's acquisitions of Occam Networks, Inc. ("Occam") in February 2011 and Optical Solutions, Inc. ("OSI") in February 2006. This goodwill is not deductible for tax purposes, and there have been no adjustments or impairment to goodwill since the acquisition dates. Intangible Assets Intangible assets are carried at cost, less accumulated amortization. The details of intangible assets as of December 31, 2016 and 2015 are disclosed in the following table (in thousands): December 31, 2016 December 31, 2015 Gross Accumulated Net Gross Carrying Amount Accumulated Amortization Net Core developed technology $ 68,964 $ (68,151 ) $ 813 $ 68,964 $ (64,047 ) $ 4,917 Customer relationships 54,740 (54,740 ) — 54,740 (53,039 ) 1,701 Total intangible assets, excluding goodwill $ 123,704 $ (122,891 ) $ 813 $ 123,704 $ (117,086 ) $ 6,618 Amortization expense for intangible assets was $5.8 million , $18.6 million , and $18.6 million for the years ended December 31, 2016 , 2015 , and 2014 , respectively. Expected future amortization expense for the fiscal year indicated is as follows (in thousands): Period Expected Amortization Expense 2017 $ 813 |
Balance Sheet Details
Balance Sheet Details | 12 Months Ended |
Dec. 31, 2016 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Details | Balance Sheet Details Accounts receivable, net consisted of the following (in thousands): December 31, December 31, Accounts receivable $ 52,792 $ 48,319 Allowance for doubtful accounts (518 ) (501 ) Product return reserve (938 ) (663 ) Accounts receivable, net $ 51,336 $ 47,155 The table below summarizes the changes in allowance for doubtful accounts and product return reserve for the periods indicated (in thousands): Balance at Beginning of Year Additions Charged to Costs or Expenses or Revenue Deductions and Write Offs Balance at End of Year Year Ended December 31, 2016 Allowance for doubtful accounts $ 501 $ 232 $ (215 ) $ 518 Product return reserve 663 3,679 (3,404 ) 938 Year Ended December 31, 2015 Allowance for doubtful accounts $ 241 $ 405 $ (145 ) $ 501 Product return reserve 508 4,224 (4,069 ) 663 Year Ended December 31, 2014 Allowance for doubtful accounts $ 358 $ 154 $ (271 ) $ 241 Product return reserve 764 4,805 (5,061 ) 508 Inventory consisted of the following (in thousands): December 31, December 31, Raw materials $ 1,827 $ 2,209 Finished goods 42,718 45,458 Total inventory $ 44,545 $ 47,667 Property and equipment, net consisted of the following (in thousands): December 31, December 31, Test equipment $ 43,580 $ 39,035 Computer equipment and purchased software 30,306 27,736 Furniture and fixtures 2,831 1,833 Leasehold improvements 6,898 6,554 Total 83,615 75,158 Accumulated depreciation and amortization (65,631 ) (58,009 ) Property and equipment, net $ 17,984 $ 17,149 Depreciation and amortization expense was $8.3 million , $10.3 million , $9.3 million for the years ended December 31, 2016 , 2015 , and 2014 , respectively. Accrued liabilities consisted of the following (in thousands): December 31, December 31, Advance customer payments $ 20,726 $ 1,094 Accrued compensation and related benefits 19,541 13,809 Accrued warranty and retrofit 12,214 9,564 Accrued professional and consulting fees 8,205 2,813 Accrued customer rebates 1,931 784 Accrued excess and obsolete inventory at contract manufacturers 1,327 1,011 Accrued freight 1,198 486 Accrued insurance 804 — Accrued non-income related taxes 699 905 Accrued business travel expenses 463 580 Accrued rent 421 381 Accrued hosting services 240 466 Income taxes payable 231 322 Accrued other 1,715 3,297 Total accrued liabilities $ 69,715 $ 35,512 As of December 31, 2016 , in conjunction with a revenue contract, the Company received $20 million as payments in advance of providing products and services to a customer. Deferred revenue consisted of the following (in thousands): December 31, 2016 December 31, 2015 Current: Product and services $ 24,472 $ 8,937 Extended warranty 3,382 3,187 27,854 12,124 Non-current: Product and services 22 58 Extended warranty 20,215 19,511 20,237 19,569 Total deferred revenue $ 48,091 $ 31,693 Deferred cost of revenue consisted of costs incurred for products and services for which revenues have been deferred or not yet earned. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Lease Commitments The Company leases office space under non-cancelable operating leases. Certain of the Company's operating leases contain renewal options and rent acceleration clauses. Future minimum payments under the non-cancelable operating leases consisted of the following as of December 31, 2016 (in thousands): Period Minimum Future Lease Payments 2017 $ 3,103 2018 2,774 2019 1,061 2020 717 2021 283 Thereafter 19 Total $ 7,957 The Company leases its primary office space in Petaluma, California under a lease agreement ("Petaluma Lease") that extended through February 2014. On January 28, 2013, the Company entered into an amendment to its Petaluma Lease ("Amendment") to extend the lease term to February 2019. In connection with the Petaluma Lease and the Amendment, the Company received lease incentives of $1.2 million and $0.4 million , respectively, which can be used for leasehold improvements or be applied as credits to rent payments. The Company capitalized the full amount of the lease incentives upon inception of the respective agreement and these incentives are being amortized to reduce rent expense over the extended lease term. As of December 31, 2016 , total unamortized lease incentive was $0.2 million of which $0.1 million and $0.1 million were included in "Accrued liabilities" and "Other long-term liabilities," respectively, in the Consolidated Balance Sheet as of December 31, 2016 . Payments under the Company's operating leases that escalate over the term of the lease are recognized as rent expense on a straight-line basis. The above table also includes future minimum lease payments primarily for our facilities in Minneapolis, Minnesota; Acton, Massachusetts; Nanjing, China; Richardson, Texas; and San Jose, and Santa Barbara, California, which expire at various dates through 2022. For the years ended December 31, 2016 , 2015 , and 2014 , total rent expense of the Company, net of sublease income, was $3.7 million , $3.5 million , and $4.1 million , respectively. Purchase Commitments The Company's primary contract manufacturers place orders for component inventory in advance based upon the Company's build forecasts in order to reduce manufacturing lead times and ensure adequate component supply. The components are used by the contract manufacturers to build the products included in the build forecasts. The Company does not take ownership of the components and any outstanding orders do not represent firm purchase commitments pursuant to the Company's agreement with the contract manufacturer. The Company will provide purchase orders to its contract manufacturers in order to fulfill its monthly finished product inventory requirements. The Company incurs a liability when the contract manufacturer has converted the component inventory to a finished product and takes ownership of the inventory when transferred to the designated shipping warehouse. However, historically, the Company has reimbursed its primary contract manufacturer for component inventory purchases when this inventory has been rendered excess or obsolete, for example due to manufacturing and engineering change orders resulting from design changes, manufacturing discontinuation of parts by its suppliers, or in cases where inventory levels greatly exceed projected demand. The estimated excess and obsolete inventory liabilities related to such manufacturing and engineering change orders and other factors, which are included in accrued liabilities in the accompanying balance sheets, were $1.3 million and $1.0 million as of December 31, 2016 and 2015 , respectively. The Company records these amounts in cost of products and services in its Consolidated Statements of Comprehensive Loss. As of December 31, 2016 , the Company had non-cancelable outstanding purchase orders of $19.0 million for inventories to be delivered by its suppliers, including contract manufacturers, within one year. Contingencies The Company evaluates the circumstances regarding outstanding and potential litigation and other contingencies on a quarterly basis to determine whether there is at least a reasonable possibility that a loss exists requiring accrual or disclosure, and if so, whether an estimate of the possible loss or range of loss can be made, or whether such an estimate cannot be made. When a loss is probable and reasonably estimable, the Company accrues for such amount based on its estimate of the probable loss considering information available at the time. When a loss is reasonably possible, the Company discloses the estimated possible loss or range of loss in excess of amounts accrued if material. Except as otherwise disclosed below, the Company does not believe that there was a reasonable possibility that a material loss may have been incurred during the period presented with respect to the matters disclosed. Accrued Warranty and Retrofit The Company provides a standard warranty for its hardware products. Hardware generally has a one -, three -, or five -year standard warranty from the date of shipment. Under certain circumstances, the Company also provides fixes on specifically identified performance failures for products that are outside of the standard warranty period and recognizes estimated costs related to retrofit activities upon identification of such product failures. The Company accrues for potential warranty and retrofit claims based on the Company's historical product failure rates and historical costs incurred in correcting product failures along with other relevant information related to any specifically identified product failures. The Company's warranty and retrofit accruals are based on estimates of losses that are probable based on information available. The adequacy of the accrual is reviewed on a periodic basis and adjusted, if necessary, based on additional information as it becomes available. Changes in the Company's warranty and retrofit reserves in the periods as indicated were as follows (in thousands): Years Ended December 31, 2016 2015 2014 Balance at beginning of period $ 9,564 $ 9,553 $ 10,856 Provision for warranty and retrofit charged to cost of revenue 9,898 4,661 3,394 Utilization of reserve (6,816 ) (4,115 ) (3,328 ) Adjustments to pre-existing reserve (432 ) (535 ) (1,369 ) Balance at end of period $ 12,214 $ 9,564 $ 9,553 Litigation From time to time, the Company is involved in various legal proceedings arising from the normal course of business activities. Steinhardt v. Howard-Anderson, et al. As previously disclosed, in connection with the Company's February 22, 2011 merger transaction with Occam Networks, Inc. ("Occam") a complaint was filed on October 6, 2010 by stockholders of Occam in the Delaware Court of Chancery styled as Steinhardt v. Howard-Anderson, et al. (Case No. 5878-VCL). The complaint, as initially amended, sought injunctive relief rescinding the merger transaction and an award of damages in an unspecified amount, as well as plaintiffs' costs, attorneys' fees, and other relief, and also alleged that Occam (which has since merged into Calix), each Occam director and the Occam CFO breached their fiduciary duties by failing to attempt to obtain the best purchase price for Occam and failing to disclose certain allegedly material facts about the merger transaction in the preliminary proxy statement and prospectus included in the Registration Statement on Form S-4 for the transaction. In July 2015, the complaint was amended to add Wilson Sonsini Goodrich & Rosati, P.C. ("Wilson Sonsini"), Occam's counsel and former defense counsel in this lawsuit. Trial on the matter commenced on April 11, 2016 before the Delaware Court of Chancery. On April 14, 2016, the parties entered into a memorandum of understanding of a settlement in principle ("Settlement") to resolve all of the claims pending before the Delaware Court of Chancery and related claims for a total settlement consideration of $35.0 million . The Settlement was made without any admission of any wrongdoing on the part of the Company or its officers and directors. Further, the Settlement terms provide that neither the Company nor any of its officers or directors would be required to make any contribution to the settlement consideration of $35 million to be paid for the benefit of the plaintiff class. On May 31, 2016, the parties signed a global settlement agreement reflecting the terms of the Settlement and filed the agreement for court approval. The court approved the global settlement at a hearing held on August 26, 2016 and, on September 7, 2016, issued its Order and Final Judgment, terminating the case before the Delaware Court of Chancery. Under the terms of the Settlement (and separate from the settlement consideration), the Company was to receive a cash payment of $4.5 million in partial recovery of its out-of-pocket expenses incurred in the litigation, payable to the Company within 45 days of the court's order entering judgment in the litigation unless an appeal is timely filed. No appeals were filed and, in November 2016, the Company received the $4.5 million cash payment. Accordingly, the Company recognized $4.5 million as "Litigation settlement gain" in the year ended December 31, 2016, presented as a reduction to operating expenses in the accompanying Consolidated Statements of Comprehensive Loss. The Company did not previously accrue any estimated loss in connection with this action and, as a result of the Settlement, will not recognize any loss related to this action. The Company incurred defense costs related to this litigation in connection with its obligations, under certain circumstances, to hold harmless and indemnify each of the former Occam directors and officers named as defendants in this action against judgments, fines, settlements and expenses related to claims against such directors and officers to the fullest extent permitted under Delaware law and Occam's bylaws and certificate of incorporation. In addition, the Company has paid fees and expenses incurred by Jefferies in connection with this matter pursuant to Jefferies indemnity demand under the engagement letter between Occam and Jefferies. Defense costs that were in excess of available insurance coverage or for which the Company's insurance carriers denied coverage were recorded as operating expense in the Company's Consolidated Statement of Comprehensive Loss in the periods incurred. Until the Settlement was reached, the Company continued to incur significant litigation expenses, including expenses that were not covered by insurance, to defend and litigate this matter. The Company recorded litigation defense costs and expenses in excess of its insurance coverage of $6.4 million , $3.7 million , and $1.0 million for the years ended December 31, 2016 , 2015 , and 2014 , respectively, as operating expense in the accompanying Consolidated Statements of Comprehensive Loss. The Company is not currently a party to any other legal proceedings that, if determined adversely to the Company, in management's opinion, are currently expected to individually or in the aggregate have a material adverse effect on the Company's business, operating results or financial condition taken as a whole. Guarantees The Company from time to time enters into contracts that require it to indemnify various parties against claims from third parties. These contracts primarily relate to (i) certain real estate leases, under which the Company may be required to indemnify property owners for environmental and other liabilities, and other claims arising from the Company's use of the applicable premises, (ii) agreements with the Company's officers, directors, and certain employees, under which the Company may be required to indemnify such persons for liabilities arising out of their relationship with the Company, (iii) contracts under which the Company may be required to indemnify customers against third-party claims that a Company product infringes a patent, copyright, or other intellectual property right and (iv) procurement or license agreements, under which the Company may be required to indemnify licensors or vendors for certain claims that may be brought against them arising from the Company's acts or omissions with respect to the supplied products or technology. Because any potential obligation associated with these types of contractual provisions are not quantified or stated, the overall maximum amount of the obligation cannot be reasonably estimated. Historically, the Company has not been required to make payments under these obligations, and no liabilities have been recorded for these obligations in the accompanying Consolidated Balance Sheets. |
Net Loss per Share
Net Loss per Share | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Net Loss per Share | Net Loss per Share The following table sets forth the computation of basic and diluted net loss per share for the periods indicated (in thousands, except per share data): Years Ended December 31, 2016 2015 2014 Numerator: Net loss $ (27,402 ) $ (26,333 ) $ (20,814 ) Denominator: Weighted-average common shares outstanding 48,730 51,489 50,808 Basic and diluted net loss per common share $ (0.56 ) $ (0.51 ) $ (0.41 ) Potentially dilutive shares, weighted-average 5,890 6,120 5,020 For the years ended December 31, 2015 and 2014, unvested restricted stock awards are included in the calculation of basic weighted-average shares because such shares are participating securities; however, the impact was immaterial. All restricted stock awards completed their vesting on July 20, 2015. Potentially dilutive shares have been excluded from the computation of diluted net loss per common share when their effect is antidilutive. These antidilutive shares were primarily from stock options, restricted stock units and performance restricted stock awards. For each of the periods presented where the Company reported a net loss, the effect of all potentially dilutive securities would be antidilutive, and as a result diluted net loss per common share is the same as basic net loss per common share. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders' Equity Common Stock Holders of our common stock are entitled to receive dividends, if any, as may be declared from time to time by our board of directors out of legally available funds. No dividends have been declared or paid as of December 31, 2016 . In the event of our liquidation, dissolution or winding up, holders of our common stock will be entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of all of our debts and other liabilities and the satisfaction of any liquidation preference granted to the holders of any then outstanding shares of preferred stock. Preferred Stock The board of directors has the authority, without action by stockholders with the exception of stockholders who hold board positions, to designate and issue up to 5.0 million shares of preferred stock in one or more series and to fix the rights, preferences, privileges and restrictions thereof. These rights, preferences and privileges could include dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences, sinking fund terms and the number of shares constituting any series or the designation of such series, any or all of which may be greater than the rights of common stock. The issuance of the Company's preferred stock could adversely affect the voting power of holders of common stock and the likelihood that such holders will receive dividend payments and payments upon liquidation. In addition, the issuance of preferred stock could have the effect of delaying, deferring or preventing a change in control of the Company or other corporate action. Subsequent to the Company's initial public offering and the conversion of all preferred stock outstanding at that date, the board of directors has not designated any rights, preference or powers of any preferred stock and no shares of preferred stock have been issued. Equity Incentive Plans The Company currently maintains two equity incentive plans, the 2002 Stock Plan ("2002 Plan") and the 2010 Equity Incentive Award Plan ("2010 Plan"). These plans were approved by the stockholders. Under the 2002 Plan, the Company may grant incentive stock options at a price not less than 100% of the fair market value of the common stock on the date of grant and non-statutory stock options at a price not less than 100% of the fair market value of the common stock on the date of grant. Before April 2004, certain options could be granted with the right to exercise those options before vesting. The majority of the stock options granted under the 2002 Plan vest over 4 years and expire in 10 years . The 2010 Plan allows the Company to grant stock options, restricted stock awards ("RSA"), restricted stock units ("RSU"), performance restricted stock units ("PRSU"), stock appreciation rights, dividend equivalents, deferred stock, and stock payments to employees, directors and consultants of the Company. A total of 4,666,666 shares of common stock were reserved for future issuance under the 2010 Plan, which became effective upon the completion of the Company's initial public offering of common stock. In addition, on the first day of each year beginning in 2011 and ending in 2020, the 2010 Plan provides for an annual automatic increase to the shares reserved for issuance and no more than 17,150,494 shares of Common Stock may be issued upon the exercise of Incentive Stock Options. Pursuant to the automatic annual increase, a total of 3,999,996 additional shares had been reserved under the 2010 Plan since 2011. Upon the effectiveness of the 2010 Plan, equity awards were granted only under the 2010 Plan and shares of common stock previously reserved for issuance under the prior plans became available for issuance under the 2010 Plan. To date, awards granted under the 2010 Plan consist of stock options, RSAs, RSUs and PRSUs. Stock options granted under the 2010 Plan are granted in general at a price not less than 100% of the fair market value of the common stock on the date of grant. Prior to 2016, stock options issued under the 2010 Plan generally vest 25% on the first anniversary of the vesting commencement date and on a monthly basis thereafter for a period of an additional three years . Stock options granted during fiscal 2016 vest 25% on the first anniversary of the vesting commencement date and on a quarterly basis thereafter for a period of an additional three years. The options have a maximum term of ten years . Each RSU granted under the 2010 Plan represents a right to receive one share of the Company's common stock (subject to adjustment for certain specified changes in the capital structure of the Company) upon the completion of a specific period of continued service. The majority of RSUs granted vest over four years . In July 2011, the Company granted 423,000 RSAs to executives under the 2010 Plan, which vest 25% per year for 4 years from the grant date . Upon issuance of RSA, the holder is entitled to have all the rights of a stockholder, subject to the restrictions in his or her Award Agreement, including the right to receive all dividends and other distributions paid or made with respect to the shares. All RSAs completed their vesting on July 20, 2015. In 2012, the Company commenced granting PRSUs to its executives with two -year and three -year performance periods. The performance criterion is based on the relative total shareholder return ("TSR") of Calix common stock as compared to the TSR of the Company's peer group. The TSR is calculated by dividing (a) the average closing trading price for the 90 -day period ending on the last day of the applicable performance period by (b) the average closing trading price for the 90 -day period immediately preceding the first day of the applicable performance period. This TSR is then used to derive the achievement ratio, which is then multiplied by the number of units in the grant to derive the common stock to be issued for each performance period, which may equal from zero percent ( 0% ) to two hundred percent ( 200% ) of the target award. In 2016, the Company granted 550,000 PRSUs to its executives. These particular performance-based awards contain a one -year performance period and a subsequent two -year service period. The performance target is based on the Company's revenue during the performance period and accounted for as a performance condition. After the one -year performance period, if the performance target is met and subject to certification by the Compensation Committee, each PRSU award shall vest in respect to 50% of the PRSUs subject to the award in February 2017, 25% in February 2018 and 25% in February 2019, subject to the executive's continuous service with the Company from the grant date through the respective vesting dates. If the performance target is not met, all PRSUs granted under this award shall be immediately forfeited and canceled without vesting of any shares. Stock Options The following table summarizes the activity of stock options under the Company's equity incentive plans (in thousands, except per share data): Weighted- Average Weighted- Remaining Average Contractual Aggregate Number of Exercise Price Life Intrinsic Stock Options Shares Per Share (in years) Value (1) Outstanding as of December 31, 2015 2,655 $ 11.81 Granted 680 6.96 Exercised (3 ) 5.77 Forfeited (3 ) 7.97 Expired (120 ) 29.31 Outstanding as of December 31, 2016 3,209 $ 10.14 6.3 $ 703 Vested and expected to vest as of December 31, 2016 3,113 $ 10.23 6.1 $ 652 Options exercisable as of December 31, 2016 2,125 $ 11.47 4.9 $ 201 (1) Amounts represent the difference between the exercise price and the fair market value of common stock at December 31, 2016 for all in the money options outstanding. During the years ended December 31, 2016 , 2015 , and 2014 , total intrinsic value of stock options exercised was $5.0 thousand , $0.3 million , and $0.6 million , respectively. Total cash received from employees as a result of stock option exercises in 2016 , 2015 , and 2014 was $17.0 thousand , $0.6 million , and $1.7 million , respectively. Total fair values of stock options vested during 2016 , 2015 , and 2014 were $1.9 million , $2.8 million , and $3.7 million , respectively. Restricted Stock Units and Performance Restricted Stock Units The following table summarizes the activities of the Company's RSUs and PRSUs under the Company's equity incentive plans (in thousands, except per share data): RSUs PRSUs Weighted- Weighted- Average Average Grant Date Grant Date Number of Fair Value Number of Fair Value Shares Per Share Shares Per Share Outstanding at December 31, 2015 2,469 $ 8.64 184 $ 9.21 Granted 1,287 6.91 550 7.42 Vested (919 ) 8.46 (45 ) 11.71 Canceled (239 ) 8.45 (124 ) 8.09 Outstanding at December 31, 2016 2,598 $ 7.86 565 $ 7.51 Upon vesting of certain RSUs and PRSUs, the Company withheld shares with value equivalent to the employees' minimum statutory obligation for the applicable income and other employment taxes, and remitted the cash to the appropriate taxing authorities. The number of shares withheld was based on the value of the RSUs or PRSUs on their vesting date as determined by the Company's closing stock price. The withheld shares are reserved for future grant and issuance under the 2010 Plan. Employee Stock Purchase Plan The Company's 2010 Employee Stock Purchase Plan, as amended ("2010 ESPP") allows employees to purchase shares of the Company's common stock through payroll deductions of up to 15 percent of their annual compensation subject to certain Internal Revenue Code limitations. In addition, no participant may purchase more than 2,000 shares of common stock in each offering period. Prior to 2015, the offering periods under the 2010 ESPP are six-month periods commencing on June 1 and December 1 of each year. In January 2015, the Compensation Committee of the Company's board of directors approved the change in those six-month period commencement dates to November 2 and May 2 of each year, effective November 2, 2015. In July 2016, the Compensation Committee of the Company's board of directors approved a change in those six-month period commencement dates to May 15 and November 15 of each year, effective May 15, 2017. The ending date of the ESPP offering period commencing on November 2, 2016 will be extended until May 14, 2017 as a result of this change. The price of common stock purchased under the plan is 85 percent of the lower of the fair market value of the common stock on the commencement date and exercise date of each six -month offering period. The 2010 ESPP, as amended in 2012, provides for the issuance of a maximum of 4.3 million shares of common stock. During the twelve months ended December 31, 2016 , 1,009,911 shares were purchased and issued. As of December 31, 2016 , there were 0.1 million shares available for issuance. Stock Based Compensation Stock-based compensation expense associated with stock options, RSUs, PRSUs, RSAs, and purchase rights under the ESPP is measured at the grant date based on the fair value of the award, and is recognized, net of forfeitures, as expense over the remaining requisite service period on a straight-line basis. During the years ended December 31, 2016 , 2015 , and 2014 , the Company recorded stock-based compensation expense of $14.3 million , $13.8 million , and $16.0 million , respectively. The following table summarizes the weighted-average grant date fair values of the Company's stock-based awards granted in the periods indicated: Years Ended December 31, 2016 2015 2014 Stock options $ 3.58 $ 4.56 $ 4.79 RSUs $ 6.91 $ 8.59 $ 8.72 PRSUs $ 7.42 N/A $ 9.16 ESPP $ 1.92 $ 2.03 $ 2.46 The Company values the RSUs at the closing market price of the Company's common stock on the date of grant. Stock-based compensation expense associated with PRSUs with graded vesting features and which contain both a performance and a service condition is measured based on the closing market price of the Company's common stock on the date of grant, and is recognized, net of forfeitures, as expense over the requisite service period using the graded vesting attribution method. Compensation expense is only recognized if the Company has determined that it is probable that the performance condition will be met. The Company reassesses the probability of vesting at each reporting period and adjusts compensation expense based on its probability assessment. Based on the Company's actual revenue recognized during fiscal 2016, the performance condition related to PRSUs granted to executives in 2016 was determined to be met as of December 31, 2016. Accordingly, the corresponding stock-based compensation expense from the grant date to December 31, 2016 of $2.4 million was recorded in fiscal 2016. The fair value of the PRSU with a market condition is estimated on the date of award, using a Monte Carlo simulation model to estimate the TSR of the Company's stock in relation to the peer group over each performance period. Compensation cost on PRSUs with a market condition is not adjusted for subsequent changes in the Company's stock performance or the level of ultimate vesting. The Company estimates the fair value of stock options and purchase rights under the ESPP at the grant date using the Black-Scholes option-pricing model. This model requires the use of the following assumptions: (i) Expected volatility of the Company's common stock - The Company computes its expected volatility assumption based on a blended volatility ( 50% historical volatility and 50% implied volatility from traded options on the Company's common stock). The selection of a blended volatility assumption was based upon the Company's assessment that a blended volatility is more representative of the Company's future stock price trend as it weighs the historical volatility with the future implied volatility. (ii) Expected life of the option award - Represents the weighted-average period that the stock options are expected to remain outstanding. The Company's computation of expected life utilizes the simplified method in accordance with Staff Accounting Bulletin No. 110 ("SAB 110") due to the lack of sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. The mid-point between the vesting date and the expiration date is used as the expected term under this method. (iii) Expected dividend yield - Assumption is based on the Company's history of not paying dividends and no future expectations of dividend payouts. (iv) Risk-free interest rate - Based on the U.S. Treasury yield curve in effect at the time of grant with maturities approximating the grant's expected life. The following table summarizes the weighted-average assumptions used in estimating the grant-date fair value of stock options and of each employee's purchase right under the ESPP in the periods indicated: Years Ended December 31, Stock Options 2016 2015 2014 Expected volatility 53 % 52 % 52 % Expected life (years) 6.25 6.25 6.21 Expected dividend yield — — — Risk-free interest rate 1.60 % 1.56 % 1.87 % Years Ended December 31, ESPP 2016 2015 2014 Expected volatility 46 % 46 % 45 % Expected life (years) 0.52 0.46 0.50 Expected dividend yield — — — Risk-free interest rate 0.47 % 0.18 % 0.07 % In addition, the Company applies an estimated forfeiture rate to awards granted and records stock-based compensation expense only for those awards that are expected to vest. Forfeiture rates are estimated at the time of grant based on the Company's historical experience. Further, to the extent the Company's actual forfeiture rate is different from management's estimate, stock-based compensation is adjusted accordingly. As of December 31, 2016 , unrecognized stock-based compensation expenses by award type, net of estimated forfeitures, and their expected weighted-average recognition periods are summarized in the following table (in thousands). As of December 31, 2016 Stock Option RSU PRSU ESPP Unrecognized stock-based compensation expense $ 3,661 $ 13,380 $ 1,328 $ 721 Weighted-average amortization period (in years) 2.9 2.5 0.9 0.4 Common Stock Warrants Warrants to purchase convertible preferred stock that did not expire at the close of the Company's initial public offering, in March 2010, converted to warrants to purchase common stock at the applicable conversion rate for the related preferred stock. As of December 31, 2016 , the following warrants to purchase common stock were outstanding (in thousands, except per share data): Expiration Date Exercise Price Per Share Number of Warrants Outstanding September 4, 2017 $ 19.56 15 Shares Reserved for Future Issuance The Company had common shares reserved for future issuance as follows (in thousands): As of December 31, 2016 2015 2014 Stock options outstanding 3,209 2,655 3,701 Restricted stock units outstanding 2,598 2,469 1,734 Performance restricted stock units outstanding 565 184 362 Shares available for future grant under 2010 Plan 1,603 2,749 2,283 Shares available for future issuance under ESPP 119 1,129 1,891 Common stock warrants 15 15 15 Total 8,109 9,201 9,986 Stock Repurchase On April 26, 2015, the Company's board of directors approved a program to repurchase up to $40 million of its common stock from time to time. This stock repurchase program commenced in May 2015 and was completed in March 2016. Under this program, stock was purchasable in open market or private transactions, through block trades, and/or pursuant to any trading plan adopted in accordance with Rule 10b5-1 of the Exchange Act and any open market purchases were to be made in accordance with the limitations set out in Rule 10b-18 of the Exchange Act. Further, decisions to consummate repurchases (including any decision to adopt a 10b5-1 plan for this purpose) were to be made at management's discretion at prices management considers to be attractive and in the best interests of the Company and its stockholders. During the year ended December 31, 2016 , the Company repurchased 1,789,287 shares of common stock for $12.8 million at an average price of $7.16 per share. During the year ended December 31, 2015, the Company repurchased 3,540,530 shares of common stock for $27.2 million at an average price of $7.68 per share. In March 2016, the Company completed the $40 million stock repurchase program and has repurchased a total of 5,329,817 shares of common stock from May 2015 to March 2016 at an average price of $7.50 per share. The Company uses the cost method to account for common stock repurchases held in treasury. The price paid for the stock is charged to the treasury stock account shown separately within stockholders' equity as a contra-equity account. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefit Plan | Employee Benefit Plan The Company sponsors a 401(k) tax-deferred savings plan for all employees who meet certain eligibility requirements. Participants may contribute, on a pre-tax basis, a percentage of their annual compensation, but not to exceed a maximum contribution amount pursuant to Section 401(k) of the Internal Revenue Code. The Company, at the discretion of the board of directors, may make additional matching contributions on behalf of the participants. The Company made matching contributions totaling $2.1 million , $1.8 million , and $1.5 million in 2016 , 2015 , and 2014 , respectively. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The table below summarizes the changes in accumulated other comprehensive income (loss) by component for the periods indicated (in thousands). Year Ended December 31, 2016 Unrealized Gains and Losses on Available-for-Sale Marketable Securities Foreign Currency Translation Adjustments Total Balance at beginning of period $ (94 ) $ (101 ) $ (195 ) Other comprehensive income (loss) 88 (549 ) (461 ) Balance at end of period $ (6 ) $ (650 ) $ (656 ) Year Ended December 31, 2015 Unrealized Gains and Losses on Available-for-Sale Marketable Securities Foreign Currency Translation Adjustments Total Balance at beginning of period $ (58 ) $ 138 $ 80 Other comprehensive loss (36 ) (239 ) (275 ) Balance at end of period $ (94 ) $ (101 ) $ (195 ) Year Ended December 31, 2014 Unrealized Gains and Losses on Available-for-Sale Marketable Securities Foreign Currency Translation Adjustments Total Balance at beginning of period $ — $ 190 $ 190 Other comprehensive loss before reclassification adjustment (57 ) (52 ) (109 ) Reclassification adjustment for realized gains on marketable securities included in net loss (1 ) — (1 ) Other comprehensive loss (58 ) (52 ) (110 ) Balance at end of period $ (58 ) $ 138 $ 80 Realized gains and losses on sales of available-for-sale marketable securities, if any, are reclassified from accumulated other comprehensive income (loss) to "Other income (expense)" in our Consolidated Statements of Comprehensive Loss. |
Credit Facility
Credit Facility | 12 Months Ended |
Dec. 31, 2016 | |
Line of Credit Facility [Abstract] | |
Credit Facility | Credit Facility The Company had a revolving credit facility ("Prior Credit Facility") of $30.0 million with Silicon Valley Bank based upon a percentage of eligible accounts receivable, which matured on June 30, 2013 . After the Prior Credit Facility matured on June 30, 2013, the Company cash collateralized the outstanding letters of credit with Silicon Valley Bank. During the first quarter of 2015, Silicon Valley Bank subsequently released the $0.3 million cash restricted for collateralizing the outstanding letters of credit reported as "restricted cash" in the Company's Consolidated Balance Sheet as of December 31, 2014. The Company entered into a credit agreement with Bank of America, N.A. on July 29, 2013 (as amended on December 23, 2015, the "Credit Agreement"). The Credit Agreement is structured such that other financial institutions can at a later time become party to the Credit Agreement through an amendment via a syndication process (collectively, together with Bank of America, N.A., the "Lenders"). The Credit Agreement provides for a revolving facility in the aggregate principal amount of up to $50.0 million , with any borrowings limited to a maximum consolidated leverage ratio of consolidated funded indebtedness to consolidated EBITDA (as defined in the Credit Agreement). In addition, the Credit Agreement includes a $20.0 million sublimit for the issuance of letters of credit and a $10.0 million sublimit for a swingline facility. Subject to customary conditions, up to $25.0 million of the revolving facility may be converted to a term loan facility at any time prior to the maturity of the revolving facility. The revolving facility matures on September 30, 2018 . The credit facility is secured by substantially all of the assets of the Company, including its intellectual property. Proceeds of the credit facility may be used for general corporate purposes and permitted acquisitions. Loans under the credit facility bear interest at an annual rate equal to the base rate plus 0.75% to 1.25% or LIBOR plus 2.00% to 2.50% based on a consolidated leverage ratio of consolidated funded indebtedness to consolidated EBITDA (as defined in the Credit Agreement). Interest on the revolving facility is due quarterly, and any outstanding interest and principal is due on the maturity date of the revolving facility. The Company is required to repay principal on a term loan in twenty equal quarterly payments from the date the Company enters into a term loan, and all outstanding principal and accrued interest is due on the revolving facility maturity date. Swingline loans must be repaid on the earlier of (i) ten business days after a loan is made and (ii) the revolving facility maturity date. The Company is also required to pay commitment fees of 0.25% per year on any unused portions of this facility. The credit facility includes affirmative and negative covenants applicable to the Company that are typical for credit facilities of this type. Furthermore, the Credit Agreement requires us to maintain certain financial covenants, including a maximum consolidated leverage ratio, and a minimum consolidated liquidity ratio of cash, cash equivalents and accounts receivable to consolidated funded indebtedness. As of December 31, 2016 , the Company was in compliance with these requirements. The credit facility also includes customary events of default, the occurrence and continuation of which would provide the Lenders with the right to demand immediate repayment of any principal and unpaid interest under the credit facility, and to exercise remedies against us and the collateral securing the loans under the credit facility. As of December 31, 2016 , no revolving loans were drawn under the Credit Agreement, as amended. The Company incurred debt issuance costs that were directly attributable to the original issuance and extension of this credit facility of $0.3 million in 2013 and $0.1 million in 2015, respectively. These costs are amortized over the extended term of the credit facility. As of December 31, 2016 , the unamortized balance of debt issuance costs was $127.0 thousand , of which $72.6 thousand were included within "Prepaid expenses and other current assets" and $54.4 thousand were included within "Other assets" in the Company's Consolidated Balance Sheets. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The domestic and foreign components of loss before provision for incomes taxes were as follows (in thousands): Years Ended December 31, 2016 2015 2014 Domestic $ (28,931 ) $ (27,674 ) $ (21,495 ) Foreign 1,876 1,876 1,262 Loss before provision for income taxes $ (27,055 ) $ (25,798 ) $ (20,233 ) The Company recorded a provision for income taxes of $0.3 million , $0.5 million , and $0.6 million , in 2016 , 2015 , and 2014 , respectively. The income tax provision for 2016 primarily consisted of state and foreign income taxes. Provision for income taxes consisted of the following for the periods indicated (in thousands): Years Ended December 31, 2016 2015 2014 Current: State $ 102 $ 90 $ 104 Foreign 673 493 469 Current income tax 775 583 573 Deferred: Foreign (428 ) (48 ) 8 Deferred income tax (428 ) (48 ) 8 Provision for income taxes $ 347 $ 535 $ 581 The differences between the statutory tax rate and the effective tax rate, expressed as a percentage of loss before income taxes, were as follows: Years Ended December 31, 2016 2015 2014 Federal statutory rate 34.0 % 34.0 % 34.0 % State statutory rate 6.1 % 2.6 % 2.5 % Foreign operations 0.6 % 1.1 % (0.1 )% R&D tax credits 6.4 % 11.2 % 9.2 % Foreign income inclusion (0.7 )% (2.4 )% (0.3 )% Non-deductible stock compensation (5.1 )% (1.9 )% (0.9 )% Other permanent items (1.4 )% (2.0 )% (1.5 )% Tax true-up 21.0 % (1.3 )% (0.2 )% Valuation allowance (62.2 )% (43.4 )% (45.6 )% Effective tax rate (1.3 )% (2.1 )% (2.9 )% The significant components of the Company's deferred tax assets and liabilities were as follows (in thousands): As of December 31, 2016 2015 Deferred tax assets: Net operating loss carryforwards $ 167,668 $ 167,387 Tax credit carryforwards 36,026 27,654 Depreciation and amortization 2,538 1,947 Accruals and reserves 13,462 12,427 Deferred revenue 12,954 9,822 Stock-based compensation 6,159 5,198 Other 1,124 528 Gross deferred tax assets 239,931 224,963 Valuation allowance (239,238 ) (222,410 ) Net deferred tax assets 693 2,553 Deferred tax liabilities: Intangible assets (157 ) (2,229 ) Other — (130 ) Gross deferred tax liabilities (157 ) (2,359 ) Net deferred tax assets reflected in balance sheet $ 536 $ 194 The Company elected to early adopt Accounting Standards Update No. 2015-17, Balance Sheet Classification of Deferred Taxes ("ASU 2015-17") prospectively on September 27, 2015, the beginning of its 2015 fourth fiscal quarter. In accordance with ASU 2015-17, all deferred tax assets, along with any related valuation allowance, and net of all deferred tax liabilities are classified in the consolidated balance sheet as long-term. Accordingly, the Company classified the net deferred tax assets of $0.5 million and $0.2 million as of December 31, 2016 and 2015 , in the consolidated balance sheet as long-term. Management reviews the recognition of deferred tax assets to determine if realization of such assets is more likely than not. The realization of the Company's deferred tax assets is dependent upon future earnings. The Company has been in a cumulative loss position since inception, which represents a significant piece of negative evidence. Using the more likely than not criteria specified in the applicable accounting guidance, this negative evidence cannot be overcome by positive evidence currently available to the Company and as a result the Company has established a full valuation allowance against its deferred tax assets with the exception of certain foreign deferred tax assets. The Company's valuation allowance increased by $16.8 million and $9.7 million for the years ended December 31, 2016 and 2015 , respectively. As of December 31, 2016 and 2015 , respectively, the valuation allowance included $0.1 million related to excess tax benefits of stock option deductions prior to the adoption of ASC Topic 718. As of December 31, 2016 , the Company had U.S. federal and state net operating losses of approximately $520.6 million and $132.2 million , respectively. The U.S. federal net operating loss carryforwards will expire at various dates beginning in 2019 and through 2036 if not utilized. The state net operating loss carryforwards will expire at various dates beginning in 2017 and through 2036 , if not utilized. In addition, as of December 31, 2016 and 2015 , the Company had $37.8 million and $37.8 million in federal deductions, respectively, and $34.4 million and $34.2 million in state deductions, respectively, related to excess tax benefits from stock options which are not included in the net operating loss carryforward amounts in the table above since they have not met the realization criteria of ASC Topic 718. The tax benefits from these deductions will be recognized in the statement of operations as benefit from income taxes when realized as a result of the adoption of ASU 2016-19 beginning on January 1, 2017. Additionally, the Company has U.S. federal, California, and other U.S. states research and development credits of approximately $27.9 million , $30.3 million , and $3.0 million , respectively, as of December 31, 2016 . The U.S. federal research and development credits will begin to expire in 2020 and through 2036 , and the California research and development credits have no expiration date. The credits related to other various U.S. states will begin to expire in 2017 and through 2031. Based on current activity during 2016 , the Company does not anticipate to have further adjustments or limitations to the Company's net operating loss carryforwards. In December 2015, President Barack Obama signed into law the Protecting Americans from Tax Hikes (PATH) Act of 2015, which makes the Section 41 research credit, which expired on December 31, 2014, a permanent provision of the Internal Revenue Code. The benefit of the reinstated credit did not impact the income statement in the period of enactment, which was the fourth quarter of 2015, as the research and development credit carryforwards are offset by a full valuation allowance. The Company recognizes deferred tax liabilities associated with outside basis differences on investments in foreign subsidiaries, unless the difference is considered essentially permanent in duration. Thus, the Company has not recorded deferred taxes on approximately $4.8 million of undistributed earnings, as they are intended to be permanently reinvested. As of December 31, 2016 , the determination of the unrecorded deferred tax liability related to these earnings is not practicable. If circumstances change and it becomes apparent that some or all of the undistributed earnings will not be invested indefinitely, or will be remitted in the foreseeable future, an additional deferred tax liability will be recorded for some or all of the outside basis difference. Uncertain Tax Positions ASC Topic 740, "Income Taxes," prescribes a recognition threshold and measurement attribute to the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The guidance also provides guidance on derecognition, classification, accounting in interim periods and disclosure requirements for uncertain tax positions. The standard requires the Company to recognize the financial statement effects of an uncertain tax position when it is more likely than not that such position will be sustained upon audit. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as interest expense and income tax expense, respectively, in statements of comprehensive loss. The following table reconciles the Company's unrecognized tax benefits for the years ended December 31, 2016 and 2015 (in thousands): Years Ended December 31, 2016 2015 Balance at beginning of period $ 16,597 $ 15,421 Additions for tax positions related to prior year 420 56 Reductions for tax positions related to prior year (145 ) (59 ) Additions for tax positions related to current year 1,477 1,179 Balance at end of period $ 18,349 $ 16,597 As of December 31, 2016 and 2015 , the Company had unrecognized tax benefits of $18.3 million and $16.6 million , respectively, none of which would affect the Company's effective tax rate if recognized. There were no accrued interest or penalties for uncertain income tax as of December 31, 2016 . The Company files tax returns in the United State and various state jurisdictions, the United Kingdom, China and Brazil. The tax years 1999 through 2016 remain open and subject to examination by the appropriate governmental agencies in the U.S. due to tax attribute carryforwards. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company develops, markets and sells communications access systems and software, and there are no segment managers who are held accountable for operations, operating results and plans for levels or components below the Company unit level. Accordingly, the Company is considered to be in a single reporting segment and operating unit structure. The Company's chief operating decision maker is the Company's Chief Executive Officer, who reviews financial information presented on a Company-wide basis, for purposes of allocating resources and evaluating financial performance. Geographic Information: The following is a summary of revenues by geographic region based upon the location of the customers (in thousands): Years Ended December 31, 2016 2015 2014 United States $ 415,629 $ 360,077 $ 352,458 Caribbean 12,934 13,358 18,725 Canada 9,064 10,198 9,995 Europe 6,334 11,090 5,948 Other 14,826 12,740 14,101 Total $ 458,787 $ 407,463 $ 401,227 The Company's property and equipment, net of accumulated depreciation, are located in the following geographical areas (in thousands): As of December 31, 2016 2015 2014 United States $ 15,321 $ 15,362 $ 17,852 China 2,663 1,787 2,292 Total $ 17,984 $ 17,149 $ 20,144 |
Quarterly Financial Data - Unau
Quarterly Financial Data - Unaudited | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data - Unaudited | Quarterly Financial Data—Unaudited The Company's fiscal year begins on January 1st and ends on December 31st. Quarterly periods are based on a 4-4-5 fiscal calendar with the first, second and third fiscal quarters ending on the 13th Saturday of each fiscal period. As a result, the Company had one fewer day in the first quarter of 2016 and two more days in the fourth quarter of 2016 than in the respective 2015 periods. The following table presents selected unaudited quarterly financial data of the Company (in thousands, except per share data). The Company's quarterly results of operations for these periods are not necessarily indicative of future results of operations. Fiscal Year 2016 Quarter Ended March 26 June 25 September 24 December 31 Revenue $ 98,375 $ 107,425 $ 121,187 $ 131,800 Gross profit 45,482 50,006 53,544 52,186 Operating income (loss) (10,738 ) (5,881 ) 735 (12,235 ) Net income (loss) (10,729 ) (5,826 ) 636 (11,483 ) Net income (loss) per common share, basic $ (0.22 ) $ (0.12 ) $ 0.01 $ (0.23 ) Net income (loss) per common share, diluted $ (0.22 ) $ (0.12 ) $ 0.01 $ (0.23 ) Fiscal Year 2015 Quarter Ended March 28 June 27 September 26 December 31 Revenue $ 91,038 $ 99,129 $ 112,297 $ 104,999 Gross profit 42,490 48,289 53,113 46,537 Operating income (loss) (11,887 ) (5,765 ) 877 (9,735 ) Net income (loss) (11,930 ) (5,779 ) 922 (9,546 ) Net income (loss) per common share, basic $ (0.23 ) $ (0.11 ) $ 0.02 $ (0.19 ) Net income (loss) per common share, diluted $ (0.23 ) $ (0.11 ) $ 0.02 $ (0.19 ) |
Description of Business and S22
Description of Business and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Company | Company Calix, Inc. (together with its subsidiaries, "Calix," the "Company," "our," "we," or "us") was incorporated in August 1999, and is a Delaware corporation. The Company is a leading global provider of broadband communications access platforms, systems and software for fiber- and copper-based network architectures and a pioneer in software defined access that enables communications service providers ("CSPs") to transform their networks and enhance how they connect to their residential and business subscribers. The Company develops and sells carrier-class hardware and software products, referred to as the Calix portfolio that are designed to enhance and transform CSP access networks to meet the changing demands of subscribers rapidly and cost-effectively. The Company enables CSPs to provide a wide range of revenue-generating services, from basic voice and data to advanced broadband services, over legacy and next-generation access networks. The Company focuses solely on CSP access networks, the portion of the network that governs available bandwidth and determines the range and quality of services that can be offered to subscribers. |
Basis of Presentation | Basis of Presentation The Company's fiscal year begins on January 1st and ends on December 31st. Quarterly periods are based on a 4-4-5 fiscal calendar with the first, second and third fiscal quarters ending on the 13th Saturday of each fiscal period. The accompanying consolidated financial statements, including the accounts of Calix, Inc. and its wholly owned subsidiaries, have been prepared in accordance with the requirements of the U.S. Securities and Exchange Commission ("SEC"). In the opinion of management, the consolidated financial statements include all normal and recurring adjustments that are considered necessary for the fair presentation of the Company's financial position and operating results. All significant intercompany balances and transactions have been eliminated in consolidation. |
Applicable Accounting Guidance | Applicable Accounting Guidance Any reference in these notes to applicable accounting guidance ("guidance") is meant to refer to the authoritative U.S. generally accepted accounting principles ("GAAP") as found in the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC"). |
Use of Estimates | Use of Estimates The preparation of financial statements is in conformity with U.S. GAAP, which requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. For the Company, these estimates include, but are not limited to: allowances for doubtful accounts and sales returns, excess and obsolete inventory, allowances for obligations to its contract manufacturers, valuation of stock-based compensation, useful lives assigned to long-lived assets and acquired intangible assets, standard and extended warranty costs, and contingencies. Actual results could differ from those estimates, and such differences could be material to the Company's financial position and results of operations. |
Revenue Recognition | Revenue Recognition The Company derives revenue primarily from the sale of hardware products and related software. Revenue is recognized when all of the following criteria have been met: • Persuasive evidence of an arrangement exists. The Company generally relies upon sales agreements and customer purchase orders as evidence of an arrangement. • Delivery has occurred. The Company uses the shipping terms of the arrangement or evidence of customer acceptance to verify delivery or performance. • Sales price is fixed or determinable. The Company assesses whether the sales price is fixed or determinable based on the payment terms and whether the sales price is subject to refund or adjustment. Payment terms to customers can range from net 30 to net 120 days. • Collectability is reasonably assured. The Company assesses collectability based primarily on creditworthiness of customers and their payment histories. Revenue from installation and training services is recognized as the services are completed. Post-sales software support revenue and extended warranty services revenue are deferred and recognized ratably over the period during which the services are to be performed. In instances where substantive acceptance provisions are specified in the customer agreement, revenue is deferred until all acceptance criteria have been met. From time to time, the Company offers customers sales incentives, which include volume rebates and discounts. These amounts are estimated on a quarterly basis and recorded as a reduction of revenue. The Company enters into arrangements with certain of its customers who receive government supported loans and grants from the U.S. Department of Agriculture's Rural Utility Service ("RUS") to finance capital spending. Under the terms of an RUS equipment contract that includes installation services, the customer does not take possession and control and title does not pass until formal acceptance is obtained from the customer. Under this type of arrangement, the Company does not recognize revenue until it has received formal acceptance from the customer. For RUS arrangements that do not involve installation services, the Company recognizes revenue when all of the revenue recognition criteria as described above have been met. The Company's products contain both software and non-software components that function together to deliver the products' essential functionality. When the Company enters into sales arrangements that consist of multiple deliverables of its product and service offerings, the Company allocates the total consideration of the arrangement to each separable deliverable based on its relative selling price. The Company limits the amount allocable to delivered elements to the amount that is not contingent upon the delivery of additional items or meeting specified performance conditions, and recognizes revenue on each deliverable in accordance with its revenue recognition policy. The determination of selling price for each deliverable is based on a selling price hierarchy, which is vendor-specific objective evidence ("VSOE") if available, third-party evidence ("TPE") if VSOE is not available, or estimated selling price ("ESP") if neither VSOE nor TPE is available. VSOE of selling price is based on the price charged when the element is sold separately. In determining VSOE, the Company requires that a substantial majority of the selling prices of an element fall within a narrow range when each element is sold separately. The Company has established VSOE for its training and post-sales software support services based on the normal pricing practices of these services when sold separately. TPE of selling price is established by evaluating whether there are similar competitor products or services that are sold in stand-alone sales transaction to similarly situated customers. Generally, the Company's marketing strategy differs from that of its peers and its offerings contain a significant level of customization and differentiation such that the comparable pricing of products with similar functionality cannot be obtained. Additionally, as the Company is unable to reliably determine what similar competitor products' selling prices are on a stand-alone basis, it is not typically able to determine TPE. ESP is established considering multiple factors including, but not limited to, geographies market conditions, competitive landscape, internal costs, gross margin objectives, characteristics of targeted customers and pricing practices. The determination of ESP is made through consultation with and formal approval by management, taking into consideration the go-to-market strategy. |
Cost of Revenue | Cost of Revenue Cost of revenue consists primarily of finished goods inventory purchased from the Company's contract manufacturers, payroll and related expenses associated with managing the relationships with contract manufacturers, depreciation of manufacturing test equipment, warranty and retrofit costs, excess and obsolete inventory costs, shipping charges, and amortization of certain intangible assets. It also includes contractor and other costs of services incurred directly related to the delivery of services to customers. |
Warranty and Retrofit | Warranty and Retrofit The Company offers limited warranties for its hardware products for a period of one , three or five years, depending on the product type. The Company recognizes estimated costs related to warranty activities as a component of cost of revenue upon product shipment or upon identification of a specific product failure. Under certain circumstances, the Company also provides fixes on specifically identified performance failures for products that are outside of the standard warranty period and recognizes estimated costs related to retrofit activities as a component of cost of revenue upon identification of such product failures. The Company recognizes estimated warranty and retrofit costs when it is probable that a liability has been incurred and the amount of loss is reasonably estimable. The estimates are based upon historical and projected product failure and claim rates, historical costs incurred in correcting product failures and information available related to any specifically identified product failures. Significant judgment is required in estimating costs associated with warranty and retrofit activities and the Company estimates are limited to information available to the Company at the time of such estimates. In some cases, such as when a specific product failure is first identified or a new product is introduced, the Company may initially have limited information and limited historical failure and claim rates upon which to base its estimates, and such estimates may require revision in future periods. The recorded amount is adjusted from time to time for specifically identified warranty and retrofit exposure. Actual warranty and retrofit expenses are charged against the Company's estimated warranty and retrofit liability when incurred. Factors that affect the Company's warranty and retrofit liability include the number of active installed units and historical and anticipated rates of warranty and retrofit claims and cost per claim. |
Stock-Based Compensation | Stock-Based Compensation Stock-based awards are measured at fair value as of the grant date and recognized to expense over the employee's requisite service period (generally the vesting period), which the Company has elected to amortize on a straight-line basis. Stock-based compensation expense is reduced by the Company's estimated forfeitures on all unvested awards. The fair value of stock option and employee stock purchase right under the Employee Stock Purchase Plan ("ESPP") is estimated at the grant date using the Black-Scholes option valuation model. The fair value of restricted stock units and restricted stock awards is based on the closing market price of the Company's common stock on the date of grant. The fair value of performance restricted stock units ("PRSUs") with a market condition is estimated on the date of grant, using a Monte Carlo simulation model to estimate the total return ranking of the Company's stock in relation to the peer group over each performance period. Compensation cost on PRSUs with a market condition is not adjusted for subsequent changes in the Company's stock performance or the level of ultimate vesting. |
Research and Development | Research and Development Research and development costs include costs of developing new products and processes, as well as design and engineering costs. Such costs are charged to research and development expense as incurred. Development costs related to software incorporated in the Company's products incurred subsequent to the establishment of technological feasibility are capitalized and amortized over the estimated useful lives of the related products. Technological feasibility is established upon completion of a working model. |
Loss Contingencies | Loss Contingencies From time to time, the Company is involved in legal proceedings arising from the normal course of business activities. The Company evaluates the likelihood of an unfavorable outcome of legal proceedings to which it is a party and accrues a loss contingency when the loss is probable and reasonably estimable. Assessing legal contingencies involves significant judgment and estimates and the outcome of litigation is inherently uncertain and subject to numerous factors outside the Company's control. Significant judgment is required when the Company assesses the likelihood of any adverse judgments or outcomes, including the potential range of possible losses, and whether losses are probable and reasonably estimable. Because of uncertainties related to these matters, the Company bases its estimates of whether a loss contingency is probable or reasonably possible, as well as the reasonable range of possible losses associated with each loss contingency, only on the information available at the time. As additional information becomes available, and at least quarterly, the Company reassesses the potential liability on each significant matter and may revise its estimates. These revisions could have a material impact on the Company's business, operating results or financial condition. The actual outcome of these legal proceedings may materially differ from the Company's estimates of potential liability, which could have a material adverse effect on the Company's business, operating results or financial condition. |
Legal Fees | Legal Fees The Company incurs legal expenses related to disputes, litigation and other legal actions in the ordinary course of business. Legal fees, including those legal defense costs expected to be incurred in connection with a loss contingency, are expensed as incurred in the period that the related services are received. In the event the Company has insurance coverage for legal defense costs incurred and the likelihood of reimbursement is assured, legal defense costs recognized in a period are reduced by the amount recoverable from the insurance. A receivable is recognized for the portion of legal costs recoverable under the insurance at the time such legal costs are incurred and accrued. |
Credit Risk and Inventory Supplier Concentrations | Credit Risk and Inventory Supplier Concentrations Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. Cash equivalents consist of money market funds, which are invested through financial institutions in the United States. Deposits in these financial institutions may, at times, exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company also has approximately $5.9 million of cash held by its foreign subsidiaries in Brazil, China and the United Kingdom. Management believes that the financial institutions that hold the Company's cash and cash equivalents are financially sound and, accordingly, minimal credit risk exists with respect to these cash and cash equivalents. Concentrations of credit risk in relation to customer with an accounts receivable balance of 10% or greater of total accounts receivable and customer with net revenues of 10% or greater of total revenues are presented below for the periods indicated. Percentage of Accounts Receivable Percentage of Revenue At December 31, Years Ended December 31, 2016 2015 2016 2015 2014 CenturyLink 28% 27% 21% 22% 23% Windstream 13% * 15% * * * Less than 10% of total accounts receivable or revenue. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company records a specific allowance based on an analysis of individual past-due balances. Additionally, based on its historical write-offs and collections experience, the Company records an additional allowance based on a percentage of outstanding receivables. The Company performs credit evaluations of its customers' financial condition. These evaluations require significant judgment and are based on a variety of factors including, but not limited to, current economic trends, payment history and financial review of the customer. Actual collection losses may differ from management's estimates, and such differences could be material to the Company's financial position and results of operations. The Company depends primarily on a small number of outside contract manufacturers for the bulk of its finished goods inventory. In particular, the Company relies on Flex Ltd., formerly Flextronics for the manufacture of a large percentage of its products. The Company generally purchases its products through purchase orders with its suppliers or contract manufacturers. While the Company seeks to maintain a sufficient reserve of its products, the Company's business and results of operations could be adversely affected by a stoppage or delay in receiving such products, the receipt of defective parts, an increase in price of such products or the Company's inability to obtain lower prices from its contract manufacturers and suppliers in response to competitive pressures. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents, marketable securities, trade receivables, accounts payable, and other accrued liabilities approximate their fair value due to their relatively short-term nature. |
Cash, Cash Equivalents, and Marketable Securities | Cash, Cash Equivalents, and Marketable Securities The Company has invested its excess cash primarily in money market funds and highly liquid marketable securities such as corporate debt instruments, commercial paper and U.S. government agency securities. The Company considers all investments with maturities of three months or less when purchased to be cash equivalents. Marketable securities represent highly liquid corporate debt instruments, commercial paper and U.S. government agency securities with maturities greater than 90 days at date of purchase. Marketable securities with maturities greater than one year are classified as current because management considers all marketable securities to be available for current operations. Cash equivalents and marketable securities are stated at amounts that approximate fair value based on quoted market prices. The Company's investments have been classified and accounted for as available-for-sale. Such investments are recorded at fair value and unrealized holding gains and losses are reported as a separate component of comprehensive loss in the stockholders' equity until realized. Realized gains and losses on sales of marketable securities, if any, are determined on the specific identification method and are reclassified from accumulated other comprehensive income to results of operations as other income (expense). The Company, to date, has not determined that any of the unrealized losses on its investments are considered to be other-than-temporary. The Company reviews its investment portfolio to determine if any security is other-than-temporarily impaired, which would require the Company to record an impairment charge in the period any such determination is made. In making this judgment, the Company evaluates, among other things: the duration and extent to which the fair value of a security is less than its cost; the financial condition of the issuer and any changes thereto; and the Company's intent and ability to hold its investment for a period of time sufficient to allow for any anticipated recovery in market value, or whether the Company will more likely than not be required to sell the security before recovery of its amortized cost basis. The Company has evaluated its investments as of December 31, 2016 and has determined that no investments with unrealized losses are other-than-temporarily impaired. No investments have been in a continuous loss position greater than one year. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company records a specific allowance based on an analysis of individual past-due balances. Additionally, based on historical write-offs and the Company's collection experience, the Company records an additional allowance based on a percentage of outstanding receivables. The Company performs credit evaluations of its customers' financial condition. These evaluations require significant judgment and are based on a variety of factors including, but not limited to, current economic trends, payment history and a financial review of the customer. Actual collection losses may differ from management's estimates, and such differences could be material to our financial position and results of operations. |
Inventory Valuation | Inventory Valuation Inventory, which primarily consists of finished goods purchased from contract manufacturers, is stated at the lower of cost, determined by the first-in, first-out method, or market value. Inbound shipping costs are included in cost of inventory. In addition, the Company, from time to time, procures component inventory primarily as a result of manufacturing discontinuation of critical components by suppliers. The Company regularly monitors inventory quantities on hand and records write-downs for excess and obsolete inventories based on the Company's estimate of demand for its products, potential obsolescence of technology, product life cycles, and whether pricing trends or forecasts indicate that the carrying value of inventory exceeds its estimated selling price. These factors are impacted by market and economic conditions, technology changes, and new product introductions and require estimates that may include elements that are uncertain. Actual demand may differ from forecasted demand and may have a material effect on gross margins. If inventory is written down, a new cost basis is established that cannot be increased in future periods. Shipments from suppliers or contract manufacturers before the Company receives them are recorded as in-transit inventory when title and the significant risks and rewards of ownership have passed to the Company. |
Deferred Revenue and Deferred Cost of Revenue | Deferred Revenue and Deferred Cost of Revenue Deferred revenue results from transactions where the Company billed the customer for product shipped or services performed but not all revenue recognition criteria have been met. When the Company's products have been shipped, but the product revenue associated with the arrangement has been deferred as a result of not meeting the criteria for immediate revenue recognition, the Company also defers the related inventory costs for the delivered items until all criteria are met for revenue recognition. The Company defers tangible direct costs associated with hardware products delivered based on the inventory cost at the time of shipment. Certain costs directly related to the delivery of professional services that cannot be accounted for separately from the undelivered items included in a multiple element arrangement or have not been earned yet are also capitalized and deferred, if deemed recoverable, until all revenue recognition criteria are met. Accordingly, all cost of services incurred directly related to the delivery of an inseparable professional service item in which revenue has not yet been recognized are deferred and recorded within "Deferred cost of revenue" in the Company's Consolidated Balance Sheets. The Company evaluates deferred cost of revenue for recoverability based on multiple factors, including whether net revenues will exceed the amount of deferred cost of revenue applicable to each deliverable specified in the arrangement. To the extent that deferred cost of revenue is determined to be unrecoverable, the Company adjusts deferred cost of revenue with a charge to cost of revenue in the current period. In connection with the Company's recoverability assessments, it has incurred $2.2 million of impairment charges through December 31, 2016 . The Company did not incur significant impairment charges as of December 31, 2015. The Company recognizes deferred revenue and associated deferred cost of revenue, as revenue and cost of revenue respectively, in the Consolidated Statements of Comprehensive Loss once all revenue recognition criteria have been met. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, less accumulated depreciation, and are depreciated using the straight-line method over the estimated useful life of each asset. Computer equipment is depreciated over two years; purchased software is depreciated over three years; test equipment is depreciated over three years; furniture and fixtures are depreciated over seven years; and leasehold improvements are depreciated over the shorter of the respective lease term or the estimated useful life of the asset. Maintenance and repairs are charged to expense as incurred. |
Goodwill | Goodwill The Company records goodwill when consideration paid in a business acquisition exceeds the fair value of the net tangible assets and the identified intangible assets acquired. Goodwill is not amortized but instead is subject to an annual impairment test or more frequently if events or changes in circumstances indicate that it may be impaired. The Company evaluates goodwill on an annual basis as of the end of the second quarter of each fiscal year. Management has determined that it operates as a single reporting unit and, therefore, evaluates goodwill impairment at the enterprise level. In an annual impairment test, the Company first assesses qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. In assessing the qualitative factors, management considers the impact of these key factors: macro-economic conditions, industry and market environment, overall financial performance of the Company, cash flow from operating activities, market capitalization and stock price. If the Company determines as a result of the qualitative assessment that it is more likely than not (that is, a likelihood of more than 50 percent) that the fair value of a reporting unit is less than its carrying amount, then the quantitative test is required. Otherwise, no further testing is required. In a quantitative test, the Company compares its fair value to its carrying value including goodwill. The Company determines its fair value using both an income approach and a market approach. Under the income approach, the Company determines fair value based on estimated future cash flows, discounted by an estimated weighted-average cost of capital, which reflects the overall level of inherent risk of the Company and the rate of return an outside investor would expect to earn. Under the market-based approach, the Company utilizes information regarding the Company as well as publicly available industry information to determine earnings multiples that are used to value the Company. If the carrying value of the Company exceeds its fair value, the Company will determine the amount of impairment loss by comparing the implied fair value of goodwill with the carrying value of goodwill. An impairment charge is recognized for the excess of the carrying value of goodwill over its implied fair value. At the end of the second quarter of 2016 , the Company completed its annual goodwill impairment test. Based on its assessment of the above qualitative factors, management concluded that the fair value of the Company was more likely than not greater than its carrying amount as of June 25, 2016 . As such, it was not necessary to perform the two-step quantitative goodwill impairment test at the time. There have been no significant events or changes in circumstances subsequent to the 2016 annual impairment test that would more likely than not indicate that the carrying value of goodwill may have been impaired as of December 31, 2016 . Therefore, there was no impairment to the carrying value of the Company's goodwill as of December 31, 2016 . There were no impairment losses for goodwill in the years ended December 31, 2015 or 2014 . |
Intangible Assets and Other Long-Lived Assets | Intangible Assets and Other Long-Lived Assets Intangible assets with finite useful lives are amortized over their estimated useful life. The Company periodically evaluates long-lived assets, including intangible assets, for impairment whenever events or changes in circumstances indicate that a potential impairment may have occurred. If such events or changes in circumstances arise, the Company compares the carrying amount of the long-lived assets to the estimated future undiscounted cash flows expected to be generated by the long-lived assets. If the estimated aggregate undiscounted cash flows are less than the carrying amount of the long-lived assets, an impairment charge, calculated as the amount by which the carrying amount of the assets exceeds the fair value of the assets, is recorded. The fair value of long-lived assets is determined based on the estimated discounted cash flows expected to be generated from the assets. The Company has reviewed events and changes to its business during the year and has determined that there was no impairment to its intangible assets and other long-lived assets during 2016 . The Company did not incur any impairment losses for intangible assets and other long-lived assets in the years ended December 31, 2015 and 2014 . |
Income Taxes | Income Taxes The Company evaluates its tax positions and estimates its current tax exposure along with assessing temporary differences that result from different book to tax treatment of items not currently deductible for tax purposes. These differences result in deferred tax assets and liabilities on the Company's balance sheets, which are estimated based upon the difference between the financial statement and tax bases of assets and liabilities using the enacted tax rates that will be in effect when these differences reverse. In general, deferred tax assets represent future tax benefits to be received when certain expenses previously recognized in the Company's statements of operations become deductible expenses under applicable income tax laws or loss or credit carryforwards are utilized. Accordingly, realization of the Company's deferred tax assets is dependent on future taxable income against which these deductions, losses and credits can be utilized. The Company must assess the likelihood that the Company's deferred tax assets will be recovered from future taxable income, and to the extent the Company believes that recovery is not more likely than not, the Company must establish a valuation allowance. Management judgment is required in determining the Company's provision for income taxes, the Company's deferred tax assets and liabilities and any valuation allowance recorded against the Company's net deferred tax assets. Excluding foreign operations, the Company recorded a full valuation allowance at each balance sheet date presented because, based on the available evidence, the Company believes it is more likely than not that it will not be able to utilize all of its deferred tax assets in the future. The Company intends to maintain the full valuation allowances until sufficient evidence exists to support the reversal of the valuation allowances. |
Foreign Currency Translation | Foreign Currency Translation Assets and liabilities of the Company's wholly owned foreign subsidiaries are translated from their respective functional currencies at exchange rates in effect at the balance sheet date, and revenues and expenses are translated at the monthly average exchanges rates. Translation adjustments are reflected as a separate component of stockholders' equity. Realized foreign currency transaction gains and losses were not significant during the years ended December 31, 2016 , 2015 , and 2014 . |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Stock-Based Compensation In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"), which simplifies several aspects of the accounting for employee share-based payment transactions for both public and nonpublic entities, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The Company adopted ASU 2016-09 in the first quarter of fiscal 2017 and will have the following impact: a. Accounting for Income Taxes — The primary impact of the adoption was the recognition of excess tax benefits and tax deficiencies through the statement of operations when the awards vest or are settled rather than through paid-in capital. The new guidance eliminates the requirement to delay the recognition of excess tax benefits until it reduces current taxes payable and requires the recognition of excess tax benefits and tax deficiencies in the period they arise. The Company adopted this guidance on a modified retrospective basis beginning on January 1, 2017 and the adoption will have a cumulative-effect adjustment to the beginning balance of deferred tax asset and corresponding valuation allowance as of January 1, 2017. The adoption will have no cumulative-effect adjustment on January 1, 2017 accumulated deficit balance as the Company's net operating loss carryforwards are offset by a full valuation allowance. b. Classification of Excess Tax Benefits on the Statement of Cash Flows — ASU 2016-09 requires all tax-related cash flows resulting from share-based payments to be reported as operating activities on the statement of cash flows, a change from the current requirement to present windfall tax benefits as an inflow from financing activities and an outflow from operating activities. The Company adopted this guidance prospectively beginning on January 1, 2017. c. Forfeitures — The Company has historically recognized stock-based compensation expense net of estimated forfeitures on all unvested awards and elected to continuously do so with the adoption of this new guidance. Hence, the adoption of ASU 2016-09 as it relates to this matter will have no impact to the Company's consolidated financial statements. d. Minimum Statutory Tax Withholding Requirements — ASU 2016-09 allows companies to withhold an amount up to the employees' maximum individual tax rate in the relevant jurisdiction without resulting in liability classification of the award. The Company adopted this guidance using a modified retrospective approach. The adoption will have no impact on the January 1, 2017 accumulated deficit as the Company had no outstanding liability awards that would otherwise qualify for equity classification under this new guidance. e. Classification of Employee Taxes Paid on the Statement of Cash Flows When an Employer Withholds Shares for Tax-Withholding Purposes — ASU 2016-09 clarifies that all cash payments made to taxing authorities on the employees' behalf for withheld shares should be presented as financing activities on the statement of cash flows. The Company has historically presented the taxes paid related to net share settlement of equity awards as a financing activity on the statements of cash flows. Hence, the adoption of ASU 2016-09 as it relates to this matter will have no impact to the Company's consolidated financial statements. Leases In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) ("ASU 2016-02"), which requires recognition of an asset and liability for lease arrangements longer than twelve months. ASU 2016-02 will be effective for the Company beginning in the first quarter of fiscal 2019. Early application is permitted, and it is required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The Company expects its assets and liabilities to increase as a result of the adoption of this standard. The Company is currently assessing the potential impact of adopting this new guidance on its consolidated financial statements. Inventory In July 2015, the FASB issued Accounting Standards Update No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory ("ASU 2015-11"), which requires measurement of inventory at lower of cost and net realizable value, versus lower of cost or market. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The Company adopted ASU 2015-11 prospectively beginning on January 1, 2017. The adoption of this standard will have no material impact on the Company's consolidated financial statements. Revenue from Contracts with Customers In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"), which provides guidance for revenue recognition. ASU 2014-09 supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. Additionally, it supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts, and creates new Subtopic 340-40, Other Assets and Deferred Costs-Contracts with Customers. The standard's core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under the previous guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. On August 12, 2015, the FASB issued Accounting Standards Update No. 2015-14, Revenue from Contracts with Customers (Topic 606), Deferral of the Effective Date ("ASU 2015-14") to defer the effective date of ASU 2014-09 by one year. ASU 2015-14 permits early adoption of the new revenue standard, but not before its original effective date. In April 2016, the FASB issued Accounting Standards Update No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing ("ASU 2016-10") which further clarifies guidance related to identifying performance obligations and licensing implementation guidance contained in ASU 2014-09. In May 2016, the FASB issued Accounting Standards Update No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients ("ASU 2016-12") which addresses narrow-scope improvements to the guidance on collectibility, non-cash consideration, and completed contracts at transition and provides a practical expedient for contract modifications at transition and an accounting policy election related to the presentation of sales taxes and other similar taxes collected from customers. The new standard permits adoption either by using (i) a full retrospective approach for all periods presented in the period of adoption or (ii) a modified retrospective approach with the cumulative effect of initially applying the new standard recognized at the date of initial application and providing certain additional disclosures. The Company has not yet determined which transition method it will adopt. Its determination will depend on a number of factors, such as the significance of the impact of the new standard on its financial results, system readiness and its ability to accumulate and analyze the information necessary to assess the impact on prior period financial statements, as necessary. The standard will be effective for the Company in the first quarter of fiscal 2018, with early adoption permitted for annual reporting period beginning in the first quarter of fiscal 2017. The Company is not planning to early adopt, and accordingly, it will adopt the new standard effective January 1, 2018. The Company is in the initial stages of its evaluation of the impact of the new standard on its accounting policies, processes, and system requirements. The Company has assigned internal resources in addition to the engagement of third party service providers to assist in its evaluation. Additionally, the Company expects to make investments in new systems or enhancement of existing systems to enable timely and accurate reporting under the new standard. While the Company continues to perform further assessment of all potential impacts under the new standard, the Company expects the timing of revenue recognition to be accelerated for certain performance obligations related to certain revenue arrangements which are currently deferred until customer acceptance. Depending on the outcome of the Company's final evaluation, the timing of when revenue is recognized could change significantly for those revenue arrangements under the new standard. As part of its preliminary evaluation, the Company also considered the impact of the guidance in ASC 340-40, Other Assets and Deferred Costs - Contracts with Customers with respect to capitalization and amortization of incremental costs of obtaining a contract. As a result of this new guidance, the Company may need to capitalize additional costs of obtaining the contract, including sales commissions, as the new cost guidance requires the capitalization of all incremental costs incurred to obtain a contract with a customer that it would not have incurred if the contract had not been obtained, provided it expects to recover the costs. Accordingly, the Company may need to defer certain sales commissions and amortize them over the period that the related revenue is recognized. While the Company continues to assess all the potential impacts of the new standard, including the areas described above, and anticipates this standard could have a material impact on its consolidated financial statements, the Company is not able to quantify or cannot reasonably estimate quantitative information related to the impact of the new standard on its consolidated financial statements at this time. |
Description of Business and S23
Description of Business and Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Customer Concentration Risk | Concentrations of credit risk in relation to customer with an accounts receivable balance of 10% or greater of total accounts receivable and customer with net revenues of 10% or greater of total revenues are presented below for the periods indicated. Percentage of Accounts Receivable Percentage of Revenue At December 31, Years Ended December 31, 2016 2015 2016 2015 2014 CenturyLink 28% 27% 21% 22% 23% Windstream 13% * 15% * * * Less than 10% of total accounts receivable or revenue. |
Cash, Cash Equivalents and Ma24
Cash, Cash Equivalents and Marketable Securities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Cash and Cash Equivalents [Abstract] | |
Summary of cash and cash equivalents | Cash, cash equivalents and marketable securities consisted of the following (in thousands): December 31, December 31, Cash and cash equivalents: Cash $ 34,340 $ 13,378 Money market funds 15,020 10,248 Commercial paper 999 — Total cash and cash equivalents 50,359 23,626 Marketable securities: Corporate debt securities 17,272 35,799 Commercial paper 6,275 3,645 U.S. government agency securities 4,201 10,520 Total marketable securities 27,748 49,964 Total cash, cash equivalents and marketable securities $ 78,107 $ 73,590 |
Amortized cost and fair value of marketable securities | The amortized cost and fair value of marketable securities as of December 31, 2016 were as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Corporate debt securities $ 17,279 $ 1 $ (8 ) $ 17,272 Commercial paper 6,275 — — 6,275 U.S. government agency securities 4,200 1 — 4,201 Total marketable securities $ 27,754 $ 2 $ (8 ) $ 27,748 The amortized cost and fair value of marketable securities as of December 31, 2015 were as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Corporate debt securities $ 35,869 $ 2 $ (72 ) $ 35,799 Commercial paper 3,645 — — 3,645 U.S. government agency securities 10,544 — (24 ) 10,520 Total marketable securities $ 50,058 $ 2 $ (96 ) $ 49,964 |
Amortized cost and fair value of marketable securities by contractual maturity | As of December 31, 2016 , the amortized cost and fair value of marketable securities by contractual maturity were as follows (in thousands): Amortized Cost Fair Value Due in 1 year or less $ 27,754 $ 27,748 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Summary of fair values of financial assets | The following table sets forth the Company's financial assets measured at fair value as of December 31, 2016 and 2015 , based on the three-tier fair value hierarchy (in thousands): As of December 31, 2016 Level 1 Level 2 Total Money market funds $ 15,020 $ — $ 15,020 Corporate debt securities — 17,272 17,272 Commercial paper — 7,274 7,274 U.S. government agency securities — 4,201 4,201 Total $ 15,020 $ 28,747 $ 43,767 As of December 31, 2015 Level 1 Level 2 Total Money market funds $ 10,248 $ — $ 10,248 Corporate debt securities — 35,799 35,799 Commercial paper — 3,645 3,645 U.S. government agency securities — 10,520 10,520 Total $ 10,248 $ 49,964 $ 60,212 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of intangible assets | The details of intangible assets as of December 31, 2016 and 2015 are disclosed in the following table (in thousands): December 31, 2016 December 31, 2015 Gross Accumulated Net Gross Carrying Amount Accumulated Amortization Net Core developed technology $ 68,964 $ (68,151 ) $ 813 $ 68,964 $ (64,047 ) $ 4,917 Customer relationships 54,740 (54,740 ) — 54,740 (53,039 ) 1,701 Total intangible assets, excluding goodwill $ 123,704 $ (122,891 ) $ 813 $ 123,704 $ (117,086 ) $ 6,618 |
Summary of expected future amortization | Expected future amortization expense for the fiscal year indicated is as follows (in thousands): Period Expected Amortization Expense 2017 $ 813 |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Balance Sheet Related Disclosures [Abstract] | |
Accounts Receivable, net | Accounts receivable, net consisted of the following (in thousands): December 31, December 31, Accounts receivable $ 52,792 $ 48,319 Allowance for doubtful accounts (518 ) (501 ) Product return reserve (938 ) (663 ) Accounts receivable, net $ 51,336 $ 47,155 |
Changes In Allowance For Doubtful Accounts And Product Reserve | The table below summarizes the changes in allowance for doubtful accounts and product return reserve for the periods indicated (in thousands): Balance at Beginning of Year Additions Charged to Costs or Expenses or Revenue Deductions and Write Offs Balance at End of Year Year Ended December 31, 2016 Allowance for doubtful accounts $ 501 $ 232 $ (215 ) $ 518 Product return reserve 663 3,679 (3,404 ) 938 Year Ended December 31, 2015 Allowance for doubtful accounts $ 241 $ 405 $ (145 ) $ 501 Product return reserve 508 4,224 (4,069 ) 663 Year Ended December 31, 2014 Allowance for doubtful accounts $ 358 $ 154 $ (271 ) $ 241 Product return reserve 764 4,805 (5,061 ) 508 |
Inventory | Inventory consisted of the following (in thousands): December 31, December 31, Raw materials $ 1,827 $ 2,209 Finished goods 42,718 45,458 Total inventory $ 44,545 $ 47,667 |
Property and Equipment, net | Property and equipment, net consisted of the following (in thousands): December 31, December 31, Test equipment $ 43,580 $ 39,035 Computer equipment and purchased software 30,306 27,736 Furniture and fixtures 2,831 1,833 Leasehold improvements 6,898 6,554 Total 83,615 75,158 Accumulated depreciation and amortization (65,631 ) (58,009 ) Property and equipment, net $ 17,984 $ 17,149 |
Accrued Liabilities | Accrued liabilities consisted of the following (in thousands): December 31, December 31, Advance customer payments $ 20,726 $ 1,094 Accrued compensation and related benefits 19,541 13,809 Accrued warranty and retrofit 12,214 9,564 Accrued professional and consulting fees 8,205 2,813 Accrued customer rebates 1,931 784 Accrued excess and obsolete inventory at contract manufacturers 1,327 1,011 Accrued freight 1,198 486 Accrued insurance 804 — Accrued non-income related taxes 699 905 Accrued business travel expenses 463 580 Accrued rent 421 381 Accrued hosting services 240 466 Income taxes payable 231 322 Accrued other 1,715 3,297 Total accrued liabilities $ 69,715 $ 35,512 |
Deferred Revenue | Deferred revenue consisted of the following (in thousands): December 31, 2016 December 31, 2015 Current: Product and services $ 24,472 $ 8,937 Extended warranty 3,382 3,187 27,854 12,124 Non-current: Product and services 22 58 Extended warranty 20,215 19,511 20,237 19,569 Total deferred revenue $ 48,091 $ 31,693 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | Future minimum payments under the non-cancelable operating leases consisted of the following as of December 31, 2016 (in thousands): Period Minimum Future Lease Payments 2017 $ 3,103 2018 2,774 2019 1,061 2020 717 2021 283 Thereafter 19 Total $ 7,957 |
Schedule of Product Warranty Liability | Changes in the Company's warranty and retrofit reserves in the periods as indicated were as follows (in thousands): Years Ended December 31, 2016 2015 2014 Balance at beginning of period $ 9,564 $ 9,553 $ 10,856 Provision for warranty and retrofit charged to cost of revenue 9,898 4,661 3,394 Utilization of reserve (6,816 ) (4,115 ) (3,328 ) Adjustments to pre-existing reserve (432 ) (535 ) (1,369 ) Balance at end of period $ 12,214 $ 9,564 $ 9,553 |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of net loss per share | The following table sets forth the computation of basic and diluted net loss per share for the periods indicated (in thousands, except per share data): Years Ended December 31, 2016 2015 2014 Numerator: Net loss $ (27,402 ) $ (26,333 ) $ (20,814 ) Denominator: Weighted-average common shares outstanding 48,730 51,489 50,808 Basic and diluted net loss per common share $ (0.56 ) $ (0.51 ) $ (0.41 ) Potentially dilutive shares, weighted-average 5,890 6,120 5,020 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Stock Options Activity | The following table summarizes the activity of stock options under the Company's equity incentive plans (in thousands, except per share data): Weighted- Average Weighted- Remaining Average Contractual Aggregate Number of Exercise Price Life Intrinsic Stock Options Shares Per Share (in years) Value (1) Outstanding as of December 31, 2015 2,655 $ 11.81 Granted 680 6.96 Exercised (3 ) 5.77 Forfeited (3 ) 7.97 Expired (120 ) 29.31 Outstanding as of December 31, 2016 3,209 $ 10.14 6.3 $ 703 Vested and expected to vest as of December 31, 2016 3,113 $ 10.23 6.1 $ 652 Options exercisable as of December 31, 2016 2,125 $ 11.47 4.9 $ 201 (1) Amounts represent the difference between the exercise price and the fair market value of common stock at December 31, 2016 for all in the money options outstanding. |
Schedule of Restricted Stock and Restricted Stock Units Activity | The following table summarizes the activities of the Company's RSUs and PRSUs under the Company's equity incentive plans (in thousands, except per share data): RSUs PRSUs Weighted- Weighted- Average Average Grant Date Grant Date Number of Fair Value Number of Fair Value Shares Per Share Shares Per Share Outstanding at December 31, 2015 2,469 $ 8.64 184 $ 9.21 Granted 1,287 6.91 550 7.42 Vested (919 ) 8.46 (45 ) 11.71 Canceled (239 ) 8.45 (124 ) 8.09 Outstanding at December 31, 2016 2,598 $ 7.86 565 $ 7.51 |
Schedule of Grant Date Fair Values | The following table summarizes the weighted-average grant date fair values of the Company's stock-based awards granted in the periods indicated: Years Ended December 31, 2016 2015 2014 Stock options $ 3.58 $ 4.56 $ 4.79 RSUs $ 6.91 $ 8.59 $ 8.72 PRSUs $ 7.42 N/A $ 9.16 ESPP $ 1.92 $ 2.03 $ 2.46 |
Valuation Assumptions, Stock Options | The following table summarizes the weighted-average assumptions used in estimating the grant-date fair value of stock options and of each employee's purchase right under the ESPP in the periods indicated: Years Ended December 31, Stock Options 2016 2015 2014 Expected volatility 53 % 52 % 52 % Expected life (years) 6.25 6.25 6.21 Expected dividend yield — — — Risk-free interest rate 1.60 % 1.56 % 1.87 % |
Valuation Assumptions, ESPP | Years Ended December 31, ESPP 2016 2015 2014 Expected volatility 46 % 46 % 45 % Expected life (years) 0.52 0.46 0.50 Expected dividend yield — — — Risk-free interest rate 0.47 % 0.18 % 0.07 % |
Schedule of Unrecognized Compensation Cost | As of December 31, 2016 , unrecognized stock-based compensation expenses by award type, net of estimated forfeitures, and their expected weighted-average recognition periods are summarized in the following table (in thousands). As of December 31, 2016 Stock Option RSU PRSU ESPP Unrecognized stock-based compensation expense $ 3,661 $ 13,380 $ 1,328 $ 721 Weighted-average amortization period (in years) 2.9 2.5 0.9 0.4 |
Schedule of Warrants | As of December 31, 2016 , the following warrants to purchase common stock were outstanding (in thousands, except per share data): Expiration Date Exercise Price Per Share Number of Warrants Outstanding September 4, 2017 $ 19.56 15 |
Shares Reserved For Future Issuance | The Company had common shares reserved for future issuance as follows (in thousands): As of December 31, 2016 2015 2014 Stock options outstanding 3,209 2,655 3,701 Restricted stock units outstanding 2,598 2,469 1,734 Performance restricted stock units outstanding 565 184 362 Shares available for future grant under 2010 Plan 1,603 2,749 2,283 Shares available for future issuance under ESPP 119 1,129 1,891 Common stock warrants 15 15 15 Total 8,109 9,201 9,986 |
Accumulated Other Comprehensi31
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The table below summarizes the changes in accumulated other comprehensive income (loss) by component for the periods indicated (in thousands). Year Ended December 31, 2016 Unrealized Gains and Losses on Available-for-Sale Marketable Securities Foreign Currency Translation Adjustments Total Balance at beginning of period $ (94 ) $ (101 ) $ (195 ) Other comprehensive income (loss) 88 (549 ) (461 ) Balance at end of period $ (6 ) $ (650 ) $ (656 ) Year Ended December 31, 2015 Unrealized Gains and Losses on Available-for-Sale Marketable Securities Foreign Currency Translation Adjustments Total Balance at beginning of period $ (58 ) $ 138 $ 80 Other comprehensive loss (36 ) (239 ) (275 ) Balance at end of period $ (94 ) $ (101 ) $ (195 ) Year Ended December 31, 2014 Unrealized Gains and Losses on Available-for-Sale Marketable Securities Foreign Currency Translation Adjustments Total Balance at beginning of period $ — $ 190 $ 190 Other comprehensive loss before reclassification adjustment (57 ) (52 ) (109 ) Reclassification adjustment for realized gains on marketable securities included in net loss (1 ) — (1 ) Other comprehensive loss (58 ) (52 ) (110 ) Balance at end of period $ (58 ) $ 138 $ 80 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | The domestic and foreign components of loss before provision for incomes taxes were as follows (in thousands): Years Ended December 31, 2016 2015 2014 Domestic $ (28,931 ) $ (27,674 ) $ (21,495 ) Foreign 1,876 1,876 1,262 Loss before provision for income taxes $ (27,055 ) $ (25,798 ) $ (20,233 ) |
Schedule of Components of Income Tax Expense (Benefit) | Provision for income taxes consisted of the following for the periods indicated (in thousands): Years Ended December 31, 2016 2015 2014 Current: State $ 102 $ 90 $ 104 Foreign 673 493 469 Current income tax 775 583 573 Deferred: Foreign (428 ) (48 ) 8 Deferred income tax (428 ) (48 ) 8 Provision for income taxes $ 347 $ 535 $ 581 |
Schedule of Effective Income Tax Rate Reconciliation | The differences between the statutory tax rate and the effective tax rate, expressed as a percentage of loss before income taxes, were as follows: Years Ended December 31, 2016 2015 2014 Federal statutory rate 34.0 % 34.0 % 34.0 % State statutory rate 6.1 % 2.6 % 2.5 % Foreign operations 0.6 % 1.1 % (0.1 )% R&D tax credits 6.4 % 11.2 % 9.2 % Foreign income inclusion (0.7 )% (2.4 )% (0.3 )% Non-deductible stock compensation (5.1 )% (1.9 )% (0.9 )% Other permanent items (1.4 )% (2.0 )% (1.5 )% Tax true-up 21.0 % (1.3 )% (0.2 )% Valuation allowance (62.2 )% (43.4 )% (45.6 )% Effective tax rate (1.3 )% (2.1 )% (2.9 )% |
Schedule of Deferred Tax Assets and Liabilities | The significant components of the Company's deferred tax assets and liabilities were as follows (in thousands): As of December 31, 2016 2015 Deferred tax assets: Net operating loss carryforwards $ 167,668 $ 167,387 Tax credit carryforwards 36,026 27,654 Depreciation and amortization 2,538 1,947 Accruals and reserves 13,462 12,427 Deferred revenue 12,954 9,822 Stock-based compensation 6,159 5,198 Other 1,124 528 Gross deferred tax assets 239,931 224,963 Valuation allowance (239,238 ) (222,410 ) Net deferred tax assets 693 2,553 Deferred tax liabilities: Intangible assets (157 ) (2,229 ) Other — (130 ) Gross deferred tax liabilities (157 ) (2,359 ) Net deferred tax assets reflected in balance sheet $ 536 $ 194 |
Unrecognized Tax Benefits Activity | The following table reconciles the Company's unrecognized tax benefits for the years ended December 31, 2016 and 2015 (in thousands): Years Ended December 31, 2016 2015 Balance at beginning of period $ 16,597 $ 15,421 Additions for tax positions related to prior year 420 56 Reductions for tax positions related to prior year (145 ) (59 ) Additions for tax positions related to current year 1,477 1,179 Balance at end of period $ 18,349 $ 16,597 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Revenue by Geographic Region | The following is a summary of revenues by geographic region based upon the location of the customers (in thousands): Years Ended December 31, 2016 2015 2014 United States $ 415,629 $ 360,077 $ 352,458 Caribbean 12,934 13,358 18,725 Canada 9,064 10,198 9,995 Europe 6,334 11,090 5,948 Other 14,826 12,740 14,101 Total $ 458,787 $ 407,463 $ 401,227 |
Property and Equipment by Geographic Region | The Company's property and equipment, net of accumulated depreciation, are located in the following geographical areas (in thousands): As of December 31, 2016 2015 2014 United States $ 15,321 $ 15,362 $ 17,852 China 2,663 1,787 2,292 Total $ 17,984 $ 17,149 $ 20,144 |
Quarterly Financial Data - Un34
Quarterly Financial Data - Unaudited (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | The following table presents selected unaudited quarterly financial data of the Company (in thousands, except per share data). The Company's quarterly results of operations for these periods are not necessarily indicative of future results of operations. Fiscal Year 2016 Quarter Ended March 26 June 25 September 24 December 31 Revenue $ 98,375 $ 107,425 $ 121,187 $ 131,800 Gross profit 45,482 50,006 53,544 52,186 Operating income (loss) (10,738 ) (5,881 ) 735 (12,235 ) Net income (loss) (10,729 ) (5,826 ) 636 (11,483 ) Net income (loss) per common share, basic $ (0.22 ) $ (0.12 ) $ 0.01 $ (0.23 ) Net income (loss) per common share, diluted $ (0.22 ) $ (0.12 ) $ 0.01 $ (0.23 ) Fiscal Year 2015 Quarter Ended March 28 June 27 September 26 December 31 Revenue $ 91,038 $ 99,129 $ 112,297 $ 104,999 Gross profit 42,490 48,289 53,113 46,537 Operating income (loss) (11,887 ) (5,765 ) 877 (9,735 ) Net income (loss) (11,930 ) (5,779 ) 922 (9,546 ) Net income (loss) per common share, basic $ (0.23 ) $ (0.11 ) $ 0.02 $ (0.19 ) Net income (loss) per common share, diluted $ (0.23 ) $ (0.11 ) $ 0.02 $ (0.19 ) |
Description of Business and S35
Description of Business and Significant Accounting Policies - Customer Concentration Risk (Details) - Customer Concentration Risk | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accounts Receivable | CenturyLink | |||
Concentration Risk [Line Items] | |||
Concentration of credit risk, percentage | 28.00% | 27.00% | |
Accounts Receivable | Windstream | |||
Concentration Risk [Line Items] | |||
Concentration of credit risk, percentage | 13.00% | ||
Revenue | CenturyLink | |||
Concentration Risk [Line Items] | |||
Concentration of credit risk, percentage | 21.00% | 22.00% | 23.00% |
Revenue | Windstream | |||
Concentration Risk [Line Items] | |||
Concentration of credit risk, percentage | 15.00% |
Description of Business and S36
Description of Business and Significant Accounting Policies - Useful Lives of Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Computer Equipment | |
Property, Plant and Equipment [Line Items] | |
Useful life of property and equipment | 2 years |
Purchased Software | |
Property, Plant and Equipment [Line Items] | |
Useful life of property and equipment | 3 years |
Test Equipment | |
Property, Plant and Equipment [Line Items] | |
Useful life of property and equipment | 3 years |
Furniture and Fixtures | |
Property, Plant and Equipment [Line Items] | |
Useful life of property and equipment | 7 years |
Description of Business and S37
Description of Business and Significant Accounting Policies - Textual (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Schedule of Certain Terms [Line Items] | |||
Product warranty period | 3 years | ||
Cash held by foreign subsidiaries | $ 5,900,000 | ||
Deferred cost of revenue, impairment charges | 2,200,000 | ||
Accumulated impairment loss of goodwill | 0 | ||
Goodwill, impairment loss | $ 0 | $ 0 | |
Impairment of intangible and long-lived assets | $ 0 | $ 0 | $ 0 |
Minimum | |||
Schedule of Certain Terms [Line Items] | |||
Customer payment term | 30 days | ||
Product warranty period | 1 year | ||
Maximum | |||
Schedule of Certain Terms [Line Items] | |||
Customer payment term | 120 days | ||
Product warranty period | 5 years |
Cash, Cash Equivalents and Ma38
Cash, Cash Equivalents and Marketable Securities - Summary (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | $ 50,359,000 | $ 23,626,000 | $ 48,829,000 | $ 82,747,000 |
Marketable securities | 27,748,000 | 49,964,000 | ||
Total cash, cash equivalents and marketable securities | 78,107,000 | 73,590,000 | ||
Available-for-sale securities in a continuous unrealized loss position in excess of twelve months | 0 | 0 | ||
Corporate debt securities | ||||
Cash and Cash Equivalents [Line Items] | ||||
Marketable securities | 17,272,000 | 35,799,000 | ||
Commercial paper | ||||
Cash and Cash Equivalents [Line Items] | ||||
Marketable securities | 6,275,000 | 3,645,000 | ||
U.S. government agency securities | ||||
Cash and Cash Equivalents [Line Items] | ||||
Marketable securities | 4,201,000 | 10,520,000 | ||
Cash | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | 34,340,000 | 13,378,000 | ||
Money market funds | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | 15,020,000 | 10,248,000 | ||
Commercial paper | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | $ 999,000 | $ 0 |
Cash, Cash Equivalents and Ma39
Cash, Cash Equivalents and Marketable Securities - Amortized Cost and Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 27,754 | $ 50,058 |
Gross Unrealized Gains | 2 | 2 |
Gross Unrealized Losses | (8) | (96) |
Fair Value | 27,748 | 49,964 |
Corporate debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 17,279 | 35,869 |
Gross Unrealized Gains | 1 | 2 |
Gross Unrealized Losses | (8) | (72) |
Fair Value | 17,272 | 35,799 |
Commercial paper | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 6,275 | 3,645 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 6,275 | 3,645 |
U.S. government agency securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 4,200 | 10,544 |
Gross Unrealized Gains | 1 | 0 |
Gross Unrealized Losses | 0 | (24) |
Fair Value | $ 4,201 | $ 10,520 |
Cash, Cash Equivalents and Ma40
Cash, Cash Equivalents and Marketable Securities - Contractual Maturity (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Cash and Cash Equivalents [Abstract] | |
Marketable securities due in 1 year or less, amortized cost | $ 27,754 |
Marketable securities due in 1 year or less, fair value | $ 27,748 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Summary of fair values of financial assets | ||
Marketable securities | $ 27,748 | $ 49,964 |
Corporate debt securities | ||
Summary of fair values of financial assets | ||
Marketable securities | 17,272 | 35,799 |
Commercial paper | ||
Summary of fair values of financial assets | ||
Marketable securities | 6,275 | 3,645 |
U.S. government agency securities | ||
Summary of fair values of financial assets | ||
Marketable securities | 4,201 | 10,520 |
Fair Value, Measurements, Recurring | ||
Summary of fair values of financial assets | ||
Total | 43,767 | 60,212 |
Fair Value, Measurements, Recurring | Corporate debt securities | ||
Summary of fair values of financial assets | ||
Marketable securities | 17,272 | 35,799 |
Fair Value, Measurements, Recurring | Commercial paper | ||
Summary of fair values of financial assets | ||
Marketable securities | 7,274 | 3,645 |
Fair Value, Measurements, Recurring | U.S. government agency securities | ||
Summary of fair values of financial assets | ||
Marketable securities | 4,201 | 10,520 |
Fair Value, Measurements, Recurring | Level 1 | ||
Summary of fair values of financial assets | ||
Total | 15,020 | 10,248 |
Fair Value, Measurements, Recurring | Level 1 | Corporate debt securities | ||
Summary of fair values of financial assets | ||
Marketable securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Commercial paper | ||
Summary of fair values of financial assets | ||
Marketable securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | U.S. government agency securities | ||
Summary of fair values of financial assets | ||
Marketable securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | ||
Summary of fair values of financial assets | ||
Total | 28,747 | 49,964 |
Fair Value, Measurements, Recurring | Level 2 | Corporate debt securities | ||
Summary of fair values of financial assets | ||
Marketable securities | 17,272 | 35,799 |
Fair Value, Measurements, Recurring | Level 2 | Commercial paper | ||
Summary of fair values of financial assets | ||
Marketable securities | 7,274 | 3,645 |
Fair Value, Measurements, Recurring | Level 2 | U.S. government agency securities | ||
Summary of fair values of financial assets | ||
Marketable securities | 4,201 | 10,520 |
Fair Value, Measurements, Recurring | Money market funds | ||
Summary of fair values of financial assets | ||
Money market funds | 15,020 | 10,248 |
Fair Value, Measurements, Recurring | Money market funds | Level 1 | ||
Summary of fair values of financial assets | ||
Money market funds | 15,020 | 10,248 |
Fair Value, Measurements, Recurring | Money market funds | Level 2 | ||
Summary of fair values of financial assets | ||
Money market funds | $ 0 | $ 0 |
Goodwill and Intangible Asset42
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Summary of intangible assets | ||
Gross Carrying Amount | $ 123,704 | $ 123,704 |
Accumulated Amortization | (122,891) | (117,086) |
Net, amortizable intangible assets | 813 | 6,618 |
Core developed technology | ||
Summary of intangible assets | ||
Gross Carrying Amount | 68,964 | 68,964 |
Accumulated Amortization | (68,151) | (64,047) |
Net, amortizable intangible assets | 813 | 4,917 |
Customer relationships | ||
Summary of intangible assets | ||
Gross Carrying Amount | 54,740 | 54,740 |
Accumulated Amortization | (54,740) | (53,039) |
Net, amortizable intangible assets | $ 0 | $ 1,701 |
Goodwill and Intangible Asset43
Goodwill and Intangible Assets - Expected Future Amortization (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 5,805 | $ 18,561 | $ 18,561 |
Summary of expected future amortization | |||
2,017 | $ 813 |
Balance Sheet Details - Account
Balance Sheet Details - Accounts Receivable (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Summary of accounts receivable, net | ||
Accounts receivable | $ 52,792 | $ 48,319 |
Allowance for doubtful accounts | (518) | (501) |
Product return reserve | (938) | (663) |
Accounts receivable, net | $ 51,336 | $ 47,155 |
Balance Sheet Details - Allowan
Balance Sheet Details - Allowance and Product Return Reserve (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Allowance for doubtful accounts | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Year | $ 501 | $ 241 | $ 358 |
Additions Charged to Costs or Expenses or Revenue | 232 | 405 | 154 |
Deductions and Write Offs | (215) | (145) | (271) |
Balance at End of Year | 518 | 501 | 241 |
Product return reserve | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Year | 663 | 508 | 764 |
Additions Charged to Costs or Expenses or Revenue | 3,679 | 4,224 | 4,805 |
Deductions and Write Offs | (3,404) | (4,069) | (5,061) |
Balance at End of Year | $ 938 | $ 663 | $ 508 |
Balance Sheet Details - Invento
Balance Sheet Details - Inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Summary of inventory, net | ||
Raw materials | $ 1,827 | $ 2,209 |
Finished goods | 42,718 | 45,458 |
Total inventory | $ 44,545 | $ 47,667 |
Balance Sheet Details - Propert
Balance Sheet Details - Property and Equipment, net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 83,615 | $ 75,158 | |
Accumulated depreciation and amortization | (65,631) | (58,009) | |
Property and equipment, net | 17,984 | 17,149 | $ 20,144 |
Depreciation and amortization | 8,319 | 10,262 | $ 9,263 |
Test equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 43,580 | 39,035 | |
Computer equipment and purchased software | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 30,306 | 27,736 | |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 2,831 | 1,833 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 6,898 | $ 6,554 |
Balance Sheet Details - Accrued
Balance Sheet Details - Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Summary of accrued liabilities | ||
Advance customer payments | $ 20,726 | $ 1,094 |
Accrued compensation and related benefits | 19,541 | 13,809 |
Accrued warranty and retrofit | 12,214 | 9,564 |
Accrued professional and consulting fees | 8,205 | 2,813 |
Accrued customer rebates | 1,931 | 784 |
Accrued excess and obsolete inventory at contract manufacturers | 1,327 | 1,011 |
Accrued freight | 1,198 | 486 |
Accrued insurance | 804 | 0 |
Accrued non-income related taxes | 699 | 905 |
Accrued business travel expenses | 463 | 580 |
Accrued rent | 421 | 381 |
Accrued hosting services | 240 | 466 |
Income taxes payable | 231 | 322 |
Accrued other | 1,715 | 3,297 |
Total accrued liabilities | $ 69,715 | $ 35,512 |
Balance Sheet Details - Deferre
Balance Sheet Details - Deferred Revenue (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue, current | $ 27,854 | $ 12,124 |
Deferred revenue, non-current | 20,237 | 19,569 |
Total deferred revenue | 48,091 | 31,693 |
Revenue Contract | ||
Deferred Revenue Arrangement [Line Items] | ||
Total deferred revenue | 20,000 | |
Product and services | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue, current | 24,472 | 8,937 |
Deferred revenue, non-current | 22 | 58 |
Extended warranty | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue, current | 3,382 | 3,187 |
Deferred revenue, non-current | $ 20,215 | $ 19,511 |
Commitments and Contingencies -
Commitments and Contingencies - Future Minimum Payments Under Operating Leases (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,017 | $ 3,103 |
2,018 | 2,774 |
2,019 | 1,061 |
2,020 | 717 |
2,021 | 283 |
Thereafter | 19 |
Total | $ 7,957 |
Commitments and Contingencies51
Commitments and Contingencies - Product Warranty Activities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Product warranty activities [Roll Forward] | |||
Balance at beginning of period | $ 9,564 | $ 9,553 | $ 10,856 |
Provision for warranty and retrofit charged to cost of revenue | 9,898 | 4,661 | 3,394 |
Utilization of reserve | (6,816) | (4,115) | (3,328) |
Adjustments to pre-existing reserve | (432) | (535) | (1,369) |
Balance at end of period | $ 12,214 | $ 9,564 | $ 9,553 |
Commitments and Contingencies52
Commitments and Contingencies - Textual (Details) - USD ($) $ in Thousands | Apr. 14, 2016 | Nov. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Lease Commitments | |||||
Unamortized lease incentive | $ 200 | ||||
Rent expense | 3,700 | $ 3,500 | $ 4,100 | ||
Purchase Commitments | |||||
Accrued customer rebates | 1,327 | 1,011 | |||
Non-cancelable outstanding purchase orders | $ 19,000 | ||||
Accrued Warranty | |||||
Product warranty period | 3 years | ||||
Litigation | |||||
Litigation settlement gain | $ 4,500 | 0 | 0 | ||
Minimum | |||||
Accrued Warranty | |||||
Product warranty period | 1 year | ||||
Maximum | |||||
Accrued Warranty | |||||
Product warranty period | 5 years | ||||
Accrued Liabilities | |||||
Lease Commitments | |||||
Unamortized lease incentive | $ 100 | ||||
Other Long-term Liabilities | |||||
Lease Commitments | |||||
Unamortized lease incentive | 100 | ||||
Petaluma Lease | |||||
Lease Commitments | |||||
Lease incentive received | 1,200 | ||||
Amendment to Petaluma Lease | |||||
Lease Commitments | |||||
Lease incentive received | 400 | ||||
Pending Litigation | Steinhardt v. Howard-Anderson, et al. | |||||
Litigation | |||||
Damages sought, value | $ 35,000 | ||||
Legal fees | $ 6,400 | $ 3,700 | $ 1,000 | ||
Litigation settlement, amount received | $ 4,500 | ||||
Number of days for settlement after court judgment | 45 days | ||||
Litigation settlement gain | $ 4,500 |
Net Loss per Share - Basic and
Net Loss per Share - Basic and Diluted Shares Calculation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 24, 2016 | Jun. 25, 2016 | Mar. 26, 2016 | Dec. 31, 2015 | Sep. 26, 2015 | Jun. 27, 2015 | Mar. 28, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Numerator: | |||||||||||
Net loss | $ (11,483) | $ 636 | $ (5,826) | $ (10,729) | $ (9,546) | $ 922 | $ (5,779) | $ (11,930) | $ (27,402) | $ (26,333) | $ (20,814) |
Denominator: | |||||||||||
Weighted-average common shares outstanding (in shares) | 48,730 | 51,489 | 50,808 | ||||||||
Basic and diluted net loss per common share (in dollars per share) | $ (0.56) | $ (0.51) | $ (0.41) | ||||||||
Potentially dilutive shares, weighted-average (in shares) | 5,890 | 6,120 | 5,020 |
Stockholders' Equity - Stock Op
Stockholders' Equity - Stock Options Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Stock Options, Number of Shares: | ||
Stock options outstanding, beginning | 2,655 | 3,701 |
Stock options granted | 680 | |
Stock options exercised | (3) | |
Stock options forfeited | (3) | |
Stock options expired | (120) | |
Stock options outstanding, ending | 3,209 | 2,655 |
Stock options vested and expected to vest | 3,113 | |
Stock options exercisable | 2,125 | |
Stock Options, Weighted-Average Exercise Price Per Share: | ||
Stock options outstanding, beginning (in dollars per share) | $ 11.81 | |
Stock options granted (in dollars per share) | 6.96 | |
Stock options exercised (in dollars per share) | 5.77 | |
Stock options forfeited (in dollars per share) | 7.97 | |
Stock options expired (in dollars per share) | 29.31 | |
Stock options outstanding, ending (in dollars per share) | 10.14 | $ 11.81 |
Stock options vested and expected to vest (in dollars per share) | 10.23 | |
Stock options exercisable (in dollars per share) | $ 11.47 | |
Weighted-average remaining contractual term, stock options outstanding | 6 years 3 months 4 days | |
Weighted-average remaining contractual term, stock options vested and expected to vest | 6 years 1 month 14 days | |
Weighted-average remaining contractual term, stock options exercisable | 4 years 10 months 25 days | |
Aggregate intrinsic value, stock options outstanding | $ 703 | |
Aggregate intrinsic value, stock options vested and expected to vest | 652 | |
Aggregate intrinsic value, stock options exercisable | $ 201 |
Stockholders' Equity - RSU, PRS
Stockholders' Equity - RSU, PRSU and RSA Activities (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
RSUs | |||
RSU, PRSU and RSA, Number of Shares: | |||
Outstanding, beginning | 2,469,000 | 1,734,000 | |
Granted | 1,287,000 | ||
Vested | (919,000) | ||
Canceled | (239,000) | ||
Outstanding, ending | 2,598,000 | 2,469,000 | 1,734,000 |
RSU, PRSU and RSA, Weighted-Average Grant Date Fair Value Per Value: | |||
Outstanding, beginning (in dollars per share) | $ 8.64 | ||
Granted (in dollars per share) | 6.91 | $ 8.59 | $ 8.72 |
Vested (in dollars per share) | 8.46 | ||
Canceled (in dollars per share) | 8.45 | ||
Outstanding, ending (in dollars per share) | $ 7.86 | $ 8.64 | |
PRSUs | |||
RSU, PRSU and RSA, Number of Shares: | |||
Outstanding, beginning | 184,000 | 362,000 | |
Granted | 550,000 | ||
Vested | (45,000) | ||
Canceled | (124,000) | ||
Outstanding, ending | 565,000 | 184,000 | 362,000 |
RSU, PRSU and RSA, Weighted-Average Grant Date Fair Value Per Value: | |||
Outstanding, beginning (in dollars per share) | $ 9.21 | ||
Granted (in dollars per share) | 7.42 | $ 9.16 | |
Vested (in dollars per share) | 11.71 | ||
Canceled (in dollars per share) | 8.09 | ||
Outstanding, ending (in dollars per share) | $ 7.51 | $ 9.21 |
Stockholders' Equity - Fair Val
Stockholders' Equity - Fair Value of Awards Granted (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average grant date fair value per share, stock options | $ 3.58 | $ 4.56 | $ 4.79 |
RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average grant date fair value per share | 6.91 | 8.59 | 8.72 |
PRSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average grant date fair value per share | 7.42 | 9.16 | |
ESPP | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average grant date fair value per share | $ 1.92 | $ 2.03 | $ 2.46 |
Stockholders' Equity - Assumpti
Stockholders' Equity - Assumptions (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Stock Options | |||
Weighted average assumptions used to estimate fair value of stock options | |||
Expected volatility | 53.00% | 52.00% | 52.00% |
Expected life | 6 years 3 months | 6 years 3 months | 6 years 2 months 16 days |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Risk-free interest rate | 1.60% | 1.56% | 1.87% |
ESPP | |||
Weighted average assumptions used to estimate fair value of stock options | |||
Expected volatility | 46.00% | 46.00% | 45.00% |
Expected life | 6 months 7 days | 5 months 15 days | 6 months |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Risk-free interest rate | 0.47% | 0.18% | 0.07% |
Stockholders' Equity - Unrecogn
Stockholders' Equity - Unrecognized Stock-based Compensation Expenses (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized stock-based compensation expense | $ 3,661 |
Weighted-average amortization period | 2 years 10 months 25 days |
RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized stock-based compensation expense | $ 13,380 |
Weighted-average amortization period | 2 years 6 months |
PRSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized stock-based compensation expense | $ 1,328 |
Weighted-average amortization period | 10 months 25 days |
ESPP | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized stock-based compensation expense | $ 721 |
Weighted-average amortization period | 134 days |
Stockholders' Equity - Warrants
Stockholders' Equity - Warrants Outstanding (Details) shares in Thousands | Dec. 31, 2016$ / sharesshares |
Stockholders' Equity Note [Abstract] | |
Exercise Price Per Share | $ / shares | $ 19.56 |
Number of Warrants Outstanding | shares | 15 |
Stockholders' Equity - Shares R
Stockholders' Equity - Shares Reserved For Future Issuance (Details) - shares | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options outstanding | 3,209,000 | 2,655,000 | 3,701,000 |
Shares available for future issuance under ESPP | 8,109,000 | 9,201,000 | 9,986,000 |
Common stock warrants | 15,000 | 15,000 | 15,000 |
RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Outstanding awards, instruments other than options | 2,598,000 | 2,469,000 | 1,734,000 |
PRSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Outstanding awards, instruments other than options | 565,000 | 184,000 | 362,000 |
ESPP | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares available for future issuance under ESPP | 119,000 | 1,129,000 | 1,891,000 |
2010 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares available for future grant under 2010 Plan | 1,603,000 | 2,749,000 | 2,283,000 |
Shares available for future issuance under ESPP | 4,666,666 |
Stockholders' Equity - Textual
Stockholders' Equity - Textual (Details) | Mar. 21, 2010 | Jul. 31, 2011shares | Dec. 31, 2016USD ($)Plan$ / sharesshares | Dec. 31, 2015USD ($)shares | Dec. 31, 2014USD ($)shares | Dec. 31, 2012 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | ||||
Stock split, conversion ratio | 1.5 | |||||
Dividends declared or paid | $ / shares | $ 0 | |||||
Preferred stock, shares issued | 0 | 0 | ||||
Number of equity incentive plans | Plan | 2 | |||||
Total intrinsic value for exercised stock options | $ | $ 5,000 | $ 300,000 | $ 600,000 | |||
Exercise of stock options | $ | 17,000 | 638,000 | 1,668,000 | |||
Total fair value of stock options vested | $ | $ 1,900,000 | $ 2,800,000 | $ 3,700,000 | |||
Shares issued in connection with Employee Stock Purchase Plan | 1,009,911 | |||||
Shares available for future issuance under ESPP | 8,109,000 | 9,201,000 | 9,986,000 | |||
Stock based compensation | $ | $ 14,300,000 | $ 13,800,000 | $ 16,000,000 | |||
Percent of historical volatility | 50.00% | |||||
Percent of implied volatility | 50.00% | |||||
Stock options granted, shares | 680,000 | |||||
Stock Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Expected volatility | 53.00% | 52.00% | 52.00% | |||
RSUs | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Conversion basis description | Each RSU granted under the 2010 Plan represents a right to receive one share of the Company's common stock (subject to adjustment for certain specified changes in the capital structure of the Company) upon the completion of a specific period of continued service. | |||||
Awards granted, shares | 1,287,000 | |||||
RSAs | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting rights | vest 25% per year for 4 years from the grant date | |||||
Awards granted, shares | 423,000 | |||||
PRSUs | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Period of average closing trading price preceding first day of performance period | 90 days | |||||
Period of average closing trading price ending on last day of performance period | 90 days | |||||
Stock based compensation | $ | $ 2,400,000 | |||||
Awards granted, shares | 550,000 | |||||
PRSUs | Minimum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Performance period, PRSU | 1 year | 2 years | ||||
Target performance rate, PRSU | 0.00% | |||||
PRSUs | Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Performance period, PRSU | 2 years | 3 years | ||||
Target performance rate, PRSU | 200.00% | |||||
ESPP | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
ESPP, maximum employee payroll deduction percentage | 15.00% | |||||
Maximum number of shares employee can purchase during offering period | 2,000 | |||||
ESPP, discounted purchase price percentage | 85.00% | |||||
Offering period | 6 months | |||||
Shares authorized | 4,300,000 | |||||
Shares available for future issuance under ESPP | 119,000 | 1,129,000 | 1,891,000 | |||
Expected volatility | 46.00% | 46.00% | 45.00% | |||
Prior Plans | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 4 years | |||||
Contractual term, stock options | 10 years | |||||
2010 Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Minimum exercise price of stock option, percentage | 100.00% | |||||
Vesting period | 4 years | |||||
Contractual term, stock options | 10 years | |||||
Automatic annual increase of reserved shares | 3,999,996 | |||||
Vesting rights | vest 25% on the first anniversary of the vesting commencement date and on a monthly basis thereafter for a period of an additional three years | |||||
Shares available for future issuance under ESPP | 4,666,666 | |||||
2010 Plan | Incentive Stock Option | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Maximum shares allowed to be issued | 17,150,494 | |||||
2010 Plan | RSUs | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 4 years | |||||
RSU granted converted into common stock | 1 | |||||
Award vesting rights, percentage | 25.00% | |||||
Incentive Stock Option | Prior Plans | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Minimum exercise price of stock option, percentage | 100.00% | |||||
Non-qualified Stock Option | 2002 Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Minimum exercise price of stock option, percentage | 100.00% | |||||
Period February 2017 | PRSUs | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting rights, percentage | 50.00% | |||||
Period February 2017 | 2010 Plan | Stock Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting rights, percentage | 25.00% | |||||
Period February 2018 | PRSUs | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting rights, percentage | 25.00% | |||||
Period February 2018 | 2010 Plan | Stock Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 3 years | |||||
Period February 2019 | PRSUs | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting rights, percentage | 25.00% |
Stockholders' Equity - Stock Re
Stockholders' Equity - Stock Repurchase (Details) - Common Stock - USD ($) | 11 Months Ended | 12 Months Ended | ||
Mar. 26, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Apr. 26, 2015 | |
Class of Stock [Line Items] | ||||
Stock repurchase program, authorized amount | $ 40,000,000 | |||
Number of shares repurchased | 5,329,817 | 1,789,287 | 3,540,530 | |
Shares repurchased, value | $ 12,800,000 | $ 27,200,000 | ||
Average price per share | $ 7.50 | $ 7.16 | $ 7.68 |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Compensation and Retirement Disclosure [Abstract] | |||
Company matching contributions, 401(K) Plan | $ 2.1 | $ 1.8 | $ 1.5 |
Accumulated Other Comprehensi64
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Balance at beginning of period | $ 235,785 | $ 272,591 | $ 273,923 |
Balance at end of period | 212,964 | 235,785 | 272,591 |
Unrealized Gains and Losses on Available-for-Sale Marketable Securities | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Balance at beginning of period | (94) | (58) | 0 |
Other comprehensive loss before reclassification adjustment | (57) | ||
Reclassification adjustment for realized gains on marketable securities included in net loss | (1) | ||
Other comprehensive income (loss) | 88 | (36) | (58) |
Balance at end of period | (6) | (94) | (58) |
Foreign Currency Translation Adjustments | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Balance at beginning of period | (101) | 138 | 190 |
Other comprehensive loss before reclassification adjustment | (52) | ||
Reclassification adjustment for realized gains on marketable securities included in net loss | 0 | ||
Other comprehensive income (loss) | (549) | (239) | (52) |
Balance at end of period | (650) | (101) | 138 |
Total | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Balance at beginning of period | (195) | 80 | 190 |
Other comprehensive loss before reclassification adjustment | (109) | ||
Reclassification adjustment for realized gains on marketable securities included in net loss | (1) | ||
Other comprehensive income (loss) | (461) | (275) | (110) |
Balance at end of period | $ (656) | $ (195) | $ 80 |
Credit Facility (Details)
Credit Facility (Details) | Jul. 29, 2013USD ($) | Mar. 28, 2015USD ($) | Dec. 31, 2016USD ($)quarterly_payment | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Jun. 28, 2013USD ($) |
Line of Credit Facility [Line Items] | |||||||
Revolving credit facility, maximum capacity | $ 50,000,000 | ||||||
Increase (decrease) in restricted cash | $ (300,000) | $ 0 | $ (295,000) | $ 0 | |||
Term loan repayment, frequency of equal quarterly payments | quarterly_payment | 20 | ||||||
Commitment fee percentage | 0.25% | ||||||
Outstanding revolving loans | $ 0 | ||||||
Payments of debt issuance costs | 0 | $ 138,000 | $ 0 | $ 300,000 | |||
Unamortized debt issuance expense | 127,000 | ||||||
Prepaid expenses and other current assets | |||||||
Line of Credit Facility [Line Items] | |||||||
Unamortized debt issuance expense | 72,600 | ||||||
Other assets | |||||||
Line of Credit Facility [Line Items] | |||||||
Unamortized debt issuance expense | $ 54,400 | ||||||
Swingline Facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Revolving credit facility, maximum capacity | 10,000,000 | ||||||
Swingline loan repayment period | 10 days | ||||||
Prior Credit Facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Revolving credit facility, maximum capacity | $ 30,000,000 | ||||||
Letter of Credit | |||||||
Line of Credit Facility [Line Items] | |||||||
Revolving credit facility, maximum capacity | 20,000,000 | ||||||
Long-term Debt | |||||||
Line of Credit Facility [Line Items] | |||||||
Revolving credit facility, maximum capacity | $ 25,000,000 | ||||||
Base Rate | Minimum | |||||||
Line of Credit Facility [Line Items] | |||||||
Basis spread on variable rate | 0.75% | ||||||
Base Rate | Maximum | |||||||
Line of Credit Facility [Line Items] | |||||||
Basis spread on variable rate | 1.25% | ||||||
LIBOR | Minimum | |||||||
Line of Credit Facility [Line Items] | |||||||
Basis spread on variable rate | 2.00% | ||||||
LIBOR | Maximum | |||||||
Line of Credit Facility [Line Items] | |||||||
Basis spread on variable rate | 2.50% |
Income Taxes - Loss before Prov
Income Taxes - Loss before Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ (28,931) | $ (27,674) | $ (21,495) |
Foreign | 1,876 | 1,876 | 1,262 |
Loss before provision for income taxes | $ (27,055) | $ (25,798) | $ (20,233) |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
State | $ 102 | $ 90 | $ 104 |
Foreign | 673 | 493 | 469 |
Current income tax | 775 | 583 | 573 |
Foreign | (428) | (48) | 8 |
Deferred income tax | (428) | (48) | 8 |
Provision for income taxes | $ 347 | $ 535 | $ 581 |
Income Taxes - Income Tax Rate
Income Taxes - Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory rate | 34.00% | 34.00% | 34.00% |
State statutory rate | 6.10% | 2.60% | 2.50% |
Foreign operations | 0.60% | 1.10% | (0.10%) |
R&D tax credits | 6.40% | 11.20% | 9.20% |
Foreign income inclusion | (0.70%) | (2.40%) | (0.30%) |
Non-deductible stock compensation | (5.10%) | (1.90%) | (0.90%) |
Other permanent items | (1.40%) | (2.00%) | (1.50%) |
Tax true-up | 21.00% | (1.30%) | (0.20%) |
Valuation allowance | (62.20%) | (43.40%) | (45.60%) |
Effective tax rate | (1.30%) | (2.10%) | (2.90%) |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 167,668 | $ 167,387 |
Tax credit carryforwards | 36,026 | 27,654 |
Depreciation and amortization | 2,538 | 1,947 |
Accruals and reserves | 13,462 | 12,427 |
Deferred revenue | 12,954 | 9,822 |
Stock-based compensation | 6,159 | 5,198 |
Other | 1,124 | 528 |
Gross deferred tax assets | 239,931 | 224,963 |
Valuation allowance | (239,238) | (222,410) |
Net deferred tax assets | 693 | 2,553 |
Deferred tax liabilities: | ||
Gross deferred tax liabilities | (157) | (2,229) |
Other | 0 | (130) |
Gross deferred tax liabilities | (157) | (2,359) |
Net deferred tax assets reflected in balance sheet | $ 536 | $ 194 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Unrecognized Tax Benefits [Roll Forward] | ||
Balance at beginning of period | $ 16,597 | $ 15,421 |
Additions for tax positions related to prior year | 420 | 56 |
Reductions for tax positions related to prior year | (145) | (59) |
Additions for tax positions related to current year | 1,477 | 1,179 |
Balance at end of period | $ 18,349 | $ 16,597 |
Income Taxes - Textual (Details
Income Taxes - Textual (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Taxes [Line Items] | |||
Provision for income taxes | $ 347,000 | $ 535,000 | $ 581,000 |
Net deferred tax assets | 536,000 | 194,000 | |
Increase (decrease) In valuation allowance | 16,800,000 | 9,700,000 | |
Excess tax benefits of stock option deductions included in valuation allowance | 100,000 | 100,000 | |
Research and development credits | 36,026,000 | 27,654,000 | |
Undistributed earnings of foreign subsidiaries | 4,800,000 | ||
Unrecognized tax benefits | 18,349,000 | 16,597,000 | $ 15,421,000 |
Accrued interest or penalties for uncertain income tax | 0 | ||
US Federal | |||
Income Taxes [Line Items] | |||
Operating loss carryforward | 520,600,000 | ||
Deduction related to excess tax benefits from stock options which are not included in net operating loss carryforward | 37,800,000 | 37,800,000 | |
Research and development credits | 27,900,000 | ||
State | |||
Income Taxes [Line Items] | |||
Operating loss carryforward | 132,200,000 | ||
Deduction related to excess tax benefits from stock options which are not included in net operating loss carryforward | 34,400,000 | $ 34,200,000 | |
California State | |||
Income Taxes [Line Items] | |||
Research and development credits | 30,300,000 | ||
Other State | |||
Income Taxes [Line Items] | |||
Research and development credits | $ 3,000,000 |
Segment Information - Revenue b
Segment Information - Revenue by Geographic Region (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 24, 2016 | Jun. 25, 2016 | Mar. 26, 2016 | Dec. 31, 2015 | Sep. 26, 2015 | Jun. 27, 2015 | Mar. 28, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | $ 131,800 | $ 121,187 | $ 107,425 | $ 98,375 | $ 104,999 | $ 112,297 | $ 99,129 | $ 91,038 | $ 458,787 | $ 407,463 | $ 401,227 |
United States | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | 415,629 | 360,077 | 352,458 | ||||||||
Caribbean | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | 12,934 | 13,358 | 18,725 | ||||||||
Canada | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | 9,064 | 10,198 | 9,995 | ||||||||
Europe | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | 6,334 | 11,090 | 5,948 | ||||||||
Other | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | $ 14,826 | $ 12,740 | $ 14,101 |
Segment Information - Property
Segment Information - Property and Equipment by Geographic Region (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Property and equipment, net | $ 17,984 | $ 17,149 | $ 20,144 |
United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Property and equipment, net | 15,321 | 15,362 | 17,852 |
China | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Property and equipment, net | $ 2,663 | $ 1,787 | $ 2,292 |
Quarterly Financial Data - Un74
Quarterly Financial Data - Unaudited (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 24, 2016 | Jun. 25, 2016 | Mar. 26, 2016 | Dec. 31, 2015 | Sep. 26, 2015 | Jun. 27, 2015 | Mar. 28, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenue | $ 131,800 | $ 121,187 | $ 107,425 | $ 98,375 | $ 104,999 | $ 112,297 | $ 99,129 | $ 91,038 | $ 458,787 | $ 407,463 | $ 401,227 |
Gross profit | 52,186 | 53,544 | 50,006 | 45,482 | 46,537 | 53,113 | 48,289 | 42,490 | 201,218 | 190,429 | 177,789 |
Operating income (loss) | (12,235) | 735 | (5,881) | (10,738) | (9,735) | 877 | (5,765) | (11,887) | (28,119) | (26,510) | (20,384) |
Net income (loss) | $ (11,483) | $ 636 | $ (5,826) | $ (10,729) | $ (9,546) | $ 922 | $ (5,779) | $ (11,930) | $ (27,402) | $ (26,333) | $ (20,814) |
Net income (loss) per common share, basic (in dollars per share) | $ (0.23) | $ 0.01 | $ (0.12) | $ (0.22) | $ (0.19) | $ 0.02 | $ (0.11) | $ (0.23) | |||
Net income (loss) per common share, diluted (in dollars per share) | $ (0.23) | $ 0.01 | $ (0.12) | $ (0.22) | $ (0.19) | $ 0.02 | $ (0.11) | $ (0.23) |