Organization and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Oct. 31, 2013 |
Accounting Policies [Abstract] | ' |
Description of Business | ' |
Description of Business |
Violin Memory, Inc. (the “Company”) was incorporated in the State of Delaware on March 9, 2005 under the name Violin Technologies, Inc. The Company re-incorporated as Violin Memory, Inc. in the State of Delaware on April 11, 2007. The Company is a developer and supplier of high-performance, persistent memory-based storage systems that are designed to bring storage performance in line with high-speed applications, servers and networks. These Flash Memory Arrays are specifically designed at each level of the system architecture, starting with memory and optimized through the array, to leverage the inherent capabilities of flash memory. These systems’ embedded software function together with the hardware to deliver their essential functionality. The Company is also a developer and supplier of Velocity PCIe Flash Memory Cards designed to leverage its persistent memory architecture in servers. The Company also recently introduced the Violin Symphony Management Software Suite and Maestro Memory Services Software Suite as software offerings enhancing the process to manage, monitor and protect application data in the enterprise data center. The Company sells its products through its global direct sales force, systems vendors, resellers and other channel partners. The Company operates in a single business segment. |
On September 12, 2013, the Company effected a two-for-one reverse stock split to its common stock for all stockholders of record as of September 12, 2013 with an automatic adjustment to the conversion ratio of the outstanding shares of convertible preferred stock to reflect the same reverse stock split ratio upon conversion of the convertible preferred stock into common stock. Based on the adjusted conversion ratio, two outstanding shares of preferred stock converted into one share of common stock, except for Series D convertible preferred stock for which every two shares converted into 1.016998402 shares of common stock. All information related to common stock, stock options, RSUs and earnings per share for prior periods has been retroactively adjusted to give effect to the two-for-one reverse stock split. |
On October 2, 2013, the Company closed its initial public offering, or IPO, of 18,000,000 shares of its common stock sold by the Company. The public offering price of the shares sold in the IPO was $9.00 per share. The total gross proceeds from the IPO to the Company were $162 million. After deducting underwriting discounts and commissions and IPO costs payable by the Company, the aggregate net proceeds to the Company totaled $145.8 million. During the fourth quarter of fiscal 2013, the Company had paid issuance costs of $2.1 million which were recorded in the condensed consolidated statement of cash flows as deferred IPO costs in that period. As of October 31, 2013, issuance costs of $1.6 million remained unpaid and these costs are expected to be paid in the Company’s fourth fiscal quarter. On November 1, 2013, the option held by the underwriters to purchase 2,700,000 additional shares of common stock from the Company at the public offering price, less underwriting discounts and commissions, expired. |
Basis of Presentation and Consolidation | ' |
Basis of Presentation and Consolidation |
The accompanying condensed consolidated balance sheets and the condensed consolidated statements of operations, comprehensive loss, and cash flows are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission ( “SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in the prospectus filed with the SEC pursuant to Rule 424(b) under the Securities Act of 1933, on September 27, 2013. The results of operations for the three and nine months ended October 31, 2013 are not necessarily indicative of the results to be expected for the year ended January 31, 2014 or for other interim periods or for future years. |
The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | ' |
Use of Estimates |
The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, the Company evaluates its significant estimates, including those related to estimated selling prices for elements sold in multiple-element revenue arrangements, product warranty, determination of the fair value of stock options, carrying values of inventories, liabilities for unrecognized tax benefits and deferred income tax asset valuation allowances. The Company also uses estimates in determining the useful lives of property and equipment and in its provision for doubtful accounts. Actual results could differ from those estimates. |
Significant Accounting Policies | ' |
Significant Accounting Policies |
The Company’s significant accounting policies have been described in Note 1 to the consolidated financial statements included in the prospectus filed with the SEC pursuant to Rule 424(b) under the Securities Act of 1933 on September 27, 2013. With exception of the discussion below, there have been no changes to the Company’s significant accounting policies described in the Prospectus that have had a material impact on the Company’s condensed consolidated financial statements and related notes. |
Investments | ' |
Investments |
The Company classifies its investments as available-for-sale at the time of purchase since it is the Company’s intent that these investments are available for current operations, and includes these investments on the condensed consolidated balance sheet as short-term or long-term investments depending on their maturity and management’s intention with regard to the utilization of these investments, as needed, to fund current operations. As of October 31, 2013, all investments have been classified as short-term. |
Investments are considered impaired when a decline in fair value is judged to be other-than-temporary. The Company consults with its investment managers and considers available quantitative and qualitative evidence in evaluating potential impairment of its investments on a quarterly basis. If the cost of an individual investment exceeds its fair value, the Company evaluates, among other factors, general market conditions, the duration and extent to which the fair value is less than cost, and its intent and ability to hold the investment. Once a decline in fair value is determined to be other-than-temporary, an impairment charge is recorded and a new cost basis in the investment is established. |
Significant Customers | ' |
Significant Customers |
Customers that accounted for 10% or more of the Company’s revenue represented 20% and 24% of revenue for the three months ended October 31, 2013 and 2012, respectively, and 13% of revenue for the nine months ended October 31, 2012. No single customer accounted for 10% of more of the Company’s revenue for the nine months ended October 31, 2013. Revenue from our five largest customers for the three months ended October 31, 2013 and 2012 was 41% and 45%, respectively, and 32% and 43% for the nine months ended October 31, 2013 and 2012, respectively. As a consequence of our limited number of customers and the concentrated nature of their purchases, our revenue, gross margin and operating results may fluctuate significantly from period to period and are difficult to estimate. |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements |
In February 2013, the Financial Accounting Standards Board (“FASB”) issued additional guidance regarding the presentation of comprehensive income. The new guidance requires an entity to present the effects on net income line items of significant amounts reclassified out of accumulated other comprehensive income, but only if the item reclassified is required under GAAP to be reclassified to net income in its entirety in the same reporting period. An entity shall provide this information either on the face of the consolidated financial statements or in the notes to the consolidated financial statements. The guidance is effective for fiscal years beginning after December 15, 2012. The adoption of this guidance effective February 1, 2013 did not result in a material impact on the Company’s condensed consolidated financial statements. |
In March 2013, the FASB issued an accounting standard update requiring an entity to release into net income the entire amount of a cumulative translation adjustment related to its investment in a foreign entity when as a parent it either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets within a foreign entity. This accounting standard update will be effective prospectively for the Company beginning in the first quarter of fiscal 2015. The Company does not expect the adoption of this accounting standard update will have a material impact on its condensed consolidated financial statements. |